Document:

Exhibit 10.31

 

REDACTED
COPY

 

Portions of this Exhibit 10.31
have been omitted pursuant to a confidential treatment request.  The
omitted material has been filed with the Securities and Exchange Commission.

 

 

CREDIT AGREEMENT

 

BETWEEN

 

WILLIS LEASE FINANCE CORPORATION,

as Borrower

 

UNION BANK, N.A.,

as Lender and Lead Arranger

 

WELLS FARGO BANK, N.A.,

as Lender and Co-Lead Arranger

 

AND

 

UNION BANK, N.A.

as Administrative Agent

 

November 18, 2009

 

 

 

TABLE
OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1.

  	
  DEFINITIONS
  AND ACCOUNTING TERMS

  	
  1

  
	
   

  	
  1.1

  	
  Defined
  Terms

  	
  1

  
	
   

  	
  1.2

  	
  Accounting
  Terms

  	
  31

  
	
   

  	
  1.3

  	
  UCC

  	
  31

  
	
   

  	
  1.4

  	
  Construction

  	
  31

  
	
   

  	
  1.5

  	
  USA
  Patriot Act Notice

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  REVOLVING
  COMMITMENT

  	
  32

  
	
   

  	
  2.1

  	
  Revolving
  Loans

  	
  32

  
	
   

  	
  2.2

  	
  Swing
  Line Loans

  	
  33

  
	
   

  	
  2.3

  	
  Letters
  of Credit

  	
  35

  
	
   

  	
  2.4

  	
  Payment
  of Interest; Interest Rate

  	
  39

  
	
   

  	
  2.5

  	
  Maximum
  Rate of Interest

  	
  40

  
	
   

  	
  2.6

  	
  Fees

  	
  41

  
	
   

  	
  2.7

  	
  Late
  Payments

  	
  42

  
	
   

  	
  2.8

  	
  Repayment
  and Prepayment

  	
  42

  
	
   

  	
  2.9

  	
  Term

  	
  43

  
	
   

  	
  2.10

  	
  Early
  Termination

  	
  43

  
	
   

  	
  2.11

  	
  Note
  and Accounting

  	
  43

  
	
   

  	
  2.12

  	
  Manner
  of Payment

  	
  44

  
	
   

  	
  2.13

  	
  Application
  of Payments

  	
  45

  
	
   

  	
  2.14

  	
  Use
  of Proceeds

  	
  45

  
	
   

  	
  2.15

  	
  All
  Obligations to Constitute One Obligation

  	
  45

  
	
   

  	
  2.16

  	
  Authorization
  to Make Loans

  	
  45

  
	
   

  	
  2.17

  	
  Authorization
  to Debit Accounts

  	
  45

  
	
   

  	
  2.18

  	
  Administrative
  Agent’s Right to Assume Funds Available for Revolving Loans

  	
  46

  
	
   

  	
  2.19

  	
  Optional
  Increase to the Revolving Commitment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  SECURITY

  	
  48

  
	
   

  	
   

  	
   

  
	
  4.

  	
  CONDITIONS
  PRECEDENT

  	
  48

  
	
   

  	
  4.1

  	
  Conditions
  Precedent to Closing

  	
  48

  
	
   

  	
  4.2

  	
  Conditions
  to All Loans

  	
  51

  
	
   

  	
  4.3

  	
  Conditions
  to Borrowing Base Inclusion

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
  54

  
	
   

  	
  5.1

  	
  Corporate
  Existence; Compliance with Law

  	
  54

  
	
   

  	
  5.2

  	
  Executive
  Offices; Corporate or Other Names; Conduct of Business

  	
  54

  
	
   

  	
  5.3

  	
  Authority;
  Compliance with Other Agreements and Instruments and Government Regulations

  	
  54

  

 

i

 

	
   

  	
  5.4

  	
  No
  Governmental Approvals Required

  	
  55

  
	
   

  	
  5.5

  	
  Subsidiaries

  	
  55

  
	
   

  	
  5.6

  	
  Financial
  Statements

  	
  56

  
	
   

  	
  5.7

  	
  No
  Material Adverse Effect

  	
  56

  
	
   

  	
  5.8

  	
  Title
  To and Location of Property

  	
  56

  
	
   

  	
  5.9

  	
  Intellectual
  Property

  	
  56

  
	
   

  	
  5.10

  	
  Litigation

  	
  57

  
	
   

  	
  5.11

  	
  Binding
  Obligations

  	
  57

  
	
   

  	
  5.12

  	
  No
  Default

  	
  57

  
	
   

  	
  5.13

  	
  ERISA

  	
  57

  
	
   

  	
  5.14

  	
  Regulation
  U; Investment Company Act

  	
  57

  
	
   

  	
  5.15

  	
  Disclosure

  	
  57

  
	
   

  	
  5.16

  	
  Tax
  Liability

  	
  58

  
	
   

  	
  5.17

  	
  Hazardous
  Materials

  	
  58

  
	
   

  	
  5.18

  	
  Security
  Interests

  	
  58

  
	
   

  	
  5.19

  	
  Leases,
  Engines and Equipment

  	
  58

  
	
   

  	
  5.20

  	
  Cape
  Town Convention

  	
  59

  
	
   

  	
  5.21

  	
  Depreciation
  Policies

  	
  59

  
	
   

  	
  5.22

  	
  Non-Lender
  Protection Agreements

  	
  59

  
	
   

  	
  5.23

  	
  Eligible
  Leases

  	
  59

  
	
   

  	
  5.24

  	
  Preservation
  of International Interests

  	
  59

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  AFFIRMATIVE
  COVENANTS (OTHER THAN INFORMATION AND REPORTING REQUIREMENTS)

  	
  59

  
	
   

  	
  6.1

  	
  Payment
  of Taxes and Other Potential Liens

  	
  59

  
	
   

  	
  6.2

  	
  Preservation
  of Existence

  	
  60

  
	
   

  	
  6.3

  	
  Maintenance
  of Property

  	
  60

  
	
   

  	
  6.4

  	
  Maintenance
  of Insurance

  	
  60

  
	
   

  	
  6.5

  	
  Compliance
  with Applicable Laws

  	
  61

  
	
   

  	
  6.6

  	
  Inspection
  Rights

  	
  61

  
	
   

  	
  6.7

  	
  Keeping
  of Records and Books of Account

  	
  61

  
	
   

  	
  6.8

  	
  Compliance
  with Agreements

  	
  61

  
	
   

  	
  6.9

  	
  Use
  of Proceeds

  	
  61

  
	
   

  	
  6.10

  	
  Hazardous
  Materials Laws

  	
  62

  
	
   

  	
  6.11

  	
  Future
  Subsidiaries

  	
  62

  
	
   

  	
  6.12

  	
  Conduct
  of Business

  	
  62

  
	
   

  	
  6.13

  	
  Further
  Assurances; Schedule Supplements

  	
  62

  
	
   

  	
  6.14

  	
  Financial
  Covenants

  	
  62

  
	
   

  	
  6.15

  	
  Subordination
  of Third Party Fees

  	
  63

  
	
   

  	
  6.16

  	
  Maintenance
  of Borrowing Base

  	
  63

  
	
   

  	
  6.17

  	
  Placards

  	
  63

  
	
   

  	
  6.18

  	
  Maintenance
  of Current Depreciation Policies

  	
  64

  
	
   

  	
  6.19

  	
  Preservation
  of International Interests

  	
  64

  
	
   

  	
  6.20

  	
  Maintenance
  of WEST Management Agreement and Servicing Agreement

  	
  64

  
	
   

  	
  6.21

  	
  Notice
  of Non-Lender Protection Agreement

  	
  64

  

 

ii

 

	
  7.

  	
  NEGATIVE
  COVENANTS

  	
  64

  
	
   

  	
  7.1

  	
  Modification
  of Formation Documents

  	
  64

  
	
   

  	
  7.2

  	
  Modification
  of Debt

  	
  64

  
	
   

  	
  7.3

  	
  Net
  Income

  	
  64

  
	
   

  	
  7.4

  	
  Payment
  of Subordinated Obligations

  	
  64

  
	
   

  	
  7.5

  	
  Mergers

  	
  65

  
	
   

  	
  7.6

  	
  Hostile
  Acquisitions

  	
  65

  
	
   

  	
  7.7

  	
  ERISA

  	
  65

  
	
   

  	
  7.8

  	
  Change
  in Nature of Business

  	
  65

  
	
   

  	
  7.9

  	
  Liens
  and Negative Pledges

  	
  65

  
	
   

  	
  7.10

  	
  Indebtedness
  and Guaranteed Indebtedness

  	
  66

  
	
   

  	
  7.11

  	
  Transactions
  with Affiliates

  	
  67

  
	
   

  	
  7.12

  	
  Amendments
  to Subordinated Obligations

  	
  67

  
	
   

  	
  7.13

  	
  Non-Lender
  Protection Agreements

  	
  67

  
	
   

  	
  7.14

  	
  Distributions

  	
  67

  
	
   

  	
  7.15

  	
  Investments

  	
  68

  
	
   

  	
  7.16

  	
  Additional
  Bank Accounts

  	
  69

  
	
   

  	
  7.17

  	
  No
  Adverse Selection

  	
  69

  
	
   

  	
  7.18

  	
  Negative
  Pledge/WEST

  	
  69

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  INFORMATION
  AND REPORTING REQUIREMENTS

  	
  69

  
	
   

  	
  8.1

  	
  Reports
  and Notices

  	
  69

  
	
   

  	
  8.2

  	
  Other
  Reports

  	
  72

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  EVENTS
  OF DEFAULT; RIGHTS AND REMEDIES

  	
  72

  
	
   

  	
  9.1

  	
  Events
  of Default

  	
  72

  
	
   

  	
  9.2

  	
  Remedies

  	
  75

  
	
   

  	
  9.3

  	
  Waivers
  by Borrower

  	
  75

  
	
   

  	
  9.4

  	
  Proceeds

  	
  75

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  SUCCESSORS
  AND ASSIGNS

  	
  75

  
	
   

  	
   

  	
   

  
	
  11.

  	
  [Intentionally
  deleted.]

  	
  76

  
	
   

  	
   

  	
   

  
	
  12.

  	
  MISCELLANEOUS

  	
  76

  
	
   

  	
   

  	
   

  
	
   

  	
  12.1

  	
  Complete
  Agreement; Modification of Agreement

  	
  76

  
	
   

  	
  12.2

  	
  Reimbursement
  and Expenses

  	
  76

  
	
   

  	
  12.3

  	
  Indemnity

  	
  76

  
	
   

  	
  12.4

  	
  No
  Waiver

  	
  77

  
	
   

  	
  12.5

  	
  Severability;
  Drafting

  	
  78

  
	
   

  	
  12.6

  	
  Conflict
  of Terms

  	
  78

  
	
   

  	
  12.7

  	
  Notices

  	
  78

  
	
   

  	
  12.8

  	
  Binding
  Effect; Assignment

  	
  79

  
	
   

  	
  12.9

  	
  Right
  of Setoff

  	
  82

  
	
   

  	
  12.10

  	
  Sharing
  of Setoffs

  	
  82

  

 

iii

 

	
   

  	
  12.11

  	
  Section Titles

  	
  82

  
	
   

  	
  12.12

  	
  Counterparts

  	
  83

  
	
   

  	
  12.13

  	
  Time
  of the Essence

  	
  83

  
	
   

  	
  12.14

  	
  GOVERNING
  LAW; VENUE

  	
  83

  
	
   

  	
  12.15

  	
  WAIVER
  OF JURY TRIAL

  	
  84

  
	
   

  	
  12.16

  	
  Amendments;
  Consents

  	
  84

  
	
   

  	
  12.17

  	
  Foreign
  Lenders and Participants

  	
  85

  
	
   

  	
  12.18

  	
  Custodial
  Agreement

  	
  85

  
	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
  ADMINISTRATIVE
  AGENT

  	
  86

  
	
   

  	
  13.1

  	
  Appointment
  and Authorization

  	
  86

  
	
   

  	
  13.2

  	
  Administrative
  Agent and Affiliates

  	
  86

  
	
   

  	
  13.3

  	
  Lenders’
  Credit Decisions

  	
  86

  
	
   

  	
  13.4

  	
  Action
  by Administrative Agent

  	
  86

  
	
   

  	
  13.5

  	
  Liability
  of Administrative Agent

  	
  87

  
	
   

  	
  13.6

  	
  Indemnification

  	
  89

  
	
   

  	
  13.7

  	
  Successor
  Administrative Agent

  	
  89

  
	
   

  	
  13.8

  	
  No
  Obligations of Borrower

  	
  90

  
	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
  SECURITY
  AGENT

  	
  90

  
	
   

  	
  14.1

  	
  Appointment
  and Authorization

  	
  90

  
	
   

  	
  14.2

  	
  Security
  Agent and Affiliates

  	
  90

  
	
   

  	
  14.3

  	
  Proportionate
  Interest in any Collateral

  	
  90

  
	
   

  	
  14.4

  	
  Lenders’
  Credit Decisions

  	
  91

  
	
   

  	
  14.5

  	
  Action
  by Security Agent

  	
  91

  
	
   

  	
  14.6

  	
  Liability
  of Security Agent

  	
  92

  
	
   

  	
  14.7

  	
  Indemnification

  	
  93

  
	
   

  	
  14.8

  	
  Successor
  Security Agent

  	
  93

  
	
   

  	
  14.9

  	
  No
  Obligations of Borrower

  	
  94

  
	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
  COMMITMENT
  COSTS AND RELATED MATTERS

  	
  94

  
	
   

  	
  15.1

  	
  Eurodollar
  Costs and Related Matters

  	
  94

  
	
   

  	
  15.2

  	
  Capital
  Adequacy

  	
  97

  
	
   

  	
  15.3

  	
  Federal
  Reserve System/Wire Transfers

  	
  97

  
	
   

  	
  15.4

  	
  Assignment
  of Commitments Under Certain Circumstances; Duty to Mitigate

  	
  97

  

 

iv

 

INDEX
OF EXHIBITS AND SCHEDULES

 

	
  Exhibit A

  	
   

  	
  Form of
  Borrowing Base Certificate

  
	
  Exhibit B

  	
   

  	
  Form of
  Borrowing Notice

  
	
  Exhibit C

  	
   

  	
  Form of
  Commitment Assignment and Acceptance

  
	
  Exhibit D

  	
   

  	
  Form of
  Compliance Certificate

  
	
  Exhibit E

  	
   

  	
  Form of
  Request for Letter of Credit

  
	
  Exhibit F

  	
   

  	
  Form of
  Security Agreement

  
	
  Exhibit G

  	
   

  	
  Form of
  Mortgage and Security Agreement

  
	
  Exhibit H

  	
   

  	
  Form of
  Stock Pledge Agreement

  
	
  Exhibit I

  	
   

  	
  Form of
  Beneficial Interest Pledge Agreement

  
	
  Exhibit J

  	
   

  	
  Form of
  Owner Trustee Mortgage and Security Agreement

  
	
  Exhibit K

  	
   

  	
  Form of
  Owner Trustee Guaranty

  
	
  Exhibit L

  	
   

  	
  Form of
  Leasing Subsidiary Security Assignment

  
	
  Exhibit M

  	
   

  	
  Form of
  Subsidiary Guaranty

  
	
  Exhibit N

  	
   

  	
  Form of
  Trust Agreement

  
	
  Exhibit O

  	
   

  	
  Form of
  Placard

  
	
   

  	
   

  	
   

  
	
  Schedule
  1.1b

  	
   

  	
  Borrowing
  Base Geographic Limitations

  
	
  Schedule
  1.1c

  	
   

  	
  Eligible
  Equipment

  
	
  Schedule
  1.1d

  	
   

  	
  Liens
  of Record

  
	
  Schedule
  1.1d

  	
   

  	
  Schedule
  of Documents

  
	
  Schedule
  2.1

  	
   

  	
  Revolving
  Commitment — Pro Rata Share

  
	
  Schedule
  5.2

  	
   

  	
  Executive
  Offices; Corporate or Other Names; Conduct of Business

  
	
  Schedule
  5.5

  	
   

  	
  Subsidiaries

  
	
  Schedule
  5.7

  	
   

  	
  No
  Other Liabilities; No Material Adverse Changes

  
	
  Schedule
  5.9

  	
   

  	
  Trade
  Names

  
	
  Schedule
  5.10

  	
   

  	
  Litigation

  
	
  Schedule
  5.17

  	
   

  	
  Hazardous
  Materials

  
	
  Schedule
  5.21

  	
   

  	
  Depreciation
  Policies

  
	
  Schedule
  5.22

  	
   

  	
  Non-Lender
  Protection Agreements

  
	
  Schedule
  5.23

  	
   

  	
  Eligible
  Leases as of the Closing Date

  
	
  Schedule
  7.10

  	
   

  	
  Indebtedness
  and Guaranteed Indebtedness existing on the Closing Date

  
	
  Schedule
  7.15

  	
   

  	
  Investments
  Existing as of the Closing Date

  

 

v

 

CREDIT AGREEMENT

 

THIS CREDIT AGREEMENT (“Agreement”), is
entered into as of November 18, 2009, between WILLIS LEASE FINANCE
CORPORATION, a Delaware corporation (“Borrower”), UNION BANK, N.A.,
together with any other Lender hereunder from time to time (collectively, the “Lenders”
and individually, a “Lender”) and UNION BANK, N.A., as administrative
agent (in such capacity, “Administrative Agent”), as the Swing Line
Lender (in such capacity, “Swing Line Lender”), Issuing Lender (“Issuing
Lender”), Security Agent (in such capacity, “Security Agent”), and
Lead Arranger and WELLS FARGO BANK, N.A., as Co-Lead Arranger, effective as of
the Closing Date, with reference to the following facts:

 

RECITALS

 

A.            Borrower is in the business
of purchasing and leasing airplane engines and equipment, and has requested
that Lenders, Issuing Lender, and Swing Line Lender (collectively, the “Credit
Facility Lenders”) provide Borrower with a revolving line of credit in an
amount equal to the Revolving Commitment to be used by Borrower for among other
things, refinancing the loans outstanding under the Original Credit Agreement,
and for its general corporate purposes, including financing aircraft engines
and equipment owned and held for lease.

 

B.            Credit Facility Lenders are
willing to extend such a revolving line of credit to Borrower, subject to the
terms and conditions set forth herein.

 

NOW,
THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:

 

1.             DEFINITIONS
AND ACCOUNTING TERMS

 

1.1           Defined Terms.  As used in this Agreement, the following
terms shall have the respective meanings set forth below:

 

“Acceptable
Manufacturer” means any of General Electric Company, Snecma, CFM
International, Pratt & Whitney, Rolls-Royce, International Aero
Engines and any other aircraft engine manufacturer approved by Administrative
Agent in the exercise of its reasonable discretion.

 

“Account
Debtor” means any Person who is obligated under an Account.

 

“Accounts”
means all “accounts,” as such term is defined in the UCC, now owned or
hereafter acquired by Borrower, including (a) all accounts receivable,
payments and pre-payments under Leases, other receivables, book debts and other
forms of obligations (other than forms of obligations evidenced by chattel
paper, documents or instruments), whether arising out of goods sold or services
rendered by it or from any other transaction (including any such obligations
that may be characterized as an account or contract right under the UCC), (b) all
purchase orders or receipts for goods or services, (c) all rights to any
goods represented by any of the foregoing (including unpaid sellers’ rights of
rescission, reclamation and stoppage in transit and rights to returned,
reclaimed or repossessed goods), (d) all monies due or to become due to
Borrower under all purchase orders and contracts for the sale of goods or the
performance of

 

1

 

services
or both by Borrower or in connection with any other transaction (whether or not
yet earned by performance on the part of Borrower) now or hereafter in
existence, including the right to receive the proceeds of said purchase orders
and contracts, and (e) all collateral security and guaranties of any kind,
now or hereafter in existence, given by any Person with respect to any of the
foregoing.

 

“Acquisition”
means any transaction, or any series of related transactions, consummated after
the Closing Date, by which Borrower and/or any of its Subsidiaries directly or
indirectly (a) acquires any ongoing business or all or substantially all
of the assets of any Person engaged in any ongoing business, whether through
purchase of assets, merger or otherwise, (b) acquires control of
securities of a Person engaged in an ongoing business representing more than
50% of the ordinary voting power for the election of directors or other
governing position if the business affairs of such Person are managed by a
board of directors or other governing body or (c) acquires control of more
than 50% of the ownership interest in any partnership, joint venture, limited
liability company, business trust or other Person engaged in an ongoing
business that is not managed by a board of directors or other governing body.

 

“Adjusted
Base Value” means, with respect to an Engine, such Engine’s Base Value,
adjusted for the actual maintenance status of such Engine, but without regard
to any Lease, Maintenance Reserve Payments, Security Deposits or other related
assets.

 

“Administrative
Agent” means that party mentioned in the introductory paragraph hereof,
when such party is acting in its capacity as Administrative Agent under any of
the Loan Documents, or any successor Administrative Agent.

 

“Affiliate”
means, with respect to any Person, another Person that, directly or indirectly,
Controls, or is Controlled by or is under common Control  with such other Person.  For the purpose of this definition, “Control”
or “Controlled” means the possession, directly or indirectly, of the power to
direct or cause the direction of its management or policies, whether through
the ownership of voting securities, by contract or otherwise.  Notwithstanding the foregoing, “Affiliate”
shall not include Hawaii Island Air, Inc. or JT Power LLC.

 

“Agent”
means Administrative Agent and/or Security Agent, as applicable, and “Agents”
means, collectively, Administrative Agent and Security Agent.

 

“Aggregate
Effective Amount” means, as of any date of determination and with respect
to all Letters of Credit then outstanding, the sum of (a) the
aggregate effective face amounts of all such Letters of Credit not then paid by
Issuing Lender plus (b) the aggregate amounts paid by Issuing
Lender under such Letters of Credit not then reimbursed to Issuing Lender by
Borrower pursuant to Section 2.3.4
and not the subject of Loans made pursuant to Section 2.3.4.

 

“Agreement”
means this Credit Agreement, as the same may, from time to time, be amended,
supplemented, modified or restated.

 

“Alternative
Dispute Resolution Agreement” means the Alternative Dispute Resolution
Agreement of even date herewith among Administrative Agent, Security Agent,
each Lender, and Borrower.

 

2

 

“Applicable
Base Rate” means the percentage as calculated in Section 2.4.1(i).

 

“Applicable
Base Rate Margin” means the percentage determined by reference to Table 1 in Section 2.4.1(iii) of this Agreement.

 

“Applicable
Law” means, in respect of any Person, all provisions of constitutions,
statutes, rules, regulations and orders of governmental bodies or regulatory
agencies applicable to such Person, and all orders and decrees of all courts
and arbitrators in proceedings or actions to which the Person in question is a
party or by which it or its properties are bound.

 

“Applicable
LIBOR Margin” means the percentage determined by reference to Table 1 in Section 2.4.1(iii) of this Agreement.

 

“Applicable
LIBOR Rate” means the percentage as calculated in Section 2.4.1(ii).

 

“Applicable
Unused Line Fee Percentage” means the percentage determined by reference to
Table 1 in Section 2.4.1(iii) of
this Agreement.

 

“Appraisal”
means a “desktop appraisal” (i.e., an appraisal without a physical inspection
of such Engine or Equipment), or, if a Default or Event of Default exists, such
other type of appraisal (e.g., extended desktop, visual inspection) as shall be
required by Security Agent, of an Engine or Equipment to determine the
Appraised Value of such Engine or Equipment, performed by an Appraiser retained
by Security Agent on behalf of the Lenders.

 

“Appraisal
Deficiency” means the excess, if any, of (i) the aggregate Net Book
Value of all Eligible Engines and Eligible Equipment included in the Borrowing
Base over (ii) the most recent Appraised Value of the foregoing
(calculated in the case of both (i) and (ii) by multiplying such
values times the applicable advance percentage specified in clauses (a) through
(d) of the definition of Borrowing Base).

 

“Appraised
Value” means, with respect to an Engine, the Adjusted Base Value of such
Engine, and, with respect to Equipment, the Equipment Market Value or Parts
Market Value, as the case may be, of such Equipment, in each case as determined
in an Appraisal.

 

“Appraiser”
means Avitas, Inc., or any other an independent appraiser that is a member
of the International Society of Transport Aircraft Trading (“ISTAT”) or, if
ISTAT ceases to exist, any similar professional aircraft appraiser organization
and that in each case (other than with respect to Avitas) is acceptable to
Administrative Agent.

 

“APU”
means an auxiliary power unit, capable of being installed on an aircraft, to
start the main engines, usually with compressed air, and to provide electrical
power and air conditioning while the aircraft is on the ground and, in certain
cases, in the air.

 

“Authorized
Party” means each Person identified in Section 2.16.

 

“Authorized
Signatory” means (a) the president and chief executive officer, (b) the
executive vice president and chief operating officer, (c) the senior vice
president and chief financial officer and (d) any executive or senior vice
president, in each case of Borrower, and

 

3

 

solely
with respect to (i) Borrowing Notices, (ii) letter of credit
requests, (iii) Borrowing Base Certificates (iv) and Compliance
Certificates, each person listed above (a) - (d) and the treasurer of
Borrower.

 

“Aviation
Authority” means the FAA, the JAA/EASA and/or any other Governmental
Authority which, from time to time, has control or supervision of civil aviation
or has jurisdiction over the airworthiness, operation and/or maintenance of an
Engine or Turboprop Engine.

 

“Bankruptcy
Code” means the Bankruptcy Code (11 U.S.C. Sections 101 et seq.).

 

“Base
Rate” shall have the meaning ascribed thereto in Section 2.4.1(i).

 

“Base
Rate Loans” means a Revolving Loan or Swing Line Loan which Borrower
requests to be made as a Base Rate Loan or a Revolving Loan which is reborrowed
as, or converted to, a Base Rate Loan, in accordance with the provisions of Sections 2.1.2 and 2.1.3(iii).

 

“Base
Value” means, with respect to an Engine, an Appraiser’s opinion of the
underlying economic value of an Engine in an open, unrestricted, stable market
environment with a reasonable balance of supply and demand, and assumes full
consideration of its “highest and best use.” An Engine’s Base Value is founded
in the historical trend of values and in the projection of value trends and
presumes an arm’s-length, cash transaction between willing and knowledgeable
parties, acting prudently, with an absence of duress and with a reasonable
period of time for marketing.  Base Value
typically assumes that an engine’s physical condition is average for an engine
of its type and age, and its maintenance time status is at mid-life, mid-time
(or benefiting from an above-average maintenance status if new).

 

“Beneficial
Interest” means a beneficial interest in a trust which owns one or more
Engines or items of Equipment.

 

“Beneficial
Interest Pledge Agreements” means, collectively, those certain Beneficial
Interest Pledge Agreements, in the form attached hereto as Exhibit I, as each may be amended,
modified or supplemented from time to time, entered into by Borrower (or its
Wholly-Owned Subsidiary, if applicable), the applicable Owner Trustee, and
Security Agent, whereby Borrower (or its Wholly-Owned Subsidiary, if
applicable) pledges to Security Agent all of its right, title and interest in
the Beneficial Interest under each applicable Trust Agreement.

 

“Books
and Records” means all books, records, board minutes, contracts, licenses,
insurance policies, environmental audits, business plans, files, accounting
books and records, financial statements (actual and pro forma), and filings
with Governmental Authorities.

 

“Borrower”
means Willis Lease Finance Corporation, a Delaware corporation.

 

“Borrowing
Availability” means, at any time, the lesser of (a) the Maximum
Amount, or (b) the Borrowing Base Availability.

 

4

 

“Borrowing
Base” means, at any time, an amount equal to the sum of the following
(without duplication), as shall be determined by Administrative Agent based on
the Borrowing Base Certificate most recently delivered by Borrower to
Administrative Agent and on other information available to Administrative Agent:

 

(a)           *** (***%) of the Net
Book Value of Eligible Engines that have not been Off-Lease for a period of
greater than one hundred eighty (180) days as of the date of
determination; plus

 

(b)           *** percent (***%) of
the Net Book Value of all other Eligible Engines; plus

 

(c)           *** percent (***%) of the
Net Book Value of Eligible Equipment that has not been Off-Lease for a period
of greater than one hundred eighty (180) days as of the date of determination; plus

 

(d)           *** percent (***%) of the
Net Book Value of all other Eligible Equipment;

 

provided that all of
the following conditions shall apply to the Borrowing Base:

 

(x)            Annual
Appraisal.  The Net
Book Value of all assets included in the Borrowing Base shall be adjusted
annually based on an Appraisal of such assets by an Appraiser, as set forth in Section 8.1.6, and Borrower will be
required, as set forth in Section 2.8.3,
to pay down the Loans by the amount of any Appraisal Deficiency.

 

(y)           Additional
Conditions.  The
aggregate Net Book Value of Eligible Engines and Eligible Equipment included in
the Borrowing Base (subject to the conditions and restrictions set forth in the
definition of “Borrowing Base”) shall, collectively, comply with the following
additional conditions:

 

(i)            Eligible Lease Limitation.  If an Eligible Engine or an item of Eligible
Equipment is subject to a Lease and to be included in the Borrowing Base under
clauses (a)  or (c) above, the Eligible Engine or item of Eligible
Equipment will be included in the Borrowing Base only if the applicable Lease
is an Eligible Lease.

 

(ii)           Geographic Limitations.  The aggregate contribution to the Borrowing
Base of the Net Book Values of Eligible Engines and Eligible Equipment subject
to Eligible Leases with Lessees domiciled, or having their chief executive
offices located, in particular countries and geographic regions shall not at
any time exceed in the aggregate, the percentages of the Borrowing Base shown
on Schedule 1.1b.

 

***        Confidential information omitted pursuant
to a request for confidential treatment filed separately with the Securities
and Exchange Commission

 

5

 

(iii)          Concentration Limitations.  The following additional concentration
limitations shall apply to the determination of the Borrowing Base:

 

(1)           the aggregate contribution to the Borrowing Base of
the Net Book Values of Eligible Equipment constituting Eligible Parts,
Turboprop Engines and APUs shall not exceed ***% of the Borrowing Base;

 

(2)           the aggregate contribution to the Borrowing Base of
the Net Book Values of Eligible Engines and Eligible Equipment used on a single
make and model of narrow-body aircraft shall not exceed ***% of the Borrowing
Base; provided, the foregoing limitation shall not apply to the 737-600,
-700, -800 and -900 model aircraft;

 

(3)           the aggregate contribution to the Borrowing Base of
the Net Book Values of Eligible Engines and Eligible Equipment used on a single
make and model of wide-body aircraft shall not exceed ***% of the Borrowing
Base;

 

(4)           the aggregate contribution to the Borrowing Base of
the Net Book Values of Eligible Engines and Eligible Equipment used on
wide-body aircraft shall not exceed ***% of the Borrowing Base;

 

(5)           the aggregate contribution to the Borrowing Base of
the Net Book Values of Eligible Engines and Eligible Equipment subject to
Leases to the Three Primary Lessees shall not exceed ***% of the Borrowing
Base;

 

(6)           the aggregate contribution to the Borrowing Base of
the Net Book Values of Eligible Engines and Eligible Equipment subject to
Leases to a single Lessee shall not exceed ***% of the Borrowing Base; and

 

(7)           the aggregate contribution to the Borrowing Base of
the Net Book Values of Eligible Engines and Eligible Equipment which are
Off-Lease shall not exceed ***% of the Borrowing Base.

 

“Borrowing
Base Availability” means, as determined by Administrative Agent, based on
the Borrowing Base Certificate most recently delivered by Borrower to
Administrative Agent and on other information available to Administrative
Agent, an amount equal to the Borrowing Base less (i) the aggregate
undrawn and unreimbursed amounts of any Letters of Credit outstanding hereunder
at such time and (ii) the aggregate amount of any negative net

 

***        Confidential information omitted pursuant
to a request for confidential treatment filed separately with the Securities
and Exchange Commission

 

6

 

mark-to-market
valuation of any Non-Lender Protection Agreement(s) secured by the
Collateral, which mark-to-market valuation shall be recalculated at the end of
each Fiscal Quarter in accordance with GAAP.

 

“Borrowing
Base Certificate” means a certificate in the form attached hereto as Exhibit A.

 

“Borrowing
Base Deficiency” means, at any time, the amount, if any, by which the
aggregate amount of any Loans then outstanding (excluding the aggregate undrawn
and unreimbursed amounts of any Letters of Credit outstanding hereunder at such
time) exceeds the Borrowing Base Availability.

 

“Borrowing
Notice” means a written request for a Loan substantially in the form of Exhibit B signed by an Authorized
Signatory of Borrower and properly completed to provide all information
required to be included therein.

 

“Business
Day” means (i) any day that is not a Saturday, Sunday, or other day on
which banks in the State of California or in Frankfurt, Germany are authorized
or required to close, and (ii) in reference to LIBOR Loans means a
Business Day that is also a day on which banks in the city of London are open
for interbank or foreign exchange transactions.

 

“Cape
Town Convention” means the official English language texts of the “Convention
on International Interests in Mobile Equipment” and the “Protocol to the
Convention on International Interests in Mobile Equipment on Matters Specific
to Aircraft Equipment”, both of which were signed in Cape Town, South Africa on
November 16, 2001, and including the Regulations for the International
Registry and the Procedures for the International Registry, as promulgated
thereunder.

 

“Cape
Town Eligible Lease” means those certain Leases which constitute
International Interests under the Cape Town Convention.

 

“Capital
Lease Obligations” means all monetary obligations of a Person under any
leasing or similar arrangement which, in accordance with GAAP, is classified as
a capital lease.

 

“Cash”
means, when used in connection with any Person, all monetary and non-monetary
items owned by that Person that are treated as cash in accordance with GAAP,
consistently applied, including, but not limited to, cash held in ordinary
demand deposit accounts.

 

“Cash
Equivalents” means, when used in connection with any Person, that Person’s
Investments in:

 

(a)                                  Government Securities due
within one year after the date of the making of the Investment;

 

(b)                                 readily marketable direct
obligations of any State of the United States of America or any political
subdivision of any such State or any public agency or instrumentality thereof
given on the date of such Investment a credit rating of at

 

7

 

least
AA by Moody’s Investors Service, Inc. or AA by Standard & Poor’s
Rating Group (a division of McGraw Hill, Inc.), in each case due within
one year from the making of the Investment;

 

(c)                                  certificates of deposit
issued by, bank deposits in, Eurodollar deposits through, bankers’ acceptances
of, and repurchase agreements covering Government Securities executed by Lender
or any bank incorporated under the Applicable Laws of the United States of
America, any State thereof or the District of Columbia and having on the date
of such Investment combined capital, surplus and undivided profits of at least
$250,000,000, or total assets of at least $5,000,000,000, in each case due
within one year after the date of the making of the Investment;

 

(d)                                 certificates of deposit
issued by, bank deposits in, Eurodollar deposits through, bankers’ acceptances
of, and repurchase agreements covering Government Securities executed by Lender
or any branch or office located in the United States of America of a bank
incorporated under the Applicable Laws of any jurisdiction outside the United
States of America having on the date of such Investment combined capital,
surplus and undivided profits of at least $500,000,000, or total assets of at
least $15,000,000,000, in each case due within one year after the date of the
making of the Investment;

 

(e)                                  repurchase agreements
covering Government Securities executed by a broker or dealer registered under Section 15(b) of
the Securities Exchange Act of 1934, as amended, having on the date of the
Investment capital of at least $50,000,000, due within ninety (90) days
after the date of the making of the Investment; provided that the maker
of the Investment receives written confirmation of the transfer to it of record
ownership of the Government Securities on the books of a “primary dealer” in
such Government Securities or on the books of such registered broker or dealer,
as soon as practicable after the making of the Investment;

 

(f)                                    readily marketable
commercial paper or other debt securities issued by corporations doing business
in and incorporated under the Applicable Laws of the United States of America
or any State thereof or of any corporation that is the holding company for a
bank described in clause (c) or (d) above given on the date of
such Investment a credit rating of at least P 1 by Moody’s Investors Service, Inc.
or A 1 by Standard & Poor’s Rating Group (a division of McGraw Hill, Inc.),
in each case due within one year after the date of the making of the Investment;

 

(g)                                 “money market preferred
stock” issued by a corporation incorporated under the Applicable Laws of the
United States of America or any State thereof (i) given on the date of
such Investment a credit rating of at least AA by Moody’s Investors Service, Inc.
and AA by Standard & Poor’s Rating Group (a division of McGraw Hill, Inc.),
in each case having an investment period not exceeding fifty (50) days or (ii) to
the extent that investors therein have the benefit of a standby letter of
credit issued by Lender or a bank described in clauses (c) or (d) above;
provided that (y) the amount of all such Investments issued by the
same issuer does not

 

8

 

exceed
$5,000,000 and (z) the aggregate amount of all such Investments does not
exceed $15,000,000;

 

(h)                                 a readily redeemable “money
market mutual fund” sponsored by a bank described in clause (c) or (d) hereof,
or a registered broker or dealer described in clause (e) hereof, that
has and maintains an investment policy limiting its investments primarily to
instruments of the types described in clauses (a) through (g) hereof
and given on the date of such Investment a credit rating of at least AA by
Moody’s Investors Service, Inc. and AA by Standard & Poor’s
Rating Group (a division of McGraw Hill, Inc.); and

 

(i)                                     corporate notes or bonds
having an original term to maturity of not more than one year issued by a
corporation incorporated under the Applicable Laws of the United States of
America, or a participation interest therein; provided that (i) commercial
paper issued by such corporation is given on the date of such Investment a
credit rating of at least AA by Moody’s Investors Service, Inc. and AA by
Standard & Poor’s Rating Group (a division of McGraw Hill, Inc.),
(ii) the amount of all such Investments issued by the same issuer does not
exceed $5,000,000 and (iii) the aggregate amount of all such Investments
does not exceed $15,000,000.

 

“Change
in Control” means (a) any transaction or series of related transactions
in which any Unrelated Person or two or more Unrelated Persons acting in
concert acquire beneficial ownership (within the meaning of Rule 13d 3(a)(1) under
the Securities Exchange Act of 1934, as amended), directly or indirectly, of
30% or more of the ownership interests in Borrower or (b) Borrower
consolidates with or merges into another Person or conveys, transfers or leases
all or substantially all of its assets to any Person or any Person consolidates
with or merges into Borrower, in either event pursuant to a transaction in
which the ownership interests in Borrower are changed into or exchanged for
cash, securities or other property, with the effect that any Unrelated Person
becomes the beneficial owner, directly or indirectly, of 30% or more of ownership
interests in Borrower or that the Persons who were the holders of ownership
interests in Borrower immediately prior to the transaction hold less than 70%
of the interests of the surviving entity after the transaction.  For purposes of the foregoing, the term “Unrelated
Person” means any Person other than (i) any Affiliate of any
thereof and members of the immediate family of any thereof, (ii) a
Subsidiary of Borrower, (iii) an employee stock ownership plan or other
employee benefit plan covering the employees of Borrower and its Subsidiaries,
or (iv) Charles F. Willis IV, his trusts, family limited partnerships or
heirs).

 

“Charges”
means all Federal, state, county, city, municipal, local, foreign or other
governmental taxes (including taxes owed to PBGC at the time due and payable),
levies, assessments, charges, liens, and all additional charges, interest,
penalties, expenses, claims or encumbrances upon or relating to (a) the
Collateral, (b) the Obligations, (c) the employees, payroll, income
or gross receipts of Borrower, (d) the ownership or use of any assets by
Borrower, or (e) any other aspect of Borrower’s business.

 

“Chattel
Paper” means all “chattel paper,” as such term is defined in the UCC, now
owned or hereafter acquired by any Person, wherever located, but excluding
Leases.

 

9

 

“Claim”
means any and all suits, actions, or proceedings in any court or forum, at law,
in equity or otherwise; costs, fines, deficiencies, or penalties; asserted
claims or demands by any Person; arbitration demands, proceedings or awards;
damages, losses, liabilities and expenses (including reasonable attorneys’ fees
and disbursements and other costs of collection, defense or appeal);
enforcement of rights and remedies; or criminal, civil or regulatory
investigations.

 

“Closing
Date” means the time and Business Day on which the conditions set forth in Section 4.1 are satisfied or waived.

 

“Collateral”
means all of the “Collateral” as defined in each of the Collateral Documents.

 

“Collateral
Documents” means, collectively, the Security Agreement, the Mortgage and
Security Agreement, the Custodial Agreement, the Stock Pledge Agreement, each
Owner Trustee Mortgage and Security Agreement, each Beneficial Interest Pledge
Agreement, each Subsidiary Guaranty, each Owner Trustee Guaranty, each Leasing
Subsidiary Security Assignment, UCC financing statements, and such other
agreements, and all amendments thereto, instruments and documents as Security
Agent may reasonably require pursuant to this Agreement.

 

“Commitment
Assignment and Acceptance” means a commitment assignment and acceptance
substantially in the form of Exhibit C.

 

“Compliance
Certificate” means a Compliance Certificate in the form attached hereto as Exhibit D signed by an Authorized
Signatory.

 

“Contract”
means, individually and collectively, all contracts, leases, undertakings, and
agreements (other than rights evidenced by Chattel Paper, Documents or
Instruments) in or under which any Person may now or hereafter have any right,
title or interest, including any agreement relating to the terms of payment or
the terms of performance of any Account.

 

“Contracting
State” shall have the meaning given to such term under Article 4 of
the Cape Town Convention.

 

“Contractual
Obligation” means, as to any Person, any provision of any outstanding
security issued by that Person or of any material agreement, instrument or
undertaking to which that Person is a party or by which it or any of its
property is bound.

 

“Credit
Facility” means the Revolving Commitment, Swing Line Commitment and
issuance of Letters of Credit hereunder.

 

“Credit
Facility Lenders” means, collectively, the Lenders, the Swing Line Lender,
and Issuing Lender.

 

“Custodial
Agreement” means the Custodial Agreement, dated as of June 29, 2004,
by and among The Bank of New York, as custodian, the Borrower and Fortis Bank

 

10

 

(Nederland)
NV, as amended from time to time, or any other custodial agreement, if any, as
may be approved by the Security Agent.

 

“Custodian”
means the Security Agent or the custodian under the Custodial Agreement, if
any.

 

“Default”
means any event which, with the passage of time or notice or both, would,
unless cured or waived, become an Event of Default.

 

“Default
Rate” means (i) for all Base Rate Loans and LIBOR Loans converted into
Base Rate Loans, a per annum default rate equal to the applicable Base Rate
plus two percent (2.0%), and (ii) for all then outstanding LIBOR
Loans, a per annum default rate equal to the Applicable LIBOR Rate plus two
percent (2.0%), which Default Rate with respect to any LIBOR Loans shall be in
effect until the earlier to occur of (x) the cure of the applicable “Event
of Default” and (y) the end of the LIBOR Loan Period, at which time
(provided an Event of Default is then continuing) any such LIBOR Loan(s) shall
automatically convert to Base Rate Loan(s) and accrue interest at the
Default Rate set forth herein for Base Rate Loans.

 

“Defaulting
Lender” means a Lender which fails to fund any amounts due from such Lender
to any Agent, Lender or the Borrower under this Agreement within one (1) Business
Day following written notice by the Administrative Agent of such failure to
fund. A Lender shall cease to be a “Defaulting Lender” immediately upon the
cure of such failure to fund.

 

“Demand
Deposit Account” means account number *** in the name of Borrower
maintained at the Administrative Agent.

 

“Designated
Eurodollar Market” shall have the meaning set forth in Section 2.8.5 hereof.

 

“Distribution”
shall have the meaning set forth in Section 7.14
hereof.

 

“Documents”
means all “documents,” as such term is defined in the UCC, now owned or
hereafter acquired by any Person, wherever located, including all bills of
lading, dock warrants, dock receipts, warehouse receipts, and other documents
of title, whether negotiable or non-negotiable.

 

“Dollars”
means lawful currency of the United States.

 

“EASA”
means the European Aviation Safety Agency.

 

“Eligible
Asset” means, at any time, an Engine or item of Equipment that meets all of
the following criteria:

 

(a)                                  the purchase
price of which has been paid in full and it is not subject to any other
financing;

 

***                 Confidential information omitted pursuant
to a request for confidential treatment filed separately with the Securities
and Exchange Commission

 

11

 

(b)                                 as to which an
Engine Owner (in the case of an Engine) or Equipment Owner (in the case of
items of Equipment) or Lessor (in the case of a Lease) has good and marketable
title, on which Security Agent has a fully perfected first priority Lien, and
which is not subject to any other Lien other than Permitted Liens;

 

(c)                                  as to which, if
owned by an Owner Trustee, the Borrower (or its Wholly-Owned Subsidiary, if
applicable) shall have executed and delivered to Security Agent a Beneficial
Interest Pledge Agreement covering, among other things, its Beneficial Interest
in the owner trust which owns such Engine(s) or item(s) of Equipment
and/or Lease, and as to which the Owner Trustee shall have executed and
delivered to Security Agent an (x) Owner Trustee Mortgage and Security
Agreement covering, among other things, such Engines(s), items of Equipment
and/or Lease, (y) a Trust Agreement and (z) an Owner Trustee
Guaranty;

 

(d)                                 as to which the
Engine Owner (in the case of an Engine) or Equipment Owner (in the case of
items of Equipment) or the Lessor (in the case of a Lease) shall have executed
and delivered to Security Agent and/or filed (x) a Mortgage and Security
Agreement covering, among other things, such Engine(s), items of Equipment
and/or Lease and (y) the other documentation required in respect of
Engines as set forth in Section 4.3;
and

 

(e)                                  as to which, in
the case of Engines or items of Equipment, it has not suffered an Event of
Loss, it is being used solely for lawful purposes and in the ordinary course of
business of the Engine Owner or Equipment Owner and, in the case of Engines and
Equipment subject to Lease, the Lessee, and it is insured against loss by
either the Engine Owner, Equipment Owner or the Lessee in accordance with this
Agreement and industry practice.

 

“Eligible
Assignee” means (a) another Lender, (b) with respect to any
Lender, any Affiliate of that Lender, (c) any commercial bank having total
assets of $1,000,000,000 or more, and (d) any savings bank, savings
and loan association or entity owned by the U.S. Government which, in each case
(A) has total assets of $1,000,000,000 or more, (B) is engaged in the
business of lending money and extending credit under credit facilities
substantially similar to those extended under this Agreement and (C) is
operationally and procedurally able to meet the obligations of a Lender
hereunder to the same degree as a commercial bank; provided that each
Eligible Assignee must either (aa) be organized under the laws of the
United States of America, any State thereof or the District of Columbia or
(bb) be organized under the laws of the Cayman Islands or any country
which is a member of the Organization for Economic Cooperation and Development
(“OECD”), or a political subdivision of such a country, and (i) act
hereunder through a branch, agency or funding office located in the United
States of America or in a country which is a member of the OECD and (ii) be
exempt from withholding of tax on interest and deliver the documents related
thereto pursuant to Section 12.17.

 

“Eligible
Engine” means an Engine that is an Eligible Asset.

 

“Eligible
Equipment” means Equipment that satisfies each of the following
requirements:

 

12

 

(a)                                  it is an
Eligible Asset; and

 

(b)                                 it is an APU
for a Stage III Aircraft, a Turboprop Engine, or Parts; and

 

(c)                                  in the case of
Parts, it satisfies the requirements of Eligible Parts;

 

provided,
that all of the Equipment listed on Schedule
1.1c shall constitute Eligible Equipment.

 

“Eligible
Lease” means a Lease that satisfies each of the following requirements (provided
that in respect of a Leasing Subsidiary, the requirements below (except
where otherwise indicated) shall apply both to the Head Lease in respect of
which the Borrower is Lessor and to the sublease and sublessee in respect of
which a Leasing Subsidiary is sublessor):

 

(a)                                  it is with a
Lessee for the Lease of Eligible Engines and/or Eligible Equipment;

 

(b)                                 it is freely
assignable and transferable for security purposes, assuming satisfaction of any
notice or consent conditions and, except for a Head Lease of any Engine or item
of Equipment to a Leasing Subsidiary, prohibits assignment in whole or in part
by the Lessee thereof;

 

(c)                                  it provides
that the Lessee’s obligations thereunder are absolute and unconditional and which
obligations are not, either pursuant to the terms of such Lease or otherwise,
subject to contingencies, defense, deduction, set-off, reduction, claim or
counterclaim of any kind whatsoever and as to which no defenses, deductions,
set-offs, reductions, claims or counterclaims exist or have been asserted by
the Lessee or anyone on its behalf and the Borrower has no material obligations
thereunder, including without limitation, any service or maintenance of the
related Equipment (excluding agreements to share in the costs of applicable
airworthiness directives), other than the obligation to sell, lease or finance
the Equipment and grant a covenant of quiet enjoyment to such lessee, whereby
Lessor covenants not to repossess or to disturb the lessee’s possession or use
of a leased asset so long as the lessee is in compliance with its obligations
under the lease;

 

(d)                                 it is a triple
net contract and with respect to which the Lessee thereunder is responsible for
all payments in connection therewith, including payment of all taxes (including
sales and use taxes), insurance and maintenance expenses (or payment of
maintenance reserves in lieu thereof) and all other expenses pertaining to the
assets subject thereto;

 

(e)                                  with respect to
which the Borrower’s books and records are accurate, complete and genuine;

 

(f)                                    the rent is
payable in Dollars or in Euros by periodic, fixed Lease payments; provided
that the Borrower will maintain Foreign Exchange Contracts covering all
Leases payable in Euros in the event the aggregate amount included in the
Borrowing Base in respect of Engines and/or Equipment subject to such Leases at
any time exceeds five percent (5%) of the Borrowing Base;

 

13

 

(g)                                 it is the valid
and binding obligation of the parties thereto, is in full force and effect and
each Engine and/or item of Equipment leased thereunder has been delivered to
and accepted by the Lessee;

 

(h)                                 other than a
Leasing Subsidiary (with respect to a Head Lease),  the Lessee under which is not a Subsidiary, employee, agent
or other Affiliate of the Borrower;

 

(i)                                     it requires the
Lessee to comply with all maintenance, return, alteration, replacement, pooling
and sublease conditions as typically found in leases for similar types of
engines or equipment and as necessary to maintain at all times the
airworthiness certification and serviceability status of the related Engine or
Engines and/or Equipment pursuant to all applicable governmental and regulatory
requirements;

 

(j)                                     it requires the
Lessee to provide liability insurance, all risk ground and flight engine
coverage for damage or loss of the related Engine or Engines, and war risk
insurance (if applicable), and with respect to which Agents are named as
additional insureds on liability insurance and Security Agent is named as a
loss payee on hull insurance as set forth in Section 6.4
of this Agreement;

 

(k)                                  Unless Security
Agent or Requisite Lenders have  confirmed
to the Borrower that, based on the credit quality of the Lessee, such insurance
is not necessary, it requires the Lessee to provide confiscation and
expropriation insurance, with deductibles that are acceptable to Agents, for
Engines or Equipment operated (x) on routes with respect to which it is
customary for air carriers flying comparable routes to carry such insurance or (y) in
any area designated by companies providing such coverage as a recognized or
threatened war zone or area of hostilities or an area where there is a
substantial risk of confiscation or expropriation;

 

(l)                                     the Lessee is
not based in, and the Lease requires that the related Engine(s) or
Equipment not be operated in (i) unless appropriate insurance as determined by
Security Agent is obtained,  any
country or any jurisdiction that would not be covered by or would void any
insurance coverage required hereunder, or (ii) any country which is
subject to any United States, European Union or United Nations sanctions or the
lease to which would violate United States law, rule or regulation or
other restrictions;

 

(m)                               the designated “Chattel
Paper” original of which is in the possession of the Custodian or, with respect
to chattel paper, if there shall be more than one original, then the sole
counterpart which shall constitute “chattel paper” for purposes of perfection
by possession under the UCC shall be in the possession of the Custodian; provided,
originals of Indemnified Original Lease shall not be required to be in the
possession of the Custodian.

 

(n)                                 for which, in
the case of any Head Lease under which a Leasing Subsidiary is the Lessee, (i) the
Lease and Head Lease have been assigned to Security Agent pursuant to a Leasing
Subsidiary Security Agreement; (ii) a charge over the Lease and Head Lease
have been filed in the appropriate office in Ireland together with such other
filings or recordings as are deemed reasonably necessary in Ireland to protect
the interests of Security Agent; (iii) the sublessee thereunder is not
domiciled or whose chief executive office is not located in a non-U.S.
jurisdiction in which the ability of Security Agent to foreclose upon and

 

14

 

receive
possession or sell any related Engine or item of Equipment is unsatisfactory
(in each case, as reasonably determined by Security Agent); and (iv) Security
Agent shall have received opinions of legal counsel (in England, assuming the
sublease or any of the other transaction documents are governed by English law)
as to such Lessee’s and sublessees’ authority to enter into the respective
Lease and Head Lease, such opinions to be in form and substance reasonably
satisfactory to Security Agent;

 

(o)                                 that, if the
Lessee (other than a Leasing Subsidiary under a Head Lease) of the related
Engine(s) and/or item(s) of Equipment is domiciled or whose chief executive
office is located in a Non-U.S. jurisdiction, (a) such Engine(s) and
item(s) of Equipment 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 Security Agent the Owner Trustee Guaranty, (c) such Owner
Trustee shall have executed and delivered to Security Agent an Owner Trustee
Mortgage and Security Agreement covering, among other things, such Engine(s),
such item(s) of Equipment and such Lease, and (d) the Borrower shall
have executed and delivered to Security Agent the Beneficial Interest Pledge
Agreement covering, among other things, the Borrower’s Beneficial Interest in
the owner trust which owns such Engine(s) or item(s) of Equipment; and

 

(p)                                 if it contains
a fixed purchase option, the terms thereof provide for payment upon exercise
thereof of an amount which is not less than the Net Book Value of the Engine(s) or
the item(s) of Equipment being purchased determined at the date or dates
such option is exercisable.

 

“Eligible
Parts’’ means Parts that in each case (a) unless consented to in
writing by Administrative Agent, are for Eligible Engines or aircraft supported
by Eligible Engines, (b) are not unmerchantable or obsolete, and (d) have
been held by the Borrower for not more than twelve (12) months from the
date of purchase of such Part (or in the case of disassembled engine
parts, twelve (12) months from the date a value was allocated to such
parts), (e) are physically tagged with identifiable part or serial numbers,
(f) are not subject to a consignment or lease arrangement or held on the
premises of an air carrier certificated under 49 U.S.C. 44705, and (g) comply
with all applicable Aviation Authority requirements.  Eligible Parts will be valued at the lower of
cost or Parts Market Value.

 

“Emerging
Country” shall have the meaning given thereto on Schedule 1.1b (Borrowing Base Geographic Limitations).

 

“Engine”
means any Stage III compliant jet propulsion engine manufactured by an
Acceptable Manufacturer, owned by an Engine Owner and designed or suitable for
use to propel an aircraft, whether or not subject to a Lease.

 

“Engine
Owner” means the Borrower or any Owner Trustee.

 

“Environmental
Liabilities and Costs” means all liabilities, obligations, responsibilities,
remedial actions, removal costs, losses, damages, costs and expenses that
relate to any health or safety condition regulated under any Environmental Law
or in connection with any other environmental matter or Release, threatened
Release, or the presence of any Hazardous Material.

 

15

 

“Equipment”
means all Turboprop Engines, APUs and Parts owned by the Equipment Owner,
whether or not such items are subject to a Lease.

 

“Equipment
Market Value” means, with respect to an item of Equipment other than Parts,
an amount as determined by the Appraiser to be the amount that would be
obtained in an arm’s length cash transaction between willing, able and
knowledgeable parties, acting prudently, with an absence of duress and with a
reasonable time period available for marketing, adjusted to account for the
maintenance status of such item of Equipment, but without taking into account
any existing maintenance reserves, any value attributed to Lease payments or
any security deposits under the related Lease.

 

“Equipment
Owner” means the Borrower or any Owner Trustee.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974 and the regulations
thereunder.

 

“ERISA
Affiliate” means any trade or business (whether or not incorporated) which
is a member of a “controlled group of corporations,” a group of trades or
businesses under “common control,” or an “affiliated service group,” which
includes Borrower within the meaning of Sections 414(b), (c), (m) or (o) of
the Internal Revenue Code of 1986.

 

“Euro”
means the single official currency of the participating member states of the
European Monetary Union.

 

“Event
of Default” means any of the events specified in Section 9.1.

 

“Event
of Loss” means (i) if an Engine or item of Equipment is not subject to
a Lease, any of the following events: (x) the actual or constructive total
loss of such Engine or item of Equipment or the agreed or compromised total
loss of such Engine or item of Equipment; (y) its destruction, damage beyond
economic repair or being rendered permanently unfit for normal use for any
reason whatsoever and (z) any capture, condemnation, confiscation,
requisition, purchase, seizure or forfeiture of, or any taking for use or of
title to, such Engine or item of Equipment, in each case, that shall have
resulted in the loss of possession or title of such Engine or item of Equipment
by the Lessor (other than a requisition for use for not more than one hundred
eighty (180) days by the United States Government) and (ii) in
addition, if an Engine or item of Equipment is subject to a Lease, any events
defined as an “Event of Loss,” “Casualty Occurrence” or similar term in such
Lease.  An Event of Loss shall be deemed
to have occurred on the earlier to occur of (a) the Borrower’s or
Administrative Agent’s (as applicable) receipt of insurance proceeds in respect
of such Engine or Equipment and (b) the date that is forty-five (45) days
after the date of such loss, damage or destruction.

 

“FAA”
means the Federal Aviation Administration or any Governmental Authority
succeeding to the functions thereof.

 

“FAR”
means the Federal Aviation Regulations issued by the FAA as in effect from time
to time.

 

16

 

“Federal
Funds Rate” means, as of any date of determination, the rate set forth in
the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, “H.15(519)”) for such date opposite the caption “Federal
Funds (Effective)”.  If for any relevant
date such rate is not yet published in H.15(519), the rate for such date will
be the rate set forth in the daily statistical release designated as the
Composite 3:30 p.m. Quotations for U.S. Government Securities, or any
successor publication, published by the Federal Reserve Bank of New York (including
any such successor, the “Composite 3:30 p.m. Quotation”) for such
date under the caption “Federal Funds Effective Rate”.  If on any relevant date the appropriate rate
for such date is not yet published in either H.15(519) or the Composite 3:30 p.m.
Quotations, the rate for such date will be the arithmetic mean of the rates for
the last transaction in overnight Federal funds arranged prior to 9:00 a.m.
(New York City time) on that date by each of three leading brokers of Federal
funds transactions in New York City selected by Administrative Agent.  For purposes of this Agreement, any change in
the Base Rate due to a change in the Federal Funds Rate shall be effective as
of the opening of business on the effective date of such change.

 

“Financial
Statements” means the income statement, balance sheet and statement of cash
flows of Borrower and its Subsidiaries, internally prepared for each Fiscal
Quarter, and audited for each Fiscal Year, in each case prepared in accordance
with GAAP including the notes and schedules thereto.

 

“Fiscal
Quarter” means any of the quarterly accounting periods of Borrower,
specifically ending March 31, June 30, September 30, and December 31
of each year.

 

“Fiscal
Year” means the twelve month fiscal period of Borrower ending December 31
of each year.  Subsequent changes of the
Fiscal Year of Borrower shall not change the term “Fiscal Year” unless
Administrative Agent shall consent in writing to such change.

 

“Foreign
Exchange Contract” means any foreign exchange contract, currency exchange
contract or other contractual arrangement protecting a Person against
fluctuations in the exchange rate of different currencies.

 

“GAAP”
means generally accepted accounting principles as in effect from time to time
in the United States, consistently applied, subject to Section 1.2 below.

 

“Governmental
Authority” means (a) any international, foreign, federal, state,
county or municipal government, or political subdivision thereof, (b) any
governmental or quasi governmental agency, authority, board, bureau,
commission, department, instrumentality or public body or (c) any court or
administrative tribunal of competent jurisdiction.

 

“Government
Securities” means readily marketable direct full faith and credit
obligations of the United States of America or obligations guaranteed by the
full faith and credit of the United States of America.

 

“Guaranteed
Indebtedness” means, with respect to any Person, any obligation of such
Person guaranteeing any indebtedness, lease, dividend, or other obligation (“primary
obligations”) of any other Person (the “primary obligor”) in any
manner, including any obligation or arrangement of such Person (a) to
purchase or repurchase any such primary obligation, (b) to

 

17

 

advance
or supply funds (1) for the purchase or payment of any such primary
obligation, or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet condition of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment
of such primary obligation, or (d) to indemnify the owner of such primary
obligation against loss in respect thereof (other than ordinary course
indemnities or guaranties included in leases, purchase and sale agreements,
repair and maintenance agreements, servicing and other consulting agreements,
or ordinary course trade payables or liabilities).  The amount of any “Guaranteed Indebtedness”
at any time shall be deemed to be an amount equal to the lesser at such time of
(x) the stated or determinable amount of the primary obligation in respect
of which such Guaranteed Indebtedness is made, and (y) the maximum amount
for which such Person may be liable pursuant to the terms of the instrument
embodying such Guaranteed Indebtedness; or, if not stated or determinable, the
maximum reasonably anticipated liability (assuming full performance) in respect
thereof.

 

“Hazardous
Material” means any substance, material or waste, the generation, handling,
storage, treatment or disposal of which is regulated by any Governmental
Authority, or forms the bases of liability now or hereafter under, any
Environmental Law in any jurisdiction in which Borrower has owned, leased, or
operated real property or disposed of hazardous materials other than cleaning,
maintenance or office supplies used in the ordinary course of business and in
compliance with Environmental Laws.

 

“Head
Lease” means a lease between an Engine Owner or Equipment Owner and a
Leasing Subsidiary substantially in the form of the sublease between the
Leasing Subsidiary and the operator (with any amendment thereto as Security
Agent shall approve in writing).

 

“Indebtedness”
means as to any Person at any time (without duplication) and, for the Borrower,
determined on a consolidated basis:  (a) all
indebtedness for borrowed money or for the deferred purchase price of property
or services (including reimbursement and all other obligations with respect to
surety bonds, letters of credit (including Letters of Credit) and bankers’
acceptances, whether or not matured); (b) all obligations evidenced by
notes, bonds, debentures or similar instruments; (c) all indebtedness
created or arising under any conditional sale or other title retention
agreements with respect to property acquired by Borrower (even though the
rights and remedies of the seller or lender under such agreement in the event
of default are limited to repossession or sale of such property); (d) all
Capital Lease Obligations; (e) all Guaranteed Indebtedness; (f) all
Indebtedness referred to in clauses (a), (b), (c), (d) or (e) above
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien upon or in property
(including accounts and contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such Indebtedness; (g) with
respect to Borrower, the Obligations; (h) all liabilities under Title IV
of ERISA; (i) the net present value of the non-cancelable payments owed under
any Lease which is qualified as an operating lease in accordance with GAAP for
engines, aircraft and aircraft and engine parts, using a 10% discount rate; and
(j) all obligations with respect to deposits or maintenance reserves to
the extent not supported by cash reserved specifically therefor; provided,
however, that the term Indebtedness shall not include ordinary course
trade accounts payable.

 

18

 

“Indemnified
Original Lease” means a Lease for which the “Chattel Paper” original is
lost and for which Borrower has been provided a binding and assignable
indemnification from Custodian with respect to any risk of loss with respect to
such lost original.

 

“Indemnified
Person” means Administrative Agent, Security Agent, Issuing Lender, Swing
Line Lender, and each Lender and each of the foregoing parties’ respective
Affiliates, employees, attorneys and agents.

 

“Instruments”
means all “instruments,” as such term is defined in the UCC, now owned or
hereafter acquired by Borrower, wherever located, including all certificated
securities and all notes and other evidences of indebtedness, other than
instruments that constitute, or are a part of a group of writings that
constitute, Chattel Paper.

 

“Intellectual
Property” means all of the following now owned or hereafter acquired by
Borrower:  (a) patents, trademarks,
trade dress, trade names, service marks, copyrights, trade secrets and all
other intellectual property or Licenses thereof; and (b) all Proceeds of
the foregoing.

 

“Interest
Rate Protection Agreement” means a written agreement providing for “swap”, “cap”,
“collar” or other interest rate protection with respect to any Indebtedness.

 

“International
Interest” shall have the meaning given to such term in the Cape Town
Convention.

 

“International
Registry” shall have the meaning given to such term in the Cape Town
Convention.

 

“Investment”
means, when used in connection with any Person, any investment by or of that
Person, whether by means of purchase or other acquisition of stock or other
securities of any other Person or by means of a loan, advance creating a debt,
capital contribution, guaranty or other debt or equity participation or
interest in any other Person, including any partnership and joint
venture interests of such Person.  The
amount of any Investment shall be the amount actually invested (minus
any return of capital with respect to such Investment which has actually been
received in Cash or has been converted into Cash), without adjustment for subsequent
increases or decreases in the value of such Investment.

 

“Issuing
Lender” means Union Bank, N.A.

 

“JAA”
means the Joint Airworthiness Authorities of the European Union.

 

“Lead
Arranger” means a Lender in charge of arranging the Credit Facility.

 

“Lease”
means, with respect to an Engine or an item of Equipment, any written lease
agreement, general terms agreement or other similar arrangement, as may be in
effect with respect to such Engine or item of Equipment between a Lessor,
including an Engine Owner, an Equipment Owner or a Leasing Subsidiary, and a
Lessee, as such agreement or arrangement may be amended, modified, extended,
supplemented, assigned or novated from time to time in accordance with the
terms thereof and the Loan Documents.

 

19

 

“Leasing
Subsidiary” means each of WLFC (Ireland) Limited and, subject to
satisfaction of the conditions for a Subsidiary set forth in Section 7.15.5, any other Subsidiary
of Borrower to which an Engine Owner or Equipment Owner may lease one or more
Engines or items of Equipment pursuant to a Head Lease and which are Lessors
under Leases of such Engines or Equipment to Lessees.

 

“Leasing
Subsidiary Security Assignment” means, collectively, those certain Leasing
Subsidiary Security Assignments in the form attached hereto as Exhibit L, each as amended, modified
or supplemented from time to time, made by each Leasing Subsidiary in favor of
Security Agent, whereby each Leasing Subsidiary assigns to Security Agent all
of such Leasing Subsidiary’s rights under subleases of Engines and Equipment.

 

“Lender”
means each Lender named in Schedule 2.1
and each other party that may be named a “Lender” under this Agreement.

 

“Lender
and Non-Lender Obligations” means (i) all of the Obligations and (ii) all
liabilities and obligations of the Borrower under any Interest Rate Protection
Agreements, Foreign Exchange Contracts, Cash Management Services Agreements,
including any Non-Lender Protection Agreements (subject only to Permitted Liens).

 

“Lessee”
means the lessee of Engines or Equipment subject to a Lease (including a
Leasing Subsidiary in its capacity as lessee under a Head Lease).

 

“Lessor”
means (i) any Engine Owner or Equipment Owner party to a Lease as lessor
and (ii) a Leasing Subsidiary as sublessor under a Lease.

 

“Letter
of Credit” means an irrevocable standby letter of credit or a commercial
letter of credit issued for the account of Borrower pursuant to Section 2.3.

 

“Letter
of Credit Fees” means those fees to be paid by Borrower to Issuing Lender
and/or Administrative Agent for the ratable benefit of Lenders or for the
benefit of Issuing Lender as set forth in Section 2.6.2.

 

“Letter
of Credit Obligations” means all obligations incurred by Issuing Lender at
the request of Borrower in connection with the issuance of Letters of Credit.

 

“Leverage
Ratio” means the ratio set forth in Section 6.14.2.

 

“LIBOR”
means, for any LIBOR Loan Period, the rate determined by Administrative Agent
to be the per annum rate (rounded upward to the nearest one-hundredth of one
percent (1/100%)) at which deposits in immediately available funds and in
lawful money of the United States would be offered to Administrative Agent by
reference to the British Bankers’ Association Interest Settlement Rates for
deposits in dollars (as set forth by any service selected by Administrative
Agent that has been nominated by the British Banker’s Association as an
authorized information vendor for the purpose of displaying such rates) at
approximately 11:00 a.m. (London time) two (2) Business Days
before the first day of such LIBOR Loan Period, in an amount equal to the
principal amount of, and for a length of time equal to the LIBOR Loan Period
for, the LIBOR Loan sought by Borrower.

 

20

 

“LIBOR
Basis” means a per annum interest rate equal to the quotient of (a) LIBOR
divided  by (b) one minus the LIBOR Reserve
Percentage, stated as a decimal.  The
LIBOR Basis shall be rounded upward to the nearest one thirty second of one
percent (1/32%) and, once determined, shall remain unchanged during the
applicable LIBOR Loan Period, except for changes to reflect adjustments in the
LIBOR Reserve Percentage.

 

“LIBOR
Loan” means a Revolving Loan that Borrower requests to be made as a LIBOR
Loan or that is reborrowed as, or converted to, a LIBOR Loan, in each case in
accordance with the provisions of Section 2.1.3.

 

“LIBOR
Loan Period” means, for each LIBOR Loan, each one (1), two (2), three (3) or
six (6) month period (or such other longer or shorter period as approved
by Lenders), as selected by Borrower pursuant to Section 2.1.3, during which LIBOR applicable to such
LIBOR Loan shall remain unchanged; provided, that (a) any
applicable LIBOR Loan Period that would otherwise end on a day that is not a
Business Day shall be extended to the next succeeding Business Day, unless such
Business Day falls in another calendar month, in which case such LIBOR Loan
Period shall end on the immediately preceding Business Day, (b) any
applicable LIBOR Loan Period which begins on a day for which there is no
numerically corresponding day in the calendar month during which such LIBOR
Loan Period is to end shall (subject to clause (a) above) end on the
last day of such calendar month, and (c) no LIBOR Loan Period shall extend
beyond the Maturity Date.

 

“LIBOR
Reserve Percentage” means the percentage in effect from time to time under
Regulation D of the Board of Governors of the Federal Reserve System as the
maximum reserve requirement applicable with respect to Eurocurrency Liabilities
(as that term is defined in Regulation D), whether or not any Lender has any
Eurocurrency Liabilities subject to such reserve requirement at that time.  The LIBOR Basis for any LIBOR Loan shall be
adjusted as of the effective date of any change in the LIBOR Reserve
Percentage.

 

“License”
means any license under any written agreement now owned or hereafter acquired
by Borrower granting the right to use any Intellectual Property or other
license of rights or interests now held or hereafter acquired by Borrower.

 

“Lien”
means, with respect to any property, any security deed, mortgage, deed to
secure debt, deed of trust, lien, pledge, assignment, charge, security
interest, title retention agreement, negative pledge, levy, execution, seizure,
attachment, garnishment, or other encumbrance of any kind in respect of such
property, whether or not perfected.

 

“Loan
Documents” means collectively, this Agreement, the Notes, the Collateral
Documents, and any and all other agreements, documents, or instruments (including
financing statements) entered into in connection with the transactions
contemplated by this Agreement, together with all alterations, amendments,
changes, extensions, modifications, refinancings, refundings, renewals,
replacements, restatements, or supplements, of or to any of the foregoing.

 

“Loans”
means all loans and advances made by Lenders to or for the benefit of Borrower
under this Agreement or under any of the Loan Documents, including the
Revolving

 

21

 

Loans
extended to Borrower under the Revolving Commitment, any Swing Line Loan(s) and
the undrawn and unreimbursed amounts of any Letter of Credit Obligations.

 

“Maintenance
Reserve Payments” means any payment (including any use payment) that is
based on the usage of an Engine or which is based on, or in respect of which,
the Lessor under a Lease may be obligated to reimburse the Lessee under such
Lease for specified maintenance activities with respect to the Engine subject
to such Lease.

 

“Material
Adverse Effect” means a material adverse effect on (a) the business,
property, assets, operations or condition (financial or otherwise) of Borrower,
(b) the ability of Borrower to pay or perform in accordance with the terms
of any of the Loan Documents taken as a whole, or (c) the rights and
remedies of any Credit Facility Lender under any of the Loan Documents.

 

“Maturity
Date” means the earliest of (a) three years after the Closing Date (November 19, 2012), (b) the date Credit Facility
Lenders’ obligation to make Loans and incur Letter of Credit Obligations is
terminated and the Obligations are declared to be due and payable pursuant to Section 9.2, or (c) the date of
prepayment in full by Borrower of the Obligations in accordance with the
provisions of Section 2.10.

 

“Maximum
Amount” means $240,000,000.00,
or such other increased or decreased amount as provided for under Sections 2.10 and 2.19 of this Agreement.

 

“Mortgage
and Security Agreement” means that certain Mortgage and Security Agreement,
in the form attached hereto as Exhibit G,
dated as of even date herewith, as amended, modified or supplemented from time
to time, made by Borrower in favor of Security Agent, whereby Borrower grants
to Security Agent a security interest in the “Collateral” as defined therein.

 

“Negative
Pledge” means a Contractual Obligation which contains a covenant binding on
Borrower or any of its Subsidiaries that prohibits Liens on any of its
Property, other  than (a) any such covenant contained in a
Contractual Obligation granting or relating to a particular Lien which affects
only the Property that is the subject of such Lien; (b) any such covenant
that does not apply to Liens securing the Obligations; and (c) permitted
junior Liens under Section 7.9.

 

“Net
Book Value” of an Engine or an item of Equipment shall be calculated as the
lesser of: (i) the book value of such Engine or item of Equipment
determined in accordance with GAAP as set forth on Borrower and its
Subsidiaries financial statements or (ii) such Engine’s Adjusted Base
Value or item of Equipment’s Equipment Market Value or Parts Market Value, as
the case may be, in each case reduced utilizing depreciation methods consistent
with current practice and GAAP.

 

“Net
Income” means, with respect to any fiscal period, the consolidated net
income (or loss) of Borrower and its Subsidiaries attributable to common
shareholders for that period (after taxes), determined in accordance with GAAP,
consistently applied, provided that “Net Income” shall not take into account gains
or losses resulting from changes in the fair market

 

22

 

value
of derivative instruments (within the meaning of Statement of Financial
Accounting Standards No. 133).

 

“New
Lender” means those lenders described in Section 2.19.4.

 

“Non-Defaulting
Lender” means any Lender which is not a Defaulting Lender.

 

“Non-Lender”
means a Person who is not a Credit Facility Lender and who has entered into a
Non-Lender Protection Agreement with Borrower.

 

“Non-Lender
Protection Agreement” means an Interest Rate Protection Agreement entered
into (i) between Borrower and a Non-Lender, including each such agreement
existing as of the date hereof, set forth on Schedule
5.22 hereto, or (ii) between Borrower and a Lender who during the
term of such agreement becomes a Non-Lender, and in each case, in clauses (i) and
(ii), which agreement or contract is nonetheless secured by the Collateral
pursuant to this Agreement on a pari passu basis with Lenders, subject to the
condition set forth in Section 7.13.

 

“Non-Recourse
Debt” shall mean Indebtedness for which the remedy for nonpayment or
non-performance of any obligation or any default (other than for breach of
standard representations and warranties or misapplication of funds) in respect
thereof is limited to specified collateral securing such indebtedness and in
respect of which the Borrower is not subject to any personal liability.

 

“Note”
means any note, including any Revolving Note or Swing Line Note, executed and
delivered by Borrower to any Credit Facility Lender under this Agreement, and “Notes”
means collectively all such notes executed and delivered by Borrower to each
Lender under this Agreement.

 

“Obligations”
means all loans, advances, debts, expenses reimbursements, fees, liabilities
and obligations, for the performance of covenants, tasks or duties or for
payment of monetary amounts (whether or not such performance is then required
or contingent, or amounts are liquidated or determinable) owing by Borrower to
any Lender, Swing Line Lender, or Issuing Lender of any kind or nature, present
or future, whether or not evidenced by any note, agreement or other instrument,
arising under this Agreement or in connection with any of the other Loan
Documents (including an Interest Rate Protection Agreement entered into in
connection with this Agreement and Foreign Exchange Contracts), and all
covenants and duties regarding such amounts. 
This term includes all principal, interest (including interest which
accrues after the commencement of any case or proceeding in bankruptcy, or for
the reorganization of Borrower), fees, Charges, expenses, reasonable attorneys’
fees and any other sum chargeable to Borrower under this Agreement or any of
the other Loan Documents or any Interest Rate Protection Agreement entered into
in connection with this Agreement or Foreign Exchange Contract, and all
principal and interest due in respect of the Loans.

 

“Off-Lease”
means, with respect to an Engine or item of Equipment , at the time of
determination or for any specified period, not subject to a Lease (or, in
respect of an Engine or item of Equipment subject to a Head Lease, not subject
to a Lease with a sublessee).

 

23

 

“Overadvance”
means the amount by which the aggregate amount of all Loans then outstanding
exceeds the Maximum Amount.

 

“Owner
Trust” means an owner trust created under a Trust Agreement.

 

“Owner
Trustee” means Wells Fargo Bank Northwest, National Association or another
bank or trust company reasonably satisfactory to the Administrative Agent and
the Security Agent acting as trustee under a Trust Agreement.

 

“Owner
Trustee Guaranty” means each and collectively those certain Owner Trustee
Guaranties, in the form attached hereto as Exhibit K,
as amended, modified or supplemented from time to time, made by Owner Trustee
in favor of Security Agent, whereby Owner Trustee guaranties performance of the
Obligations under the Loan Documents.

 

“Owner
Trustee Mortgage and Security Agreement” means, each and collectively,
those certain Owner Trustee Mortgage and Security Agreements, in the form
attached hereto as Exhibit J,
as amended, modified or supplemented from time to time, made by Borrower in
favor of Security Agent, whereby Owner Trustee grants to Security Agent a first
priority security interest in that certain Equipment or other collateral as
defined therein.

 

“Partial
Recourse Debt” shall mean Indebtedness of any Person a portion of which
(but in no event less than eighty-five (85%) percent of the principal amount
thereof) shall constitute Non-Recourse Debt.

 

“Parts”
means components of an aircraft or an Engine or any systems within an aircraft
or an Engine that have either been removed from an aircraft or an Engine or
have not yet been incorporated into an aircraft or an Engine.

 

“Parts
Market Value” means, with respect to any Parts, the “current market value”
(as such term is defined by the International Society of Transport Aircraft
Trading (ISTAT)) as determined by the Appraiser.  The current market value shall take into
consideration of, maintenance status of such assets, current trading history
and other methodologies as are consistent with the methodologies utilized in
current industry practices, but without taking into account any existing maintenance
reserves.

 

“Payment
Date” means the last day of each LIBOR Loan Period for a LIBOR Loan.

 

“PBGC”
means the Pension Benefit Guaranty Corporation or any successor thereto.

 

“Permitted
Indebtedness” means, as applied to Borrower, all Indebtedness other than
the Obligations hereunder, whether such other Indebtedness is secured or
unsecured, in an aggregate amount of up to $150,000,000.00; provided such
$150,000,000.00 maximum shall exclude any Indebtedness of WEST.

 

“Permitted
Liens” means, as applied to any Property: 
(a) Liens securing taxes, assessments, and other governmental
charges or levies (excluding any Lien imposed pursuant to

 

24

 

any
of the provisions of ERISA that would result in an Material Adverse Effect) or
the claims of materialmen, mechanics, carriers, repairmen, warehousemen, or
landlords or other like Liens, but which (1) are for amounts not yet due,
or (2) which are being contested in good faith by appropriate proceedings
and for which Borrower shall have set aside on its books adequate reserves with
respect thereto in accordance with GAAP, provided that such contested claims
shall not exceed an aggregate amount of $5,000,000.00; (b) Liens consisting of
deposits or pledges made in the ordinary course of business in connection with,
or to secure payment of, obligations under worker’s compensation, unemployment
insurance, or similar legislation; (c) Liens constituting encumbrances in
the nature of zoning restrictions, easements, and rights of way or restrictions
of record on use of real property which do not materially detract from the
value of such property or impair the use thereof in the business of Borrower; (d) Liens
of record set forth in Schedule 1.1d;
(e) Liens created under the Loan Documents; (f) the rights of any
Lessee or sublessee under any Lease to utilize any Collateral pursuant to the
terms of a Lease; (g) Liens arising in connection with legal or equitable
proceedings against Borrower, which Borrower is contesting with diligence and
good faith and which Liens do not have a Material Adverse Effect; (h) liens
in respect of personal property leases that do not affect any assets included
in the Borrowing Base, which, in the aggregate, are not substantial in amount
and do not materially detract from the value of the property subject thereto or
interfere with the ordinary conduct of the business of the Borrower so as to
cause a Material Adverse Effect; (i) any Lien on any asset not included in
the Borrowing Base to secure Indebtedness permitted hereunder; (j) Liens
securing Indebtedness that has since been repaid in full, which filings
Borrower cannot independently terminate; (k) Liens arising out of
judgments that do not constitute an Event of Default under this Agreement; (l) any
Lien arising by virtue of any statutory or common law provision relating to
banker’s liens, rights of set-off or similar rights and remedies as to deposit
accounts or other funds maintained with a creditor depository institution in
the ordinary course of business; (m) Liens securing Capital Lease Obligations
on assets subject to such leases provided that such capitalized leases
are otherwise permitted under this Agreement; (n) Liens arising from the
following types of liabilities of a lessee or any other operator of an Engine
or item of Equipment, so long as such liabilities are either not yet due or are
being contested in good faith through appropriate proceedings that do not give
rise to any reasonable likelihood of the sale, forfeiture or other loss of such
Engine or item of Equipment, title thereto or Security Agent’s security
interest therein or of criminal or unindemnified civil liability on the part of
the Borrower, any Bank or any Agent and with respect to which the lessee
maintains adequate reserves (in the reasonable judgment of the Borrower):  (A) fees or charges of any airport or
air navigation authority, (B) judgments that do not constitute an Event of
Default under this Agreement, or (C) salvage or other rights of insurers; (o) Liens
on assets not included in the Borrowing Base evidenced by UCC financing
statements which are expressly permitted under the terms of the Loan Documents;
and (p) Liens on assets which are not Collateral securing Permitted
Indebtedness in an aggregate amount not in excess of $150,000,000.00.

 

“Person”
means any individual or entity, including a trustee, sole proprietorship,
partnership, limited partnership, limited liability partnership, joint venture,
trust, unincorporated organization, association, corporation, limited liability
company, institution, public benefit corporation, entity or government (whether
Federal, state, county, city, municipal or otherwise, including any
instrumentality, division, agency, body or department thereof).

 

25

 

“Plan”
means, with respect to Borrower or any of its Affiliates, at any time, an
employee benefit plan, as defined in Section 3(3) of ERISA, which
Borrower or any of its Affiliates maintains, contributes to or has an
obligation to contribute to on behalf of participants who are or were employed
by any of them.

 

“Pro
Rata Share” means, with respect to each Lender, the percentage of the
Revolving Commitment set forth opposite the name of that Lender on Schedule 2.1, as such percentage may be
increased or decreased pursuant to a Commitment Assignment and Acceptance
executed in accordance with Section 12.8.

 

“Proceeds”
means “proceeds,” as such term is defined in the UCC and, in any event, shall
include:  (a) any and all proceeds
of any insurance, indemnity, warranty or guaranty payable to Borrower from time
to time with respect to any Collateral; (b) any and all payments (in any
form whatsoever) made or due and payable to Borrower from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of any Collateral by any governmental body, authority, bureau or
agency (or any person acting under color of Governmental Authority); (c) any
claim of Borrower against third parties for past, present or future infringement
or dilution of any Intellectual Property or for injury to the goodwill
associated with any Intellectual Property; (d) any recoveries by Borrower
against third parties with respect to any litigation or dispute concerning any
Collateral; and (e) any and all other amounts from time to time paid or
payable under or in connection with any Collateral, upon disposition or
otherwise.

 

“Property”
means any real property, personal property, or Intellectual Property owned,
leased or operated by the Borrower, any Owner Trustee, or any Subsidiary of the
Borrower.

 

“Prospective
International Interest” shall have the meaning given to such term in the
Cape Town Convention.

 

“Reference
Rate” means the variable per annum rate of interest most recently announced
by Administrative Agent at its corporate headquarters as the “Union Bank, N.A.
Reference Rate,” with the understanding that the “Union Bank, N.A. Reference
Rate” is one of Administrative Agent’s index rates and merely serves as a basis
upon which effective rates of interest are calculated for loans making
reference thereto and may not be the lowest or best rate at which
Administrative Agent calculates interest or extends credit.  The Reference Rate shall be adjusted on the last
Business Day of the calendar month of any change in the “Union Bank, N.A.
Reference Rate.”  The Reference Rate, as
adjusted, shall constitute the Reference Rate on the date when such adjustment
is made and shall continue as the applicable Reference Rate until further
adjustment.

 

“Release”
means, as to Borrower, any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, dumping, leaching or
migration of Hazardous Materials in the indoor or outdoor environment by
Borrower, including the movement of Hazardous Materials through or in the air,
soil, surface water, ground water or property.

 

“Reportable
Event” has the meaning set forth in Title IV of ERISA.

 

26

 

“Request
for Letter of Credit” means a written request for a Letter of Credit
substantially in the form of Exhibit E
signed by an Authorized Signatory of Borrower and properly completed to provide
all information required to be included therein.

 

“Requisite
Lenders” means (a) all Non-Defaulting Lenders, with respect to those
decisions requiring unanimous consent of all Lenders as set forth in Section 12.16 and (b) those
Non-Defaulting Lenders holding Notes evidencing in the aggregate 50.1% or more
of the aggregate Indebtedness then evidenced by the Notes held by
Non-Defaulting Lenders, with respect to all other decisions required of the
Lenders hereunder; provided, any Defaulting Lender or Indebtedness under Notes
held by such Defaulting Lender shall not be included under the foregoing items (a) and
(b) or have voting, waiver or consent rights with respect to any decision.

 

“Revolving
Commitment” means, subject to Sections
2.10 and 2.19,
$240,000,000.00.  The respective Pro Rata
Shares of the Lenders with respect to the Revolving Commitment are set forth in
Schedule 2.1.

 

“Revolving
Loan” means a loan(s) made by the Lenders to Borrower pursuant to Section 2.1.

 

“Revolving
Note” means each Revolving Note executed and delivered by Borrower to each
Lender in accordance with its Pro Rata Share of the Revolving Commitment, dated
as of the Closing Date, in the original aggregate principal amount of the
Revolving Commitment, together with any other notes executed and delivered by
Borrower to any Lender evidencing at any time any portion of the Loans.

 

“Schedule
of Documents” means the schedule, including all appendices, exhibits or
schedules thereto, listing certain documents and information to be delivered in
connection with this Agreement and the other Loan Documents and the
transactions contemplated hereunder and thereunder, substantially in the form
of Schedule 1.1e.

 

“Security
Agent” means that party mentioned in the introductory paragraph hereof,
when such party is acting in its capacity as Security Agent under any of the
Loan Documents, or any successor Security Agent.

 

“Security
Agreement” means that certain Security Agreement, in the form attached
hereto as Exhibit F, dated as
of even date herewith, as amended, modified or supplemented from time to time,
made by Borrower in favor of Security Agent, whereby Borrower grants to
Security Agent a perfected security interest and Lien in, and assigns to
Security Agent, the following: all right, title and interest of the Borrower
and its Subsidiaries (other than WEST and the WEST Subsidiaries) in and to all
of its assets and properties, whether now existing or owned or hereafter
acquired (including 100% of residual cash distributions from WEST, but
excluding (x) Borrower’s beneficial interests in WEST and (y) the
WEST Servicing Agreement).

 

“Security
Deposit” means any cash deposits and other collateral provided by, or on
behalf of, a Lessee to secure the obligations of such Lessee under a Lease.

 

“SEC”
means the United States Securities Exchange Commission.

 

27

 

“Special
Eurodollar Circumstance” means the application or adoption after the
Closing Date of any Law or interpretation, or any change therein or thereof, or
any change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable authority charged with the interpretation
or administration thereof, or compliance by Lender or its LIBOR lending office
with any request or directive (whether or not having the force of Law) of any
such Governmental Authority, central bank or comparable authority.

 

“Special
Purpose Financing Vehicle” means a bankruptcy remote Subsidiary or
Affiliate (including without limitation, WEST and the Subsidiaries of WEST) of
the Borrower or other Person owned by or at the request of the Borrower
(excluding any Owner Trustee which shall have executed and delivered an Owner
Trustee Mortgage and Security Agreement) for the sole purpose of holding and/or
assigning Engines received directly or indirectly from the Borrower or any of
its Subsidiaries and issuing notes or other Indebtedness which are secured by
such Engines or other securities representing interests in such Engines, and
which Subsidiary or Affiliate or other Person is prohibited by its articles of
incorporation or (if it is not a corporation) other organizational documents
from engaging in any other business.

 

“Stage
III” means, with respect to any aircraft or engine, any aircraft or engine
which, at the time of its manufacture, was compliant with the noise regulations
set forth in FAR Part 36.

 

“Stock”
means all certificated and uncertificated shares, options, warrants, general or
limited partnership interests, participation or other equivalents (regardless
of how designated) of or in a corporation, partnership, limited liability
company or equivalent entity whether voting or nonvoting, including common
stock, preferred stock, or any other “equity security” (as such term is defined
in Rule 3a11-1 of the General Rules and Regulations promulgated by
the Securities and Exchange Commission under the Securities Exchange Act of
1934).

 

“Stock
Pledge Agreement” means that certain Stock Pledge Agreement dated as of
even date herewith, as amended, modified or supplemented from time to time,
made by Borrower in favor of Security Agent, whereby Borrower pledges to
Security Agent sixty-five percent (65%) of the issued and outstanding shares of
capital stock of WFLC (Ireland) Limited.

 

“Stock
Power” means that certain Stock Power executed by Borrower in favor of
Security Agent in connection with the Stock Pledge Agreement.

 

“Subordinated
Obligation” means any Indebtedness of Borrower that (a) does not have
any scheduled principal payment, mandatory principal prepayment or sinking fund
payment due prior to the date that is one year after the Maturity Date, (b) is
not secured by any Lien on any Property of Borrower or any of its Subsidiaries,
(c) is not guarantied by any Subsidiary of Borrower, (d) is
subordinated by its terms in right of payment to the Obligations pursuant to
provisions acceptable to Agents and Credit Facility Lenders, (e) is
subject to such financial and other covenants and events of defaults as may be
acceptable to Agents and Credit Facility Lenders and (f) is subject to
customary interest blockage and delayed acceleration provisions as may be acceptable
to Agents and Credit Facility Lenders.

 

28

 

“Subsidiary”
means, as of any date of determination and with respect to any Person, any
corporation, limited liability company or partnership (whether or not, in any
case, characterized as such or as a “joint venture”), trust or other
legal entity, whether now existing or hereafter organized or acquired:  (a) in the case of a corporation or
limited liability company, of which a majority of the securities having
ordinary voting power for the election of directors or other governing body
(other than securities having such power only by reason of the happening of a
contingency) are at the time beneficially owned by such Person and/or one or
more Subsidiaries of such Person, or (b) in the case of a partnership or
other ownership interests, of which (i) a majority of the partnership or
other ownership interests are at the time beneficially owned by such Person
and/or one or more of its Subsidiaries or (ii) a Subsidiary is the general
partner.  Notwithstanding the foregoing,
WEST and WEST Subsidiaries shall only be considered Subsidiaries hereunder with
respect to Section 6.14 and Section 7.3 and the definitions
related thereto.

 

“Subsidiary
Guaranty” means, collectively, those certain Subsidiary Guaranties dated as
of even date herewith, as amended, modified or supplemented from time to time,
made by each Subsidiary (but excluding WEST, WEST Subsidiaries and WLFC
(Ireland) Limited) in favor of Security Agent, whereby such Subsidiary
guaranties performance of the Obligations under the Loan Documents.

 

“Swing
Line Commitment” means the commitment of the Swing Line Lender to make
Swing Line Loans in an aggregate maximum principal amount at any one time
outstanding of Fifteen Million Dollars ($15,000,000.00) or such lesser
amount as shall be agreed to by the Swing Line Lender and Borrower pursuant to Section 2.2 of this Agreement.

 

“Swing
Line Lender” means that party mentioned in the introductory paragraph
hereof or any successor Swing Line Lender.

 

“Swing
Line Loans” means loans made by the Swing Line Lender to Borrower pursuant
to Section 2.2.

 

“Tangible
Net Worth” means on any date of determination, the following with respect
to Borrower and its Subsidiaries on a consolidated basis:  (a) the sum of the total assets
less the total liabilities minus (b) intangibles (excluding gains
and losses from fair value of derivatives charges whether or not included in
other comprehensive income or net income) on such date, all as determined in
accordance with GAAP, consistently applied.

 

“Termination
Date” means the date on which the Loans, the Letters of Credit and all
other Obligations under this Agreement and the other Loan Documents are
indefeasibly paid in full, in cash (other than amounts in respect of Letter of
Credit Obligations if any, then outstanding, provided that Borrower
shall have paid to Lenders, in immediately available funds, the maximum amount
then available to be drawn under outstanding Letters of Credit), and Borrower
shall have no further right to borrow any moneys or obtain other credit
extensions or financial accommodations under this Agreement.

 

“Three
Primary Lessees” means the three Lessees under Leases which, at the time of
determination, have leased (whether under one or more Leases) the highest
percentages of the

 

29

 

Engines
and Equipment described in clause (y)(iii)(5) of the definition of
Borrowing Base, based on Net Book Value, of all Eligible Engines and Eligible
Equipment.

 

“Total
Debt” means the all Indebtedness of the Borrower and its consolidated
Subsidiaries, including, without limitation, Non-Recourse Debt, Partial
Recourse Debt and Subordinated Debt.

 

“Transactional
User Entity” is defined in the Regulations for the International Registry.

 

“Trust
Agreement” means, each and collectively, those certain Trust Agreements
entered into prior to the date hereof and any Trust Agreements entered into
after the date hereof, each of which Trust Agreements shall be in the form
attached hereto as Exhibit N, by and between Owner Trustee, as
owner trustee, and Borrower or a Wholly-Owned Subsidiary, as the sole
beneficiary, as each such Trust Agreement is amended, supplemented or otherwise
modified from time to time, whereby the parties agreed, among other things,
that Owner Trustee shall act as trustee with respect to the “Equipment” and “Lease
Agreement” as defined therein and by and between Owner Trustee, as owner
trustee, and Borrower or a Wholly-Owned Subsidiary, as the sole beneficiary, as
each Trust Agreement is amended, supplemented or otherwise modified from time
to time, whereby the parties agreed, among other things, that Owner Trustee
shall act as trustee with respect to the “Equipment” and “Lease Agreement” as
defined therein.

 

“Turboprop
Engine” means a gas turbine engine used in aircraft (other than an Engine)
with at least 550 rated shaft horsepower.

 

“UCC”
means the Uniform Commercial Code as the same may, from time to time, be
enacted and in effect in the State of Delaware; provided, that in the
event by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of Security Agent’s Lien on any Collateral is governed
by the Uniform Commercial Code as enacted and in effect in a jurisdiction other
than the State of Delaware, the term “UCC” means the Uniform Commercial
Code as enacted and in effect in such other jurisdiction solely for purposes of
the provisions hereof relating to such attachment, perfection or priority and
for purposes of definitions related to such provisions.

 

“Unused
Line Fee” means that fee set forth in Section 2.6.1.

 

“WEST”
means Willis Engine Securitization Trust, a Delaware statutory trust which is a
wholly-owned Subsidiary of the Borrower.

 

“WEST
Administrative Agency Agreement” means that certain Administrative Agency
Agreement dated August 5, 2005 among WEST, Borrower, Deutsche Bank Trust
Company Americas and the entities listed on Appendix A thereto

 

“WEST
Funding Facility” means the transactions contemplated by that certain
Indenture dated as of August 9, 2005, by and between WEST and Deutsche
Bank Trust Company Americas, as indenture trustee, as amended, waived,
restated, supplemented, or otherwise modified from time to time.

 

30

 

“WEST
Owner Trusts” means the owner trusts in which WEST or a WEST Subsidiary
holds 100% of the beneficial interest.

 

“WEST
Servicing Agreement” means that certain Servicing Agreement dated as of August 9,
2005, among Borrower, as servicer and administrative agent, WEST, and the
entities listed on Appendix A to the Servicing Agreement, as amended, waived,
restated, supplemented, or otherwise modified from time to time.

 

“WEST
Subsidiaries” means WEST Engine Funding LLC f/k/a Willis Engine Funding
LLC, a Delaware limited liability company and a wholly-owned Subsidiary of
WEST, WEST Engine Funding (Ireland) Limited, a limited liability company
existing under the laws of Ireland, and each other legal entity owned by WEST
or in respect of which WEST or a WEST Subsidiary holds 100% of the beneficial
interest, including the WEST Owner Trusts.

 

“Wholly-Owned
Subsidiary” means a Subsidiary of Borrower, 100% of the capital stock or
other equity interest of which is owned, directly or indirectly, by Borrower, except
for director’s qualifying shares required by Applicable Laws.

 

1.2           Accounting
Terms.  All accounting terms used, but
not specifically defined, in this Agreement shall be construed and defined in
accordance with GAAP, provided that if GAAP shall change from the basis used in
preparing the Financial Statements delivered to the Administrative Agent on or
before the date of this Agreement, the Compliance Certificates delivered
pursuant to this Agreement demonstrating compliance with the covenants
contained in Section 6.14 shall include calculations setting forth the
adjustments necessary to demonstrate how the Borrower is in compliance with the
financial covenants based upon GAAP as in effect on the date of this Agreement.

 

1.3           UCC.  Any terms that are defined in the UCC and
used, but not specifically defined, in this Agreement shall be construed and
defined in accordance with the UCC.

 

1.4           Construction.  For purposes of this Agreement and the other
Loan Documents, the following rules of construction shall apply, unless
specifically indicated to the contrary:  (a) wherever
from the context it appears appropriate, each term stated in either the
singular or plural shall include the singular and the plural, and pronouns
stated in the masculine, feminine or neuter gender shall include the masculine,
the feminine and the neuter; (b) the term “or” is not exclusive; (c) the
term “including” (or any form thereof) shall not be limiting or exclusive; (d) all
references to statutes and related regulations shall include any amendments
thereof and any successor statutes and regulations; (e) the words “herein,”
“hereof” and “hereunder” or other words of similar import refer to this
Agreement as a whole, including the exhibits and schedules hereto, as the same
may from time to time be amended, modified or supplemented, and not to any
particular section, subsection or clause contained in this Agreement; (f) all
references in this Agreement or in the schedules to this Agreement to sections,
schedules, disclosure schedules, exhibits, and attachments shall refer to the
corresponding sections, schedules, disclosure schedules, exhibits, and
attachments of or to this Agreement; and (g) all references to any
instruments or agreements, including references to any of the Loan Documents,
shall include any and all modifications or amendments thereto and any and all
extensions or renewals thereof.

 

31

 

1.5           USA Patriot Act
Notice.  Each Lender is subject to the
USA Patriot Act and hereby notifies Borrower that pursuant to the requirements
of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (as amended and supplemented from time to time, the “Patriot Act”),
each Lender is required to obtain, verify and record information that
identifies Borrower, which information includes the name and address of
Borrower and other information that will allow each Lender to identify Borrower
in accordance with the Patriot Act.

 

2.             REVOLVING
COMMITMENT

 

2.1           Revolving Loans.  Subject to the terms and conditions of this
Agreement, Lenders shall, pro rata according to that Lender’s Pro Rata Share of
the Revolving Commitment, extend Revolving Loans to Borrower from time to time
until the Maturity Date.  Subject to Section 2.8.2, the aggregate amount of
Loans outstanding shall not exceed at any time the Borrowing Availability.  Prior to the Maturity Date, Borrower may
repay at any time any outstanding Loans and any amounts so repaid may be
reborrowed, up to Borrowing Availability. 
Loans shall be evidenced by and repayable in accordance with the terms
of the Revolving Note and this Agreement.

 

2.1.1           Choice of Interest Rate.  Any Revolving Loan shall, at the option of
Borrower, be made either as a Base Rate Loan or as a LIBOR Loan; provided, that
if a Default or Event of Default has occurred and is continuing, all Loans
shall be made as Base Rate Loans.  If
Borrower fails to give notice to Administrative Agent specifying whether any
LIBOR Loan is to be repaid or reborrowed on a Payment Date, such LIBOR Loan
shall be repaid and then reborrowed as a Base Rate Loan on the Payment
Date.  Each request for a Revolving Loan
shall, among other things, specify (1) the date of the proposed Revolving
Loan, which shall be a Business Day, (2) the amount of the Revolving Loan,
(3) whether it is to be a Base Rate Loan or a LIBOR Loan, and (4) the
LIBOR Loan Period, if applicable.

 

2.1.2        Request for Loans.  Except as otherwise specified herein,
Borrower shall give to Administrative Agent, irrevocable notice of a request
for each Loan by telephone or facsimile transmission not later than 11:00 a.m.
(California time) at least one (1) Business Day prior to the proposed Base
Rate Loan.  Any notice in connection with
a requested Revolving Loan under this Agreement that is received by
Administrative Agent after 11:00 a.m. (California time) on any Business
Day, or at any time on a day that is not a Business Day, shall be deemed
received by Administrative Agent on the next Business Day.

 

2.1.3        LIBOR Loans.

 

(i)            Borrower shall
give to Administrative Agent irrevocable notice of a request for a LIBOR Loan
by telephone or facsimile transmission not later than three (3) Business
Days prior to the date of the proposed LIBOR Loan.  Administrative Agent shall determine the
applicable LIBOR Basis as of the Business Day prior to the date of the
requested LIBOR Loan.  Each determination
by Administrative Agent of a LIBOR Basis shall, absent

 

32

 

manifest
error, be deemed final, binding and conclusive upon Borrower.  The LIBOR Loan Period for each LIBOR Loan
shall be fixed at one (1), two (2), three (3) or six (6) months.

 

(ii)           (i) Each LIBOR Loan
shall be in a principal amount of not less than Five Million and 0/100 Dollars
($5,000,000.00) and in an integral multiple of $100,000, (ii) at no time
shall there be more than ten (10) tranches of LIBOR Loans outstanding, and
(iii) subject to Section 2.8.2, the total aggregate principal amount
of all LIBOR Loans outstanding at any one time shall not exceed Borrowing
Availability.

 

(iii)          At least three (3) Business
Days prior to each Payment Date for a LIBOR Loan, Borrower shall give
irrevocable written notice to Lender specifying whether all or a portion of
such LIBOR Loan outstanding on the Payment Date (i) is to be repaid and
then reborrowed in whole or in part as a new LIBOR Loan, in which case such
notice shall also specify the LIBOR Loan Period that Borrower shall have
selected for such new LIBOR Loan; provided, that if a Default or Event
of Default has occurred and is continuing, Borrower shall not have the option
to repay and then reborrow such LIBOR Loan as a new LIBOR Loan, (ii) is to
be repaid and then reborrowed in whole or in part as a Base Rate Loan, or (iii) is
to be repaid and not reborrowed; provided, that any such reborrowings
described in clauses (i) and (ii) above shall be in a principal
amount of not less than $5,000,000.00 and in an integral multiple of
$100,000.  Upon such Payment Date such
LIBOR Loan will, subject to the provisions of this Agreement, be so repaid and,
as applicable, reborrowed.

 

2.1.4           Request and Disbursement.  Administrative Agent shall, upon the
reasonable request of Borrower from time to time, provide to Borrower such
information with regard to the LIBOR Basis as Borrower may request.  Promptly following receipt of a request for a
Loan, Administrative Agent shall notify each Lender by telephone or telecopier
(and if by telephone, promptly confirmed by telecopier) of the date and type of
Loan, the applicable LIBOR Loan Period, and that Lender’s Pro Rata Share of the
Loan.  Not later than 10:00 a.m.,
California time, on the date specified for any Loan (which must be a Business
Day), each Lender shall make its Pro Rata Share of the Loan in immediately
available funds available to Administrative Agent at Administrative Agent’s
office.  Prior to 11:00 a.m.
(California time) on the date of a Revolving Loan, Administrative Agent shall,
subject to the satisfaction of the conditions set forth in Section 2.2, disburse the amount of
the requested Revolving Loan by deposit into the Demand Deposit Account or by
wire transfer pursuant to Borrower’s written instructions.

 

2.2           Swing Line
Loans.

 

2.2.1           Swing Line Commitment.  The Swing Line Lender shall from time to time
from the Closing Date through the day prior to the Maturity Date make loans to
Borrower in such amounts as Borrower may request, up to an aggregate maximum
amount of $15,000,000.00 (each, a “Swing Line Loan”), provided that
(a) if after giving effect to such Swing Line Loan, the sum of the
aggregate principal amount of all then outstanding Loans does not exceed the
Borrowing Availability at such time; and (b) without the consent of all of
the

 

33

 

Lenders, no Swing Line Loan may be made during the continuation of an
Event of Default, provided written notice of such Event of Default shall have
been provided to Swing Line Lender by Administrative Agent or a Lender
sufficiently in advance of the making of such Swing Line Loan.

 

2.2.2        Request for Swing Line Loan.  Borrower may borrow, repay and reborrow under
the Swing Line Commitment, subject to the remaining availability under the
Swing Line Commitment and subject to availability under the Revolving
Commitment, upon telephonic request by an Authorized Signatory of Borrower made
to Administrative Agent not later than 2:00 p.m., California time, on the
Business Day of the requested borrowing (which telephonic request shall be
promptly confirmed in writing by telecopier or electronic mail).  Promptly after receipt of such a request for
borrowing, Administrative Agent shall provide telephonic verification to the
Swing Line Lender that, after giving effect to such request, availability under
the Swing Line Commitment and the Revolving Commitment will exist (and such
verification shall be promptly confirmed in writing by telecopier or electronic
mail).  Borrower shall notify the Swing
Line Lender of its intention to make a repayment of a Swing Line Loan not later
than 1:00 p.m. California time on the date of repayment.  If Borrower instructs the Swing Line Lender
to debit its Demand Deposit Account in the amount of any payment with respect
to a Swing Line Loan, or the Swing Line Lender otherwise receives repayment,
after 3:00 p.m., California time, on a Business Day, such payment shall be
deemed received on the next Business Day. 
The Swing Line Lender shall promptly notify Administrative Agent of the
Swing Line Loan outstanding each time there is a change therein.

 

2.2.3           Swing Line Interest Rate.  Swing Line Loans shall bear interest at a
fluctuating all-in rate (commensurate with a market rate of interest at the
time of funding) per annum as quoted by Swing Line Lender to Borrower at the
time a Swing Line Loan is requested by Borrower.  Interest shall be payable monthly on such
dates as may be specified by the Swing Line Lender and in any event on the
Maturity Date.  The Swing Line Lender
shall be responsible for invoicing Borrower for such interest.  The interest payable on Swing Line Loans is
solely for the account of the Swing Line Lender (subject to Section 2.2.5 below).

 

2.2.4           Swing Line Maturity Date.  Subject to Section 2.2.6
below, the principal amount of all Swing Line Loans shall be due and
payable on the earlier of (i) the maturity date agreed to by the Swing
Line Lender and Borrower with respect to such loan or (ii) the Maturity
Date.

 

2.2.5           Swing Line Participation.  Upon the making of a Swing Line Loan, each
Lender shall be deemed to have purchased from the Swing Line Lender a
participation therein in an amount equal to that Lender’s Pro Rata Share times
the amount of the Swing Line Loan.  Upon
demand made by the Swing Line Lender, which shall occur not more than once per
week, each Lender shall, according to its Pro Rata Share, promptly provide to
the Swing Line Lender its

 

34

 

purchase price therefor in an amount equal to its participation
therein.  The obligation of each Lender
to so provide its purchase price to the Swing Line Lender shall be absolute and
unconditional (except for modifications or demand made by the Swing Line
Lender) and shall not be affected by the existence of an uncured Event of
Default; provided that no Lender shall be obligated to purchase its Pro Rata
Share of (i) the Swing Line Loans to the extent that, after giving effect
to such Swing Line Loan, advances under the Revolving Commitment exceed the
Borrowing Availability, (ii) Swing Line Loans to the extent that, after
giving effect to such Swing Line Loan, the aggregate amount of Swing Line Loans
outstanding exceed $15,000,000.00, or (iii) any Swing Line Loan made
(absent the consent of all of the Lenders) during the continuation of an Event
of Default if written notice of such Event of Default shall have been provided
to Swing Line Lender by Administrative Agent or a Lender sufficiently in
advance of the making of such Swing Line Loan. 
Each Lender that has provided to the Swing Line Lender the purchase
price due for its participation in Swing Line Loans shall thereupon acquire a
pro rata participation, to the extent of such payment, in the claim of the
Swing Line Lender against Borrower for principal and interest and shall share,
in accordance with that pro rata participation, in any principal payment made
by Borrower with respect to such claim and in any interest payment made by
Borrower (but only with respect to periods subsequent to the date such Lender
paid the Swing Line Lender its purchase price) with respect to such claim.

 

2.2.6           Swing Line Repayment;
Revolving Loans.  The Swing
Line Lender may, at any time, in its sole discretion, by not less than two
Business Days’ prior written notice to Borrower and Lenders, demand payment of
the Swing Line Loans by way of a Revolving Loan in the full amount or any
portion of the outstanding amount of Swing Line Loans.  In each case, Administrative Agent shall
automatically provide the advances made by each Lender to the Swing Line Lender
(which the Swing Line Lender shall then apply to the outstanding amount of the
Swing Line Loans).  In the event that
Borrower fails to request a Revolving Loan within the time specified by this Section 2.2.6 on any such date,
Administrative Agent may, but is not required to, without notice to or the
consent of Borrower, cause Base Rate Loans to be made by the Lenders under the
Revolving Commitment in amounts which are sufficient to reduce the outstanding
amount of the Swing Line Loans as required above.  The proceeds of such advances shall be paid
directly to the Swing Line Lender for application to the outstanding amount of
the Swing Line Loans.

 

2.3           Letters of
Credit.

 

2.3.1           As a sublimit under the
Revolving Commitment, Issuing Lender agrees, subject to the terms and
conditions hereof, from time to time from the Closing Date through the Maturity
Date to issue Letters of Credit for the account of Borrower; provided, however,
that the form and substance of each Letter of Credit shall be subject to
approval by Issuing Lender, in its sole discretion; and provided further that after
giving effect to all such Letters of

 

35

 

Credit, (i) the sum of the aggregate principal amount of all
then-outstanding Loans does not exceed the Borrowing Availability and (ii) the
Aggregate Effective Amount under all outstanding Letters of Credit does not
exceed Fifteen Million and 00/100 Dollars ($15,000,000).  Each Letter of Credit shall mature fifteen
(15) days prior to the Maturity Date, and unless the Requisite Lenders
otherwise consent in a writing delivered to Administrative Agent, the term of
any Letter of Credit shall not exceed one (1) year or extend beyond the
Maturity Date, provided that in the Requisite Lenders’ discretion, Letters of
Credit may mature after the Maturity Date provided Borrower agrees to deposit
cash with Issuing Lender in the amount of such Letter of Credit at least
fifteen (15) days prior to the Maturity Date in order to secure such
outstanding Letter of Credit obligations.  Each Letter of Credit shall be
subject to the additional terms and conditions of Issuing Lender’s standard
agreement for a Letter of Credit-and related documents, if any, required by
Issuing Lender in connection with the issuance thereof.  If for any reason advances under the
Revolving Commitment are not available at the time any draft is paid by Lender,
then Borrower shall immediately pay to Issuing Lender the full amount of such
draft, together with interest thereon from the date such amount is paid by
Issuing Lender to the date such amount is fully repaid by Borrower, at the Base
Rate of interest applicable to the unpaid principal under the Loans.

 

2.3.2        Each Request for Letter of Credit shall be submitted
to Issuing Lender, with a copy to Administrative Agent, at least two (2) Business
Days prior to the date upon which the related Letter of Credit is proposed to
be issued.  Administrative Agent shall
promptly notify Issuing Lender whether such Request for Letter of Credit, and
the issuance of a Letter of Credit pursuant thereto, conforms to the requirements
of this Agreement.  Upon issuance of a
Letter of Credit, Issuing Lender shall promptly notify Administrative Agent,
and Administrative Agent shall promptly notify the Lenders, of the amount and
terms thereof.

 

2.3.3        Upon the issuance of a Letter of Credit, each Lender
shall be deemed to have purchased a pro rata participation in such Letter of
Credit from Issuing Lender in an amount equal to that Lender’s Pro Rata
Share.  Without limiting the scope and
nature of each Lender’s participation in any Letter of Credit, to the extent
that Issuing Lender has not been reimbursed by Borrower for any payment
required to be made by Issuing Lender under any Letter of Credit, each Lender
shall, pro rata according to its Pro Rata Share, reimburse Issuing Lender through
Administrative Agent promptly upon demand for the amount of such payment.  The obligation of each Lender to so reimburse
Issuing Lender shall be absolute and unconditional and shall not be affected by
the occurrence of an Event of Default or any other occurrence or event.  Any such reimbursement shall not relieve or
otherwise impair the obligation of Borrower to reimburse Issuing Lender for the
amount of any payment made by Issuing Lender under any Letter of Credit together
with interest as hereinafter provided.

 

36

 

2.3.4           Borrower agrees to pay to
Issuing Lender through Administrative Agent an amount equal to any payment made
by Issuing Lender with respect to each Letter of Credit within one (1) Business
Day after demand made by Issuing Lender therefor, together with interest at the
Base Rate plus the Applicable Base Rate Margin on such amount from the date of
any payment made by Issuing Lender at the rate applicable to Base Rate Loans
for two (2) Business Days and thereafter at the Default Rate applicable to
Base Rate Loans.  The principal amount of
any such payment shall be used to reimburse Issuing Lender for the payment made
by it under the Letter of Credit and, to the extent that the Lenders have not
reimbursed Issuing Lender pursuant to Section 2.3.3,
the interest amount of any such payment shall be for the account of Issuing
Lender.  Each Lender that has reimbursed
Issuing Lender pursuant to Section 2.3.3
for its Pro Rata Share of any payment made by Issuing Lender under a
Letter of Credit shall thereupon acquire a pro rata participation, to the
extent of such reimbursement, in the claim of Issuing Lender against Borrower
for reimbursement of principal and interest under this Section 2.3.4 and shall share, in
accordance with that pro rata participation, in any principal payment made by
Borrower with respect to such claim and in any interest payment made by
Borrower (but only with respect to periods subsequent to the date such Lender
reimbursed Issuing Lender) with respect to such claim.

 

2.3.5           Borrower may request that a
Revolving Loan be made to provide funds for the payment required by Section 2.3.4.  The proceeds of such Revolving Loan shall be
paid directly to Issuing Lender to reimburse it for the payment made by it
under the Letter of Credit.

 

2.3.6           If Borrower fails to make
the payment required by Section 2.3.4
within the time period therein set forth, in lieu of the reimbursement to
Issuing Lender under Section 2.3.3,
Issuing Lender may (but is not required to), without notice to or the consent
of Borrower, instruct Administrative Agent to cause Revolving Loans to be made
by the Lenders under the Revolving Commitment in an aggregate amount equal to
the amount paid by Issuing Lender with respect to that Letter of Credit.  The proceeds of such Loans shall be paid
directly to Issuing Lender to reimburse it for the payment made by it under the
Letter of Credit.

 

2.3.7           The issuance of any
supplement, modification, amendment, renewal, or extension to or of any Letter
of Credit shall be treated in all respects the same as the issuance of a new
Letter of Credit.

 

2.3.8           The obligation of Borrower
to pay to Issuing Lender the amount of any payment made by Issuing Lender under
any Letter of Credit shall be absolute, unconditional, and irrevocable, subject
only to performance by Issuing Lender of its obligations to Borrower under
Uniform Commercial Code Section 5-109. 
Without limiting the foregoing, Borrower’s obligations shall not be
affected by any of the following circumstances:

 

37

 

(i)            any lack of
validity or enforceability prior to its stated expiration date of the Letter of
Credit, this Agreement, or any other agreement or instrument relating thereto;

 

(ii)           any amendment or waiver of
or any consent to departure from the Letter of Credit, this Agreement, or any
other agreement or instrument relating thereto;

 

(iii)          the existence of any claim,
setoff, defense, or other rights which Borrower may have at any time against
Issuing Lender, Administrative Agent or any Lender, any beneficiary of the
Letter of Credit (or any persons or entities for whom any such beneficiary may
be acting) or any other Person, whether in connection with the Letter of
Credit, this Agreement, or any other agreement or instrument relating thereto,
or any unrelated transactions;

 

(iv)          any demand, statement, or
any other document presented under a Letter of Credit proving to be forged,
fraudulent, invalid, or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect whatsoever so long as any such
document appeared substantially to comply with the terms of such Letter of
Credit and provided Issuing Lender did not act with gross negligence or willful
misconduct in accepting such document;

 

(v)           payment by Issuing Lender in
good faith under a Letter of Credit against presentation of a draft or any
accompanying document which does not strictly comply with the terms of the
Letter of Credit and provided Issuing Lender did not act with gross negligence
or willful misconduct in accepting such document;

 

(vi)          the existence, character,
quality, quantity, condition, packing, value or delivery of any property
purported to be represented by documents presented in connection with any
Letter of Credit or any difference between any such property and the character,
quality, quantity, condition, or value of such property as described in such
documents;

 

(vii)         the time, place, manner,
order or contents of shipments or deliveries of property as described in
documents presented in connection with any Letter of Credit or the existence,
nature and extent of any insurance relative thereto;

 

(viii)        the solvency or financial
responsibility of any party issuing any documents in connection with a Letter
of Credit, except for Issuing Lender;

 

(ix)           any failure or delay in
notice of shipments or arrival of any property;

 

(x)            any error in the
transmission of any message relating to a Letter of Credit not caused by
Issuing Lender, or any delay or interruption in any such message;

 

(xi)           any error, neglect or
default (other than gross negligence or willful misconduct) of any
correspondent of Issuing Lender in connection with a Letter of Credit;

 

38

 

(xii)          any consequence arising from
acts of God, war, insurrection, civil unrest, disturbances, labor disputes,
emergency conditions or other causes beyond the control of Issuing Lender; and

 

(xiii)         so long as Issuing Lender in
good faith determines that the contract or document appears substantially to
comply with the terms of the Letter of Credit, the form, accuracy, genuineness
or legal effect of any contract or document referred to in any document
submitted to Issuing Lender in connection with a Letter of Credit.

 

(xiv)        The Uniform
Customs and Practice for Documentary Credits, as published in its most current
version by the International Chamber of Commerce, shall be deemed a part of
this Section 2.3.8 and shall
apply to all Letters of Credit to the extent not inconsistent with Applicable
Law.

 

2.4           Payment of
Interest; Interest Rate.

 

2.4.1           Loans.  Interest on Revolving Loans and Swing Line
Loans shall be payable as follows:

 

(i)            Base Rate Loans.  Interest on each outstanding Base Rate Loan
shall be computed for the actual number of days elapsed on the basis of a year
of 360 days and shall be payable to Administrative Agent for the ratable
benefit of Lenders, in arrears (i) on the first Business Day of each
month, (ii) on the Maturity Date, and (iii) if any interest accrues
or remains payable after the Maturity Date or during the continuance of an
Event of Default, upon demand by Administrative Agent.  Interest shall accrue and be payable on each
Base Rate Loan at a per annum interest rate equal to the Base Rate plus
the Applicable Base Rate Margin (“Applicable Base Rate”).  The Base Rate shall be equal to the highest
of (i) the rate of interest most recently announced by Administrative
Agent as to its U.S. dollar “Reference Rate”, (ii) the Federal Funds Rate
plus one-half of one percent (0.50%) or (iii) one month LIBOR plus
one and one half percent (1.50%).

 

(ii)           LIBOR Loans.  Interest on each outstanding LIBOR Loan shall
be computed for the actual number of days elapsed on the basis of a year of 360
days and shall be payable to Administrative Agent, for the ratable benefit of
Lenders, in arrears (i) on the last day of the applicable LIBOR Loan
Period in the case of any LIBOR Loan with a LIBOR Loan Period of one, two or
three months, (ii) on the 90th day and the last day of the applicable
LIBOR Loan Period in the case of any LIBOR Loan with a LIBOR Loan Period
greater than three months, (iii) on the Maturity Date, and (iv) if
any interest accrues or remains payable after the Maturity Date or during the
continuance of an Event of Default, upon demand by Administrative Agent.  Interest shall accrue and be payable on each
LIBOR Loan at a per annum interest rate equal to the LIBOR Basis applicable to
such LIBOR Loan plus the Applicable LIBOR Margin (“Applicable LIBOR
Rate”).

 

(iii)          Applicable Margins and Fees.  The Applicable Base Rate Margin, the
Applicable LIBOR Margin, and Applicable Unused Line Fee Percentage shall be
determined based on the Leverage Ratio as reported in the most recent
Compliance Certificate (delivered to Administrative Agent pursuant to Section 8) by reference to Table 1 below:

 

39

 

Table 1

 

	
  Level

  	
   

  	
  Leverage Ratio

  	
   

  	
  Applicable Base

  Rate Margin

  	
   

  	
  Applicable

  LIBOR

  Margin 

  	
   

  	
  Applicable

  Unused

  Line Fee

  Percentage

  	
   

  
	
  I

  	
   

  	
  <3.0

  	
   

  	
  1.50%

  	
   

  	
  3.00%

  	
   

  	
  0.65%

  	
   

  
	
  II

  	
   

  	
  >3.0 but less than 3.5

  	
   

  	
  2.00%

  	
   

  	
  3.50%

  	
   

  	
  0.75%

  	
   

  
	
  III

  	
   

  	
  >3.5 but less than 4.0

  	
   

  	
  2.50%

  	
   

  	
  4.00%

  	
   

  	
  1.00%

  	
   

  
	
  IV

  	
   

  	
  >4.0

  	
   

  	
  3.00%

  	
   

  	
  4.50%

  	
   

  	
  1.25%

  	
   

  

 

Notwithstanding
the foregoing, Level II rates shall apply for all Loans made from the Closing
Date until Administrative Agent has received a Compliance Certificate,
satisfactory in form and substance to Administrative Agent, for Borrower’s
Fiscal Quarter ending December 31, 2009.

 

2.4.2           Default Rate.  Upon the occurrence and during the continuance
of an Event of Default, interest on all outstanding Obligations shall, upon the
election of Administrative Agent (acting at the direction of the Requisite
Lenders), confirmed by written notice from Administrative Agent to Borrower,
accrue and be payable at the Default Rate; provided, however,
that the Default Rate shall not apply to any Letter of Credit Obligations
unless such Letter of Credit Obligations are not paid when due by Borrower
under this Agreement.   Interest accruing at the Default Rate shall be
payable to Administrative Agent, for the ratable benefit of Lenders, on demand
and in any event on the Maturity Date. 
Administrative Agent shall not be required to (1) accelerate the
maturity of the Loans or (2) exercise any other rights or remedies under
the Loan Documents, in order to charge the Default Rate.  Upon the occurrence and during the
continuance of an Event of Default specified in Sections 9.1.5, 9.1.6, or 9.1.7, the interest rate shall be increased automatically to
the Default Rate without the necessity of any action by Administrative Agent.

 

2.5           Maximum Rate of
Interest.  In no event
shall the aggregate of all interest on the Obligations charged or collected
pursuant to the terms of this Agreement or pursuant to the Notes exceed the highest
rate permissible under any law that a court of competent jurisdiction shall, in
a final determination, deem applicable. 
In the event that such a court determines that a Lender has charged or
received interest under this Agreement or the Notes in excess of the highest
applicable rate, the rate in effect under this Agreement and the Notes shall
automatically be reduced to the maximum rate permitted by Applicable Law and
Lender shall promptly apply such excess to reduce the principal balance of the
Obligations, or if the principal balance of the Obligations owing have been
paid in full, Lender shall promptly apply such excess to reduce any other
Obligations, and if all Obligations have been paid in full, then Lender shall
refund to Borrower any interest received by Lender in excess of the maximum
lawful rate; provided, that if at any time thereafter the rate of
interest payable hereunder is less than the highest applicable rate, Borrower
shall continue to pay interest hereunder at the highest applicable rate, until
such time as the total interest received by Lender from the making of Loans
hereunder is equal to the total interest that Lender would have received had
the interest rate payable hereunder been (but for the operation of this Section 2.5) the interest rate payable
since the Closing Date as otherwise provided in this Agreement.  It is the intent of this Agreement that
Borrower not pay or contract

 

40

 

to
pay, and that Lender not receive or contract to receive, directly or
indirectly, interest in excess of that which may be paid by Borrower under
Applicable Law.

 

2.6           Fees.  Borrower shall pay to Administrative Agent:

 

2.6.1           Unused Line Fee.  The Unused Line Fee for the ratable benefit
of Lenders commencing as of the Closing Date, payable quarterly in arrears,
commencing on the first Business Day of the Fiscal Quarter beginning January 1,
2010, and ending on the Termination Date. 
The Unused Line Fee shall be, for each day after the Closing Date
through the Maturity Date, an amount equal to (a) the difference between (1) the
Maximum Amount, and (2) the closing balance of the Loans for such day, multiplied
by (b) the Applicable Unused Line Fee Percentage, the product of
which is then divided  by (c) 360.  Notwithstanding the foregoing, no Unused Line
Fee shall be paid by Borrower for the benefit of any Defaulting Lender for each
day that such Lender remains a Defaulting Lender; provided, an Unused Line Fee
shall continue to accrue for the ratable benefit of all Non-Defaulting Lenders
for such time period and an Unused Line Fee shall accrue as to the previously
Defaulting Lender upon the date that such Lender becomes a Non-Defaulting
Lender.

 

2.6.2        Letter of Credit Fees.

 

(i)            Letter of
Credit fee(s) payable to Administrative Agent for the account of Issuing
Lender in an amount equal to (i) 25 basis points (0.25%) per annum on the
undrawn face amount of each Letter of Credit together with all other standard
and customary fees of Issuing Lender in connection with the Letters of Credit,
including those fees provided for in any Letter of Credit application agreement
to be entered into between Issuing Lender and Borrower and Issuing Lender’s
regulations, interpretations and published schedule of fees in connection
with the Letters of Credit, which fee(s) are payable on the date of
issuance of each such Letter of Credit for the first year and payable annually
thereafter as invoiced by Issuing Lender, and (ii) upon the payment or
negotiation by Issuing Lender of each draft under any Letter of Credit and upon
the occurrence of any other activity with respect to any Letter of Credit
(including without limitation, the transfer, amendment or cancellation of any
Letter of Credit) such fees and charges determined in accordance with Issuing
Lender’s standard fees and charges then in effect for such activity, payable as
invoiced by Issuing Lender.

 

(ii)           A per annum standby letter
of credit fee payable to Administrative Agent for the ratable benefit of each
Lender, in an amount equal to the then Applicable LIBOR Margin multiplied by
the undrawn face amount of each standby Letter of Credit, payable quarterly in
arrears (i) on the first Business Day of each Fiscal Quarter and (ii) on
the Maturity Date.

 

2.6.3           Fees to Administrative Agent.  On the Closing Date and on each other date
upon which a fee is payable, Borrower shall pay to Administrative Agent such
fees as heretofore agreed upon by letter agreement dated as of May 7,
2009, between Borrower and Union Bank, N.A., as

 

41

 

Administrative Agent, which fees shall be solely for its own account
and are nonrefundable.

 

2.7           Late Payments.  If any installment of principal or interest
or any fee or cost or other amount payable under any Loan Document to any
Lender, Issuing Lender, or Swing Line Lender is not paid when due, it shall
thereafter bear interest at a fluctuating interest rate per annum at all times
equal to the Default Rate, to the fullest extent permitted by Applicable Laws.

 

2.8           Repayment and
Prepayment.

 

2.8.1           Repayment and Voluntary
Prepayment.  Borrower
shall pay the principal balance of the Loans and all other Obligations in full
on the Maturity Date.  The principal
amount of any Base Rate Loan may be prepaid prior to the Maturity Date at any
time; provided, that any such prepayments shall be in minimum amounts to
be agreed upon by Administrative Agent and Borrower.  The principal amount of any LIBOR Loan
together with all accrued and unpaid interest thereon may be prepaid prior to
the applicable Payment Date, together with any breakage fees as set forth in Section 2.8.5, upon three (3) Business
Days’ prior notice to Lender.  Each
notice of prepayment shall be irrevocable.

 

2.8.2           Overadvances.  Borrower shall immediately repay to
Administrative Agent, for the ratable benefit of Lenders, any Overadvance.  Overadvances constitute Obligations that are
evidenced by the Revolving Note, secured by the Collateral, and entitled to all
of the benefits of the Loan Documents.

 

2.8.3           Mandatory Prepayment.  Within three (3) Business Days of
receiving written notice from Administrative Agent of the occurrence of any
Borrowing Base Deficiency or Appraisal Deficiency, Borrower shall repay all  or such portion of the Loans in an amount
equal to such deficiency, together with any breakage fees as set forth in Section 2.8.5; provided, however, that
with respect to an Appraisal Deficiency which is the result of a new or updated
appraisal, the foregoing cure period shall be extended to be sixty (60)  days.

 

2.8.4           Mandatory Repayment.  Upon the occurrence of a Change in Control,
the Revolving Commitment shall be terminated, and all outstanding Loans shall
be repaid in full, together with any breakage fees as set forth in Section 2.8.5.

 

2.8.5           Breakage Fees.  Upon payment or prepayment of any LIBOR Loan
(other than as the result of a conversion required under Section 15.1.3) on a day other than
the last day in the applicable LIBOR Loan Period (whether voluntarily,
involuntarily, by reason of acceleration, or otherwise), or upon the failure of
Borrower (for a reason other than the breach by a Lender of its obligation to
make a LIBOR Loan pursuant to this Agreement) to borrow on the date or in the
amount specified for a LIBOR Loan in any Notice of Borrowing, Borrower shall
pay to Lender within five (5) Business Days after

 

42

 

demand a prepayment fee or failure to borrow fee, as the case may be
(determined based on 100% of the LIBOR Loan actually funded in the London
Eurodollar Market (the “Designated Eurodollar Market”)) equal to the sum
of:

 

(i)            $250; plus

 

(ii)           the amount, if any, by which
(i) the additional interest would have accrued on the amount prepaid or
not borrowed at the LIBOR Basis exceeds (ii) the interest Lenders
could recover by placing such amount on deposit in the Designated Eurodollar
Market for a period beginning on the date of the prepayment or failure to
borrow and ending on the last day of the applicable LIBOR Loan Period (or, if
no deposit rate quotation is available for such period, for the most comparable
period for which a deposit rate quotation may be obtained); plus

 

(iii)          all out-of-pocket expenses
incurred by Lenders directly attributable to such payment, prepayment or
failure to borrow.

 

Each
Lender making a claim under this Section shall submit to the Borrower an
itemized and substantiated statement setting forth such Lender’s accounting of
the amount of any prepayment fee payable under this Section, which calculation
shall, absent manifest error, be deemed final, binding and conclusive upon
Borrower, unless Borrower, within thirty (30) days after the date any such
accounting is rendered, provides such Lender with written notice of any
objection which Borrower may have to such accounting.

 

2.9           Term.  The Credit Facilities shall be in effect
until the Maturity Date.  The Credit Facilities and all
other Obligations related thereto shall be automatically due and payable in
full on the Maturity Date, unless earlier due and payable or terminated as
provided in this Agreement.

 

2.10         Early
Termination.  The Credit
Facilities may be terminated, in whole or in increments of $10,000,000.00, by
Borrower prior to the Maturity Date upon five (5) Business Days’ prior
written notice to Administrative Agent; provided, that at such time
Borrower shall (a) prepay all amounts outstanding under the Credit
Facilities which exceed the reduced Revolving Commitment amount elected by
Borrower, (b) cause the outstanding Letters of Credit to be canceled and
returned to Lenders or provide Lenders with a standby letter of credit or
collateral therefor, acceptable to Issuing Lender and/or Lenders in its/their
sole discretion if such outstanding Letters of Credit would cause the amounts
outstanding under the Credit Facilities to exceed the reduced Revolving
Commitment amount elected by Borrower, (c) pay all accrued interest
thereon and fees and charges incurred in connection therewith, and (d) reimburse
Lenders for those costs and expenses incurred by Lenders in connection with
such prepayment and termination, as set forth in Section 2.8.5.

 

2.11         Note and
Accounting. 
Administrative Agent shall provide a quarterly accounting to Borrower of
the Loans and Letter of Credit Obligations and other transactions under this
Agreement, including Administrative Agent’s calculation of principal and
interest.  Each and every such accounting
shall, absent manifest error, be deemed final, binding and conclusive upon
Borrower, unless Borrower, within thirty (30) days after the date any such
accounting is rendered, provides Administrative Agent with written notice of
any objection which Borrower

 

43

 

may
have to any item in such accounting, describing the basis for such objection
with specificity.  In that event, only
those items expressly objected to in such notice shall be deemed to be disputed
by Borrower, and in the event the parties cannot resolve their dispute, such
dispute shall be resolved in accordance with the terms and conditions of the
Alternative Dispute Resolution Agreement.

 

2.12         Manner of
Payment.

 

2.12.1         When Payments Due.

 

(i)            Except as
expressly set forth in this Agreement, each payment (including any prepayment)
by Borrower on account of the principal of or interest on the Loans and any
other amount owed to Lenders on account of the Obligations shall be made not
later than 11:00 a.m. (California time) on the date specified for payment
under this Agreement to Administrative Agent in lawful money of the United
States and in immediately available funds. 
Any payment received by Administrative Agent on a day that is not a
Business Day or after 11:00 a.m. (California time) on a Business Day,
shall be deemed received on the next Business Day.  The amount of all payments received by
Administrative Agent for the account of each Lender shall be immediately paid
by Administrative Agent to the applicable Non-Defaulting Lender in immediately
available funds and, if such payment was received by Administrative Agent by
11:00 a.m., California time, on a Business Day and not so made available
to the account of a Lender on that Business Day, Administrative Agent shall
reimburse that Lender for the cost to such Lender of funding the amount of such
payment at the Federal Funds Rate.  The
amount of all payments received by the Administrative Agent for the account of
any Defaulting Lender shall be held in trust by the Administrative Agent for
the benefit of such Defaulting Lender until such time as such Defaulting Lender
shall cease to be a Defaulting Lender under this Agreement, at which time, the
Administrative Agent shall pay over such amounts (without interest) to such
Lender.  All payments shall be made in lawful
money of the United States of America.

 

(ii)           If any payment on any
Obligation is specified to be made upon a day that is not a Business Day, it
shall (subject to the provisions of the LIBOR Loan Period which may require
payment by one (1) earlier Business Day) be deemed to be specified to be
made on the next succeeding day that is a Business Day, and such extension of
time shall in such case be included in computing interest and fees, if any, in
connection with such payment.

 

2.12.2         No Deductions.  Subject to Section 2.12.1(a) above,
Borrower shall pay principal, interest, fees, and all other amounts due on the
Obligations without set-off or counterclaim or any deduction whatsoever.

 

2.12.3      Inadequate Payments.  If, on the date on which any amount
(including any payment of principal, interest or other costs and expenses)
shall be due and payable by Borrower to Credit Facility Lenders, the amount
received by any such Lenders from Borrower shall not be adequate to pay the
entire amount then due and payable, then Administrative Agent shall be authorized,
but shall not be obligated, to make a Base Rate Loan to Borrower in the amount
of the deficiency.

 

44

 

2.13         Application of
Payments.  Borrower
irrevocably waives the right to direct the application of any and all payments
received at any time by any Credit Facility Lender from or on behalf of
Borrower and specifically waives any provisions of the law of the State of New
York or any other Applicable Law giving Borrower the right to designate application
of payments.  All amounts received by
Administrative Agent for application to the Obligations shall be applied by
Administrative Agent in the following order of priority:  (i) to the payment of any fees then due
and payable, (ii) to the payments of all other amounts not otherwise
referred to in this Section 2.13 then
due and payable hereunder or under the other Loan Documents (including any
costs and expenses incurred by Administrative Agent as a result of a Default or
an Event of Default), (iii) to the payment of interest then due and
payable on the Loans, and (iv) to the payment of principal then due and
payable on the Loans.  Notwithstanding
the foregoing, Borrower irrevocably agrees that, during the occurrence of an
Event of Default, Credit Facility Lenders shall have the continuing exclusive
right to determine the order and method of the application of payments against
the then due and payable Obligations of Borrower in each of the Credit Facility
Lenders’ sole discretion and to revise such application prospectively or
retroactively in Credit Facility Lenders’ sole discretion; provided that all
proceeds of Collateral shall be distributed pari passu to the Credit Facility
Lender and Non-Lenders.

 

2.14         Use of Proceeds.  The proceeds of the Loans shall be used by
Borrower for general corporate purposes, including financing aircraft engines
owned and held for lease and the purchase of Parts.

 

2.15         All Obligations
to Constitute One Obligation.  All Obligations related to the Credit
Facilities constitute one general obligation of Borrower and shall be secured
by Security Agent’s Liens upon all of the Collateral, and by all other Liens
previously, now or at any time in the future granted by Borrower to Security
Agent, Administrative Agent, any Credit Facility Lender or any Non-Lender to
the extent provided in the Collateral Documents and permitted by this
Agreement.

 

2.16         Authorization
to Make Loans. 
Administrative Agent, Lender, Swing Line Lender, and Issuing Lender
(each, an “Authorized Party”) are authorized to make the Loans based on
telephonic or other oral or written instructions received from any Person that
an Authorized Party believes in good faith to be an authorized representative
of Borrower, or at the discretion of such Authorized Party, if such Loans are
necessary to satisfy any of the Obligations. 
Borrower consents to the recordation of any telephonic or other
communications between an Authorized Party and Borrower for the purpose of
maintaining such party’s business records of such transactions.

 

2.17         Authorization
to Debit Accounts.  Borrower
authorizes each Authorized Party, upon prior notice to Borrower, to debit any
of Borrower’s bank accounts with such party for the purpose of Borrower’s
payment of principal, interest or other costs and expenses due and payable by
Borrower to Lenders under this Agreement.

 

2.18         Administrative
Agent’s Right to Assume Funds Available for Revolving Loans.  Unless Administrative Agent shall have been
notified by any Lender no later than 10:00 a.m. on the Business Day of the
proposed funding by Administrative Agent of any Revolving Loan that such Lender
does not intend to make available to Administrative Agent such Lender’s portion
of

 

45

 

the
total amount of such Revolving Loan, Administrative Agent may assume that such
Lender has made such amount available to Administrative Agent on the date of
the Revolving Loan and Administrative Agent may, in reliance upon such
assumption, make available to Borrower a corresponding amount.  If Administrative Agent has made funds
available to Borrower based on such assumption and such corresponding amount is
not in fact made available to Administrative Agent by such Lender,
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Lender.  If such Lender
does not pay such corresponding amount forthwith upon Administrative Agent’s
demand therefor, Administrative Agent promptly shall notify Borrower and
Borrower shall either (i) pay such corresponding amount to Administrative
Agent or (ii) arrange for another Lender or Lenders to assume the
Defaulting Lender’s commitment to pay such corresponding amount and such
assuming Lender(s) shall pay the corresponding amount to Administrative
Agent (upon which payment the Defaulting Lender’s and any such assuming Lender’s
Pro Rata Share shall be adjusted accordingly). 
Administrative Agent also shall be entitled to recover from such
Defaulting Lender interest on such corresponding amount in respect of each day
from the date such corresponding amount was made available by Administrative
Agent to Borrower to the date such corresponding amount is recovered by
Administrative Agent, at a rate per annum equal to the daily Federal Funds
Rate.  Nothing herein shall be deemed to
relieve any Lender from its obligation to fulfill its share of the Revolving
Commitment or to prejudice any rights which Administrative Agent or Borrower
may have against any Lender as a result of any default by such Lender
hereunder.

 

2.19         Optional
Increase to the Revolving Commitment.

 

2.19.1         Provided that no Default or
Event of Default then exists, Borrower may elect, from time to time, on or
after the Closing Date, in writing, that the then effective Revolving
Commitment be increased up to an aggregate amount which is not in excess of
Three Hundred Million and 00/100 Dollars ($300,000,000.00).  Any request under this Section 2.19 shall be submitted by
Borrower to Lenders through Administrative Agent not less than thirty
(30) days prior to the proposed increase, specify the proposed effective
date and amount of such increase, and be accompanied by (i) a certificate
signed by an Authorized Signatory, stating that no Default or Event of Default
exists as of the date of the request or will result from the requested increase
and (ii) an updated Appraisal of the Collateral satisfactory to
Administrative Agent, in its sole and absolute discretion.  Any such request shall be approved by
Administrative Agent if Borrower provides the foregoing items and Administrative
Agent receives sufficient commitments from Lenders pursuant to Sections 2.19.2 through 2.19.4 to fund the requested increase.

 

2.19.2         Borrower shall be solely
responsible for requesting a commitment from each Lender to assume a portion of
the proposed increase to the Revolving Commitment, and Borrower shall copy
Administrative Agent on all such requests. 
Each Lender may approve or reject such request in its sole and absolute
discretion, and any Lender who fails to send an affirmative written response to
Borrower, with a copy to Administrative Agent, within ten (10) Business
Days after receipt of such request, shall be deemed to have rejected Borrower’s
request.

 

46

 

2.19.3         In responding to a request
under this Section, each Lender which is willing to assume a portion of the
proposed increase to the Revolving Commitment shall specify the amount of the
proposed increase that it is willing to assume. 
Each consenting Lender shall be entitled to participate ratably (based
on its Pro Rata Share of the Revolving Commitment before such increase) in any
resulting increase in the Revolving Commitment, subject to the right of
Administrative Agent to adjust allocations of the increased Revolving
Commitment so as to result in the amounts of the Pro Rata Shares of the Lenders
being in integral multiples of $100,000.00.

 

2.19.4         If the aggregate principal
amount offered to be assumed by the consenting Lenders is less than the amount
requested, Borrower may (i) reject the proposed increase in its entirety, (ii) accept
the offered amounts, or (iii) designate new lenders who qualify as
Eligible Assignees as additional Lenders hereunder (each, a “New Lender”),
which New Lenders may assume the amount of the increase in the Revolving
Commitment that has not been assumed by the consenting Lenders.

 

2.19.5         After completion of the
foregoing, Administrative Agent shall give written notification to the Lenders
and any New Lenders of the increase to the Revolving Commitment which shall
thereupon become effective, and in connection with such notification
Administrative Agent will distribute to the Borrower and the Lenders a revised Schedule 2.1 reflecting the then
applicable Pro Rata Shares of the Lenders.

 

2.19.6         Each New Lender shall become
an additional party hereto as a Lender concurrently with the effectiveness of
the proposed increase in the Revolving Commitment upon its execution of an
instrument of joinder to this Agreement, which is in form and substance
reasonably acceptable to Administrative Agent and which, in any event, contains
the representations, warranties, indemnities and other protections afforded to
Administrative Agent and the other Lenders which would be granted or made by an
Eligible Assignee by means of the execution of a Commitment Assignment and
Acceptance.

 

2.19.7         Subject to the foregoing,
any increase to the Revolving Commitment requested under this Section shall
be effective upon the date agreed to by Administrative Agent and Borrower and
shall be in the principal amount equal to (i) the amount which consenting
Lenders are willing to assume as increases to their respective Revolving
Commitment plus (ii) the amount assumed by New Lenders.  Upon the effectiveness of any such increase,
each Revolving Loan outstanding shall be refinanced with new Loans reflecting
the adjusted Pro Rata Share of each Lender in the Revolving Commitment if there
is any change thereto and Borrower shall:

 

(i)            issue a
replacement Revolving Note to each affected Lender and a new Revolving Note to
each New Lender, and the Pro Rata Share of each Lender will be adjusted to give
effect to the increase in the Revolving Commitment;

 

47

 

(ii)           execute and deliver to
Administrative Agent such amendments to the Loan Documents as Administrative
Agent may reasonably request relating to such increase to, among other things,
assure the continued priority and perfection the Lien granted by Borrower to
Security Agent, for the ratable benefit of Lenders, upon all of Borrower’s
right, title and interest in the Collateral; and

 

(iii)          pay to the existing Lenders
any breakage costs as set forth in Section 2.8.5,
which are payable in connection with the refinancing of any LIBOR Loans.

 

2.19.8         Notwithstanding the
foregoing or anything in this Agreement to the contrary, any increase in the
Revolving Commitment pursuant to this Section 2.19
shall not increase the amount of the Letter of Credit sublimit as
set forth in Section 2.3.1 or
the maximum amount of the Swing Line Commitment unless consented to in writing
by Issuing Lender or Swing Line Lender, respectively.

 

3.             SECURITY

 

To
secure the prompt payment and performance of all Obligations and all
obligations of Borrower under Non-Lender Protection Agreements, for the ratable
benefit of Credit Facility Lenders and Non-Lenders, Borrower, each Engine
Owner, each Equipment Owner and each Leasing Subsidiary, as applicable, shall
enter into the Collateral Documents creating security interests in the
Collateral.

 

4.             CONDITIONS
PRECEDENT

 

4.1           Conditions
Precedent to Closing.  Credit
Facility Lenders shall not be obligated to make any Loan or cause Issuing
Lender to incur any Letter of Credit Obligations, or to take, fulfill, or
perform any other action under this Agreement, until the following conditions
have been satisfied to their reasonable satisfaction or waived in writing by
each such lender:

 

4.1.1           Administrative Agent shall
have received:

 

(i)            originals of
the documents set forth on Schedule 1.1e (Schedule
of Documents), each duly executed by the appropriate parties, together with
such other assurances, certificates, documents or consents related to the
foregoing as Administrative Agent 
reasonably may require, all in form and substance satisfactory to
Administrative Agent;

 

(ii)           such documentation as
Administrative Agent may reasonably require to establish the due organization,
valid existence and good standing of Borrower and each Leasing Subsidiary, and
as to each, its qualification to engage in business in each material
jurisdiction in which it is engaged in business or required to be so qualified,
its authority to execute, deliver and perform the Loan Documents to which it is
a party, the identity, authority and capacity of each Authorized Signatory
thereof authorized to act on its behalf, including certified copies of articles
of organization and amendments thereto, bylaws and operating agreements and
amendments thereto, certificates of good standing and/or qualification to
engage in business, tax clearance certificates, certificates of corporate
resolutions, incumbency certificates, certificates of Authorized Signatory, and
the like;

 

48

 

(iii)          (i) a list of all
current insurance of any nature maintained by Borrower, as well as a summary of
the terms of such insurance, including insurance for Engines and Equipment
leased pursuant to an Eligible Lease and (ii) a copy of all insurance
certificates or other evidence of insurance for the Collateral, as requested by
Agent;

 

(iv)          originals of favorable
written opinions, dated as of the date hereof, of independent and internal
counsel to the Borrower, Leasing Subsidiary and the Owner Trustee, in each case
acceptable to Administrative Agent, addressed to Agents and Credit Facility
Lenders (and their respective participants and assigns) and otherwise in form
and substance satisfactory to Administrative Agent as to such matters as
Administrative Agent shall determine.

 

(v)           a Compliance Certificate
dated as of the Closing Date.

 

(vi)          copies of all consents and
authorizations of, permits from or filings with, any Governmental Authority or
other Person required in connection with the execution, delivery, performance
or enforceability of the Loan Documents or any provision thereof and no
material changes in governmental regulations affecting the Borrower, Agents or
the Lenders shall have occurred.

 

(vii)         a certified lien search for
the State of Delaware with respect to the Borrower and each of its
Subsidiaries, (ii) an International Registry search with respect to each
Engine and Turboprop Engine; (iii) an FAA search with respect to each
Engine and Turboprop Engine, (iv) a Federal tax lien search with respect
to the Borrower and each of its Subsidiaries, and any other searches as may be
required by Administrative Agent or Security Agent.

 

4.1.2           All of the financing
statements and other documentation described in the Security Agreement shall
have been filed with the appropriate Governmental Agencies, and Security Agent
shall hold a first priority perfected Lien in the Collateral, for the ratable
benefit of Credit Facility Lenders and Non-Lenders, subject only to Permitted
Liens.

 

4.1.3        The following statements shall be true, and
Administrative Agent shall have received evidence reasonably satisfactory to it
(including, with respect to each Engine and Turboprop Engine which is eligible
for registration with the International Registry, a printout of the “priority
search certificate” from the International Registry showing the Engine Owners’
ownership interest with respect to such Engine or Turboprop Engine under a
contract of sale) with respect to each Engine or Turboprop Engine and any
related Lease included in the Borrowing Base to the effect that:

 

(i)            the applicable
Engine Owner has good title to such Engine or Turboprop Engine and the related
Lease, free and clear of Liens other than (i) Permitted Liens and (ii) the
Lien, the International Interests and assignment of International Interests
created by the Mortgage and Security Agreement; and

 

(ii)           with respect to
each Engine or Turboprop Engine, the Borrower is in compliance with the
applicable requirements of the Security Agreement and the Mortgage and Security
Agreement or the Owner Trustee Mortgage and Security Agreement, as applicable.

 

49

 

4.1.4           payment by Borrower to
Administrative Agent of all fees, costs, and expenses of closing (including
reasonable fees of legal counsel to Administrative Agent presented as of the
Closing Date);

 

4.1.5        payment by Borrower to each Lender of upfront fees,
if any, payable on or prior to the Closing Date as heretofore agreed upon by
separate letter agreement between Borrower and any such Lender;

 

4.1.6        no action, proceeding, investigation, regulation or
legislation shall have been instituted, threatened or proposed before any
court, Governmental Authority or legislative body to enjoin, restrain or
prohibit, or to obtain damages in respect of, or which is related to or arises
out of, this Agreement or any other Loan Document or the consummation of the
transactions contemplated hereby or thereby and which, in any Lender’s sole
judgment, would make it inadvisable to consummate the transactions contemplated
by this Agreement or any other Loan Document;

 

4.1.7        Administrative Agent shall have completed its
independent business and legal due diligence, including but not limited to
financial, legal and insurance reviews, with results satisfactory to
Administrative Agent;

 

4.1.8        all of the representations and warranties of
Borrower under this Agreement shall be true and correct as of the Closing Date;

 

4.1.9        Credit Facility Lenders, Administrative Agent, and
Security Agent each shall have obtained satisfactory credit or other required
internal approval(s) in connection with the transactions contemplated by
this Agreement and the Loan Documents;

 

4.1.10      The Closing Date shall occur on or before November 30,
2009;

 

4.1.11      No circumstance or event shall have occurred,
including but not limited to any litigation, actions, suits, proceedings or
investigations pending as to Borrower, that constitutes a Material Adverse
Effect as of the Closing Date;

 

4.1.12      Borrower shall be in compliance with all the terms
and provisions of the Loan Documents, and no Default or Event of Default shall
have occurred and be continuing;

 

4.1.13      Borrower shall have established the Demand Deposit
Account with Administrative Agent.

 

If
any other term of any Loan Document should conflict, or appear to conflict,
with this Section 4.1, the
terms of this Section 4.1
shall control, and Borrower shall have no rights under this Agreement or any
other Loan Document until each of the conditions of this

 

50

 

Section 4.1 has been complied with to
Administrative Agent’s and Lenders’ satisfaction or specifically waived in a
writing by Lenders.

 

4.2           Conditions to
All Loans.  It shall be
a condition to the funding of any Loan that the following statements be true on
the date of each such funding, advance or incurrence of a Letter of Credit
Obligation, as the case may be:

 

4.2.1           Administrative Agent shall
have timely received a Borrowing Notice, telephonic request, or a Request for
Letter of Credit, as applicable, together with an Borrowing Base Certificate
dated as of the date of such Borrowing Notice;

 

4.2.2           Administrative Agent shall
determine that, after giving effect to the requested Revolving Loan, no
Overadvance will occur and that the conditions of Sections 2.2.1 and 2.3.1,
as applicable, have been satisfied;

 

4.2.3           all of the representations
and warranties of Borrower under this Agreement and the other Loan Documents
shall be true and correct at such date, except to the extent any such
representations and warranties relate to an earlier date, both before and after
giving effect to the funding or issuance of such Loan, and Administrative Agent
shall have received, if it so elects, a certification to that effect signed by
an Authorized Signatory;

 

4.2.4           Borrower shall be in
compliance with all the terms and provisions of the Loan Documents, and no
Default or Event of Default shall have occurred and be continuing or would
result after giving effect to such Loan.

 

4.2.5           no circumstance or event
shall have occurred since the Closing Date, or would result from the funding,
advance or incurrence of any Loan, that constitutes a Material Adverse Effect;

 

4.2.6           Security Agent shall hold a
perfected, first priority Lien on all Collateral, for the ratable benefit of
Credit Facility Lenders and Non-Lenders, subject only to Permitted Liens.

 

4.2.7           Each Lender shall have
received such information from Borrower and its Affiliates as required by such
Lender to confirm that Borrower and its Affiliates are in compliance with the
Patriot Act and similar laws.

 

4.3           Conditions to
Borrowing Base Inclusion.  As
of the Closing Date, and thereafter, with respect to each new Engine or item of
Equipment the following conditions shall be satisfied within five (5) Business
Days of an advance of the Loan related thereto:

 

4.3.1           With respect to each Engine
or item of Equipment which is owned by an Owner Trustee, Security Agent (or the
Custodian) shall have received the documentation (including, without
limitation, the Owner Trustee Guaranties, Owner Trustee Mortgage and Security
Agreements, Trust Agreements, Beneficial Interest Pledge Agreements, Leasing
Subsidiary Security

 

51

 

Agreement, as applicable) set forth in the definitions of “Eligible Asset”
and “Eligible Lease.”

 

4.3.2        In respect of any Owner Trustee which shall not have
previously provided such documents to Administrative Agent, Administrative
Agent shall have received (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 Loan
Documents to which the Owner Trustee is or will be a party and (ii) an
incumbency certificate of Owner Trustee, as to the persons authorized to
execute and deliver the Loan Documents to which it is or will be a party and
the signatures of such person or persons.

 

4.3.3        In the case of any Engine or Turboprop Engine, the
Borrower (for itself or Owner Trustee) will have caused a Prospective
International Interest (or International Interest) in such Engine or Turboprop
Engine listing Security Agent as creditor to be registered with the
International Registry with respect to the Mortgage and Security Agreement for
such Engine and Turboprop Engines and shall have caused to be filed with the
FAA the Mortgage and Security Agreement or Owner Trustee Mortgage and Security
Agreement with respect thereto and delivered the same to Security Agent.

 

4.3.4        In the case of any Engine or Turboprop Engine,
Administrative Agent shall have received evidence reasonably satisfactory to it
(including, with respect to each Engine or Turboprop Engine which is eligible
for registration with the International Registry, a printout of the “priority
search certificate” (as defined in the Regulations for the International
Registry) from the International Registry relating to Security Agent’s
International Interest with respect to such Engine or Turboprop Engine) with
respect to such Engine or Turboprop Engine to the effect that:

 

(i)            the applicable
Engine Owner has good title to such Engine or Turboprop Engine, free and clear
of Liens other than Permitted Liens, and the Lien and International Interests
and assignment of International Interests created by the Mortgage and Security
Agreement or Owner Trustee Mortgage and Security Agreement, as the case may be;

 

(ii)           the Lien and International
Interest (or Prospective International Interest) of the Mortgage and Security
Agreement created (or to be created) with respect to such Engine or Turboprop
Engine shall have been registered with the International Registry and the FAA,
and no Lien or International Interest shall have been registered on the
International Registry or with the FAA prior to such International Interest (or
Prospective International Interest) with respect to such Engine or Turboprop
Engine; and

 

(iii)          with respect to such Engine
or Turboprop Engine and any related Lease, the Borrower is in compliance with
the applicable provisions of the Security Agreement and the Mortgage and
Security Agreement;

 

52

 

4.3.5           If an Engine or Turboprop
Engine is subject to a Lease, then the following statements shall be true, and
Administrative Agent shall have received evidence reasonably satisfactory to it
(including, with respect to each Cape Town Eligible Lease, a printout of the “priority
search certificate” (as defined in the Regulations for the International
Registry) from the International Registry relating to the Lessor’s interest in
and International Interest with respect to such Engine or Turboprop Engine
under such Lease) with respect to such Engine or Turboprop Engine and the
related Lease to the effect that:

 

(i)            the applicable
Engine Owner has good title to such Engine or Turboprop Engine and Lease, free
and clear of Liens other than Permitted Liens and the Lien, the International
Interests and the assignment of International Interests created by the Mortgage
and Security Agreement and/or Owner Trustee Mortgage and Security Agreement;

 

(ii)           if the Lessee under such
Lease is situated in a Contracting State, the International Interest created by
such Lease shall have been registered with the International Registry, and no
International Interest shall have been registered on the International Registry
prior to the registration of such International Interest (or Prospective
International Interest) with respect to such Lease, the registration of the
International Interest created by such Lease shall be subordinate to the
International Interest of Security Agent in the related Engine or Turboprop
Engine, and the assignment (or prospective assignment) of such International
Interest by the Lessor to Security Agent shall have been registered with the
International Registry; and

 

(iii)          the Borrower shall have
caused executed originals of the Mortgage and Security Agreement or Owner
Trustee Mortgage and Security Agreement with respect to such Engine or
Turboprop Engine and/or Lease to be filed with the FAA.

 

Notwithstanding
the foregoing, but subject to clause (a) of this Section 4.3.5 if the Mortgage and
Security Agreement or Owner Trustee Mortgage and Security Agreement and/or
Lease for any Engine or Turboprop Engine is not available on any Borrowing
Date, but provided, in the case of a Lease of any Engine or Turboprop Engine,
that the Lessee thereunder is situated in a Contracting State, the parties
hereto agree nevertheless to close on the financing of such Engine or Turboprop
Engine so long as a Prospective International Interest or International
Interest in such Engine or Turboprop and such Mortgage and Security Agreement
or Owner Trustee Mortgage and Security Agreement and/or Lease has been duly registered
in favor of Security Agent at the International Registry (with no prior
International Interest in such Engine, Turboprop Engine or Lease having been
registered at the International Registry prior to the registration of such
Prospective International Interest or International Interest in favor of
Security Agent), in which case the Borrower shall cause the Mortgage and
Security Agreement or Owner Trustee Mortgage and Security Agreement and/or
Lease to be filed with the FAA within three (3) days of such registration
of Prospective International Interest or International Interest.

 

4.3.6           The Borrower shall have
caused its legal counsel to deliver to the Administrative Agent and the
Borrower an opinion as to the filing with the FAA for recordation and registration
of an International Interest on the International Registry with respect to, the
Mortgage and Security Agreement or Owner Trustee Mortgage and Security
Agreement and/or Lease and the lack of

 

53

 

filing with the FAA of any intervening documents, and the lack of
registration with the International Registry of any intervening interests, with
respect to such Engine, Turboprop Engine and/or Lease, as applicable.

 

The
request and acceptance by Borrower of the proceeds of the Loan and the
incurrence of any Letter of Credit Obligation by Issuing Lender shall be deemed
to constitute, as of the date of such Loan or incurrence of such Letter of
Credit Obligation, (1) a representation and warranty by Borrower that the
conditions in Sections 4.2 and 4.3, as applicable, have been satisfied,
and (2) a confirmation by Borrower of the granting and continuance of
Security Agent’s Liens pursuant to the Collateral Documents.

 

5.             REPRESENTATIONS
AND WARRANTIES

 

Borrower
represents, warrants and agrees that from and after the Closing Date and until
the Termination Date:

 

5.1           Corporate
Existence; Compliance with Law.  Borrower is a corporation duly formed,
validly existing and in good standing under the Applicable Laws of Delaware.  Borrower is duly qualified or registered to
transact business and is in good standing in Delaware, New York, California and
in each other jurisdiction in which the conduct of its business or the
ownership or leasing of its Property makes such qualification or registration
necessary and in which the failure to be so qualified or registered could have
a Material Adverse Effect.  Borrower has
all requisite power and authority to conduct its business, to own, pledge,
mortgage or otherwise encumber and operate its Property, to lease the Property
it operates under lease, to conduct its business as now or proposed to be
conducted, to execute and deliver each Loan Document to which it is a party and
to perform its Obligations. Borrower is in compliance with all Applicable Laws
and other legal requirements applicable to its business, has obtained all
authorizations, consents, approvals, orders, licenses and permits from, and has
accomplished all filings, registrations and qualifications with, or obtained exemptions
from any of the foregoing from, any Governmental Authority that are necessary
for the transaction of its business.

 

5.2           Executive
Offices; Corporate or Other Names; Conduct of Business.  The locations of Borrower’s executive offices
and principal place of business, and locations where all of Borrower’s records
with respect to Collateral are kept are as set forth in Schedule 5.2, which schedule Borrower
may update at any time without consent of, but with notice to, Agent.  Notwithstanding the foregoing, Borrower shall
not change its (a) name, (b) chief executive office, (c) principal
place of business or jurisdiction of formation, or (d) location of its
records concerning the Collateral, without, in each instance, giving thirty
(30) days’ subsequent written notice thereof to Administrative Agent and
Security Agent and taking all actions deemed necessary or appropriate by
Administrative Agent to protect and perfect Security Agent’s Liens continuously
upon the Collateral.   Notwithstanding
the foregoing, Borrower shall not change its principal place of business to a
location outside the United States.

 

5.3           Authority;
Compliance with Other Agreements and Instruments and Government Regulations.  The execution, delivery and performance by
Borrower, any Owner Trustee, any Leasing Subsidiary, and any Subsidiary of the
Loan Documents to which each is a party have been duly authorized by all
necessary corporate action, and do not and will not:

 

54

 

5.3.1           Require any consent or
approval not heretofore obtained of any member, partner, director, stockholder,
security holder or creditor of such party;

 

5.3.2        Violate or conflict with any provision of such party’s
operating agreement, charter, articles of incorporation or bylaws, as
applicable;

 

5.3.3        Result in or require the creation or imposition of
any Lien (other than pursuant to the Loan Documents) upon or with respect to
any Property now owned or leased or hereafter acquired or leased by such party;

 

5.3.4        Violate any Applicable Law applicable to such party;
or

 

5.3.5        Result in a breach of or constitute a default under,
or cause or permit the acceleration of any obligation owed under, any indenture
or loan or credit agreement or any other Contractual Obligation to which such
party is a party or by which such party or any of its property is bound or
affected; and such party is not in violation of, or default under, any
Applicable Law or Contractual Obligation, or any indenture, loan or credit
agreement, in any respect.

 

5.4           No Governmental
Approvals Required.  Except as
previously obtained or made, no authorization, consent, approval, order,
license or permit from, or filing, registration or qualification with, any
Governmental Authority is or will be required to authorize or permit under
Applicable Laws the execution, delivery and performance by Borrower, any Owner
Trustee, any Leasing Subsidiary, and any Subsidiary of the Loan Documents to
which it is a party.

 

5.5           Subsidiaries.

 

5.5.1           As of the Closing Date, Schedule 5.5 hereto correctly sets
forth the names, form of legal entity, membership interests or stock of
Borrower or a Subsidiary of Borrower (specifying such owner) and jurisdictions
of organization of all Subsidiaries of Borrower.  Except as described in Schedule 5.5, Borrower does not own
any capital stock, equity interest or debt security which is convertible, or
exchangeable, for capital stock or equity interest in any Person.  Unless otherwise indicated in Schedule 5.5, all of the outstanding
shares of capital stock, or all of the units of equity interest, as the case
may be, of each Subsidiary are owned of record and beneficially by Borrower,
there are no outstanding options, warrants or other rights to purchase capital
stock of any such Subsidiary, and all such shares or equity interests so owned
are duly authorized, validly issued, fully paid and non-assessable, and were
issued in compliance with all applicable state and federal securities and other
Applicable Laws, and are free and clear of all Liens, except for Permitted
Liens.

 

5.5.2        Each Subsidiary is a legal entity of the type
described in Schedule 5.5
duly formed, validly existing and in good standing under the Applicable Laws of
its jurisdiction of organization and is duly qualified to do business as a foreign
organization and in good standing as such in each

 

55

 

jurisdiction
in which the conduct of its business or the ownership or leasing of its
property makes such qualification necessary and in which the failure to be so
qualified or registered could adversely affect the Borrower in any material
respect, and has all requisite power and authority to conduct its business and
to own and lease its property.

 

5.5.3        Each Subsidiary is in compliance with all Applicable
Laws and other requirements applicable to its business and has obtained all
authorizations, consents, approvals, orders, licenses, and permits from, and
each such Subsidiary has accomplished all filings, registrations, and
qualifications with, or obtained exemptions from any of the foregoing from, any
Governmental Authority that are necessary for the transaction of its business.

 

5.5.4        Borrower shall update Schedule 5.5, as necessary and
without the consent of, but with notice to, Agent, to maintain the accuracy and
correctness of such schedule at all times from the Closing Date through the
Termination Date.

 

5.5.5        WLFC Funding (Ireland) limited is a Wholly-Owned
Subsidiary which is not currently operating as a business and which has no
assets or operating income.

 

5.6           Financial
Statements.  Borrower
has furnished to Lender the audited financial statements of Borrower and its
Subsidiaries (on a consolidated basis) as of the fiscal year ending December 31,
2008 (including balance sheets and income statements) and the unaudited
financial statements of Borrower and its Subsidiaries (on a consolidated basis)
as of the Fiscal Quarter ending September 30, 2009.  The financial information contained therein
fairly presents in all material respects the financial condition, results of
operations and changes in financial position of Borrower and its Subsidiaries
(on a consolidated basis) as of such dates and for such periods.

 

5.7           No Material
Adverse Effect.  Except as
set forth on Schedule 5.7, as
of the Closing Date, no circumstance or event has occurred that constitutes a
Material Adverse Effect.

 

5.8           Title To and
Location of Property.  Borrower
and its Subsidiaries have valid title, 
to, or leasehold interests in, the Property, including all Engines and
Equipment, as reflected in the balance sheet(s) described in Section 5.6, other than items of
Property or exceptions to title which are in each case immaterial and Property
subsequently sold or disposed of in the ordinary course of business.  Such Property is free and clear of all Liens,
other than those described in Schedule 5.8
and Permitted Liens.

 

5.9           Intellectual
Property.  Borrower
and its Subsidiaries own, or possess the right to use to the extent necessary
in their respective businesses, all Intellectual Property, and no such
Intellectual Property conflicts with the valid Intellectual Property of any
other Person.  Except as set forth in Schedule 5.9, which schedule shall be
accurate as of the Closing Date only and which Borrower shall not be required
to update, Borrower has not used any trade name, trade style or “dba” during
the five-year period ending on the Closing Date.

 

56

 

5.10         Litigation.  Except for matters set forth in Schedule 5.10, there are no actions,
suits, proceedings or investigations pending as to which Borrower or any of its
Subsidiaries have been served or have received notice or, to the best knowledge
of Borrower, threatened against or affecting Borrower or any of its
Subsidiaries or any Property of any of them, the Collateral, or any other
transactions contemplated by this Agreement, in each case, which if determined
adversely, could reasonably have a Material Adverse Effect.

 

5.11         Binding
Obligations.  Each of the
Loan Documents to which Borrower, any Owner Trustee, any Leasing Subsidiary,
and any Subsidiary is a party will, when executed and delivered by such party,
constitute the legal, valid and binding obligation of such party, enforceable
against such party in accordance with its terms, except as enforcement may be
limited by (i) the Bankruptcy Code of the United States of America, as
amended from time to time, and all other applicable liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, receivership,
insolvency, reorganization, or similar debtor relief Laws from time to time in
effect affecting the rights of creditors generally, or (ii) equitable
principles relating to the granting of specific performance and other equitable
remedies as a matter of judicial discretion.

 

5.12         No Default.  No event has occurred and is continuing that
is a Default or Event of Default.

 

5.13         ERISA.  Neither Borrower nor any of its Subsidiaries
has any Pension Plans.  Neither Borrower
nor any of its Subsidiaries has incurred or expects to incur any withdrawal
liability to any Multiemployer Plan (as defined herein).  As used herein, “Pension Plan” means any “employee
pension benefit plan” (as such term is defined in Section 3(2) of
ERISA)) and “Multiemployer Plan” means any employee benefit plan of the type
described in Section 001(a)(3) of ERISA to which Borrower or any of
its ERISA affiliates contributes or is obligated to contribute.

 

5.14         Regulation U;
Investment Company Act.  No
part of the proceeds of any Loan hereunder will be used to purchase or carry,
or to extend credit to others for the purpose of purchasing or carrying, any
margin stock in violation of Regulation U. 
Neither Borrower nor any of its Subsidiaries is or is required to be
registered as an “investment company” under the Investment Company Act of 1940.

 

5.15         Disclosure.  None of the representations or warranties
made by the Borrower in the Loan Documents as of the date such representations
and warranties are made, and none of the statements contained in any exhibit,
report, or certificate furnished by the Borrower in connection with the Loan
Documents, contained any untrue statement of a material fact (when taken as a
whole) or omitted a material fact necessary to make the statement made not
misleading in light of all the circumstances existing at the date the statement
was made; provided, however, that with respect to information relating
to the Borrower’s business generally and not to Borrower specifically, the
Borrower represents and warrants only that such information was derived from
sources the Borrower believes to be reliable and the Borrower has no reason to
believe at the time such information was furnished or provided to the
Administrative Agent or any Lender that such information was misleading; and provided
further that to the extent any such information, report, financial
statement, exhibit or schedule was based

 

57

 

upon
or constitutes a forecast or projection, the Borrower represents only that it
acted in good faith and utilized reasonable assumptions and due care in the
preparation of such information, report, financial statement, exhibit or
schedule (it being understood that forecasts and projections by their nature
involve approximations and uncertainties).

 

5.16         Tax Liability.  Borrower and its Subsidiaries have filed all
tax returns which are required to be filed, and have paid, or made provision
for the payment of, all taxes with respect to the periods, Property or
transactions covered by said returns, or pursuant to any assessment received by
Borrower or any of its Subsidiaries, except such taxes, if any, as are being
contested in good faith by appropriate proceedings and as to which adequate
reserves have been established and maintained.

 

5.17         Hazardous
Materials.  Except as
described in Schedule 5.17,
as of the Closing Date (a) neither Borrower nor any of its Subsidiaries at
any time has disposed of, discharged, released or threatened the release of any
Hazardous Materials in violation of any Hazardous Materials Law, (b) to
the best knowledge of Borrower, no condition exists that violates any Hazardous
Material Law affecting any real property owned by Borrower or any of its
Subsidiaries, (c) no real property or any portion thereof is or has been
utilized by Borrower or any of its Subsidiaries as a site for the manufacture
of any Hazardous Materials and (d) to the extent that any Hazardous
Materials are used, generated or stored by Borrower or any of its Subsidiaries
on any real property, or transported to or from such real property by Borrower
or any of its Subsidiaries, such use, generation, storage and transportation
are in compliance with all Hazardous Materials Laws.

 

5.18         Security
Interests.  Upon the
execution and delivery of all of the Collateral Documents and the completion of
all actions to perfect the security interests so created, the Security
Agreement will create a valid first priority security interest in the
Collateral described therein securing the Lender and Non-Lender Obligations.

 

5.19         Leases, Engines
and Equipment.  Each of the
following is true and correct with respect to each Lease for an Engine and item
of Equipment included in the Borrowing Base:

 

5.19.1         The amounts of rent and
other amounts due under each Lease, as shown on the Borrower’s books and
records and on any statement or schedule delivered to Administrative Agent in
connection therewith, are the true and correct amounts actually owed to the
Borrower and the other Lessors;

 

5.19.2      The Lessor delivered to the Custodian an original
counterpart of such Lease, except with respect to Indemnified Original Lease in
an aggregate amount of up to $5,000,000.00;

 

5.19.3      All rentals, fees, costs, expenses and charges paid
or payable by the Lessee under any Lease, including without limitation, any
brokerage and other fees paid to the Borrower do not violate any Applicable Law
relating to the maximum fees, costs, expenses or charges that can be charged in
any jurisdiction in which any Engine or Equipment is located or in which the
corresponding Lessee is located, or in which a transaction was consummated, or

 

58

 

in
any other jurisdiction which may have jurisdiction with respect to any such
Engine, Equipment, Lease or Lessee.

 

5.20         Cape Town
Convention.    The
Borrower is (a) a “Transactional User Entity” (as such term is defined in
the Regulations for the International Registry); (b) “situated”, for the
purposes of the Cape Town Convention, in the United States; and (c) has
the “power to dispose” (as such term is used in the Cape Town Convention) of
the Engines or Turboprop Engines;

 

5.20.1         The Engines and Turboprop
Engines are “aircraft objects” (as such term is defined in the Cape Town
Convention);

 

5.20.2      The Borrower has identified any and all Cape Town Eligible
Leases, and has notified Agents of such Leases, in writing;

 

5.20.3      The payment of principal of and interest on the
Notes, and the performance by the Borrower of the Lender and Non-Lender
Obligations, are “associated rights” (as such term is defined in the Cape Town
Convention) with respect to the Engines or Turboprop Engines.

 

5.21         Depreciation
Policies.  The
Borrower’s depreciation policies in effect as of the Closing Date with respect
to the Engines and the Equipment are as set forth on Schedule 5.21.

 

5.22         Non-Lender
Protection Agreements.  Schedule 5.22 identifies each
Non-Lender Protection Agreement to which Borrower is a party that is in effect
as of the Closing Date, and a copy of each such Non-Lender Protection Agreement
has been made available to Agent.

 

5.23         Eligible Leases.  A list of all Eligible Engines and/or items
of Eligible Equipment (other than Eligible Parts) subject to a Lease in effect
as of the Closing Date is set forth in Schedule
5.23.

 

5.24         Preservation of
International Interests.  The
Lien, International Interest and assignment of International Interest of each
Mortgage and Security Agreement and Owner Trustee Mortgage and Security
Agreement and the International Interest of each Cape Town Eligible Lease shall
be registered with the FAA and/or International Registry, and such rights,
International Interests and assignments of International Interest of the Engine
Owner and Security Agent in the Engines or Turboprop Engines are at all times
maintained as against any third parties under the applicable laws of any
jurisdiction within the United States and as against any third parties in any
Contracting State under the Cape Town Convention.

 

6.             AFFIRMATIVE
COVENANTS (OTHER THAN INFORMATION AND REPORTING REQUIREMENTS)

 

So
long as any portion of the Loan remains in force and/or any Obligation remains
unpaid, Borrower shall, and shall cause its Subsidiaries to:

 

6.1           Payment of
Taxes and Other Potential Liens.  Pay and discharge promptly all material
taxes, assessments and governmental charges or levies imposed upon any of them,
upon its respective Property or any part thereof and upon its respective income
or profits or any part

 

59

 

thereof,
except that Borrower and its Subsidiaries shall not be required to pay or cause
to be paid any tax, assessment, charge or levy that is not yet past due, or is
being contested in good faith by appropriate proceedings so long as the
relevant entity has established and maintains adequate reserves for the payment
of the same and provided that such contested amounts shall not exceed in the
aggregate $5,000,000.00.

 

6.2           Preservation of
Existence.  Except as
permitted under Sections 7.1 and 7.5, preserve and maintain its respective
existence in the jurisdiction of its formation and all material authorizations,
rights, franchises, privileges, consents, approvals, orders, licenses, permits,
or registrations from any Governmental Authority that are necessary for the
transaction of its respective business and qualify and remain qualified to
transact business in each jurisdiction in which such qualification is necessary
in view of its respective business or the ownership or leasing of its
respective Property, unless failing to do so would not have a Material Adverse Effect.

 

6.3           Maintenance of
Property.  Maintain,
or, with respect to Property subject to Leases, require the Lessees to
maintain, in good working order and condition consistent with industry
practices and standards (taking into consideration ordinary wear and tear), all
of its Property and not permit any waste thereof, and, in the ordinary course
of business, make all needful and proper repairs, replacements, additions and
improvements thereto as are necessary for the conduct of its business, except
that the failure to maintain, preserve and protect a particular item of
Property shall not constitute a violation of this covenant if such failure
shall not cause a Material Adverse effect or if such item is at the end of its
useful life or otherwise is not of significant value, either intrinsically or
to the operations of Borrower.

 

6.4           Maintenance of
Insurance.  Maintain or
cause Lessee(s), as applicable, liability, casualty and other insurance
(subject to customary deductibles and retentions) on all Property with
responsible insurance companies in such amounts and against such risks as is
carried by responsible companies engaged in similar businesses and owning
similar assets in the general areas in which Borrower and its Subsidiaries
operate and shall furnish to Lenders statements of its insurance coverage and
shall promptly, upon Administrative Agent’s request, furnish other or
additional insurance deemed necessary by Administrative Agent to the extent
that such insurance may be available. 
Borrower shall take all actions required to maintain the foregoing
insurance and/or to comply with all requirements of such insurance
coverage.  Prior to any Loan disbursement
or incurrence of any Letter of Credit Obligations, Agents (or National City
Bank, as prior administrative agent under the Original Credit Agreement,
provided National City Bank shall have entered into an assignment agreement
with Agents assigning all its rights in the Loan, including rights as an
insured party, to Agents) shall be named as additional insureds on all
liability insurance, all risk ground and flight engine coverage for damage or
loss of the related Engine or Engines, and war risk insurance (if applicable)  and Agents shall be named as a loss payee
under all hull insurance policies insuring the Collateral.  Borrower shall deliver to Administrative
Agent endorsements to all of its (a) “All Risk” and business interruption
insurance policies naming Administrative Agent as loss payee, and (b) general
liability and other liability policies naming Administrative Agent as an
additional insured.  All policies of
insurance on real and personal property will include an endorsement, in form
and substance acceptable to Administrative Agent, showing loss payable to Administrative
Agent (Form 438 BFU or equivalent) (or National City Bank, as set forth
above) and extra expense and business

 

60

 

interruption
endorsements.  Such endorsement, or an
independent instrument furnished to Administrative Agent, will provide that the
insurer will give at least thirty (30) days’ prior written notice to
Administrative Agent before any such policy or policies of insurance shall be
canceled.  Upon the occurrence and
continuation of a Default or Event of Default, Borrower hereby directs all
present and future insurers under its and its Subsidiaries’ “All Risk” policies
of insurance to pay all proceeds payable thereunder directly to Administrative
Agent for the ratable benefit of Lenders. 
Administrative Agent reserves the right at any time, upon review of
Borrower’s risk profile, to require additional forms and limits of insurance to
adequately protect Lenders’ interests in accordance with Administrative Agent’s
normal practices for similarly situated borrowers, and if the circumstances are
unusual, in Administrative Agent’s sole opinion.  In the event that any insurance policies or
endorsements thereto required hereunder are in the name of National City Bank
as of the Closing Date, Borrower shall use its commercially reasonable best
efforts to have such insurance and endorsements reissued in Agent’s name as
required hereunder as promptly as possible after the Closing Date and in any
event within ninety (90) days after the Closing Date.

 

6.5           Compliance with Applicable
Laws.  Comply with all Applicable
Laws, except that Borrower and its Subsidiaries need not comply with an
Applicable Law then being contested by any of them in good faith by appropriate
proceedings or when failure to comply would not have a Material Adverse Effect.

 

6.6           Inspection Rights.  Upon reasonable notice, at any time during
regular business hours (but not so as to materially interfere with the business
of Borrower or any of its Subsidiaries) and up to two times per Fiscal Year if
no Event of Default has occurred and is then continuing and as often as
requested after the occurrence and during the Continuation of a Default, permit
Agent, or any authorized employee or representative thereof, to examine, audit
and make copies and abstracts from the records and books of account of, and to
visit and inspect the Property of, Borrower and its Subsidiaries and to discuss
the affairs, finances and accounts of Borrower and its Subsidiaries with any of
its officers, key employees or accountants. 
Borrower shall reimburse Agent for up to $25,000.00 of
inspection-related expenses per year; provided, Borrower shall reimburse Agent
for all inspection-related expenses incurred while Event of Default has
occurred and is then continuing.

 

6.7           Keeping of Records and Books
of Account.  Keep
adequate records and books of account reflecting all financial transactions in
conformity with GAAP, consistently applied, and in material conformity with all
applicable requirements of any Governmental Authority having regulatory
jurisdiction over Borrower and its Subsidiaries.

 

6.8           Compliance with Agreements.  Promptly and fully comply in all material
respects with all Contractual Obligations to which any one or more of them is a
party, except for any such Contractual Obligations then being contested by any
of them in good faith by appropriate proceedings.

 

6.9           Use of Proceeds.  Use the proceeds of the Loans only for the
purposes set forth in this Agreement.

 

61

 

6.10         Hazardous Materials Laws.  Keep and maintain all real property used
and/or owned by Borrower and any of its Subsidiaries and each portion thereof
in compliance in all material respects with all applicable Hazardous Materials
Laws and promptly notify Lender in writing (attaching a copy of any pertinent
written material) of (a) any and all material enforcement, cleanup,
removal or other governmental or regulatory actions instituted, completed or
threatened in writing by a Governmental Authority pursuant to any applicable
Hazardous Materials Laws, (b) any and all material claims made or
threatened in writing by any Person against Borrower relating to damage,
contribution, cost recovery, compensation, loss or injury resulting from any
Hazardous Materials and (c) discovery by any senior officer of any of
Borrower of any material occurrence or condition on any real property adjoining
or in the vicinity of such real property that could reasonably be expected to
cause such real property or any part thereof to be subject to any restrictions
on the ownership, occupancy, transferability or use of such real property under
any applicable Hazardous Materials Laws.

 

6.11         Future Subsidiaries.  Notify Lender of the existence of any
Subsidiary not disclosed on Schedule 5.5.

 

6.12         Conduct of Business.  Conduct its business substantially as now
conducted or as otherwise permitted hereunder.

 

6.13         Further Assurances;
Schedule Supplements.  At any
time and from time to time, upon the written request of Administrative Agent or
Security Agent and at the sole expense of Borrower, promptly and duly execute
and deliver any and all such further instruments and documents and take such
further action as such Agent may reasonably request to obtain the full benefits
of this Agreement and to protect, preserve and maintain all respective parties’
rights in the Collateral and under this Agreement.  Upon the occurrence and continuation of a
Default or Event of Default and as often as Agent may thereafter require,
Borrower will supplement each Schedule to this Agreement with respect to any
matter hereafter arising that, if existing or occurring as of the Closing Date,
would have been required to be set forth or described in such Schedule; provided,
that except for Schedules 5.2, 5.5 and 5.9,
such supplement shall not be deemed to be an amendment thereof unless expressly
consented to in writing by Administrative Agent.

 

6.14         Financial Covenants.  Maintain the following financial covenants on
a consolidated basis, each of which shall be calculated in accordance with GAAP
consistently applied as of the end of each Fiscal Quarter, as applicable, on a
rolling four (4) quarter basis:

 

6.14.1         Minimum
Consolidated Tangible Net Worth.  Minimum Consolidated Tangible Net Worth in an
amount equal to or greater than the sum of (i) eighty-five percent
(85%) of Tangible Net Worth at the close of the immediately preceding Fiscal
Quarter plus (ii) seventy-five percent (75%) of Positive Net Income
for each such successive Fiscal Quarter. 
As used herein “Positive Net Income” means Net Income for such
Fiscal Quarter, with no deduction for any net losses in such Fiscal Quarter.

 

62

 

6.14.2      Leverage Ratio.

 

(i)            A ratio of Total Debt on
that date to Tangible Net Worth of not more than 4.50 : 1.0.

 

(ii)           A ratio of
Total Debt (calculated with respect to Borrower only) on that date to Tangible
Net Worth (calculated with respect to Borrower only) of not more than 4.25 :
1.0.

 

6.14.3         Minimum Ratio
of EBIT to Consolidated Interest.  A ratio of EBIT to Consolidated Interest of
at least 1.50 : 1.0.  As used herein, “EBIT”
means, with respect to any fiscal period, the sum of (a) Net Income
for that period, plus (b) any extraordinary loss reflected in such
Net Income, minus (c) any extraordinary gain reflected in such Net
Income, plus (d) Interest Expense of Borrower and its Subsidiaries
for that period, plus (e) the aggregate amount of federal and state
taxes on or measured by income of Borrower and its Subsidiaries for that period
(whether or not payable during that period); provided that “EBIT” shall
not include any gains or losses resulting from changes in the fair market value
of derivative instruments (within the meaning of SFAS 133).  As used herein, “Consolidated Interest”
shall mean with respect to Borrower and its Subsidiaries as of the last day of
any Fiscal Quarter, the sum of all interest, fees, charges and related expenses
(in each case as such expenses are calculated according to GAAP) paid or
payable (without duplication) for that Fiscal Quarter to a lender in connection
with borrowed money (including any obligations for fees, charges and related
expenses payable to the issuer of any letter of credit) or the deferred
purchase price of assets that are considered “interest expense” under GAAP; provided
that “Consolidated Interest” shall not include any gains or losses resulting
from changes in the fair market value of derivative instruments (within the
meaning of SFAS 133).

 

6.15         Subordination of Third Party
Fees.  Borrower shall agree to
subordinate, on terms satisfactory to Administrative Agent, any fees paid to
any Subsidiaries or Affiliates of Borrower pursuant to ongoing contractual
arrangements for services provided to Borrower, including without limitation,
licensing, management and marketing fees.

 

6.16         Maintenance of Borrowing
Base.  Subject to Borrower’s right to
cure set forth in Section 2.8.3,
maintain the value of the Borrowing Base at all times such that no Borrowing
Base Deficiency occurs.

 

6.17         Placards.  Affix and maintain or use its best efforts to
cause each Lessee under a Lease to affix to and maintain on all Eligible Engine(s) or
item(s) of Eligible Equipment (other than Eligible Parts) a placard
bearing an inscription substantially in the form attached hereto as Exhibit P or such other inscription as
Security Agent from time to time may reasonably request.  The Borrower shall, on a quarterly basis,
provide to Administrative Agent and Security Agent a list of all Eligible
Engines or items of Eligible Equipment (other than Eligible Parts) subject to a
Lease indicating, to the best knowledge of the Borrower, which Engines have
placards affixed and on which no such placard is affixed.

 

63

 

6.18         Maintenance of Current
Depreciation Policies. 
Maintain its method of depreciating its assets substantially consistent
with past practices as set forth in Schedule
5.22 and promptly notify the Banks of any deviation from such
practices.

 

6.19         Preservation of
International Interests.  At
its expense, Borrower shall or shall cause any other Party, as applicable, to (i) register
with the FAA and/or International Registry, and thereafter maintain, the Lien,
International Interest and assignment of International Interest of each
Mortgage and Security Agreement and Owner Trustee Mortgage and Security
Agreement and the International Interest of each Cape Town Eligible Lease; and (ii) maintain
the rights and International Interests and assignment of International Interest
of the Engine Owner and Security Agent in the Engines or Turboprop Engines, as
against any third parties under the applicable laws of any jurisdiction within
the United States and as against any third parties in any Contracting State
under the Cape Town Convention.  The
Borrower agrees to furnish Security Agent with copies of all documents relating
to the foregoing and with recording and registration data as promptly as
practicable following the issuance of the same by the FAA and the International
Registry.

 

6.20         Maintenance of WEST
Management Agreement and Servicing Agreement.  Maintain substantially consistent with past
practices and not terminate Borrower’s interest and/or role under the WEST
Administrative Agency Agreement and Borrower’s management fee arrangement under
the WEST Servicing Agreement and promptly notify the Banks of any deviation
from such practices.

 

6.21         Notice of Non-Lender
Protection Agreement.  Promptly
upon the execution of any such Non-Lender Protection Agreement or incurrence of
such obligation after the Closing Date and until the Termination Date, Borrower
shall provide to Administrative Agent prompt written notice of such event and a
copy of such Non-Lender Protection Agreement.

 

7.             NEGATIVE COVENANTS

 

Borrower
covenants and agrees that Borrower and its Subsidiaries shall not, directly or
indirectly, by operation of law or otherwise.

 

7.1           Modification of Formation
Documents.  Amend its
certificate of incorporation or formation documents in such a way that could
reasonably be expected to have a Material Adverse Effect.

 

7.2           Modification of Debt.  Cancel or modify any Indebtedness owing to
it, except for reasonable consideration in the ordinary course of its business
or to the extent that it would not have a Material Adverse Effect on Borrower’s
financial condition.

 

7.3           Net Income.  Permit Net Income of the Borrower and its
Subsidiaries for any two consecutive Fiscal Quarters, as reported at the end of
each such Fiscal Quarter, to be less than zero.

 

7.4           Payment of Subordinated
Obligations.  Pay any (a) principal
(including sinking fund payments) or any other amount (other than scheduled
interest payments) with respect to any Subordinated Obligation, or purchase or
redeem (or offer to purchase or redeem) any

 

64

 

Subordinated
Obligation, or deposit any monies, securities or other Property with any
trustee or other Person to provide assurance that the principal or any portion
thereof of any Subordinated Obligation will be paid when due or otherwise to
provide for the defeasance of any Subordinated Obligation or (b) scheduled
interest on any Subordinated Obligation unless the payment thereof is then
permitted pursuant to the terms of the indenture or other agreement governing
such Subordinated Obligation; provided that Borrower and its Subsidiaries shall
be permitted to pay regularly scheduled payments of principal and interest on
Subordinated Obligations so long as no Event of Default is then outstanding.

 

7.5           Mergers.  Merge or consolidate with or into any Person,
except (a) mergers and consolidations of a Subsidiary of Borrower into
Borrower or a Wholly-Owned Subsidiary or of Subsidiaries with each other and (b) a
merger or consolidation of a Person into Borrower or with or into a
Wholly-Owned Subsidiary of Borrower that is not prohibited by Section 7.6; provided that (i) Borrower
is the surviving entity, (ii) no Change in Control results therefrom, (iii) no
Default or Event of Default then exists or would result therefrom, (iv) Borrower
executes such amendments to the Loan Documents as Administrative Agent may
reasonably determine are appropriate as a result of such merger, (v) the
aggregate consideration paid or to be paid (whether cash, notes, stock, or
assumption of debt or otherwise) by the Borrower and/or its Subsidiaries in any
one such merger or consolidation does not exceed $25,000,000.00, and (vi) such
aggregate consideration with respect to all such mergers or consolidations
shall not exceed $50,000,000.00 in any Fiscal Year. Without limitation, no such
merger or consolidation shall result in a violation of the terms of Section 6.2 or Section 6.14 based on pro forma
financials.

 

7.6           Hostile Acquisitions.  Directly or indirectly use the proceeds of
any Loan in connection with the Acquisition of a public corporation if such
Acquisition is opposed by the board of directors of such corporation or
business entity.

 

7.7           ERISA.  Create or maintain any Pension Plans or incur
any withdrawal liability to any Multiemployer Plan (as defined herein).

 

7.8           Change in Nature of Business.  Make any material change in the nature of the
business of Borrower and its Subsidiaries, taken as a whole.

 

7.9           Liens and Negative Pledges.  Create, incur, assume or suffer to exist any
Lien or Negative Pledge of any nature upon or with respect to any of its
respective Property or any Collateral or engage in any sale and leaseback
transaction with respect to any of its respective Property or any Collateral,
whether now owned or hereafter acquired, except:

 

7.9.1        Liens and
Negative Pledges under the Loan Documents and as permitted in Section 7.18;

 

7.9.2        Permitted
Liens; or

 

7.9.3        Liens on
Property acquired by Borrower or any of its Subsidiaries that were in existence
at the time of the acquisition of such Property and were not created in
contemplation of such acquisition; or

 

65

 

7.9.4        Liens securing (i) purchase
money Indebtedness permitted by Section 7.10.4
and (ii) Indebtedness that directly or indirectly refinances purchase
money Indebtedness referred to in clause (i) and that is otherwise
permitted by Section 7.10,
solely to the extent such Liens are on and limited to the capital assets
acquired, constructed or financed with the proceeds of the Indebtedness
referred to in clause (i); or

 

7.9.5        Sale and
leaseback transactions with respect to Engines or Equipment not included in the
Borrowing Base; or

 

7.9.6        Liens securing
the NordLB loan in an amount up to $*** which do not encumber any of the
Collateral.

 

7.10         Indebtedness and Guaranteed
Indebtedness.  Create,
incur or assume any Indebtedness or Guaranty Indebtedness except:

 

7.10.1      Indebtedness
and Guaranteed Indebtedness existing on the Closing Date, including the
anticipated loan from NordLB, and disclosed in Schedule 7.10, and refinancings, renewals, extensions or
amendments that do not increase the amount thereof;

 

7.10.2      Indebtedness
and Guaranteed Indebtedness under the Loan Documents;

 

7.10.3      Except as
permitted in Section 7.10.7 below, intercompany Indebtedness and
intercompany Guaranteed Indebtedness of Borrower or any of its Subsidiaries not
to exceed $5,000,000.00 outstanding at any one time;

 

***   Confidential information omitted pursuant
to a request for confidential treatment filed separately with the Securities
and Exchange Commission

 

66

 

7.10.4      Indebtedness
consisting of Capital Lease Obligations not to exceed $5,000,000.00 outstanding
at any one time;

 

7.10.5      Subordinated
Obligations in such amount as may be approved in writing by Agents and Credit
Facility Lenders;

 

7.10.6      Indebtedness
consisting of Interest Rate Protection Agreements solely to the extent entered
into in the ordinary course of business for the purpose of mitigating risks
associated with liabilities, commitments, investments, assets or property and
not for the purpose of speculation or taking a market risk;

 

7.10.7      Guaranteed
Indebtedness in support of the obligations of a Wholly-Owned Subsidiary, provided
that such obligations are not prohibited by this Agreement; and

 

7.10.8      In addition to
the foregoing, Permitted Indebtedness.

 

7.11         Transactions with Affiliates.  Make, or suffer to exist, any loan or advance
or extend any credit to any Person, including, without limitation, any
Affiliate of the Borrower other than:

 

7.11.1      advances to
employees in the ordinary course of business not to exceed $100,000.00 in the
aggregate outstanding at any time;

 

7.11.2      trade credit
advanced in the ordinary course of business;

 

7.11.3      transactions
between or among Borrower and its Subsidiaries; and

 

7.11.4      transactions on
overall terms at least as favorable to Borrower or its Subsidiaries as would be
the case in an arm’s length transaction between unrelated parties of equal
bargaining power.

 

7.12         Amendments to Subordinated
Obligations.  Amend or
modify any term or provision of any indenture, agreement or instrument
evidencing or governing any Subordinated Obligation in any respect that will or
may adversely affect the interests of Lenders.

 

7.13         Non-Lender Protection
Agreements.  Cause or
permit the aggregation notional amount of all Non-Lender Protection Agreements
entered into after the date of this Agreement and not shown on Schedule 5.22 to exceed $75,000,000.00
without Requisite Lenders’ written approval.

 

7.14         Distributions.  Purchase, redeem, retire or otherwise
acquire, directly or indirectly, or make any sinking fund payments with respect
to, any shares of its Stock now or hereafter outstanding (each and collectively
a “Distribution”); provided, however, that the Borrower
may (i) declare and pay dividends if no Default or Event of Default exists
prior to or

 

67

 

after
giving effect to such declaration or payment, and (ii) repurchase up to
$10,000,000.00 of its issued and outstanding shares of Stock in each fiscal
year provided no Default or Event of Default exists prior to, or would result
after, such repurchase.

 

7.15         Investments.  Make or suffer to exist any Investment, other
than:

 

7.15.1      Investments in
existence on the Closing Date and disclosed on Schedule 7.15;

 

7.15.2      Investments
consisting of Cash Equivalents or Cash, which may be held in ordinary demand
deposit accounts;

 

7.15.3      Investments in
a Person that is the subject of an Acquisition not prohibited by Section 7.6;

 

7.15.4      Investments
consisting of advances to officers, directors and employees of Borrower and its
Subsidiaries for travel, entertainment, relocation, anticipated bonus and
analogous ordinary business purposes;

 

7.15.5      Investments in
a Subsidiary that is a Wholly-Owned Subsidiary; provided that Borrower shall
not (a) create or allow to exist any Subsidiary (unless with respect to
Subsidiaries other than Special Purpose Financing Vehicles and WLFC Funding
(Ireland) Limited provided WLFC Funding (Ireland) Limited does not operate or
maintain any assets, the same shall have executed and delivered to the Security
Agent and the Administrative Agent a Subsidiary Guaranty and (with respect to
Subsidiaries other than WEST and the WEST Subsidiaries) a joinder agreement to
the Security Agreement in form acceptable to the Security Agent creating in
favor of the Security Agent a first priority perfected Lien on its assets,
provided that such Lien shall be subject and subordinate to any permitted Lien
on assets securing Permitted Indebtedness unless the Borrower, despite the
exercise of reasonable efforts, shall be unable to close such financing with
the Security Agent’s subordinate Lien thereon (in which event, assuming no
Default exists or would exist after giving effect to such financing, the
Security Agent shall not be required to have a Lien on the assets securing such
Permitted Indebtedness)) or (b) purchase or otherwise acquire (unless no
Default exists or would exist immediately thereafter) including, without
limitation, by way of share exchange, any part or amount of the capital stock
or assets of, or make any Investments in any other Person, except for stock,
obligations or securities received in settlement of debts owing to it created
in the ordinary course of business and Investments otherwise expressly
permitted under this Agreement;

 

7.15.6      Investments
consisting of the extension of credit to customers or suppliers of Borrower and
its Subsidiaries in the ordinary course of business and any Investments
received in satisfaction or partial satisfaction thereof;

 

68

 

7.15.7      Investments
received in connection with the settlement of a bona fide dispute with another
Person;

 

7.15.8      Investments:  (i) up to $10,000,000.00 in the
aggregate outstanding at any one time; (ii) in excess of $10,000,000.00
and up to $20,000,000.00 in the aggregate outstanding at any one time,
provided, (x) such Investments are approved in writing by Agent and (y) Borrower
has provided pro forma evidence of compliance with Section 6.4 taking into account such Investment; and (iii) in
excess of $20,000,000.00 or more in the aggregate at any one time outstanding, provided
such Investments are approved in writing by the Requisite Lenders;

 

7.15.9      Notes
receivable in an aggregate up to $10,000,000.00; or

 

7.15.10    Subject to Section 7.13,
Interest Rate Protection Agreements.

 

7.16         Additional Bank Accounts.  Directly or indirectly, open, maintain or
otherwise have any checking, savings or other accounts where money is or may be
deposited or maintained outside the United States of America, except as may be
required for the receipt of Lease payments from a Lessee located in a non-U.S.
jurisdiction and provided that amounts deposited into any such account are
swept into Borrower’s operating account once per calendar month.

 

7.17         No Adverse Selection.  Allow any adverse selection procedures to be
used by the Borrower as between the credit facility established by this
Agreement and any other credit facility to which the Borrower is a party
(including, without limitation, the WEST Funding Facility) in selecting any
Engine or item of Equipment for inclusion in the Borrowing Base.

 

7.18         Negative Pledge/WEST.  Borrower shall not cause or permit Liens or
Negative Pledges on the Borrower’s interest in the WEST Subsidiaries or the
WEST Administrative Agency Agreement and/or management fee arrangement with
WEST under the Servicing Agreement other than Liens or negative pledges
currently existing under the WEST Funding Facility provided such Liens or
Negative Pledges shall not adversely affect such management agreement or
Borrower’s interest therein.

 

7.19         WLFC Funding (Ireland)
Limited.  Borrower shall not permit WLFC
Funding (Ireland) Limited to maintain operations or assets or earn any income
unless WLFC Funding (Ireland) Limited shall have executed a Subsidiary Guaranty
and Security Agreement as required under this Agreement.

 

8.             INFORMATION AND REPORTING REQUIREMENTS

 

8.1           Reports and Notices.  Borrower represents, warrants and agrees
that, from and after the Closing Date until the Termination Date, Borrower
shall deliver to Administrative Agent:

 

8.1.1           within
forty-five (45) days following the end of each Fiscal Quarter (unless an
extension is approved by the Securities Exchange Commission), (1) SEC Form 10-Q
of Borrower for such Fiscal Quarter, (2) a

 

69

 

Compliance Certificate, and (3) the unconsolidated income
statement, balance sheet and statement of cash flows of Borrower (only),
internally prepared for each Fiscal Quarter, prepared in accordance with GAAP,
including the notes and schedules thereto.

 

8.1.2        within one
hundred twenty (120) days following the end of each Fiscal Year (unless an
extension is approved by the Securities Exchange Commission) or, in any event,
within fifteen (15) days of a timely filing with the SEC, (1) the
Financial Statements of Borrower for such Fiscal Year accompanied by an
unqualified report and opinion by an independent certified public accounting
firm acceptable to Administrative Agent certified by an Authorized Signatory; (2) a
Compliance Certificate; and (3) the unconsolidated income statement,
balance sheet and statement of cash flows of Borrower (only), internally
prepared for such Fiscal Year, prepared in accordance with GAAP, including the
notes and schedules thereto.

 

8.1.3        on or before May 31
of each calendar year, the audited financial statements of WEST
(unconsolidated).

 

8.1.4        as soon as
practicable and in any event within 15 days after the end of each calendar
month, a report listing the Leases of Engines and Equipment in the Borrowing
Base (in form and substance reasonably satisfactory to the Administrative
Agent).

 

8.1.5        as soon as
available, but in any event within fifteen (15) days after the end of the
immediately preceding calendar month, a Borrowing Base Certificate of the
Borrower showing, as of the end of such calendar month setting forth, among
other things, the Eligible Engines and Eligible Equipment that are subject to
an Eligible Lease. The Borrowing Base Certificate shall also include a list of
all Engines and Equipment acquired by the Borrower since the date of the last
Borrowing Base Certificate delivered to Administrative Agent.

 

8.1.6        within twenty
(20) days following the receipt by Administrative Agent of the Borrowing Base
Certificate covering the last month of a Fiscal Quarter, an Appraisal with
respect to Eligible Engines and/or Eligible Equipment added to the Borrowing
Base during the Fiscal Quarter just ended. 
In addition, at least once per each Fiscal Year, the Borrower shall
permit the Security Agent to retain an Appraiser (at Borrower’s expense) to
conduct an appraisal with respect to all Eligible Engines and Eligible
Equipment included in the Borrowing Base. 
Each Appraisal shall assign specific values for the Engines covered
thereby.

 

8.1.7        promptly,
notice in writing of (i) any litigation, legal proceeding or dispute, other
than disputes in the ordinary course of business or, whether or not in the
ordinary course of business, involving amounts, individually or in the
aggregate, in excess of $5,000,000, affecting the Borrower or any Subsidiary as
a defendant, whether or not fully covered by insurance, and

 

70

 

regardless
of the subject matter thereof, or, if no monetary amounts are claimed in
connection therewith, which proceeding or dispute, if determined or resolved
against the Borrower or any Subsidiary is reasonably likely to have a Material
Adverse Effect on the Borrower or any Subsidiary or (ii) any cancellation
or threatened cancellation by any insurance carrier of any insurance policy or
policies carried by the Borrower or by any of its Subsidiaries on the assets
and properties of the Borrower or any Subsidiary.

 

8.1.8        promptly, and
in any event within two (2) Business Days of when the Borrower becomes
aware or, in the exercise of reasonable due diligence should have become aware
of the same, notice in writing in the event that at any time a Borrowing Base
Deficiency exists, and promptly, and in any event within five (5) Business
Days, notify in writing the Administrative Agent of any material damage to or
other Event of Loss with respect to any Eligible Engine or Eligible Equipment.

 

8.1.9        promptly upon the
earlier of the date on which the Borrower becomes aware or, in the exercise of
reasonable due diligence should have become aware of the same, notify the
Administrative Agent (or, in the case of (f) below, the Security Agent) by
telephone (to be confirmed within three calendar days in writing from the
Borrower to each Bank) of the occurrence of any of the following:

 

(i)            any Default or Event of
Default;

 

(ii)           any breach
under any contract or contracts and breach involves payments by the Borrower in
an aggregate amount equal to or in excess of $5,000,000;

 

(iii)          a default or
event of default under or as defined in any evidence of or agreements for any
Indebtedness for borrowed money under which the Borrower’s liability is equal
to or in excess of $5,000,000, individually or in the aggregate, whether or not
an event of default thereunder has been declared by any party to such agreement
or any event which, upon the lapse of time or the giving of notice or both,
would become an event of default under any such agreement or instrument or
would permit any party to any such instrument or agreement to terminate or
suspend any commitment to lend to the Borrower or to declare or to cause any
such indebtedness to be accelerated or payable before it would otherwise be due;

 

(iv)          any change in
any Regulation, including, without limitation, changes in tax laws and
regulations, which would have a Material Adverse Effect on the Borrower or any
Subsidiary;

 

(v)           any litigation,
administrative proceeding or investigation which could reasonably have a
Material Adverse Effect on the Borrower or any Subsidiary;

 

(vi)          any instance in
which Engines or Equipment are operated (x) on routes with respect to
which it is customary for air carriers flying comparable routes to carry
confiscation or expropriation insurance or (y) in any area designated by
companies providing

 

71

 

such
coverage as a recognized or threatened war zone or area of hostilities or an
area where there is a substantial risk of confiscation or expropriation; and

 

(vii)         any “Early
Amortization Event,” Event of Default or “Servicer Termination Event” (as such
terms are defined in the WEST Funding Facility) under the WEST Funding
Facility.

 

8.1.10         promptly upon
the filing thereof with the SEC one copy of each financial statement, report,
notice or proxy statement sent by the Borrower to stockholders generally, and,
a copy of each regular or periodic report, and any registration statement, or
prospectus in respect thereof, filed by the Borrower with any securities
exchange or with federal or state securities and exchange commissions or any
successor agency.

 

8.1.11         subject to the
prohibitions set forth in Section 7.1
hereof, promptly deliver to the Administrative Agent copies of any material
amendments, modifications or supplements to (i) certificate of
incorporation or by-laws, and (ii) the WEST Funding Facility, certified,
with respect to the certificate of incorporation, by the appropriate state
officials, and, with respect to the other foregoing documents, by the secretary
or assistant secretary of the Borrower as a true and correct copy thereof.

 

8.1.12         promptly,
notice in writing of any merger or consolidation involving the Borrower.

 

8.2           Other Reports.  Borrower shall, upon the request of any
Agent, furnish to Administrative Agent and/or Security Agent such other reports
in connection with the affairs, business, financial condition, operations,
prospects or management of Borrower or the Collateral, all in reasonable detail
in each case as the Administrative Agent shall reasonably request.

 

9.             EVENTS OF DEFAULT; RIGHTS AND REMEDIES

 

9.1           Events of Default.  The occurrence of any one or more of the
following events (regardless of the reason therefor) shall constitute an “Event
of Default” under this Agreement:

 

9.1.1           Borrower shall
fail to make any required payment in respect of any Obligations within
three (3) Business Days after the same shall become due and payable
or is declared due and payable (provided that no grace period shall
apply to principal payments required under this Agreement or to nonpayment of
the Obligations on the Maturity Date); or

 

9.1.2           Borrower shall
fail or neglect to, or shall fail to cause the applicable Owner Trustee to,
perform, keep or observe any of the covenants, promises, agreements,
requirements, conditions or other terms, Obligations (other than under Section 9.1.1) or provisions contained
in this Agreement or any of the other Loan Documents and such default shall
have continued for a period of thirty (30) days after Agent’s or any
Lender’s notice to Borrower, of such default hereunder; provided, there
shall be no grace period for Borrower’s failure to

 

72

 

perform, keep or observe any of the covenants, promises, agreements,
requirements, conditions or other terms or provisions contained in Section 6.14 and Section 7
(except for Section 7.9); or

 

9.1.3           an event of
default shall occur under any Indebtedness to which Borrower is a party, or by
which any such Person or its property is bound, and such event of default (1) involves
the failure to make any payment, whether of principal, interest or otherwise,
and whether due by scheduled maturity, required prepayment, acceleration,
demand or otherwise, in respect of any Indebtedness (other than the
Obligations) of such Person in an aggregate amount exceeding $5,000,000, or (2) causes
(or permits any holder of such Indebtedness or a trustee to cause) such
Indebtedness, or a portion thereof, in an aggregate amount exceeding $5,000,000
to become due prior to its stated maturity or prior to its regularly scheduled
dates of payment; or

 

9.1.4           any
representation or warranty in this Agreement or any other Loan Document, or in
any written statement, report or certificate pursuant hereto or thereto, shall
be untrue or incorrect in any material respect as of the date when made or
deemed to be made by the Borrower or any Subsidiaries; or

 

9.1.5           any of the
assets of Borrower or any Subsidiary having a value of $5,000,000  or more shall be attached, seized, levied
upon or subjected to a writ or distress warrant or come within the possession
of any receiver, trustee, custodian or assignee for the benefit of creditors of
such Person, and any of the foregoing shall remain unstayed or undismissed for
sixty (60) consecutive days; or any Person other than Borrower or any
Subsidiary shall apply for the appointment of a receiver, trustee or custodian
for the assets of Borrower or any Subsidiary and the order appointing such
receiver, trustee or custodian shall remain unstayed or undismissed for sixty
(60) consecutive days; or Borrower or any Subsidiary shall have concealed,
removed or permitted to be concealed or removed, any part of its Property with
intent to hinder, delay or defraud its creditors or any of them or made or
suffered a transfer of any of its property or the incurring of an obligation
which may be fraudulent under any bankruptcy, fraudulent transfer or other
similar law; or

 

9.1.6           a case or
proceeding shall have been commenced involuntarily against Borrower or any
Subsidiary in a court having competent jurisdiction seeking a decree or
order:  (1) under the Bankruptcy
Code or any other applicable Federal, state or foreign Bankruptcy or other
similar law, and seeking either (i) the appointment of a custodian,
receiver, liquidator, assignee, trustee or sequestrator (or similar official)
of such Person or of any substantial part of its properties, or (ii) the
reorganization or winding up or liquidation of the affairs of any such Person
and such case or proceeding shall remain undismissed or unstayed for sixty (60)
consecutive days or such court shall enter a decree or order granting the
relief sought in such case or proceeding; or (2) invalidating or denying (i) any
Person’s right, power, or competence to enter into or perform any of its
obligations under any Loan Document, or (ii) the validity or
enforceability

 

73

 

of
this Agreement or any other Loan Document or any action taken hereunder or
thereunder; or

 

9.1.7           Borrower or any
Subsidiary shall (1) file a petition under the Bankruptcy Code or any
other applicable Federal, state or foreign bankruptcy or other similar law, (2) consent
to the institution of proceedings thereunder or to the filing of any such
petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee or sequestrator (or similar official)
of any such Person or of any substantial part of its properties, (3) fail
generally to pay (or admit in writing its inability to pay) its debts as such
debts become due, or (4) take any corporate action in furtherance of any
such action; or

 

9.1.8           final judgment
or judgments (after the expiration of all times to appeal therefrom) for the
payment of money in excess of $5,000,000 in the aggregate shall be rendered
against Borrower or any Subsidiary, unless the same shall be (i) fully
covered by insurance (subject to any contractual deductibles) and the issuer(s) of
the applicable policies shall have acknowledged substantial coverage in writing
within thirty (30) days of judgment, or (ii) vacated, stayed, bonded, paid
or discharged within a period of thirty (30) days from the date of such
judgment; or

 

9.1.9           Borrower or any
Subsidiary voluntarily or involuntarily dissolves or is dissolved, terminates
or is terminated; or

 

9.1.10         Borrower or any
Subsidiary is enjoined, restrained, or in any way prevented by the order of any
court or other Governmental Authority, the effect of which order restricts such
Person from conducting all or any material part of its business; or

 

9.1.11         the loss,
suspension, revocation or failure to renew any License or permit now held or
hereafter acquired by Borrower or any Subsidiary, which loss, suspension,
revocation or failure to renew could reasonably be expected to have a Material
Adverse Effect; or

 

9.1.12         any Lien or any
provision of any Loan Document shall for any reason cease to be valid, binding
and enforceable in accordance with its terms, or any Lien granted, or intended
by the Loan Documents to be granted, to Security Agent shall cease to be a
valid and perfected Lien having the first priority (or a lesser priority if
expressly permitted in the Loan Documents) in any of the Collateral covered or
purported to be covered thereby; or

 

9.1.13         any Change of
Control of Borrower shall have occurred; or

 

9.1.14         The occurrence
of any Event of Default or Servicer Termination (as such terms are defined in
the WEST Funding Facility) under the WEST Funding Facility

 

74

 

9.2           Remedies.  If any Default or Event of Default has
occurred and is continuing, then, subject to Section 13.4.4 hereof,
Administrative Agent will be entitled to, with the prior written approval of
Requisite Lenders (or all of the Lenders, as applicable), exercise one or more
of the following remedies:  (1) upon
notice to Borrower from Administrative Agent, increase the rate of interest
applicable to the Loans (excluding any Letter of Credit Obligations) to the
Default Rate effective as of the date of the initial Default; or (2) terminate
or suspend Lenders’ obligation to make further Loans or incur further Letter of
Credit Obligations.  In addition, if any
Event of Default shall have occurred and be continuing, Agent may (upon prior
written approval of Requisite Lenders), without notice, take any one or more of
the following actions:  (i) declare
all or any portion of the Obligations to be forthwith due and payable,
including contingent liabilities with respect to Letter of Credit Obligations,
whereupon such Obligations shall become and be due and payable; (ii) require
that all Letter of Credit Obligations be fully collateralized; or (iii) exercise
any rights and remedies provided to Agents under the Loan Documents or at law
or equity, including all remedies provided under the UCC; provided, that upon
the occurrence of an Event of Default specified in Sections 9.1.5, 9.1.6 or 9.1.7, the Obligations shall
become immediately due and payable (and any obligation of Lenders to make
further Loans or incur any further Letter of Credit Obligations, if not
previously terminated, shall immediately be terminated) without declaration,
notice or demand by Agent.

 

9.3           Waivers by Borrower.  Except for notices that Administrative Agent
or Lender has otherwise agreed to give in this Agreement (whether under notice
and cure provisions or otherwise) and to the fullest extent permitted by
Applicable Law, Borrower waives:  (a) presentment,
demand and protest, and notice of maturity, presentment, intent to accelerate,
acceleration, protest, default, and release of any or all Loan Documents or the
Notes; (b) all rights to notice and a hearing prior to Lender’s taking
possession or control of, or to Lender’s replevin, attachment or levy upon, any
Collateral or any bond or security which might be required by any court prior
to allowing Lender to exercise any of its remedies; and (c) the benefit of
all valuation, appraisal and exemption laws. 
Borrower acknowledges that it has been advised by counsel with respect
to this Agreement, the other Loan Documents and the transactions evidenced
hereby and thereby.

 

9.4           Proceeds. The Proceeds
of any sale, disposition or other realization upon any Collateral shall be
applied by any Lender upon receipt as set forth in Section 2.13.

 

10.           SUCCESSORS AND ASSIGNS

 

Subject
to the limitations on assignment and the grants of participations set forth in Section 12.8,
each Loan Document shall be binding on and shall inure to the benefit of
Borrower, Credit Facility Lenders, Security Agent and their respective
successors and assigns, except as otherwise provided herein or therein.  Borrower shall not assign, transfer,
hypothecate or otherwise convey its rights, benefits, obligations or duties
under any Loan Document without the prior written consent of all of the
Lenders, and any such purported assignment, transfer, hypothecation or other
conveyance by Borrower without the prior express written consent of all Lenders
shall be void.  The terms and provisions
of this Agreement and the other Loan Documents are for the purpose of defining
the relative rights and obligations of Borrower and Lenders with respect to the
transactions contemplated hereby and thereby, and there shall be no third party
beneficiaries of any of the terms and provisions of any of the Loan Documents.

 

75

 

11.           [Intentionally deleted.]

 

12.           MISCELLANEOUS

 

12.1         Complete Agreement;
Modification of Agreement.  This
Agreement and the other Loan Documents constitute the complete agreement among
the parties with respect to the subject matter hereof and thereof, supersede
all prior agreements, commitments, understandings or inducements (oral or
written, expressed or implied), and may not be modified, altered or amended
except by a written agreement signed by Administrative Agent, Security Agent,
Credit Facility Lenders, Borrower and each other Person executing this
Agreement or any other Loan Document, as applicable, and in accordance with Section 12.16 hereof.

 

12.2         Reimbursement and Expenses.  Borrower will promptly pay:

 

12.2.1         without regard
for whether any Loans are made or any Letter of Credit Obligations are
incurred, all reasonable out-of-pocket expenses of Agents in connection with
the preparation, negotiation, execution, and delivery of this Agreement, the
Notes and the other Loan Documents, including all due diligence, all
post-closing matters, syndication, and the transactions contemplated hereunder
and thereunder and the making of the Loans and the incurrence of the Letter of
Credit Obligations, including, recording and filing fees, and the reasonable
attorneys’ fees and disbursements of counsel for Agents;

 

12.2.2      all reasonable
out-of-pocket expenses of Agents in connection with the administration or
monitoring of the Loans, the Collateral, this Agreement and the other Loan
Documents in accordance with the provisions thereof, the restructuring and
refinancing of the transaction herein contemplated, and in connection with the
preparation, negotiation, execution, and delivery of any waiver, amendment, or
consent by Agents relating to this Agreement or the other Loan Documents,
including, auditing costs and expenses with respect to the Collateral and the
reasonable attorneys’ fees and expenses of counsel;

 

12.2.3      all of Agents’
out-of-pocket costs and expenses of obtaining performance under this Agreement
or the other Loan Documents, of collection of the Obligations, in any
arbitration, mediation, legal action or proceeding (including any case under
the Bankruptcy Code or similar laws), which, in each case, shall include
reasonable fees and expenses of counsel for Agents and each Credit Facility
Lender;

 

12.2.4      all Charges
levied on, or assessed, placed or made against any Collateral, the Notes or the
other Loan Documents or the Obligations.

 

12.3         Indemnity.

 

12.3.1         Borrower shall
indemnify and hold each Indemnified Person harmless from and against any Claim
which may be instituted or asserted against or incurred by any such Indemnified
Person as the result of credit having been extended or not extended under this
Agreement and the other Loan

 

76

 

Documents or otherwise in connection with or arising out of the
transactions contemplated hereunder or thereunder, including any Claim for
Environmental Liabilities and Costs and legal costs and expenses of disputes
between the parties to this Agreement; provided, that Borrower shall not
be liable for indemnification of an Indemnified Person to the extent that (a) such
Claim is brought by any Indemnified Person against Borrower and Borrower is the
prevailing party thereunder or (b) any such Claim is finally determined by
a court of competent jurisdiction to have resulted from such Indemnified Person’s
gross negligence or willful misconduct. 
NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY
TO ANY LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OR ANY
OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT,
PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A
RESULT OF CREDIT HAVING BEEN EXTENDED OR NOT EXTENDED UNDER THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION CONTEMPLATED
HEREUNDER OR THEREUNDER.

 

12.3.2         In any suit,
proceeding or action brought by Agent or any Credit Facility Lender relating to
any item of Collateral or any amount owing hereunder, or to enforce any
provision of any item of Collateral, Borrower shall save, indemnify and keep
Agent and each Credit Facility Lender harmless from and against all expense,
loss or damage suffered by reason of such action or any defense, setoff, or
counterclaim asserted for any reason by the other party or parties to such
litigation and however arising unless (a) such suit, proceeding or action
is brought by Agent or any Credit Facility Lender against Borrower and Borrower
is the prevailing party thereunder, or (b) any such suit, proceeding or
action is finally determined by a court of competent jurisdiction to have
resulted from Agent’s or any Credit Facility Lender’s gross negligence or
willful misconduct.  All obligations of
Borrower with respect to any item of Collateral shall be and remain enforceable
against, and only against, Borrower and shall not be enforceable against Agent
or any Credit Facility Lender.  This Section 12.3.2 shall survive the
Termination Date.

 

12.4         No Waiver.  Neither Agent’s nor any Credit Facility
Lender’s failure, at any time or times, to require strict performance by
Borrower of any provision of any Loan Document, nor Agent’s or any Credit
Facility Lender’s failure to exercise, nor any delay in exercising, any right,
power or privilege under this Agreement, (a) shall waive, affect or
diminish any right of such Agent or any Credit Facility Lender thereafter to
demand strict compliance and performance therewith, or (b) shall operate
as a waiver thereof.  Any suspension or
waiver of a Default, Event of Default, or other provision under the Loan
Documents must be in writing signed by an authorized employee of Administrative
Agent or any Credit Facility Lender to be effective and shall not suspend,
waive or affect any other Default or Event of Default, whether the same is
prior or subsequent thereto and whether of the same or of a different type, and
shall not be construed as a bar to any right or remedy which Agent or any
Credit Facility Lender would otherwise have had on any future occasion.

 

77

 

12.5         Severability; Drafting.  Wherever possible, each provision of the Loan
Documents shall be interpreted in such manner as to be effective and valid
under Applicable Law, but if any provision of any Loan Document shall be
prohibited by or invalid under Applicable Law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of such Loan
Document.  Except as otherwise expressly
provided herein or in any other Loan Document, all undertakings, agreements,
covenants, warranties and representations of or binding upon Borrower and all
rights of Agents and Credit Facility Lender, all as contained in the Loan
Documents, shall not terminate or expire, but rather shall survive such
termination or cancellation and shall continue in full force and effect until
the Termination Date; provided, that the reimbursement and expense
provisions of Section 12.2,
the indemnity provisions of Section 12.3,
and the governing law and venue provisions of Section 12.14
shall all survive the Termination Date. 
In the event of a dispute between any of the parties hereto over the
meaning of this Agreement, all parties shall be deemed to have been the drafter
hereof, and any Applicable Law that states that contracts are construed against
the drafter shall not apply.

 

12.6         Conflict of Terms.  Except as otherwise provided in any Loan
Document by specific reference to the applicable provisions of this Agreement,
if any provision contained in this Agreement is in conflict with, or inconsistent
with, any provision in any other Loan Document, the provision contained in this
Agreement shall govern and control.

 

12.7         Notices.

 

12.7.1         All notices and
other communications under this Agreement and the other Loan Documents shall be
in writing and shall be deemed to have been given three (3) days after
deposit in the mail, first class mail, postage prepaid, or one (1) day
after being entrusted to a reputable commercial overnight delivery service, or
when sent out by facsimile transmission or by electronic mail delivery
addressed to the party to which such notice is directed at its address
determined as provided in this Section 12.7
(provided that for electronic mail delivery of notices other than
pursuant to Sections 8.1.1-8.1.5,
an identical notice is also sent simultaneously by mail, overnight courier, or
as otherwise provided in this Section 12.7).  All notices and other communications under
this Agreement shall be given to the parties hereto at the following addresses:

 

(i)            If to Borrower:

 

Willis Lease Finance
Corporation

773 San Marin Drive, Suite 2225

Novato, CA 94998

Attn:  COO and General Counsel

Telephone No.:  (415) 408-4712

Facsimile
No.:  (415) 408-4702

Email:
tnord@willislease.com

 

(ii)           If to Administrative Agent,
Security Agent, and/or to Issuing Lender:

 

78

 

Union Bank, N.A.

Northern California Commercial Banking
Division

350 California Street

San Francisco, CA 94104

Attn: 
Commercial Finance Division

Telephone No.:  (415) 705-7385

Facsimile No.:  (415) 705-7111

Email:
Kevin.Sullivan@unionbank.com

 

with a copy to:

 

Sheppard Mullin Richter & Hampton
LLP

Four Embarcadero Center, 17th Floor

San
Francisco, CA 94111-4106

Attn:  Juliette M. Ebert, Esq.

Telephone No.:  (415) 434-9100

Facsimile
No.:  (415) 434-3947

Email:
jebert@sheppardmullin.com

 

12.7.2         Any party to
this Agreement may change the address to which notices shall be directed under
this Section 12.7 by giving
ten (10) days’ written notice of such change to the other parties.

 

12.8         Binding Effect; Assignment.

 

12.8.1         This Agreement
and the other Loan Documents to which Borrower is a party will be binding upon
and inure to the benefit of Borrower, Agents, each of Credit Facility Lenders,
and their respective permitted successors and assigns, except that
Borrower may not assign its rights hereunder or thereunder or any interest
herein or therein without the prior written consent of all Lenders.  Each Credit Facility Lender represents that
it is not acquiring its Note with a view to the distribution thereof within the
meaning of the Securities Act of 1933, as amended (subject to any requirement
that disposition of such Note must be within the control of such Lender).  Any Credit Facility Lender may at any time
pledge its Note or any other instrument evidencing its rights as a lender under
this Agreement to a Federal Reserve Bank, but no such pledge shall release that
lender from its obligations hereunder or grant to such Federal Reserve Bank the
rights of a Credit Facility Lender hereunder absent foreclosure of such pledge.

 

12.8.2      From time to
time following the Closing Date, each Lender may assign to one or more Eligible
Assignees all or any portion of its Pro Rata Share of the Revolving Commitment;
provided that (i) such Eligible Assignee, if not then a Lender or
an Affiliate of the assigning Lender, shall be approved by Administrative Agent
and, provided no Default or Event of Default then exists, Borrower, which
approval(s) shall not be unreasonably withheld, conditioned or delayed; (ii) such
assignment shall be evidenced by a Commitment Assignment and Acceptance, a copy
of which shall be furnished to Administrative

 

79

 

Agent
as hereinbelow provided; (iii) except in the case of an assignment (a) to
an Affiliate of the assigning Lender or to another Lender or (b) of the
entire remaining Revolving Commitment of the assigning Lender, the assignment
shall not assign a Pro Rata Share of the Revolving Commitment that is
equivalent to less than $5,000,000.00; (iv) the effective date of any such
assignment shall be as specified in the Commitment Assignment and Acceptance,
but not earlier than the date which is five (5) Business Days after the
date Administrative Agent has received the Commitment Assignment and
Acceptance; and (v) such Eligible Assignee shall execute an Alternative
Dispute Resolution Agreement, in form and substance satisfactory to
Administrative Agent.  Upon the effective
date of such Commitment Assignment and Acceptance, the Eligible Assignee named
therein shall be a Lender for all purposes of this Agreement, with the Pro Rata
Share of the Revolving Commitment therein set forth and, to the extent of such
Pro Rata Share, the assigning Lender shall be released from its further
obligations under this Agreement. 
Borrower agrees that it shall execute and deliver (against delivery by
the assigning Lender to Borrower of its Note(s)) to such assignee Lender, Note(s) evidencing
that assignee Lender’s Pro Rata Share of the Revolving Commitment, and to the
assigning Lender, Note(s) evidencing the Pro Rata Share retained by the
assigning Lender.

 

12.8.3         By executing
and delivering a Commitment Assignment and Acceptance, the Eligible Assignee
thereunder acknowledges and agrees that: 
(i) other than the representation and warranty that it is the legal
and beneficial owner of the Pro Rata Share of the Revolving Commitment being
assigned thereby free and clear of any adverse claim, the assigning Lender has
made no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
this Agreement or the execution, legality, validity, enforceability,
genuineness or sufficiency of this Agreement or any other Loan Document; (ii) the
assigning Lender has made no representation or warranty and assumes no
responsibility with respect to the financial condition of Borrower or the
performance by Borrower of the Obligations; (iii) it has received a copy
of this Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 8
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such Commitment Assignment
and Acceptance; (iv) it will, independently and without reliance upon
Administrative Agent or any Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement; (v) it
appoints and authorizes Administrative Agent to take such action and to
exercise such powers under this Agreement as are delegated to Administrative
Agent by this Agreement; and (vi) it will perform in accordance with their
terms all of the obligations which by the terms of this Agreement are required
to be performed by it as a Lender.

 

12.8.4         Administrative
Agent shall maintain at Administrative Agent’s Office a copy of each Commitment
Assignment and Acceptance

 

80

 

delivered
to it and a register (the “Register”) of the names and address of each
of the Lenders and the Pro Rata Share of the Commitments held by each Lender,
giving effect to each Commitment Assignment and Acceptance.  The Register shall be available during normal
business hours for inspection by Borrower or any Lender upon reasonable prior
notice to Administrative Agent.  After
receipt of a completed Commitment Assignment and Acceptance executed by any
Lender and an Eligible Assignee, and receipt of a non-refundable assignment fee
of Three Thousand Five Hundred Dollars ($3,500.00) from such Lender or Eligible
Assignee, Administrative Agent shall, promptly following the effective date
thereof, provide to Borrower and the Lenders a revised Schedule 2.1 giving effect thereto.  Borrower, Administrative Agent and the
Lenders shall deem and treat the Persons listed as Lenders in the Register as
the holders and owners of the Pro Rata Share of the Revolving Commitment listed
therein for all purposes hereof, and no assignment or transfer of any such Pro
Rata Share of the Revolving Commitment shall be effective, in each case unless
and until a Commitment Assignment and Acceptance effecting the assignment or
transfer thereof shall have been accepted by Administrative Agent and recorded
in the Register as provided above.  Prior
to such recordation, all amounts owed with respect to the applicable Pro Rata
Share of the Revolving Commitment shall be owed to the Lender listed in the Register
as the owner thereof, and any request, authority or consent of any Person who,
at the time of making such request or giving such authority or consent, is
listed in the Register as a Lender shall be conclusive and binding on any
subsequent holder, assignee or transferee of the corresponding Pro Rata Share
of the Revolving Commitment.

 

12.8.5         Each Lender may
from time to time grant participations to one or more banks or other financial
institutions in a portion of its Pro Rata Share of the Revolving Commitment; provided,
however, that (i) such Lender’s obligations under this Agreement
shall remain unchanged; (ii) such Lender shall remain solely responsible
to the other parties hereto for the performance of such obligations; (iii) the
participating banks or other financial institutions shall not be a Lender
hereunder for any purpose except, if the participation agreement so
provides, for the purposes of Section 12.3
but only to the extent that the cost of such benefits to Borrower does not
exceed the cost which Borrower would have incurred in respect of such Lender
absent the participation; (iv) Borrower, Agents and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations under this Agreement; (v) the
participation interest shall be expressed as a percentage of the granting
Lender’s Pro Rata Share of the Revolving Commitment as it then exists and shall
not restrict an increase in the Revolving Commitment, or in the granting Lender’s
Pro Rata Share of the Revolving Commitment, so long as the amount of the
participation interest is not affected thereby; and (vi) the consent of
the holder of such participation interest shall not be required for amendments
or waivers of provisions of the Loan Documents and the Lender granting such
participation shall be empowered to bind such participant for the purpose of
all consents, waiver and amendments other  than those which (A) extend
the Maturity Date or any other date upon which any payment of money is due to
the Lenders, (B)

 

81

 

reduce the rate of interest on the Notes, any fee or any other monetary
amount payable to the Lenders, (C) reduce the amount of any installment of
principal due under the Notes, or (D) release all or a substantial portion
of the Collateral from the Lien of the Collateral Documents if the effect
thereof is to cause the outstanding principal amount of the Loans to exceed the
amount of the Borrowing Base, except if such release of Collateral occurs in
connection with a disposition permitted under this Agreement in which case such
release shall not require the consent of any of the Lenders or of any holder of
a participation interest in the Revolving Commitment.

 

12.9         Right of Setoff.  If an Event of Default has occurred and is
continuing, Agent or any Lender (but in each case only with the consent of the
Requisite Lenders) may exercise its rights under Article 9 of the Uniform
Commercial Code and other Applicable Laws and, to the extent permitted by
Applicable Laws, apply any funds in any deposit account maintained with it by
Borrower and/or any Property of Borrower in its possession against the
Obligations.

 

12.10       Sharing of Setoffs.  Each Lender severally agrees that if it,
through the exercise of any right of setoff, banker’s lien or counterclaim
against Borrower, or otherwise, receives payment of the Obligations held by it
that is ratably more than any other Lender, through any means, receives in
payment of the Obligations held by that Lender, then, subject to Applicable
Laws:  (a) the Lender exercising the
right of setoff, banker’s lien or counterclaim or otherwise receiving such
payment shall purchase, and shall be deemed to have simultaneously purchased,
from each of the other Lenders a participation in the Obligations held by the
other Lenders and shall pay to the other Lenders a purchase price in an amount
so that the share of the Obligations held by each Lender after the exercise of
the right of setoff, banker’s lien or counterclaim or receipt of payment shall
be in the same proportion that existed prior to the exercise of the right of
setoff, banker’s lien or counterclaim or receipt of payment; and (b) such
other adjustments and purchases of participations shall be made from time to
time as shall be equitable to ensure that all of the Lenders share any payment
obtained in respect of the Obligations ratably in accordance with each Lender’s
share of the Obligations immediately prior to, and without taking into account,
the payment; provided that, if all or any portion of a disproportionate
payment obtained as a result of the exercise of the right of setoff, banker’s
lien, counterclaim or otherwise is thereafter recovered from the purchasing
Lender by Borrower or any Person claiming through or succeeding to the rights
of Borrower, the purchase of a participation shall be rescinded and the
purchase price thereof shall be restored to the extent of the recovery, but
without interest.  Each Lender that
purchases a participation in the Obligations pursuant to this Section 12.10 shall from and after the
purchase have the right to give all notices, requests, demands, directions and
other communications under this Agreement with respect to the portion of the
Obligations purchased to the same extent as though the purchasing Lender were
the original owner of the Obligations purchased.  Borrower expressly consents to the foregoing
arrangements and agrees that any Lender holding a participation in an
Obligation so purchased pursuant to this Section 12.10
may exercise any and all rights of setoff, banker’s lien or
counterclaim with respect to the participation as fully as if the Lender were
the original owner of the Obligation purchased.

 

12.11       Section Titles.  The Section titles and Table of Contents
contained in this Agreement and any other Loan Document are and shall be
without substantive meaning or content of any kind whatsoever and are not a
part of the agreement between the parties hereto.

 

82

 

12.12       Counterparts.  Each Loan Document may be executed in any
number of identical counterparts, which shall constitute an original and
collectively and separately constitute a single instrument or agreement.  Execution of any such counterpart may be
evidenced by a facsimile transmission or electronic delivery of the signature
of such party.  The execution of this
Agreement or any other Loan Document by any Party hereto or thereto will not
become effective until counterparts hereof or thereof, as the case may be, have
been executed by all the parties hereto or thereto.

 

12.13       Time of the Essence.  Time is of the essence for payment and
performance of the Obligations.

 

12.14       GOVERNING LAW; VENUE.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY
OF THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE
OBLIGATIONS ARISING HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO THE
PRINCIPLES THEREOF REGARDING CONFLICTS OF LAWS (OTHER THAN SECTION 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW), AND ANY APPLICABLE LAWS OF THE UNITED
STATES OF AMERICA.  BORROWER HEREBY
CONSENTS AND AGREES, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW, THAT THE STATE OR FEDERAL COURTS LOCATED IN THE COUNTY OF NEW
YORK, NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY
CLAIMS OR DISPUTES BETWEEN BORROWER AND ANY CREDIT FACILITY LENDER PERTAINING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR TO ANY MATTER ARISING OUT OF OR
RELATED TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS; PROVIDED,
THAT CREDIT FACILITY LENDERS AND BORROWER ACKNOWLEDGE THAT ANY APPEALS FROM
THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK,
NEW YORK; AND FURTHER PROVIDED, THAT NOTHING IN THIS AGREEMENT SHALL BE
DEEMED OR OPERATE TO PRECLUDE AGENT OR ANY CREDIT FACILITY LENDER FROM BRINGING
SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO COLLECT THE
OBLIGATIONS, TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SUCH
AGENT OR CREDIT FACILITY LENDER. BORROWER EXPRESSLY SUBMITS AND CONSENTS TO
SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND
BORROWER HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF
PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT.  BORROWER
HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS
ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS,
COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO BORROWER AT THE

 

83

 

ADDRESS
SET FORTH IN SECTION 12.7 AND
THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE BORROWER’S ACTUAL
RECEIPT THEREOF.

 

12.15       WAIVER OF JURY TRIAL.  To the extent permitted by law, in connection
with any action or proceeding, whether brought in state or federal court,
Borrower, Agents and each Credit Facility Lender hereby expressly,
intentionally and deliberately waive any right such party may otherwise have to
trial by jury of any claim, cause of action, action, dispute or controversy
between or among such parties, whether sounding in contract, tort or otherwise,
which arises out of or relates to: (i) any of the Loan Documents and any
and all related documents, instruments and agreements, and any and all
extensions, renewals, amendments and replacements of any of the foregoing, (ii) any
negotiations or communications relating to the Loan Documents and any and all
related documents, instruments and agreements, and any and all extensions,
renewals, amendments and replacements thereof, whether or not incorporated into
the Loan Documents; or (iii) any alleged agreements, promises, representations
or transactions in connection therewith.

 

12.16       Amendments; Consents.  No amendment, modification, supplement,
extension, termination or waiver of any provision of this Agreement or any
other Loan Document, no approval or consent thereunder, and no consent to any
departure by Borrower or any other party therefrom, may in any event be
effective unless in writing signed by Agents with the written approval of the
Requisite Lenders (and, in the case of any amendment, modification or
supplement of or to any Loan Document to which Borrower is a party, signed by
Borrower, and, in the case of any amendment, modification or supplement to Section 13 or Section 14, signed by Administrative
Agent or Security Agent, respectively), and then only in the specific instance
and for the specific purpose given; and, without the approval in writing of all
the Lenders, no amendment, modification, supplement, termination, waiver or
consent may be effective:

 

12.16.1       To amend or
modify the principal of (other than in accordance with Section 2.19), or the amount of
principal, principal prepayments or the rate of interest payable on, any Note,
or the amount of the Revolving Commitment or the Pro Rata Share of any Lender
or the amount of any commitment fee payable to any Lender, or any other fee or
amount payable to any Lender under the Loan Documents or to waive an Event of
Default consisting of the failure of Borrower to pay when due principal,
interest or any fee;

 

12.16.2       To postpone any
date fixed for any payment of principal of, prepayment of principal of or any
installment of interest on, any Note or any installment of any fee, or to
extend the term of the Revolving Commitment;

 

12.16.3       To amend the
provisions of the definition of “Requisite Lenders” or “Maturity Date”
or to increase the percentages of Net Book Value as set forth in paragraphs (a) —
(d) in the definition of “Borrowing Base,” or

 

12.16.4       To release all
or a substantial portion of the Collateral from the Lien of the Collateral
Documents if the effect thereof would be to cause a Borrowing Base Deficiency;

 

84

 

12.16.5       To amend or
waive Section 4 or this Section 12.16 or any part thereof; or

 

12.16.6       To amend any
provision of this Agreement that expressly requires the consent or approval of
all or a specified portion of the Lenders.

 

Any
amendment, modification, supplement, termination, waiver or consent pursuant to
this Section 12.16 shall
apply equally to, and shall be binding upon, all the Lenders and Administrative
Agent.

 

12.17       Foreign Lenders and
Participants.  Each Lender
that is incorporated or otherwise organized under the Applicable Laws of a
jurisdiction other than the United States of America or any State thereof or
the District of Columbia shall deliver to Borrower (with a copy to
Administrative Agent), on or before the Closing Date (or on or before accepting
an assignment or receiving a participation interest herein pursuant to Section 12.8, if applicable) two duly
completed copies, signed by an authorized officer, of either Form 1001
(relating to such Lender and entitling it to a complete exemption from
withholding on all payments to be made to such Lender by Borrower pursuant to
this Agreement) or Form W-8BEN (relating to all payments to be made to such
Lender by the Borrower pursuant to this Agreement) of the United States
Internal Revenue Service or such other evidence (including, if reasonably
necessary, Form W-9) satisfactory to Borrower and Administrative Agent
that no withholding under the federal income tax laws is required with respect
to such Lender.  Thereafter and from time
to time, each such Lender shall (a) promptly submit to Borrower (with a
copy to Administrative
Agent), such additional duly completed and signed copies of one of such forms
(or such successor forms as shall be adopted from time to time by the relevant
United States taxing authorities) as may then be available under then current
United States laws and regulations to avoid, or such evidence as is
satisfactory to Borrower and Administrative Agent of any available exemption
from, United States withholding taxes in respect of all payments to be made to
such Lender by Borrower pursuant to this Agreement and (b) take such steps
as shall not be materially disadvantageous to it, in the reasonable judgment of
such Lender, and as may be reasonably necessary (including the re designation
of its LIBOR lending office, if any) to avoid any requirement of Applicable
Laws that Borrower make any deduction or withholding for taxes from amounts
payable to such Lender.  In the event
that Borrower or Administrative Agent become aware that a participation has
been granted pursuant to Section 12.8.5
to a financial institution that is incorporated or otherwise organized under
the laws of a jurisdiction other than the United States of America, any State
thereof or the District of Columbia, then, upon request made by Borrower or
Administrative Agent to the Lender which granted such participation, such
Lender shall cause such participant financial institution to deliver the same
documents and information to Borrower and Administrative Agent as would be
required under this Section if such financial institution were a Lender.

 

12.18       Custodial Agreement.  The Security Agent has entered into one or
more agreements with third parties pursuant to which agreements such third
parties will hold custody to any or all of the Collateral. Without limiting the
foregoing, the Administrative Agent and each of the other Lenders hereto
acknowledge and agree (i) to the terms and conditions of the Custodial
Agreement; (ii) that the third party custodian thereto may hold each of
the documents and instruments to be delivered therein, including without
limitation, the “chattel paper” original

 

85

 

of
each Lease, for the benefit of the Security Agent; and (iii) that the
Security Agent shall not be liable in the event of any damage, loss or
destruction of any of the documents or instruments to be delivered therein,
including without limitation, the “chattel paper” originals of each Lease, by
such third party custodian.

 

13.           ADMINISTRATIVE AGENT

 

13.1         Appointment and
Authorization.  Subject to Section 12.8, each Credit Facility
Lender hereby irrevocably appoints and authorizes Administrative Agent to take
such action as agent on its behalf and to exercise such powers under the Loan
Documents as are delegated to Administrative Agent by the terms thereof or are
reasonably incidental, as determined by Administrative Agent, thereto.  This appointment and authorization is
intended solely for the purpose of facilitating the servicing of the Loans and
does not constitute appointment of Administrative Agent as trustee for any
Credit Facility Lender or as representative of any Credit Facility Lender for
any other purpose and, except as specifically set forth in the Loan Documents
to the contrary, Administrative Agent shall take such action and exercise such
powers only in an administrative and ministerial capacity.

 

13.2         Administrative Agent and Affiliates.  Union Bank, N.A. (and each successor
Administrative Agent) has the same rights and powers under the Loan Documents
as any other Credit Facility Lender and may exercise the same as though it were
not Administrative Agent, and the term “Lender” or “Lenders” includes Union
Bank, N.A. in its individual capacity. 
Union Bank, N.A. (and each successor Administrative Agent) and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of banking, trust or other business with Borrower or any Affiliate of
Borrower, as if it were not Administrative Agent and without any duty to
account therefor to Credit Facility Lenders. 
Union Bank, N.A. (and each successor Administrative Agent) need not
account to any other Credit Facility Lender for any monies received by it in
its capacity as a Credit Facility Lender hereunder.  Administrative Agent shall not be deemed to
hold a fiduciary relationship with any Credit Facility Lender and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or otherwise exist against Administrative
Agent.

 

13.3         Lenders’ Credit Decisions.  Each Credit Facility Lender agrees that it
has, independently and without reliance upon Administrative Agent, any other
Credit Facility Lender or the directors, officers, agents, employees or
attorneys of the foregoing parties, and instead in reliance upon information
supplied to it by or on behalf of Borrower and upon such other information as
it has deemed appropriate, made its own independent credit analysis and
decision to enter into this Agreement. 
Each Credit Facility Lender also agrees that it shall, independently and
without reliance upon Administrative Agent, any other Credit Facility Lender or
the directors, officers, agents, employees or attorneys of the foregoing
parties, continue to make its own independent credit analyses and decisions in
acting or not acting under the Loan Documents.

 

13.4         Action by Administrative
Agent.

 

13.4.1         Absent actual
knowledge of Administrative Agent of the existence of a Default, Administrative
Agent may assume that no Default has

 

86

 

occurred and is continuing, unless Administrative Agent (or the Credit
Facility Lender that is then Administrative Agent) has received notice from
Borrower stating the nature of the Default or has received notice from a Credit
Facility Lender stating the nature of the Default and that such Credit Facility
Lender considers the Default to have occurred and to be continuing.

 

13.4.2      Administrative
Agent has only those obligations under the Loan Documents as are expressly set
forth therein.

 

13.4.3      Except for any
obligation expressly set forth in the Loan Documents and as long as
Administrative Agent may assume that no Event of Default has occurred and is
continuing, Administrative Agent may, but shall not be required to, exercise
its discretion to act or not act, except that Administrative Agent shall be
required to act or not act upon the instructions of the Requisite Lenders (or
of all the Lenders, to the extent required by Section 12.16)
and those instructions shall be binding upon Administrative Agent and Credit
Facility Lenders, provided that Administrative Agent shall not be
required to act or not act if to do so would be contrary to any Loan Document
or to Applicable Law or would result, in the reasonable judgment of
Administrative Agent, in substantial risk of liability to Administrative Agent.

 

13.4.4      If
Administrative Agent has received a notice of any Event of Default,
Administrative Agent shall immediately give notice thereof to Credit Facility
Lenders and shall act or not act upon the instructions of the Requisite Lenders
(or of all the Lenders, to the extent required by Section 12.16), provided that Administrative Agent
shall not be required to act or not act if to do so would be contrary to any
Loan Document or to Applicable Law or would result, in the reasonable judgment
of Administrative Agent, in substantial risk of liability to Administrative
Agent, and except that if the Requisite Lenders fail, for five (5) Business
Days after the receipt of notice from Administrative Agent, to instruct
Administrative Agent, then Administrative Agent, in its sole discretion, may
act or not act as it deems advisable for the protection of the interests of
Credit Facility Lenders.

 

13.4.5      Absent its
gross negligence or willful misconduct, Administrative Agent shall have no
liability to any Credit Facility Lender for acting, or not acting, as
instructed by the Requisite Lenders, notwithstanding any other provision
hereof.

 

13.5         Liability of Administrative
Agent.  Neither Administrative Agent
nor any of its directors, officers, agents, employees or attorneys shall be
liable for any action taken or not taken by them under or in connection with
the Loan Documents, except for their own gross negligence or willful
misconduct.  Without limitation on the
foregoing, Administrative Agent and its directors, officers, agents, employees
and attorneys:

 

13.5.1         May treat the
payee of any Note as the holder thereof until Administrative Agent receives
notice of the assignment or transfer thereof,

 

87

 

in form satisfactory to Administrative Agent, signed by the payee, and
may treat each Credit Facility Lender as the owner of that Credit Facility
Lender’s interest in the Obligations for all purposes of this Agreement until
Administrative Agent receives notice of the assignment or transfer thereof, in
form satisfactory to Administrative Agent, signed by that Credit Facility
Lender;

 

13.5.2      May consult
with legal counsel (including in-house legal counsel), accountants (including
in house accountants) and other professionals or experts selected by it, or
with legal counsel, accountants or other professionals or experts for Borrower
or Credit Facility Lenders, and shall not be liable for any action taken or not
taken by it in good faith in accordance with any advice of such legal counsel,
accountants or other professionals or experts selected by it with reasonable
care;

 

13.5.3      Shall not be
responsible to any Credit Facility Lender for any statement, warranty or
representation made in any of the Loan Documents or in any notice, certificate,
report, request or other statement (written or oral) given or made in
connection with any of the Loan Documents except for those expressly made by
it;

 

13.5.4      Except to the
extent expressly set forth in the Loan Documents, shall have no duty to ask or
inquire as to the performance or observance by Borrower of any of the terms,
conditions or covenants of any of the Loan Documents or to inspect any
collateral or any Property, books or records of Borrower;

 

13.5.5      Will not be
responsible to any Credit Facility Lender for the due execution, legality,
validity, enforceability, genuineness, effectiveness, sufficiency or value of
any Loan Document, any other instrument or writing furnished pursuant thereto
or in connection therewith, or any collateral;

 

13.5.6      Will not incur
any liability by acting or not acting in reliance upon any Loan Document,
notice, consent, certificate, statement, request or other instrument or writing
reasonably believed by it to be genuine and signed or sent by the proper party
or parties; and

 

13.5.7      Will not incur
any liability for any arithmetical error in computing any amount paid or
payable by Borrower thereof or paid or payable to or received or receivable
from any Credit Facility Lender under any Loan Document, including,
without limitation, principal, interest, commitment fees, Loans and other
amounts; provided that, promptly upon discovery of such an error in
computation, Administrative Agent, Credit Facility Lenders and (to the extent
applicable) Borrower shall make such adjustments as are necessary to correct
such error and to restore the parties to the position that they would have
occupied had the error not occurred.

 

88

 

13.6         Indemnification.  Each Credit Facility Lender shall, ratably in
accordance with its proportion of the aggregate Indebtedness then evidenced by
the Notes, indemnify and hold Administrative Agent and its directors, officers,
agents, employees and attorneys harmless against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever (including
reasonable attorneys’ fees and disbursements and allocated costs of attorneys
employed by Administrative Agent) that may be imposed on, incurred by or
asserted against it or them in any way relating to or arising out of the Loan
Documents (other than losses incurred by reason of the failure of Borrower to
pay the Indebtedness represented by the Notes) or any action taken or not taken
by it as Administrative Agent thereunder, except such as result from its own
gross negligence or willful misconduct. 
Without limitation on the foregoing, each Credit Facility Lender shall
reimburse Administrative Agent upon demand for that Credit Facility Lender’s
share (as set forth in this Section) of any out of pocket cost or expense
incurred by Administrative Agent in connection with the negotiation,
preparation, execution, delivery, amendment, waiver, restructuring,
reorganization (including a bankruptcy reorganization), enforcement or attempted
enforcement of the Loan Documents, to the extent that Borrower or any other
party is required by Section 12.2
to pay that cost or expense but fails to do so upon demand.  Nothing in this Section 13.6 shall entitle Administrative Agent or any
indemnitee referred to above to recover any amount from Credit Facility Lenders
if and to the extent that such amount has theretofore been recovered from
Borrower.  To the extent that
Administrative Agent or any indemnitee referred to above is later reimbursed
such amount by Borrower, it shall return the amounts paid to it by Credit
Facility Lenders in respect of such amount.

 

13.7         Successor Administrative
Agent.  Administrative Agent may, and
at the request of the Requisite Lenders shall, resign as Administrative Agent
upon reasonable notice to Credit Facility Lenders and Borrower, effective upon
acceptance of appointment by a successor Administrative Agent.  If Administrative Agent shall resign as
Administrative Agent under this Agreement, the Requisite Lenders shall appoint
from among Credit Facility Lenders a successor Administrative Agent for Credit
Facility Lenders, which successor Administrative Agent shall be approved by
Borrower (and such approval shall not be unreasonably withheld or delayed).  If no successor Administrative Agent is
appointed prior to the effective date of the resignation of Administrative
Agent, Administrative Agent may appoint, after consulting with Credit Facility
Lenders and Borrower, a successor Administrative Agent from among Credit Facility
Lenders.  Upon the acceptance of its
appointment as successor Administrative Agent hereunder, such successor
Administrative Agent shall succeed to all the rights, powers and duties of the
retiring Administrative Agent and the term “Administrative Agent” shall mean
such successor Administrative Agent and the retiring Administrative Agent’s
appointment, powers and duties as Administrative Agent shall be
terminated.  After any retiring
Administrative Agent’s resignation hereunder as Administrative Agent, the
provisions of this Section 13,
and Section 12.3, shall inure
to its benefit as to any actions taken or omitted to be taken by it while it
was Administrative Agent under this Agreement. 
Notwithstanding the foregoing, if (a) Administrative Agent has not
been paid those fees referenced in Section 2.6.3
or has not been reimbursed for any expense reimbursable to it under Sections 12.2 or 12.3, in either case for a period of at
least one (1) year and (b) no successor Administrative Agent has
accepted appointment as Administrative Agent by the date which is thirty (30)
days following a retiring Administrative Agent’s notice of resignation, the
retiring Administrative Agent’s resignation shall nevertheless thereupon become
effective and Credit Facility Lenders shall perform all of the

 

89

 

duties
of Administrative Agent hereunder until such time, if any, as the Requisite
Lenders appoint a successor Administrative Agent as provided for above.

 

13.8         No Obligations of Borrower.  Nothing contained in this Section 13 shall be deemed to impose
upon Borrower any obligation in respect of the due and punctual performance by
Administrative Agent of its obligations to Credit Facility Lenders under any
provision of this Agreement, and Borrower shall have no liability to
Administrative Agent or any of Credit Facility Lenders in respect of any
failure by Administrative Agent or any Credit Facility Lender to perform any of
its obligations to Administrative Agent or Credit Facility Lenders under this
Agreement.  Without limiting the
generality of the foregoing, where any provision of this Agreement relating to
the payment of any amounts due and owing under the Loan Documents provides that
such payments shall be made by Borrower to Administrative Agent for the account
of Credit Facility Lenders, Borrower’s obligations to Credit Facility Lenders
in respect of such payments shall be deemed to be satisfied upon the making of
such payments to Administrative Agent in the manner provided by this
Agreement.  In addition, Borrower may
rely on a written statement by Administrative Agent to the effect that it has
obtained the written consent of the Requisite Lenders or Credit Facility
Lenders, as applicable under Section 12.16,
in connection with a waiver, amendment, consent, approval or other action by
Credit Facility Lenders hereunder, and shall have no obligation to verify or
confirm the same.

 

14.           SECURITY AGENT

 

14.1         Appointment and
Authorization.  Each Credit
Facility Lender hereby irrevocably appoints and authorizes Security Agent to
take such action as agent on its behalf and to exercise such powers under the
Collateral Documents and any other Loan Documents as are delegated to Security
Agent by the terms thereof or are reasonably incidental, as determined by
Security Agent, thereto.  This
appointment and authorization is intended solely for the purpose of securing
the Collateral as set forth in this Agreement and does not constitute
appointment of Security Agent as trustee for any Credit Facility Lender or as
representative of any Credit Facility Lender for any other purpose and, except
as specifically set forth in the Loan Documents to the contrary, Security Agent
shall take such action and exercise such powers only in an administrative and
ministerial capacity.

 

14.2         Security Agent and
Affiliates.  Union Bank,
N.A. (and each successor Security Agent) shall not be deemed to hold a
fiduciary relationship with any Credit Facility Lender and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or otherwise exist against Security Agent.

 

14.3         Proportionate Interest in
any Collateral.  Security
Agent, on behalf of Credit Facility Lenders and Non-Lenders, shall hold in
accordance with the Loan Documents all items of any collateral or interests
therein to be received or held by Security Agent.  Subject to Agents’ and Credit Facility
Lenders’ rights to reimbursement for their costs and expenses hereunder
(including reasonable attorneys’ fees and disbursements and other professional
services and the reasonably allocated costs of attorneys employed by Security
Agent or a Credit Facility Lender) and subject to the application of payments
in accordance with Section 9.4,
each Credit Facility Lender and Non-Lender shall have an interest in such
collateral or interests therein in the same proportion that the aggregate
obligations owed such Credit Facility Lender or Non-Lender, under

 

90

 

the
Loan Documents and/or any Non-Lender Protection Agreement, as applicable, bears
to the aggregate obligations owed under the Loan Documents and all Non-Lender
Protection Agreement, without priority or preference among Credit Facility
Lenders.

 

14.4                           Lenders’ Credit
Decisions.  Each Credit
Facility Lender agrees that it has, independently and without reliance upon
Security Agent, any other Credit Facility Lender or the directors, officers,
agents, employees or attorneys of the foregoing parties, and instead in
reliance upon information supplied to it by or on behalf of Borrower and upon
such other information as it has deemed appropriate, made its own independent
credit analysis and decision to enter into this Agreement.  Each Credit Facility Lender also agrees that
it shall, independently and without reliance upon Security Agent, any other
Credit Facility Lender or the directors, officers, agents, employees or
attorneys of the foregoing parties, continue to make its own independent credit
analyses and decisions in acting or not acting under the Loan Documents.

 

14.5                           Action by
Security Agent.

 

14.5.1                            Absent actual
knowledge of Security Agent of the existence of a Default, Security Agent may
assume that no Default has occurred and is continuing, unless Security Agent
(or the Lender that is then Security Agent) has received notice from Borrower
stating the nature of the Default or has received notice from a Credit Facility
Lender stating the nature of the Default and that such Credit Facility Lender
considers the Default to have occurred and to be continuing.

 

14.5.2                  Security Agent has only those obligations
under the Loan Documents as are expressly set forth therein.

 

14.5.3                  Except for any obligation expressly set forth
in the Loan Documents and as long as Security Agent may assume that no Event of
Default has occurred and is continuing, Security Agent may, but shall not be
required to, exercise its discretion to act or not act, except that Security
Agent shall be required to act or not act upon the instructions of the
Requisite Lenders (or of all the Lenders, to the extent required by Section 12.16) and those instructions
shall be binding upon Security Agent and all Credit Facility Lenders, provided
that Security Agent shall not be required to act or not act if to do so
would be contrary to any Loan Document or to Applicable Law or would result, in
the reasonable judgment of Security Agent, in substantial risk of liability to
Security Agent.

 

14.5.4                  If Security Agent has received a notice
specified in Section 14.5.1,
Security Agent shall immediately give notice thereof to Credit Facility Lenders
and shall act or not act upon the instructions of the Requisite Lenders (or of
all the Lenders, to the extent required by Section 12.16),
provided that Security Agent shall not be required to act or not act if
to do so would be contrary to any Loan Document or to Applicable Law or would
result, in the reasonable judgment of Security Agent, in substantial risk of
liability to Security Agent, and except that if the Requisite Lenders
fail, for five (5) Business Days after the receipt of notice from Security
Agent, to instruct Security Agent, then 

 

91

 

Security
Agent, in its sole discretion, may act or not act as it deems advisable for the
protection of the interests of Credit Facility Lenders.

 

14.5.5                  Absent its gross negligence or willful
misconduct, Security Agent shall have no liability to any Credit Facility
Lender for acting, or not acting, as instructed by the Requisite Lenders,
notwithstanding any other provision hereof.

 

14.6                           Liability of
Security Agent.  Neither
Security Agent nor any of its directors, officers, agents, employees or
attorneys shall be liable for any action taken or not taken by them under or in
connection with the Loan Documents, except for their own gross negligence or
willful misconduct.  Without limitation
on the foregoing, Security Agent and its directors, officers, agents, employees
and attorneys:

 

14.6.1                            May treat
the payee of any Note as the holder thereof until Security Agent receives
notice of the assignment or transfer thereof, signed by the payee, and may
treat each Credit Facility Lender as the owner of that Credit Facility Lender’s
interest in the Obligations for all purposes of this Agreement until Security
Agent receives notice of the assignment or transfer thereof, signed by that
Credit Facility Lender;

 

14.6.2                  May consult with legal counsel (including
in-house legal counsel), accountants (including in house accountants)
and other professionals or experts selected by it, or with legal counsel,
accountants or other professionals or experts for Borrower or Credit Facility
Lenders, and shall not be liable for any action taken or not taken by it in
good faith in accordance with any advice of such legal counsel, accountants or
other professionals or experts selected by it with reasonable care;

 

14.6.3                  Shall not be responsible to any Credit
Facility Lender for any statement, warranty or representation made in any of
the Loan Documents or in any notice, certificate, report, request or other
statement (written or oral) given or made in connection with any of the Loan
Documents except for those expressly made by it;

 

14.6.4                  Except to the extent expressly set forth in
the Loan Documents, shall have no duty to ask or inquire as to the performance
or observance by Borrower of any of the terms, conditions or covenants of any
of the Loan Documents or to inspect any collateral or any Property, books or
records of Borrower;

 

14.6.5                  Will not be responsible to any Credit
Facility Lender for the due execution, legality, validity, enforceability,
genuineness, effectiveness, sufficiency or value of any Loan Document, any
other instrument or writing furnished pursuant thereto or in connection
therewith, or any collateral;

 

14.6.6                  Will not incur any liability by acting or not
acting in reliance upon any Loan Document, notice, consent, certificate,
statement, request 

 

92

 

or
other instrument or writing reasonably believed by it to be genuine and signed
or sent by the proper party or parties; and

 

14.7                           Indemnification.  Each Credit Facility Lender shall, ratably in
accordance with its proportion of the aggregate Indebtedness then evidenced by
the Notes, indemnify and hold Security Agent and its directors, officers,
agents, employees and attorneys harmless against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever (including
reasonable attorneys’ fees and disbursements and allocated costs of attorneys
employed by Security Agent) that may be imposed on, incurred by or asserted
against it or them in any way relating to or arising out of the Loan Documents
(other than losses incurred by reason of the failure of Borrower to pay the
Indebtedness represented by the Notes) or any action taken or not taken by it
as Security Agent thereunder, except such as result from its own gross
negligence or willful misconduct. 
Without limitation on the foregoing, each Credit Facility Lender shall
reimburse Security Agent upon demand for that Lender’s Pro Rata Share of any
out of pocket cost or expense incurred by Security Agent in connection with the
negotiation, preparation, execution, delivery, amendment, waiver,
restructuring, reorganization (including a bankruptcy reorganization),
enforcement or attempted enforcement of the Loan Documents, to the extent that
Borrower or any other party is required by Section 12.2
to pay that cost or expense but fails to do so upon demand.  Nothing in this Section 14.7 shall entitle Security Agent or any
indemnitee referred to above to recover any amount from Credit Facility Lenders
if and to the extent that such amount has theretofore been recovered from Borrower.  To the extent that Security Agent or any
indemnitee referred to above is later reimbursed such amount by Borrower, it
shall return the amounts paid to it by Credit Facility Lenders in respect of
such amount.

 

14.8                           Successor
Security Agent.  Security
Agent may, and at the request of the Requisite Lenders shall, resign as
Security Agent upon reasonable notice to Credit Facility Lenders and Borrower
effective upon acceptance of appointment by a successor Security Agent.  If Security Agent shall resign as Security
Agent under this Agreement, the Requisite Lenders shall appoint from among
Credit Facility Lenders a successor Security Agent for Credit Facility Lenders,
which successor Security Agent shall be approved by Borrower (and such approval
shall not be unreasonably withheld or delayed). 
If no successor Security Agent is appointed prior to the effective date
of the resignation of Security Agent, Security Agent may appoint, after
consulting with Credit Facility Lenders and Borrower, a successor Security
Agent from among Credit Facility Lenders. 
Upon the acceptance of its appointment as successor Security Agent
hereunder, such successor Security Agent shall succeed to all the rights,
powers and duties of the retiring Security Agent and the term “Security Agent”
shall mean such successor Security Agent and the retiring Security Agent’s
appointment, powers and duties as Security Agent shall be terminated.  After any retiring Security Agent’s
resignation hereunder as Security Agent, the provisions of this Section 14, and Section 12.3, shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Security Agent under this Agreement. 
Notwithstanding the foregoing, if (a) Security Agent has not been
paid those fees referenced in Section 2.6.3
or has not been reimbursed for any expense reimbursable to it under Sections 12.2 or 12.3, in either case for a period of at
least one (1) year and (b) no successor Security Agent has accepted
appointment as Security Agent by the date which is thirty (30) days following a
retiring Security Agent’s notice of resignation, the retiring Security Agent’s
resignation shall nevertheless thereupon become effective and Credit Facility
Lenders shall perform all of the duties of 

 

93

 

Security
Agent hereunder until such time, if any, as the Requisite Lenders appoint a
successor Security Agent as provided for above.

 

14.9                           No Obligations
of Borrower.  Nothing
contained in this Section 14
shall be deemed to impose upon Borrower any obligation in respect of the due
and punctual performance by Security Agent of its obligations to Credit
Facility Lenders under any provision of this Agreement, and Borrower shall have
no liability to Security Agent or any of Credit Facility Lenders in respect of
any failure by Security Agent or any Credit Facility Lender to perform any of
its obligations to Security Agent or Credit Facility Lenders under this
Agreement.

 

15.                              COMMITMENT COSTS AND RELATED MATTERS.

 

15.1                           Eurodollar Costs
and Related Matters.

 

15.1.1                            In the event
that any Governmental Authority imposes on any Credit Facility Lender any
reserve or comparable requirement (including any emergency, supplemental or
other reserve) with respect to the Eurodollar liabilities (as defined in
Regulation D or any comparable regulation of any Governmental Authority having
jurisdiction over any Credit Facility Lender) of any Credit Facility Lender,
Borrower shall pay such lender within five (5) Business Days after demand
all amounts necessary to compensate such Credit Facility Lender (determined as
though such lender’s LIBOR lending office had funded 100% of its LIBOR Loan in
the Designated Eurodollar Market) in respect of the imposition of such reserve
requirements (provided, that Borrower shall not be obligated to pay any such
amount which arose prior to the date which is forty five (45) days
preceding the date of such demand or is attributable to periods prior to the
date which is forty five (45) days preceding the date of such demand).  Such Credit Facility Lender’s determination
of such amount shall be conclusive in the absence of manifest error.

 

15.1.2                  If, after the date hereof, the existence or
occurrence of any Special Eurodollar Circumstance:

 

(i)                                     shall subject
any Credit Facility Lender or its LIBOR lending office to any tax, duty or
other charge or cost with respect to any LIBOR Loan, its Note evidencing such
LIBOR Loan(s) or its obligation to make LIBOR Loans, or shall change the
basis of taxation of payments to any Credit Facility Lender attributable to the
principal of or interest on any LIBOR Loan or any other amounts due under this
Agreement in respect of any LIBOR Loan, its Note evidencing such LIBOR Loan(s) or
its obligation to make LIBOR Loans, excluding taxes imposed on or
measured in whole or in part by its overall net income by (A) any
jurisdiction (or political subdivision thereof) in which it is organized or
maintains its principal office or LIBOR lending office or (B) any
jurisdiction (or political subdivision thereof) in which it is “doing business”;

 

(ii)                                  shall impose,
modify or deem applicable any reserve not applicable or deemed applicable on
the date hereof (including any reserve imposed by the Board of Governors
of the Federal Reserve System, special deposit, capital or similar requirements
against 

 

94

 

assets
of, deposits with or for the account of, or credit extended by, any Credit
Facility Lender or its LIBOR lending office); or

 

(iii)                               shall impose on
any Credit Facility Lender or its LIBOR lending office or the Designated
Eurodollar Market any other condition affecting any LIBOR Loan, its Note
evidencing such LIBOR Loan(s), its obligation to make LIBOR Loans or this
Agreement, or shall otherwise affect any of the same;

 

and
the result of any of the foregoing, as determined in good faith by any Credit
Facility Lender, increases the cost to any Credit Facility Lender or its LIBOR
lending office of making or maintaining any LIBOR Loan or in respect of any
LIBOR Loan, any Note evidencing LIBOR Loans or its obligation to make LIBOR
Loans or reduces the amount of any sum received or receivable by any Credit
Facility Lender or its LIBOR lending office with respect to any LIBOR Loan, its
Note evidencing such LIBOR Loan(s) or its obligation to make LIBOR Loans
(assuming such Credit Facility Lender’s LIBOR lending office had funded 100% of
its LIBOR Loan in the Designated Eurodollar Market), then, within five (5) Business
Days after demand by such lender (with a copy to Administrative Agent),
Borrower shall pay to such Credit Facility Lender such additional amount or
amounts as will compensate such lender for such increased cost or reduction
(determined as though such Credit Facility Lender’s LIBOR lending office had
funded 100% of its LIBOR Loan in the Designated Eurodollar Market); provided,
that Borrower shall not be obligated to pay any such amount which arose prior
to the date which is ninety (90) days preceding the date of such demand or
is attributable to periods prior to the date which is ninety (90) days
preceding the date of such demand.  A
statement of Credit Facility Lender claiming compensation under this subsection
shall be conclusive in the absence of manifest error.

 

15.1.3                  If, after the date hereof, the existence or
occurrence of any Special Eurodollar Circumstance shall, in the good faith
opinion of Credit Facility Lender, make it unlawful or impossible for Credit
Facility Lender or its LIBOR lending office to make, maintain or fund its
portion of any LIBOR Loan, or materially restrict the authority of Credit
Facility Lender to purchase or sell, or to take deposits of, Dollars in the
Designated Eurodollar Market, or to determine or charge interest rates based
upon the LIBOR Basis, and Credit Facility Lender shall so notify Administrative
Agent, then such Credit Facility Lender’s obligation to make LIBOR Loans shall
be suspended for the duration of such illegality or impossibility and Credit
Facility Lender forthwith shall give notice thereof to the other Credit
Facility Lenders and Borrower.  Upon
receipt of such notice, the outstanding principal amount of such Credit
Facility Lender’s LIBOR Loans, together with accrued interest thereon,
automatically shall be converted to Base Rate Loans on either (1) the last
day of the LIBOR Loan Period(s) applicable to such LIBOR Loans if such
lender may lawfully continue to maintain and fund such LIBOR Loans to such day(s) or
(2) immediately if such lender may not lawfully continue to fund and
maintain such LIBOR Loans to such day(s), provided that in such event
the conversion shall not be subject to payment of a prepayment fee under Section 2.8.5.  Credit Facility Lenders agrees to endeavor
promptly to notify Borrower of any event of which it has actual knowledge,
occurring after the Closing Date, which will cause any Credit Facility Lender
to notify Administrative Agent under this Section, and agrees to designate a
different 

 

95

 

LIBOR
lending office if such designation will avoid the need for such notice and will
not, in the good faith judgment of such lender, otherwise be materially
disadvantageous to such lender.  In the
event that any Credit Facility Lender is unable, for the reasons set forth
above, to make, maintain or fund its portion of any LIBOR Loan, such Credit
Facility Lender shall fund such amount as a Base Rate Loan for the same period
of time, and such amount shall be treated in all respects as a Base Rate
Loan.  Any Credit Facility Lender whose
obligation to make LIBOR Loans has been suspended under this Section shall
promptly notify Administrative Agent and Borrower of the cessation of the
Special Eurodollar Circumstance which gave rise to such suspension. Borrower
shall have the right to terminate the Revolving Commitment of any Credit
Facility Lender for which the funding of LIBOR Loans becomes unlawful or
impossible, as set forth above, and to substitute a new Credit Facility Lender
into this Agreement subject to the provisions of Section 12.8 of this Agreement.

 

15.1.4                  If, with respect to any proposed LIBOR Loan,
any Credit Facility Lender:

 

(i)                                     reasonably
determines that, by reason of circumstances affecting the Designated Eurodollar
Market generally that are beyond the reasonable control of such lender, deposits
in Dollars (in the applicable amounts) are not being offered to lender in the
Designated Eurodollar Market for the applicable LIBOR Loan Period; or

 

(ii)                                  LIBOR Basis as
determined by such lender (i) does not represent the effective pricing to
lender for deposits in Dollars in the Designated Eurodollar Market in the
relevant amount for the applicable LIBOR Loan Period, or (ii) will not
adequately and fairly reflect the cost to such lender of making the applicable
LIBOR Loans;

 

then
such Credit Facility Lender forthwith shall give notice thereof to Borrower and
Administrative Agent, whereupon until such Credit Facility Lender notifies
Borrower that the circumstances giving rise to such suspension no longer exist,
the obligation of such Credit Facility Lender to make any future LIBOR Loans
shall be suspended and such Credit Facility Lender’s Loans shall be treated in
all respects as a Base Rate Loan.

 

15.1.5                            Each Credit
Facility Lender agrees to endeavor promptly to notify Borrower of any event of
which it has actual knowledge, occurring after the Closing Date, which will
entitle any Credit Facility Lender to compensation pursuant to this Section,
and agrees to designate a different LIBOR lending office if such designation
will avoid the need for or reduce the amount of such compensation and will not,
in the good faith judgment of such lender, otherwise be materially
disadvantageous to lender.  Any request
for compensation by any Credit Facility Lender under this Section shall
set forth the basis upon which it has been determined that such an amount is
due from Borrower, a calculation of the amount due, and a certification that
the corresponding costs have been incurred by such lender.

 

96

 

15.2                           Capital
Adequacy.  If, after
the date hereof, any Credit Facility Lender (or any Affiliate of any Credit
Facility Lender) shall have reasonably determined that the adoption of any
Applicable Law, governmental rule, regulation or order regarding the capital
adequacy of banks or bank holding companies, or any change therein, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Credit Facility Lender (or any
Affiliate of any Credit Facility Lender) with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
Governmental Authority, central bank or comparable agency, has or would have
the effect of reducing the rate of return on the capital of Credit Facility
Lender (or any Affiliate of Credit Facility Lender) as a consequence of any of
such Credit Facility Lender’s obligations hereunder to a level below that which
it could have achieved but for such adoption, change or compliance (taking into
consideration the policies of any Credit Facility Lender (or Affiliate of any
Credit Facility Lender) with respect to capital adequacy immediately before
such adoption, change or compliance and assuming that the capital of such
Credit Facility Lender (or Affiliate of such Credit Facility Lender) was fully
utilized prior to such adoption, change or compliance), then, upon demand by
such Credit Facility Lender, Borrower shall immediately pay to such lender such
additional amounts as shall be sufficient to compensate such lender for any
such reduction actually suffered; provided, that there shall be no
duplication of amounts paid to any Credit Facility Lender pursuant to this
sentence and Section 15.1.  Such Credit Facility Lender’s determination
of the amount to be paid to such lender by Borrower as a result of any event
referred to in this Section 15.2 shall,
absent manifest error, be deemed final, binding and conclusive upon Borrower.

 

15.3                           Federal Reserve
System/Wire Transfers.  The
obligation of any Credit Facility Lender to make any loan by wire transfer to
Borrower or any other Person shall be subject to all Applicable Laws, including
the policy of the Board of Governors of the Federal Reserve System on Reduction
of Payments System Risk as in effect from time to time.  Borrower acknowledges that such laws,
regulations and policy may delay the transmission of any funds to Borrower.

 

15.4                           Assignment of
Commitments Under Certain Circumstances; Duty to Mitigate.  In the event any Credit Facility Lender (i) requests
compensation pursuant to Section 15.1 or
15.2, above, (ii) delivers a notice described in Section 15.1 or 15.2, above, (iii) refuses
to consent to any amendment, waiver or other modification of any Loan Document
requested by any Borrower and which amendment, waiver or other modification is
required under this Agreement for such amendment, waiver or other modification,
or (iv) is a Defaulting Lender, Borrower may, at its sole expense and effort
(including with respect to the assignment fee referred to in Section 12.8), upon notice to such
Credit Facility Lender and Administrative Agent, require such Credit Facility
Lender to transfer and assign, without recourse (in accordance with and subject
to the restrictions contained in Section 12.8),
all of its interests, rights and obligations under this Agreement to an
Eligible Assignee that shall assume such assigned obligations (which Eligible
Assignee may be another Lender, if a Lender accepts such assignment); provided
that (x) such assignment shall not conflict with any law, rule or
regulation or order of any court or other Governmental Authority having
jurisdiction, (y) Borrower shall have received the prior written consent
of Administrative Agent, which consent shall not unreasonably be withheld or
delayed, and (z) the Borrower or such assignee shall have paid to the
affected Credit Facility Lender in immediately available funds an amount equal
to the sum of the principal of and interest accrued to the date of such payment
on the outstanding Loans or Letter of Credit Obligations of such 

 

97

 

Credit
Facility Lender, respectively, affected by such assignment plus all fees and
other amounts accrued for the account of such Credit Facility Lender hereunder;
provided, Borrower shall not be required to pay any costs and expenses
that are incurred by a Defaulting Lender solely as a result of such Credit
Facility Lender’s default of its obligations hereunder; provided further,
if prior to any such transfer and assignment the circumstances or event that
resulted in such Credit Facility Lender’s claim for compensation or notice, as
referred to above in (i) and (ii) of this Section 15.4, as the case may be, cease to cause such
Credit Facility Lender to suffer increased costs or reductions in amounts
received or receivable or reduction in return on capital, or cease to have the
consequences specified in Section 15.1
or 15.2, above, or cease to result in amounts being payable under Section 15.1 or 15.2, as the case may
be, or if such Credit Facility Lender shall waive its right to claim or notice
under Section 15.1 or 15.2,
as applicable in respect of such circumstances or event or shall consent to the
proposed amendment, waiver, consent or other modification, as the case may be,
then such Credit Facility Lender shall not thereafter be required to make any
such transfer and assignment hereunder. 
Each Credit Facility Lender hereby grants to Administrative Agent an irrevocable
power of attorney (which power is coupled with an interest) to execute and
deliver, on behalf of such Credit Facility Lender as assignor, any Commitment
Assignment and Acceptance necessary to effectuate any assignment of such Credit
Facility Lender’s interests hereunder in the circumstances contemplated by this
paragraph.  The Borrower hereby agrees to
pay all reasonable costs and expenses incurred by any Credit Facility Lender in
connection with any such filing or assignment, delegation and transfer; provided,
Borrower shall not pay any such costs and expenses incurred by any Credit
Facility Lender who has defaulted on its obligations to make loans or other
extensions of credit.  

 

98

 

IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  WILLIS LEASE FINANCE CORPORATION,

  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bradley S. Forsyth

  
	
   

  	
  Name:

  	
  Bradley S. Forsyth

  
	
   

  	
  Title:

  	
  Senior
  Vice President and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  ADMINISTRATIVE AGENT AND SECURITY AGENT:

  
	
   

  	
   

  
	
   

  	
  UNION BANK, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin Sullivan

  
	
   

  	
  Name:

  	
  Kevin Sullivan

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDERS:

  
	
   

  	
   

  
	
   

  	
  UNION BANK, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin Sullivan

  
	
   

  	
  Name:

  	
  Kevin Sullivan

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carlos Lua

  
	
   

  	
  Name:

  	
  Carlos Lua

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  KFW IPEX-BANK GMBH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Alexander Jacobs

  
	
   

  	
  Name:

  	
  Alexander Jacobs

  
	
   

  	
  Title:

  	
  First
  Vice President

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas Bernhards

  
	
   

  	
  Name:

  	
  Thomas Bernhards

  
	
   

  	
  Title:

  	
  Senior
  Project Manager

  
				

 

S-1

 

	
   

  	
  U.S. BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Cecilia Person

  
	
   

  	
  Name:

  	
  Cecilia Person

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CITY NATIONAL BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeanine A. Smith

  
	
   

  	
  Name:

  	
  Jeanine A. Smith

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
  CREDIT INDUSTRIEL ET
  COMMERCIAL, NEW YORK BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alex Aupoix

  
	
   

  	
  Name:

  	
  Alex Aupoix

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Adrienne Molloy

  
	
   

  	
  Name:

  	
  Adrienne Molloy

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CALIFORNIA BANK & TRUST

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J. Michael Sullivan

  
	
   

  	
  Name:

  	
  J. Michael Sullivan

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UMPQUA BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ George Diesch

  
	
   

  	
  Name:

  	
  George Diesch

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  STATE BANK OF INDIA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sanjay Gaujam

  
	
   

  	
  Name:

  	
  Sanjay Gaujam

  
	
   

  	
  Title:

  	
  Vice President (Credit & Operations)

  

 

S-2

 

 

	
   

  	
  LEAD ARRANGER:

  
	
   

  	
   

  
	
   

  	
  UNION BANK, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin Sullivan

  
	
   

  	
  Name:

  	
  Kevin Sullivan

  
	
   

  	
  Title:

  	
  Senior Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CO-LEAD ARRANGER:

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carlos Lua

  
	
   

  	
  Name:

  	
  Carlos Lua

  
	
   

  	
  Title:

  	
  Vice President

  

 

S-3

 

Exhibit A

 

FORM OF BORROWING BASE CERTIFICATE

 

BORROWING BASE CERTIFICATE

 

To:                              UNION BANK, as
Administrative Agent

 

This
Borrowing Base Certificate (“Certificate”) is delivered pursuant to that
certain Credit Agreement dated as of
                    ,
2009 among Willis Lease Finance Corporation, a Delaware corporation (“Borrower”),
Union Bank, N.A., together with any other Lender thereunder from time to time
(collectively, the “Lenders”) and Union Bank, N.A., as Administrative
Agent (“Administrative Agent”), Swing Line Lender (“Swing Line Lender”),
Issuing Lender (“Issuing Lender”), and Security Agent (“Security
Agent”) (as amended from time to time, the “Credit Agreement”).  Terms defined in the Credit Agreement and not
otherwise defined in this Certificate shall have the meanings defined for them
in the Credit Agreement.  Section references
herein relate to the Credit Agreement unless stated otherwise.  This Certificate covers the fiscal month
ending               ,
20     (the “Determination Date”), and is delivered
to Administrative Agent pursuant to Section 8.1.5
of the Credit Agreement.

 

The
following calculations determine the Borrowing Base and the Borrowing Base
Availability as of the Determination Date under the Revolving Commitment
described in the Credit Agreement and related Loan Documents.  Such calculations are derived from the Books
and Records of Borrower in accordance with the relevant definitions of financial
terms set forth in the Credit Agreement:

 

	
  1.

  	
    BORROWING
  BASE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1

  	
  Eligible
  Engines (not Off-Lease for more than 180 days)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i) Net
  Book Value of Eligible Engines that are not Off-Lease at such time and that
  have not been Off-Lease for more than 180 days

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii) times
  ***%

  	
   

  	
   x

  	
  ***

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Total
  Eligible Engines (not Off-Lease) [(i)  x (ii)]

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.2

  	
  Eligible
  Engines (Off-Lease)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i) Net
  Book Value of all other Eligible Engines

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii) times
  ***%

  	
   

  	
    x

  	
  ***

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Total
  of Eligible Engines (Off-Lease) [(i)  x (ii)]

  	
   

  	
  $

  

 

***      Confidential information omitted pursuant to a request
for confidential treatment filed separately with the Securities and Exchange
Commission

 

A-1

 

	
   

  	
  1.3

  	
  Eligible
  Equipment (not Off-Lease for more than 180 days)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i) Net
  Book Value of Eligible Equipment that is not Off-Lease and that has not been
  Off-Lease for more than 180 days

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii) times
  ***%

  	
   

  	
   x

  	
  ***

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Total
  Eligible Equipment (not Off-Lease) [(i)  x (ii)]

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.4

  	
  Eligible
  Equipment (Off-Lease)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i) Net
  Book Value of all other Eligible Equipment 

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii) times
  ***%

  	
   

  	
   x

  	
  ***

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Total
  Eligible Equipment (Off-Lease) [(i)  x (ii)]

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.5

  	
  Borrowing
  Base

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Borrowing
  Base  [Sum of Totals for (1), (2), (3) and
  (4)]

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  less:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Appraisal
  adjustment (based on annual Appraisal (pursuant to definition of Borrowing
  Base (subsection x)), if applicable)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BORROWING BASE (as adjusted)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
    BORROWING
  AVAILABILITY 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Borrower’s
  Borrowing Availability under the Revolving Commitment as of the Determination
  Date is
  $                      ,
  calculated as the lesser of the following (1 or 2):

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
  Maximum
  Amount ($240,000,000.00 subject to Sections 2.10 and 2.19)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  or

  	
   

  	
   

  

 

***      Confidential information omitted pursuant
to a request for confidential treatment filed separately with the Securities
and Exchange Commission

 

A-2

 

	
   

  	
  2.2

  	
  Borrowing
  Base Availability [sum of (i) and (ii)]

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i) 
  Borrowing Base (as adjusted) as of the Determination Date (item 5 above)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  less:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii) 
  Aggregate amount of any Letters of Credit then outstanding

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  less:
  

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii) Negative
  net aggregate mark-to-market valuation of any Non-Lender Interest Rate
  Agreement(s) (as calculated at the end of each Fiscal Quarter)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Equals Borrowing Base Availability [(i) less (ii) &
  (iii)]  

  	
   

  	
  $

  
	
   

  	
   

  	
  BORROWING AVAILABILITY [Equals Lesser of 1 or 2]

  	
   

  	
  $

  

 

[Signature on following page.]

 

A-3

 

This
Certificate is executed on
                    ,
20    , by the
                          of
Borrower, an Authorized Signatory.  The
undersigned hereby further certifies that each and every matter contained
herein is derived from the Books and Records of Borrowers and is true and
correct in all material respects.

 

	
   

  	
   

  
	
   

  	
  of
  WILLIS LEASE FINANCE CORPORATION, a Delaware corporation 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Printed
  name]

  

 

A-4

 

Exhibit B

 

FORM OF BORROWING NOTICE

 

BORROWING NOTICE

 

1.                                            This BORROWING
NOTICE is executed and delivered by Willis Lease Finance Corporation, a
Delaware corporation (“Borrower”), to Union Bank, N.A. (“Administrative Agent”)
pursuant to that certain Credit Agreement dated as of
                          ,
2009, among, Union Bank, N.A., together with any other Lender thereunder from
time to time (collectively, the “Lenders”) and Union Bank, N.A., as
Administrative Agent, Swing Line Lender, Issuing Lender, and Security Agent (as
amended, extended, renewed, supplemented or otherwise modified from time to
time, the “Credit Agreement”).  Any terms
used herein and not defined herein shall have the meanings set forth for such
terms in the Credit Agreement.

 

2.                                            Borrower hereby
requests a Revolving Loan pursuant to the Credit Agreement as follows:

 

2.1                                 AMOUNT OF
REQUESTED ADVANCE(1):  $

 

2.2                                 DATE OF
REQUESTED ADVANCE:

 

2.3                                 TYPE OF
REQUESTED ADVANCE (Check one box):

 

o                          BASE RATE LOAN

 

o                          LIBOR RATE LOAN(2),
FOR A LIBOR LOAN PERIOD OF
                
MONTHS (3)

 

3.                                               In connection
with this request, Borrower certifies that:

 

3.1                                 After giving
effect to such Advance, no Overadvance shall have occurred (the aggregate
amount of all Loans then outstanding shall not exceed the lesser of the (i) Maximum
Amount or (ii) Borrowing Base Availability), and there is availability
under the Revolving Commitment.

 

3.2                                 Now and as of
the date of the requested Advance, except (i) for representations and
warranties which expressly relate to a particular date or which are no longer
true and correct as a result of a change permitted by the Credit Agreement or
the other Loan Documents, or (ii) as disclosed by Borrower and approved in
writing by Administrative Agent, each representation and warranty made by
Borrower in Section 5 of the Credit Agreement will be true and correct in 

 

(1) Each LIBOR Loan must be in a principal amount of
at least $5,000,000.00 and in an integral multiple of $100,000.

(2) Maximum of 10 tranches of LIBOR Loans Collectively
May Be Outstanding At Once.  

(3) Specify whether 1, 2, 3 or 6-month Libor
Loan Period.  

 

B-1

 

all
material respects, both immediately before and after giving effect to such
Advance, as though such representations and warranties were made on and as of
that date;

 

3.3                                 No circumstance
or event has occurred that constitutes a Material Adverse Effect since the
Closing Date;

 

3.4                                 Other than
matters described in Schedule 5.10 (Litigation) to the Credit Agreement or not
required as of the Closing Date to be described therein or disclosed by
Borrower and approved in writing by the Lender, there is no action, suit,
proceeding or investigation pending or, to the best knowledge of Borrower (on
behalf of Borrower and its Subsidiaries, if any), threatened against or
affecting Borrower or any Subsidiary or any Property of any of them before any
Governmental Agency; and

 

3.5                                 No Default or
Event of Default presently exists or will have occurred and be continuing as a
result of the Borrowing requested hereunder.

 

4.                                               This Request
for Borrowing is executed on
                          ,
20    , by an Authorized Signatory of Borrower.  The undersigned, in such capacity, hereby
certifies, on behalf of Borrower, each and every matter contained herein to be
true and correct.

 

	
   

  	
  WILLIS
  LEASE FINANCE CORPORATION,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  

 

B-2

 

Exhibit C

 

FORM OF COMMITMENT ASSIGNMENT AND ACCEPTANCE AGREEMENT

 

COMMITMENT ASSIGNMENT AND ACCEPTANCE AGREEMENT

 

This
COMMITMENT ASSIGNMENT AND ACCEPTANCE AGREEMENT (this “Assignment and Acceptance”)
dated as of                               ,
20     is made between
                                              
(the “Assignor”) and
                                              
(the “Assignee”).

 

RECITALS

 

WHEREAS,
the Assignor is party to that certain Credit Agreement dated as of
                          ,
2009 (as amended from time to time, the “Credit Agreement”), among
Willis Lease Finance Corporation, a Delaware corporation (“Borrower”),
Union Bank, N.A., together with any other Lender hereunder from time to time
(collectively, the “Lenders” and individually, a “Lender”) and
Union Bank, N.A., as Administrative Agent (“Administrative Agent”),
Swing Line Lender, Issuing Lender, and Security Agent (“Security Agent”).  All capitalized terms used herein and not
otherwise defined shall have the respective meanings ascribed to them in the
Credit Agreement;

 

WHEREAS,
as provided under the Credit Agreement, the Assignor has committed to making
Revolving Loans (the “Committed Loans”) to the Borrower for Assignor’s
Pro Rata Share of the Revolving Commitment in an aggregate amount not to exceed
$                      
(the “Commitment”);

 

WHEREAS,
[the Assignor has made Committed Loans in the aggregate principal amount of
$                          
to the Borrower] [no Committed Loans are outstanding under the Credit
Agreement];

 

WHEREAS,
the Assignor wishes to assign to the Assignee [part of the] [all] rights and
obligations of the Assignor under the Credit Agreement in respect of its
Commitment, in an amount equal to $                        
(the “Assigned Amount”) on the terms and subject to the conditions set
forth herein and the Assignee wishes to accept assignment of such rights and to
assume such obligations from the Assignor on such terms and subject to such
conditions;

 

NOW,
THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:

 

1.                                       Assignment and
Acceptance.

 

(a)                                  Subject to the
terms and conditions of this Assignment and Acceptance, (i) the Assignor
hereby sells, transfers and assigns to the Assignee, and (ii) the Assignee
hereby purchases, assumes and undertakes from the Assignor, without recourse
and without representation or warranty (except as provided in this Assignment
and Acceptance)       % (the “Assignee’s
Percentage Share”) of (A) the Commitment of the Assignor, and (B) all
related rights, benefits, obligations, liabilities and indemnities of the
Assignor under and in connection with the Credit Agreement and the Loan
Documents.

 

C-1

 

(b)                                 With effect on
and after the Effective Date (as defined in Section 5
hereof), the Assignee shall be a party to the Credit Agreement and succeed to
all of the rights and be obligated to perform all of the obligations of a
Lender under the Credit Agreement, with a Commitment in an amount equal to the
Assigned Amount.  The Assignee agrees
that it will perform in accordance with their terms all of the obligations
which it is required to perform as a Lender under the Credit Agreement.  It is the intent of the parties hereto that
the Commitment of the Assignor shall, as of the Effective Date, be reduced by
an amount equal to the Assigned Amount and the Assignor shall relinquish its
rights and be released from its obligations under the Credit Agreement to the
extent such obligations have been assumed by the Assignee; provided, however,
the Assignor shall not relinquish its rights under Sections 12.2 (Reimbursement and Expenses) and 12.3 (Indemnity) of the Credit Agreement to
the extent such rights relate to the time prior to the Effective Date.

 

(c)                                  After giving
effect to the assignment and acceptance set forth herein, on the Effective Date
the Assignor’s Commitment will be
$                    
(an amount equal to         % of the
Revolving Commitment).

 

(d)                                 After giving
effect to the assignment and acceptance set forth herein, on the Effective Date
the Assignee’s Commitment will be
$                    (an
amount equal to         % of the
Revolving Commitment).

 

2.                                       Payments.

 

(a)                                  As
consideration for the sale, assignment and transfer contemplated in Section 1
hereof, the Assignee shall pay to the Assignor on the Effective Date in
immediately available funds an amount equal to
$                    ,
representing the Assignee’s Percentage Share of the Principal amount of all
Committed Loans.

 

(b)                                 The [Assignor]
[Assignee] further agrees to pay to Administrative Agent an administrative fee
in the amount specified in Section 12.8.4
of the Credit Agreement.

 

(c)                                  Administrative
Agent shall retain all additional amounts paid by the Borrower as a commitment
fee or as interest on the Committed Loans outstanding to the Borrower with
respect to the Assignee’s Commitment.

 

3.                                       Reallocation of
Payments.  Any
interest, fees and other payments accrued to the Effective Date with respect to
the Commitment shall be for the account of the Assignor.  Any interest, fees and other payments accrued
on and after the Effective Date with respect to the Assigned Amount shall be
for the account of the Assignee.  Each of
the Assignor and the Assignee agrees that it will hold in trust for the other
party any interest, fees and other amounts which it may receive to which the
other party is entitled pursuant to the preceding sentence and pay to the other
party any such amounts which it may receive promptly upon receipt.

 

4.                                       Independent
Credit Decision.  The
Assignee (a) acknowledges that it has received a copy of the Credit
Agreement and the Schedules and Exhibits thereto, together with copies of the
most recent financial statements referred to in the Credit Agreement, and such
other documents and information as it has deemed appropriate to make its own
credit and legal analysis and decision to enter into this Assignment and
Acceptance; and (b) agrees that it will, 

 

C-2

 

independently
and without reliance upon the Assignor, Agents or any Credit Facility Lender
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit and legal decisions in taking or not
taking action under the Credit Agreement.

 

5.                                       Effective Date;
Notices.

 

(a)                                  As between the
Assignor and the Assignee, the effective date for this Assignment and
Acceptance shall be
                    ,
20     (the “Effective Date”); provided that
the following conditions precedent have been satisfied on or before the
Effective Date:

 

(i)                                     this Assignment and
Acceptance shall be executed and delivered by the Assignor and the Assignee and
a copy shall have been delivered to Administrative Agent;

 

(ii)                                  the consent of
Administrative Agent and Borrower (as applicable) required for an effective
assignment of the Assigned Amount by the Assignor to the Assignee under the
Credit Agreement shall have been duly obtained and shall be in full force and
effect as of the Effective Date;

 

(iii)                               the Assignee shall pay to
the Assignor all amounts due to the Assignor under this Assignment and
Acceptance;

 

(iv)                              the Assignee shall have
complied with all terms and conditions for such assignment and otherwise as set
forth in the Credit Agreement;

 

(v)                                 the administrative fee
referred to in Section 12.8.4
of the Credit Agreement shall have been paid to Administrative Agent; and

 

(vi)                              the Assignor shall have
assigned and the Assignee shall have assumed a percentage equal to the Assignee’s
Pro Rata Share of the rights and obligations of the Assignor under the Credit
Agreement.

 

(b)                                 Notwithstanding
the foregoing, the Effective Date of this Assignment and Acceptance shall not
be earlier than five (5) Business Days after the date on which
Administrative Agent receives a copy of the Assignment and Acceptance as set
forth above.

 

[6.                              Administrative
Agent.  [INCLUDE ONLY IF THE ASSIGNOR
IS ADMINISTRATIVE AGENT]

 

(a)                                  The Assignee
hereby appoints and authorizes the Assignor to take such action as agent on its
behalf and to exercise such powers under the Credit Agreement as are delegated
to Administrative Agent by the Lenders pursuant to the terms of the Credit
Agreement.

 

(b)                                 The Assignee
shall assume no duties or obligations held by the Assignor in its capacity as
Administrative Agent under the Credit Agreement.]

 

C-3

 

 

7.             Withholding Tax.  The Assignee (a) represents and warrants
to the Credit Facility Lenders, Administrative Agent and the Borrower that
under applicable law and treaties no tax will be required to be withheld by the
Lenders with respect to any payments to be made to the Assignee hereunder, (b) agrees
to furnish (if it is organized under the laws of any jurisdiction other than
the United States or any state thereof) to Administrative Agent and the
Borrower prior to the time that Administrative Agent or the Borrower is
required to make any payment of principal, interest or fees hereunder,
duplicate executed originals of either U.S. Internal Revenue Service Form W-8BEN
or U.S. Internal Revenue Service Form 1001 (wherein the Assignee claims
entitlement to the benefits of a tax treaty that provides for a complete
exemption from U.S. federal income withholding tax an all payments hereunder)
and agrees to provide new Forms W-8BEN or 1001 upon the expiration of any
previously delivered form or comparable statements in accordance with
applicable U.S. law and regulations and amendments thereto, duly executed and
completed by the Assignee, and (c) agrees to comply with all applicable
U.S. laws and regulations with regard to such withholding tax exemption.

 

8.             Representations and
Warranties.

 

(a)           The Assignor represents and
warrants to the Assignee that (i) it is the legal and beneficial owner of
the interest being assigned by it hereunder and that such interest is free and
clear of any Lien or other adverse claim; (ii) it is duly organized and
existing and it has the full power and authority to take, and has taken, all
action necessary to execute and deliver this Assignment and Acceptance and any
other documents required or permitted to be executed or delivered by it in connection
with this Assignment and Acceptance and to fulfill its obligations hereunder; (iii) no
notices to, or consents, authorizations or approvals of, any Person are
required (other than any already given or obtained) for its due execution,
delivery and performance of this Assignment and Acceptance, and apart from any
agreements or undertakings or filings required by the Credit Agreement, no
further action by, or notice to, or filing with, any Person is required of it
for such execution, delivery or performance; and (iv) this Assignment and
Acceptance has been duly executed and delivered by it and constitutes the
legal, valid and binding obligation of the Assignor, enforceable against the
Assignor in accordance with the terms hereof, subject, as to enforcement, to
bankruptcy, insolvency, moratorium, reorganization and other laws of general
application relating to or affecting creditors’ rights and to general equitable
principles.

 

(b)           The Assignor makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement or any other instrument
or document furnished pursuant thereto. 
The Assignor makes no representation or warranty in connection with, and
assumes no responsibility with respect to, the solvency, financial condition or
statements of the Borrower, or the performance or observance by the Borrower,
of any of its respective obligations under the Credit Agreement or any other
instrument or document furnished in connection therewith.

 

(c)           The Assignee represents and
warrants to the Assignor that (i) it is duly organized and existing and it
has full power and authority to take, and has taken, all action necessary to
execute and deliver this Assignment and 

 

C-4

 

Acceptance
and any other documents required or permitted to be executed or delivered by it
in connection with this Assignment and Acceptance, and to fulfill its
obligations hereunder; (ii) no notices to, or consents, authorizations or
approvals of, any Person are required (other than any already given or
obtained) for its due execution, delivery and performance of this Assignment
and Acceptance; and apart from any agreements or undertakings or filings
required by the Credit Agreement, no further action by, or notice to, or filing
with, any Person is required of it for such execution, delivery or performance;
(iii) this Assignment and Acceptance has been duly executed and delivered
by it and constitutes the legal, valid and binding obligation of the Assignee,
enforceable against the Assignee in accordance with the terms hereof, subject,
as to enforcement, to bankruptcy, insolvency, moratorium, reorganization and
other laws of general application relating to or affecting creditors’ rights
and to general equitable principles; and (iv) it is an Eligible Assignee.

 

9.             Further Assurances.  The Assignor and the Assignee each hereby
agree to execute and deliver such other instruments, and to take such other
action, as either party may reasonably request in connection with the
transactions contemplated by this Assignment and Acceptance, including the
delivery of any notices or other documents or instruments to the Borrower or
Administrative Agent, which may be required in connection with the assignment
and acceptance contemplated hereby.

 

10.           Miscellaneous.

 

(a)           Any amendment or waiver of
any provision of this Assignment and Acceptance shall be in writing and signed
by the parties hereto.  No failure or
delay by either party hereto in exercising any right, power or privilege
hereunder shall operate as a waiver thereof and any waiver of any breach of the
provisions of this Assignment and Acceptance shall be without prejudice to any
rights with respect to any other or further breach thereof.

 

(b)           All payments made hereunder
shall be made without any set-off or counterclaim.

 

(c)           The Assignor and the
Assignee shall each pay its own costs and expenses incurred in connection with
the negotiation, preparation, execution and performance of this Assignment and
Acceptance.

 

(d)           This Assignment and
Acceptance may be executed in any number of counterparts, and all of such
counterparts taken together shall be deemed to constitute one and the same
instrument.

 

(e)           THIS ASSIGNMENT AND
ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF CALIFORNIA.  The Assignor
and the Assignee each irrevocably submit to the non-exclusive jurisdiction of
any State or Federal court sitting in California over any suit, action or
proceeding arising out of or relating to this Assignment and Acceptance and
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in such California State or Federal court.  Each party to this Assignment and Acceptance
hereby irrevocably waives, to the fullest extent it may effectively do so, the
defense of an inconvenient forum to the maintenance of such action or
proceeding.

 

C-5

 

(f)            THE ASSIGNOR AND THE
ASSIGNEE EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS
THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS ASSIGNMENT AND
ACCEPTANCE, THE CREDIT AGREEMENT, ANY RELATED DOCUMENTS AND AGREEMENTS OR ANY
COURSE OF CONDUCT, COURSE OF DEALING OR STATEMENTS (WHETHER ORAL OR WRITTEN).

 

C-6

 

IN
WITNESS WHEREOF, the Assignor and the Assignee have caused this Assignment and
Acceptance to be executed and delivered by their duly authorized officers as of
the date first above written.

 

	
   

  	
  [ASSIGNOR]

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
  [ASSIGNEE]

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  

 

C-7

 

Exhibit D

 

FORM OF COMPLIANCE CERTIFICATE

 

COMPLIANCE CERTIFICATE

 

To:          UNION BANK, N.A., as
Administrative Agent

 

This
Compliance Certificate (this “Certificate”) is delivered pursuant to
that certain Credit Agreement dated as of
                    ,
2009 among Willis Lease Finance Corporation, a Delaware corporation (“Borrower”),
Union Bank, N.A., together with any other Lender thereunder from time to time
(collectively, the “Lenders”), and Union Bank, N.A., as Administrative
Agent (“Administrative Agent”), Swing Line Lender (“Swing Line Lender”),
Issuing Lender (“Issuing Lender”), and Security Agent (“Security
Agent”) (as amended from time to time, the “Credit Agreement”).  Terms defined in the Credit Agreement and not
otherwise defined in this Certificate shall have the meanings defined for them
in the Credit Agreement.  Section references
herein relate to the Credit Agreement unless stated otherwise.

 

This
Certificate is delivered to Administrative Agent by Borrower in accordance with
Section 8 of the Credit
Agreement.  This Certificate is delivered
with respect to the Fiscal Quarter ended
                                  ,
20     (“Determination Date”).  Computations and other information indicating
compliance with respect to the covenants contained in Sections 6.14.1, 6.14.2, 6.14.3,
and 7.3 of the Credit Agreement
are set forth below:

 

	
  1.             Section 6.14.1:  Minimum Consolidated Tangible Net Worth.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1.1           As of the
  Determination Date, the Consolidated Tangible Net Worth was:

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  1.2           Minimum
  required (as calculated below):

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  1.3           Minimum Consolidated
  Tangible Net Worth was computed as the sum of (1) 85% of Tangible Net
  Worth at the close of the immediately preceding Fiscal Quarter plus (2) 75%
  of Positive Net Income for the Fiscal Quarter ending as of the Determination
  Date, as follows:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (i) total
  assets 

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  less:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (ii) total
  liabilities

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  less:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (iii) intangibles,
  related receivables, and prepared assets on the Determination Date

  	
   

  	
  $

  
	
  (y) Equals
  Tangible Net Worth [sum of (i) less (ii) & (iii)]

  	
   

  	
  $

  

 

D-1

 

	
  (z) times
  85%

  	
   

  	
  x                 .85

  
	
   

  	
   

  	
   

  
	
  (I) Equals
  85% of Tangible Net Worth [(y) x (z)]

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  plus:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (y) Positive Net Income 

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  (z) times 75%

  	
   

  	
  x                 .75

  
	
   

  	
   

  	
   

  
	
  (II) Equals 75% of Positive Net
  Income [(y) x (z)]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Equals Minimum Consolidated Tangible Net Worth [sum of (I) and
  (II)]

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  2.             Section 6.14.2(a):  Leverage Ratio.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  2.1           As of the
  Determination Date, the Leverage Ratio (as calculated below) was:

  	
   

  	
            :
  1.00

  
	
   

  	
   

  	
   

  
	
  2.2           Maximum
  Permitted:

  	
   

  	
  4.5
  : 1.00

  
	
   

  	
   

  	
   

  
	
  2.3           The Leverage
  Ratio was computed as follows:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  2.3.1           Total Debt as of the
  Determination Date

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  divided by:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  2.3.2           Tangible Net Worth as of
  the Determination Date(4)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  Equals Leverage Ratio [(i)÷(ii)]

  	
   

  	
                :
  1.00

  
	
   

  	
   

  	
   

  
	
  3.             Section 6.14.2(b) :  Leverage Ratio — Borrower only.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  3.1           As of the
  Determination Date, the Leverage Ratio (as calculated below) was:

  	
   

  	
            :
  1.00

  
	
   

  	
   

  	
   

  
	
  3.2           Maximum
  Permitted:

  	
   

  	
  4.25
  : 1.00

  
	
   

  	
   

  	
   

  
	
  3.3           The Leverage
  Ratio was computed as follows:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  3.3.1           Total Debt as of the
  Determination Date

  	
   

  	
  $

  

 

(4)  As calculated in Item 1 above
[Item 1(c)(y)].

 

D-2

 

	
  divided by:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  3.3.2           Tangible Net Worth as of
  the Determination Date(5)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  Equals Leverage Ratio
  [(i)÷(ii)]

  	
   

  	
                :
  1.00

  
	
   

  	
   

  	
   

  
	
  4.             Section 6.14.3:  Minimum Ratio of EBIT to Consolidated Interest.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  4.1           As of the
  Determination Date, the Ratio of EBIT to Consolidated Interest (as calculated
  below) was:

  	
   

  	
            :
  1.00

  
	
   

  	
   

  	
   

  
	
  4.2           Minimum
  Required:

  	
   

  	
  1.5:
  1.00

  
	
   

  	
   

  	
   

  
	
  4.3           The Ratio of
  EBIT to Consolidated Interest was computed as follows:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  4.3.1           Net Income for that period

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  plus:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  4.3.2           any non-operating
  non-recurring loss reflected in such Net Income

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  minus:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  4.3.3           any non-operating
  non-recurring gain reflected in such Net Income

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  plus:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  4.3.4           Interest Expense of
  Borrower and its Subsidiaries for that period

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  plus:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  4.3.5           the aggregate amount of
  federal and state taxes on or measured by income of Borrower and its
  Subsidiaries for that period (whether or not payable during that period)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  minus:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  4.3.6           the aggregate amount of
  federal and state credits against taxes on or measured by income of 

  	
   

  	
  $

  

 

(5)  As calculated in Item 1 above
[Item 1(c)(y)].

 

D-3

 

	
  Borrower and its
  Subsidiaries for that period (whether or not usable during that period).

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  4.3.7           Equals EBIT [the sum of (i) —
  (iv)]

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  divided by the sum of:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  4.3.8        (i)     
  all interest, fees, charges and related expenses (in each case as such
  expenses are calculated according to GAAP) paid or payable (without
  duplication) for that Fiscal Quarter to a lender in connection with borrowed
  money (including any obligations for fees, charges and related expenses
  payable to the issuer of any letter of credit) or the deferred purchase price
  of assets that are considered “interest expense” under GAAP

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  plus:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  4.3.9        (i)     
  the portion of rent paid or payable (without duplication) for that
  Fiscal Quarter under Capital Lease Obligations that should be treated as
  interest in accordance with Financial Accounting Standards Board Statement No. 13.

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  4.3.10         Equals Consolidated
  Interest [sum of (xiii) and (ix)]

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  4.3.11         Ratio of EBIT divided by
  Consolidated Interest [(vii) divided by (x)]

  	
   

  	
            
  : 1.00

  

 

D-4

 

5.             Section 7.3:  Net Income.  Borrower’s Net Income for the two prior
Fiscal Quarters (including the Fiscal Quarter ending as of the Determination
Date and the Fiscal Quarter immediately preceding such Fiscal Quarter) was
greater than $0.00.

 

6.          A review of the
activities of Borrower during the fiscal period covered by this Certificate has
been made under the supervision of the undersigned with a view to determining
whether during such fiscal period Borrower performed and observed all of its
Obligations.  To the best knowledge of
the undersigned, during the fiscal period covered by this Certificate, all
covenants and conditions have been so performed and observed and no Default or
Event of Default has occurred and is continuing, with the exceptions set forth
below in response to which Borrower has taken or proposes to take the following
actions (if none, so state).

 

7.          The undersigned
an Authorized Signatory of Borrower certifies that the calculations made and
the information contained herein are derived from the Books and Records of
Borrower, as applicable, and that each and every matter contained herein
correctly reflects those Books and Records.

 

8.          To the best
knowledge of the undersigned no event or circumstance has occurred that
constitutes a Material Adverse Effect since the date the most recent Compliance
Certificate was executed and delivered, with the exceptions set forth below (if
none, so state).

 

[Signature on following page.]

 

D-5

 

This
Certificate is executed on
                    ,
20    , by the                                       
of Borrower, an Authorized Signatory.

 

	
   

  	
   

  
	
   

  	
  of
  WILLIS LEASE FINANCE 

  CORPORATION, a Delaware corporation 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Printed
  name]

  

 

D-6

 

 

Exhibit E

 

FORM OF REQUEST FOR
LETTER OF CREDIT

 

REQUEST FOR LETTER OF CREDIT

 

This REQUEST FOR LETTER OF
CREDIT is executed and delivered by WILLIS LEASE FINANCE CORPORATION, a
Delaware corporation (“Borrower”) to UNION BANK, N.A.,  as administrative agent (“Administrative
Agent”), pursuant to that certain Credit Agreement dated as of
                          ,
2009, among, Union Bank, N.A., together with any other Lender thereunder from
time to time (collectively, the “Lenders” and individually, a “Lender”) and
Union Bank, N.A., as Administrative Agent, Swing Line Lender, Issuing Lender,
and Security Agent (as amended, extended, renewed, supplemented or otherwise
modified from time to time, the “Credit Agreement”).  Any capitalized terms used and not defined
herein shall have the meanings set forth for such terms in the Credit
Agreement.

 

1.             Borrower hereby requests
that the Issuing Lender issue a Letter of Credit as follows:

 

(a)           AMOUNT OF REQUESTED LETTER
OF CREDIT:  $

 

(b)           DATE OF ISSUANCE:

 

(c)           BENEFICIARY UNDER LETTER OF
CREDIT:

 

NAME:

 

ADDRESS:            

Attn:
                                              

 

 

(d)           EXPIRY DATE(1):

 

(e)           PURPOSE OF LETTER OF CREDIT:

 

.

 

 The term of any Letter of Credit shall not
exceed one year from the date of issuance or extend beyond the Maturity Date.

 

E-1

 

(f)            ADDITIONAL
INFORMATION/TERMS:

 

 

 

2.             The requested Letter of
Credit is (Check one box only):

 

o            a new Letter of Credit in
addition to Letters of Credit already outstanding

 

o            a supplement, modification,
amendment, renewal, or extension to or of the following outstanding Letter(s) of
Credit:

 

 

3.             In connection with this
request, Borrower represents, warrants, and certifies that:

 

(a)           After giving effect to the issuance of the Letter of
Credit requested herein, (i) the sum of the aggregate principal amount of
all then-outstanding Loans shall not exceed the Borrowing Availability and (ii) the
Aggregate Effective Amount under all outstanding Letters of Credit shall not
exceed Fifteen Million and 00/100 Dollars ($15,000,000); and (iii) the
requested Letter of Credit complies in all other respects with the requirements
of Section 2.3 (Letters of
Credit) of the Credit Agreement;

 

(b)           No circumstance or event has
occurred that constitutes a Material Adverse Effect since the Closing Date;

 

(c)           Other than matters
described in Schedule 5.10 (Litigation)
to the Credit Agreement or not required as of the Closing Date to be described
therein or disclosed by Borrower and approved in writing by Administrative
Agent, there is no action, suit, proceeding or investigation pending or, to the
best knowledge of Borrower (on behalf of Borrower and its Subsidiaries, if
any), threatened against or affecting Borrower or any Subsidiary or any Property
of any of them before any Governmental Agency; and

 

(d)           No Default or Event of
Default presently exists or will have occurred and be continuing as a result of
the Letter of Credit requested hereunder.

 

4.             Attached hereto is an
application for letter of credit on the form provided to Borrower by the
Issuing Lender, the provisions of which are incorporated herein by this
reference as though set forth herein in full.

 

E-2

 

This Request for Letter of Credit is executed on
                    ,
20    , by an Authorized Signatory of Borrower.  The undersigned, in such capacity, hereby
certifies, on behalf of Borrower, each and every matter contained herein to be
true and correct.

 

	
   

  	
  WILLIS
  LEASE FINANCE CORPORATION,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  

 

E-3

 

Exhibit F

 

FORM OF SECURITY AGREEMENT

 

SECURITY AGREEMENT

 

This
Security Agreement (“Agreement”) is executed on November 18, 2009 by WILLIS
LEASE FINANCE CORPORATION, a Delaware corporation (herein called “Debtor”)
in favor of UNION BANK, N.A. (together with its successors and assigns, the “Security
Agent”), in its capacity as Security Agent for itself and on behalf of the
Credit Facility Lenders and Non-Lenders under the Credit Agreement (as defined
below)

 

WITNESSETH:

 

WHEREAS,
Debtor, Union Bank, N.A., together with any other Lenders from time to time
(collectively, the “Lenders”) and Union Bank, N.A., as Administrative
Agent, Swing Line Lender, Issuing Lender, and Security Agent have entered into
that certain Credit Agreement, dated as of November 18, 2009 (as amended,
restated, modified or supplemented from time to time, the “Credit Agreement”).  All capitalized terms used herein and not
otherwise defined shall have the respective meanings ascribed to them in the
Credit Agreement.

 

WHEREAS,
as a condition to the making of the Loans under the Credit Agreement, Debtor
must provide collateral security to secure the prompt payment and performance
of all Obligations under the Credit Agreement and all obligations of Debtor
under any and all Non-Lender Protection Agreements (referred to herein
collectively as the “Secured Obligations”), for the ratable benefit of
the Credit Facility Lenders and Non-Lenders, which collateral includes, without
limitation, the Collateral (as defined herein).

 

AGREEMENT

 

NOW,
THEREFORE, Debtor hereby covenants and agrees as follows:

 

1.             Grant of Security Interest.  To secure the prompt payment and performance
of all the Secured Obligations, Debtor hereby grants a continuing security
interest in, and assigns and transfers to, Security Agent, for the ratable
benefit of the Credit Facility Lenders and Non-Lenders, the following personal
property of Debtor and its Subsidiaries (other than the WEST Subsidiaries),
whether or not delivered to or in the possession or control of Security Agent
or its agents, and whether now or hereafter owned or in existence, and all
proceeds thereof (hereinafter called the “Collateral”):

 

(A)          All present and hereafter
acquired personal property including, but not limited to, all cash, cash
equivalents, accounts, bank and deposit accounts (including any control
account, disbursement account and any other bank accounts, chattel paper,
instruments, books and records, personal property aspects of leasehold estates
in real property, contract rights, general intangibles (including all
intellectual property, stock, claims, contract rights, and choses in action),
goods, equipment inventory, documents, certificates of title, deposit accounts,
returned or repossessed goods, fixtures, commercial tort claims, insurance
claims, rights and policies, letter of credit rights, investment property,
supporting obligations, 100% of residual 

 

F-1

 

cash
distributions from Willis Engine Securitization Trust, a Delaware statutory
trust, a wholly-owned Subsidiary of Debtor, and the proceeds (including
insurance proceeds), products, parts, accessories, attachments, accessions,
replacements, substitutions, additions, and improvements of or to each of the
foregoing; and

 

(B)           All copyright rights,
copyright applications, copyright registrations and like protections in each
work or authorship and derivative work thereof, now or hereafter existing,
created, acquired or held (“Copyrights”); all patents patent
applications and like protections including without limitation improvements
divisions, continuations, renewals, reissues, extensions and
continuations-in-part of the same (“Patents”); all trademark and
servicemark rights whether registered or not, applications to register and
registrations of the same and like protections, and the entire goodwill of the
business of Debtor connected with and symbolized by such trademarks, including
without limitation those set forth on Schedule 1 attached hereto (“Trademarks”);
all amendments, renewals and extensions of any of the Copyrights, Patents, or
Trademarks; all supporting obligations; and all proceeds, including insurance
proceeds, of any of the foregoing;

 

provided,
the Collateral shall not include the Debtor’s beneficial and equity interests
in (I) WEST; (II) the Servicing Agreement dated as of August 9, 2005, among
Debtor, as servicer and administrative agent, WEST, and the entities listed on
Appendix A to the Servicing Agreement, as amended, waived, restated,
supplemented, or otherwise modified from time to time; (III) the WEST Series 2008
B-1 Note, (IV) (x) one Canadair Ltd. Model CL-600 2412 (Challenger 601-1A)
aircraft bearing MSN 3004 and (y) the two General Electric Model CF-34-3A
aircraft engines bearing MSNs 350110 and 350115; and (V) (x) One CFM56-7B
aircraft engine bearing MSN 890994, (y) One CFM56-7B aircraft engine bearing
MSN 802416, and (z) One V2500-A aircraft engine bearing MSN V15205.

 

As
used herein, the following terms shall have the following meanings:

 

“Accounts”
means all accounts, whether or not defined in the UCC (as defined herein), now
owned or hereafter acquired, including without limitation, (a) all accounts receivable,
other receivables, book debts and other forms of obligations whether arising
out of goods sold or services rendered or from any other transaction (including
any such obligations that may be characterized as an account or contract under
the UCC), (b) all purchase orders or receipts for goods or services, (c) all
rights to any goods represented by any of the foregoing (including unpaid
sellers’ rights or rescission, replevin, reclamation and stoppage in transit
and rights to returned or repossessed goods), (d) all monies due or to become
due under all purchase orders and contracts for the sale of goods or the
performance of services or both or in connection with any other transaction
(whether or not yet earned by performance) now or hereafter in existence,
including the right to receive the proceeds of said purchase orders and
contracts, and (e) all collateral security and guaranties of any kind, now or
hereafter in existence, with respect to any of the foregoing.

 

“Inventory”
means all inventory now owned or hereafter acquired, wherever located,
including without limitation all goods, merchandise and other personal property
held for sale or lease or which is furnished under any contract of service or
is held as raw materials, works or goods in process, materials and supplies of
every nature used or consumed or to be used 

 

F-2

 

or
consumed in the ordinary course of its business, whether now owned or hereafter
acquired and the proceeds of products thereof.

 

“Equipment”
means all equipment now owned or hereafter acquired, wherever located,
including without limitation, all machinery, computers, machine tools, motors,
equipment, furniture, furnishings, fixtures, vehicles (including motor vehicles
and trailers), tools, parts, dies, jugs, goods (other than consumer goods, farm
products or inventory), and all attachments, accessories, accessions,
replacements, substitutions, additions, and improvements to any of the
foregoing.

 

“UCC”
shall mean the Uniform Commercial Code of the State of Delaware and in any
other jurisdiction where enforcement is sought.

 

2.             Debtor Name, State of
Organization, Place of Business.  Debtor agrees not to change its state of
organization, principal place of business (if a general partnership or other
nonregistered entity) or name, as identified below, except as permitted by Section
5.2 of the Credit Agreement:

 

F-3

 

	
  LEGAL
  NAME OF DEBTOR

  	
   

  	
  STATE
  OF ORGANIZATION

  
	
  WILLIS
  LEASE FINANCE 

  CORPORATION, a Delaware corporation

  	
   

  	
  Delaware

   

  
	
   

  	
   

  	
  PRINCIPAL
  PLACE OF BUSINESS

   

  Willis
  Lease Finance Corporation

  773 San Marin Drive, Suite 2225

  Novato, CA 94998

  Attn:
  COO and General Counsel

  Telephone
  No.: (415) 408-4712

  Facsimile
  No.: (415) 408-4702

  

 

3.             Debtor Obligations.  Debtor will: 
(a) pay when due all Secured Obligations; (b) promptly, and in any event
no more than five (5) Business Days after the need therefore or after a request
by Security Agent, take, or cause to be taken, at the Debtor’s cost and expense,
such action with respect to the execution, delivery, recording, registration
and filing of any financing statements or such other instruments or documents
as are necessary or desirable, or that Security Agent may from time to time
request, to fully carry out the intent and purpose of this Agreement and/or to
establish, protect, preserve, or maintain a valid perfected security interest
in the Collateral; (c) furnish Security Agent such information concerning
Debtor and the Collateral as Security Agent may from time to time request,
including but not limited to current financial statements; (d) keep the
Collateral separate and identifiable where such the Collateral is currently
located and permit Security Agent and its representatives to inspect the Collateral
and/or records pertaining thereto from time to time during normal business
hours; (h) reimburse Security Agent for any expenses, including but not limited
to reasonable attorneys’ fees and expenses (including the allocated costs of
Security Agent’s in-house counsel and legal staff) incurred by Security Agent
in seeking to protect, collect or enforce any rights in the Collateral; (i) faithfully
keep complete and accurate books and records and make all necessary entries
therein to reflect the quantities, costs, current values and locations of all
Collateral, the events and transactions giving rise thereto and all payments,
credits and adjustments applicable thereto, shall keep the Security Agent fully
and accurately informed as to the locations of all such books and records; (j) maintain
the Collateral in good condition and not use the Collateral for any unlawful
purpose; (k) perform all of the obligations of Debtor under the Collateral and
save Security Agent harmless from the consequence of any failure to do so; and (l)
at its own expense, upon request of Security Agent, notify any parties
obligated to Debtor on any the Collateral to make payment to Security Agent,
and Debtor hereby irrevocably grants Security Agent power of attorney to make
said notifications and collections,

 

4.          Debtor
Representations, Warranties.  Debtor represents, warrants and agrees that (a)
it has the capacity to grant a security interest in the Collateral to Security
Agent; (b) all information furnished by Debtor to Security Agent heretofore or
hereafter, whether oral or written, is and will be correct and true as of the
date given; (c) if Debtor is an entity, the execution, delivery and performance
hereof are within its powers and have been duly authorized; and (d) it is and
will be the lawful owner of all Collateral and no effective security agreement,
mortgage, deed of trust, financing statement, equivalent security or Lien
instrument 

 

F-4

 

or continuation statement covering all or any part
of the Collateral is or will be on file or of record in any public office or
otherwise, except those filed by Debtor in favor of Security Agent pursuant to
the Loan Documents, and those relating to other Permitted Liens.

 

5.          Priority of
Security Interest.  Debtor will
not create, consent to or suffer to exist any Lien upon or with respect to any
of the Collateral, except for Permitted Liens. 
Debtor shall defend the right, title and interest of Security Agent in
and to the Collateral against the claims and demands of all Persons whomsoever,
and shall take such actions, including (i) the prompt delivery of all original
Instruments, Chattel Paper and certificated Stock owned by Debtor to Security
Agent, (ii) notification of Security Agent’s interest in the Collateral at
Security Agent’s request, and (iii) the institution of litigation against third
parties as shall be prudent in order to protect and preserve Debtor’s and
Security Agent’s respective and several interests in the Collateral.  All Chattel Paper shall be marked with the
following legend:

 

“THIS
WRITING AND THE OBLIGATIONS EVIDENCED OR SECURED HEREBY ARE SUBJECT TO THE LIEN
OF UNION BANK, N.A.”

 

6.             Insurance.

 

(A)          The Debtor shall bear the
risk of each item of Collateral being destroyed, irreparably damaged or
rendered permanently unfit for sale, lease or use or being damaged in part,
from any cause whatsoever at any time during the term of this Agreement, and
shall at its own cost and expense, or in the alternative shall cause each any lessee
under the applicable lease to, obtain and keep in full force and effect all
risk of physical loss or damage insurance covering such Collateral, wherever
the same may be located, insuring against the risks of fire, explosion, theft
and such other risks as are customarily insured against by organizations
engaged in the same business and similarly situated with the Debtor (and
specifically including vandalism and malicious mischief coverage), in an amount
usually carried by organizations engaged in the same business or similarly
situated with the Debtor, and in any event, in kind and form reasonably
satisfactory to the Security Agent. All such policies of insurance shall be
written for the benefit of the Debtor as the insured, and Security Agent shall
be named as additional insured on liability insurance and as a loss payee on
any hull insurance..

 

(B)           If the Debtor or the
applicable Lessee fails to pay any premium on any such insurance, the Security
Agent shall have the right, but shall be under no obligation, to pay such
premium for the Debtor’s account. The Debtor shall repay to the Security Agent
on demand all sums which the Security Agent shall have paid under this section
in respect of insurance premiums, with interest thereon and the Debtor’s
liability to the Security Agent for such repayment with interest shall be
included in the Secured Obligations. The Debtor hereby assigns to the Security
Agent any return or unearned premium which may be due upon the cancellation for
any reason whatsoever of any policy of insurance maintained in respect of the
Collateral and hereby directs the insurer to pay the Security Agent any amount
so due. The Debtor’s right to receive payment of any such return or unearned
premium and the proceeds of any such insurance shall constitute a part of the
Collateral for all purposes hereof. If no Event of Default has occurred and is
continuing, the Security Agent shall pay any such return or unearned premium to
the Debtor, provided that all amounts paid by Security Agent in respect of
insurance premiums have been repaid in full with interest.

 

F-5

 

7.             Event of Default, Remedies.  The term default shall mean the occurrence of
an Event of Default as defined under the Credit Agreement.  Whenever an Event of Default occurs and is
continuing, Security Agent, at its option, may exercise any and all remedies
available to it under the Credit Agreement and all other Loan Documents and/or
pursuant to Applicable Law, including without limitation:  (a) without notice accelerate the maturity of
any part or all of the indebtedness secured hereby and terminate any agreement
for the granting of further credit to Debtor; (b) sell, lease or otherwise
dispose of the Collateral at public or private sale; (c) transfer any of the
Collateral into its own name or that of its nominee; (d) retain the Collateral
in satisfaction of obligations secured hereby, with notice of such retention
sent to Debtor as required by law; (e) notify any parties obligated on any of the
Collateral consisting of accounts, instruments, chattel paper, choses in action
or the like to make payment to Security Agent and enforce collection of any of
the Collateral; (f) file any action or proceeding which Security Agent may deem
necessary or appropriate to protect and preserve the right, title and interest
of the Security Agent in the Collateral; (g) require Debtor to assemble and
deliver any of the Collateral to Security Agent at a reasonably convenient
place designated by Security Agent; (h) apply all sums received or collected
from or on account of the Collateral, including the proceeds of any sale
thereof, to the payment of the costs and expenses incurred in preserving and
enforcing rights of Security Agent, including reasonable attorneys’ fees
(including the allocated costs of Security Agent’s in-house counsel and legal
staff), and indebtedness secured hereby in such order and manner as Security
Agent in its sole discretion determines; Security Agent shall account to Debtor
for any surplus remaining thereafter, and shall pay such surplus to the party
entitled thereto, including any second secured party who has made a proper
demand upon Security Agent and has furnished proof to Security Agent as
requested in the manner provided by law; in like manner, Debtor agrees to pay
to Security Agent without demand any deficiency after any of the Collateral has
been disposed of and proceeds applied as aforesaid; and (i) exercise its banker’s
lien or right of setoff in the same manner as though the credit were
unsecured.  Security Agent shall have all
the rights and remedies of a secured party under the UCC.  All rights, powers and remedies of Security
Agent hereunder shall be cumulative and not alternative.  No delay on the part of Security Agent in the
exercise of any right or remedy shall constitute a waiver thereof and no
exercise by Security Agent of any right or remedy shall preclude the exercise
of any other right or remedy or further exercise of the same remedy.  The right of Security Agent to have recourse
against the Collateral shall not be affected in any way by the fact that the
credit is or may at any time be secured by a mortgage, deed of trust or other
lien upon real property.

 

8.          Additional
Agreements.

 

(A)          In addition to any and all
rights under this Agreement and the other Loan Documents, at any time after the
occurrence and continuance of an Event of Default, Security Agent may, at any
time in Security Agent’s own name or in the name of Debtor, (i) communicate
with Account Debtors, parties to Contracts and Leases, and obligors in respect
of Instruments, Chattel Paper or other Collateral to verify to Security Agent’s
satisfaction the existence, amount and terms of any such Accounts, Contracts,
Instruments, Chattel Paper, Leases or other Collateral, and (ii) without prior
notice to Debtor, notify Account Debtors, parties to Contracts, parties to
Leases, and obligors in respect of Chattel Paper, Instruments, or other
Collateral that such Collateral has been assigned to Security Agent and that
payments shall be made directly to Security Agent.  Upon the request of Security Agent, Debtor
shall so notify such Account 

 

F-6

 

Debtors,
parties to Contracts, parties to Leases, and obligors in respect of Instruments,
Chattel Paper, Leases or other Collateral.

 

(B)           It is expressly agreed by
Debtor that Debtor shall remain liable under each Contract, License and Lease
to observe and perform all the conditions and obligations to be observed and
performed by it thereunder, and Security Agent shall have no obligation or
liability whatsoever to any Person under any Contract, License or Lease
(between Debtor and any Person other than Security Agent) by reason of or
arising out of the execution, delivery or performance of this Agreement, and
Security Agent shall not be required or obligated in any manner (i) to perform
or fulfill any of the obligations of Debtor thereunder, (ii) to make any
payment or inquiry, or (iii) to take any action of any kind to collect or enforce
any performance or the payment of any amounts which may have been assigned to
it or to which it may be entitled at any time or times under or pursuant to any
Contract, License or Lease.

 

(C)           Debtor shall, with respect
to each owned, leased, or controlled property or facility, during normal
business hours and upon reasonable prior notice (unless a Default or Event of
Default has occurred and is continuing, in which event no notice shall be
required and Security Agent shall have access at any and all times):  (i) provide access to such facility or
property to Security Agent and any of its officers, employees and agents, as
frequently as Security Agent determines to be appropriate to further or
protects its interests hereunder; (ii) permit Security Agent and any of its
officers, employees and agents to inspect, audit and make extracts from all of
Debtor’s books and records; and (iii) subject to the lessee’s rights under any
Lease, permit Security Agent to inspect, review, evaluate and make physical
verifications and appraisals of any Collateral in any manner and through any
medium that Security Agent considers advisable, and Debtor shall provide to
Security Agent, at Debtor’s cost and expense, such clerical and other
assistance as may be reasonably requested with regard thereto.  Debtor shall make available to Security Agent
and its counsel, as quickly as practicable under the circumstances, originals
or copies of all of Debtor’s books and records and any other instruments and
documents which Security Agent may reasonably request.  Debtor shall deliver any document or
instrument reasonably necessary for Security Agent, as it may from time to time
request, to obtain records from any service bureau or other Person that maintains
records for Debtor.

 

(D)          Upon the occurrence and
during the continuance of an Event of Default, Debtor, at its own expense,
shall cause its independent certified public accountants to prepare and deliver
to Security Agent at any time and from time to time, promptly upon Security
Agent’s request:  (i) a reconciliation of
all Accounts; (ii) an aging of all Accounts; (iii) trial balances; and (iv) test
verifications of such Accounts as Security Agent may request.  Debtor, at its own expense, shall cause its
independent certified public accountants to deliver to Security Agent the
results of (x) any physical verifications of all or any portion of the
Collateral made or observed by such accountants, and (y) any verifications of
Debtor’s Accounts, in each case when and if any such verifications are
conducted.  Security Agent shall be
permitted to observe and consult with Debtor and Debtor’s certified public
accountants in the performance of these tasks.

 

9.             License to Use Intellectual
Property.  For the
purpose of enabling Security Agent to exercise its rights and remedies under
the Loan Documents, Debtor hereby grants to Security Agent an irrevocable,
non-exclusive license (exercisable only upon the occurrence and continuance of
an Event of Default and without payment of royalty or other compensation to
Debtor) to use, transfer, license or sublicense any Intellectual Property now
owned, licensed to,

 

F-7

 

 

or hereafter acquired by Debtor, and wherever the same may be located,
and including in such license access to all media in which any of the licensed
items may be recorded or stored and to all computer and automatic machinery
software and programs used for the compilation or printout thereof, and Debtor
represents, warrants and agrees that any such license or sublicense is not and
will not be in conflict with the contractual or commercial rights of any other
Person; provided, that such license will terminate on the Termination Date.

 

10.        Continuing Lien.  This Agreement shall create a continuing lien
and security interest in the Collateral and shall (i) remain in full force
and effect until payment and performance in full of all of the Secured
Obligations and the expiration of the term of the Credit Agreement
and/or the termination of the obligation of any Credit Facility Lender or
Non-Lender to make any advances or Loans to Debtor pursuant to the Credit
Agreement or any other agreement, (ii) be binding upon Debtor, its
successors and assigns, and (iii) inure, together with the rights and
remedies of the Security Agent hereunder, to the benefit of the Security Agent,
and its respective successors, transferees and assigns. The Security Agent may,
but subject to the provisions of Section 14 of the Credit Agreement,
assign or otherwise transfer its rights hereunder or under the Credit Agreement
to any other Person, and such other Person shall thereupon become vested with
all the benefits in respect thereof granted to the Security Agent herein or
otherwise, subject, however, to the provisions hereof; provided that, as soon
as practicable after such assignment or transfer, Security Agent shall notify
Debtor of any change in payment instructions necessitated by such assignment or
transfer.

 

11.        Partial Releases.  Provided no Default or Event of Default
exists and no Overadvance would result, Security Agent shall from time to time
execute partial releases of Collateral (x) sold by Debtor in the ordinary
course of its business in accordance with this Agreement or (y) financed
or refinanced by the Debtor outside of the Credit Agreement (in accordance with
the terms and provisions of the Credit Agreement) from the security interests
under the Loan Documents which partial releases shall be in form reasonably
satisfactory to Security Agents.

 

12.        Reinstatement.  The provisions of this Agreement shall to the
extent permitted by Applicable Law remain in full force and effect and continue
to be effective even if:  (a) any
petition is filed by or against Debtor for liquidation or reorganization; (b) Debtor
becomes insolvent or makes an assignment for the benefit of creditors; (c) a
receiver or trustee is appointed for all or any significant part of Debtor’s
assets; or (d) at any time payment and performance of the Secured
Obligations, or any part thereof, is, pursuant to Applicable Law, rescinded or
reduced in amount, or must otherwise be restored or returned by any obligee of
the Secured Obligations, whether as a “voidable preference,” “fraudulent
transfer” or otherwise, all as though such payment or performance had not been
made.  In the event that any payment, or
any part thereof, is rescinded, reduced, restored or returned, the Secured
Obligations and Security Agent’s Liens in the Collateral shall be reinstated
and deemed reduced only by any amount paid and not so rescinded, reduced,
restored or returned.

 

13.        Loss of Value.  The Debtor shall promptly, and in any event
within five (5) Business Days, notify the Security Agent in writing
of any event causing any material deterioration, loss or unscheduled
depreciation in value of the Collateral and the Debtor’s best estimate of the
amount of such deterioration, loss or depreciation.

 

F-8

 

14.        Miscellaneous.  Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under Applicable Law, but, if any provision of this Agreement shall be
prohibited or invalid under applicable law, such provisions shall be
ineffective to the extent of such prohibition or invalidity without
invalidating the remainder of such or the remaining provisions of this
Agreement.  In the event of a conflict
between the terms of this Agreement and the terms of the Credit Agreement, the
terms of the Credit Agreement shall control.

 

The
section titles contained in this Agreement and any other Loan Document are and
shall be without substantive meaning or content of any kind whatsoever and are
not a part of the agreement between the parties hereto. Time is of the essence
for performance of any obligations under this Agreement.  In the event of a dispute between any of the
parties hereto over the meaning of this Agreement, all parties shall be deemed
to have been the drafter hereof, and any Applicable Law that states that
contracts are construed against the drafter shall not apply.

 

15.           GOVERNING LAW;
VENUE.  EXCEPT AS OTHERWISE EXPRESSLY
PROVIDED IN ANY OF THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS AND THE OBLIGATIONS ARISING HEREUNDER AND THEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE,
WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICTS OF LAWS (OTHER
THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW), AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.  DEBTOR HEREBY CONSENTS AND AGREES, PURSUANT
TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, THAT THE STATE
OR FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, NEW YORK SHALL HAVE
EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN
DEBTOR AND SECURITY AGENT PERTAINING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OF
THE OTHER LOAN DOCUMENTS; PROVIDED, DEBTOR ACKNOWLEDGES THAT ANY APPEALS FROM
THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK,
NEW YORK; AND FURTHER PROVIDED, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED
OR OPERATE TO PRECLUDE SECURITY AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL
ACTION IN ANY OTHER JURISDICTION TO COLLECT THE OBLIGATIONS, TO REALIZE ON THE
COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT
OR OTHER COURT ORDER IN FAVOR OF SECURITY AGENT. DEBTOR EXPRESSLY SUBMITS AND
CONSENTS TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH
COURT, AND DEBTOR HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON
LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND
HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT.  DEBTOR HEREBY
WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS 

 

F-9

 

ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH
SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL ADDRESSED TO DEBTOR AT THE ADDRESS SET FORTH ABOVE AND THAT
SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE DEBTOR’S ACTUAL RECEIPT
THEREOF.

 

16.        WAIVER OF JURY TRIAL. To the extent
permitted by law, in connection with any action or proceeding, whether brought
in state or federal court, Debtor hereby expressly, intentionally and
deliberately waives any right such party may otherwise have to trial by jury of
any claim, cause of action, action, dispute or controversy between or among
such parties, whether sounding in contract, tort or otherwise, which arises out
of or relates to: (i) this Agreement and any of the Loan Documents and any
and all related documents, instruments and agreements, and any and all
extensions, renewals, amendments and replacements of any of the foregoing, (ii) any
negotiations or communications relating to this Agreement and the other Loan
Documents and any and all related documents, instruments and agreements, and
any and all extensions, renewals, amendments and replacements thereof, whether
or not incorporated into the Agreement or other Loan Documents; or (iii) any
alleged agreements, promises, representations or transactions in connection
therewith.

 

[REMAINDER OF PAGE INTENTIONALLY BLANK. SIGNATURE PAGE
FOLLOWS.]

 

F-10

 

	
  Debtor:

  	
   

  
	
   

  	
   

  
	
  WILLIS
  LEASE FINANCE CORPORATION,

  	
   

  
	
  a
  Delaware corporation

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Bradley
  S. Forsyth

  	
   

  
	
   

  	
  Title:

  	
  Executive
  Vice President and

  	
   

  
	
   

  	
   

  	
  Chief
  Financial Officer

  	
   

  

 

F-1

 

Exhibit G

 

Form of Mortgage and Security Agreement

 

MORTGAGE AND SECURITY AGREEMENT

 

dated as November 18, 2009

 

made by

 

WILLIS LEASE FINANCE CORPORATION,

as Borrower

 

in favor of

 

UNION BANK, N.A.,

as Mortgagee

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I CERTAIN DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 1.01

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE II GRANTING CLAUSE

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE III COVENANTS

  	
  4

  
	
  Section 3.01

  	
  Registration;
  Maintenance and Operation

  	
  4

  
	
  Section 3.02

  	
  Further
  Assurances

  	
  6

  
	
  Section 3.03

  	
  Liens

  	
  6

  
	
  Section 3.04

  	
  Books
  and Records

  	
  6

  
	
  Section 3.05

  	
  Priority
  of Mortgagee’s Security Interest

  	
  6

  
	
  Section 3.06

  	
  Mortgagee’s
  Rights

  	
  7

  
	
  Section 3.07

  	
  Reinstatement

  	
  8

  
	
  Section 3.08

  	
  Loss
  of Value

  	
  8

  
	
  Section 3.09

  	
  Insurance

  	
  8

  
	
  Section 3.10

  	
  Warranties

  	
  9

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV EVENTS OF DEFAULT AND REMEDIES

  	
  9

  
	
  Section 4.01

  	
  Events
  of Default

  	
  9

  
	
  Section 4.02

  	
  Remedies

  	
  9

  
	
  Section 4.03

  	
  Expenses
  of Enforcement

  	
  11

  
	
  Section 4.04

  	
  Waiver
  of Appraisement, Etc.

  	
  11

  
	
  Section 4.05

  	
  Waiver
  of Claims

  	
  11

  
	
  Section 4.06

  	
  Additional
  Waivers

  	
  12

  
	
  Section 4.07

  	
  Remedies
  Cumulative, No Waiver

  	
  12

  
	
  Section 4.08

  	
  Application
  of Proceeds

  	
  12

  
	
  Section 4.09

  	
  Delay
  or Omission; Possession of Notes

  	
  12

  
	
  Section 4.10

  	
  Power
  of Attorney

  	
  12

  
	
   

  	
   

  	
   

  
	
  ARTICLE V CONCERNING THE LEASES

  	
  13

  
	
  Section 5.01

  	
  Acknowledgment
  of Leases

  	
  13

  
	
  Section 5.02

  	
  Quiet
  Enjoyment, Etc.

  	
  13

  
	
  Section 5.03

  	
  Only
  One Original Lease

  	
  14

  
	
  Section 5.04

  	
  Miscellaneous

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI MISCELLANEOUS PROVISIONS

  	
  15

  
	
  Section 6.01

  	
  Amendments,
  Etc.

  	
  15

  
	
  Section 6.02

  	
  Notices

  	
  15

  
	
  Section 6.03

  	
  Continuing
  Lien and Security Interests; Transfer

  	
  16

  

 

G-i

 

	
  Section 6.04

  	
  Governing
  Law; Choice of Forum; Service of Process

  	
  16

  
	
  Section 6.05

  	
  Severability

  	
  17

  
	
  Section 6.06

  	
  Entire
  Agreement

  	
  17

  
	
  Section 6.07

  	
  Counterparts

  	
  17

  
	
  Section 6.08

  	
  Credit
  Agreement to Control

  	
  18

  
	
  Section 6.09

  	
  Section Titles

  	
  18

  
	
  Section 6.10

  	
  Time
  of the Essence

  	
  18

  
	
  Section 6.11

  	
  Termination
  and Release

  	
  18

  

 

G-ii

 

MORTGAGE AND SECURITY AGREEMENT

 

THIS MORTGAGE AND SECURITY AGREEMENT, dated as of November 18,
2009 (as amended, modified, or supplemented from time to time, the “Mortgage”)
made by WILLIS LEASE FINANCE CORPORATION, a Delaware corporation (the “Borrower”)
in favor of UNION BANK, N.A. (together with its successors and assigns, the “Mortgagee”),
in its capacity as Security Agent for itself and on behalf of the Credit
Facility Lenders and Non-Lenders under the Credit Agreement (as defined below).

 

WITNESSETH:

 

WHEREAS, Borrower, Union Bank, N.A., together with
any other Lenders from time to time (collectively, the “Lenders”) and
Union Bank, N.A., as Administrative Agent, Swing Line Lender, Issuing Lender,
and Security Agent have entered into that certain Credit Agreement, dated as of
November 18, 2009 (as amended, restated, modified or supplemented from
time to time, the “Credit Agreement”). 
All capitalized terms used herein and not otherwise defined shall have
the respective meanings ascribed to them in the Credit Agreement; and

 

WHEREAS, as a condition to the making of the Loans
under the Credit Agreement, the Borrower must provide collateral security to
secure the prompt payment and performance of all Obligations and all
obligations of Borrower under Non-Lender Protection Agreements (referred to
herein collectively as the “Secured Obligations”), for the ratable
benefit of the Credit Facility Lenders and Non-Lenders, which collateral
includes, without limitation, the Collateral (as defined herein); and

 

NOW, THEREFORE, in consideration of the mutual
covenants and agreements herein contained, the parties hereto covenant and
agree as follows:

 

ARTICLE I

CERTAIN DEFINITIONS

 

Section 1.01           Definitions.  All capitalized terms used herein and not
otherwise defined shall have the respective meanings ascribed to them in the
Credit Agreement, and the following terms shall have the following meanings
(and shall be applicable to both the singular and the plural forms of such
terms):

 

“Act”
shall mean the United States Federal Aviation Act of 1958, as amended, as in
effect on the date of this Mortgage, as recodified in 49 U.S.C. § 40101 et
seq., as amended, or any successor or substituted legislation at the time in
effect and applicable.

 

“Administrator”
shall have the meaning given to such term in the Cape Town Convention.

 

“Aircraft
Objects” shall have the meaning given to such term in the Cape Town
Convention.

 

G-1

 

“Bill
of Sale” means, with respect to each Engine, the warranty bill of sale
executed in favor of the Borrower in form satisfactory to the Mortgagee
evidencing the transfer of title to such Engine.

 

“Cape
Town Convention” means the Convention on International Interests in Mobile
Equipment and the Protocol to the Convention on International Interests in
Mobile Equipment on Matters Specific to Aircraft Equipment, both of which were
signed in Cape Town, South Africa on November 16, 2001, and including the
Regulations for the International Registry and the Procedures for the
International Registry, as promulgated thereafter.

 

“Collateral”
shall have the meaning set forth in the Granting Clause (Article II)
hereof.

 

“Contract
of Sale” shall have the meaning given to such term in the Cape Town
Convention.

 

“Contracting
State” shall have the meaning given to such term under Article 4 in
the Cape Town Convention.

 

“Default”
means any event specified in Section 4.01 hereof which, with the
passage of time or notice or both, would, unless cured or waived become an
Event of Default.

 

“Engine”
means each engine that is (i) an “Engine” or “Turboprop Engine” (as such
terms are defined in the Credit Agreement) and (ii) described on Exhibit A
hereto or in a Mortgage Supplement hereto which has not been the subject of a
release (each of which has 750 or more rated takeoff horsepower or the
equivalent of such horsepower), together with any Propeller.  An Engine shall also include any and all
Parts which are either incorporated or installed in or attached to such Engine
or Propeller or required to be subject to the lien and security interest of
this Mortgage.

 

“Event
of Default” means any of the events specified in Section 4.01
hereof.

 

“International
Interest” shall have the meaning given to such term in the Cape Town
Convention.

 

“International
Registry” shall have the meaning given to such term in the Cape Town
Convention.

 

“Lease”
means any “Lease” (as such term is defined in the Credit Agreement), including
those described on Exhibit B hereto or in a Mortgage Supplement
hereto and any and all after-acquired Leases hereafter arising in which
Borrower is lessor or an assignee of a lessor covering an Engine (as defined in
the Credit Agreement) or Equipment, as each such Lease may be modified, amended
or supplemented from time to time.

 

“Lease
Event of Default” means, with respect to a given Lease, an “Event of
Default” or comparable term as defined in the Lease.

 

“Mortgage
Documents” means this Mortgage and all documents relating to the perfection
and/or establishment of the Lien intended to be created by this Mortgage (including,
without 

 

G-2

 

limitation,
the Mortgage Supplement(s), the Notes, any other documents relating to the
Mortgagee’s security interest in the Collateral and any documents expressly
stated to be Mortgage Documents).

 

“Mortgage
Supplement” means any mortgage supplement, substantially in the form of Exhibit C
hereto.

 

“Permitted
Lessee” means, with respect to a given Lease, the Lessee thereunder and any
substitute Lessee which is acceptable to the Mortgagee.

 

“Proceeds”
means whatever is receivable or received when any Engine or Equipment or other
collateral is sold, exchanged, collected or otherwise disposed of, including,
without limitation, all amounts payable or paid under insurance, requisition or
other payments as the result of any loss (including an Event of Loss) or damage
to such Engine or Equipment.

 

“Professional
User Entity” is defined in the Regulations for the International Registry.

 

“Propeller”
means any propeller described in a Mortgage Supplement.

 

“Prospective
Sale” shall have the meaning given to such term in the Cape Town
Convention.

 

“Records”
shall have the meaning set forth in the Granting Clause hereof.

 

“Security
Agreement” shall have the meaning given to the term in the Cape Town Convention.

 

ARTICLE II

GRANTING CLAUSE

 

The
Borrower hereby assigns, mortgages, transfers and confirms unto the Mortgagee,
and hereby grants to the Mortgagee a first priority security interest in, all
right, title and interest of the Borrower in and to the following property,
whether now owned or hereafter acquired, and all replacements of the following
property as collateral security for the prompt and complete payment and
performance of all Secured Obligations, for the ratable benefit of all Credit
Facility Lenders and Non-Lenders (herein collectively called the “Collateral”),
to wit:

 

(i)            each Engine and
all Equipment;

 

(ii)           all of the Borrower’s right,
title and interest in and to any Lease of an Engine or Equipment, including,
without limitation, each Lease together with all schedules, supplements,
amendments, modifications, extensions, renewals of or replacements for any such
Lease, executed from time to time, and all payments, including, without
limitation, the right to exercise the rights and remedies under the Lease and
to receive all rentals, payments and monies due and to become due, including,
without limitation, all payments of rent, all maintenance reserves, if any,
each Security Deposit, and all proceeds thereof, insurance proceeds and all
other amounts due or to become due thereunder (subject, in each case, to the
rights of the Permitted Lessee thereto under the applicable Lease);

 

G-3

 

(iii)                               all records,
logs and other materials required to be maintained with respect to each Engine
and item of Equipment by Persons in operational control of such Engine and
Equipment under any applicable laws, rules or regulations and all logs,
books, maintenance records and other information relating to the Engines and
Equipment pertaining thereto (collectively, the “Records”) as well as
all right, title and interest of the Borrower in, to and under the overhaul,
repair and maintenance manuals, programs and catalogues which are part of or
used in connection with the maintenance program and all warranties and rights
relating thereto in respect of the Engines and Equipment; and

 

(iv)                              all Proceeds of
all or any of the foregoing.

 

So
long as an Event of Default has not occurred and is not continuing, the
Borrower shall be entitled to remain in full possession, enjoyment and control
of the Collateral and to manage and use the Collateral and each part thereof
with the same rights and franchises appertaining thereto; provided always that
the possession, use, enjoyment and control of the Collateral shall at all times
be subject to the terms of this Mortgage and the other Loan Documents and the
Lien and security interest granted thereunder and hereunder.

 

The
parties hereto agree that for all purposes of the Cape Town Convention, (i) this
Mortgage is effective to constitute an International Interest with respect to
the Engines, (ii) each Engine constitutes an Aircraft Object, (iii) the
Borrower is situated in a Contracting State and has the power to dispose of the
Engines, (iv) this Mortgage constitutes a Security Agreement and the
interest created hereunder is eligible for registration with the International
Registry relating to the Engines and (v) this Mortgage constitutes an
assignment of associated rights secured by or associated with the Engines and
the Mortgagee hereby acknowledges and agrees that such assignment shall be
effective to assign any related International Interests in the Engines for all
purposes of the Cape Town Convention.

 

ARTICLE III

COVENANTS

 

Section 3.01                                Registration;
Maintenance and Operation.  The
Borrower, at its own cost and expense, will:

 

(a)                                                prior to mortgaging such Engine, item of Equipment or Lease, (i) register
with the International Registry (x) the ownership interest of the Borrower
in each Engine represented by the Contract of Sale (or Prospective Sale)
constituting the Bill of Sale, as long as the seller of the Engine is situated
in a Contracting State, as provided for in the Cape Town Convention, and (y) the
Borrower’s ownership interest with respect to each Contract of Sale with
respect to each Engine and Lease, as long as the lessee of the Engine under
such Lease is situated in a Contracting State, as provided for in the Cape Town
Convention, and (ii) cause each Engine, item of Equipment and Lease to be
duly registered and at all times thereafter remain duly registered in the name
of the Borrower in accordance with the Act, if applicable, or other applicable
law;

 

(b)                                               make or cause such filings, registrations, or otherwise with the FAA,
International Registry, and otherwise under the UCC as shall be required to
perfect the Lien of 

 

G-4

 

Mortgagee with respect to all
Collateral under the Mortgage, including but not limited to the following:

 

(1)                                  register the
International Interest (or Prospective International Interest) of the
Mortgagee, under this Mortgage, with respect to each Engine and Lease with the
International Registry (so long as the lessee of the Engine under such Lease is
situated in a Contracting State, as provided for in the Cape Town Convention);

 

(2)                                  register the
International Interest (or Prospective International Interest) of the Lessor,
under the Lease with respect to each Engine with the International Registry (so
long as the lessee of the Engine under such Lease is situated in a Contracting
State, as provided for in the Cape Town Convention);

 

(3)                                  register the Prospective
International Interest or International Interest and Lien under this Mortgage
and the Lease with the FAA pursuant to the Act;

 

(4)                                  file UCC financing
statements in such states in the United States of America as required, in the
judgment of Mortgagee, to perfect the Lien of Mortgagee in all UCC Collateral,
which financing statements shall name Mortgagee as secured party and as
Security Agent for the benefit of Credit Facility Lenders and Non-Lenders; and

 

(5)                                  maintain the rights and
International Interests and assignment of International Interests of the Engine
Owner and Security Agent in the Engines or Turboprop Engines, as against any
third parties under the applicable laws of any jurisdiction within the United
States and as against any third parties in any Contracting State under the Cape
Town Convention;

 

(c)                                  at all times maintain, service, repair, overhaul and test or cause to be
maintained, serviced, repaired, overhauled and tested each Engine and item of
Equipment so as to keep the same in as good operating condition as when
originally mortgaged hereunder, ordinary wear and tear excepted, and, in any
event in the condition required by the relevant Lease; and

 

(d)                                 maintain or cause to be maintained (in the English language) all Records.

 

Borrower
hereby confirms, represents and warrants that no further action, including any
filing or recording of any document (including any financing statement in
respect thereof under Article 9 of the Uniform Commercial Code of any
applicable jurisdiction), is necessary or advisable to establish as against
third parties the perfected first priority Lien of the Mortgagee on the
Borrower’s interest in each Engine, item of Equipment and Lease and in order to
properly file, register and record this Mortgage, the International Interest of
the Mortgagee under the Mortgage, the assignment of International Interest of
Mortgagee under the Lease, or the International Interest of the Lessor in each
Engine under the Lease, in any applicable jurisdiction 

 

G-5

 

in
the United States.  The Borrower agrees
to furnish Mortgagee with copies of all documents relating to the foregoing and
with recording and registration data as promptly as practicable following the
issuance of the same by the FAA and the International Registry.

 

Section 3.02                                Further
Assurances.  The
Borrower will promptly, and in any event no more than five (5) Business
Days after such action is required by this Mortgage, take, or cause to be
taken, at the Borrower’s cost and expense, such action with respect to the
execution, delivery, recording, registration and filing of this Mortgage and
any financing statements, Mortgage Supplements or other instruments as are
necessary or desirable, or that the Mortgagee may from time to time request, to
fully carry out the intent and purpose of this Mortgage and/or to establish,
protect, preserve, and/or perfect the Liens created by this Mortgage. The
Borrower agrees to furnish to the Mortgagee (a) timely notice of the
necessity of any such action, together with such instruments, in execution
form, and such other information as may be required to enable the Mortgagee to
take such action, and (b) evidence of every such action taken by the
Borrower. In addition to the foregoing, during the term of this Mortgage, the
Borrower shall establish and maintain a valid and existing account as a
Transacting User Entity with the International Registry to make registrations
in regard to this Mortgage as required by the Mortgagee.

 

Section 3.03                                Liens.  The Borrower will not create, consent to or
suffer to exist any Lien upon or with respect to any of the Collateral, except
for Permitted Liens.

 

Section 3.04                                Books and
Records.  The Borrower shall faithfully
keep complete and accurate books and records and make all necessary entries
therein to reflect the quantities, costs, current values and locations of all
Collateral, the events and transactions giving rise thereto and all payments,
credits and adjustments applicable thereto, shall keep the Mortgagee fully and
accurately informed as to the locations of all such books and records.

 

Section 3.05                                Priority of
Mortgagee’s Security Interest.  Borrower represents, warrants and agrees that
no effective security agreement, mortgage, deed of trust, financing statement,
equivalent security or Lien instrument or continuation statement covering all
or any part of the Collateral is or will be on file or of record in any public
office or otherwise, except those filed by Borrower in favor of Mortgagee
pursuant to this Mortgage and/or other Loan Documents, and those relating to
other Permitted Liens.  Borrower shall
defend the right, title and interest of Mortgagee in and to the Collateral
against the claims and demands of all Persons whomsoever, except if such claims
or demands are the direct result of Mortgagee’s gross negligence or willful
misconduct, and Borrower shall take such actions, including (i) the prompt
delivery of all original Instruments, Chattel Paper and certificated Stock
owned by Borrower to Mortgagee, (ii) notification of Mortgagee’s interest
in Collateral at Mortgagee’s request, and (iii) the institution of
litigation or other proceedings against third parties as shall be prudent in
order to protect and preserve Borrower’s and Mortgagee’s respective and several
interests in the Collateral.

 

Section 3.06                                Mortgagee’s
Rights.

 

(a)                                                In addition to any and all rights under this Mortgage and the other
Loan  Documents, at any time after the
occurrence and continuance of an Event of Default, Mortgagee 

 

G-6

 

may, at any time in Mortgagee’s
own name or in the name of Borrower, (i) communicate with Account Debtors,
parties to Contracts and Leases, and obligors in respect of Instruments,
Chattel Paper or other Collateral to verify to Mortgagee’s satisfaction the
existence, amount and terms of any such Accounts, Contracts, Instruments,
Chattel Paper, Leases or other Collateral, and (ii) without prior notice
to Borrower, notify Account Debtors, parties to Contracts, parties to Leases,
and obligors in respect of Chattel Paper, Instruments, or other Collateral that
such Collateral has been assigned to Mortgagee and that payments shall be made
directly to Mortgagee.  Upon the request
of Mortgagee, Borrower shall so notify such Account Debtors, parties to
Contracts, parties to Leases, and obligors in respect of Instruments, Chattel
Paper, Leases or other Collateral.

 

(b)                                 It is expressly agreed by Borrower that Borrower shall remain liable
under each Contract, License and Lease to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, and
Mortgagee shall have no obligation or liability whatsoever to any Person under
any Contract, License or Lease (between Borrower, Engine Owner and Equipment
Owner and any Person other than Mortgagee) by reason of or arising out of the
execution, delivery or performance of this Mortgage, and Mortgagee shall not be
required or obligated in any manner (i) to perform or fulfill any of the
obligations of Borrower thereunder, (ii) to make any payment or inquiry,
or (iii) to take any action of any kind to collect or enforce any
performance or the payment of any amounts which may have been assigned to it or
to which it may be entitled at any time or times under or pursuant to any
Contract, License or Lease.

 

(c)                                  Borrower shall, with respect to each owned, leased, or controlled
property or facility, during normal business hours and upon reasonable prior
notice (unless a Default or Event of Default has occurred and is continuing, in
which event no notice shall be required and Mortgagee shall have access at any
and all times):  (i) provide access
to such facility or property to Mortgagee and any of its officers, employees
and agents, as frequently as Mortgagee determines to be appropriate to further
or protects its interests hereunder; (ii) permit Mortgagee and any of its
officers, employees and agents to inspect, audit and make extracts from all of
Borrower’s books and records; and (iii) subject to the lessee’s rights
under any Lease, permit Mortgagee to inspect, review, evaluate and make
physical verifications and appraisals of any Engine, Equipment and other
Collateral in any manner and through any medium that Mortgagee considers
advisable, and Borrower shall provide to Mortgagee, at Borrower’s cost and
expense, such clerical and other assistance as may be reasonably requested with
regard thereto.  Borrower shall make
available to Mortgagee and its counsel, as quickly as practicable under the
circumstances, originals or copies of all of Borrower’s books and records and
any other instruments and documents which Mortgagee may reasonably
request.  Borrower shall deliver any
document or instrument reasonably necessary for Mortgagee, as it may from time
to time request, to obtain records from any service bureau or other Person that
maintains records for Borrower.

 

(d)                                 Upon the occurrence and during the continuance of an Event of
Default, Borrower, at its own expense, shall cause its independent certified
public accountants to prepare and deliver to Mortgagee at any time and from
time to time, promptly upon Mortgagee’s request:  (i) a reconciliation of all Accounts; (ii) an
aging of all Accounts; (iii) trial balances; and (iv) test
verifications of such Accounts as Mortgagee may request.  Borrower, at its own expense, shall 

 

G-7

 

cause its independent certified
public accountants to deliver to Mortgagee the results of (x) any physical
verifications of all or any portion of the Collateral made or observed by such
accountants, and (y) any verifications of Borrower’s Accounts, in each
case when and if any such verifications are conducted.  Mortgagee shall be permitted to observe and
consult with Borrower and Borrower’s certified public accountants in the
performance of these tasks.

 

Section 3.07                                Reinstatement.  The provisions of this Mortgage shall to the
extent permitted by Applicable Law remain in full force and effect and continue
to be effective even if:  (a) any
petition is filed by or against Borrower for liquidation or reorganization; (b) Borrower
becomes insolvent or makes an assignment for the benefit of creditors; (c) a
receiver or trustee is appointed for all or any significant part of Borrower’s
assets; or (d) at any time payment and performance of the Secured
Obligations, or any part thereof, is, pursuant to Applicable Law, rescinded or
reduced in amount, or must otherwise be restored or returned by any obligee of
the Secured Obligations, whether as a “voidable preference,” “fraudulent
transfer” or otherwise, all as though such payment or performance had not been
made.  In the event that any payment, or
any part thereof, is rescinded, reduced, restored or returned, the Secured
Obligations and Mortgagee’s Liens in the Collateral shall be reinstated and
deemed reduced only by any amount paid and not so rescinded, reduced, restored
or returned.

 

Section 3.08                                Loss of Value.  The Borrower shall promptly, and in any event
within five (5) Business Days, notify the Mortgagee in writing of any
event causing any material deterioration, loss or unscheduled depreciation in
value of the Collateral and the Borrower’s best estimate of the amount of such
deterioration, loss or depreciation.

 

Section 3.09                                Insurance.  The Borrower shall bear the risk of each
Engine or item of Equipment being destroyed, irreparably damaged or rendered
permanently unfit for sale, lease or use or being damaged in part, from any
cause whatsoever at any time during the term of this Mortgage, and shall at its
own cost and expense, or in the alternative shall cause each Lessee under each
applicable Lease to, obtain and keep in full force and effect all risk of
physical loss or damage insurance covering each Engine or item of Equipment,
wherever the same may be located, insuring against the risks of fire,
explosion, theft and such other risks as are customarily insured against by
organizations engaged in the same business and similarly situated with the
Borrower (and specifically including vandalism and malicious mischief
coverage), in an amount usually carried by organizations engaged in the same
business or similarly situated with the Borrower, and in any event, in kind and
form reasonably satisfactory to the Mortgagee. All such policies of insurance
shall be written for the benefit of the Borrower as the insured, and Mortgagee
and the Administrative Agent shall be named as additional insureds on liability
insurance and Mortgagee shall be named as a loss payee on hull insurance, as
applicable. Notwithstanding the foregoing or anything to the contrary herein,
to the extent any Engine or item of Equipment included in the Collateral
hereunder is included in the Borrowing Base, Borrower shall comply with all
insurance requirements set forth in the Credit Agreement.

 

(a)                                                If the Borrower or the applicable Lessee fails to pay any premium on any
such insurance, the Mortgagee shall have the right, but shall be under no
obligation, to pay such premium for the Borrower’s account. The Borrower shall
repay to the Mortgagee on demand all sums which the Mortgagee shall have paid
under this section in respect of insurance premiums, with interest thereon and
the Borrower’s liability to the Mortgagee for such repayment 

 

G-8

 

with interest shall be included
in the Secured Obligations. The Borrower hereby assigns to the Mortgagee any
return or unearned premium which may be due upon the cancellation for any
reason whatsoever of any policy of insurance maintained in respect of the
Collateral and hereby directs the insurer to pay the Mortgagee any amount so
due. The Borrower’s right to receive payment of any such return or unearned
premium and the proceeds of any such insurance shall constitute a part of the
Collateral for all purposes hereof. If no Event of Default has occurred and is
continuing, the Mortgagee shall pay any such return or unearned premium to the
Borrower, provided that all amounts paid by Mortgagee in respect of insurance
premiums have been repaid in full with interest.

 

Section 3.10                                Warranties.  Borrower warrants:  (a) it is and will be the lawful owner
of all Collateral free of all Claims, Liens, encumbrances and setoffs
whatsoever, other than the security interest granted pursuant hereto; (b) it
has the capacity to grant a security interest in Collateral to Mortgagee; (c) all
information furnished by Borrower to Mortgagee heretofore or hereafter, whether
oral or written, is and will be correct and true as of the date given; and (d) the
execution, delivery and performance hereof are within its powers and have been
duly authorized.

 

ARTICLE IV

EVENTS OF DEFAULT AND REMEDIES

 

Section 4.01                                Events of
Default.  The Borrower shall be in
default upon the occurrence of an Event of Default as defined under the Credit
Agreement.

 

Section 4.02                                Remedies.  If any Event of Default has occurred and is
continuing,

 

(a)                                                Mortgagee, at its option, may exercise any rights and remedies provided
to Agents under the Credit Agreement and/or available at law or equity,
including all rights and remedies provided under the Uniform Commercial Code in
any jurisdiction where enforcement is sought, which include but are not limited
to, the following:  (i) without
notice accelerate the maturity of any part or all of the Secured Obligations
and terminate any agreement for the granting of further credit to Borrower; (ii) sell,
lease or otherwise dispose of Collateral at public or private sale; (iii) transfer
any Collateral into its own name or that of its nominee; (iv) retain
Collateral in satisfaction of the Secured Obligations, with notice of such
retention sent to Borrower as required by law; (v) notify any parties
obligated on any Collateral consisting of Accounts, Instruments, Chattel Paper,
choses in action or the like to make payment to Mortgagee and enforce
collection of any Collateral; (vi) file any action or proceeding which
Mortgagee deems necessary or appropriate to protect and preserve the right,
title and interest of Mortgagee in the Collateral; (vii) exercise its
banker’s lien or right of setoff in the same manner as though the credit were
unsecured and (viii) apply all or a portion of sums received or collected
from or on account of Collateral, including the proceeds of any sales thereof,
to the payment of the costs and expenses incurred in preserving and enforcing
rights of Mortgagee including reasonable attorneys’ fees (including the
allocated costs of Mortgagee’s in-house counsel and legal staff), and after
application of such sums to the Secured Obligations as set forth in the Credit
Agreement, Mortgagee shall account to Borrower for any surplus remaining thereafter,
and shall pay such surplus to the party entitled thereto, including any second
secured party who has made a proper demand upon Mortgagee and has furnished
proof to Mortgagee as requested in the manner provided by law; in like manner,
Borrower agrees to pay to Mortgagee without demand any deficiency after any
Collateral has been disposed of and proceeds applied as aforesaid.

 

G-9

 

(b)                                 Borrower expressly agrees that, subject to Sections 5.01 and 5.02
hereof, Mortgagee may collect, receive, assemble, process, appropriate and
realize upon the Collateral, or any part thereof, and may forthwith sell,
lease, assign, give an option or options to purchase or otherwise dispose of
and deliver said Collateral (or contract to do so), or any part thereof, in one
or more parcels at public or private sale or sales, at any exchange at such
prices as it may deem best, for cash or on credit or for future delivery
without assumption of any credit risk. 
Mortgagee shall have the right upon any such public sale or sales and,
to the extent permitted by law, to purchase for the benefit of Mortgagee by
credit bid the whole or any part of said Collateral so sold, free of any right
or equity of redemption, which equity of redemption Borrower hereby
releases.  Such sales may be adjourned,
or continued from time to time with or without notice.  Borrower shall remain liable for any
deficiency if the proceeds of any sale or disposition of the Collateral are
insufficient to pay the Secured Obligations and all other amounts to which
Mortgagee is entitled.

 

(c)                                  Borrower further agrees, subject to Sections 5.01 and 5.02
hereof, to assemble the Collateral and make it available to Mortgagee at places
which Mortgagee shall reasonably select. 
Until Mortgagee is able to effect a sale, lease, or other disposition of
the Collateral and subject to Sections 5.01 and 5.02 hereof,
Mortgagee shall have the right to complete, assemble, use or operate the
Collateral or any part thereof, to the extent that Mortgagee deems appropriate,
for the purpose of preserving such Collateral or its value or for any other
purpose. In addition, the Borrower will provide, without cost or expense to the
Mortgagee, storage facilities for any such Engine or item of Equipment and will
cause such Engine or item of Equipment to be maintained as required by the
terms hereof and of the Credit Agreement. 
Mortgagee shall have no obligation to Borrower to maintain or preserve
the rights of Borrower as against third parties with respect to any Collateral
while such Collateral is in the possession of Mortgagee.

 

(d)                                 Upon the completion of any sale of any Collateral, full title and
(subject to Sections 5.01 and 5.02 hereof) right of possession to
the Engine or item of Equipment so sold shall (subject to any retention of
title by the Mortgagee as part of the terms of such sale) pass to the accepted
purchaser forthwith upon the completion of such sale, and the Borrower shall
deliver, in accordance with the instructions of the Mortgagee (including
causing the Engine or item of Equipment to be delivered to such airports as the
Mortgagee may specify), such Engine or item of Equipment so sold.  The Mortgagee is hereby irrevocably appointed
the true and lawful attorney of the Borrower, and in its stead, to make all
necessary conveyances of an Engine or item of Equipment if so sold.  Nevertheless, if so requested by the
Mortgagee or by any purchaser, the Borrower shall confirm any such sale or
conveyance by executing and delivering all proper instruments of conveyance or
releases as may be designated in any such request.  If the Borrower shall for any reason fail to
deliver such Engine or item of Equipment or any part thereof after demand by
the Mortgagee, the Mortgagee (subject to Sections 5.01 and 5.02
hereof) may, without being responsible for loss or damage, except to the extent
caused by the gross negligence or willful misconduct of the Mortgagee, (i) obtain
a judgment conferring on the Mortgagee the right to immediate possession or
requiring the Borrower to deliver immediate possession of all or part of such
Engine or item of Equipment to the Mortgagee, to the entry of which judgment
the Borrower hereby specifically consents, or (ii) with or, to the fullest
extent provided by law, without such judgment, pursue the whole or any part of
such Engine or item of Equipment wherever it may be found and enter any of the
premises where such Engine or item of 

 

G-10

 

Equipment may be and take
possession of and remove the same.  Upon
every such taking of possession, the Mortgagee may (but shall not be obligated
to), from time to time, make all such reasonable expenditures for maintenance,
insurance, repairs, replacements, alterations, additions and improvements to
and of the Engine or item of Equipment as it may deem proper.

 

(e)                                  The Borrower hereby covenants and agrees that a notice, which shall be
sent in accordance with the provisions of the Credit Agreement or this
Mortgage, at least ten (10) Business Days before the date of any of the
acts described in this Section 4.02 shall be deemed to be
reasonable notice of such act and, specifically, reasonable notification of the
time and place of any public sale hereunder and reasonable notification of the
time after which any private sale or other intended disposition to be made
hereunder is to be made.

 

(f)                                    Mortgagee shall be entitled, as a matter of right as against the
Borrower, without notice or demand and without regard to the adequacy of the
security for the Secured Obligations by virtue of this Mortgage or any other
collateral or to the solvency of the Borrower, upon the commencement of
judicial proceedings by it to enforce any right under this Mortgage, to the
appointment of a receiver of all or any part of the Collateral.

 

Section 4.03                                Expenses of
Enforcement.  The
Borrower shall pay to the Mortgagee on demand any and all reasonable expenses
(including reasonable attorneys’ fees and legal expenses and including the
allocated costs of Mortgagee’s in-house counsel and legal staff) which may have
been incurred by the Mortgagee, with interest (i) in the prosecution or
defense of any action growing out of or connected with the subject matter of
this Mortgage, the Secured Obligations, the Collateral or any of the Mortgagee’s
rights therein or thereto; or (ii) in connection with the custody,
preservation, use, operation, preparation for sale or sale of any of the
Collateral or in connection with obtaining possession of any of the Collateral
or otherwise exercising any of Mortgagee’s rights and remedies pursuant to this
Mortgage, the incurring of all of which are hereby authorized to the extent the
Mortgagee deems the same advisable. The Borrower’s liability to the Mortgagee
for any such payment with interest shall be included in the Secured
Obligations. The Borrower, to the extent of its rights in the Collateral,
waives and releases any right to require the Mortgagee to collect any of the
Secured Obligations from any other Collateral (as defined under the Credit Agreement)
or any other collateral then held by the Mortgagee under any theory of
marshaling of assets or otherwise.

 

Section 4.04                                Waiver of
Appraisement, Etc.  The
Borrower agrees, to the fullest extent that it lawfully may, that it will not
(and hereby irrevocably waives its right to) at any time plead, or claim the
benefit or advantage of, any appraisement, valuation, stay, extension,
moratorium or redemption law now or hereafter in force, in order to prevent or
hinder the enforcement of this Mortgage or the absolute sale of the Collateral.

 

Section 4.05                                Waiver of
Claims.  To the maximum extent
permitted by Applicable Law, Borrower waives all claims, damages, and demands
against Mortgagee, its Affiliates, agents, and the officers and employees of
any of them arising out of the repossession, retention or sale of any
Collateral and any other acts or failure to act in connection with Mortgagee’s
rights and remedies hereunder, except such as are determined in a final
judgment by a court of competent jurisdiction to have arisen out of the gross
negligence or willful misconduct of such Person.

 

G-11

 

Section 4.06                                Additional
Waivers.  Borrower waives:  (a) all right to require Mortgagee to
proceed against any other person including any other borrower hereunder or
under the Credit Agreement or to apply any Collateral Mortgagee may hold at any
time or to pursue any other remedy, Collateral, endorsers or guarantors may be
released, substituted or added without affecting the liability of Borrower
hereunder; (b) the defense of the Statute of Limitations in any action
upon any obligations of Borrower secured hereby; (c) any right of
subrogation and any right to participate in Collateral until all obligations
secured hereby have been paid in full; and (d) to the fullest extent
permitted by law, any right to oppose the appointment of a receiver or similar
official to operate Borrower’s business after the occurrence and during the
continuance of an Event of Default.

 

Section 4.07                                Remedies
Cumulative, No Waiver.  No
remedy herein conferred upon the Mortgagee is intended to be exclusive of any
other remedy, but every such remedy shall be cumulative and shall be in
addition to every other remedy herein conferred or now or hereafter existing in
law.  The exercise by the Mortgagee of
any one right or remedy shall not be deemed a waiver or release of or any
election against any other right or remedy, and the Mortgagee may proceed
against the Borrower or any other Person and the Collateral and any other
collateral granted by the Borrower to the Mortgagee under any other agreement,
all in any order and through any available remedies. A waiver on any one
occasion shall not be construed as a waiver or bar on any future occasion. All
property of any kind held at any time by the Mortgagee as Collateral shall
stand as one general continuing collateral security for all the Secured
Obligations and may be retained by the Mortgagee as security until all the
Secured Obligations are fully satisfied.

 

Section 4.08                                Application of
Proceeds.  Proceeds of
any sale, lease or other disposition or other realization upon any Collateral
pursuant to this Mortgage and all other sums realized or held by the Mortgagee
under this Mortgage or any proceedings hereunder (including any proceeds of
insurance) shall be applied by any Credit Facility Lender or Non-Lender upon
receipt as set forth in the Credit Agreement.

 

Section 4.09                                Delay or Omission;
Possession of Notes.

 

(a)                                                No delay or omission of the Mortgagee to exercise any right or remedy
arising upon the happening of any Default or Event of Default shall impair any
right or remedy or shall be construed to be a waiver of any such Default or
Event of Default or an acquiescence therein; and every right and remedy given to
the Mortgagee by this Article IV or by applicable law may be exercised
from time to time and as often as may be deemed expedient by the Mortgagee.

 

(b)                                               All rights of action under this Mortgage may be enforced by the Mortgagee
without the possession of any Note(s) or any other instrument or document
evidencing any obligation or the production thereof in any proceeding.

 

Section 4.10                                Power of
Attorney.  The
Borrower hereby irrevocably appoints the Mortgagee the true and lawful attorney
of the Borrower for the duration of this Mortgage (with full power of
substitution) in the name, place and stead of, and at the expense of, the
Borrower in connection with the enforcement of the rights and remedies provided
for in this Article IV:  (a) to

 

G-12

 

give
any necessary receipts or acquittances for amounts collected or received
hereunder, (b) to make all necessary transfers of the Engines or Equipment
in connection with any sale, lease or other disposition made pursuant hereto, (c) to
execute and deliver for value all necessary or appropriate bills of sale,
assignments and other instruments in connection with any such sale, lease or
other disposition, the Borrower hereby ratifying and confirming all that such
attorney (or any substitute) shall lawfully do hereunder and pursuant hereto, (d) to
sign any agreements, orders or other documents in connection with or pursuant
to any Lease, (e) to endorse Borrower’s name on any checks, notices,
acceptances, money orders, drafts, or other forms of payment or security that
may come into Mortgagee’s possession; (f) to receive, open, and retain all
mail addressed to Borrower relating to the Collateral, (g) to make,
settle, and adjust all claims under Borrower ‘s policies of insurance and make
all determinations and decisions with respect to such policies of insurance
relating to the Collateral, (h) to settle and adjust disputes and claims
respecting the Accounts directly with Account Debtors, for amounts and upon
terms which Mortgagee determines to be reasonable, and Mortgagee may cause to
be executed and delivered any documents and releases which Mortgagee determines
to be necessary, and (i) to sign the name of Borrower on any document to
be executed, recorded or filed in order to perfect or continue perfected
Mortgagee’s Lien upon the Collateral if Borrower fails to do so promptly after
request therefor by Mortgagee, including filing any financing or continuation
statement without the signature of Borrower to the extent permitted by Applicable
Law.  Except for item (i) above, the
power of attorney granted hereby may not be exercised unless an Event of
Default has occurred and is continuing and Mortgagee has notified Borrower that
it will enforce its security interest in the Collateral if such notice is
specifically required under the applicable Loan Documents (including pursuant
to any notice and cure rights).  The
appointment of Mortgagee as Borrower’s attorney-in-fact, and each and every one
of Mortgagee’s rights and powers, being coupled with an interest, is
irrevocable until all of the Secured Obligations have been fully repaid and
performed.  MORTGAGEE AND ANY OF ITS
OFFICERS, DIRECTORS, EMPLOYEES, LENDERS OR REPRESENTATIVES SHALL NOT BE RESPONSIBLE
TO BORROWER OR ANY OTHER PERSON FOR ANY ACT OR FAILURE TO ACT PURSUANT TO THE
POWERS GRANTED UNDER THE POWER OF ATTORNEY HEREIN OR OTHERWISE, EXCEPT FOR ITS
OR THEIR OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, NOR FOR ANY PUNITIVE,
EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES.

 

ARTICLE V

CONCERNING THE LEASES

 

Section 5.01                                Acknowledgment
of Leases.  The
Borrower and the Mortgagee acknowledge and agree for the benefit of each
Permitted Lessee that notwithstanding any other provisions hereof to the
contrary, the Lien of this Mortgage shall, so long as no Lease Event of Default
has occurred and is continuing, be expressly subject to all of the rights of
such Permitted Lessee under the applicable Lease.

 

Section 5.02                                Quiet
Enjoyment, Etc.  The
Borrower and the Mortgagee acknowledge and agree for the benefit of each
Permitted Lessee that notwithstanding any other provision hereof to the
contrary:

 

G-13

 

(a)                                                so long as no Lease Event of Default
under the applicable Lease shall have occurred and be continuing, the Mortgagee
shall not interfere or permit any Person acting by, through or under the
Mortgagee to interfere with any right of such Permitted Lessee peaceably and
quietly without hindrance or molestation to hold, possess and use, during the
term of the applicable Lease and in accordance with the terms thereof, the
applicable Engine or item of Equipment;

 

(b)                                               subject to the provisions of this
Mortgage, and until the occurrence of an Event of Default (which Event of
Default has not been waived in writing by the Mortgagee) and upon demand by the
Mortgagee following notice to Borrower that it will enforce its security
interest in the Collateral (if such notice is specifically required under the
applicable Loan Documents (including pursuant to any notice and cure rights)),
the Borrower may exercise all the rights and enjoy all the benefits of the
lessor under the applicable Lease;

 

(c)                                                any amounts held by the Mortgagee or any
agent or trustee acting on behalf of the Mortgagee for which application is
provided in the Lease or applicable replacement lease shall be applied solely
as provided in such lease.

 

Section 5.03                                Only One Original Lease.  Where available and for each Lease included
in the Collateral, one originally executed copy shall be marked “original” and
legended in form satisfactory to the Mortgagee to indicate that it is the
original of such Lease with all other copies marked “copy.” Where available, a
chattel paper counterpart or duplicate original Lease shall be delivered by the
Borrower to the Mortgagee prior to said Lease being included (subject to the
terms and conditions in the Credit Agreement) in the Borrowing Base
calculation.

 

Section 5.04                                Miscellaneous.

 

(a)                                                The Borrower shall remain liable as
lessor under the applicable Lease to perform all the obligations assumed by the
Borrower thereunder. The obligations of Borrower under the applicable Lease may
be performed by Mortgagee or any subsequent assignee of the Mortgagee (“Subsequent
Mortgagee”) without releasing Borrower therefrom. The Mortgagee or any
Subsequent Mortgagee shall have no liability or obligation under any Lease by
reason of this Mortgage and shall not, by reason of this Mortgage, be obligated
to perform any of the obligations of Borrower under the Leases or to file any
claim or take any other action to collect or enforce any payment assigned
hereunder.

 

(b)                                               The Borrower hereby agrees (i) to
perform duly and punctually each of the terms, conditions and covenants
contained in the Leases, and (ii) subject to the Borrower’s business
judgment and reasonable commercial practice, to exercise promptly and
diligently each and every right it may have under the Leases.

 

(c)                                                The Borrower does hereby warrant and
represent that all Leases are in full force and effect and that it has not
assigned or pledged, and hereby covenants that it will not assign or pledge, so
long as this Mortgage shall remain in effect, the whole or any part of the rights
to the Leases or any other of the rights hereby assigned, to anyone other than
the Mortgagee except in the case of Permitted Liens or as may otherwise be
permitted under the Credit Agreement.

 

G-14

 

ARTICLE VI

MISCELLANEOUS PROVISIONS

 

Section 6.01                                Amendments, Etc.  None of the terms or provisions of this Mortgage may
be waived, amended, supplemented or otherwise modified except by a written
instrument executed by the Borrower and Mortgagee, provided, that any provision
of this Mortgage may be waived by the Mortgagee in a written letter or
agreement executed by the Mortgagee or by facsimile transmission from the
Mortgagee, and any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.

 

Section 6.02                                Notices.  All notices
and other communications under this Mortgage shall be in writing and shall be
deemed to have been given three (3) days after deposit in the mail, first
class mail, postage prepaid, or one (1) day after being entrusted to a
reputable commercial overnight delivery service, or when sent out by facsimile
transmission addressed to the party to which such notice is directed at its
address determined as provided in this Section. 
All notices and other communications under this Mortgage shall be given
to the parties hereto at the following addresses:

 

Borrower:

 

Willis Lease Finance Corporation

773 San Marin Drive, Suite 2225

Novato, CA 94998

Attn: 
COO and General Counsel

Telephone No.:  (415) 408-4712

Facsimile No.: 
(415) 408-4702

Mortgagee:

 

Union Bank, N.A.

Northern California Commercial Banking
Division

350 California Street

San
Francisco, CA 94104

Attn:  Commercial Finance Division

Telephone No.:  (415) 705-7385

Facsimile No.:  (415) 705-7111

 

With a copy to:

 

Sheppard, Mullin, Richter &
Hampton, LLP

Four Embarcadero Center, 17th Floor

San Francisco, CA 94111

Attention: Julie Ebert

Telephone:   (415)
434-9100

Facsimile:    (415)
434-3947

 

G-15

 

Section 6.03                                Continuing Lien and Security Interests; Transfer.  This Mortgage shall create a continuing lien
and security interest in the Collateral and (i) shall remain in full force and effect
until the earlier to occur of the following: (a) payment in full of the
Secured Obligations (other than contingent obligations which by their nature
cannot be satisfied by payment at such time) and (b) either (i) expiration
of the term of the Credit Agreement or (ii) termination of the obligation
of any Credit Facility Lender and Non-Lender to make any advances to Borrower
pursuant to the Credit Agreement or any other Loan Document (ii) shall
be binding upon the Borrower, its successors and assigns, and (iii) shall
inure, together with the rights and remedies of the Mortgagee hereunder, to the
benefit of the Mortgagee, and its respective successors, transferees and
assigns. The Mortgagee may, but subject to the provisions of Section 14  of the Credit Agreement, assign or otherwise transfer its
rights hereunder or under the Credit Agreement to any other Person, and such
other Person shall thereupon become vested with all the benefits in respect
thereof granted to the Mortgagee herein or otherwise, subject, however, to the
provisions hereof; provided that, as soon as practicable after such assignment
or transfer, Mortgagee shall notify the Borrower of any change in payment
instructions necessitated by such assignment or transfer.

 

Section 6.04                                Governing Law; Choice of Forum; Service
of Process.

 

(a)                                                IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS MORTGAGE AND THE OBLIGATIONS
ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND PERFORMED IN SUCH STATE, INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW
YORK GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO THE PRINCIPLES
THEREOF REGARDING CONFLICTS OF LAWS, AND ANY APPLICABLE LAWS OF THE UNITED
STATES OF AMERICA.  ANY INTEREST CREATED
BY THIS MORTGAGE HEREIN IS EFFECTIVE TO CONSTITUTE AN “INTERNATIONAL INTEREST”
WITHIN THE MEANING OF THE CAPE TOWN CONVENTION AND IS LEGALLY SUFFICIENT UNDER
APPLICABLE LAW TO CREATE VALID AND ENFORCEABLE RIGHTS, OBLIGATIONS AND
INTERESTS OF THE TYPE IT PURPORTS TO CREATE.

 

(b)                                               BORROWER HEREBY CONSENTS AND AGREES,
PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, THAT
THE STATE OR FEDERAL COURTS LOCATED IN STATE OF NEW YORK AND SITTING IN THE
COUNTY OF NEW YORK OR SOUTHERN DISTRICT OF NEW YORK, RESPECTIVELY, SHALL HAVE
EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN
BORROWER AND MORTGAGEE PERTAINING TO THIS MORTGAGE OR TO ANY MATTER ARISING OUT
OF OR RELATED TO THIS MORTGAGE OR ANY OF THE OTHER LOAN DOCUMENTS; PROVIDED,
THAT MORTGAGEE AND BORROWER ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE
TO BE HEARD BY A COURT LOCATED OUTSIDE OF COUNTY OF NEW YORK OR SOUTHERN
DISTRICT OF NEW YORK; AND FURTHER PROVIDED, THAT NOTHING IN THIS
MORTGAGE SHALL BE DEEMED OR OPERATE TO PRECLUDE MORTGAGEE FROM BRINGING SUIT OR
TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO COLLECT THE 

 

G-16

 

OBLIGATIONS DUE UNDER THE CREDIT FACILITY, TO REALIZE ON THE COLLATERAL
OR ANY OTHER SECURITY FOR SUCH OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER
COURT ORDER IN FAVOR OF MORTGAGEE. BORROWER EXPRESSLY SUBMITS AND CONSENTS TO
SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND
BORROWER HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF
PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT.  BORROWER
HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS
ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS,
COMPLAINTS AND OTHER PROCESS MAY BE MADE TO BORROWER AS SET FORTH IN SECTION 6.2 AND THAT SERVICE SO MADE SHALL BE DEEMED
COMPLETED UPON THE BORROWER’S ACTUAL RECEIPT THEREOF.

 

(c)                                                TO THE EXTENT PERMITTED BY LAW, IN
CONNECTION WITH ANY ACTION OR PROCEEDING, WHETHER BROUGHT IN STATE OR FEDERAL
COURT, BORROWER AND MORTGAGEE EACH HEREBY EXPRESSLY, INTENTIONALLY AND
DELIBERATELY WAIVE ANY RIGHT SUCH PARTY MAY OTHERWISE HAVE TO A TRIAL BY
JURY.

 

(d)                                               To the extent permitted by law, service
of process in any action against the Borrower or the Mortgagee may be made by
registered or certified mail, return receipt requested, to its address indicated
herein.

 

(e)                                                The Borrower agrees that any final
judgment rendered against it in any action or proceeding shall be conclusive as
to the subject of such final judgment and may be enforced in other
jurisdictions in any manner provided by law.

 

Section 6.05                                Severability.  The invalidity of any one or more of the
provisions of this Mortgage shall not affect the remaining provisions of this
Mortgage; if any one or more of the provisions of this Mortgage should be held
by any court of law to be invalid, or should operate to render this Mortgage
invalid or to impair the lien and security interest of this Mortgage on all or
the major portion of the property intended to be mortgaged hereunder, this
Mortgage shall be construed as if such provisions had not been contained
therein.

 

Section 6.06                                Entire Agreement.  This Mortgage (including all exhibits hereto)
and the documents executed pursuant hereto constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede all prior
agreements, commitments, understandings or inducements (oral or written,
expressed or implied), and may not be modified, altered or amended except by a
written agreement signed by Borrower and Mortgagee.

 

Section 6.07                                Counterparts.  This Mortgage may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. No modification
or waiver of any provision hereof shall be effective unless the same is in writing
and signed by the party against whom its enforcement is sought.

 

G-17

 

Section 6.08                                Credit Agreement to Control.  In the event of a conflict between the terms
of this Mortgage and the terms of the Credit Agreement, the terms of the Credit
Agreement shall control.

 

Section 6.09                                Section Titles.  The Section titles and Table of Contents
contained in this Mortgage and any other Loan Document are and shall be without
substantive meaning or content of any kind whatsoever and are not a part of the
agreement between the parties hereto.

 

Section 6.10                                Time of the Essence.  Time is of the essence for performance of any
obligations under this Mortgage.

 

Section 6.11                                Termination and Release.

 

(a)                                                Full Release. 
Upon the earlier to occur of (i) payment in full of all Secured
Obligations (other than contingent obligations which by their nature cannot be
satisfied by payment at such time) and either (x) expiration of the
term of the Credit Agreement or (y) termination of the obligation of any
Credit Facility Lender and Non-Lender to make any advances to Borrower pursuant
to the Credit Agreement or any other Loan Document; or (ii) release by the
Mortgagee of the Lien created hereunder in accordance with the terms and conditions
of this Mortgage, the Credit Agreement and the other Loan Documents, this
Mortgage, and all of the powers, rights and interests granted hereunder and
created hereby shall forthwith terminate, and the Mortgagee shall, at the cost
and expense of the Borrower, execute and deliver all such documents and
instruments reasonably necessary to accomplish the same, within a reasonable
period of time.

 

(b)                                               Partial Release. 
Notwithstanding paragraph (a), the Borrower shall be entitled to have
any item of Collateral released from this Mortgage, which partial releases
shall be in form reasonably satisfactory to Mortgagee, for the following
reasons: (i) for sale or other disposal of Collateral in accordance with
the Credit Agreement; or (ii) to allow the relevant Collateral to be
pledged to another lender in connection with the incurrence of Debt permitted
under Sections 7.9.4 and 7.10.4 of the Credit Agreement, but solely to the
extent the Lien created herein shall be required to be released and not
subordinated as a condition thereof (and the Borrower shall use reasonable
efforts to require such subordination in lieu of release). If any item of
Collateral released pursuant to the foregoing is then the subject of a Lease
from the Borrower and if the lessee has deposited with the Borrower any related
cash, letter of credit, guaranty or security deposit, maintenance reserve or
other cash deposit that does not constitute payment of rental under the
relevant Lease, then at the time of release of the relevant Collateral the
Mortgagee shall also release the related cash deposit and letter of
credit.  Notwithstanding the foregoing,
the Borrower shall not be entitled to a release of any item of Collateral
unless, at the time of such release: (i) the Borrower complies with all requirements
set forth in the Credit Agreement regarding the sale, disposal or other
transfer of such Collateral and in any other Loan Document; (ii) there is
not then existing an Default or Event of Default; and (iii) no Default,
Event of Default or Overadvance would exist immediately following the release.

 

[Remainder
of Page Intentionally Left Blank]

 

G-18

 

IN WITNESS WHEREOF, the parties hereto have
caused this Mortgage to be duly executed and delivered as of the day and year
first above written.

 

	
   

  	
  WILLIS LEASE FINANCE
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Bradley S. Forsyth

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President
  and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNION BANK, N.A.,

  
	
   

  	
  as Mortgagee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title

  

 

G-S-1

 

EXHIBIT A

LIST OF ENGINES

 

G-A-1

 

EXHIBIT B

LIST OF LEASES

 

G-B-1

 

EXHIBIT
C

FORM OF
MORTGAGE SUPPLEMENT

 

THIS MORTGAGE SUPPLEMENT dated                                ,
20     (the “Mortgage Supplement”) is made by WILLIS
LEASE FINANCE CORPORATION, a Delaware corporation (the “Borrower”) in
favor of UNION BANK, N.A. (together with its successors and assigns, the “Mortgagee”),
in its capacity as Security Agent for itself and on behalf of the Credit
Facility Lenders and Non-Lenders under the Credit Agreement (as defined below).

 

WITNESSETH:

 

WHEREAS, Borrower,
Union Bank, N.A., together with any other Lenders from time to time
(collectively, the “Lenders”) and Union Bank, N.A., as Administrative
Agent, Swing Line Lender, Issuing Lender, and Security Agent have entered into
that certain Credit Agreement, dated as of [                  ],
2009 (as amended, restated, modified or supplemented from time to time, the “Credit
Agreement”).  All capitalized terms
used herein and not otherwise defined shall have the respective meanings
ascribed to them in the Credit Agreement;

 

WHEREAS, as a condition to the making of the Loans under
the Credit Agreement, the Borrower must provide collateral security to secure
the prompt payment and performance of all Obligations and all obligations of
Borrower under Non-Lender Protection Agreements (referred to herein collectively
as the “Secured Obligations”), for the ratable benefit of the Credit
Facility Lenders and Non-Lenders, which collateral includes, without
limitation, the Collateral (as defined herein);

 

WHEREAS, the Borrower has executed that certain Mortgage and Security Agreement dated as
of                 ,
2009 in favor of the Mortgagee, which was recorded by the FAA on                 ,
2009 and assigned FAA Conveyance No.                     ,
(as amended, modified or supplemented from time to time, herein called the “Mortgage”);

 

WHEREAS, the Mortgage provides for the execution and
delivery from time to time of Mortgage Supplements thereto, each of which shall
describe certain additional Collateral (such term and other defined terms in
the Mortgage being herein used with the same meanings) and shall specifically
mortgage such Collateral to the Mortgagee; and

 

WHEREAS, the Borrower desires to mortgage, pledge and grant
a security interest in each Engine [and Lease] as set forth herein.

 

NOW, THEREFORE, this Mortgage Supplement witnesseth,
that to secure (i) the prompt and complete payment and performance when
due of all of the Secured Obligations and (ii) the performance and
observance by the Borrower of all the agreements, covenants and provisions in
the Mortgage, and in consideration of the premises and of the covenants
contained in the Mortgage, and of the sum of $1.00 paid to the Borrower by the
Mortgagee at or before the delivery hereof, the receipt whereof is hereby
acknowledged, the Borrower has mortgaged, pledged, granted a security interest
in and confirmed unto the Mortgagee, and does hereby mortgage, pledge, grant a
security interest in and confirm unto the Mortgagee, the following described
property to be included in the defined term “Collateral” and to be
subject to all terms of the Mortgage, as amended hereby:

 

G-C-1

 

A.                                   (i)                                     One (1)                       
model            aircraft
engine bearing Manufacturer’s Serial Number                     
(which has at least 750 rated takeoff horsepower or its equivalent), together
with any Propeller and all Parts which 
are either incorporated or installed in or attached to such Engine or
Propeller or required to be subject to the lien and security interest of this
Mortgage (the “Engine”);

 

(ii)                             Each of the
lease agreements described below and any and all after-acquired leases
hereafter arising in which Borrower is lessor or an assignee of a lessor
covering the Engine or Equipment, as the same may be modified, amended or
supplemented from time to time:

 

[list any existing leases
here]

 

B.                                     all parts,
components, equipment, instruments, appliances, and loose equipment that are
incorporated or installed in or attached to said Engine, whether now owned or
hereafter acquired by the Borrower;

 

C.                                     all Records;
and

 

D.                                    all Proceeds of
all or any of the foregoing.

 

TO HAVE AND TO HOLD all and singular the aforesaid
property unto the Mortgagee, its successors and assigns, for the uses and
purposes and subject to the terms and provisions set forth in the Mortgage.

 

This Mortgage Supplement shall be construed as
supplemental to the Mortgage and shall form a part of the Mortgage and the
Mortgage is hereby incorporated by reference herein and is hereby ratified,
approved and confirmed.

 

This Mortgage Supplement is being delivered in the
state of New York.

 

This Mortgage Supplement may be executed by the
Borrower and the Mortgagee in separate counterparts, each of which when so
executed and delivered is an original, but all such counterparts shall together
constitute but one and the same Mortgage Supplement.

 

AND, FURTHER, the Borrower hereby acknowledges that
the Collateral covered by this Mortgage Supplement has been delivered to the
Borrower and is included in the property of the Borrower covered by all the
terms and conditions of the Mortgage.

 

[Remainder
of Page Intentionally Left Blank]

 

G-C-2

 

IN
WITNESS WHEREOF, the parties hereto have caused this Mortgage Supplement to be
duly executed and delivered as of the day and year first above written.

 

 

	
   

  	
  WILLIS
  LEASE FINANCE CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNION
  BANK, N.A.,

  
	
   

  	
  as
  Mortgagee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title

  

 

G-C-3

 

Exhibit H

 

FORM OF STOCK PLEDGE AGREEMENT

 

STOCK PLEDGE
AGREEMENT

 

THIS STOCK PLEDGE AGREEMENT (this “Agreement”)
is dated and entered into as of November 18, 2009, by and WILLIS LEASE
FINANCE CORPORATION, a Delaware corporation (the “Pledgor”), and UNION BANK,
N.A. (together with its successors and assigns, the “Security Agent”),
in its capacity as Security Agent for itself and on behalf of the Credit
Facility Lenders and Non-Lenders under the Credit Agreement (as defined below).

 

RECITALS

 

A.            Pledgor, Union
Bank, N.A., together with any other Lenders from time to time (collectively,
the “Lenders”) and Union Bank, N.A., as Administrative Agent, Swing Line
Lender, Issuing Lender, and Security Agent have entered into that certain
Credit Agreement, dated as of November 18, 2009  (as amended, restated, modified or
supplemented from time to time, the “Credit Agreement”).  All capitalized terms used herein and not otherwise
defined shall have the respective meanings ascribed to them in the Credit
Agreement.

 

B             Pledgor is the
sole shareholder of and owns one hundred percent (100%) of the issued and
outstanding shares in the capital of WFLC (Ireland) Limited (the “Company”).

 

C.            As a condition
to the making of the Loans under the Credit Agreement, Pledgor must pledge in
favor of Security Agent, and grant Security Agent a security interest in,
certain of Pledgor’s holdings of ordinary shares of the Company and any and all
other rights of Pledgor in connection therewith, which pledge and grant of a
security interest shall secure the prompt payment and performance of all
Obligations (as defined in the Credit Agreement) and all obligations of Pledgor
under Non-Lender Protection Agreements (referred to herein collectively as the “Secured
Obligations”), for the ratable benefit of the Credit Facility Lenders and
Non-Lenders.

 

NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
it is hereby agreed as follows:

 

1.             Obligations Secured. 
This Agreement and the security interest created hereby are given for
the purpose of securing (i) the Secured Obligations; (iii) performance
of each agreement of the Pledgor herein contained; and (iv) any and all
amendments, modifications, renewals and/or extensions of any of the foregoing,
including but not limited to amendments, modifications, renewals or extensions
which are evidenced by new or additional instruments, documents or agreements
or which change the terms of any obligations secured hereby (all of the
foregoing collectively referred to hereafter as the “Obligations”).

 

2.             Grant of Security Interest. 
For valuable consideration and to secure the Obligations, Pledgor hereby
delivers, pledges and grants a continuing security interest to Security Agent, in its capacity
as Security Agent for itself and on behalf of the Credit Facility

 

H-1

 

Lenders and Non-Lenders
under the Credit Agreement, in all of Pledgor’s right, title and interest, whether now existing or
hereafter arising, in and to the following (collectively, the “Collateral”):

 

(a)           Sixty five percent (65%)of the existing
and future shares in the capital of the Company (the “Pledged Shares”);

 

(b)           any documents, certificates, negotiable
or non-negotiable instruments and any other writing evidencing the Pledged
Shares or by which any deposit, transfer, negotiation, roll over, renewal,
substitution, withdrawal or other disposition may be made with respect to the
Pledged Shares (the “Documents”);

 

(c)           all stock rights, rights to subscribe,
stock splits, liquidating dividends, cash dividends, dividends paid in stock,
new securities or other property of any kind, which Pledgor is or may hereafter
be entitled to receive on account of the Pledged Shares, including, without
limitation, stock received by such Pledgor due to stock splits or dividends
paid in stock or sums paid upon or in respect of any securities pledged
hereunder upon the liquidation or dissolution of the issuer thereof; and

 

(d)           all proceeds of any sale, exchange or
disposition of the property described in subparagraphs (a), (b) or (c) above,
whether such disposition is voluntary or involuntary, including, without limitation,
all rights to payment and returned premiums with respect to any insurance
relating to any of the foregoing.

 

3.             Delivery of Documents. 
All Documents, now or hereafter evidencing any Collateral, shall be
delivered into the possession of Security Agent so that Security Agent may
perfect its security interest therein, and shall contain such endorsements or
assignments as Security Agent may in its sole discretion deem necessary or
advisable.  Security Agent agrees that it
will, from time to time upon the written request of Pledgor, accept a
substitute or replacement Document for any item of Collateral which has
matured; provided, however, that such substitute or replacement
document shall:  (a) contain such
endorsements or assignments as Security Agent may in its sole discretion deem
necessary or advisable; (b) be issued by an institution acceptable in all
respects to Security Agent, in its sole discretion; and (c) be in an
amount not less than the redemption value of the item of Collateral being
replaced.  For so long as any of the
Obligations remain outstanding:  (i) without
Security Agent’s prior written consent, Pledgor shall take no action of any
kind whatsoever with respect to the Collateral, including but not limited to,
creating, incurring, assuming or suffering to exist any Lien or Negative Pledge
of any nature upon or with respect to the Collateral or agreeing to grant a
Negative Pledge with respect to the Collateral for the benefit of any other
party other than Lender; and (ii) Security Agent is hereby irrevocably
authorized and appointed as agent and attorney in fact of Pledgor, which
appointment is coupled with an interest, to sign and deliver such documents,
endorsements and instruments, including, but not limited to the Documents, and
to take all such action in the name of Pledgor or Security Agent, as Security
Agent may in its sole discretion deem necessary or advisable to perfect,
preserve or enforce its interest in and lien on the Collateral.

 

4.             Stock Adjustments And Dividends. 
If during the term of this Agreement, any stock dividend,
reclassification, readjustment or other change is declared or made in the
capital

 

H-2

 

structure of the Company or any option included within
the Collateral is exercised, or both, all new, substituted and additional
shares, or other securities, issued to Pledgor by reason of any such change or
exercise shall be delivered to and held by Security Agent under the terms of
this Agreement in the same manner as the Collateral originally pledged
hereunder.  If during the term of this
Agreement, any dividend or other distribution is made on account of the
Collateral, Pledgor shall immediately deliver all such dividends or other distributions
to Security Agent in the same form received and in the same manner as the
Collateral pledged hereunder.

 

5.             Warrants And Rights. 
If during the term of this Agreement, subscription warrants or any other
rights or options shall be issued in connection with the Collateral, such
warrants, rights and options shall be immediately assigned by Pledgor to
Security Agent to be held under the terms of this Agreement in the same manner
as the Collateral originally pledged hereunder.

 

6.             Voting Rights; Taxes and Other Charges. 
During the term of this Agreement, so long as an Event of Default (as
defined in Section 9 below) has not occurred and is not continuing,
Pledgor shall have the right to vote the Collateral on all corporate questions
for all purposes not inconsistent with the terms of this Agreement.  Upon the occurrence of an Event of Default,
Security Agent shall thereafter have, at its discretion, the option to exercise
all voting powers and other corporate rights pertaining to the Collateral.  Security Agent may, upon or at any time after
the occurrence of an Event of Default, at its option, transfer or register the
Collateral or any part thereof into its own or its nominee’s name.  Pledgor shall pay prior to delinquency all
taxes, charges, liens and assessments against any of the Collateral and, upon
Pledgor’s failure to do so, Security Agent may, at its option, pay such charges
and shall be the sole judge of the legality and validity thereof and the amount
so paid shall become an Obligation hereunder.

 

7.             Representations and Warranties. 
For so long as any Obligations remain outstanding, Pledgor represents
and warrants that:  (a) Pledgor
shall have full power to enter into and perform this Agreement and has taken
all necessary action to authorize the execution, delivery and performance of this
Agreement; (b) this Agreement constitutes the legal, valid and binding
obligation of Pledgor, enforceable in accordance with its terms, subject to
bankruptcy, insolvency or other similar laws affecting the rights of creditors
generally; (c) the execution, delivery and performance of this Agreement
will not violate any law, treaty or regulation applicable to Pledgor, any order
or decree of any court, arbitrator or governmental agency, or any contractual
undertaking to which Pledgor is a party or by which Pledgor may be bound; (d) no
consents, licenses, approvals or authorizations of, exemptions by or
registrations or declarations with, any governmental authority are required
with respect to this Agreement; provided that a precautionary Form 8E
should be filed with the Companies Registration Office in Dublin within 21 days
of the execution of this Agreement; (e) all of the Pledged Shares are
fully paid, non-assessable and validly issued; (f) Pledgor shall have
title to the Collateral free and clear of all liens and encumbrances except the
interests created hereby; and (g) Security Agent shall have the absolute
and unqualified right to sell, at public or private sale, or otherwise dispose
of the Collateral, in whole or in part, without restriction, contingent only
upon the conditions set forth in this Agreement.

 

8.             Further Assurances. 
Pledgor covenants and agrees that: 
(i) it will execute and deliver, or cause to be executed and
delivered, all such stock powers, proxies, instruments and

 

H-3

 

documents as Security Agent may reasonably request
from time to time in order to carry out the provisions and purposes hereof; (ii) it
will take all such other action, as Security Agent may reasonably request from
time to time in order to carry out the provisions and purposes hereof; (iii) the
Collateral will remain free and clear of all security interests and liens
throughout the term hereof; and (iv) it will forward to Security Agent,
immediately upon receipt, copies of any information or documents received by
Pledgor in connection with the Collateral. 
For purposes of defining security interest perfection, Pledgor further
agrees that any Collateral which is in transit to Security Agent shall be
deemed to be in Security Agent’s possession. 
Pledgor warrants and represents that none of the Collateral constitutes
margin securities for the purposes of Regulations G, T, U or X.

 

9.             Events Of Default. 
It shall be an “Event of Default” under this Agreement upon the
occurrence of any Event of Default as defined in the Credit Agreement, or if
Pledgor breaches any representation, warranty, covenant or provision hereof.

 

10.          Remedies Upon Default. 
In addition to the other remedies provided for herein, in the other Loan
Documents, or otherwise available under Applicable Law, upon and after the
occurrence of an Event of Default,

 

(a)           The Security Agent may:

 

(i)            Exercise in respect of the Collateral,
any one or more of the rights and remedies available under the Uniform
Commercial Code and other Applicable Law in any jurisdiction where enforcement
is sought;

 

(ii)           Sell or otherwise assign, give an option
or options to purchase or dispose of and deliver the Collateral (or contract to
do so), or any part thereof, in one or more parcels at public or private sale
or sales, at any exchange, broker’s board or at any of the Security Agent’s
offices or elsewhere upon such terms and conditions as it may deem advisable
and at such prices as it may deem best, for cash, on credit or for future
delivery without assumption of any credit risk, free of any claim or right of
whatsoever kind (including any right or equity of redemption) of Pledgor, which
claim, right and equity are hereby expressly waived and released.  Security Agent shall have the right to the
extent permitted by Applicable Law, upon any such sale or sales, public or
private, to purchase the whole or any part of the Collateral so sold; provided,
however, Pledgor shall not receive any net proceeds, if any, of any such
credit sale or future delivery until cash proceeds are actually received by
Security Agent (which cash proceeds shall be applied by Security Agent to the
Obligations) and after all Obligations have been paid in full.  In case of any sale of all or any part of the
Collateral on credit or for future delivery, the Collateral so sold may be
retained by Security Agent until the selling price is paid by the purchaser
thereof, but Security Agent shall incur no liability in case of the failure of
such purchaser to pay for the Collateral so sold and, in case of such failure,
the Collateral may again be sold as herein provided.

 

(b)           Any notice required to be given by
Security Agent of a sale of the Collateral, or any part thereof, or of any
other intended action by Security Agent, which occurs not less than
twenty (20) days prior to such proposed action, shall constitute
commercially reasonable and fair notice to Pledgor thereof.  No notification need be given to the Pledgor
if it

 

H-4

 

has signed, after the occurrence of an Event of
Default, a statement renouncing or modifying any right to notification of sale
or other intended disposition.

 

(c)           Security Agent shall not be obligated to
make any sale or other disposition of the Collateral, or any part thereof
unless the terms thereof shall, in its sole discretion, be satisfactory to
it.  Security Agent may, if it deems it
reasonable, postpone or adjourn the sale of any of the Collateral, or any part
thereof, from time to time by an announcement at the time and place of such
sale or by announcement at the time and place of such postponed or adjourned
sale, without being required to give a new notice of sale.  Pledgor agrees that Security Agent has no
obligations to preserve rights against prior parties to the Collateral.

 

(d)           Pledgor acknowledges and agrees that
Security Agent may comply with limitations or restrictions in connection with
any sale of the Collateral in order to avoid any violation of Applicable Law or
in order to obtain any required approval of the sale or of the purchase thereof
by any governmental regulatory authority or official and, without limiting the
generality of the foregoing, Pledgor acknowledges and agrees that Security
Agent may be unable to effect a public sale of any or all of the Collateral by
reason of certain prohibitions contained in the federal securities laws and
applicable state securities laws, but may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers who will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof.  Pledgor acknowledges and agrees that any such
private sale may result in prices and other terms less favorable to the seller
than if such sale were a public sale. 
Notwithstanding any such circumstances, Pledgor acknowledges and agrees
that such compliance shall not result in any such private sale for such reason
alone being deemed to have been made in a commercially unreasonable
manner.  Security Agent shall not be
liable or accountable to Pledgor for any discount allowed by reason of the fact
that the Collateral is sold in compliance with any such limitation or restriction.  Security Agent shall not be under any
obligation to delay a sale of any of the Collateral for the period of time
necessary to permit the issuer of such securities to register such securities
for public sale under the federal securities laws, or under applicable state
securities laws, even if the issuer desires, requests or would agree to do so.

 

(e)           Any cash held by Security Agent as
Collateral and all cash proceeds received by the Security Agent in respect of
any sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Security Agent, be held by Security
Agent as Collateral for the Obligations and/or then or at any time thereafter
applied, without any marshalling of rights, remedies or assets, and after
payment of any amounts payable to Security Agent hereunder and, after deducting
all reasonable costs and expenses of every kind in connection with the care,
safekeeping, collection, sale, delivery or otherwise of any or all of the
Collateral or in any way relating to the rights of Security Agent hereunder
(including attorneys’ fees and costs), to the payment of reduction of the
Obligations.  Any surplus of such cash or
cash proceeds held by Security Agent and remaining after payment in full of all
the Obligations shall be paid over to Pledgor or to whomsoever may be lawfully
entitled to receive such surplus.

 

11.          Term.  Upon the
earlier to occur of (i) the satisfaction in full of all of the Obligations
and the expiration of the term of the Credit Agreement and/or the
termination of the

 

H-5

 

obligation of any Credit Facility Lender or Non-Lender
to make any advances or Loans to Pledgor pursuant to the Credit Agreement or
any other Loan Documents or (ii) release by the Security Agent of the Lien
created hereunder in accordance with the terms and conditions of the Credit
Agreement, all of the powers, rights and interests granted hereunder and
created hereby shall forthwith terminate, and the Security Agent shall, at the
cost and expense of the Pledgor, return to Pledgor all stock certificates and
other documents relating to this Agreement, together with any further documents
necessary to establish that the pledge given herein is terminated.

 

12.          Notices.  All notices
and other communications under this Agreement shall be in writing and shall be
deemed to have been given three (3) days after deposit in the mail, first
class mail, postage prepaid, or one (1) day after being entrusted to a
reputable commercial overnight delivery service, or when sent out by facsimile
transmission addressed to the party to which such notice is directed at its
address determined as provided in this Section. 
All notices and other communications under this Agreement shall be given
to the parties hereto at the following addresses:

 

	
  To Pledgor:

  
	
   

  
	
  Willis Lease Finance Corporation

  
	
  773
  San Marin Drive, Suite 2225

  
	
  Novato, CA 94998

  
	
  Attn: COO and General Counsel

  
	
  Telephone No.: 
  (415) 408-4712

  
	
  Facsimile No.: 
  (415) 408-4702

  
	
   

  
	
  To the Security Agent:

  
	
   

  
	
  Union Bank, N.A.

  
	
  Northern California Commercial Banking Division

  
	
  350 California Street

  
	
  San Francisco, CA
  94104

  
	
  Attn: Commercial
  Finance Division

  
	
  Telephone No.: 
  (415) 705-7385

  
	
  Facsimile No.: 
  (415) 705-7111

  
	
   

  
	
  With a copy to:

  
	
   

  
	
  Sheppard, Mullin, Richter & Hampton, LLP

  
	
  Four Embarcadero Center, 17th Floor

  
	
  San Francisco, CA 94111

  
	
  Attention: Julie Ebert

  
	
  Telephone:

  	
  (415)
  434-9100

  
	
  Facsimile:

  	
  (415) 434-3947

  

 

H-6

 

13.          Successors And Assigns. 
This Agreement shall be binding upon and shall inure to the benefit of
the heirs, administrators, successors and assigns of Security Agent and
Pledgor; provided, however, that Pledgor may not assign any of its
rights or delegate any of its Obligations hereunder without the prior written
consent of Security Agent.  The Security
Agent may, but subject to the provisions of Section 14 of the Credit
Agreement, assign or otherwise transfer its rights hereunder or under the
Credit Agreement to any other Person (each, a “Holder”), and such other Person
shall thereupon become vested with all the benefits in respect thereof granted
to the Security Agent herein or otherwise, subject, however, to the provisions
hereof; provided that, as soon as practicable after such assignment or
transfer, Security Agent shall notify the Pledgor of any change in payment
instructions necessitated by such assignment or transfer.  Pledgor agrees that the rights of any such
Holder hereunder or with respect to the related Obligations shall not be
subject to any defense, set off or counterclaim that Pledgor may assert or
claim against Security Agent, and that any such Holder shall have all of the
Security Agent’s rights hereunder but none of the Security Agent’s
obligations.  Security Agent shall have
an unimpaired right to enforce this Agreement for its benefit with respect to
that portion of the Obligations which Security Agent has not sold, assigned,
transferred participated, pledged or otherwise disposed of.

 

14.          GOVERNING LAW; VENUE.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE
LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE
OBLIGATIONS ARISING HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES
THEREOF REGARDING CONFLICTS OF LAWS (OTHER THAN SECTION 5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW), AND ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA.  PLEDGOR HEREBY CONSENTS AND
AGREES, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS
LAW, THAT THE STATE OR FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, NEW
YORK SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR
DISPUTES BETWEEN PLEDGOR AND SECURITY AGENT PERTAINING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS; PROVIDED, THAT SECURITY
AGENT AND PLEDGOR ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE
TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK; AND FURTHER
PROVIDED, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO
PRECLUDE SECURITY AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY
OTHER JURISDICTION TO COLLECT THE OBLIGATIONS, TO REALIZE ON THE COLLATERAL OR
ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT
ORDER IN FAVOR OF SECURITY AGENT. PLEDGOR EXPRESSLY SUBMITS AND CONSENTS TO
SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND
PLEDGOR HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF
PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON

 

H-7

 

CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.  PLEDGOR HEREBY WAIVES PERSONAL SERVICE OF THE
SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND
AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE
MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO PLEDGOR AT THE ADDRESS SET
FORTH ABOVE AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE PLEDGOR’S
ACTUAL RECEIPT THEREOF.

 

15.          WAIVER OF JURY TRIAL. 
TO THE MAXIMUM EXTENT PERMITTED BY LAW, PLEDGOR AND SECURITY AGENT
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY AND ALL RIGHTS IT MAY HAVE
TO A TRIAL BY JURY, TO THE EXTENT THAT ANY SUCH RIGHTS SHALL NOW OR HEREAFTER
EXIST, IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS AGREEMENT, OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS
OF ANY PLEDGOR OR SECURITY AGENT RELATING TO THE LOAN, AND THE LENDING
RELATIONSHIP WHICH IS THE SUBJECT OF THE LOAN AGREEMENT.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR
SECURED PARTY ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

 

16.          Attorneys’ Fees. 
In the event any action or proceeding is commenced to enforce the terms
and provisions of this Agreement, the prevailing party in such action or
proceeding shall be entitled to recover from the losing party therein, such
prevailing party’s costs and expenses, including, without limitation,
reasonable attorneys’ fees and costs and court costs.

 

17.          Severability. 
The invalidity of any one or more of the provisions of this Agreement
shall not affect the remaining provisions of this Agreement; if any one or more
of the provisions of this Agreement should be held by any court of law to be
invalid, or should operate to render this Agreement invalid or to impair the
lien and security interest of this Agreement on all or the major portion of the
property intended to be mortgaged hereunder, this Agreement shall be construed
as if such provisions had not been contained therein.

 

18.          Entire Agreement. 
This Agreement (including all exhibits hereto) and the documents
executed pursuant hereto constitute the entire agreement of the parties with
respect to the subject matter hereof and supersede all prior agreements,
commitments, understandings or inducements (oral or written, expressed or
implied), and may not be modified, altered or amended except by a written
agreement signed by Pledgor and Security Agent.

 

19.          Counterparts. 
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. No modification or
waiver of any provision hereof shall be effective unless the same is in writing
and signed by the party against whom its enforcement is sought.

 

H-8

 

20.          Credit Agreement to Control. 
In the event of a conflict between the terms of this Agreement and the
terms of the Credit Agreement, the terms of the Credit Agreement shall control.

 

21.          Section Titles. 
The Section titles contained in this Agreement and any other Loan
Document are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.

 

22.          Time of the Essence. 
Time is of the essence for performance of any obligations under this
Agreement.

 

[Remainder of Page Is
Intentionally Left Blank.

Signatures on Following Page.]

 

H-9

 

IN
WITNESS WHEREOF, the undersigned has executed this Agreement as of the date
first written above.

 

	
   

  	
  PLEDGOR:

  
	
   

  	
   

  
	
   

  	
  WILLIS
  LEASE FINANCE CORPORATION,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  SECURITY AGENT:

  
	
   

  	
   

  
	
   

  	
  UNION
  BANK, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

Acknowledged
and Agreed By:

 

COMPANY:

 

	
  SIGNED, SEALED and DELIVERED

  	
   

  
	
  for
  and on behalf of

  	
   

  
	
  WLFC (Ireland) Limited               )

  	
   

  
	
  acting
  by its attorney-in-fact         )

  	
  LS

  
	
  in
  the presence
  of:                       )

  	
   

  

 

 

	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title: 

  	
   

  

 

H-S-1

 

ACKNOWLEDGMENT

 

	
  STATE
  OF CALIFORNIA

  	
  )

  
	
   

  	
  )

  
	
  COUNTY
  OF

  	
  )

  

 

On
                                            
before me,
                                                                      ,
personally appeared
                                    
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the
instrument.

 

I
certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.

 

WITNESS
my hand and official seal.

 

 

	
  Signature

  	
   

  	
    (Seal)

  

 

H-A-1

 

ACKNOWLEDGMENT

 

	
  STATE
  OF CALIFORNIA

  	
  )

  
	
   

  	
  )

  
	
  COUNTY
  OF

  	
  )

  

 

On
                                            
before me,                                                                       ,
personally appeared
                                    
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the
instrument.

 

I
certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.

 

WITNESS
my hand and official seal.

 

 

	
  Signature

  	
   

  	
    (Seal)

  

 

H-A-2

 

ACKNOWLEDGMENT

 

	
  STATE
  OF CALIFORNIA

  	
  )

  
	
   

  	
  )

  
	
  COUNTY
  OF

  	
  )

  

 

On
                                            
before me,
                                                                      ,
personally appeared                                     
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the
instrument.

 

I
certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.

 

WITNESS
my hand and official seal.

 

 

	
  Signature

  	
   

  	
    (Seal)

  

 

H-A-3

 

Exhibit I

 

FORM OF BENEFICIAL INTEREST PLEDGE

AND SECURITY AGREEMENT

 

BENEFICIAL INTEREST PLEDGE

AND SECURITY AGREEMENT

 

dated as of
[                              ,
20    ]

 

among

 

WILLIS LEASE FINANCE CORPORATION,

as Owner Participant,

 

UNION BANK, N.A.,

as Security Agent

 

and

 

WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,

as Owner Trustee

 

[Number] [Engine Manufacturer] [Model]

Manufacturer’s Serial Number [ ]

 

I-1

 

BENEFICIAL INTEREST PLEDGE AND SECURITY AGREEMENT

 

THIS BENEFICIAL INTEREST PLEDGE AND SECURITY AGREEMENT
(as amended, modified or supplemented from time to time, the  “Pledge Agreement”), dated as of
[                ,
20    ], is among WILLIS
LEASE FINANCE CORPORATION, a Delaware corporation (the “Owner
Participant”), WELLS FARGO BANK
NORTHWEST, NATIONAL ASSOCIATION (the “Owner Trustee”), not
individually, but solely as Owner Trustee under that certain Trust Agreement,
dated as of
[              ,
20    ] (the “Trust Agreement”), and UNION BANK, N.A. (the “Security Agent”),
in its capacity as Security Agent, for itself and on behalf of the Credit Facility
Lenders and Non-Lenders under the Credit Agreement (as defined below).

 

W I T N E S S E T H:

 

WHEREAS, the Willis Lease Finance
Corporation, a Delaware corporation (the “Owner Participant”) and the
Owner Trustee entered into the Trust Agreement (as hereinafter defined),
pursuant to which the Owner Trustee has agreed to hold the Trust Estate (as
defined in the Trust Agreement) for the benefit of the Owner Participant in
accordance with the terms of the Trust Agreement;

 

WHEREAS, the Owner Trustee made that
certain Owner Trustee Guaranty No.         
dated as of
                        ,
20     in favor of the Security Agent (the “Owner
Trustee Guaranty”) pursuant to which the Owner Trustee has agreed to
guaranty, inter alia, certain obligations of the Owner Participant in
accordance with the terms of the Owner Trustee Guaranty, which Owner Trustee
Guaranty is secured by that certain Owner Trustee Mortgage and Security
Agreement No.          dated as of
                        ,
20    , made by the Owner Trustee, in its capacity as
trustee, in favor of the Security Agent (the “Owner Trustee Mortgage”).

 

WHEREAS, Owner Participant, Union
Bank, N.A., together with any other Lenders from time to time (collectively,
the “Lenders”) and Union Bank, N.A., as Administrative Agent, Swing Line
Lender, Issuing Lender, and Security Agent have entered into that certain
Credit Agreement, dated as of November 18, 2009 (as amended, restated,
modified or supplemented from time to time, the “Credit Agreement”); and

 

WHEREAS, it is a condition under
the Credit Agreement that the Owner Participant and the Owner Trustee shall
have executed and delivered this Pledge Agreement to the Security Agent
pursuant to which the Owner Participant shall pledge to the Security Agent all
of the Owner Participant’s rights and interests in, to and under the Trust
Agreement, including, without limitation, all of the Owner Participant’s right,
title and interest thereunder in and to the Trust Estate (such rights and
interests and such right, title and interest being referred to herein
collectively as the “Beneficial Interest”).

 

NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Owner Participant and the Owner Trustee hereby agree with the Security
Agent as follows:

 

1.             Defined Terms.
All capitalized terms used herein and not otherwise defined shall have the
respective meanings ascribed to them in the Credit Agreement, and the following
terms 

 

I-2

 

shall
have the following meanings (and shall be applicable to both the singular and
the plural forms of such terms):

 

“Code”
means the Uniform Commercial Code as from time to time in effect in the State
of New York.

 

“Collateral”
shall have the meaning assigned to it in Section 2 of this Pledge
Agreement.

 

“Equipment”
shall have the meaning assigned to it in the Trust Agreement.

 

“Excluded
Payment” means (i) any indemnity payments paid or payable pursuant to
the Lease to or in respect of the Owner Participant, its Affiliates, successors
and permitted assigns and their directors, officers, employees, servants and
agents or any corresponding payments, (ii) proceeds of public liability
insurance in respect of the Equipment payable as a result of insurance claims
made, or losses suffered, by the Owner Participant, which are payable directly
to or in respect of the Owner Participant, or its Affiliates, successors and
permitted assigns and their directors, officers, employees, servants and
agents, respectively, for its own account, (iii) proceeds of insurance
maintained with respect to the Equipment by the Owner Participant or any
Affiliate thereof for its or their own account or benefit and permitted under
the Lease, (iv) any interest that pursuant to the Loan Documents may from
time to time accrue in respect of any of the amounts described in clauses (i) through
(iii) above, (v) the proceeds from the enforcement of any right to
enforce the payment of any amount described in clauses (i) through (iii) above
(provided that the rights referred to in this clause (v) shall not be
deemed to include the exercise of any remedies provided for in the Lease other
than the right to sue for specific performance of any covenant to make such
payment or to sue for damages in respect of the breach of any such covenant),
and (vi) any right to exercise any election or option or make any decision
or determination, or to give or receive any notice, consent, waiver or
approval, or to take any other action in respect of, but in each case, only to
the extent relating to, any Excluded Payments. Nothing herein is intended to
limit or restrict any Lien granted to the Security Agent under any other Loan
Document.

 

“Lease”
shall mean that certain lease agreement as described in the Trust Agreement.

 

“Lessee”
shall mean the Lessee under the Lease.

 

“Proceeds”
shall have the meaning specified in the Code.

 

“Trust
Agreement” shall mean that certain Trust Agreement No.         
dated
                ,
20     between the Owner Trustee and the Owner Participant.

 

“Trust
Estate” shall have the meaning specified in the Trust Agreement.

 

2.             Grant of Lien. (a) As
collateral security for the prompt payment and performance of all Obligations
and all obligations of Borrower under Non-Lender Protection Agreements
(referred to herein collectively as the “Secured Obligations”), for the
ratable benefit of Credit Facility Lenders and Non-Lenders, the Owner
Participant hereby grants, bargains, conveys and assigns to the Security Agent
a first priority Lien in all of the following property now owned or at any time
hereafter acquired by the Owner Participant or in which the Owner Participant
now 

 

I-3

 

has
or at any time in the future may acquire any right, title or interest,
excluding, however, any and all Excluded Payments (collectively, the “Collateral”):

 

(1)           the Beneficial
Interest (including, without limitation, all rights of the Owner Participant in
and to the Trust Agreement and the Trust Estate and all rights of Owner
Participant in and to the Lease and any insurance or requisition proceeds in
respect of the Equipment); and

 

(2)           to the extent not otherwise included,
all Proceeds and products of any and all of the foregoing (including, without
limitation, proceeds of the sale of the Equipment).

 

(b)           So long as an Event
of Default has not occurred and is not continuing, the Owner Participant shall
be entitled to remain in full possession, enjoyment and control of the
Collateral and to manage and use the same and each part thereof with the same
rights and franchises appertaining thereto; provided always that the
possession, use, enjoyment and control of the Collateral shall at all times be
subject to the terms of this Pledge Agreement and the other Loan Documents and
the Lien and security interest granted hereunder and thereunder.

 

3.             Limitations on
Security Agent’s Obligations. Anything herein to the contrary
notwithstanding, the Owner Participant and the Owner Trustee shall remain
liable under each of the agreements constituting part of or relating to the
Beneficial Interest to observe and perform all the conditions and obligations
to be observed and performed by them thereunder, all in accordance with the
terms and provisions thereof. The Security Agent shall have no obligation or
liability under any of the agreements constituting part of or relating to the
Beneficial Interest by reason of or arising out of this Pledge Agreement or the
receipt by the Security Agent of any payment relating thereto pursuant hereto,
nor shall the Security Agent be obligated in any manner to perform any of the
obligations of the Owner Participant under or pursuant to any of the agreements
constituting part of or relating to the Beneficial Interest, to make any
payment, to make any inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by any party under
any of the agreements constituting part of or relating to the Beneficial
Interest, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.

 

4.             Representations
and Warranties. The Owner Participant hereby represents and warrants that:

 

(a)           Title; No Other
Liens. Except for the Lien granted to the Security Agent pursuant to this
Pledge Agreement and Permitted Liens, the Owner Participant has not granted any
Lien in, or other claims in respect of, the Collateral. No security agreement,
financing statement or other public notice with respect to all or any part of
the Collateral has been placed by the Owner Participant on file or of record in
any public office, except such as may have been filed in favor of the Security
Agent pursuant to this Pledge Agreement or another Loan Document.

 

I-4

 

(b)           Perfected First Priority Liens.
The Owner Participant will take such action within the United States as the
Security Agent reasonably determines necessary in order to perfect a first
priority Lien in the Collateral in favor of the Security Agent.

 

(c)           Contracts. Other than consents
obtained and delivered to the Security Agent pursuant to the Credit Agreement,
to the Owner Participant’s knowledge no consent of any party (other than the
Owner Participant and the Owner Trustee) is required, or purports to be
required, in connection with the execution, delivery and performance of this
Pledge Agreement. Assuming the due authorization, execution and delivery by the
other parties thereto, each of the agreements constituting part of the
Beneficial Interest to which the Owner Participant is a party is in full force
and effect and constitutes a valid and legally enforceable obligation of the
Owner Participant, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally. No consent or authorization of,
filing with or other act by or in respect of any Governmental Authority
applicable to it is required in connection with the execution, delivery and
performance by the Owner Participant or the validity or enforceability against
the Owner Participant of any of the agreements constituting part of the
Beneficial Interest other than those which have been duly obtained, made or
performed. Neither the Owner Participant nor (to the best of the Owner
Participant’s knowledge) any other party to any of the agreements constituting
part of the Beneficial Interest is in default in the performance or observance
of any of the terms thereof. The Owner Participant has fully performed all
obligations owing up to this date under each of the agreements constituting
part of the Beneficial Interest. The right, title and interest of the Owner
Participant in, to and under each of the agreements constituting part of the
Beneficial Interest are not subject to any defense, offset, counterclaim or
claim which would materially adversely affect the value of such agreements as
Collateral, nor have any of the foregoing been asserted or alleged against the
Owner Participant as to any of the agreements constituting part of or relating
to the Beneficial Interest. The Owner Participant has delivered to the Security
Agent a complete and correct copy of each of the agreements constituting part
of or relating to the Beneficial Interest, including all amendments,
supplements and other modifications thereto.

 

5.             Covenants.
The Owner Participant covenants and agrees with the Security Agent that, from
and after the date of this Pledge Agreement until the Secured Obligations are
paid in full or the Lien created hereunder is released or terminated in
accordance with the terms hereof:

 

(a)           Further
Documentation. At any time and from time to time, upon the written request
of the Security Agent, and at the sole expense of the Owner Participant, the
Owner Participant will promptly and duly execute and deliver such further
instruments and documents and take such further action as the Security Agent
may reasonably request for the purpose of obtaining or preserving the full
benefits of this Pledge Agreement and of the rights and powers herein granted,
including, without limitation, the filing of any financing or continuation
statements under the Uniform Commercial Code in effect in the applicable
jurisdiction with respect to the Liens created hereby. A carbon, photographic
or other reproduction of this Pledge Agreement shall be sufficient as a
financing statement for filing in any jurisdiction.

 

(b)           Expenses of Enforcement. The
Owner Participant shall pay to the Security Agent on demand any and all
reasonable expenses (including reasonable attorneys’ fees and legal 

 

I-5

 

expenses)
which may have been incurred by the Security Agent, with interest (i) in
the prosecution or defense of any action growing out of or connected with the
subject matter of this Pledge Agreement, the Secured Obligations, the
Collateral or any of the Security Agent’s rights therein or thereto; or (ii) in
connection with the custody, preservation, use, operation, preparation for sale
or sale of any of the Collateral or in connection with obtaining possession of
any of the Collateral, the incurring of all of which are hereby authorized to
the extent the Security Agent deems the same advisable. The Owner Participant’s
liability to the Security Agent for any such payment with interest shall be
included in the Secured Obligations. The Proceeds of any Collateral received by
the Security Agent at any time before or after default, whether from a sale or
other disposition of Collateral or otherwise, or the Collateral itself, may be
applied to the payment in full or in part of such of the Secured Obligations
and in such order and manner as the Security Agent may elect. The Owner
Participant, to the extent of its rights in the Collateral, waives and releases
any right to require the Security Agent to collect any of the Secured
Obligations from any other of the Collateral or any other collateral then held
by the Security Agent under any theory of marshaling of assets or otherwise.

 

(c)           Notices. The Owner Participant
will advise the Security Agent promptly, in reasonable detail, at its address
set forth in the Credit Agreement, of any Lien (other than Liens created hereby
or permitted under the Credit Agreement) on, or claim asserted against, any of
the Collateral.

 

(d)           No Amendment to Trust Agreement.
The Owner Participant will not amend, supplement, modify or terminate the Trust
Agreement, or revoke the trust established pursuant to the Trust Agreement,
without the Security Agent’s prior written consent; provided, however, that so
long as no Event of Default shall have occurred and be continuing, the Owner
Participant may, without such consent: (1) amend or supplement the Trust
Agreement to add property to the Trust Estate or to substitute Equipment,
provided that the terms of the Credit Agreement are complied with in connection
with such substitution; (2) amend the Trust Agreement in any manner that
does not adversely affect the interests of the Security Agent; and (3) replace
the Owner Trustee in accordance with the terms of the Trust Agreement, provided
that the successor Owner Trustee agrees in writing to be bound by the terms of
this Pledge Agreement, the Owner Trustee Guaranty and the Owner Trustee
Mortgage.

 

(e)           Information and Reports. The
Owner Participant will promptly furnish or cause to be furnished to the
Security Agent such information, reports and records in respect of or relating
to the Beneficial Interest as the Security Agent may reasonably request from
time to time.

 

(f)            Transfer and Liens. Except as
may be permitted by the Credit Agreement, the Owner Participant will not
without the prior written consent of the Security Agent sell, transfer, assign
or otherwise encumber or dispose of the Beneficial Interest (or any interest or
right therein, including but not limited to a transfer of Owner Participant’s
interest pursuant to Article VIII of the Trust Agreement) or create or
incur any Lien (other than a Permitted Lien) in or upon the Beneficial Interest
(or any part thereof).

 

(g)           Books and Records; Inspection.
The Owner Participant will faithfully keep or cause to be kept complete and
accurate books and records and make all necessary entries

 

I-6

 

therein
to reflect the quantities, costs, current values and locations of all
Collateral, the events and transactions giving rise thereto and all payments,
credits and adjustment applicable thereto, shall keep the Security Agent fully
and accurately informed as to the locations of all such books and records and
shall permit the Security Agent’s agents to have such access to them and to any
other records pertaining to the Owner Participant’s business as the Security
Agent may request from time to time.

 

6.             Security Agent’s Appointment
as Attorney-in-Fact.

 

(a)           Powers. The Owner
Participant hereby irrevocably constitutes and appoints the Security Agent and
any officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of the Owner Participant and in the name of the Owner Participant or
in its own name, from time to time in the Security Agent’s discretion, for the
purpose of carrying out the terms of this Pledge Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Pledge
Agreement, and, without limiting the generality of the foregoing, the Owner
Participant hereby gives the Security Agent the power and right, on behalf of
the Owner Participant, without notice to or assent by the Owner Participant, to
do the following:

 

(i)            in the case of
any Collateral, at any time when any Event of Default shall have occurred and
is continuing, in the name of the Owner Participant or its own name, or
otherwise, take possession of and indorse and collect any checks, drafts,
notes, acceptances or other instruments for the payment of moneys due under any
agreement constituting part of the Beneficial Interest or with respect to any
other Collateral (including, without limitation, the Trust Estate) and to file
any claim or take any other action or proceeding in any court of law or equity
or otherwise deemed appropriate by the Security Agent for the purpose of
collecting any and all such moneys due under any agreement constituting part of
the Beneficial Interest or with respect to any other Collateral (including,
without limitation, the Trust Estate) whenever payable;

 

(ii)           pay or discharge taxes and
Liens (other than Permitted Liens) levied or placed on or threatened against
the Collateral or any part thereof; and

 

(iii)          upon the occurrence and
during the continuance of any Event of Default (A) direct any party liable
for any payment under any of the Collateral to make payment of any and all
moneys due or to become due thereunder directly to the Security Agent or as the
Security Agent shall direct; (B) ask or demand for, collect, receive
payment of and receipt for, any and all moneys, claims and other amounts due or
to become due at any time in respect of or arising out of any Collateral; (C) commence
and prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral or any thereof and to
enforce any other right in respect of any Collateral; (D) to defend any
suit, action or proceeding brought against the Owner Participant with respect
to any Collateral; (E) settle, compromise or adjust any suit, action or
proceeding described in clause (D) above and, in connection therewith,
give such discharges or releases as the Security Agent may deem appropriate;
and (F) generally, sell, transfer, pledge and make any agreement with
respect to or otherwise deal with any of the Collateral as fully and completely
as though the Security Agent 

 

I-7

 

were the absolute owner thereof for all
purposes, and perform at the Security Agent’s option and the Owner Participant’s
expense, at any time, or from time to time, all acts and things which the
Security Agent deems necessary to protect, preserve or realize upon the
Collateral and the Security Agent’s Liens thereon and to effect the intent of
this Pledge Agreement, all as fully and effectively as the Owner Participant
might do.

 

This
power of attorney is a power coupled with an interest and shall be irrevocable.
The Security Agent agrees not to exercise its rights under this Section 6(a) unless
an Event of Default then exists or when doing so would be inconsistent with the
acknowledgment and agreement made by the Security Agent under Sections 5.01 and
5.02 of the Mortgage for the benefit of the Lessee.

 

(b)           Other Powers. The Owner
Participant also authorizes the Security Agent, at any time and from time to
time, to execute, in connection with the sale provided for in Section 9
hereof, any endorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral.

 

(c)           No Duty on Security Agent’s
Part. The powers conferred on the Security Agent hereunder are solely to
protect the Security Agent’s interests in the Collateral and shall not impose
any duty upon the Security Agent to exercise any such powers. The Security
Agent shall be accountable only for amounts that it actually receives as a
result of the exercise of such powers, and neither it nor any of its officers,
directors, employees or agents shall be responsible to the Owner Participant
for any act or failure to act hereunder, except for its own gross negligence or
willful misconduct.

 

7.             Performance by
Security Agent of Owner Participant’s Obligations. If the Owner
Participant fails to perform or comply with any of its agreements contained
herein and the Security Agent, as provided for by the terms of this Pledge
Agreement, shall itself perform or comply, or otherwise cause performance or
compliance, with such agreement, the reasonable expenses of the Security Agent
incurred in connection with such performance or compliance, together with
interest thereon at the Default Rate, shall be payable by the Owner Participant
to the Security Agent on demand and shall constitute Secured Obligations
secured hereby.

 

8.             Proceeds. It is agreed
that if an Event of Default shall occur and be continuing (a) all Proceeds
received by the Owner Participant consisting of cash, checks and other
near-cash items shall be held by the Owner Participant in trust for the
Security Agent, segregated from other funds of the Owner Participant, and
shall, forthwith upon receipt by the Owner Participant, be turned over to the
Security Agent in the exact form received by the Owner Participant (duly
endorsed by the Owner Participant to the Security Agent, if required), and (b) any
and all such Proceeds received by the Security Agent (whether from the Owner
Participant or otherwise) may, in the sole discretion of the Security Agent, be
held by the Security Agent and applied in the manner specified in Section 11
hereof.

 

9.             Remedies. If an Event
of Default shall occur and be continuing, the Security Agent may exercise, in
addition to all other rights and remedies granted to it in this Pledge
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Secured Obligations, all rights and remedies of a secured party
under the Code. Without limiting 

 

I-8

 

the generality of the foregoing, the Security
Agent, without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon the Owner Participant or any other Person (all and each of
which demands, defenses, advertisements and notices are hereby waived), may in
such circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker’s
board or office of the Security Agent or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of any credit risk.
The Security Agent shall have the right upon any such public sale or sales,
and, to the extent permitted by law, upon any such private sale or sales, to
purchase the whole or any part of the Collateral so sold, free of any right or
equity of redemption in the Owner Participant, which right or equity is hereby
waived or released. The Owner Participant further agrees, at the Security Agent’s
request, to assemble the Collateral and make it available to the Security Agent
at places which the Security Agent shall reasonably select, whether at the
Owner Participant’s premises or elsewhere. To the extent permitted by
applicable law, the Owner Participant waives all claims, damages and demands it
may acquire against the Security Agent arising out of its exercise of any
rights hereunder. If any notice of a proposed sale or other disposition of
Collateral shall be required by law, such notice shall be deemed reasonable and
proper if given, and the Security Agent agrees to give such notice to the Owner
Participant in any event, at least ten (10) Business Days before such sale
or other disposition.

 

10.           Limitation on Duties
Regarding Preservation of Collateral. The Security Agent’s sole
duty with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the Code or
otherwise, shall be to deal with it in the same manner as the Security Agent
deals with similar property for its own account. Neither the Security Agent nor
any of its directors, officers, employees or agents shall be liable for failure
to demand, collect or realize upon all or any part of the Collateral or for any
delay in doing so or shall be under any obligation to sell or otherwise dispose
of any Collateral upon the request of the Owner Participant or otherwise.

 

11.           Application of Proceeds. All amounts
received by the Security Agent in respect of any of the Collateral after the
occurrence of an Event of Default and all Proceeds received by the Security
Agent with respect to the exercise of remedies against the Collateral (or any
part thereof) shall be held by the Security Agent and applied in the manner
specified in the Credit Agreement.

 

12.           The Owner Trustee. The Owner
Trustee acknowledges and consents to the grant and pledge of the Liens in the
Beneficial Interest as set forth in Section 2 hereof and irrevocably
agrees as follows:

 

(a)           The Owner
Trustee hereby covenants with and undertakes to the Security Agent as follows:

 

I-9

 

(i)            it shall
promptly furnish or cause to be furnished to the Security Agent such
information, reports and records in respect of or relating to the Beneficial
Interest as the Security Agent may reasonably request from time to time;

 

(ii)           except as may be permitted
by the Credit Agreement, it shall not without the prior written consent of the
Security Agent sell, transfer, assign or otherwise encumber or dispose of the
Beneficial Interest (or any interest or right therein, including but not
limited to a transfer of Owner Participant’s interest pursuant to Article VIII
of the Trust Agreement) or create or incur any Lien (other than a Permitted
Lien) in or upon the Beneficial Interest (or any part thereof); and

 

(iii)          following the occurrence of
an Event of Default and while the same is continuing, it will (a) refrain
from taking any action at the request of Owner Participant in relation or
relating to the Beneficial Interest, and shall, prior to taking any such
requested action, obtain written consent from Security Agent for the same, and (b) take
any action as requested in writing by Security Agent from time to time.

 

(b)           The Security
Agent shall at any time following the occurrence of an Event of Default and
while the same is continuing be entitled by written notice to the Owner
Participant and the Owner Trustee to direct the Owner Trustee (subject to the
terms of the Trust Agreement) to: (i) exercise any and all of the rights
of the Owner Trustee in respect of the Lease or any other agreement comprising
part of the Trust Estate, in each case in accordance with the terms thereof
provided that the Owner Trustee shall not be obligated to take any steps
pursuant to such notice which would result in a breach by it of its obligations
under any of the aforementioned agreements; and/or (ii) pay all monies
payable to the Owner Participant pursuant to the terms of the Trust Agreement
or in connection with the Beneficial Interest by wire transfer in immediately
available funds directly to the Security Agent to the following account:

 

Union
Bank, N.A.

ABA
No. 122-000-496

Account
No. 77070-196431

Attn:
Commercial Loan Operations

Ref:
Willis Lease Finance

 

Accordingly,
the Owner Trustee irrevocably agrees and undertakes as follows:

 

(c)           it shall recognize
the power of attorney granted by the Owner Participant to the Security Agent
pursuant to Section 6 hereof and shall recognize the Security Agent
as the Owner Participant’s attorney-in-fact in the performance of all actions
permitted pursuant to Section 6.

 

(d)           except as permitted
hereunder, it will not amend, supplement, modify or terminate the Trust
Agreement, or revoke the trust established pursuant to the Trust Agreement,
without the Security Agent’s prior written consent.

 

13.           Powers Coupled
with an Interest. All authorizations and agencies herein contained
with respect to the Collateral are irrevocable and powers coupled with an
interest.

 

I-10

 

14.           Severability. Any provision
of this Pledge Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

15.           Paragraph Headings. The paragraph
headings used in this Pledge Agreement are for convenience of reference only
and are not to affect the construction hereof or be taken into consideration in
the interpretation hereof.

 

16.           No Waiver; Cumulative
Remedies. The Security Agent shall not by any act (except by
a written instrument pursuant to Section 17 hereof), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any Potential Default or Event of Default or
in any breach of any of the terms and conditions hereof. No failure to
exercise, nor any delay in exercising, on the part of the Security Agent, any
right, power or privilege hereunder shall operate as a waiver thereof. No
single or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. A waiver by the Security Agent of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Security Agent would otherwise have on any future
occasion. The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any rights or
remedies provided by law.

 

17.           Waivers and Amendments;
Successors and Assigns; Governing Law. None of the terms or
provisions of this Pledge Agreement may be waived, amended, supplemented or
otherwise modified except by a written instrument executed by the Owner
Participant, the Owner Trustee and the Security Agent, provided, that
any provision of this Pledge Agreement may be waived by the Security Agent in a
written letter or agreement executed by the Security Agent or by facsimile
transmission from the Security Agent, and any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.  This Pledge Agreement shall be
binding upon the successors and assigns of the Owner Participant and the Owner
Trustee and shall inure to the benefit of the Security Agent and its successors
and assigns, provided that neither Owner Participant nor Owner Trustee shall
assign its rights or obligations hereunder without the prior written consent of
the Security Agent. THIS PLEDGE AGREEMENT IN ALL RESPECTS, INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS PLEDGE AGREEMENT AND
THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN SUCH STATE, INCLUDING SECTIONS 5-1401 AND
5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT OTHERWISE WITHOUT REGARD TO
CONFLICT OF LAW PRINCIPLES, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA.

 

18.           Notices. All notices
and other communications under this Pledge Agreement shall be in writing and
shall be deemed to have been given three (3) days after deposit in the
mail, first class mail, postage prepaid, or one (1) day after being
entrusted to a reputable commercial overnight delivery service, or when sent
out by facsimile transmission addressed to the party to 

 

I-11

 

which such notice is directed at its address
determined as provided in this Section. 
All notices and other communications under this Pledge Agreement shall
be given to the parties hereto at the following addresses:

 

	
  The
  Owner Participant:

  	
   

  	
  Willis
  Lease Finance Corporation

  773
  San Marin Drive, Suite 2225

  Novato,
  CA 94998

  Attn:
  COO and General Counsel

  Telephone
  No.: (415) 408-4712

  Facsimile
  No.: (415) 408-4702

  
	
   

  	
   

  	
   

  
	
  The
  Security Agent:

  	
   

  	
  Union
  Bank, N.A.

  Northern
  California Commercial Banking Division

  350
  California Street

  San
  Francisco, CA 94104

  Attn:
  Commercial Finance Division

  Telephone
  No.: (415) 705-7385

  Facsimile
  No.: (415) 705-7111

   

  with
  a copy to:

   

  Sheppard,
  Mullin, Richter & Hampton, LLP

  Four
  Embarcadero Center, 17th Floor

  San
  Francisco, CA 94111

  Attention:
  Julie Ebert

  Telephone:(415)
  434-9100

  Facsimile:(415)
  434-3947

  
	
   

  	
   

  	
   

  
	
  The
  Owner Trustee

  	
   

  	
  Wells
  Fargo Bank Northwest, National Association 

  79
  South Main Street 

  Salt
  Lake City, Utah 84111 

  Attention:
  Val Orton 

  Telephone:
  801-246-5300 

  Facsimile:
  801-246-5053

  

 

19.           Submission to
Jurisdiction; Waivers.

 

(a)           EACH OF THE
SECURITY AGENT, THE OWNER TRUSTEE AND THE OWNER PARTICIPANT HEREBY CONSENTS AND
AGREES, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS
LAW, THAT THE STATE OR FEDERAL COURTS LOCATED IN THE STATE OF NEW YORK AND
SITTING IN THE COUNTY OF NEW YORK OR SOUTHERN DISTRICT OF NEW YORK,
RESPECTIVELY, SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY
CLAIMS OR DISPUTES BETWEEN OR AMONG THE PARTIES 

 

I-12

 

HERETO PERTAINING TO THIS PLEDGE AGREEMENT OR
TO ANY MATTER ARISING OUT OF OR RELATED TO THIS PLEDGE AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS; PROVIDED, THAT EACH OF THE SECURITY AGENT, THE OWNER
TRUSTEE AND THE OWNER PARTICIPANT ACKNOWLEDGE THAT ANY APPEALS FROM THOSE
COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF THE COUNTY OF
NEW YORK OR SOUTHERN DISTRICT OF NEW YORK; AND FURTHER PROVIDED, THAT
NOTHING IN THIS PLEDGE AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE
SECURITY AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER
JURISDICTION TO COLLECT THE OBLIGATIONS DUE UNDER THE CREDIT FACILITY, TO
REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR SUCH OBLIGATIONS, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SECURITY AGENT. EACH OF THE
OWNER TRUSTEE AND THE OWNER PARTICIPANT EXPRESSLY SUBMITS AND CONSENTS TO SUCH JURISDICTION
IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH OF THE OWNER TRUSTEE
AND THE OWNER PARTICIPANT HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE
BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON
CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE
RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. 
EACH OF THE OWNER TRUSTEE AND THE OWNER PARTICIPANT HEREBY WAIVES
PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH
ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER
PROCESS MAY BE MADE TO BORROWER AS SET FORTH IN SECTION 18 AND THAT SERVICE SO MADE SHALL BE DEEMED
COMPLETED UPON SUCH PARTY’S ACTUAL RECEIPT THEREOF.

 

(b)           AS SET FORTH IN THE
ALTERNATIVE DISPUTE RESOLUTION AGREEMENT, THE OWNER TRUSTEE AND THE OWNER
PARTICIPANT EACH WAIVE ITS RIGHT TO A TRIAL BY JURY AND AGREE TO HAVE ANY
DISPUTE BETWEEN OR AMONG ITSELF AND ANY OTHER PARTY(IES) IN CONNECTION WITH
THIS PLEDGE AGREEMENT OR ANY OTHER LOAN DOCUMENT RESOLVED PURSUANT TO THE TERMS
OF THE ALTERNATIVE DISPUTE RESOLUTION AGREEMENT.

 

(c)           To the extent permitted by
law, service of process in any action against the Owner Trustee and/or the
Owner Participant may be made by registered or certified mail, return receipt
requested, to its address indicated herein.

 

(d)           The Owner Trustee and the Owner
Participant agree that any final judgment rendered against it in any action or
proceeding shall be conclusive as to the subject of such final judgment and may
be enforced in other jurisdictions in any manner provided by law.

 

20.           Miscellaneous. The Security
Agent may, with the consent of Owner Trustee and Owner Participant (which
consent shall not be unreasonably withheld) and subject to the provisions of Section 14
of the Credit Agreement,  assign or
otherwise transfer its rights hereunder or under the Credit Agreement to any
other Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to the Security Agent 

 

I-13

 

herein or otherwise, subject, however, to the
provisions hereof; provided that, as soon as practicable after such assignment
or transfer, the Security Agent shall notify the Borrower of any change in
payment instructions necessitated by such assignment or transfer.

 

21.           Termination and Release. Upon the
earliest to occur of the following: (a) payment in full of all Obligations
(other than contingent obligations which by their nature cannot be satisfied by
payment at such time) and either (i) expiration of the term of the Credit
Agreement or (ii) termination of the obligation of any Credit Facility
Lender and Non-Lender to make any advances to Owner Participant pursuant to the
Credit Agreement or any other Loan Document or (b) the release, in
accordance with the terms of Section 6.09 of the Owner Trustee Mortgage,
of the pledge of the Beneficial Interest created in favor of the Security Agent
under this Pledge Agreement, this Pledge Agreement and all of the powers,
rights and interests granted hereunder and created hereby, shall forthwith
terminate, and the Security Agent shall, upon the request and at the expense of
the Owner Participant, execute and deliver all such documents and instruments
reasonably necessary to accomplish the same, within a reasonable time
thereafter.

 

[Remainder of page intentionally left blank;
signatures on following pages]

 

I-14

 

IN WITNESS WHEREOF, the parties hereto have
caused this Beneficial Interest Pledge and Security Agreement to be duly
executed and delivered as of the date first above written.

 

	
   

  	
  WILLIS LEASE FINANCE CORPORATION, as Owner Participant

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  UNION BANK, N.A., as Security Agent

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not individually but solely as Owner Trustee under
  the Trust Agreement

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

I-S-1

 

Exhibit J

 

FORM OF OWNER TRUSTEE MORTGAGE AND SECURITY AGREEMENT

 

OWNER TRUSTEE MORTGAGE 

AND SECURITY AGREEMENT NO.            

 

dated as of
[                        
          ,
20    ]

 

made by

 

WELLS FARGO BANK NORTHWEST,

NATIONAL ASSOCIATION,

not in its individual capacity, but solely as Owner
Trustee,

 

in favor of

 

UNION BANK, N.A.,

as Mortgagee

 

 

OWNER TRUSTEE MORTGAGE

AND SECURITY AGREEMENT NO.            

 

THIS OWNER TRUSTEE MORTGAGE AND SECURITY AGREEMENT
NO.                    
(as amended, modified or supplemented from time to time, the “Mortgage”),
dated as of
                      ,
20     made by WELLS
FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual
capacity, but solely as Owner Trustee (the “Owner Trustee”) in favor of UNION BANK, N.A., in its capacity as
Security Agent for itself and the Credit Facility Lenders and Non-Lenders under
the Credit Agreement (as defined below) (together with its successors and
assigns, the “Mortgagee”).

 

W I T N E S S E T H:

 

WHEREAS, Willis Lease Finance Corporation, a
Delaware corporation (the “Owner Participant”), as borrower, Union Bank,
N.A., together with any other Lenders from time to time (collectively, the “Lenders”)
and Union Bank, N.A., as Administrative Agent, Swing Line Lender, Issuing
Lender, and Security Agent have entered into that certain Credit Agreement,
dated as of November 18, 2009 (as amended, restated, modified or
supplemented from time to time, the “Credit Agreement”), and pursuant to
the Credit Agreement, the Credit Facility Lenders have agreed to make certain
loans to Owner Participant (the “Loans”).  All capitalized terms used herein and not
otherwise defined shall have the respective meanings ascribed to them in the
Credit Agreement;

 

WHEREAS, the Borrower and Owner Trustee have entered
into that certain Trust Agreement (as hereinafter defined) pursuant to which
Owner Trustee has agreed to hold the Trust Estate (as defined in the Trust
Agreement) for the benefit of the Borrower in accordance with the terms of the
Trust Agreement;

 

WHEREAS, the Owner Trustee has guaranteed the
payment and performance of all of the obligations of the Borrower under the
Credit Agreement and the other Loan Documents pursuant to the Owner Trustee
Guaranty (as hereinafter defined);

 

WHEREAS, as a condition to the making of the Loans
under the Credit Agreement, the Borrower must provide security for the prompt
payment and performance of all Obligations (as hereinafter defined); and

 

WHEREAS, the Owner Trustee is entering into this
Mortgage with the Mortgagee in order to secure the payment of the Obligations
(as hereinafter defined) of the Owner Trustee under the Owner Trustee Guaranty,
and for the purpose of subjecting the Collateral (as hereinafter defined) to
the Lien (as hereinafter defined) of this Mortgage as security for such
Obligations.

 

NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Owner Trustee hereby agrees with the Mortgagee as follows:

 

J-1

 

ARTICLE I

 

CERTAIN DEFINITIONS

 

Section 1.01                               Definitions.  All capitalized terms used herein and not
otherwise defined shall have the respective meanings ascribed to them in the
Credit Agreement, and the following terms shall have the following meanings
(and shall be applicable to both the singular and the plural forms of such
terms):

 

“Administrator”
shall have the meaning given to such term in the Cape Town Convention.

 

“Agreement”
shall have the meaning given to such term in the Cape Town Convention.

 

“Aircraft
Objects” shall have the meaning given to such term in the Cape Town
Convention.

 

“Bill
of Sale” means, in respect to the Engine, the warranty bill of sale
executed in favor of the Owner Trustee in form satisfactory to the Mortgagee
evidencing the transfer of title to the Engine.

 

“Cape
Town Convention” means the Convention on International Interests in Mobile
Equipment and the Protocol to the Convention on International Interests in
Mobile Equipment on Matters Specific to Aircraft Equipment, both of which were
signed in Cape Town, South Africa on November 16, 2001, and including the
Regulations for the International Registry and the Procedures for the
International Registry, as promulgated thereafter.

 

“Collateral”
shall have the meaning set forth in the Granting Clause hereof.

 

“Contract
of Sale” shall have the meaning given to such term in the Cape Town
Convention.

 

“Contracting
State” shall have the meaning given to such term under Article 4 of
the Cape Town Convention.

 

“Default”
means any event specified in Section 4.01 hereof which, with the
passage of time or notice or both, would, unless cured or waived become an
Event of Default.

 

“Engine”
means the aircraft engine described by manufacturer, model and serial number in
Exhibit A hereto (which has 550 or more rated takeoff horsepower or
the equivalent of such horsepower).  An
Engine shall also include any and all Parts which are either incorporated or
installed in or attached to such Engine or required to be subject to the lien
and security interest of this Mortgage.

 

“Equipment”
means Engine, Turboprop Engines, APUs or Parts, as applicable.

 

“Event
of Default” means any of the events specified in Section 4.01
hereof.

 

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“Event
of Loss” shall have the meaning given the term in the Credit Agreement.

 

“FAA”
means the Federal Aviation Administration (or its successor) of the United
States of America.

 

“GAAP”
means generally accepted accounting principles in the jurisdiction of
incorporation of such relevant Person in effect from time to time.

 

“Governmental
Authority” means any nation or government, any state or other political
subdivision thereof, and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled (through
stock or capital ownership or otherwise) by any of the foregoing.

 

“International
Interest” shall have the meaning given to such term in the Cape Town
Convention.

 

“International
Registry” shall have the meaning given to such term in the Cape Town
Convention.

 

“Lease”
means the lease agreement described in Exhibit A hereto and any and
all after-acquired leases hereafter arising in which Owner Trustee is the
lessor or an assignee of a lessor with respect to the Equipment, as the same
may be modified, amended or supplemented from time to time.

 

“Lease
Event of Default” means an “Event of Default,” or comparable term, as
defined in the Lease.

 

“Lessee”
means, with respect to the Lease, the Lessee as defined therein.

 

“Lien”
means, with respect to any property, any security deed, mortgage, deed to
secure debt, deed of trust, lien, pledge, assignment, charge, security
interest, title retention agreement, negative pledge, levy, execution, seizure,
attachment, garnishment, or other encumbrance of any kind in respect of such
property, whether or not perfected.

 

“Mortgage
Documents” means this Mortgage and all documents relating to the perfection
and/or establishment of the Lien intended to be created by this Mortgage, any
other documents relating to the Mortgagee’s security interest in the Collateral
and any documents expressly stated to be Mortgage Documents.

 

“Obligations”
means all obligations of the Owner Trustee under the Owner Trustee Guaranty,
which, for all purposes hereof, shall be deemed to include all of the
Obligations of Borrower under the Credit Agreement, including but not limited
to the aggregate unpaid principal amount of, and accrued interest on, the
Notes, and all other payment and other obligations and liabilities of the Owner
Trustee and the Borrower, as applicable, now or hereafter existing under this
Mortgage, the Owner Trustee Guaranty, the Notes, the Credit Agreement and each Mortgage
Document, whether for principal, interest, premiums, fees, expenses or
otherwise.

 

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“Owner
Trustee Guaranty” means that certain Owner Trustee Guaranty No.                     
dated as of                 ,
20     by the Owner Trustee in favor of the Security Agent.

 

“Parts”
means, at any time, all parts, components, equipment, instruments, appliances
and loose equipment that are at such time incorporated or installed in or
attached to an Engine.

 

“Permitted
Lessee” means, with respect to the Lease, the Lessee thereunder and any
substitute Lessee which is acceptable to the Mortgagee.

 

“Person”
shall mean and include an individual, a partnership, a corporation, a limited
liability company, a business trust, a joint stock company, a trust, an
unincorporated association, a joint venture, a Governmental Authority or any
other entity of whatever nature.

 

“Proceeds”
means whatever is receivable or received when any Engine or any Part or
any Parts Package or other collateral is sold, exchanged, collected or
otherwise disposed of in any fashion, including, without limitation, all
amounts payable or paid under insurance, requisition or other payments as the
result of any loss (including an Event of Loss) or damage to such Engine or Part or
Parts Package.

 

“Professional
User Entity” is defined in the Regulations for the International Registry.

 

“Prospective
Sale” shall have the meaning given to such term in the Cape Town
Convention.

 

“Prospective
International Interest” shall have the meaning given to such term in the
Cape Town Convention.

 

“Records”
shall have the meaning set forth in the Granting Clause hereof.

 

“Security
Deposit” means, with respect to the Lease, the “Security Deposit” as such
term is defined in the Lease or any similar term in the nature of a security
deposit set forth in the Lease.

 

“Transactional
User Entity” is defined in the Regulations for the International Registry.

 

“Trust
Agreement” shall mean that certain Trust Agreement No.                   
dated
                ,
20     between the Owner Trustee and the Borrower, as
amended from time to time.

 

ARTICLE II

 

GRANTING CLAUSE

 

The
Owner Trustee hereby assigns, mortgages, transfers and confirms unto the
Mortgagee, and hereby grants to the Mortgagee for the ratable benefit of all
Credit Facility Lenders and Non-Lenders as collateral security for the prompt
and complete payment and performance when due of all the Obligations, a first
priority security interest in all “accounts”, “chattel paper”, “instruments”, “documents”,
“supporting obligations”, “investment property”, “inventory”, “equipment”, “goods”,
“deposit accounts”, “money”, “letter-of-credit rights”, 

 

J-4

 

“general
intangibles” (in each case, as such terms are defined in the Code) and other
personal property and fixtures of any kind, whether now owned or at any time
hereafter acquired or in, to and under which the Owner Trustee now has or at
any time in the future may acquire any interest under the Trust Agreement
(herein collectively called the “Collateral”) and all replacements
thereof including, but not limited to, all right, title and interest of the
Owner Trustee in and to the following property and all replacements of such
property, to wit:

 

(i)                                     Equipment;

 

(ii)                                  all of the Owner Trustee’s
right, title and interest in and to any lease of the Equipment, including,
without limitation, the Lease, together with all schedules, supplements,
amendments, modifications, extensions, renewals of or replacements for any such
lease, executed from time to time, and all payments, including without
limitation, the right to exercise the rights and remedies under the Lease and
to receive all rentals, payments and monies due and to become due, including,
without limitation, all payments of rent, all maintenance reserves, if any,
each Security Deposit, and all proceeds thereof, insurance proceeds and all
other amounts due or to become due thereunder but (subject, in each case, to
the rights of the Permitted Lessee thereto under the Lease);

 

(iii)                               all records, logs and other
materials required to be maintained with respect to the Equipment by Persons in
operational control of the Equipment under any applicable laws, rules or
regulations and all logs, books, maintenance records and other information
relating to the Equipment pertaining thereto (collectively, the “Records”)
as well as all right, title and interest of the Owner Trustee in, to and under
the overhaul, repair and maintenance manuals, programs and catalogues which are
part of or used in connection with the maintenance program for the Equipment
and all warranties and rights relating thereto in respect of the Equipment; and

 

(iv)                              all Proceeds of all or any
of the foregoing.

 

So
long as an Event of Default has not occurred and is not continuing, the Owner
Trustee shall be entitled to remain in full possession, enjoyment and control
of the Collateral and to manage and use the Collateral and each part thereof
with the same rights and franchises appertaining thereto; provided, always that
the possession, use, enjoyment and control of the Collateral shall at all times
be subject to the terms of this Mortgage and the other Loan Documents and the
Lien and security interest granted hereunder and thereunder.

 

The
parties hereto agree that for all purposes of the Cape Town Convention, (i) this
Mortgage is effective to constitute an International Interest with respect to
the Engine and Equipment, (ii) each Engine constitutes an Aircraft Object,
(iii) the Owner Trustee is situated in a Contracting State and has the
power to dispose of the Engine , (iv) this Mortgage is effective to
constitute an Agreement and the interests created hereunder are eligible for
registration with the International Registry relating to the Engine and (v) this
Mortgage constitutes an assignment of associated rights secured by or
associated with the Engine and the Mortgagee hereby 

 

J-5

 

acknowledges
and agrees that such assignment shall be effective to assign any related
International Interests for all purposes of the Cape Town Convention.

 

ARTICLE III

 

COVENANTS

 

Section 3.01                               Registration:  Maintenance and Operation.  The Owner Trustee, at its own cost and
expense, will:

 

(i)                                     prior to
mortgaging an Engine, item of Equipment or Lease (a) register with the
International Registry (x) the ownership interest of the Owner Trustee in
each Engine represented by the Contract of Sale (or Prospective Sale)
constituting the Bill of Sale, as long as the seller of the Engine is situated
in a Contracting State, as provided for in the Cape Town Convention, and (y) the
Owner Trustee’s ownership interest with respect to each Lease, as long as the
lessee of the Engine under such Lease is situated in a Contracting State, as
provided for in the Cape Town Convention, and (b) cause each Engine, item
of Equipment and Lease to be duly registered and at all times thereafter remain
duly registered in the name of the Owner Trustee in accordance with the Act, if
applicable, or other applicable law;

 

(ii)                                  make or cause
such filings, registrations, or otherwise with the FAA, International Registry,
and under the UCC as shall be required to perfect the Lien of Mortgagee with
respect to all Collateral under the Mortgage, including but not limited to the
following:

 

(1)                                  register the
International Interest (or Prospective International Interest) of the
Mortgagee, under this Mortgage, with respect to each Engine and Lease with the
International Registry (so long as the lessee of the Engine under such Lease is
situated in a Contracting State, as provided for in the Cape Town Convention);

 

(2)                                  register the
International Interest (or Prospective International Interest) of the Lessor,
under the Lease with respect to each Engine with the International Registry (so
long as the lessee of the Engine under such Lease is situated in a Contracting
State, as provided for in the Cape Town Convention);

 

(3)                                  register the Lien under this
Mortgage and the Lease with the FAA pursuant to the Act;

 

(4)                                  file UCC financing
statements in such states in the United States of America as required, in the
judgment of Mortgagee, to perfect the Lien of Mortgagee in all UCC Collateral,
which financing statements shall name Mortgagee as secured party and as
Security Agent for the benefit of Credit Facility Lenders and Non-Lenders; and

 

(5)                                  maintain the rights and
International Interests of the Owner Trustee and Mortgagee in the Engine, as
against any third parties under the applicable laws of any jurisdiction within
the United States and as against any third parties in any Contracting State
under the Cape Town Convention;

 

J-6

 

(iii)                               at all times
maintain, service, repair, overhaul and test or cause to be maintained, serviced,
repaired, overhauled and tested each Engine and item of Equipment so as to keep
the same in as good operating condition as when originally mortgaged hereunder,
ordinary wear and tear excepted, and, in any event in the condition required by
the relevant Lease; and

 

(iv)                              maintain or
cause to be maintained (in the English language) all Records.

 

Owner
Trustee hereby confirms, represents and warrants that no further action,
including any filing or recording of any document (including any financing
statement in respect thereof under Article 9 of the Uniform Commercial
Code of any applicable jurisdiction), is necessary or advisable to establish as
against third parties the perfected first priority Lien of the Mortgagee on the
Owner Trustee’s interest in each Engine, item of Equipment and Lease and in
order to properly file, register and record this Mortgage, the International
Interest of the Mortgagee under the Mortgage, or the International Interest of
the Lessor in each Engine under the Lease, in any applicable jurisdiction in
the United States.  The Owner Trustee
agrees to furnish Mortgagee with copies of all documents relating to the
foregoing and with recording and registration data as promptly as practicable
following the issuance of the same by the FAA and the International Registry.

 

Section 3.02                               Further
Assurances.  The Owner
Trustee will promptly, and in any event no more than five (5) Business
Days after the need therefore or after a request by Mortgagee, take, or cause
to be taken, at the Owner Trustee’s cost and expense, such action with respect
to the execution, delivery, recording, registration and filing of this Mortgage
and any financing statements, Mortgage Supplements or other instruments as are
necessary or desirable, or that the Mortgagee may from time to time request, to
fully carry out the intent and purpose of this Mortgage and/or to establish,
protect, preserve, and/or perfect the Liens created by this Mortgage. The Owner
Trustee agrees to furnish to the Mortgagee (a) timely notice of the necessity
of any such action, together with such instruments, in execution form, and such
other information as may be required to enable the Mortgagee to take such
action, and (b) evidence of every such action taken by the Owner Trustee.
In addition to the foregoing, during the term of this Mortgage, the Owner
Trustee shall establish and maintain a valid and existing account as a
Transacting User Entity with the International Registry to make registrations
in regard to this Mortgage as required by the Mortgagee.

 

Section 3.03                               Liens.  The Owner Trustee will not create, consent to
or suffer to exist any Lien upon or with respect to any of the Collateral,
except for Permitted Liens.

 

Section 3.04                               Books and
Records.  The Owner Trustee shall
faithfully keep complete and accurate books and records and make all necessary
entries therein to reflect the quantities, costs, current values and locations
of all Collateral, the events and transactions giving rise thereto and all
payments, credits and adjustments applicable thereto, shall keep the Mortgagee
fully and accurately informed as to the locations of all such books and
records.

 

Section 3.05                               Priority of
Mortgagee’s Security Interest.  Owner Trustee represents, warrants and agrees
that no effective security agreement, mortgage, deed of trust, financing
statement, equivalent security or Lien instrument or continuation statement
covering all or any part of the Collateral is or will be on file or of record
in any public office or otherwise, except 

 

J-7

 

those
filed by Owner Trustee in favor of Mortgagee pursuant to this Mortgage and/or
other Loan Documents, and those relating to other Permitted Liens.  Owner Trustee shall defend the right, title
and interest of Mortgagee in and to the Collateral against the claims and
demands of all Persons whomsoever, and shall take such actions, including (i) the
prompt delivery of all original Instruments, Chattel Paper and certificated
Stock owned by Owner Trustee to Mortgagee, (ii) notification of Mortgagee’s
interest in Collateral at Mortgagee’s request, and (iii) the institution
of litigation or other proceedings against third parties as shall be prudent in
order to protect and preserve Owner Trustee’s and Mortgagee’s respective and
several interests in the Collateral.

 

Section 3.06                               Mortgagee’s
Rights.

 

(i)                                     In addition to
any and all rights under this Mortgage and the other Loan  Documents, at any time after the occurrence
and continuance of an Event of Default, Mortgagee may, at any time in Mortgagee’s
own name or in the name of Owner Trustee, (i) communicate with Account
Debtors, parties to Contracts and Leases, and obligors in respect of
Instruments, Chattel Paper or other Collateral to verify to Mortgagee’s
satisfaction the existence, amount and terms of any such Accounts, Contracts,
Instruments, Chattel Paper, Leases or other Collateral, and (ii) without
prior notice to Owner Trustee, notify Account Debtors, parties to Contracts,
parties to Leases, and obligors in respect of Chattel Paper, Instruments, or
other Collateral that such Collateral has been assigned to Mortgagee and that
payments shall be made directly to Mortgagee. 
Upon the request of Mortgagee, Owner Trustee shall so notify such Account
Debtors, parties to Contracts, parties to Leases, and obligors in respect of
Instruments, Chattel Paper, Leases or other Collateral.

 

(ii)                                  It is expressly
agreed by Owner Trustee that Owner Trustee shall remain liable under each
Contract, License and Lease to observe and perform all the conditions and
obligations to be observed and performed by it thereunder, and Mortgagee shall
have no obligation or liability whatsoever to any Person under any Contract,
License or Lease (between Owner Trustee, Engine Owner and Equipment Owner and
any Person other than Mortgagee) by reason of or arising out of the execution,
delivery or performance of this Mortgage, and Mortgagee shall not be required
or obligated in any manner (i) to perform or fulfill any of the
obligations of Owner Trustee thereunder, (ii) to make any payment or
inquiry, or (iii) to take any action of any kind to collect or enforce any
performance or the payment of any amounts which may have been assigned to it or
to which it may be entitled at any time or times under or pursuant to any Contract,
License or Lease.

 

(iii)                               Owner Trustee
shall, with respect to each owned, leased, or controlled property or facility,
during normal business hours and upon reasonable prior notice (unless a Default
or Event of Default has occurred and is continuing, in which event no notice
shall be required and Mortgagee shall have access at any and all times):  (i) provide access to such facility or
property to Mortgagee and any of its officers, employees and agents, as
frequently as Mortgagee determines to be appropriate to further or protect its
interests hereunder; (ii) permit Mortgagee and any of its officers,
employees and agents to inspect, audit and make extracts from all of Owner
Trustee’s books and records; and (iii) subject to the lessee’s rights
under any Lease, permit Mortgagee to inspect, review, evaluate and make
physical verifications and appraisals of any Engine, Equipment and other
Collateral in any manner and through any 

 

J-8

 

medium
that Mortgagee considers advisable, and Owner Trustee shall provide to
Mortgagee, at Owner Trustee’s cost and expense, such clerical and other
assistance as may be reasonably requested with regard thereto.  Owner Trustee shall make available to
Mortgagee and its counsel, as quickly as practicable under the circumstances,
originals or copies of all of Owner Trustee’s books and records and any other
instruments and documents which Mortgagee may reasonably request.  Owner Trustee shall deliver any document or
instrument reasonably necessary for Mortgagee, as it may from time to time
request, to obtain records from any service bureau or other Person that
maintains records for Owner Trustee.

 

(iv)                              Upon the
occurrence and during the continuance of an Event of Default, Owner Trustee,
at its own expense, shall cause its independent certified public accountants to
prepare and deliver to Mortgagee at any time and from time to time, promptly
upon Mortgagee’s request:  (i) a
reconciliation of all Accounts; (ii) an aging of all Accounts; (iii) trial
balances; and (iv) test verifications of such Accounts as Mortgagee may
request.  Owner Trustee, at its own
expense, shall cause its independent certified public accountants to deliver to
Mortgagee the results of (x) any physical verifications of all or any
portion of the Collateral made or observed by such accountants, and (y) any
verifications of Owner Trustee’s Accounts, in each case when and if any such
verifications are conducted.  Mortgagee
shall be permitted to observe and consult with Owner Trustee and Owner Trustee’s
certified public accountants in the performance of these tasks.

 

Section 3.07                               Reinstatement.  The provisions of this Mortgage shall to the
extent permitted by Applicable Law remain in full force and effect and continue
to be effective even if:  (a) any
petition is filed by or against Owner Trustee for liquidation or
reorganization; (b) Owner Trustee becomes insolvent or makes an assignment
for the benefit of creditors; (c) a receiver or trustee is appointed for
all or any significant part of Owner Trustee’s assets; or (d) at any time
payment and performance of the Obligations, or any part thereof, is, pursuant
to Applicable Law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee of the Obligations, whether as a “voidable
preference,” “fraudulent transfer” or otherwise, all as though such payment or
performance had not been made.  In the
event that any payment, or any part thereof, is rescinded, reduced, restored or
returned, the Obligations and Mortgagee’s Liens in the Collateral shall be
reinstated and deemed reduced only by any amount paid and not so rescinded,
reduced, restored or returned.

 

Section 3.08                               Loss of Value.  The Owner Trustee shall promptly, and in any
event within five (5) Business Days, notify the Mortgagee in writing
of any event causing any material deterioration, loss or unscheduled
depreciation in value of the Collateral and the Owner Trustee’s best estimate
of the amount of such deterioration, loss or depreciation.

 

Section 3.09                               Insurance.  The Owner Trustee shall bear the risk of each
Engine or item of Equipment being destroyed, irreparably damaged or rendered
permanently unfit for sale, lease or use or being damaged in part, from any
cause whatsoever at any time during the term of this Mortgage, and shall at its
own cost and expense, or in the alternative shall cause each Lessee under each
applicable Lease to, obtain and keep in full force and effect all risk of
physical loss or damage insurance covering each Engine or item of Equipment,
wherever the same may be located, insuring against the risks of fire,
explosion, theft and such other risks as are customarily insured against by
organizations engaged in the same business and similarly situated with the 

 

J-9

 

Owner
Trustee (and specifically including vandalism and malicious mischief coverage),
in an amount usually carried by organizations engaged in the same business or
similarly situated with the Owner Trustee, and in any event, in kind and form
reasonably satisfactory to the Mortgagee. All such policies of insurance shall
be written for the benefit of the Owner Trustee as the insured, and Mortgagee
and the Administrative Agent shall be named as additional insureds on liability
insurance and Mortgagee shall be named as a loss payee on hull insurance, as
applicable. Notwithstanding the foregoing or anything to the contrary herein,
to the extent any Engine or item of Equipment included in the Collateral
hereunder is included in the Borrowing Base, Owner Trustee shall comply with
all insurance requirements set forth in the Credit Agreement.

 

(i)                                     If the Owner
Trustee or the applicable Lessee fails to pay any premium on any such
insurance, the Mortgagee shall have the right, but shall be under no
obligation, to pay such premium for the Owner Trustee’s account. The Owner
Trustee shall repay to the Mortgagee on demand all sums which the Mortgagee
shall have paid under this section in respect of insurance premiums, with
interest thereon and the Owner Trustee’s liability to the Mortgagee for such
repayment with interest shall be included in the Obligations. The Owner Trustee
hereby assigns to the Mortgagee any return or unearned premium which may be due
upon the cancellation for any reason whatsoever of any policy of insurance
maintained in respect of the Collateral and hereby directs the insurer to pay
the Mortgagee any amount so due. The Owner Trustee’s right to receive payment
of any such return or unearned premium and the proceeds of any such insurance
shall constitute a part of the Collateral for all purposes hereof. If no Event
of Default has occurred and is continuing, the Mortgagee shall pay any such
return or unearned premium to the Owner Trustee, provided that all amounts paid
by Mortgagee in respect of insurance premiums have been repaid in full with
interest.

 

Section 3.10                               Warranties.  Owner Trustee warrants: (a) it is and
will be the lawful owner of all Collateral free of all Claims, Liens,
encumbrances and setoffs whatsoever, other than the security interest granted
pursuant hereto; (b) it has the capacity to grant a security interest in
Collateral to Mortgagee; (c) all information furnished by Owner Trustee to
Mortgagee heretofore or hereafter, whether oral or written, is and will be
correct and true as of the date given; and (d) the execution, delivery and
performance hereof are within its powers and have been duly authorized.

 

ARTICLE IV

 

EVENTS OF DEFAULT AND REMEDIES

 

Section 4.01                               Events of Default and
Remedies.  The Owner Trustee shall be in
default upon the occurrence of an Event of Default as defined under the Credit
Agreement.

 

Section 4.02                               Remedies.  If any Event of Default has occurred and is
continuing,

 

(i)                                     Mortgagee, at
its option, may exercise any rights and remedies provided to Agents under the
Credit Agreement and/or available at law or equity, including all rights and
remedies provided under the Uniform Commercial Code in any jurisdiction where
enforcement is sought, which include but are not limited to, the following:  (i) without notice accelerate the
maturity of any part or all of the Obligations and terminate any agreement for
the

 

J-10

 

 

granting
of further credit to Owner Trustee; (ii) sell, lease or otherwise dispose
of Collateral at public or private sale; (iii) transfer any Collateral
into its own name or that of its nominee; (iv) retain Collateral in
satisfaction of the Obligations, with notice of such retention sent to Owner
Trustee as required by law; (v) notify any parties obligated on any
Collateral consisting of Accounts, Instruments, Chattel Paper, [choses in
action?] or the like to make payment to Mortgagee and enforce collection of any
Collateral; (vi) file any action or proceeding which Mortgagee deems
necessary or appropriate to protect and preserve the right, title and interest
of Mortgagee in the Collateral; (vii) exercise its banker’s lien or right
of setoff in the same manner as though the credit were unsecured and (viii) apply
all or a portion of sums received or collected from or on account of
Collateral, including the proceeds of any sales thereof, to the payment of the
costs and expenses incurred in preserving and enforcing rights of Mortgagee
including reasonable attorneys’ fees (including the allocated costs of
Mortgagee’s in-house counsel and legal staff), and after application of such
sums to the obligations as set forth in the Credit Agreement, Mortgagee shall
account to Owner Trustee for any surplus remaining thereafter, and shall pay
such surplus to the party entitled thereto, including any second secured party
who has made a proper demand upon Mortgagee and has furnished proof to
Mortgagee as requested in the manner provided by law; in like manner, Owner
Trustee agrees to pay to Mortgagee without demand any deficiency after any
Collateral has been disposed of and proceeds applied as aforesaid.

 

(ii)           Owner Trustee
expressly agrees that, subject to Sections 5.01 and 5.02 hereof,
Mortgagee may collect, receive, assemble, process, appropriate and realize upon
the Collateral, or any part thereof, and may forthwith sell, lease, assign,
give an option or options to purchase or otherwise dispose of and deliver said
Collateral (or contract to do so), or any part thereof, in one or more parcels
at public or private sale or sales, at any exchange at such prices as it may
deem best, for cash or on credit or for future delivery without assumption of
any credit risk.  Mortgagee shall have
the right upon any such public sale or sales and, to the extent permitted by
law, to purchase for the benefit of Mortgagee by credit bid the whole or any
part of said Collateral so sold, free of any right or equity of redemption,
which equity of redemption Owner Trustee hereby releases.  Such sales may be adjourned, or continued
from time to time with or without notice. 
Owner Trustee shall remain liable for any deficiency if the proceeds of
any sale or disposition of the Collateral are insufficient to pay the
Obligations and all other amounts to which Mortgagee is entitled.

 

(iii)          Owner Trustee further
agrees, subject to Sections 5.01 and 5.02 hereof, to assemble the
Collateral and make it available to Mortgagee at places which Mortgagee shall
reasonably select.  Until Mortgagee is
able to effect a sale, lease, or other disposition of the Collateral and
subject to Sections 5.01 and 5.02 hereof, Mortgagee shall have
the right to complete, assemble, use or operate the Collateral or any part
thereof, to the extent that Mortgagee deems appropriate, for the purpose of
preserving such Collateral or its value or for any other purpose. In addition,
the Owner Trustee will provide, without cost or expense to the Mortgagee,
storage facilities for any such Engine or item of Equipment and will cause such
Engine or item of Equipment to be maintained as required by the terms hereof
and of the Credit Agreement.  Mortgagee
shall have no obligation to Owner Trustee to maintain or preserve the rights of
Owner Trustee as against third parties with respect to any Collateral while
such Collateral is in the possession of Mortgagee.

 

J-11

 

(iv)          Upon the completion of any
sale of any Collateral, full title and (subject to Sections 5.01 and 5.02
hereof) right of possession to the Engine or item of Equipment so sold shall
(subject to any retention of title by the Mortgagee as part of the terms of
such sale) pass to the accepted purchaser forthwith upon the completion of such
sale, and the Owner Trustee shall deliver, in accordance with the instructions
of the Mortgagee (including causing the Engine or item of Equipment to be
delivered to such airports as the Mortgagee may specify), such Engine or item
of Equipment so sold.  The Mortgagee is
hereby irrevocably appointed the true and lawful attorney of the Owner Trustee,
and in its stead, to make all necessary conveyances of an Engine or item of
Equipment if so sold.  Nevertheless, if
so requested by the Mortgagee or by any purchaser, the Owner Trustee shall
confirm any such sale or conveyance by executing and delivering all proper
instruments of conveyance or releases as may be designated in any such
request.  If the Owner Trustee shall for
any reason fail to deliver such Engine or item of Equipment or any part thereof
after demand by the Mortgagee, the Mortgagee (subject to Sections 5.01
and 5.02 hereof) may, without being responsible for loss or damage,
except to the extent caused by the gross negligence or willful misconduct of the
Mortgagee, (i) obtain a judgment conferring on the Mortgagee the right to
immediate possession or requiring the Owner Trustee to deliver immediate
possession of all or part of such Engine or item of Equipment to the Mortgagee,
to the entry of which judgment the Owner Trustee hereby specifically consents,
or (ii) with or, to the fullest extent provided by law, without such
judgment, pursue the whole or any part of such Engine or item of Equipment
wherever it may be found and enter any of the premises where such Engine or
item of Equipment may be and take possession of and remove the same.  Upon every such taking of possession, the
Mortgagee may (but shall not be obligated to), from time to time, make all such
reasonable expenditures for maintenance, insurance, repairs, replacements,
alterations, additions and improvements to and of the Engine or item of
Equipment as it may deem proper.

 

(v)           The Owner Trustee hereby
covenants and agrees that a notice, which shall be sent in accordance with the
provisions of the Credit Agreement or this Mortgage, at least ten (10) Business
Days before the date of any of the acts described in this Section 4.02
shall be deemed to be reasonable notice of such act and, specifically,
reasonable notification of the time and place of any public sale hereunder and
reasonable notification of the time after which any private sale or other
intended disposition to be made hereunder is to be made.

 

(vi)          Mortgagee shall be entitled,
as a matter of right as against the Owner Trustee, without notice or demand and
without regard to the adequacy of the security for the Obligations by virtue of
this Mortgage or any other collateral or to the solvency of the Owner Trustee,
upon the commencement of judicial proceedings by it to enforce any right under
this Mortgage, to the appointment of a receiver of all or any part of the
Collateral.

 

Section 4.03           Expenses of
Enforcement.  The Owner
Trustee shall pay to the Mortgagee on demand any and all reasonable expenses
(including reasonable attorneys’ fees and legal expenses and including the
allocated costs of Mortgagee’s in-house counsel and legal staff) which may have
been incurred by the Mortgagee, with interest (i) in the prosecution or
defense of any action growing out of or connected with the subject matter of
this Mortgage, the Obligations, the Collateral or any of the Mortgagee’s rights
therein or thereto; or (ii) in connection with the custody, preservation,
use, operation, preparation for sale or sale of any of the Collateral or in
connection with obtaining possession of any of the Collateral or otherwise

 

J-12

 

exercising
any of Mortgagee’s rights and remedies pursuant to this Mortgage, the incurring
of all of which are hereby authorized to the extent the Mortgagee deems the
same advisable. The Owner Trustee’s liability to the Mortgagee for any such
payment with interest shall be included in the Obligations. The Owner Trustee,
to the extent of its rights in the Collateral, waives and releases any right to
require the Mortgagee to collect any of the Obligations from any other
Collateral (as defined under the Credit Agreement) or any other collateral then
held by the Mortgagee under any theory of marshaling of assets or otherwise.

 

Section 4.04           Waiver of Appraisement,
Etc.  The Owner Trustee agrees, to
the fullest extent that it lawfully may, that it will not (and hereby
irrevocably waives its right to) at any time plead, or claim the benefit or
advantage of, any appraisement, valuation, stay, extension, moratorium or
redemption law now or hereafter in force, in order to prevent or hinder the
enforcement of this Mortgage or the absolute sale of the Collateral.

 

Section 4.05           Waiver of
Claims.  To the maximum extent
permitted by Applicable Law, Owner Trustee waives all claims, damages, and
demands against Mortgagee, its Affiliates, agents, and the officers and
employees of any of them arising out of the repossession, retention or sale of
any Collateral and any other acts or failure to act in connection with Mortgagee’s
rights and remedies hereunder, except such as are determined in a final
judgment by a court of competent jurisdiction to have arisen out of the gross
negligence or willful misconduct of such Person.

 

Section 4.06           Additional
Waivers.  Owner Trustee waives:  (a) all right to require Mortgagee to
proceed against any other person including any other borrower hereunder or
under the Credit Agreement or to apply any Collateral Mortgagee may hold at any
time or to pursue any other remedy, Collateral, endorsers or guarantors may be
released, substituted or added without affecting the liability of Owner Trustee
hereunder; (b) the defense of the Statute of Limitations in any action
upon any obligations of Owner Trustee secured hereby; (c) any right of
subrogation and any right to participate in Collateral until all obligations
secured hereby have been paid in full; and (d) to the fullest extent
permitted by law, any right to oppose the appointment of a receiver or similar
official to operate Owner Trustee’s business after the occurrence and during
the continuance of an Event of Default.

 

Section 4.07           Remedies
Cumulative, No Waiver.  No
remedy herein conferred upon the Mortgagee is intended to be exclusive of any
other remedy, but every such remedy shall be cumulative and shall be in
addition to every other remedy herein conferred or now or hereafter existing in
law.  The exercise by the Mortgagee of
any one right or remedy shall not be deemed a waiver or release of or any election
against any other right or remedy, and the Mortgagee may proceed against the
Owner Trustee or any other Person and the Collateral and any other collateral
granted by the Owner Trustee to the Mortgagee under any other agreement, all in
any order and through any available remedies. A waiver on any one occasion
shall not be construed as a waiver or bar on any future occasion. All property
of any kind held at any time by the Mortgagee as Collateral shall stand as one
general continuing collateral security for all the Obligations and may be retained
by the Mortgagee as security until all the Obligations are fully satisfied.

 

J-13

 

Section 4.08           Application of
Proceeds.  Proceeds of
any sale, lease or other disposition or other realization upon any Collateral
pursuant to this Mortgage and all other sums realized or held by the Mortgagee
under this Mortgage or any proceedings hereunder (including any proceeds of
insurance) shall be applied by any Credit Facility Lender or Non-Lender upon
receipt as set forth in the Credit Agreement.

 

Section 4.09           Delay or Omission;
Possession of Notes.

 

(i)            No delay or
omission of the Mortgagee to exercise any right or remedy arising upon the
happening of any Default or Event of Default shall impair any right or remedy or
shall be construed to be a waiver of any such Default or Event of Default or an
acquiescence therein; and every right and remedy given to the Mortgagee by this
Article IV or by applicable law may be exercised from time to time and as
often as may be deemed expedient by the Mortgagee.

 

(ii)           All rights of action under
this Mortgage may be enforced by the Mortgagee without the possession of any
Note(s) or any other instrument or document evidencing any obligation or
the production thereof in any proceeding.

 

Section 4.10           Power of
Attorney.  The Owner
Trustee hereby irrevocably appoints the Mortgagee the true and lawful attorney
of the Owner Trustee for the duration of this Mortgage (with full power of
substitution) in the name, place and stead of, and at the expense of, the Owner
Trustee in connection with the enforcement of the rights and remedies provided
for in this Article IV:  (a) to
give any necessary receipts or acquittances for amounts collected or received
hereunder, (b) to make all necessary transfers of the Engines or Equipment
in connection with any sale, lease or other disposition made pursuant hereto, (c) to
execute and deliver for value all necessary or appropriate bills of sale,
assignments and other instruments in connection with any such sale, lease or
other disposition, the Owner Trustee hereby ratifying and confirming all that
such attorney (or any substitute) shall lawfully do hereunder and pursuant
hereto, (d) to sign any agreements, orders or other documents in
connection with or pursuant to any Lease, (e) to endorse Owner Trustee’s
name on any checks, notices, acceptances, money orders, drafts, or other forms
of payment or security that may come into Mortgagee’s possession; (f) to
receive, open, and retain all mail addressed to Owner Trustee relating to the
Collateral, (g) to make, settle, and adjust all claims under Owner Trustee’s
policies of insurance and make all determinations and decisions with respect to
such policies of insurance relating to the Collateral, (h) to settle and
adjust disputes and claims respecting the Accounts directly with Account
Debtors, for amounts and upon terms which Mortgagee determines to be
reasonable, and Mortgagee may cause to be executed and delivered any documents
and releases which Mortgagee determines to be necessary, and (i) to sign
the name of Owner Trustee on any document to be executed, recorded or filed in
order to perfect or continue perfected Mortgagee’s Lien upon the Collateral if
Owner Trustee fails to do so promptly after request therefor by Mortgagee,
including filing any financing or continuation statement without the signature
of Owner Trustee to the extent permitted by Applicable Law.  Except for item (i) above, the power of
attorney granted hereby may not be exercised unless an Event of Default has
occurred and is continuing and Mortgagee has notified Owner Trustee that it
will enforce its security interest in the Collateral if such notice is
specifically required under the applicable Loan Documents (including pursuant
to any notice and cure rights).  The
appointment of Mortgagee as Owner

 

J-14

 

Trustee’s
attorney-in-fact, and each and every one of Mortgagee’s rights and powers,
being coupled with an interest, is irrevocable until all of the Obligations
have been fully repaid and performed. 
MORTGAGEE AND ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES, LENDERS OR
REPRESENTATIVES SHALL NOT BE RESPONSIBLE TO BORROWER OR ANY OTHER PERSON FOR
ANY ACT OR FAILURE TO ACT PURSUANT TO THE POWERS GRANTED UNDER THE POWER OF
ATTORNEY HEREIN OR OTHERWISE, EXCEPT FOR ITS OR THEIR OWN GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT, NOR FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL
DAMAGES.

 

ARTICLE V

 

CONCERNING THE LEASE

 

Section 5.01           Acknowledgment of the Lease.  The Owner Trustee and the Mortgagee
acknowledge and agree for the benefit of each Permitted Lessee that
notwithstanding any other provisions hereof to the contrary, the Lien of this
Mortgage shall, so long as no Lease Event of Default has occurred and is continuing,
be expressly subject to all of the rights of such Permitted Lessee under the
applicable lease.

 

Section 5.02           Quiet Enjoyment, Etc. 
The Owner Trustee and the Mortgagee acknowledge and agree for the
benefit of each Permitted Lessee that notwithstanding any other provision
hereof to the contrary;

 

(a)           so long as no Lease Event of Default shall have occurred and be
continuing, the Mortgagee shall not interfere or permit any Person acting by,
through or under the Mortgagee to interfere with any right of such Permitted
Lessee peaceably and quietly without hindrance or molestation to hold, possess
and use, during the term of the Lease and in accordance with the terms thereof,
the Equipment;

 

(b)           Subject to the provisions of this Mortgage, and until the occurrence of
an Event of Default (which Event of Default has not been waived in writing by
the Mortgagee) and upon demand by the Mortgagee following notice to Owner
Trustee that it will enforce its security interest in the Collateral (if such
notice is specifically required under the applicable Loan Documents (including
pursuant to any notice and cure rights)), the Owner Trustee may exercise all
the rights and enjoy all the benefits of the lessor under the Lease; and

 

(c)           any amounts held by the Mortgagee or any agent or trustee acting on
behalf of the Mortgagee for which application is provided in the Lease or
applicable Replacement Lease shall be applied solely as provided in such lease.

 

Section 5.03           Only One Original Lease.  Where available, one originally executed
Lease included in the Collateral shall be marked “original” and legended in
form satisfactory to the Mortgagee to indicate that it is the original of the
Lease with all other copies marked “copy.” Where available, a chattel paper
counterpart or duplicate original Lease shall be delivered by the Owner Trustee
to the Mortgagee prior to said Lease being included (subject to the terms and
conditions in the Credit Agreement) in the Borrowing Base calculation.

 

J-15

 

Section 5.04           Miscellaneous.

 

(a)           The Owner Trustee shall remain liable as lessor under the Lease to
perform all the obligations assumed by the Owner Trustee thereunder.  The obligations of Owner Trustee under the
Lease may be performed by Mortgagee or any subsequent assignee of the Mortgagee
(“Subsequent Mortgagee”) without releasing Owner Trustee therefrom.  The Mortgagee or any Subsequent Mortgagee
shall have no liability or obligation under the Lease by reason of this
Mortgage and shall not, by reason of this Mortgage, be obligated to perform any
of the obligations of Owner Trustee under the Lease or to file any claim or
take any other action to collect or enforce any payment assigned hereunder.

 

(b)           The Owner Trustee hereby agrees (i) to perform duly and punctually
each of the terms, conditions and covenants contained in the Lease, and (ii) subject
to the Owner Trustee’s business judgment and reasonable commercial practice, to
exercise promptly and diligently each and every right it may have under the
Lease.

 

(c)           The Owner Trustee does hereby warrant and represent that all Leases are
in full force and effect and that it has not assigned or pledged, and hereby
covenants that it will not assign or pledge, so long as this Mortgage shall
remain in effect, the whole or any part of the rights to the Leases or any
other of the rights hereby assigned, to anyone other than the Mortgagee except
in the case of Permitted Liens or as may otherwise be permitted under the
Credit Agreement.

 

ARTICLE VI

 

MISCELLANEOUS PROVISIONS

 

Section 6.01           Amendments,
Etc.  None of the terms or
provisions of this Mortgage may be waived, amended, supplemented or otherwise
modified except by a written instrument executed by the Owner Trustee and
Mortgagee, provided, that any provision of this Mortgage may be waived by the
Mortgagee in a written letter or agreement executed by the Mortgagee or by
facsimile transmission from the Mortgagee, and any such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given.

 

Section 6.02           Notices.  All notices and other
communications under this Mortgage shall be in writing and shall be deemed to
have been given three (3) days after deposit in the mail, first class
mail, postage prepaid, or one (1) day after being entrusted to a reputable
commercial overnight delivery service, or when sent out by facsimile
transmission addressed to the party to which such notice is directed at its
address determined as provided in this Section. 
All notices and other communications under this Mortgage shall be given
to the parties hereto at the following addresses:

 

Owner
Trustee:

Wells
Fargo Bank Northwest,

National
Association

79
South Main Street

Salt
Lake City, Utah 84111

 

J-16

 

Attention:  Val Orton

Telephone:  (801) 246-5300

Facsimile:  (801) 246-5053

 

	
  With a copy to:

  
	
   

  
	
  Willis Lease Finance Corporation

  
	
  773 San Marin Drive,
  Suite 2225

  
	
  Novato, CA 94998

  
	
  Attn: COO and General Counsel

  
	
  Telephone: (415) 408-4712

  
	
  Facsimile: (415) 408-4702

  
	
   

  
	
  Mortgagee:

  
	
   

  
	
  Union Bank, N.A.

  
	
  Northern California Commercial Banking Division

  
	
  350 California Street

  
	
  San Francisco, CA
  94104

  
	
  Attn: Commercial
  Finance Division

  
	
  Telephone: (415) 705-7385

  
	
  Facsimile: (415) 705-7111

  
	
   

  
	
  With a copy to:

  
	
  Sheppard, Mullin, Richter & Hampton, LLP

  
	
  Four Embarcadero Center, 17th Floor

  
	
  San Francisco, CA 94111

  
	
  Attention: Julie Ebert

  
	
  Telephone: 

  	
  (415) 434-9100

  
	
  Facsimile: 

  	
  (415) 434-3947

  
	
   

  
	
  And with a copy to:

  
	
   

  
	
  Willis Lease Finance Corporation

  
	
  773 San Marin Drive, Suite 2225

  
	
  Novato, CA 94998

  
	
  Attn: COO and General Counsel

  
	
  Telephone: (415) 408-4712

  
	
  Facsimile: (415) 408-4702

  

 

Section 6.03           Continuing Lien and Security
Interests; Transfer.  This Mortgage shall create a
continuing lien and security interest in the Collateral and (i) shall
remain in full force and effect until earlier to occur of the following: (a) payment
in full of all Obligations (other than contingent obligations which by their
nature cannot be satisfied by payment at such time) and (b) either (i) expiration
of the term of the Credit Agreement or (ii) termination of the obligation
of any Credit Facility Lender and Non-Lender to make any advances to Owner
Participant pursuant

 

J-17

 

to the Credit Agreement or
any other Loan Document; (ii) shall be binding upon the Owner Trustee, its
successors and assigns, and (iii) shall inure, together with the rights
and remedies of the Mortgagee hereunder, to the benefit of the Mortgagee, and
its respective successors, transferees and assigns. The Mortgagee may, but
subject to the provisions of Section 14 of the Credit Agreement, assign or otherwise transfer its rights
hereunder or under the Credit Agreement to any other Person, and such other Person
shall thereupon become vested with all the benefits in respect thereof granted
to the Mortgagee herein or otherwise, subject, however, to the provisions
hereof; provided that, as soon as practicable after such assignment or
transfer, Mortgagee shall notify the Owner Trustee of any change in payment
instructions necessitated by such assignment or transfer.

 

Section 6.04           Governing Law; Choice of
Forum; Service of Process.

 

(a)           IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS MORTGAGE AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE,
INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW,
BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES, AND ANY APPLICABLE
LAWS OF THE UNITED STATES OF AMERICA. 
ANY INTEREST CREATED BY THIS MORTGAGE HEREIN IS EFFECTIVE TO CONSTITUTE
AN “INTERNATIONAL INTEREST” WITHIN THE MEANING OF THE CAPE TOWN CONVENTION AND
IS LEGALLY SUFFICIENT UNDER APPLICABLE LAW TO CREATE VALID AND ENFORCEABLE
RIGHTS, OBLIGATIONS AND INTERESTS OF THE TYPE IT PURPORTS TO CREATE.

 

(b)           BORROWER HEREBY CONSENTS AND AGREES, PURSUANT TO SECTION 5-1402 OF
THE NEW YORK GENERAL OBLIGATIONS LAW, THAT THE STATE OR FEDERAL COURTS LOCATED
IN THE STATE OF NEW YORK AND SITTING IN THE COUNTY OF NEW YORK OR SOUTHERN
DISTRICT OF NEW YORK, RESPECTIVELY, SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR
AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN BORROWER AND MORTGAGEE PERTAINING
TO THIS MORTGAGE OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS MORTGAGE OR
ANY OF THE OTHER LOAN DOCUMENTS; PROVIDED, THAT MORTGAGEE AND BORROWER
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A
COURT LOCATED OUTSIDE OF COUNTY OF NEW YORK OR SOUTHERN DISTRICT OF NEW YORK; AND
FURTHER PROVIDED, THAT NOTHING IN THIS MORTGAGE SHALL BE DEEMED OR OPERATE
TO PRECLUDE MORTGAGEE FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY
OTHER JURISDICTION TO COLLECT THE OBLIGATIONS DUE UNDER THE CREDIT FACILITY, TO
REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR SUCH OBLIGATIONS, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF MORTGAGEE. BORROWER
EXPRESSLY SUBMITS AND CONSENTS TO SUCH JURISDICTION IN ANY ACTION OR SUIT
COMMENCED IN ANY SUCH COURT, AND BORROWER HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE
BASED UPON LACK OF

 

J-18

 

PERSONAL JURISDICTION, IMPROPER
VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF
SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.  BORROWER HEREBY WAIVES PERSONAL SERVICE OF
THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND
AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE
MADE TO BORROWER AS SET FORTH IN SECTION 6.2 AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE BORROWER’S
ACTUAL RECEIPT THEREOF.

 

(c)           TO THE EXTENT PERMITTED BY LAW, IN CONNECTION WITH ANY ACTION OR
PROCEEDING, WHETHER BROUGHT IN STATE OR FEDERAL COURT, OWNER TRUSTEE AND
MORTGAGEE EACH HEREBY EXPRESSLY, INTENTIONALLY AND DELIBERATELY WAIVE ANY RIGHT
SUCH PARTY MAY OTHERWISE HAVE TO A TRIAL BY JURY.

 

(d)           To the extent permitted by law, service of process in any action against
the Owner Trustee or the Mortgagee may be made by registered or certified mail,
return receipt requested, to its address indicated herein.

 

(e)           The Owner Trustee agrees that any final judgment rendered against it in
any action or proceeding shall be conclusive as to the subject of such final
judgment and may be enforced in other jurisdictions in any manner provided by
law.

 

Section 6.05           Severability.  The invalidity of any one or more of the
provisions of this Mortgage shall not affect the remaining provisions of this
Mortgage; if any one or more of the provisions of this Mortgage should be held
by any court of law to be invalid, or should operate to render this Mortgage
invalid or to impair the lien and security interest of this Mortgage on all or
the major portion of the property intended to he mortgaged hereunder, this
Mortgage shall be construed as if such provisions had not been contained
therein.

 

Section 6.06           Entire Agreement.  This Mortgage (including all
exhibits hereto) and the documents executed pursuant hereto constitute the
entire agreement of the parties with respect to the subject matter hereof and
supersede all prior agreements, commitments, understandings or inducements
(oral or written, expressed or implied), and may not be modified, altered or
amended except by a written agreement signed by Owner Trustee and Mortgagee.

 

Section 6.07           Counterparts.  This Mortgage may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.  No modification or waiver of
any provision hereof shall be effective unless the same is in writing and
signed by the party against whom its enforcement is sought.

 

Section 6.08           Credit Agreement to Control. 
In the event of a conflict between the terms of this Mortgage and the
terms of the Credit Agreement or the Owner Trustee Guaranty, the terms of the
Credit Agreement and the Owner Trustee Guaranty shall control.

 

J-19

 

Section 6.09           Section Titles.  The Section titles and Table of Contents
contained in this Agreement and any other Loan Document are and shall be
without substantive meaning or content of any kind whatsoever and are not a
part of the agreement between the parties hereto.

 

Section 6.10           Time of the
Essence.  Time is of the essence for
performance of any obligations under this Mortgage.

 

Section 6.11           Termination and Release.  Upon the earlier to occur of (a) payment
in full of all Obligations (other than contingent obligations which by their
nature cannot be satisfied by payment at such time) and either (i) expiration
of the term of the Credit Agreement or (ii) termination of the obligation
of any Credit Facility Lender and Non-Lender to make any advances to Owner
Participant pursuant to the Credit Agreement or any other Loan Document; or (b) release
by the Mortgagee of the Lien created hereunder in accordance with the terms and
conditions of this Mortgage, the Credit Agreement and the other Loan Documents,
this Mortgage, and all of the powers, rights and interests granted hereunder
and created hereby shall forthwith terminate, and the Mortgagee shall, at the
cost and expense of the Borrower, execute and deliver all such documents and
instruments reasonably necessary to accomplish the same, and shall take all
actions necessary to discharge any interests in the Collateral on the
International Registry in favor of the Mortgagee, within a reasonable period of
time.

 

Section 6.12           Waiver.  WITHOUT LIMITING THE
GENERALITY OF ANY OTHER WAIVER OR OTHER PROVISION SET FORTH IN THIS MORTGAGE,
THE OWNER TRUSTEE HEREBY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY
AND ALL SURETYSHIP RIGHTS, BENEFITS, SANCTIONS OR DEFENSES ARISING DIRECTLY OR
INDIRECTLY UNDER ANY APPLICABLE LAW.

 

[Remainder of page intentionally left blank;
signatures on following pages]

 

J-20

 

IN WITNESS WHEREOF, the parties hereto have
caused this Mortgage to be duly executed and delivered as of the day and year
first above written.

 

	
   

  	
  WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity, except as expressly
  provided herein, but solely as Owner Trustee  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  
	
   

  	
   

  	
  Name:
  

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  UNION BANK, N.A., as Mortgagee 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  
	
   

  	
   

  	
  Name:
  

  
	
   

  	
   

  	
  Title:

  

 

J-S-1

 

Exhibit A

 

ENGINE

 

One
(1)                       
model
                        
engine bearing manufacturer’ serial number
                      
(which is described on the pre-populated drop down menus of the International
Registry as a                 
model
              
engine bearing manufacturer’s serial number
                ).

 

LEASE

 

Any
now existing and all after-acquired leases of the Equipment hereafter arising
in which Owner Trustee is the lessor or an assignee of a lessor with respect to
the Equipment, as the same may be modified, amended or supplemented from time
to time, including but not limited to the following:

 

[insert description of existing lease here with FAA recording
information]

 

J-A-1

 

Exhibit K

 

FORM OF OWNER TRUSTEE GUARANTY

 

OWNER TRUSTEE GUARANTY NO.      

 

dated as of
                                ,
          ]

 

between

 

WELLS FARGO BANK NORTHWEST,

NATIONAL ASSOCIATION,

as Guarantor

 

and

 

UNION BANK, N.A.,

as Security Agent

 

 

OWNER TRUSTEE GUARANTY NO.      

 

THIS OWNER TRUSTEE GUARANTY NO.
      , dated as of
                        
        ,
             (as
amended, modified or supplemented from time to time, the “Guaranty”),
made by WELLS FARGO BANK NORTHWEST, NATIONAL
ASSOCIATION (the “Guarantor”), not in its individual
capacity, except as expressly provided herein, but solely as trustee under that
certain Trust Agreement No.         
dated
                ,
         between Guarantor and the
Borrower (as amended from time to time, the “Trust Agreement”), for the
benefit of UNION BANK, N.A.
(together with its successors and assigns, the “Security Agent”), in its
capacity as Security Agent, for itself and on behalf of the Credit Facility
Lenders and Non-Lenders under the Credit Agreement (as defined below).

 

Preliminary Statement

 

WHEREAS, Willis Lease Finance Corporation, a
Delaware corporation (the “Owner Participant”), as borrower, Union Bank,
N.A., together with any other Lenders from time to time (collectively, the “Lenders”)
and Union Bank, N.A., as Administrative Agent, Swing Line Lender, Issuing
Lender, and Security Agent have entered into that certain Credit Agreement,
dated as of
[                  ],
2009 (as amended, restated, modified or supplemented from time to time, the “Credit
Agreement”).  All capitalized terms
used herein and not otherwise defined shall have the respective meanings
ascribed to them in the Credit Agreement;

 

WHEREAS, Owner Participant and the Guarantor have
entered into the Trust Agreement pursuant to which the Guarantor has agreed to
hold the Trust Estate (as defined in the Trust Agreement) for the benefit of
Owner Participant in accordance with the terms of the Trust Agreement;

 

WHEREAS, it is a condition under the Credit
Agreement that this Guaranty be executed and delivered by the Guarantor in
favor of the Security Agent and be in continuous full force and effect; and

 

NOW, THEREFORE, in consideration of the
foregoing premises and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, and intending to be legally
bound hereby, the Guarantor hereby makes the following representations and
warranties to the Security Agent and covenants and agrees with the Security
Agent as follows:

 

1.          Continuing and Unconditional
Guaranty. The Guarantor hereby irrevocably, unconditionally
and absolutely guaranties to and for the Security Agent, for the ratable
benefit of Credit Facility Lenders and Non-Lenders, the due performance,
including without limitation the prompt payment when due or within any applicable
grace period, whether at stated maturity, upon acceleration or otherwise and at
all times thereafter of any and all Obligations of the Borrower under the
Credit Agreement and any other agreements or Loan Documents referred to
therein, or under any renewals, extensions or modifications thereof (the “Obligations”)
irrespective of (a) any lack of enforceability of any Obligation, (b) any
change of the time, manner, place of payment, or any other term of any
Obligation, (c) any exchange, release or non-perfection of any collateral
securing payment of any Obligation, (d) any law, regulation or

 

K-1

 

order of any jurisdiction
affecting the genuineness, validity, or rights of the Security Agent, the Administrative
Agent or the Lenders with respect to the Obligations or any instruments
evidencing any of the Obligations, or (e) any other circumstance which
might otherwise constitute a defense to or discharge of the Guarantor. The
Guarantor agrees that its liability hereunder shall be immediate and shall not
be contingent upon the exercise or enforcement by the Security Agent, the
Administrative Agent or the Lenders of whatever remedies each may have against
the Borrower or the enforcement of any lien or realization upon any security
the Security Agent, the Administrative Agent or the Lenders may at any time
possess. The Guarantor agrees that any release which may be given by the
Security Agent, the Administrative Agent or the Lenders to the Borrower shall
not release the Guarantor; and the Guarantor waives the benefit of any statute
of limitations affecting its liabilities hereunder or the enforcement hereof.
This Guaranty is a guaranty of payment and not of collection.

 

If,
absent the provisions of this paragraph, this Guaranty would be held or
determined to be void, invalid or unenforceable on account of the amount of the
Guarantor’s aggregate liability under this Guaranty, then, notwithstanding any
other provision of this Guaranty to the contrary, the aggregate amount of such
liability shall, without any further action by the Guarantor, the Security
Agent, the Administrative Agent, any Lender or Non-Lender or any other Person,
be automatically limited and
reduced to the highest amount which is valid and enforceable as determined in
such action or proceeding, which (without limiting the generality of the
foregoing) may be an amount which is not greater than the greater of the excess
of the amount of the fair saleable value of the assets of the Guarantor over the
amount of all liabilities of the Guarantor (all as determined in accordance
with applicable federal and state laws governing determinations of the
insolvency of debtors), (a) as of the date hereof, and (b) as of the
date of the enforcement of this Guaranty. Nothing contained in this paragraph
shall be deemed to waive, diminish or modify the Guarantor’s representations,
acknowledgments or recitals set forth herein or in any other Loan Document.

 

The
Guarantor agrees that its obligations as a guarantor shall not be impaired,
modified, changed, released, or limited in any manner whatsoever by any
impairment, modification, change, release or limitation of the liability of the
Borrower or its estate in bankruptcy, resulting from the operation of any
present or future provision of the bankruptcy laws or other similar statute, or
from the decision of any court in a bankruptcy proceeding. Notwithstanding any
provision herein to the contrary, the Obligations shall include all amounts
that would otherwise constitute Obligations but for the fact that they are
unenforceable or not allowable due to the existence of any proceedings or
taking of any actions under any such laws. The Obligations shall not be
considered indefeasibly paid for purposes of this Guaranty unless and until all
payments to the Administrative Agent, on behalf of itself, the Security Agent
and the Lenders, are no longer subject to any right on the part of any Person,
including the Borrower, the Borrower as a debtor in possession, or any trustee
(whether appointed under the Bankruptcy Code or otherwise) of the Borrower’s
assets to invalidate or set aside such payments or to seek to recoup the amount
of such payments or any portion thereof, or to declare same to be fraudulent or
preferential. Until such full and final performance and indefeasible payment of
the Obligations whether by Guarantor or the Borrower, the Security Agent and
the Administrative Agent shall have no obligation whatsoever to transfer or
assign their interest in the Loan Documents to the Guarantor. In the event
that, for any reason, any portion of such payments to the Security Agent and
the Administrative Agent on behalf of itself, the Security Agent and the
Lenders, is set aside or 

 

K-2

 

restored,
whether voluntarily or involuntarily, after the making thereof, then the
obligation intended to be satisfied thereby shall be revived and continued in
full force and effect as if said payment or payments had not been made, and the
Guarantor shall be liable for the full amount the Security Agent, the
Administrative Agent or any Lender or Non-Lender is required to repay plus any
and all costs and expenses (including reasonable attorneys’ fees) paid by the
Security Agent, the Administrative Agent or any Lender or Non-Lender in
connection therewith.

 

To
the maximum extent permitted by law, the Guarantor hereby waives any right to
revoke this Guaranty as to future indebtedness. If such a revocation is
effective notwithstanding the foregoing waiver, the Guarantor acknowledges and
agrees that (a) no such revocation shall be effective until written notice
thereof has been received by the Security Agent, (b) no such revocation
shall apply to any Obligations in existence on such date (including, any
subsequent continuation, extension, or renewal thereof, or change in the
interest rate, payment terms, or other terms and conditions thereof), (c) no
such revocation shall apply to any Obligations made or created after such date
to the extent made or created pursuant to a legally binding commitment of the
Security Agent or the Administrative Agent in existence on the date of such
revocation, (d) no payment by the Guarantor, the Borrower, or from any
other source, prior to the date of such revocation shall reduce the maximum
obligation of the Guarantor hereunder, except to the extent of such payment,
and (e) any payment by the Borrower or from any source other than the
Guarantor, subsequent to the date of such revocation, shall first be applied to
that portion of the Obligations as to which the revocation is effective and
which are not, therefore, guaranteed hereunder, and to the extent so applied
shall not reduce the maximum obligation of the Guarantor hereunder.

 

This
is a continuing guaranty and shall remain in full force and effect and be
binding upon the Guarantor, its successors and assigns until payment in full of
all the Obligations.

 

2.          Payment of Obligations. In
furtherance of, and not limiting the Guarantor’s obligations pursuant to Section 1
hereof, upon the occurrence of an Event of Default under the Credit Agreement
(which Event of Default has not been waived in writing by Security Agent) any
demand by the Security Agent upon the Guarantor for payment of any amount in
respect of any Obligation, the Guarantor shall immediately pay the Obligation
or Obligations demanded (as determined pursuant to Section 1 hereof) in
lawful currency of the United States of America and in same day funds to the
office of the Security Agent as set forth in the Credit Agreement, or to such
other location as the Security Agent may from time to time specify.
Notwithstanding anything to the contrary contained herein or elsewhere, it
shall not be necessary for the Security Agent to make any demand upon or bring
any legal, equitable or other action, institute suit, exhaust its rights
against the Borrower or any other guarantor of the Borrower, or proceed,
enforce or exhaust its rights against any security given to secure payment of
the Obligations.

 

3.          Waiver. The Guarantor
hereby waives all notices of any character whatsoever with respect to this
Guaranty and the Obligations, including but not limited to notice of the
acceptance hereof and reliance hereon, of the present existence or future
incurring of any Obligations, of the amounts, terms and conditions thereof, and
of any defaults thereon, and further waives the defenses of diligence,
presentment for payment, protest, demand or extensions of time for payment. The
Guarantor hereby consents to the taking of, or failure to take, from time to
time without notice to the Guarantor, any such action of any nature 

 

K-3

 

whatsoever with respect to the Obligations and with
respect to any rights against any Person or Persons or in any property, including
but not limited to any renewals, extensions, modifications, postponements,
compromises, settlements, substitutions, refusals or failures to exercise or
enforce, indulgences, waivers, surrenders, exchanges and releases, and the
Guarantor will remain fully liable hereon notwithstanding any of the foregoing.
The Guarantor hereby waives the benefit of all laws now or hereafter in effect
in any way limiting or restricting its liability hereunder, including without
limitation: (a) except for the defense of payment made on account of the
Obligations to the Security Agent or the Administrative Agent or any Lender or
Non-Lender, all defenses whatsoever (legal or equitable) to the Guarantor’s
liability hereunder including (i) defenses, set-offs, counterclaims or claims
that Guarantor may have against Borrower or any other party liable to the
Security Agent or the Administrative Agent or any Lender or Non-Lender and (ii) any
defense, set-off, counterclaim or claim of any kind or nature, arising directly
or indirectly from the present or future lack of perfection, sufficiency,
validity or enforceability of the Obligations or any security therefor; (b) all
right to stay of execution and exemption of property in any action to enforce
its liability hereunder; (c) all rights accorded it under any other
statutory provisions of any other applicable jurisdiction affecting the rights
of the Security Agent to enforce the obligations of the Guarantor under this
Guaranty; (d) all notice of any adverse change in the financial condition
of the Borrower or of any other fact that might increase Guarantor’s risk; (e) any
defense based upon or arising out of an election of remedies by the Security
Agent; (f) the benefit of any statute of limitations affecting the
Guarantor’s liability hereunder or the enforcement thereof (and any act which
shall defer or delay the operation of any statute of limitations applicable to
the Obligations shall similarly operate to defer or delay the operation of such
statute of limitations applicable to the Guarantor’s liability hereunder); and (g) all
rights and defenses arising out of an election of remedies by the Security
Agent, even though that election of remedies may have the effect of destroying
the Guarantor’s rights of subrogation and reimbursement against the Borrower.

 

To
the maximum extent permitted by law, Guarantor hereby waives any right of
subrogation or reimbursement Guarantor has or may have as against the Borrower
with respect to the Obligations, until the Obligations have been indefeasibly
paid in full. In addition, Guarantor hereby waives any right to proceed against
the Borrower, now or hereafter, for contribution, indemnity, reimbursement, and
any other suretyship rights and claims, whether direct or indirect, liquidated
or contingent, whether arising under express or implied contract or by
operation of law, which Guarantor may now have or hereafter have as against the
Borrower with respect to the Obligations. Guarantor also hereby waives any
rights to recourse to or with respect to any asset of the Borrower. Guarantor
agrees that in light of the immediately foregoing waivers, the execution of
this Guaranty shall not be deemed to make Guarantor a “creditor” of the
Borrower, and that for purposes of Sections 547 and 550 of the Bankruptcy Code,
Guarantor shall not be deemed a “creditor” of the Borrower.

 

WITHOUT
LIMITING THE GENERALITY OF ANY OTHER WAIVER OR OTHER PROVISION SET FORTH IN
THIS GUARANTY, GUARANTOR HEREBY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW,
ANY AND ALL SURETYSHIP RIGHTS, BENEFITS, SANCTIONS OR DEFENSES ARISING DIRECTLY
OR INDIRECTLY UNDER ANY APPLICABLE LAW.

 

K-4

 

4.             Representations and
Warranties. The Guarantor, in its individual capacity,
represents and warrants to the Security Agent as follows:

 

(a)           Organization; Good Standing.  It is a national banking association/trust
company duly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation, and has the corporate power and authority
necessary to enter into and perform its obligations hereunder and under the
Trust Agreement, and has full right, power and authority to enter into and
perform its obligations as Guarantor pursuant to the Trust Agreement under each
of the Loan Documents to which it is a party.

 

(b)           Powers and Authorizations.
The making and performance of this Guaranty and each of the other Loan
Documents to which the Guarantor is a party has been duly authorized by all
necessary corporate action on its part, and neither the execution and delivery
thereof nor its performance of or compliance with any of the terms and
provisions thereof will violate any federal or state law or regulation
governing its banking or trust powers or contravene or result in any breach of,
or constitute any default under its charter or bylaws or the provisions of any
indenture, mortgage, contract or other agreement to which it is a party or by
which it or its properties may be bound or affected. Assuming due
authorization, execution and delivery of this Guaranty and each of the other
Loan Documents by each of the parties thereto (other than the Guarantor), this
Guaranty and each of the other Loan Documents to which it is a party is a
legal, valid and binding obligation of the Guarantor, enforceable against the
Guarantor in accordance with its respective terms, except as enforcement may be
limited by the Bankruptcy Code of the United States of America, as amended from
time to time, and all other applicable liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief Laws from time to time in effect affecting the rights of
creditors generally.

 

(c)           Loan Documents. The Guarantor further
represents and warrants to the Security Agent that the Guarantor has read and
understands the terms and conditions of the Loan Documents.

 

5.             Covenants. The Guarantor
covenants and agrees that from and after the date hereof and so long as
Obligations remain unpaid or outstanding:

 

(a)           Location of Chief Executive Offices. The chief executive office and chief
place of business (as such terms are defined in Article 9 of the Uniform
Commercial Code as in effect in the State of Utah) of the Guarantor are located
at 79 South Main Street, Salt Lake City, Utah 8411.1 and the Guarantor agrees
to give the Security Agent at least thirty (30) days’ prior written notice of
any relocation of said chief executive office or chief place of business from
its present location.

 

(b)           Compliance With Law. The Guarantor shall maintain
its corporate existence under and in compliance with all applicable laws and
conduct its business in all material respects in accordance with all applicable
laws binding on it and its operations or assets and perform its obligations under
the Loan Documents to which it is a party.

 

K-5

 

(c)           No Security Interest. The Guarantor agrees not to
create, incur, assume or suffer to exist any Lien attributable to Guarantor on
the Equipment or the other Collateral (excluding any Liens specifically
permitted under the Loan Documents), and shall take all necessary action to
remove and release any such Lien and shall reimburse and indemnify the Security
Agent, and each other party to any of the Loan Documents, for any loss incurred
as a result of any such Lien.

 

(d)           No Amendment to Trust Agreement.
The Guarantor, in its individual capacity, agrees to perform its obligations
under the Trust Agreement and further agrees not to amend, supplement, modify
or terminate the Trust Agreement, or revoke the Trust, without the Security
Agent’s prior written consent except as permitted by Section 5(d) of
the Beneficial Interest Pledge Agreement.

 

(e)           No Other Business. In its capacity as trustee for
Borrower, the Guarantor has engaged in no business activity and will engage in
no other business activities, except in respect of the transactions
contemplated by the Loan Documents, and has incurred no indebtedness other than
as contemplated by the Loan Documents.

 

(f)            Indebtedness. The Guarantor will not contract
for, create, incur or assume any indebtedness (including contingent 

liability therefor), grant any
credit, guarantee any debts or grant any indemnity other than pursuant to the
Loan Documents or as otherwise expressly permitted by the Loan Documents.

 

(g)           Sale or Assignment. Except as expressly permitted
by the Credit Agreement and the other Loan Documents and/or upon receipt of
written instructions from Security Agent, the Guarantor will not sell, assign,
transfer or otherwise dispose of the Equipment or the other Collateral (or any
portion thereof).

 

6.             Subordination of Sums
Payable to Any Guarantor. The Guarantor hereby subordinates all
claims and demands it has, or may in the future have, against the Borrower arising
or growing out of any indebtedness, liability or obligation, direct or
indirect, due or to become due which arises, may arise or arose by reason of
any advance or loan by the Guarantor, directly or indirectly, to the Borrower,
but excluding any compensation from time to time accrued and owed to Guarantor
from Borrower, as such compensation is permitted under Section 6.07 of the
Trust Agreement (all of such claims and demands being herein referred to
collectively as the “Subordinated Liabilities”), to the prior and full
payment, performance, satisfaction and discharge of the Obligations, and the
Guarantor agrees that the Security Agent shall first be paid in full with
interest all sums now due or that may hereafter accrue and become due and
payable by the Borrower under the Credit Agreement, the Notes and any other
Loan Document before the Guarantor shall be paid anything by the Borrower or
out of any property of the Borrower for or on account of any of the
Subordinated Liabilities. The Guarantor further agrees that the Security Agent,
the Administrative Agent or any Lender or Non-Lender may at any time and from
time to time renew or extend the time of payment of any indebtedness of the
Borrower to the Security Agent, the Administrative Agent or any Lender or
Non-Lender, or any portion of such indebtedness, and may make new loans to the
Borrower, secured or unsecured, under the Credit Agreement or otherwise, with
or without a guarantee, all without any notice to the Guarantor who shall
nonetheless remain fully bound by its agreement to subordinate the

 

K-6

 

Subordinated Liabilities
until this Guaranty has been terminated by the Security Agent in the manner
hereinafter provided.

 

7.          Expenses. In addition
to all other liabilities of the Guarantor hereunder, the Guarantor also agree
to pay to the Security Agent, on demand, all reasonable costs and expenses
(including reasonable fees, costs and disbursements of its counsel) which may
be incurred in the enforcement of the Obligations or the liabilities of the
Guarantor hereunder.

 

8.          Modification of
Obligations. The Guarantor hereby consents and agrees that
without further notice to or assent from it, the amount of the Obligations, the
time of payment of any or all the Obligations may be changed, any other term or

 

condition relating to any or all the Obligations may
be changed, the Borrower (or any other Person primarily or secondarily liable
for the Obligations, including the Guarantor hereunder) may be discharged from
any or all the Obligations, any composition or settlement relating thereto may
be consummated and accepted, and that the Guarantor will remain bound upon this
Guaranty notwithstanding any or all of the foregoing.

 

9.          No Waivers; No
Election; Rights and Remedies Cumulative. No failure on the part of
the Security Agent to exercise, and no delay in exercising, any right, power or
remedy shall operate as a waiver thereof, nor shall any single or partial
exercise by the Security Agent of any right, power or remedy preclude any other
further exercise thereof or the exercise of any other right, power or remedy.
Subject to the terms of Section 17 hereof, the Security Agent shall have
the right to seek recourse against the Guarantor to the fullest extent provided
for herein, and no election by the Security Agent to proceed in one form of
action or proceeding, or against any party, or on any obligation, shall
constitute a waiver of the Security Agent’s right to proceed in any other form
of action or proceeding or against other parties unless the Security Agent has
expressly waived such right in writing. Specifically, but without limiting the
generality of the foregoing, no action or proceeding by the Security Agent, the
Administrative Agent or any Lender or Non-Lender under any Loan Document or any
other document or instrument evidencing the Obligations shall serve to diminish
the liability of the Guarantor under this Guaranty except to the extent that
the Security Agent, the Administrative Agent or any Lender or Non-Lender
finally and unconditionally shall have realized indefeasible payment by such
action or proceeding. The rights and remedies provided herein shall be in
addition to and not exclusive of any rights or remedies provided at law or in
equity, and may be exercised in such order as the Security Agent shall
determine, in its sole discretion.

 

10.        Other Guaranties. A subsequent or concurrent
guaranty by any other guarantor of any of the Obligations shall not be deemed
to be in lieu of or to supersede or terminate this Guaranty but shall be
construed as an additional or supplementary guaranty; and if any other
guarantor has given to the Security Agent a previous guaranty or guaranties,
this Guaranty shall be construed to be an additional or supplementary guaranty,
and not to be in lieu thereof or to terminate such previous guaranty or
guaranties.

 

11.        Right of Set-off. Upon an Event of Default
under the Credit Agreement (which Event of Default is not waived in writing by
Security Agent), the Security Agent, the Administrative Agent and each Lender
and Non-Lender are hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set-off and apply any and all deposits at
any time

 

K-7

 

held
and other indebtedness at any time owing by the Security Agent, the
Administrative Agent and any Lender or Non-Lender to or for the credit of the
Guarantor against any and all of the obligations of the Guarantor now or
hereafter existing under this Guaranty. Any such set-off or application of
deposits by a Lender or Non-Lender shall be deemed to be made on behalf of all
of the Lenders, in accordance with their respective Pro Rata Shares.

 

12.           Termination of
Guaranty. This Guaranty shall terminate and be of no further
force and effect upon the earliest to occur of the following: (a) payment
in full of all Obligations (other than contingent obligations which by their
nature cannot be satisfied by payment at such time) and either (i) expiration
of the term of the Credit Agreement or (ii) termination of the obligation
of any Credit Facility Lender and Non-Lender to make any advances to Owner
Participant pursuant to the Credit Agreement or any other Loan Document or (b) transfer
of the Beneficial Interest contemplated by the Trust Agreement to (i) WLFC
Funding Corporation or (ii) any other Subsidiary of the Borrower pursuant
to any contribution agreement or similar agreement entered into in connection
with a securitization transaction similar to the transactions contemplated by
the WEST Funding Facility; provided that any such transfer made in connection
with this Subsection 12(b) shall occur only with the express written
consent of Security Agent, which consent may be withheld in Security Agent’s
sole discretion.

 

13.           Binding Effect;
Assignment. The provisions of this Guaranty shall be binding
upon and inure to the benefit of the Guarantor and the Security Agent and their
respective successors and assigns, except that the Guarantor may not assign or
otherwise transfer any of its rights or obligations hereunder.

 

14.           Amendments and
Waivers. None of the terms or provisions of this Guaranty may be waived,
amended, supplemented or otherwise modified except by a written instrument
executed by the then-existing Guarantor and Security Agent, provided,
that any provision of this Guaranty may be waived by the Security Agent in a
written letter or agreement executed by the Security Agent or by facsimile
transmission from the Security Agent, and any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.

 

15.           Governing Law;
Choice of Forum; Service of Process.

 

(a)                IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS GUARANTY AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE,
INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW,
BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES, AND ANY APPLICABLE
LAWS OF THE UNITED STATES OF AMERICA.

 

(b)           GUARANTOR HEREBY CONSENTS AND AGREES, PURSUANT TO SECTION 5-1402 OF
THE NEW YORK GENERAL OBLIGATIONS LAW, THAT THE STATE OR FEDERAL COURTS LOCATED
IN THE STATE OF NEW YORK AND SITTING IN THE COUNTY OF NEW YORK OR SOUTHERN
DISTRICT OF NEW YORK,

 

K-8

 

RESPECTIVELY, SHALL HAVE
EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN
GUARANTOR AND SECURITY AGENT PERTAINING TO THIS GUARANTY OR TO ANY MATTER
ARISING OUT OF OR RELATED TO THIS GUARANTY OR ANY OF THE OTHER LOAN DOCUMENTS; PROVIDED,
THAT SECURITY AGENT AND GUARANTOR ACKNOWLEDGE THAT ANY APPEALS FROM THOSE
COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF THE COUNTY OF
NEW YORK OR SOUTHERN DISTRICT OF NEW YORK; AND FURTHER PROVIDED, THAT
NOTHING IN THIS GUARANTY SHALL BE DEEMED OR OPERATE TO PRECLUDE SECURITY AGENT
FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO
COLLECT THE OBLIGATIONS DUE UNDER THE CREDIT FACILITY, TO REALIZE ON THE
COLLATERAL OR ANY OTHER SECURITY FOR SUCH OBLIGATIONS, OR TO ENFORCE A JUDGMENT
OR OTHER COURT ORDER IN FAVOR OF SECURITY AGENT. GUARANTOR EXPRESSLY SUBMITS
AND CONSENTS TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH
COURT, AND GUARANTOR HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED
UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS
AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS
DEEMED APPROPRIATE BY SUCH COURT. 
GUARANTOR HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND
OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH
SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE TO GUARANTOR AS SET
FORTH IN SECTION 15(d) HEREOF AND THAT SERVICE SO MADE SHALL BE
DEEMED COMPLETED UPON THE GUARANTOR’S ACTUAL RECEIPT THEREOF.

 

(c)           TO THE EXTENT PERMITTED BY LAW, IN CONNECTION WITH ANY ACTION OR
PROCEEDING, WHETHER BROUGHT IN STATE OR FEDERAL COURT, GUARANTOR AND SECURITY
AGENT EACH HEREBY EXPRESSLY, INTENTIONALLY AND DELIBERATELY WAIVE ANY RIGHT
SUCH PARTY MAY OTHERWISE HAVE TO A TRIAL BY JURY.

 

(d)           To the extent permitted by law, service of process in any action against
the Guarantor or the Security Agent may be made by registered or certified
mail, return receipt requested, to its address indicated herein.

 

(e)           The Guarantor agrees that any final judgment rendered against it in any action
or proceeding shall be conclusive as to the subject of such final judgment and
may be enforced in other jurisdictions in any manner provided by law.

 

16.              Assignment by Security Agent. The Security
Agent may, with the consent of Guarantor (which consent shall not be
unreasonably withheld) and subject to the provisions of Section 14 of the
Credit Agreement assign or otherwise transfer any of its rights hereunder or
under the Credit Agreement to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to the
Security Agent herein or otherwise, subject, however, to the provisions hereof;
provided that, as soon as practicable after such

 

K-9

 

assignment or transfer, the Security Agent shall
notify the Guarantor and the Borrower of any change in payment instructions
necessitated by such assignment or transfer.

 

17.           Capacity of
Guarantor. It is understood and agreed that the Guarantor is
entering into this Guaranty solely in its capacity as Trustee under the Trust
Agreement, except as otherwise expressly stated herein, and that it shall not
be liable or accountable in its individual capacity in any circumstances
whatsoever except for the gross negligence or willful misconduct of the
Guarantor in its individual capacity and as otherwise expressly provided in the
Trust Agreement, this Guaranty or any of the other Loan Documents to which it
is a party, but otherwise shall be liable or accountable solely to the extent
of the assets of the Trust Estate.

 

[Remainder of page intentionally left blank;
signatures on following pages]

 

K-10

 

IN WITNESS WHEREOF, the Guarantor has executed
this Guaranty as of the day and year first above written.

 

	
   

  	
  GUARANTOR  

  

  

  WELLS FARGO NORTHWEST, NATIONAL ASSOCIATION,
  not in its individual capacity, except as
  expressly provided herein, but solely as Trustee  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  
	
   

  	
   

  	
  Name:
  

  
	
   

  	
   

  	
  Title:

  

 

K-S-1

 

Exhibit L

 

Form of Leasing Subsidiary Security Assignment

 

WLFC (IRELAND) LEASE SECURITY ASSIGNMENT

 

 

dated
[                            
, 20    ]

 

 

WLFC (IRELAND) LIMITED

as Assignor

 

 

and

 

 

UNION BANK, N.A.

as Security Agent

 

 

 

LEASE SECURITY ASSIGNMENT RELATING TO

[                                                                ]

 

 

 

L-1

 

THIS LEASE SECURITY ASSIGNMENT (this “Assignment”)
dated
[                  ,
20    ],

 

BETWEEN

 

(1)           WLFC (IRELAND) LIMITED a
limited liability company duly incorporated under the laws of Ireland having
its registered office at Ashley House, Morehampton Road, Dublin 4 (the “Assignor”);

 

AND

 

(2)           UNION BANK, N.A., in its
capacity as Security Agent for itself and on behalf of the Credit Facility
Lenders and Non-Lenders under the Credit Agreement (as defined below), and
having its registered office at the address referenced in Section 13
hereof (the “Assignee”).

 

RECITALS

 

A.            Borrower, Union Bank, N.A.,
together with any other Lenders from time to time (collectively, the “Lenders”)
and Union Bank, N.A., as Administrative Agent, Swing Line Lender, Issuing
Lender, and Security Agent have entered into that certain Credit Agreement,
dated as of November 18, 2009 (as amended, restated, modified or
supplemented from time to time, the “Credit Agreement”).  All capitalized terms used herein and not
otherwise defined shall have the respective meanings ascribed to them in the
Credit Agreement; and

 

B.            It is a condition of the
Credit Agreement that the Assignor execute and deliver to the Assignee this
Assignment to secure performance by the Assignor of its obligations to the
Assignee under that certain Subsidiary Guaranty, dated as of even date
herewith, made by the Assignor and certain other subsidiaries of the Borrower
in favor of Assignee (“Subsidiary Guaranty”).

 

NOW IT IS AGREED as follows:

 

1.              Definitions.

 

1.1           In this
Assignment (including the Recitals) words and phrases defined in the Credit
Agreement shall have the same meaning herein and the following words shall have
the following meanings unless the context otherwise requires:

 

“Assigned
Property” means all of the Assignor’s rights, title, benefit and interest
to, in and under the Sub-Lease including (without limitation) all monies
whatsoever payable to or for the account of the Assignor under the Sub-Lease
and all other rights and benefits whatsoever accruing to the Assignor as a
result of the Sub-Lease (including the Insurances) together with the benefit of
any security granted or issued to the Assignor as security for the performance
of any other party’s obligations under the Sub-Lease;

 

“Dollars”
or “US$” means United States Dollars, the lawful currency of the United
States of America, for the time being;

 

L-2

 

“Engine”
means one
[                                      ]
with Manufacturer’s Serial No. [              ]
as more fully described in the Sub-Lease;

 

“Event
of Loss” shall have the meaning ascribed thereto in the Credit Agreement;

 

“Head
Lease” means the General Terms Engines Lease Agreement, entered into
between Wells Fargo Bank Northwest, National Association, not in its individual
capacity but solely as Owner Trustee, and the Assignor as of August 3, 2006
and Aircraft Engine Lease Agreement, entered into between Wells Fargo Bank
Northwest, National Association, not in its individual capacity but solely as
Owner Trustee, and the Assignor as of
                                  
in respect of the Engine, as same may be amended and/or supplemented from time
to time;

 

“Insurances”
means all of the Assignor’s rights, title, benefit and interest to, in and
under the insurances procured by the Sub-Lessee in fulfillment of its
obligations under the Sub-Lease (other than any policy of third party liability
insurance), including (without limitation) all monies payable to or for the
account of the Assignor under the Insurances and all other rights and benefits
whatsoever accruing to the Assignor as a result of the Insurances;

 

“Secured
Obligations” means all obligations of the Assignor under the Subsidiary
Guaranty, which, for all purposes hereof, shall be deemed to include the due
performance, including, without limitation, the prompt payment when due or
within any applicable grace period, whether at stated maturity, upon
acceleration or otherwise and at all times thereafter of any and all
obligations of the Borrower owed to Security Agent, the Administrative Agent or
any Credit Facility Lender under the Credit Agreement, the Notes, and any other
Loan Documents referred to therein, or under any renewals, extensions or
modifications thereof;

 

“Sub-Lease”
means the existing General Terms Engine Lease Agreement, entered into between
the Assignor and the Sub-Lessee as of [                      ],
and Aircraft Engine Lease Agreement, entered into between the Assignor and the
Sub-Lessee as of [                          ]
in respect of the Engine, as more particularly defined in Schedule 4
attached hereto;

 

“Sub-Lessee”
means [                        ];

 

“Transaction
Documents” means collectively the Subsidiary Guaranty and this Assignment
together with all notices and acknowledgments and any other documents amending,
supplementing, substituting or ancillary to any of the foregoing from time to
time.

 

1.2           Interpretation.

 

(f)            Clause headings are for ease of reference only.

 

(g)           References in these presents to clauses, sub-clauses, paragraphs or
Schedules are, unless otherwise specified, to be construed as references to
clauses, sub-clauses and paragraphs of and the Schedules to these presents.

 

(h)           References in these presents to herein, hereby and hereunder shall be a
reference to the entire Lease Security Assignment and not any particular
clause.

 

L-3

 

(i)            References in these presents to any statute or other legislative
provision shall include any statutory or legislative modification or
re-enactment thereof, or any substitution therefor.

 

(j)            References in these presents to “relevant statutory provision” shall
include references to any provision of the laws of any jurisdiction which may
from time be applicable.

 

(k)           References in these presents to any agreement, document or instrument
shall include such agreement, document or instrument as the same may from time
to time be varied, amended, supplemented, novated or substituted.

 

(l)            References in these presents to the word “person” or “persons” include,
without limitation, individuals, firms, corporations, government agencies,
authorities and other bodies, incorporated or unincorporated and whether having
distinct legal personality or not.

 

(m)          References in these presents to any party hereto or any person include
references to any successor or assign of such party or other person.

 

(n)           Unless the context otherwise requires, words denoting the singular number
shall include the plural and vice versa.

 

(o)           Reference in these presents to the word “written” or “in writing” shall
include any means of visible reproduction.

 

(p)           A time of day shall be construed as a reference to Dublin time.

 

2.             Warranties.

 

2.1           The Assignor
hereby represents and warrants to the Assignee that:

 

(q)                the Assignor has the full power and authority and legal right to execute,
deliver and perform the terms of this Assignment and such execution, delivery
and performance is duly authorised by all necessary corporate action of the
Assignor and this Assignment constitutes the legal, valid and binding
obligation of the Assignor, enforceable against the Assignor in accordance with
its terms;

 

(r)            the Sub-Lease constitutes valid and binding obligations of the Assignor
and is in full force and effect and has not been varied or modified in any way
or cancelled and neither the Assignor nor (so far as Assignor is actually
aware) the relevant Sub-Lessee are in default thereunder nor has any Event of
Loss occurred with respect to the Engine; and

 

(s)           it has not previously assigned, charged, pledged or otherwise encumbered
any of its rights and benefits under the Assigned Property.

 

L-4

 

3.          Assignment.

 

3.1           In
consideration as aforesaid, the Assignor as legal and beneficial owner, for the
purpose of securing the Secured Obligations, hereby assigns and agrees to
assign to the Assignee the Assigned Property:

 

Provided
that the Assignor shall keep the Assignee fully and effectually indemnified
from and against all actions, losses, claims, proceedings, costs, demands and
liabilities which may be suffered by the Assignee by reason of the failure of
the Assignor to perform any of its obligations pursuant to the Sub-Lease.

 

Provided
further that any or all monies and rights comprising the Assigned Property
shall be payable to the Assignor and performed in accordance with the
provisions regulating payment and performance thereof in the Sub-Lease until
such time as an Event of Default shall occur and be continuing and the Assignee
shall direct to the contrary, whereupon the Assignor shall forthwith, and the
Assignee may, at any time thereafter, instruct the persons from whom such
monies are then payable to pay the same to the Assignee or as it may direct.

 

3.2           The Assignee’s
rights under this Assignment shall become exercisable only upon the occurrence
of an Event of Default which is continuing.

 

3.3           Upon release of the Assignor
from its obligations under the Subsidiary Guaranty pursuant to the conditions
set forth in Section 12 of the Subsidiary Guaranty, the Assignee agrees to
re-assign to the Assignor all right, title, benefit and interest in the Assigned
Property; provided that this Assignment shall be reinstated if at any time
payment and performance of the Secured Obligations, or any part thereof, are,
pursuant to applicable law, rescinded or reduced in amount or must otherwise be
restored or returned by Assignee, whether as a “voidable preference”, “fraudulent
preference”, “fraudulent conveyance” or otherwise, all as though such payment
or performance had not been made. In addition, upon the sale or other disposal
of the Engine in accordance with the Credit Agreement, the Assignee agrees to
re-assign to the Assignor all right, title, benefit and interest in the
Assigned Property to the extent it relates to that Engine.

 

3.4           Any amount received by the
Assignee pursuant to this Assignment shall be applied in discharging any sums
then due and owing which are secured by this Assignment.

 

3.5           This security is in addition
to, and shall not be merged in, or in any way prejudice, any other security
interest, document or right which the Assignee may now or at any time hereafter
hold or have.

 

3.6           The powers which this
Assignment confers on the Assignee are cumulative, without prejudice to its
powers under the general law and may be exercised as often as the Assignee
thinks appropriate.

 

3.7           Sections 17 and 20 of the
Conveyancing and Law of Property Act 1881 shall not apply to the security
constituted by this Assignment.

 

L-5

 

4.          Notice of
Assignment.

 

4.1           Following the
occurrence of an Event of Default, and during the continuance thereof, and if
requested by Assignee in writing to do so, the Assignor shall deliver a notice
of assignment forthwith to Sub-Lessee in the form of Schedule 1 and to
brokers through whom the Insurances are placed in the form of Schedule 3
(or such other form as the Assignee may agree) and shall use its reasonable
endeavours to procure an acknowledgement of the relevant Sub-Lessee in the form
of Schedule 2 (or such other form as the Assignee may agree) PROVIDED
ALWAYS that the Assignee shall not issue or deliver any such notice of
assignment unless and until an Event of Default has occurred and is continuing.

 

4.2           From time to time after the
execution of this Assignment, the Assignor shall deliver to the Assignee
evidence, in form and substance satisfactory to the Assignee that this
Assignment or prescribed particulars thereof have been delivered to and filed
with all relevant authorities in all applicable jurisdictions including,
without limitation particulars (by way of Form C1) of the charges created
by the Assignor pursuant to this Assignment, which particulars must be filed
with the Irish Registrar of Companies within 21 days of the date of creation of
such charge.

 

5.             Covenants.

 

5.1           The Assignor
hereby covenants with the Assignee that:

 

(t)                 it will do or permit to be done each and every act or thing which the
Assignee may from time to time reasonably require to be done for the purpose of
enforcing the Assignee’s rights in relation to the Assigned Property and under
this Assignment;

 

(u)           except as permitted by the Head Lease, the Sub-Lease, the Credit
Agreement and the other Loan Documents (as defined in the Credit Agreement) and
this Assignment, it will not transfer, assign, sell, dispose of or otherwise
alienate, nor will it create or permit to exist any mortgage, charge, pledge
lien or other security interest whatsoever, howsoever created or arising, over
any of its rights, title, benefit or interest under the Assigned Property;

 

(v)           following the occurrence of an Event of Default which is continuing the
Assignor will not without the prior written consent of the Assignee, not to be
unreasonably withheld or delayed, amend or modify any provision of the
Sub-Lease which would in any way be prejudicial to the Assignee’s rights or
agree or purport to do so.

 

6.          Assignor
Acknowledgements.

 

6.1           It is agreed
that notwithstanding the provisions of this Assignment:

 

(a)                the Assignor shall at all times remain liable to perform all the duties
and obligations of the Assignor in relation to the Assigned Property to the
same extent as if this Assignment had not been executed;

 

L-6

 

(b)                                 the exercise by
the Assignee of any of the rights assigned hereunder shall not release the
Assignor from any of its duties or obligations to the Sub-Lessee under the
Sub-Lease except to the extent that such exercise by the Assignee shall
constitute performance of such duties and obligations;

 

(c)                                  the Assignee
shall not have any obligation or liability under the Assigned Property by
reason of, or arising out of, this Assignment or be obliged to perform any of
the obligations or duties of the Assignor under the Assigned Property or to
make any payment or to present or file any claim or to take any other action to
collect or enforce any claim for any payment assigned hereunder;

 

(d)                                 for so long as
no Event of Default by the Assignor in the payment or discharge of any of the
Secured Obligations shall have occurred and be continuing, the Assignor shall
continue to be entitled to exercise its rights and powers under the Sub-Lease
but at any time following the occurrence and during the continuance of an Event
of Default the Assignee shall be entitled to notify the Sub-Lessee that the
Assignee’s rights as assignee have become exercisable, and after the delivery
of such notice, during the continuance of such Event of Default, all such
rights and powers shall be exercisable only by the Assignee;

 

(e)                                  the Assignee
shall not be obliged to make any enquiry as to the nature or sufficiency of any
payment made under the Assigned Property or received by it hereunder or to make
any claim or take any other action to collect any monies or to enforce any
rights and benefits hereby assigned to the Assignee or to which the Assignee
shall be entitled;

 

(f)                                    the Assignee
shall not be responsible in any way whatsoever in the event that the exercise
by the Assignor of any of its rights or powers under the Assigned Property may
be adjudged improper or to constitute a breach or repudiation of the Assigned
Property by the Assignor; and

 

(g)                                 in the event of
any circumstances whereby further performance of the Sub-Lease becomes
impossible or unlawful or is otherwise frustrated, such impossibility,
unlawfulness or frustration shall not affect the validity of any payments
already received by the Assignee pursuant to this Assignment.

 

7.                                       Power of
Attorney. As security for the performance of the Secured
Obligations and for conferring on the Assignee the benefit of the rights
expressed to be conferred under this Assignment, the Assignor irrevocably
appoints and constitutes the Assignee as the Assignor’s true and lawful
attorney with full power (in the name of the Assignor or otherwise) to carry
out any of the Assignor’s obligations under this Assignment, to ask, require,
demand, receive, compound and give acquittance for any and all monies and
advises for monies due or to become due, under or arising out of, the Sub-Lease
or the Assigned Property, to enforce any provision thereof, to give valid
receipts and discharges, to endorse any cheques or other installments or orders
in connection therewith, and generally to file any claims or take any action or
institute any proceedings which may seem necessary or advisable to the
Assignee, for the purpose of putting into effect the intent of this Assignment.
The powers conferred on the Assignee by this Clause shall only be exercisable
by the Assignee following the occurrence and during the continuance of an Event
of Default in payment or discharge of the Secured Obligations, but no

 

L-7

 

party
dealing with the Assignee as such attorney shall be bound to enquire as to
whether this condition has in fact been satisfied.

 

8.                               Application of
Proceeds. If any sum paid or recovered in respect of the
liabilities of the Assignor under this Assignment is less than the amount then
due, the Assignee may apply that sum in accordance with the provisions of the
Credit Agreement.

 

9.                               Continuing
Security. The security hereby constituted shall be a
continuing security and shall not be discharged by reason of any matter which
would otherwise discharge the Assignor from its obligations hereunder including
without limitation, any variation of or amendment to any of the Transaction
Documents, except as provided for in Clause 3.3 above.

 

10.                         Further
Assurance. The Assignor agrees at any time and from time to
time, upon the request of the Assignee, to execute and deliver promptly and
duly to the Assignee any and all such further instruments and documents which
the Assignee may reasonably require, or which are required by law, for
obtaining the full benefits of this Assignment and the Assigned Property and of
the rights and powers herein granted.

 

11.                         Compliance. If the
Assignor fails to comply with any provision of this Assignment, the Assignee
may, without being in any way obliged to do so, or responsible for so doing and
without prejudice to its ability to treat that non-compliance as a default by
the Assignor in the payment or discharge of any of the Secured Obligations
effect compliance on the Assignor’s behalf, whereupon the Assignor will become
liable to pay immediately on receipt of written demand therefor any sums
reasonably expended by the Assignee together with all reasonable costs and
expenses (including reasonable legal costs) in connection therewith, together
with interest, at the Post-Default Rate (without deduction, both after and
before judgment) from the date of the Assignee’s expenditure until payment.

 

12.                         Delays,
Waivers, Rights Cumulative. No failure to exercise,
and no delay on the part of the Assignee in exercising, any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise of any right, power or privilege preclude the further exercise
thereof.

 

The rights and remedies
herein provided are cumulative and not exclusive of any rights or remedies
provided by law.

 

13.                         Notices.

 

13.1                           Any notice or
other communication to be given under or for the purposes of this Assignment
shall be in writing and shall be treated as properly served or given if hand
delivered or sent by registered post, reputable courier or facsimile (subject,
in the case of facsimile transmission, to the sender having posted a copy of
the facsimile transmission to the notice address of the recipient on the date
of transmission (but without prejudice to Clause 13.3)) to the relevant
person at the following address or facsimile number (or such other address or
facsimile number) as that person may have designated in writing from time to
time to the person giving the notice):

 

L-8

 

	
  Assignee:

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  Union Bank, N.A.

  
	
   

  	
  Northern California
  Commercial Banking Division

  
	
   

  	
  350 California Street

  
	
   

  	
  San Francisco, CA 94104

  
	
   

  	
  Attn: Commercial Finance
  Division

  
	
   

  	
   

  
	
   

  	
  Gen Tel:    001
  415 705 7385

  
	
   

  	
  Fax:    001
  415 705 7111

  
	
  Copy:

  	
  Sheppard, Mullin, Richter
  & Hampton, LLP

  
	
   

  	
  Four Embarcadero Center,
  17th Floor

  
	
   

  	
  San Francisco, CA
  94111-4106

  
	
   

  	
  Attn: Julie Ebert, Esq.

  
	
   

  	
   

  
	
   

  	
  Dir Tel:

  	
  001 415 774 3202

  
	
   

  	
  Gen Tel:

  	
  001 415 434 9100

  
	
   

  	
  Fax:

  	
  001 415 434 3947

  
	
   

  	
   

  
	
  Assignor:

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  WLFC (Ireland) Limited

  
	
   

  	
  Ashley House

  
	
   

  	
  Morehampton Road

  
	
   

  	
  Dublin 4

  
	
   

  	
  Ireland

  
	
   

  	
   

  
	
   

  	
  Attention:    Company
  Secretary

  
	
   

  	
   

  
	
   

  	
  Facsimile No: (353 1)
  619 9010

  

 

In addition, the Assignee
agrees to send copies of all notices that are sent to the Assignor to Willis
Lease Finance Corporation at the following address:

 

	
  Address:

  	
  Willis Lease Finance
  Corporation

  
	
   

  	
  773 San Marin Drive, Suite 2225

  
	
   

  	
  Novato, CA 94998

  
	
   

  	
  Attn:  COO and General Counsel

  
	
   

  	
  Telephone No.:  001 415 408 4712

  
	
   

  	
  Facsimile No.:  001 415 408 4702

  

 

13.2                           Any such notice
or other communication shall be deemed to have been received by the recipient:

 

(a)                                                in the case of
a letter which is hand delivered or delivered via courier, when actually
delivered and, in the case of a letter which is sent by registered post, on the
tenth day after posting (or on actual receipt if earlier); or

 

L-9

 

(b)                                               in the case of
transmission by facsimile, if transmitted during normal business hours in the
place of receipt, at the time of transmission, and otherwise, when normal
business hours next begin in the place of receipt.

 

13.3                           Each person
making a communication under this Assignment by facsimile shall promptly
confirm by telephone to the person to whom such communication was addressed
each communication made by it by facsimile pursuant to this Assignment.

 

13.4                           All
communications and documents delivered pursuant to or otherwise relating to
this Assignment shall either be in English or accompanied by a certified
English translation prepared by a translator approved by the Assignee.

 

14.                                 Partial
Invalidity. If at any time any one or more of the provisions
of this Assignment becomes invalid, illegal or unenforceable in any respect
under any law, the validity, legality and enforceability of the remaining
provisions hereof shall not in any way be affected or impaired thereby.

 

15.                                 Governing Law. THIS
ASSIGNMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK
GENERAL OBLIGATIONS LAW BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES. ASSIGNOR IRREVOCABLY CONSENTS AND AGREES, PURSUANT TO SECTION 5-1402
OF THE NEW YORK GENERAL OBLIGATIONS LAW, THAT ANY LEGAL ACTION OR PROCEEDING
AGAINST IT UNDER, ARISING OUT OF OR IN ANY MANNER RELATING TO THIS ASSIGNMENT
SHALL BE SUBJECT TO THE EXCLUSIVE JURISDICTION OF ANY COURT OF THE STATE OF NEW
YORK SITTING IN THE COUNTY OF NEW YORK OR THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK. ASSIGNOR, BY ITS EXECUTION AND DELIVERY OF THIS
ASSIGNMENT, EXPRESSLY AND IRREVOCABLY ASSENTS AND SUBMITS TO THE PERSONAL
JURISDICTION OF ANY OF SUCH COURTS IN ANY SUCH ACTION OR PROCEEDING. ASSIGNOR
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF ANY COMPLAINT, SUMMONS, NOTICE
OR OTHER PROCESS RELATING TO ANY SUCH ACTION OR PROCEEDING BY DELIVERY THEREOF
TO IT BY HAND OR BY MAIL CARE OF THE BORROWER AT THE BORROWER’S ADDRESS
SPECIFIED IN THE CREDIT AGREEMENT. ASSIGNOR HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES ANY CLAIM OR DEFENSE IN ANY SUCH ACTION OR PROCEEDING BASED ON ANY
ALLEGED LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS
OR ANY SIMILAR BASIS. ASSIGNOR SHALL NOT BE ENTITLED IN ANY SUCH ACTION OR
PROCEEDING TO ASSERT ANY DEFENSE GIVEN OR ALLOWED UNDER THE LAWS OF ANY STATE OTHER
THAN THE STATE OF NEW YORK UNLESS SUCH DEFENSE IS ALSO GIVEN OR ALLOWED BY THE
LAWS OF THE STATE OF NEW YORK. NOTHING IN THIS SECTION 15 SHALL AFFECT, OR
IMPAIR IN ANY MANNER OR TO ANY EXTENT THE RIGHT OF THE ASSIGNEE TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE ASSIGNOR IN ANY JURISDICTION
OR TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.

 

L-10

 

16.                         Counterparts. This
Assignment may be executed in any number of counterparts and by the different
parties to this Assignment on separate counterparts, each of which, when
executed and delivered, shall constitute an original, but all the counterparts
shall together constitute but one and the same instrument.

 

17.                         Amendments.  None of the terms or provisions of this
Assignment may be waived, amended, supplemented or otherwise modified except by
a written instrument executed by the Assignor and Assignee, provided,
that any provision of this Assignment may be waived by the Assignee in a
written letter or agreement executed by the Assignee or by facsimile
transmission from the Assignee, and any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.

 

[Remainder of page intentionally left blank; signatures
on following pages]

 

L-11

 

IN WITNESS WHEREOF the parties hereto have
executed and delivered this Assignment under hand in the case of the Assignee
and as a deed in the case of Assignor on the date written above.

 

	
  “Assignor”

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signed and delivered as a
  deed by

  	
   

  	
   

  
	
   

  	
  , as attorney for

  	
   

  	
   

  
	
  WLFC
  (IRELAND) LIMITED, in

  	
   

  	
   

  
	
  the presence of:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature of witness

  	
   

  	
   

  
	
  Name of witness

  	
   

  	
   

  
	
  Address of witness

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Occupation of witness

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Assignee”

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  UNION
  BANK, N.A., as Security Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 

L-S-1

 

SCHEDULE 1

NOTICE OF ASSIGNMENT

 

	
  From:

  	
  WLFC (Ireland) Limited

  	
   

  
	
  To:

  	
  [                                    ]

  	
  [                          ],
  20    

  

 

Dear Sirs,

 

We hereby give you notice
that by a Lease Security Assignment dated
[                ,
20    ] (the “Assignment”) between us and Union
Bank, N.A., as Security Agent (“Assignee”) we have assigned absolutely
by way of security to Assignee all our right, title and interest in and to:

 

1.                                       the Aircraft
Engine Lease Agreement (the “Sub-Lease”), dated as of
[                                ],
between ourselves and yourselves (as amended, novated, supplemented or
otherwise modified from time to time relating to one aircraft engine with
manufacturer’s serial no.
[                  ]
(the “Engine”).

 

2.                                       All monies that
may be payable by you under the Sub-Lease shall be paid to the US Dollar Bank
Account in the name of the Assignee with [ ] Bank Account No. [ ] (the “Account”)
with immediate effect unless and until the Assignee otherwise directs to you in
writing PROVIDED ALWAYS that your obligations under the Sub-Lease shall not be
increased as a result of making any such payments to the Account and if same
would occur we will locate the Account in a jurisdiction so as to ensure that
there is no increase in your obligations under the Sub-Lease.

 

3.                                       This notice and
the instructions herein contained are irrevocable. Please acknowledge receipt
of this notice to the Assignee on the enclosed Acknowledgment.

 

	
  Yours faithfully,

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  	
   

  
	
  WLFC
  (IRELAND) LIMITED

  	
   

  

 

L-1

 

SCHEDULE 2

ACKNOWLEDGMENT

 

	
  From:

  	
  [                      ]

  	
   

  
	
  To:

  	
  Union Bank, N.A.

  	
   

  
	
  c.c.

  	
  WLFC (Ireland) Limited

  	
  [
  ], 20    

  

 

Dear Sirs,

 

We acknowledge receipt of a
Notice of Assignment dated
[                            ,
20    ] (the “Assignment Notice”) relating to a lease
security assignment (the “Assignment”) between WLFC (Ireland) Limited
(the “Assignor”) and you, Union Bank, N.A., as assignee. We acknowledge
that the Assignment is effective to confer on you all the rights, title and
interest of the Assignor under the Sub-Lease as defined in the Assignment. All
terms defined in the Assignment Notice shall have the same meaning herein.

 

In consideration of payment
to us of US$1.00, we hereby agree as follows:

 

That we will pay to you at
the Account (or such other account as you may nominate) all amounts from time
to time payable by us under the Sub-Lease.

 

1.                                       That we will
not, without your prior written consent, create or permit to exist any
mortgage, charge, pledge, lien or other security interest whatsoever, howsoever
created or arising in and over the Engine which results directly or indirectly
from acts of or claims against ourselves except as expressly permitted by the
Sub-Lease.

 

2.                                       That we will
perform, observe and comply with all our other undertakings and obligations
under the Sub-Lease in your favour and for your benefit as if you were named
therein instead of the Assignor, and if you so request, in regard to the
Sub-Lease, enter into a new agreement with you or your nominee, on the same
terms (mutatis mutandis) as the Sub-Lease.

 

3.                                       With effect
from the date of receipt of the Assignment Notice, we agree that we shall not
recognise the exercise by the Assignor of any of its rights and powers under
the Sub-Lease unless and until requested to do so by you.

 

	
  Yours faithfully,

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  	
   

  
	
  [                                          ]

  	
   

  

 

L-2

 

SCHEDULE 3

NOTICE OF ASSIGNMENT

 

	
  Address to:

  	
  Insurance Brokers

  

 

WLFC (Ireland) Limited (“Assignor”)
a limited liability company organised under the laws of Ireland, the lessor of
one aircraft engine
[                  ]
with manufacturer’s serial number
[                  ]
(the “Engine”) pursuant to a Sub-Lease (as amended and supplemented from
time to time) between Assignor
and[                          ],
hereby gives notice that, by a certain Lease Subsidiary Security Assignment, dated
as of
[              ,
20    ] and entered into between Assignor and Union Bank,
N.A., in its capacity as Security Agent for itself and on behalf of the “Credit
Facility Lenders” and “Non-Lenders” under that certain Credit Agreement, dated
as of November 18, 2009 (the “Assignee”), Assignor has assigned by
way of security to the Assignee all its rights, title benefit and interest in
to and under all insurances in respect of the Engine except third party
liability insurances.

 

	
   

  	
   

  
	
  For and on behalf of

  	
   

  
	
  WLFC
  (IRELAND) LIMITED

  	
   

  

 

L-3

 

SCHEDULE 4

ENGINE AND SUBLEASE DETAILS

 

One (1) [                                  ]
aircraft engine model
                          
bearing manufacturer’s serial number
[                            ]

 

Aircraft Engine Lease
Agreement, dated as of
                          ,
between WLFC (Ireland) Limited (“Lessor”), as lessor, and
                                  (“Lessee”),
as lessee, incorporating the terms of the General Terms Engine Lease Agreement,
dated as of
                                  
between Lessor and Lessee.

 

[WILLIS TO PROVIDE COPY OF LEASE AGREEMENT AND SUB-LEASE TO
UNION BANK WHEN REQUESTING SIGNATURE.]

 

L-4

 

Exhibit M

 

Form of Subsidiary Guaranty

 

 

LEASING SUBSIDIARY GUARANTY

 

 

Dated as of November 18, 2009

 

made by

 

WLFC (IRELAND) LIMITED,

together
with any other entity that becomes a guarantor hereunder,

 

as
Guarantor

 

 

in favor of

 

UNION BANK, N.A.,

as Security Agent

 

 

TABLE
OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Continuing and
  Unconditional Guaranty

  	
  1

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Payment of Obligations

  	
  3

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Waiver

  	
  3

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Representations and
  Warranties

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Organization: Good
  Standing

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Corporate Authority

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Validity of Documents

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Financial Condition of
  Borrower

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (e)

  	
  No Event of Default

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (f)

  	
  Representations and
  Warranties

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  Covenants

  	
  6

  
	
   

  	
   

  	
   

  
	
  (a)

  	
  Assistance to the Borrower

  	
  6

  
	
   

  	
   

  	
   

  
	
  (b)

  	
  Credit Agreement
  Affirmative and Negative Covenants

  	
  6

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Subordination of Sums
  Payable to Any Guarantor

  	
  6

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Expenses

  	
  6

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Modification of
  Obligations

  	
  7

  
	
   

  	
   

  	
   

  
	
  9.

  	
  No Waivers: No Election:
  Rights and Remedies Cumulative

  	
  7

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Other Guaranties

  	
  7

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Right of Set-off

  	
  7

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Termination of Guaranty

  	
  8

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Binding Effect: Assignment

  	
  8

  
	
   

  	
   

  	
   

  
	
  14.

  	
  Amendments and Waivers

  	
  8

  

 

M-i

 

	
  15.

  	
  Governing Law:
  Jurisdiction

  	
  8

  
	
   

  	
   

  	
   

  
	
  16.

  	
  Waiver of Jury Trial

  	
  9

  
	
   

  	
   

  	
   

  
	
  18.

  	
  Additional Guarantors

  	
  9

  
	
   

  	
   

  	
   

  
	
  19.

  	
  Severability

  	
  9

  
	
   

  	
   

  	
   

  
	
  20.

  	
  Headings; Binding Effect

  	
  9

  
	
   

  	
   

  	
   

  
	
  21.

  	
  Consultation with Advisors

  	
  9

  
	
   

  	
   

  	
   

  
	
  22.

  	
  Entire Agreement

  	
  10

  
	
   

  	
   

  	
   

  
	
  23.

  	
  Credit Agreement to
  Control

  	
  10

  

 

	
  Schedule 1

  	
  –

  	
  List of Existing Liens

  

 

M-ii

 

SUBSIDIARY GUARANTY

 

THIS SUBSIDIARY GUARANTY, dated as of November 18,
2009 (as amended, modified or supplemented from time to time, the “Guaranty”), made by each of the undersigned
guarantors (each, a “Guarantor”
and, together with any other entity that becomes a guarantor hereunder, the “Guarantors”), for the benefit of UNION
BANK, N.A. (the “Security Agent”),
in its capacity as Security Agent for itself and on behalf of the Credit
Facility Lenders and Non-Lenders under the Credit Agreement (as defined below).

 

Preliminary Statement

 

WHEREAS, Willis Lease Finance Corporation (the “Borrower”), Union Bank, N.A., together with
any other Lenders from time to time (collectively, the “Lenders”) and Union Bank, N.A., as
Administrative Agent, Swing Line Lender, Issuing Lender, and Security Agent
have entered into that certain Credit Agreement, dated as of November 18,
2009 (as amended, restated, modified or supplemented from time to time, the “Credit Agreement”).  All capitalized terms used herein and not
otherwise defined shall have the respective meanings ascribed to them in the
Credit Agreement;

 

WHEREAS, each Guarantor is a direct or indirect
wholly owned subsidiary of the Borrower, and the Borrower will use a portion of
the proceeds of the Loans to finance or re-finance the operation of each such
Guarantor and, consequently, each Guarantor will benefit from the extension of
credit to the Borrower pursuant to the Credit Agreement;

 

WHEREAS, it is a condition to the making of any Loan
under the Credit Agreement that this Guaranty be executed and delivered by each
Guarantor in favor of the Security Agent and be in continuous full force and
effect; and

 

NOW, THEREFORE, in consideration of the
foregoing premises and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, and intending to be legally
bound hereby, each Guarantor hereby makes the following representations and
warranties to the Security Agent and covenants and agrees with the Security
Agent as follows:

 

1.                                       Continuing and
Unconditional Guaranty.  Each
Guarantor, jointly and severally, hereby irrevocably, unconditionally and
absolutely guaranties to and for the Security Agent for itself and on behalf of
the Credit Facility Lenders and Non-Lenders the due performance, including,
without limitation, the prompt payment when due or within any applicable grace
period, whether at stated maturity, upon acceleration or otherwise and at all
times thereafter of any and all obligations of the Borrower owed to the
Security Agent, the Administrative Agent or any Credit Facility Lender under
the Credit Agreement, the Notes, and any other Loan Documents referred to
therein, or under any renewals, extensions or modifications thereof (the “Obligations”) irrespective of (a) any
lack of enforceability of any Obligation, (b) any change of the time,
manner, place of payment, or any other term of any Obligation, (c) any
exchange, release or non-perfection of any collateral securing payment of any
Obligation, (d) any law, regulation or order of any jurisdiction affecting
the genuineness, validity, or rights of the Security Agent or the

 

M-1

 

Administrative Agent or the
Credit Facility Lenders with respect to the Obligations or any instruments
evidencing any of the Obligations, or (e) any other circumstance which
might otherwise constitute a defense to or discharge of any Guarantor. Each
Guarantor agrees that the obligations of each Guarantor hereunder are
independent of the obligations of the Borrower or any other Guarantor, and that
a separate action may be brought against each Guarantor whether or not such
action is brought against the Borrower or any other Guarantor or whether or not
the Borrower or any other Guarantor is joined in such action. Each Guarantor
agrees that its liability hereunder shall be immediate and shall not be
contingent upon the exercise or enforcement by the Security Agent,
Administrative Agent or the Credit Facility Lenders of whatever remedies it may
have against the Borrower or any other Guarantor, or the enforcement of any
Lien or realization upon any security the Security Agent or the Administrative
Agent may at any time possess. Each Guarantor agrees that any release which may
be given by the Security Agent or the Administrative Agent or the Credit
Facility Lenders to the Borrower or any other Guarantor shall not release such
Guarantor; and each Guarantor waives the benefit of any statute of limitations
affecting its liabilities hereunder or the enforcement hereof. This Guaranty is
a guaranty of payment and not of collection.

 

If, absent the provisions of
this paragraph, this Guaranty would be held or determined to be void, invalid
or unenforceable on account of the amount of the Guarantors’ aggregate
liability under this Guaranty, then, notwithstanding any other provision of
this Guaranty to the contrary, the aggregate amount of such liability shall,
without any further action by the Guarantors, the Security Agent, any Credit
Facility Lender or any other Person, be automatically limited and reduced to
the highest amount which is valid and enforceable as determined in such action
or proceeding, which (without limiting the generality of the foregoing) may be
an amount which is not greater than the greater of the excess of the amount of
the fair saleable value of the assets of the Guarantors on an aggregate basis
over the amount of all liabilities of the Guarantors on an aggregate basis (all
as determined in accordance with applicable federal and state laws governing
determinations of the insolvency of debtors), (a) as of the date hereof,
and (b) as of the date of the enforcement of this Guaranty. Nothing
contained in this paragraph shall be deemed to waive, diminish or modify the
Guarantors’ representations, acknowledgments or recitals set forth herein or in
any other Loan Document.

 

Each Guarantor agrees that
its obligations as a guarantor shall not be impaired, modified, changed,
released, or limited in any manner whatsoever by any impairment, modification,
change, release or limitation of the liability of the Borrower or its estate in
bankruptcy, resulting from the operation of any present or future provision of
the bankruptcy laws or other similar statute, or from the decision of any court
in a bankruptcy proceeding. Notwithstanding any provision herein to the
contrary, the Obligations shall include all amounts that would otherwise
constitute Obligations but for the fact that they are unenforceable or not
allowable due to the existence of any proceedings or taking of any actions
under any such laws. The Obligations shall not be considered indefeasibly paid
for purposes of this Guaranty unless and until all payments to the
Administrative Agent, on behalf of itself, the Security Agent and the Credit
Facility Lenders are no longer subject to any right on the part of any Person,
including the Borrower, the Borrower as a debtor in possession, or any trustee
(whether appointed under the Bankruptcy Code or otherwise) of the Borrower’s
assets to invalidate or set aside such payments or to seek to recoup the amount
of such payments or any portion thereof, or to declare same to be fraudulent or
preferential. Until such full and final performance and indefeasible payment of
the Obligations

 

M-2

 

whether by any Guarantor or the Borrower, the
Administrative Agent, on behalf of itself, the Security Agent and the Credit
Facility Lenders shall have no obligation whatsoever to transfer or assign its
interest in the Loan Documents to any Guarantor. In the event that, for any
reason, any portion of such payments to the Security Agent or the
Administrative Agent is set aside or restored, whether voluntarily or
involuntarily, after the making thereof, then the obligation intended to be
satisfied thereby shall be revived and continued in full force and effect as if
said payment or payments had not been made, and the Guarantors shall be liable
for the full amount the Security Agent or the Administrative Agent or any
Credit Facility Lender is required to repay plus any and all costs and expenses
(including reasonable attorneys’ fees) paid by the Security Agent or the
Administrative Agent or any Credit Facility Lender in connection therewith.

 

To the maximum extent
permitted by law, each Guarantor hereby waives any right to revoke this
Guaranty as to future indebtedness. If such a revocation is effective
notwithstanding the foregoing waiver, each Guarantor acknowledges and agrees
that (a) no such revocation shall be effective until written notice
thereof has been received by the Security Agent, (b) no such revocation
shall apply to any Obligations in existence on such date (including, any
subsequent continuation, extension, or renewal thereof, or change in the
interest rate, payment terms, or other terms and conditions thereof), (c) no
such revocation shall apply to any Obligations made or created after such date
to the extent made or created pursuant to a legally binding commitment of the
Security Agent or the Administrative Agent in existence on the date of such
revocation, (d) no payment by any Guarantor, the Borrower, or from any
other source, prior to the date of such revocation shall reduce the maximum
obligation of the Guarantors hereunder, except to the extent of such payment,
and (e) any payment by the Borrower or from any source other than a
Guarantor, subsequent to the date of such revocation, shall first be applied to
that portion of the Obligations as to which the revocation is effective and
which are not, therefore, guaranteed hereunder, and to the extent so applied
shall not reduce the maximum obligation of the Guarantors hereunder.

 

This is a continuing
guaranty and shall remain in full force and effect and be binding upon each
Guarantor, its successors and assigns until payment in full of all the
Obligations.

 

2.                                       Payment of
Obligations.  In
furtherance of, and not limiting each Guarantor’s obligations pursuant to Section 1
hereof, upon the occurrence of an Event of Default under the Credit Agreement
(which Event of Default has not been waived in writing by the Security Agent)
and any demand by the Security Agent upon the Guarantors for payment of any
amount in respect of any Obligation, the Guarantors shall immediately pay the
Obligation or Obligations demanded (as determined pursuant to Section 1
hereof) in lawful currency of the United States of America and in same day
funds to the office of the Security Agent as set forth in the Credit Agreement,
or to such other location as the Security Agent may from time to time specify.
Notwithstanding anything to the contrary contained herein or elsewhere, it
shall not be necessary for the Security Agent to make any demand upon or bring
any legal, equitable or other action, institute suit, exhaust its rights
against the Borrower or any other guarantor of the Borrower, or proceed,
enforce or exhaust its rights against any security given to secure payment of
the Obligations.

 

3.                                       Waiver.  Each Guarantor hereby waives all notices of any
character whatsoever with respect to this Guaranty and the Obligations,
including but not limited to notice of the acceptance

 

M-3

 

hereof and reliance hereon,
of the present existence or future incurring of any Obligations, of the
amounts, terms and conditions thereof, and of any defaults thereon, and further
waives the defenses of diligence, presentment for payment, protest, demand or
extensions of time for payment. Each Guarantor hereby consents to the taking
of, or failure to take, from time to time without notice to any Guarantor, any
such action of any nature whatsoever with respect to the Obligations and with
respect to any rights against any Person or Persons or in any property,
including but not limited to any renewals, extensions, modifications,
postponements, compromises, settlements, substitutions, refusals or failures to
exercise or enforce, indulgences, waivers, surrenders, exchanges and releases,
and each Guarantor will remain fully liable hereon notwithstanding any of the
foregoing. Each Guarantor hereby waives the benefit of all laws now or
hereafter in effect in any way limiting or restricting its liability hereunder,
including without limitation: (a) except for the defense of payment made
on account of the Obligations to the Security Agent, Administrative Agent or
any Credit Facility Lender, all defenses whatsoever (legal or equitable) to
such Guarantor’s liability hereunder including (i) defenses, set-offs,
counterclaims or claims that any Guarantor may have against Borrower or any
other party liable to the Security Agent, Administrative Agent or any Credit
Facility Lender and (ii) any defense, set-off, counterclaim or claim of
any kind or nature, arising directly or indirectly from the present or future
lack of perfection, sufficiency, validity or enforceability of the Obligations
or any security therefor; (b) all right to stay of execution and exemption
of property in any action to enforce its liability hereunder; (c) all
rights accorded it under any other statutory provisions of any other applicable
jurisdiction affecting the rights of the Security Agent to enforce the
obligations of each Guarantor under this Guaranty; (d) all notice of any
adverse change in the financial condition of the Borrower or of any other fact
that might increase Guarantor’s risk; and (e) the benefit of any statute
of limitations affecting such Guarantor’s liability hereunder or the
enforcement thereof (and any act which shall defer or delay the operation of
any statute of limitations applicable to the Obligations shall similarly
operate to defer or delay the operation of such statute of limitations
applicable to such Guarantor’s liability hereunder).

 

To the maximum extent
permitted by law, each Guarantor hereby waives any right of subrogation or
reimbursement such Guarantor has or may have as against the Borrower with
respect to the Obligations. In addition, each Guarantor hereby waives any right
to proceed against the Borrower, now or hereafter, for contribution, indemnity,
reimbursement, and any other suretyship rights and claims, whether direct or
indirect, liquidated or contingent, whether arising under express or implied
contract or by operation of law, which such Guarantor may now have or hereafter
have as against the Borrower with respect to the Obligations. Each Guarantor also
hereby waives any rights to recourse of or with respect to any asset of the
Borrower. Each Guarantor agrees that in light of the immediately foregoing
waivers, the execution of this Guaranty shall not be deemed to make such
Guarantor a “creditor” of the Borrower, and that for purposes of Sections 547
and 550 of the Bankruptcy Code, such Guarantor shall not be deemed a “creditor”
of the Borrower.

 

4.                                       Representations
and Warranties.  Each
Guarantor, jointly and severally, represents and warrants to the Security Agent
as follows:

 

(a)                                                Organization: Good Standing.  It is duly organized and validly
existing  under the laws of the
jurisdiction of its organization, and has the power and authority (corporate or
otherwise) necessary to own its assets, carry on its business and enter into
and perform its

 

M-4

 

obligations hereunder and
under the other Loan Documents to which it is a party. It is qualified to do
business and, if applicable, is in good standing as a foreign corporation in
each jurisdiction in which it is required to so qualify, except where the
failure to so qualify would not have a Material Adverse Effect.

 

(b)                                               Corporate Authority. The making and performance of this Guaranty
and the other Loan Documents to which any Guarantor is a party are within such
Guarantor’s power and authority and have been duly authorized by all necessary
action (corporate or otherwise). The making and performance of this Guaranty
and the other Loan Documents to which any Guarantor is a party (i) do not
and under present law will not require any consent or approval of any of its
shareholders or any other Person, and (ii) do not and under present law
will not violate any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award, do not and will not violate any provision of
its charter or by-laws or equivalent organizational documents, do not and will
not result in any breach of any agreement, lease or instrument to which it is a
party, by which it is bound or to which any of its assets are or may be
subject. No Guarantor is in default in any material respect under any of the
foregoing.

 

(c)                                                Validity of Documents.  This Guaranty and the other Loan Documents to
which any Guarantor is a party, if any, are, or when executed and delivered
will be, the legal, valid and binding obligation of such Guarantor, enforceable
against it in accordance with their terms. Except as has been duly obtained, no
authorization, consent, approval, license, exemption of or filing or
registration with any court, governmental agency or other tribunal is or under
present law will be necessary to the validity or performance of this Guaranty
or the other Loan Documents to which any Guarantor is a party, other than
particulars of any security document to which Guarantor is a party must be
filed on a Form C1 in the Companies Registration Office in Dublin within
21 days of the execution of each such security document.

 

(d)                                               Financial Condition of Borrower.  Each Guarantor is currently informed of the
financial condition of the Borrower and of all other circumstances which a
diligent inquiry would reveal and which bear upon the risk of nonpayment of the
Obligations. Each Guarantor further represents and warrants to the Security
Agent that such Guarantor has read and understands the terms and conditions of
the Loan Documents. Each Guarantor hereby covenants that it will continue to
keep informed of the Borrower’s financial condition, the financial condition of
other Guarantors, if any, and of all other circumstances which bear upon the
risk of nonpayment or nonperformance of the Obligations.

 

(e)                                                No Event of Default.  No
Event of Default has occurred and is continuing, or, after giving effect to
this Guaranty, shall exist.

 

(f)                                                  Representations and Warranties.  All representations and warranties made by it
in the Loan Documents are true and correct as if made on and as of the date
hereof, except in each case for representations and warranties which by their
terms are expressly applicable to an earlier date, in which event such
representations and warranties shall be true and correct as of such earlier
date.

 

M-5

 

5.                                       Covenants.  Each Guarantor, jointly and severally,
covenants and agrees that from and after the date hereof and so long as any
Obligation remains unpaid or outstanding:

 

(a)                                                Assistance to
the Borrower.  

 

It
will provide its full assistance and cooperation in order to enable the
Borrower to comply with all covenants and agreements set forth in the Credit
Agreement and the other Loan Documents to the extent such covenants and
agreements relate to the Borrower, its assets, business and operations.

 

(b)                                               Credit
Agreement Affirmative and Negative Covenants. 

 

It
will comply with each of the affirmative covenants set forth in Section 6
of the Credit Agreement and the negative covenants set forth in Section 7
of the Credit Agreement, substituting its name for the name of the Borrower
throughout the Credit Agreement as fully as if set forth therein without the
necessity of restating each and every said covenant herein; provided, however,
that in determining a Guarantor’s compliance with the aforementioned covenants
of the Credit Agreement (i) Section 7.5(b) of the Credit
Agreement shall be deemed to read “the Borrower or a Subsidiary is the
surviving entity”; (ii) the terms “Material Adverse Change” and “Material
Adverse Effect” as used in the Credit Agreement shall continue to be deemed to
refer to the Borrower rather than the Guarantor; (iii) the definition of ‘Permitted
Liens” in the Credit Agreement shall be deemed to include those existing Liens
described on Schedule I to this Guaranty, and (iv) nothing in the Credit
Agreement shall be deemed to prohibit a Guarantor from transferring assets to
the Borrower.

 

6.                                       Subordination
of Sums Payable to Any Guarantor.  Each Guarantor hereby subordinates all claims
and demands it has, or may in the future have, against the Borrower or any
other Guarantor arising or growing out of any indebtedness, liability or
obligation, direct or indirect, due or to become due which arises, may arise or
arose by reason of any advance or loan by such Guarantor, directly or
indirectly, to the Borrower or any other Guarantor (all of such claims and
demands being herein referred to collectively as the “Subordinated Liabilities”),
to the prior and full payment, performance, satisfaction and discharge of the
Obligations, and each Guarantor agrees that the Security Agent shall first be
paid in full with interest all sums now due or that may hereafter accrue and
become due and payable by the Borrower under the Credit Agreement, the Notes
and any other Loan Document before any Guarantor shall be paid anything by the
Borrower or out of any property of the Borrower for or on account of any of the
Subordinated Liabilities. Each Guarantor further agrees that the Security
Agent, the Administrative Agent or any Credit Facility Lender may at any time
and from time to time renew or extend the time of payment of any indebtedness
of the Borrower to the Credit Facility Lenders, or any portion of such
indebtedness, and may make new loans to the Borrower, secured or unsecured,
under the Credit Agreement or otherwise, with or without a guarantee, all
without any notice to the Guarantors who shall nonetheless remain fully bound
by their agreement to subordinate the Subordinated Liabilities until this
Guaranty has been terminated by the Security Agent in the manner hereinafter
provided.

 

7.                                       Expenses.  In addition to all other liabilities of each
Guarantor hereunder, the Guarantors also agree to pay to the Security Agent, on
demand, all reasonable costs and expenses

 

M-6

 

(including reasonable fees,
costs and disbursements of its counsel) which may be incurred in the
enforcement of the Obligations or the liabilities of the Guarantors hereunder.

 

8.                                       Modification of
Obligations.  Each
Guarantor hereby consents and agrees that without further notice to or assent
from it, the amount of the Obligations, the time of payment of any or all the
Obligations may be changed, any other term or condition relating to any or all
the Obligations may be changed, the Borrower (or any other Person primarily or
secondarily liable for the Obligations, including any Guarantor hereunder) may
be discharged from any or all the Obligations, any composition or settlement
relating thereto may be consummated and accepted, and that each Guarantor will
remain bound upon this Guaranty notwithstanding any or all of the foregoing.

 

9.                                       No Waivers: No
Election: Rights and Remedies Cumulative.  No failure on the part of the Security Agent
to exercise, and no delay in exercising, any right, power or remedy shall
operate as a waiver thereof, nor shall any single or partial exercise by the
Security Agent of any right, power or remedy preclude any other further
exercise thereof or the exercise of any other right, power or remedy. The
Security Agent shall have the right to seek recourse against each Guarantor to
the fullest extent provided for herein, and no election by the Security Agent
to proceed in one form of action or proceeding, or against any party, or on any
obligation, shall constitute a waiver of the Security Agent’s right to proceed
in any other form of action or proceeding or against other parties unless the
Security Agent has expressly waived such right in writing. Specifically, but
without limiting the generality of the foregoing, no action or proceeding by
the Security Agent, the Administrative Agent or any Credit Facility Lender
under any Loan Document or any other document or instrument evidencing the
Obligations shall serve to diminish the liability of any Guarantor under this
Guaranty except to the extent that the Security Agent, the Administrative Agent
or any Credit Facility Lender finally and unconditionally shall have realized
indefeasible payment by such action or proceeding and then only to the extent
of such payment. The rights and remedies provided herein shall be in addition
to and not exclusive of any rights or remedies provided at law or in equity,
and may be exercised in such order as the Security Agent shall determine, in
its sole discretion.

 

10.                                 Other
Guaranties.  A
subsequent guaranty by any other guarantor of any of the Obligations shall not
be deemed to be in lieu of or to supersede or terminate this Guaranty but shall
be construed as an additional or supplementary guaranty; and if any other
guarantor has given to the Security Agent a previous guaranty or guaranties,
this Guaranty shall be construed to be an additional or supplementary guaranty,
and not to be in lieu thereof or to terminate such previous guaranty or
guaranties.

 

11.                                 Right of
Set-off.  Upon an Event of Default under
the Credit Agreement (which Event of Default has not been waived in writing by
the Security Agent), the Security Agent, the Administrative Agent and each
Credit Facility Lender is hereby authorized at any time and from time to time,
to the fullest extent permitted by law, to set-off and apply any and all
deposits at any time held and other indebtedness at any time owing by the
Security Agent, the Administrative Agent and any Credit Facility Lender to or
for the credit of any Guarantor against any and all of the obligations of such
Guarantor now or hereafter existing under this Guaranty. Any such set-off or
application of deposits by a Credit Facility Lender shall be deemed to be

 

M-7

 

made
on behalf of all of the Credit Facility Lenders, in accordance with their
respective Pro Rata Share of the Revolving Loan Commitment.

 

12.           Termination of
Guaranty.  Notwithstanding anything
to the contrary here or in any other Loan Document, Guarantors shall be
released from liability under this Guaranty only upon the earlier to occur of (a) payment
in full of all Obligations (other than contingent obligations which by their
nature cannot be satisfied by payment at such time) and either (i) expiration
of the term of the Credit Agreement or (ii) termination of the obligation
of any Credit Facility Lender and Non-Lender to make any advances to Borrower
pursuant to the Credit Agreement or any other Loan Document; or (b) release
by Security Agent of such Guarantor in accordance with the terms and conditions
of this Guaranty, the Credit Agreement and the other Loan Documents.

 

13.           Binding
Effect:  Assignment.  The provisions of this Guaranty shall be
binding upon and inure to the benefit of each Guarantor and the Security Agent
and their respective successors and assigns, except that the Guarantors may not
assign or otherwise transfer any of their rights or obligations hereunder. The
Security Agent may at any time sell, assign, pledge, grant participations in or
otherwise transfer its rights under this Guaranty in whole or in part, to the
extent permitted by Section 13 of the Credit Agreement.

 

14.           Amendments and
Waivers.  Any provision of this
Guaranty may be amended if such amendment is in writing and is signed by the
then-existing Guarantors and the Security Agent, and any provision of this
Guaranty may be waived by the Security Agent (consistent with the provisions of
the Credit Agreement).

 

15.           Governing Law:
Jurisdiction.  THIS GUARANTY SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS
LAW BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES. EACH GUARANTOR
IRREVOCABLY CONSENTS AND AGREES, PURSUANT TO SECTION 5-1402 OF THE NEW
YORK GENERAL OBLIGATIONS LAW, THAT ANY LEGAL ACTION OR PROCEEDING AGAINST IT
UNDER, ARISING OUT OF OR IN ANY MANNER RELATING TO THIS GUARANTY SHALL BE
SUBJECT TO THE EXCLUSIVE JURISDICTION OF ANY COURT OF THE STATE OF NEW YORK
SITTING IN THE COUNTY OF NEW YORK OR THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK. EACH GUARANTOR, BY ITS EXECUTION AND DELIVERY OF
THIS GUARANTY, EXPRESSLY AND IRREVOCABLY ASSENTS AND SUBMITS TO THE PERSONAL
JURISDICTION OF ANY OF SUCH COURTS IN ANY SUCH ACTION OR PROCEEDING. EACH
GUARANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF ANY COMPLAINT,
SUMMONS, NOTICE OR OTHER PROCESS RELATING TO ANY SUCH ACTION OR PROCEEDING BY
DELIVERY THEREOF TO IT BY HAND OR BY MAIL CARE OF THE BORROWER AT THE BORROWER’S
ADDRESS SPECIFIED IN THE CREDIT AGREEMENT. EACH GUARANTOR HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES ANY CLAIM OR DEFENSE IN ANY SUCH ACTION OR PROCEEDING BASED
ON ANY ALLEGED LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON
CONVENIENS OR ANY SIMILAR BASIS. EACH GUARANTOR SHALL NOT BE ENTITLED IN ANY
SUCH ACTION OR PROCEEDING TO ASSERT ANY DEFENSE GIVEN OR ALLOWED 

 

M-8

 

UNDER
THE LAWS OF ANY STATE OTHER THAN THE STATE OF NEW YORK UNLESS SUCH DEFENSE IS
ALSO GIVEN OR ALLOWED BY THE LAWS OF THE STATE OF NEW YORK. NOTHING IN THIS SECTION 15
SHALL AFFECT, OR IMPAIR IN ANY MANNER OR TO ANY EXTENT THE RIGHT OF THE
SECURITY AGENT TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST SUCH
GUARANTOR IN ANY JURISDICTION OR TO SERVE PROCESS IN ANY MANNER PERMITTED BY
LAW.

 

16.           Waiver of Jury
Trial.  TO THE MAXIMUM EXTENT
PERMITTED BY LAW, EACH GUARANTOR HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY
JURY OF ANY ACTION, CAUSE OF ACTION, CLAIM, DEMAND, OR PROCEEDING ARISING UNDER
OR WITH RESPECT TO THIS GUARANTY, OR IN ANY WAY CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE DEALINGS OF SUCH GUARANTOR AND THE SECURITY AGENT WITH
RESPECT TO THIS GUARANTY, OR THE TRANSACTIONS RELATED HERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT,
TORT, OR OTHERWISE. TO THE MAXIMUM EXTENT PERMITTED BY LAW, EACH GUARANTOR
HEREBY AGREES THAT ANY SUCH ACTION, CAUSE OF ACTION, CLAIM, DEMAND, OR PROCEEDING
SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT THE SECURITY AGENT MAY FILE
AN ORIGINAL COUNTERPART OF THIS SECTION WITH ANY COURT OR OTHER
TRIBUNAL AS WRITTEN EVIDENCE OF THE CONSENT OF SUCH GUARANTOR TO THE WAIVER OF
ITS RIGHT TO TRIAL BY JURY.

 

17.           Additional
Guarantors.  Each Subsidiary of the
Borrower which is required by the terms of the Credit Agreement to become a
party to this Guaranty after the date hereof shall become a Guarantor for all
purposes of this Guaranty upon execution of a counterpart hereof or of an
assumption agreement in form and substance satisfactory to the Security Agent.

 

18.           Severability.  The invalidity, illegality or
unenforceability in any jurisdiction of any provision in or obligation under
this Guaranty shall not affect or impair the validity, legality or
enforceability of the remaining provisions or obligations under this Guaranty
or of such provision or obligation in any other jurisdiction. To the extent
permitted by applicable law, the parties hereby waive any provision of law
which renders any provision hereof prohibited or unenforceable in any respect.

 

19.           Headings; Binding
Effect.  The headings of the several
sections of this Guaranty are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Guaranty.
The provisions of this Guaranty shall inure to the benefit of and be binding
upon the parties hereto and their respective permitted successors and assigns.

 

20.           Consultation with
Advisors.  Each of the Borrower and
each Subsidiary Guarantor acknowledges that it has consulted with counsel and
with such other experts and advisors as it has deemed necessary in connection
with the negotiation, execution and delivery of this Guaranty. This Guaranty shall
be construed without regard to any presumption or any rule requiring that
it be construed against the party causing this Guaranty or any part hereof to
be drafted.

 

M-9

 

21.           Entire Agreement.  This Guaranty sets forth the entire
understanding and agreement of the parties hereto in relation to the subject
matter hereof and supersedes any prior negotiations and agreements among the
parties relative to such subject matter. None of the terms or conditions of this
Guaranty may be changed, modified, waived or canceled, orally or otherwise,
except with the written agreement of each of the parties hereto.

 

22.           Credit Agreement
to Control.  In the event of a
conflict between the terms of this Guaranty and the terms of the Credit
Agreement, the terms of the Credit Agreement shall control.

 

* * *

 

[Remainder of Page Intentionally Left Blank;
Signature Page Follows.]

 

M-10

 

IN
WITNESS WHEREOF, the undersigned has executed and delivered this Guaranty as a
deed as of the day and year first above written.

 

	
  SIGNED, SEALED and DELIVERED

  	
   

  
	
  for
  and on behalf of

  	
   

  
	
  WLFC (Ireland) Limited               )

  	
   

  
	
  acting
  by its attorney-in-fact         )

  	
  LS

  
	
  in
  the presence
  of:                       )

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  

 

M-S-1

 

SCHEDULE 1 TO THE

SUBSIDIARY GUARANTY

 

EXISTING LIENS

 

[TO BE APPENDED]

 

M-1

 

Exhibit N

 

Form of Trust Agreement

 

 

TRUST AGREEMENT NO.
[        ]

 

dated as of
[            
,20    ]

 

between

 

 

WILLIS LEASE FINANCE CORPORATION,

Owner Participant

 

 

and

 

 

WELLS FARGO BANK NORTHWEST, N.A.,

Owner Trustee

 

 

 

TRUST AGREEMENT NO.

 

THIS
TRUST AGREEMENT NO.
          dated as
of                  ,
20    , (as amended, modified or supplemented from time to
time, the “Trust Agreement”) (with respect to the following aircraft
engine: 
one                
model                 
aircraft engine, bearing manufacturer’s serial
number                    )
between WILLIS LEASE FINANCE CORPORATION, a Delaware corporation (the “Owner
Participant”), and WELLS FARGO BANK NORTHWEST, N.A., a national banking
association under the laws of the United States of America (in its individual
capacity, “WFB” and otherwise not in its individual capacity but solely
as trustee hereunder with its permitted successors and assigns the “Owner
Trustee”).

 

NOW,
THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:

 

ARTICLE I

 

DEFINITIONS AND TERMS

 

Section 1.01           Certain Definitions.  All definitions contained in this Section 1.01
shall be equally applicable to both the singular and plural forms of the terms
defined.  For all purposes of this Trust
Agreement the following terms shall have the following meanings:

 

“Beneficial
Interest Pledge and Security Agreement” means that certain Beneficial
Interest Pledge and Security Agreement No.          
dated as of
                    ,          among
the Owner Participant, the Owner Trustee and Union Bank, N.A., as Security
Agent (the “Security Agent”), and any amendments, modifications, or
restatements thereof.

 

[“Bill
of Sale” means the [warranty] bill of sale with respect to the Equipment
issued by
                  in
favor of the Owner Trustee.]

 

“Credit
Agreement” means that certain Credit Agreement, as it may be amended,
restated, modified or supplemented from time to time, dated as of November 18,
2009, among Owner Participant, as borrower, Union Bank, N.A., together with any
other Lenders from time to time (collectively, the “Lenders”) and Union
Bank, N.A., as Administrative Agent, Swing Line Lender, Issuing Lender, and
Security Agent.

 

“Closing
Date” means
[                  ,
20    ].

 

“Corporate
Trust Department” means the office of the Owner Trustee located at Wells
Fargo Bank Northwest, N.A., 79 South Main Street, Salt Lake City, UT 84111.

 

“Equipment”
means
                            .

 

“Lease
Agreement”
means                    [upon
which the Owner Trustee is the lessor or an assignee of the lessor], as
modified, amended or supplemented from time to time.

 

N-1

 

“Mortgage
and Security Agreement” means that certain Mortgage and Security Agreement No.           
dated as of
                        ,20    ,
made by Owner Trustee in favor of the Security Agent.

 

“Owner
Trustee Guaranty” means that certain Owner Trustee Guaranty No.           dated
as of
                    ,20    ,
made by the Owner Trustee in favor of the Security Agent.

 

“Trust
Estate” means all estate, right, title and interest of the Owner Trustee in
and to:  (i) the Equipment, (ii) the
Lease Agreement [other documents related to the Lease Agreement, such as
assignment and/or bill of sale], (iii) all amounts of rent, security
deposits, maintenance reserves, use fees, proceeds of sale, lease or other
disposition of the Equipment, insurance proceeds (other than liability
insurance proceeds payable to or for the benefit of an additional or named
insured for its own account), guarantee payments, fees, premiums and
requisition payments, indemnity payments, damage, or other payments or proceeds
of any kind for or in respect of the Equipment, the Lease Agreement [or other
document] payable to, or received by or for the account of Owner Trustee,
excluding any fees, expenses or indemnities of Owner Trustee payable to it in
its individual capacity.

 

Unless
the context otherwise requires, all capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned thereto in the Credit
Agreement.

 

ARTICLE II

 

AUTHORITY TO EXECUTE CERTAIN OPERATIVE DOCUMENTS;

DECLARATION OF TRUST

 

Section 2.01           Authority
to Execute Documents.  The Owner
Participant hereby authorizes and directs the Owner Trustee to execute and
deliver any agreements, instruments or documents to which the Owner Trustee is
a party in the respective forms thereof delivered from time to time by the
Owner Participant to the Owner Trustee for execution and delivery.

 

Section 2.02           Declaration of Trust.  The Owner Trustee hereby declares that it
will hold the Trust Estate upon the trusts hereinafter set forth for the use
and benefit of the Owner Participant.

 

Section 2.03           Name of Trust.  The name of the trust created pursuant to
this Trust Agreement shall be “Owner
Trust                      ”.

 

ARTICLE III

 

CONVEYANCE OF THE EQUIPMENT

 

Section 3.01           Conveyance of the Equipment.  The Owner Participant hereby authorizes and
directs the Owner Trustee to, and the Owner Trustee agrees for the benefit of
the Owner Participant that it will:

 

(a)           [accept delivery from the Owner
Participant [or other Person designated by the Owner Participant] of the bill
of sale for the Equipment;]

 

N-2

 

(b)           execute and deliver the Lease Agreement;

 

(c)           execute and deliver the Owner Trustee Guaranty;

 

(d)           execute and deliver the Mortgage and Security Agreement;

 

(e)           execute and deliver the Beneficial Interest Pledge and
Security Agreement;

 

(f)            [specify other steps to be taken and documentation
entered into connection with the delivery of the Equipment and its lease; and]

 

(g)           execute and deliver all such other instruments, documents
or certificates and take all such other actions in accordance with the
directions of the Owner Participant, as the Owner Participant may deem
necessary or advisable in connection with the transactions contemplated hereby.

 

ARTICLE IV

 

RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME

FROM THE TRUST ESTATE

 

Section 4.01           Distribution of Payments.

 

(a)           Payments to Owner Trustee.  The Owner Trustee will receive all amounts
constituting part of the Trust Estate which are payable to the account of the
Owner Trustee under this Trust Agreement, and shall forthwith distribute said
amounts:

 

First, to payment to the Owner Trustee for any fees,
expenses, costs or liabilities incurred for which the Owner Trustee is entitled
to payment, reimbursement or indemnity from the Owner Participant and for which
the Owner Trustee has not been paid or reimbursed from any other source; and

 

Second, to payment of the entire balance to the Owner
Participant.

 

(b)           Multiple Owner Participants.  If, as a result of a transfer by an Owner
Participant under Section 8.01 of this Trust Agreement, there is
more than one Owner Participant hereunder, each such Owner Participant shall
hold in proportion to its respective beneficial interest in the Trust Estate,
an undivided beneficial interest in the entire Trust Estate and is entitled to
receive ratably with any other Owner Participant, payments distributable by the
Owner Trustee hereunder.  No Owner
Participant shall have legal title to the Equipment or any other portion of the
Trust Estate.

 

Section 4.02           Method of Payments.  The Owner Trustee shall make distributions or
cause distributions to be made to the Owner Participant pursuant to this Article IV
by transferring by wire transfer in immediately available funds on the day
received (or on the next succeeding Business Day if the funds to be so
distributed shall not have been received by the Owner Trustee by 1:00 p.m.,
Mountain time), the amount to be distributed to such account or 

 

N-3

 

accounts of the Owner Participant as the
Owner Participant may designate from time to time in writing to the Owner
Trustee; provided, however, that the Owner Trustee shall use reasonable efforts
to invest overnight in federal funds all monies received by it at or later than
1:00 p.m., Mountain time.

 

ARTICLE V

 

DUTIES OF THE OWNER TRUSTEE

 

Section 5.01           Action
Upon Instructions.  Subject to the
terms of Sections 5.01 and 5.02 hereof, upon the written
instructions at any time and from time to time of the Owner Participant, the
Owner Trustee will take such of the following actions as may be specified in
such instructions:  (i) give such
notice or direction or exercise such right, remedy or power hereunder or under
any document to which the Owner Trustee may be a party or in respect of all or
any part of the Trust Estate, or take such other action, as shall be specified
in such instructions; (ii) take such action to preserve or protect the
Trust Estate (including the discharge of Liens) as may be specified in such
instructions; (iii) approve as satisfactory to it all matters required by
the terms of any document to which the Owner Trustee may be a party or to be
satisfactory to the Owner Trustee, it being understood that without written
instructions of the Owner Participant, the Owner Trustee shall not approve any such
matter as satisfactory to it; (iv) retain, lease or otherwise dispose of,
or from time to time take such other action with respect to, the Equipment on
such terms as shall be designated in such instructions; and (v) take or
refrain from taking such other action or actions as may be specified in such
instructions.

 

Section 5.02           Indemnification.  The Owner Trustee shall not be required to
take any action under Section 5.01 hereof if the Owner Trustee
shall reasonably believe such action is not adequately indemnified by the Owner
Participant under Section 7.01 hereof, unless the Owner Participant
agrees to furnish such additional indemnity as shall reasonably be required, in
manner and form reasonably satisfactory to the Owner Trustee and to pay the
reasonable compensation of the Owner Trustee for the services performed or to
be performed by it pursuant to such direction and any reasonable fees and
disbursements of counsel or agents employed by the Owner Trustee in connection
therewith.  The Owner Trustee shall not
be required to take any action under Section 5.01 hereof if the
Owner Trustee shall reasonably determine, or shall have been advised by
counsel, in its reasonable opinion, that such action is contrary to the terms
of any document to which the Owner Trustee may be a party or to applicable law.

 

Section 5.03           No Duties Except as Specified in
Trust Agreement or Instructions.  The
Owner Trustee shall not have any duty or obligation to manage, control, use,
sell, dispose of or otherwise deal with the Equipment or any other part of the
Trust Estate, except as expressly provided by the terms hereof or in a written
instruction from the Owner Participant received pursuant to the terms of Section 5.01,
and no implied duties or obligations shall be read into this Trust Agreement
against the Owner Trustee.  WFB agrees
that it will, in its individual capacity and at its own cost or expense (but
without any right of indemnity in respect of any such cost or expense under Section 7.01
hereof), promptly take such action as may be necessary to duly discharge and
satisfy in full all Liens on all or any part of the Trust Estate attributable
to it in its individual capacity.

 

N-4

 

Section 5.04           No Action Except Under Specified
Documents or Instruction.  The Owner
Trustee agrees that it will not manage, control, use, sell, dispose of or
otherwise deal with the Equipment or any other part of the Trust Estate except (i) as
expressly required by the terms of any document to which the Owner Trustee may
be a party, (ii) as expressly provided by the terms hereof, or (iii) as
expressly provided in written instructions from the Owner Participant pursuant
to Section 5.01 hereof.

 

ARTICLE VI

 

THE OWNER TRUSTEE

 

Section 6.01           Acceptance
of Trusts and Duties.  WFB accepts
the trusts hereby created and agrees to perform the same but only upon the
terms hereof applicable to it.  The Owner
Trustee also agrees to receive and disburse all monies received by it
constituting part of the Trust Estate upon the terms hereof.  WFB shall not be answerable or accountable
under any circumstances, except (a) for its own willful misconduct or
gross negligence, (b) its failure (in its individual capacity) to perform
its obligations under the last sentence of Section 5.03 hereof,
(c)for its or the Owner Trustee’s failure to use ordinary care to disburse
funds or to comply with the first sentence of Section 6.08 hereof
and (d) for liabilities that may result from the inaccuracy of any
representation or warranty of it in its individual capacity (or from the
failure by it in its individual capacity to perform any covenant) in Section 6.03
hereof.

 

Section 6.02           Absence of Certain Duties.  Except in accordance with written instructions
furnished pursuant to Section 5.01 hereof and except as provided
in, and without limiting the generality of, Sections 3.01 and 5.03
hereof and the last sentence of Section 9.01(b) hereof,
neither the Owner Trustee nor WFB shall have any duty (i) to see to any
recording or filing of any document or of any supplement to any thereof or to
see to the maintenance of any such recording or filing or any other filing of
reports with the Federal Aviation Administration or other governmental
agencies, except that WFB in its individual capacity agrees to comply with the
Federal Aviation Administration reporting requirements set forth in 14 C.F.R. §
47.45 and 14 C.F.R. § 47.51, and the Owner Trustee shall complete and timely
submit (and furnish the Owner Participant with a copy of) any and all reports
relating to the Equipment which may from time to time be required by the
Federal Aviation Administration or any government or governmental authority
having jurisdiction, (ii) to see to any insurance on the Equipment or to
effect or maintain any such insurance, or (iii) to see to the payment or
discharge of any tax, assessment or other governmental charge or any lien or
encumbrance of any kind owing with respect to, assessed or levied against any
part of the Trust Estate. 
Notwithstanding the foregoing, the Owner Trustee will furnish to the
Owner Participant, promptly upon receipt thereof, duplicates or copies of all
reports, notices, requests, demands, tax bills, invoices, certificates and
financial statements received under or in connection with the Trust Estate,
except to the extent to which a responsible officer of the Owner Trustee
reasonably believes (and confirms by telephone call with the Owner Participant)
that duplicates or copies thereof have already been furnished to the Owner
Participant by some other person.

 

Section 6.03           No Representations or Warranties
as to Certain Matters.  NEITHER THE
OWNER TRUSTEE NOR WFB MAKES OR SHALL BE DEEMED TO HAVE MADE (a) ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE, 

 

N-5

 

AIRWORTHINESS, VALUE,
CONDITION, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE FOR A
PARTICULAR PURPOSE OF THE EQUIPMENT OR ANY PART THEREOF, AS TO THE ABSENCE
OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, OR ANY OTHER
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE EQUIPMENT
OR ANY PART THEREOF WHATSOEVER, except that WFB in its individual capacity
warrants that on the Closing Date the Owner Trustee shall have received whatever
title was conveyed to it by                     
and that the Equipment shall during the term of this Trust Agreement be free of
Liens attributable to WFB in its individual capacity, or (b) any
representation or warranty as to the validity, legality or enforceability of
this Trust Agreement, or any other document or instrument, or as to the
correctness of any statement contained in any thereof except to the extent that
any such statement is expressly made herein or therein by such party as a
representation by the Owner Trustee or by WFB in its individual capacity, as
the case may be, and except that WFB in its individual capacity hereby
represents and warrants that this Trust Agreement has been, and (assuming due
authorization, execution and delivery by the Owner Participant of this Trust
Agreement) the other Loan Documents to be entered into by the Owner Trustee
have been duly executed and delivered by one of its officers who is duly
authorized to execute and deliver such instruments on behalf of itself or the
Owner Trustee, as the case may be, and that the Trust Agreement, and such other
Loan Documents constitute the legal, valid and binding obligation of WFB or the
Owner Trustee, as the case may be, enforceable against WFB or the Owner
Trustee, as the case may be, in accordance with their respective terms.

 

Section 6.04           No Segregation of Monies; Interest.  Monies received by the Owner Trustee
hereunder need not be segregated in any manner except to the extent provided by
law, and shall be invested as provided in Section 4.02 hereof.

 

Section 6.05           Reliance Upon Certificates,
Counsel and Agents.  The Owner
Trustee shall incur no liability to anyone in acting in good faith in reliance
upon and in accordance with any signature, instrument, notice, resolution,
request, consent, order, certificate, report, opinion, bond or other document
or paper reasonably believed by it to be genuine and reasonably believed by it
to be signed by the proper party or parties. 
Unless other evidence in respect thereof is specifically prescribed
herein, any request, direction, order or demand of the Owner Participant
mentioned herein shall be sufficiently evidenced by written instruments signed
by a person purporting to be the Chairman of the Board, the President, any Vice
President or any other officer and in the name of the Owner Participant.  In the administration of trusts hereunder,
the Owner Trustee may execute any of the trusts or powers hereof and perform
its powers and duties hereunder directly or through agents or attorneys and
may, at the expense of the Trust Estate, consult with counsel, accountants and
other skilled persons to be selected and employed by it.  The Owner Trustee shall not be liable for
anything done, suffered or omitted in good faith by it in accordance with the
advice or opinion of any such counsel, accountants or other skilled persons and
the Owner Trustee shall not be liable for the negligence of any such counsel,
accountant or other skilled person appointed by it with due care hereunder.

 

Section 6.06           Not Acting in Individual Capacity.  In acting hereunder, the Owner Trustee acts
solely as trustee and not in its individual capacity except as otherwise
expressly provided herein; and, except as may be otherwise expressly provided
in this Trust Agreement, all persons having any claim against the Owner Trustee
by reason of the transactions contemplated 

 

N-6

 

hereby shall look only to
the Trust Estate for payment or satisfaction thereof except to the extent the
Owner Trustee shall expressly agree otherwise in writing.

 

Section 6.07           Fees:  Compensation.  The Owner Trustee shall be entitled to
receive compensation on the terms heretofore agreed upon between Owner Trustee
and Owner Participant, together with reimbursement within thirty (30) days of
its request for all reasonable expenses incurred or made by it in accordance
with any of the provisions of this Trust Agreement (including the reasonable
compensation and the expenses of its counsel, accountants or other skilled
persons and of all other persons not regularly in its employ).  The Owner Participant shall be required to
pay the fees of the Owner Trustee comprising the compensation and reimbursement
of expenses to which the Owner Trustee is entitled under this Section 6.07,
provided that the Owner Trustee shall have a lien upon the Trust Estate for any
such fee not paid by the Owner Participant as contemplated by this Section 6.07,
and such lien shall entitle the Owner Trustee to priority as to payment thereof
over payment to any other person under this Trust Agreement.

 

Section 6.08           Tax Returns.  The Owner Trustee shall be responsible for
the keeping of all appropriate books and records relating to the receipt and
disbursement of all monies under this Trust Agreement or any agreement
contemplated hereby.  The Owner
Participant shall be responsible for causing to be prepared and filed all
income tax returns required to be filed by the Owner Participant.  The Owner Trustee shall be responsible for
causing to be prepared, at the request and expense of the Owner Participant,
all income tax returns required to be filed with respect to the trust created
hereby and shall execute and file such returns. 
Owner Participant, upon request, will furnish the Owner Trustee with all
such information as may be reasonably required from the Owner Participant in
connection with the preparation of such income tax returns.

 

ARTICLE VII

 

INDEMNIFICATION OF WFB BY OWNER PARTICIPANT

 

Section 7.01           Owner
Participant to Indemnify WFB.  The
Owner Participant hereby agrees to assume liability for, and hereby
indemnifies, protects, saves and keeps harmless WFB in its individual capacity
and its successors, assigns, legal representatives, agents and servants, from and
against any and all liabilities, obligations, losses, damages, penalties, taxes
(excluding any taxes payable by WFB in its individual capacity on or measured
by any compensation received by WFB in its individual capacity for its services
hereunder), claims, actions, suits, costs, expenses or disbursements
(including, without limitation, reasonable legal fees and expenses, and
including without limitation any liability of an owner, any strict liability
and any liability without fault) of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against WFB in its individual capacity in
any way relating to or arising out of this Trust Agreement or in any way
relating to or arising out of the manufacture, purchase, acceptance, nonacceptance,
rejection, ownership, delivery, lease, possession, use, operation, condition,
sale, return or other disposition of the Equipment or any part thereof
(including, without limitation, latent and other defects, whether or not
discoverable, and any claim for patent, trademark or copyright infringement),
or in any way relating to or arising out of the administration of the Trust
Estate or the action or inaction of the Owner Trustee or WFB in its 

 

N-7

 

individual capacity
hereunder, except (a) in the case of willful misconduct or gross
negligence on the part of the Owner Trustee or WFB in its individual capacity
in the performance or nonperformance of its duties hereunder or under any other
document to which the Owner Trustee may be a party or (b) those resulting
from the inaccuracy of any representation or warranty of WFB in its individual
capacity (or from the failure of WFB in its individual capacity to perform any
of its covenants) in Section 6.03 hereof or in any other document
to which the Owner Trustee may be a party or (c) as may result from a
breach by WFB in its individual capacity of its covenant in the last sentence
of Section 5.03 hereof or (d) in the case of the failure to
use ordinary care on the part of the Owner Trustee or WFB in its individual
capacity in the disbursement of funds or in compliance with the provisions of
the first sentence of Section 6.08 hereof.  The indemnities contained in this Section 7.01
extend to WFB only in its individual capacity and shall not be construed as
indemnities of the Trust Estate (except to the extent, if any, that WFB in its
individual capacity has been reimbursed by the Trust Estate for amounts covered
by the indemnities contained in this; Section 7.01).  The indemnities contained in this Section 7.01
shall survive the termination of this Trust Agreement.

 

ARTICLE VIII

 

TRANSFER OF THE OWNER PARTICIPANT’S INTEREST

 

Section 8.01           Transfer
of Interests.  If there is more than
one Owner Participant, no assignment, conveyance or other transfer by an Owner
Participant of any of its right, title or interest in and to this Trust
Agreement or the Trust Estate shall be valid unless each other Owner
Participant’s prior written consent (which consent may be withheld in the sole
discretion of such other Owner Participants) is given to such assignment,
conveyance or other transfer.

 

Section 8.02           Actions of the Owner Participants.  If at any time prior to the termination of
this Trust Agreement there is more than one Owner Participant, then, subject to
Section 11.05 hereof, during such time, if any action is required
to be taken by all Owner Participants and whenever any direction,
authorization, approval, consent, instruction, or other action is permitted to
be given or taken by the Owner Participant, such direction, authorization,
approval, consent, instruction, or other action shall be given or taken only
upon unanimous agreement of all Owner Participants; provided, however,
that the termination of this Trust Agreement pursuant to Section 11.01
hereof may be effected upon the election of any Owner Participant.

 

ARTICLE IX

SUCCESSOR OWNER TRUSTEES; CO-TRUSTEES

 

Section 9.01           Resignation
of Owner Trustee; Appointment of Successor.

 

(a)                Resignation or Removal.  The Owner Trustee or any successor Owner
Trustee may resign at any time without cause by giving at least 60 days’ prior
written notice to the Owner Participant, such resignation to be effective upon
the acceptance of appointment by the successor Owner Trustee under Section 9.01(b) hereof.  In addition, the Owner Participant may at any
time remove the Owner Trustee with or without cause by a notice in writing
delivered to the Owner Trustee, such removal to be effective upon the
acceptance of appointment by the successor Owner Trustee under Section 9.01(b) hereof.  In the case of the resignation or 

 

N-8

 

removal of the Owner Trustee, the
Owner Participant may appoint a successor Owner Trustee by an instrument signed
by the Owner Participant.  If a successor
Owner Trustee shall not have been appointed within 30 days after such notice of
resignation or removal, the Owner Trustee may apply to any court of competent
jurisdiction to appoint a successor Owner Trustee to act until such time, if
any, as a successor shall have been appointed as above provided.  Any successor Owner Trustee so appointed by
such court shall immediately and without further act be superseded by any
successor Owner Trustee appointed as above provided.

 

(b)           Execution and Delivery of Documents, etc.  Any successor Owner Trustee, however
appointed, shall execute and deliver to the predecessor Owner Trustee an
instrument accepting such appointment, and thereupon such successor Owner
Trustee, without further act, shall become vested with all the estates,
properties, rights, powers, duties and trusts of the predecessor Owner Trustee
in the trusts hereunder with like effect as if originally named the Owner
Trustee herein; but nevertheless, upon the written request of such successor
Owner Trustee, such predecessor Owner Trustee shall execute and deliver an
instrument transferring to such successor Owner Trustee, upon the trusts herein
expressed, all the estates, properties, rights, powers and trusts of such
predecessor Owner Trustee, and such predecessor Owner Trustee shall duly
assign, transfer, deliver and pay over to such successor Owner Trustee all
monies or other property then held by such predecessor Owner Trustee upon the
trusts herein expressed.  Upon the
appointment of any successor Owner Trustee hereunder, the predecessor Owner
Trustee will execute such documents as are provided to it by such successor
Owner Trustee and will take such further actions as are requested of it by such
successor Owner Trustee as are reasonably requested.

 

(c)           Qualifications. 
Any successor Owner Trustee, however appointed, shall be a “citizen of
the United States” within the meaning of 49 U.S.C. § 40102(a)(15) and shall
also be a bank or trust company organized under the laws of the United States
or any state thereof having a combined capital and surplus of at least
$50,000,000, if there be such an institution willing, able and legally
qualified to perform the duties of the Owner Trustee hereunder upon reasonable
or customary terms.  No such successor
trustee shall charge fees for its services as an Owner Trustee in excess of the
then prevailing market rates for such services.

 

(d)           Merger, etc. 
Any corporation into which WFB may be merged or converted or with which
it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which WFB shall be a party, or any corporation
to which substantially all the corporate trust business of WFB may be
transferred, shall, subject to the terms of Section 9.01(c) hereof,
be the Owner Trustee hereunder without further act.

 

Section 9.02           Co-Trustees
and Separate Trustees.  If at any
time it shall be necessary or prudent in order to conform to any law of any
jurisdiction in which all or any part of the Trust Estate is located, or the
Owner Trustee being advised by counsel shall determine that it is so necessary
or prudent in the interest of the Owner Participant or the Owner Trustee, or
the Owner Trustee shall have been directed to do so by the Owner Participant,
the Owner Trustee and the Owner Participant shall execute and deliver an
agreement supplemental hereto and all other instruments and agreements
necessary or proper to constitute another bank or trust company or one or more
persons (any and all of which shall be a “citizen of the United States” as
defined in 49 U.S.C. § 40102(a)(15)) approved by the Owner Trustee and the
Owner Participant, either to 

 

N-9

 

act as co-trustee, jointly
with the Owner Trustee, or to act as separate trustee hereunder (any such
co-trustee or separate trustee being herein sometimes referred to as an “additional
trustee”).  In the event the Owner
Participant shall not have joined in the execution of such agreements
supplemental hereto within ten days after the receipt of a written request from
the Owner Trustee so to do, or in case an Event of Default shall occur and be
continuing, the Owner Trustee may act under the foregoing provisions of this Section 9.02
without the concurrence of the Owner Participant; and the Owner Participant
hereby appoints the Owner Trustee its agent and attorney-in-fact to act for it
under the foregoing provisions of this Section 9.02 in either of
such contingencies.

 

Every
additional trustee hereunder shall, to the extent permitted by law, be
appointed and act, and the Owner Trustee and its successors shall act, subject
to the following provisions and conditions:

 

(a)                All powers, duties, obligations
and rights conferred upon the Owner Trustee in respect of the custody, control
and management of monies, the Equipment or documents authorized to be delivered
hereunder shall be exercised solely by the Owner Trustee;

 

(b)           All other rights, powers, duties and obligations conferred
or imposed upon the Owner Trustee shall be conferred or imposed upon and
exercised or performed by the Owner Trustee and such additional trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (including the holding of title to
the Trust Estate) the Owner Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties and
obligations shall be exercised and performed by such additional trustee;

 

(c)           No power given to any such additional trustee shall be
exercised hereunder by such additional trustee, except jointly with, or with
the consent in writing of, the Owner Trustee;

 

(d)           No trustee hereunder shall be personally liable by reason
of any action or omission of any other trustee hereunder; and

 

(e)           The Owner Trustee and Owner Participant may remove any
such additional trustee, at any time, by an instrument in writing signed by
both parties; provided, in the event that the Owner Participant shall
not have joined in the execution of any such instrument within ten days after
the receipt of a written request from the Owner Trustee so to do, the Owner
Trustee shall have the power to remove any such additional trustee without the
concurrence of the Owner Participant, and the Owner Participant hereby appoints
the Owner Trustee its agent and attorney-in-fact in connection therewith.

 

ARTICLE X

 

SUPPLEMENTS AND AMENDMENTS TO TRUST AGREEMENT

AND OTHER DOCUMENTS

 

Section 10.01         Supplements
and Amendments.  This Trust Agreement
may not be amended, supplemented or otherwise modified except by an instrument
in writing signed by the 

 

N-10

 

Owner Trustee and the Owner
Participant.  Subject to Section 10.02
hereof, the Owner Trustee will execute any amendment, supplement or other
modification of this Trust Agreement or of any other document to which the
Owner Trustee may be a party which it is requested to execute by the Owner
Participant.

 

Section 10.02         Discretion as to Execution of
Documents.  Prior to executing any
document required to be executed by it pursuant to the terms of Section 10.01
hereof, the Owner Trustee shall be entitled to receive an opinion of its
counsel to the effect that the execution of such document is authorized
hereunder.  If in the opinion of the
Owner Trustee any such document adversely affects any right, duty, immunity or
indemnity in favor of the Owner Trustee hereunder or under any other document
to which the Owner Trustee is a party, the Owner Trustee may in its discretion
decline to execute such document.

 

Section 10.03         Absence of Requirements as to Form.  It shall not be necessary for any written
request furnished pursuant to Section 10.01 hereof to specify the
particular form of the proposed documents to be executed pursuant to such
section, but it shall be sufficient if such request shall indicate the
substance thereof.

 

Section 10.04         Distribution of Documents.  Promptly after the execution by the Owner
Trustee of any document entered into pursuant to Section 10.01 hereof,
the Owner Trustee shall mail, by certified mail, postage prepaid, a conformed
copy thereof to the Owner Participant, but the failure of the Owner Trustee to
mail such conformed copy shall not impair or affect the validity of such
document.

 

ARTICLE XI

 

MISCELLANEOUS

 

Section 11.01         Termination
of Trust Agreement.  This Trust
Agreement and the trusts created hereby shall be of no further force or effect
upon the earlier of (a) the sale or other final disposition by the Owner
Trustee of all property constituting part of the Trust Estate and the final
distribution by the Owner Trustee of all monies or other property or proceeds
constituting part of the Trust Estate in accordance with Article IV
hereof or (b) twenty-one years less one day after the death of the last
survivor of all of the descendants of the grandparents of David C. Rockefeller
living on the date of the earliest execution of this Trust Agreement by any
party hereto, but if this Trust Agreement and the trusts created hereby shall
be or become authorized under applicable law to be valid for a period
commencing on the 21st anniversary of the death of such last survivor (or,
without limiting the generality of the foregoing, if legislation shall become
effective providing for the validity of this Trust Agreement and the trusts
created hereby for a period in gross exceeding the period for which this Trust
Agreement and the trusts created hereby are hereinabove stated to extend and be
valid), then this Trust Agreement and the trusts created hereby shall not
terminate under this subsection (b) but shall extend to and continue in
effect, but only if such non-termination and extension shall then be valid
under applicable law, until the day preceding such date as the same shall,
under applicable law, cease to be valid; otherwise this Trust Agreement and the
trusts created hereby shall continue in full force and effect in accordance
with the term hereof.  Except as
expressly set forth in this Section 11.01., this Trust Agreement
and the trusts created hereby may not be revoked by the Owner Participant.

 

N-11

 

Section 11.02         Owner Participant Has No Legal Title
in Trust Estate.  No Owner
Participant shall have legal title to any part of the Trust Estate.  No transfer, by operation of law or
otherwise, of any right, title and interest of the Owner Participant in and to
the Trust Estate hereunder shall operate to terminate this Trust Agreement or
the trusts hereunder or entitle any successors or transferees of the Owner
Participant to an accounting or to the transfer of legal title to any part of
the Trust Estate.

 

Section 11.03         Assignment, Sale, etc. of Equipment.  Any assignment, sale, transfer or other
conveyance of the Equipment or any part thereof by the Owner Trustee made
pursuant to the terms hereof shall bind the Owner Participant and shall be
effective to transfer or convey all right, title and interest of the Owner
Trustee and the Owner Participant in and to the Equipment so assigned, sold,
transferred or conveyed.  No purchaser or
other grantee shall be required to inquire as to the authorization, necessity,
expediency or regularity of such assignment, sale, transfer or conveyance or as
to the application of any sale or other proceeds with respect thereto by the
Owner Trustee.

 

Section 11.04         Trust Agreement for Benefit of
Certain Parties Only.  Except for the
terms of Article VIII hereof and except as otherwise provided in Article IX
and Sections 6.07, 10.01 and 11.01 hereof, nothing herein, whether expressed or
implied, shall be construed to give any person other than the Owner Trustee and
the Owner Participant any legal or equitable right, remedy or claim under or in
respect of this Trust Agreement; but this Trust Agreement shall be held to be
for the sole and exclusive benefit of the Owner Trustee and the Owner
Participant.

 

Section 11.05         Notices.  All notices, demands, instructions and other
communications required or permitted to be given to or made upon any party
hereto shall be in writing and shall be personally delivered or sent by
registered or certified mail, postage prepaid, or by facsimile, or by prepaid
courier service, and shall be deemed to be given for purposes of this Agreement
on the day that such writing is delivered or, if sent by registered or
certified mail, three Business Days after being deposited in the mails
addressed to the intended recipient thereof in accordance with the provisions
of this Section 11.05. 
Unless otherwise specified in a notice sent or delivered in accordance
with the foregoing provisions of this Section 11.05., notices,
demands, instructions and other communications in writing shall be given to or
made upon the respective parties hereto at their respective addresses (or to
their respective facsimile numbers) as follows: 
(A) if to Owner Trustee, to: 
Wells Fargo Bank Northwest, N.A., 79 South Main Street, Salt Lake City,
Utah 84111, telecopier:  (801) 246-5053,
attention:  Mr. Val T. Orton, (B) if
to the Original Owner Participant to: 
Willis Lease Finance Corporation, 773 San Marin Drive, Suite 2225,
Novato, CA 94998, telecopier:  (415)
408-4702, Attention:  General Counsel or (C) if
to a Subsequent Owner Participant, addressed to such Subsequent Owner
Participant at such address as such Subsequent Owner Participant shall have
furnished by notice to the parties hereto.

 

Section 11.06         Severability.  Subject to Sections 11.06 and 11.12
hereof, any provision hereof which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

N-12

 

Section 11.07         Waivers, etc.  No term or provision hereof maybe changed,
waived, discharged or terminated orally, but only by an instrument in writing
entered into in compliance with the terms of Article X hereof; and
any waiver of the terms hereof shall be effective only in the specific instance
and for the specific purpose given.

 

Section 11.08         Counterparts.  This Trust Agreement may be executed by the
parties hereto 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.

 

Section 11.09         Binding Effect, etc.  All covenants and agreements contained herein
shall be binding upon, and inure to the benefit of, the Owner Trustee and its
successors and assigns, and the Owner Participant, its successors and, to the
extent permitted by Article VIII hereof, its assigns.  Any request, notice, direction, consent,
waiver or other instrument or action by an Owner Participant shall bind its
successors and assigns.

 

Section 11.10         Headings; References.  The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.

 

Section 11.11         Governing Law.  IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS MORTGAGE AND THE OBLIGATIONS
ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS
MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES THEREOF
REGARDING CONFLICTS OF LAWS, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA.

 

[Remainder of page intentionally left blank; signatures on
following pages]

 

N-13

 

IN WITNESS WHEREOF, the parties hereto have
caused this Trust Agreement to be duly executed by their respective officers
thereunto duly authorized as of the day and year first above written.

 

	
   

  	
  WILLIS LEASE FINANCE CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name
  :

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK NORTHWEST, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

N-S-1

 

Exhibit O

 

Form of Placard

 

Placard to be used for Engines owned by Owner Trustee:

 

THIS
ENGINE IS OWNED BY AND LEASED FROM WELLS FARGO BANK NORTHWEST, NATIONAL
ASSOCIATION, AS OWNER TRUSTEE, AND IS SUBJECT TO A FIRST PRIORITY SECURITY
INTEREST IN FAVOR OF ONE OR MORE FINANCIAL INSTITUTIONS.

 

C/O
Willis Lease Finance Corporation, as Servicer

773 San Marin Drive, Suite 2215

Novato, CA 94998

415-408-4700

 

Placard to be used for Engines owned by Borrower:

 

THIS
ENGINE IS OWNED BY WILLIS LEASE FINANCE CORPORATION, OR AN AFFILIATE, AND IS
SUBJECT TO A FIRST PRIORITY SECURITY INTEREST IN FAVOR OF ONE OR MORE FINANCIAL
INSTITUTIONS.

 

Willis
Lease Finance Corporation

773 San Marin Drive, Suite 2215

Novato, CA 94998

415-408-4700

 

O-1

 

Schedule 1.1b

 

Borrowing Base Geographic Limitations

 

(i)                                               United States
and Canada                                                                                     ***%

 

(ii)                                            Western Europe
(Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Ireland,
Italy, Malta, Norway, Portugal, Slovenia, Spain, Sweden, Switzerland, The
Netherlands or the United Kingdom) ***%

 

(iii)                                         Asia/Pacific
(Australia, Fiji, Hong Kong, India, Japan, New Zealand, Singapore, Taiwan,
China, Indonesia, South Korea, Malaysia, Philippines, Thailand, or Vietnam)***%

 

(iv)                                        Central and
South America (Argentina, Aruba, Belize, Bolivia, Chile, Colombia, Costa Rica,
Ecuador, El Salvador, Guatemala, Honduras, Jamaica, Nicaragua, Panama, Peru, or
Venezuela)***%

 

(v)                                           Africa/Middle
East/Eastern Europe (Bahrain, Croatia, Hungary, Israel, Kuwait, Qatar, South
Africa, Pakistan, Poland, Turkey, Yemen or United Arab Emirates)***%

 

(vi)                                        Brazil                                                                                                                                                                                                  ***%

 

(vii)                                     China                                                                                                                                                                                                ***%

 

(viii)                                  Mexico                                                                                                                                                                                        ***%

 

(ix)                                          India                                                                                                                                                                                                    ***%

 

(x)                                             South Korea                                                                                                                                                            ***%

 

(xi)                                          Any individual
country outside of North America and Western Europe, excluding Australia, New
Zealand, and Singapore (each an “Emerging Country”) ***%

 

***      Confidential information omitted pursuant to a request
for confidential treatment filed separately with the Securities and Exchange
Commission

 

1

 

Schedule 1.1c

 

Eligible Equipment

 

	
   

  	
   

  	
  Model

  	
   

  	
  Serial
  No.

  
	
  1

  	
   

  	
  APU

  	
   

  	
  ***

  
	
  2

  	
   

  	
  RB211-535E4

  	
   

  	
  ***

  
	
  3

  	
   

  	
  PW118

  	
   

  	
  ***

  
	
  4

  	
   

  	
  PW121

  	
   

  	
  ***

  
	
  5

  	
   

  	
  PW121

  	
   

  	
  ***

  
	
  6

  	
   

  	
  PW121

  	
   

  	
  ***

  
	
  7

  	
   

  	
  PW124

  	
   

  	
  ***

  
	
  8

  	
   

  	
  PW121

  	
   

  	
  ***

  
	
  9

  	
   

  	
  PW121

  	
   

  	
  ***

  
	
  10

  	
   

  	
  PW123

  	
   

  	
  ***

  
	
  11

  	
   

  	
  PW123

  	
   

  	
  ***

  
	
  12

  	
   

  	
  PW124B

  	
   

  	
  ***

  
	
  13

  	
   

  	
  PW124

  	
   

  	
  ***

  
	
  14

  	
   

  	
  PW124

  	
   

  	
  ***

  
	
  15

  	
   

  	
  PW125

  	
   

  	
  ***

  
	
  16

  	
   

  	
  CF34-8C5

  	
   

  	
  ***

  
	
  17

  	
   

  	
  CF34-8C5

  	
   

  	
  ***

  
	
  18

  	
   

  	
  CF6-50C2

  	
   

  	
  ***

  
	
  19

  	
   

  	
  CFM56-5B

  	
   

  	
  ***

  
	
  20

  	
   

  	
  CFM56-5B4/P

  	
   

  	
  ***

  
	
  21

  	
   

  	
  CF6-80C2B4

  	
   

  	
  ***

  
	
  22

  	
   

  	
  CF6-80C2B4

  	
   

  	
  ***

  
	
  23

  	
   

  	
  CFM56-5B

  	
   

  	
  ***

  
	
  24

  	
   

  	
  CF6-80C2B7F

  	
   

  	
  ***

  
	
  25

  	
   

  	
  CF6-80C2B4F

  	
   

  	
  ***

  
	
  26

  	
   

  	
  CF6-80C2B7F

  	
   

  	
  ***

  
	
  27

  	
   

  	
  JT8D-219

  	
   

  	
  ***

  
	
  28

  	
   

  	
  PW2037

  	
   

  	
  ***

  
	
  29

  	
   

  	
  CFM56-3C1

  	
   

  	
  ***

  
	
  30

  	
   

  	
  CFM56-3C1

  	
   

  	
  ***

  
	
  31

  	
   

  	
  CFM56-3C1

  	
   

  	
  ***

  

 

***      Confidential information omitted pursuant to a request
for confidential treatment filed separately with the Securities and Exchange
Commission

 

1

 

	
  32

  	
   

  	
  CFM56-3C1

  	
   

  	
  ***

  
	
  33

  	
   

  	
  PW4168

  	
   

  	
  ***

  
	
  34

  	
   

  	
  CFM56-5C4

  	
   

  	
  ***

  
	
  35

  	
   

  	
  CFM56-5B4

  	
   

  	
  ***

  
	
  36

  	
   

  	
  CFM56-7B

  	
   

  	
  ***

  
	
  37

  	
   

  	
  CF6-80E1A3

  	
   

  	
  ***

  
	
  38

  	
   

  	
  CFM56-3C1

  	
   

  	
  ***

  
	
  39

  	
   

  	
  CFM56-3C1

  	
   

  	
  ***

  
	
  40

  	
   

  	
  CFM56-3C1

  	
   

  	
  ***

  
	
  41

  	
   

  	
  CF34-3B1

  	
   

  	
  ***

  
	
  42

  	
   

  	
  CF34-3B1

  	
   

  	
  ***

  
	
  43

  	
   

  	
  CF34-3B1

  	
   

  	
  ***

  
	
  44

  	
   

  	
  CF34-3B1

  	
   

  	
  ***

  
	
  45

  	
   

  	
  CF34-3B1

  	
   

  	
  ***

  
	
  46

  	
   

  	
  CF34-3B1

  	
   

  	
  ***

  
	
  47

  	
   

  	
  CFM56-7B24

  	
   

  	
  ***

  
	
  48

  	
   

  	
  CFM56-7B22

  	
   

  	
  ***

  
	
  49

  	
   

  	
  CFM56-7B

  	
   

  	
  ***

  
	
  50

  	
   

  	
  CFM56-7B

  	
   

  	
  ***

  
	
  51

  	
   

  	
  CFM56-7B

  	
   

  	
  ***

  
	
  52

  	
   

  	
  CFM56-7B

  	
   

  	
  ***

  
	
  53

  	
   

  	
  CFM56-7B

  	
   

  	
  ***

  
	
  54

  	
   

  	
  CFM56-7B

  	
   

  	
  ***

  
	
  55

  	
   

  	
  CFM56-7B

  	
   

  	
  ***

  
	
  56

  	
   

  	
  CFM56-7B

  	
   

  	
  ***

  
	
  57

  	
   

  	
  CF34-10E7

  	
   

  	
  ***

  
	
  58

  	
   

  	
  PW124

  	
   

  	
  ***

  
	
  59

  	
   

  	
  QEC

  	
   

  	
  ***

  
	
  60

  	
   

  	
  QEC

  	
   

  	
  ***

  
	
  61

  	
   

  	
  PW123

  	
   

  	
  ***

  
	
  62

  	
   

  	
  PW127F

  	
   

  	
  ***

  
	
  63

  	
   

  	
  V2500-A

  	
   

  	
  ***

  
	
  64

  	
   

  	
  V2500-A

  	
   

  	
  ***

  
	
  65

  	
   

  	
  V2500-A

  	
   

  	
  ***

  
	
  66

  	
   

  	
  V2500-D5

  	
   

  	
  ***

  

 

***      Confidential information omitted pursuant to a request
for confidential treatment filed separately with the Securities and Exchange
Commission

 

1

 

Schedule 1.1d

 

Liens of Record

 

Residual
liens in favor of National City Bank, as Security Agent for the benefit of the “Banks”
under the Second Amended and Restated Credit Agreement, dated as of June 30,
2006, as amended, on the “Collateral” as defined under that agreement, to be
terminated concurrently with the Closing.

 

Liens
in favor of Bank of America Leasing and Capital, LLC on ***

 

1.               Liens in favor of Calyon New York Branch on
the WEST Series 2008 B-1 Note

 

2.               Liens in favor
of Norddeutsche Landesbank Girozentrale, as lender on the following equipment:

 

·                  *** aircraft engine bearing MSN ***

 

·                  *** aircraft
engine bearing MSN ***

 

·                  *** aircraft
engine bearing MSN ***

 

***      Confidential information omitted pursuant
to a request for confidential treatment filed separately with the Securities
and Exchange Commission

 

1

 

Schedule 1.1e

 

Schedule of Documents

 

Credit
Agreement

 

Revolving
Notes for all Lenders

 

Swing
Line Note

 

Security
Agreement

 

Mortgage
and Security Agreement

 

Amendment
to Trust Agreements

 

Beneficial
Interest Pledge Agreements

 

Owner
Trustee Mortgage and Security Agreements

 

Owner
Trustee Guaranty

 

Leasing
Subsidiary Security Agreements

 

Subsidiary
Guaranty

 

Stock
Pledge Agreement

 

Stock
Power

 

Borrowing
Base Certificate

 

Borrowing
Notice

 

Compliance
Certificate

 

1

 

Schedule 2.1

 

Revolving Commitment

 

	
  Commitment

  	
   

  	
  Lender

  	
   

  	
  Pro Rata Share

  	
   

  
	
  $

  	
  50,000,000.00

  	
   

  	
  Union
  Bank, N.A.

  	
   

  	
  20.833333

  	
  %

  
	
  $

  	
  50,000,000.00

  	
   

  	
  Wells
  Fargo Bank, N.A.

  	
   

  	
  20.833333

  	
  %

  
	
  $

  	
  35,000,000.00

  	
   

  	
  KfW
  IPEX-Bank GmbH

  	
   

  	
  14.583333

  	
  %

  
	
  $

  	
  25,000,000.00

  	
   

  	
  U.S.
  Bank National Association

  	
   

  	
  10.416667

  	
  %

  
	
  $

  	
  25,000,000.00

  	
   

  	
  City
  National Bank

  	
   

  	
  10.416667

  	
  %

  
	
  $

  	
  20,000,000.00

  	
   

  	
  Credit
  Industriel et Commercial, New York Branch

  	
   

  	
  8.333333

  	
  %

  
	
  $

  	
  15,000,000.00

  	
   

  	
  California
  Bank & Trust

  	
   

  	
  6.250000

  	
  %

  
	
  $

  	
  15,000,000.00

  	
   

  	
  Umpqua
  Bank

  	
   

  	
  6.250000

  	
  %

  
	
  $

  	
  5,000,000.00

  	
   

  	
  State
  Bank of India

  	
   

  	
  2.083333

  	
  %

  

 

1

 

Schedule 5.2

 

Executive Offices; Corporate or Other Names; Conduct of Business

 

Willis
Lease Finance Corporation — Corporate Headquarters

773 San Marin Drive, Ste. 2215

Novato, CA 94998

 

Willis
Lease Finance Corporation — Technical office

6495
Marindustry Place

San Diego, CA 92121

 

The
Bank of New York — Collateral Custodian

MBS
Collateral Services

5730
Katella Avenue

Cypress,
CA 90630

 

1

 

Schedule 5.5

 

Subsidiaries

 

	
  Wholly-Owned Subsidiaries

  	
   

  	
  State or Jurisdiction

  of Incorporation

  
	
   

  	
   

  	
   

  
	
  Willis
  Engine Securitization Trust

  	
   

  	
  Delaware;
  business trust

  
	
   

  	
   

  	
   

  
	
  WEST
  Engine Funding LLC

  	
   

  	
  Delaware;
  limited liability company

  
	
   

  	
   

  	
   

  
	
  WLFC
  (Ireland) Limited

  	
   

  	
  Rep.
  of Ireland; limited liability company

  
	
   

  	
   

  	
   

  
	
  WEST
  Engine Funding (Ireland) Limited

  	
   

  	
  Rep.
  of Ireland; limited liability company

  
	
   

  	
   

  	
   

  
	
  WLFC
  Funding (Ireland) Limited

  	
   

  	
  Rep.
  of Ireland; limited liability company

  

 

	
  Other Non-Subsidiary Equity Interests

  	
   

  	
  Percentage Interest

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  WOLF
  A340, LLC

  (Limited liability company formed under the laws of Delaware)

  	
   

  	
  50.0

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Sichuan
  Snecma Aero-engine Maintenance Co. Ltd. 

  (Sino-foreign equity joint venture company formed under the laws of the
  People’s Republic of China)

  	
   

  	
  4.6

  	
  %

  

 

1

 

Schedule 5.7

 

No Other Liabilities; No Material Adverse Changes

 

None

 

1

 

Schedule 5.9

 

Trade Names

 

Willis
Leasing

 

Willis
Lease

 

WLFC

 

1

 

Schedule 5.10

 

Litigation

 

None.

 

1

 

Schedule 5.17

 

Hazardous Materials

 

None.

 

1

 

Schedule 5.21

 

Depreciation Policies

 

The
Borrower generally depreciates engines on a straight-line basis over 15 years
to a 55% residual value. Spare parts packages are generally depreciated on a
straight-line basis over 15 years to a 25% residual value. Aircraft are
generally depreciated on a straight-line basis over 13-20 years to a 15%-17%
residual value. For equipment which is unlikely to be repaired at the end of
its current expected life, and is likely to be disassembled upon lease
termination, we depreciate the equipment over its estimated life to a residual
value based on an estimate of the wholesale value of the parts after
disassembly. Currently, 23 engines having a net book value of $44.2 million are
depreciated using this policy. If useful lives or residual values are lower
than those estimated by us, upon sale of the equipment, a loss may be realized.
It is our policy to review estimates regularly to more accurately expense the
cost of equipment over the useful life of the engines.  Beginning April 1,
2008 and again on July 1, 2008, we changed the depreciation estimate
related to certain older engine types in our portfolio. This change in
depreciation estimate resulted in a $3.8 million increase in depreciation
during 2008 and on an annual basis will result in an increase in depreciation
expense of $6.8 million per year assuming no change in our portfolio. The net
effect of these changes in depreciation estimates is a reduction in 2008 net
income of $2.4 million or $0.28 in diluted earnings per share over what net
income would have otherwise been had these changes in depreciation estimates
not been made.

 

1

 

Schedule 5.22

 

Non-Lender Protection Agreements as of the Closing Date

 

None

 

1

 

Schedule 5.23

 

Eligible Leases as of the Closing Date

 

	
   

  	
   

  	
  Model

  	
   

  	
  Serial No.

  	
   

  	
  Lessee

  
	
  *1

  	
   

  	
  APU

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  2

  	
   

  	
  RB211-535E4

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  3

  	
   

  	
  PW118

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  4

  	
   

  	
  PW121

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  5

  	
   

  	
  PW121

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  6

  	
   

  	
  PW121

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  7

  	
   

  	
  PW124

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  8

  	
   

  	
  PW121

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  9

  	
   

  	
  PW121

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  10

  	
   

  	
  PW123

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  11

  	
   

  	
  PW123

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  12

  	
   

  	
  PW124B

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  13

  	
   

  	
  PW124

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  14

  	
   

  	
  PW124

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  15

  	
   

  	
  PW125

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  *16

  	
   

  	
  CF34-8C5

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  17

  	
   

  	
  CF34-8C5

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  *18

  	
   

  	
  CF6-50C2

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  19

  	
   

  	
  CFM56-5B

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  20

  	
   

  	
  CFM56-5B4/P

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  21

  	
   

  	
  CF6-80C2B4

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  22

  	
   

  	
  CF6-80C2B4

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  23

  	
   

  	
  CFM56-5B

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  24

  	
   

  	
  CF6-80C2B7F

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  25

  	
   

  	
  CF6-80C2B4F

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  26

  	
   

  	
  CF6-80C2B7F

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  27

  	
   

  	
  JT8D-219

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  28

  	
   

  	
  PW2037

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  *29

  	
   

  	
  CFM56-3C1

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  30

  	
   

  	
  CFM56-3C1

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  31

  	
   

  	
  CFM56-3C1

  	
   

  	
  ***

  	
   

  	
  ***

  

 

***        Confidential information omitted pursuant
to a request for confidential treatment filed separately with the Securities
and Exchange Commission

 

1

 

	
  32

  	
   

  	
  CFM56-3C1

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  33

  	
   

  	
  PW4168

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  34

  	
   

  	
  CFM56-5C4

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  35

  	
   

  	
  CFM56-5B4

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  36

  	
   

  	
  CFM56-7B

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  37

  	
   

  	
  CF6-80E1A3

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  38

  	
   

  	
  CFM56-3C1

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  39

  	
   

  	
  CFM56-3C1

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  40

  	
   

  	
  CFM56-3C1

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  41

  	
   

  	
  CF34-3B1

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  42

  	
   

  	
  CF34-3B1

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  43

  	
   

  	
  CF34-3B1

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  44

  	
   

  	
  CF34-3B1

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  45

  	
   

  	
  CF34-3B1

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  46

  	
   

  	
  CF34-3B1

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  47

  	
   

  	
  CFM56-7B24

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  48

  	
   

  	
  CFM56-7B22

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  49

  	
   

  	
  CFM56-7B

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  50

  	
   

  	
  CFM56-7B

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  51

  	
   

  	
  CFM56-7B

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  52

  	
   

  	
  CFM56-7B

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  53

  	
   

  	
  CFM56-7B

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  54

  	
   

  	
  CFM56-7B

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  55

  	
   

  	
  CFM56-7B

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  56

  	
   

  	
  CFM56-7B

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  57

  	
   

  	
  CF34-10E7

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  58

  	
   

  	
  PW124

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  59

  	
   

  	
  QEC

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  60

  	
   

  	
  QEC

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  61

  	
   

  	
  PW123

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  *62

  	
   

  	
  PW127F

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  63

  	
   

  	
  V2500-A

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  64

  	
   

  	
  V2500-A

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  65

  	
   

  	
  V2500-A

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  66

  	
   

  	
  V2500-D5

  	
   

  	
  ***

  	
   

  	
  ***

  

 

*
Lease of this asset does not constitute an “Eligible Lease” as of the Closing
Date.

 

***        Confidential
information omitted pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission

 

1

 

Schedule
7.10

 

Indebtedness and Guaranteed Indebtedness existing on the Closing Date

 

	
  Creditor

  	
   

  	
  Original Principal

  Amount /

  Notional Amount

  	
   

  	
  Description

  	
   

  
	
  Calyon
  New York Branch

  	
   

  	
  $

  	
  ***

  	
   

  	
  $

  	
  ***

  	
   

  
	
  Canela
  Investments LLC

  	
   

  	
  $

  	
  ***

  	
   

  	
  $

  	
  ***

  	
   

  
	
  Bank
  of America Leasing and Capital, LLC

  	
   

  	
  $

  	
  ***

  	
   

  	
  $

  	
  ***

  	
   

  
	
  Bank
  of America Leasing and Capital, LLC

  	
   

  	
  $

  	
  ***

  	
   

  	
  $

  	
  ***

  	
   

  
	
  Norddeutsche
  Landesbank Girozentrale

  	
   

  	
  $

  	
  ***

  	
   

  	
  $

  	
  ***

  	
   

  

 

***        Confidential information omitted pursuant
to a request for confidential treatment filed separately with the Securities
and Exchange Commission

 

1

 

Schedule 7.15

 

Investments Existing as of the Closing Date

 

50.0%
membership interest in a joint venture, WOLF A340, LLC, a Delaware limited
liability company

 

4.6%
membership interest in a joint venture, Sichuan Snecma Aero-engine Maintenance
Co. Ltd., a Sino-foreign equity joint venture company formed under the laws of
the People’s Republic of China

 

Willis
Engine Securitization Trust Series 2008 B-1 Note in the original principal
amount of $***

 

***        Confidential information omitted pursuant
to a request for confidential treatment filed separately with the Securities
and Exchange Commission

 

1Exhibit 10.1

 

 

FIRST AMENDMENT TO FAGGIOLI EMPLOYMENT AGREEMENT

 

This First Amendment to Employment Agreement (the “Amendment”)
is entered into on this 12th day of March, 2010, by and
between Nature’s Sunshine Products, Inc. (“the Company” or “NSP”) and Douglas
Faggioli (“Executive”).  NSP and
Executive are collectively referred to herein as the “Parties.”

 

RECITALS

 

A.            The
Parties entered into that Employment Agreement, dated on or about December 30,
2008 (the “Employment Agreement”). 
Each capitalized term in this Amendment shall have the meaning ascribed
to it in the Employment Agreement, except as otherwise defined herein.

 

B.            The
Parties now desire to amend certain provisions of the Employment Agreement.

 

C.            The
Company and Executive have previously entered into: (1) a Stock Option
Agreement entitled Nature’s Sunshine Products, Inc. 2009 Stock Incentive
Plan Non-Incentive Stock Option Agreement, dated September 24, 2009,
granting Executive the option to purchase Nineteen Thousand (19,000) shares of
the Company’s common stock subject to the terms and conditions of the Company’s
2009 Stock Option Plan; and, (2) a Stock Option Agreement entitled Nature’s
Sunshine Products, Inc. Stock Option Agreement, dated April 1, 2003,
granting Executive the option to purchase Two Thousand (2,000) shares of the
Company’s common stock subject to the terms and conditions of the Company’s
1995 Stock Option Plan (collectively referred to as the “Stock Agreements”).

 

D.            The
Parties wish to resolve any and all disputes, claims, complaints, grievances,
charges, actions, petitions, and demands that the Executive may have against
the Company, including, but not limited to, any and all claims arising out of
or in any way related to Executive’s employment with or separation from the Company;

 

NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, NSP and Executive
hereby amend the Employment Agreement and agree as follows:

 

1.     Resignation. 
Executive agrees to resign from his regular full-time employment with
the Company and to resign his seat on the Company’s Board of Directors
effective June 30, 2010 (the Resignation Date”).

 

2.     Restricted Period. 
Section 6.1 of the Employment Agreement is hereby amended to extend
the Restricted Period from twelve (12) months to twenty-four (24) months from
the Resignation Date.

 

3.     Stock Options.  All
NSP stock options owned by Executive on the date of this Amendment shall vest
on July 1, 2010 and the term for his exercise of Executive’s stock options
will be the longer of (a) the date set forth in the Stock Option Agreement
relating to such stock options, or (b) one year following the Retirement
Date.  All Stock Agreements shall be
deemed

 

 

amended to reflect the foregoing
sentence.  Executive acknowledges that
upon fully accelerating all outstanding stock options, Executive will have
vested in 21,000 options under the Stock Agreements, and no more.

 

4.     Life Insurance. 
The Company will pay all premiums on Executive’s current life insurance
policy from Beneficial Life through the 24-month period following the
Resignation Date.

 

5.     Release/Consulting Agreement. On his last day of
employment, Executive agrees to execute the release agreement attached as Exhibit A
to this Agreement (“Release”) in exchange for: (1) an agreement for the
Company to enter into a one (1) year consulting agreement with Executive
in the form attached as Exhibit 1 to the Release (the “Consulting
Agreement”); and, (2) reimbursement of the cost of Executive’s health insurance
coverage under COBRA (and for his family members if Executive provided for
their coverage during his employment) for up to 18 months from the Resignation
Date, or as long as Executive is eligible for COBRA coverage, whichever is
shorter.  COBRA reimbursements shall be
made by the Company to Executive consistent with the Company’s normal expense
reimbursement policy, provided that Executive submits documentation to the
Company substantiating his payments for COBRA.

 

6.     Company Covenants. 
The Company agrees as follows:

 

a.     Payments for First Twelve Months.  The Company will pay Executive $466,818.18
(his base annual salary of $421,328.18 plus $45,518.00 as a tax “gross-up”) on
a pro rata monthly basis for the twelve months following his Resignation Date
in accordance with the Consulting Agreement.

 

b.     Put Right or Payment in Connection with Second Twelve Months.  The Company hereby grants to Executive a
right to compel the Company to purchase, during the period of July 1, 2011
to September 1, 2011 (“Put Exercise Period”), up to and including 38,275
shares of Executive’s NSP common stock at the specified or strike price of
$11.00 per share (the “Put Right”). 
Executive may exercise the Put Right by written notice delivered to the
Company.  The Put Right shall lapse
automatically upon the expiration of the Put Exercise Period.  If Executive fails to exercise the Put Right
during the Put Exercise Period and the Put Right lapses, Company shall pay
Executive upon such expiration a lump sum amount equal to Executive’s base
annual salary.

 

c.     Change of Control. 
In the event of any “change of control” of NSP at any time during the
24-month period following Executive’s resignation, the (i) Company shall
immediately notify Executive of the change of control (the “Change of Control
Notice”), and in no event later than thirty (30) days prior to the change of
control taking effect, (ii) the Consulting Agreement” shall terminate upon
Company’s approval of a change of control, and which termination shall be
deemed without cause, notwithstanding anything in the Consulting Agreement to
the contrary, (iii) the Company will pay Executive the remaining balance
for the first 12-month period following his Resignation Date and, (iv) at
Executive’s sole election, Executive may (x) exercise his Put Right within
30 days of Executive’s receipt of the Change of Control Notice, or (y), if he
fails to exercise the Put Right within such 30-day period, pay 

 

2

 

Executive a lump sum amount of
$421,328.18.  A “change in control” shall
be deemed to have occurred:

 

i.              At such time as a third person, including a “group” as
defined in Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended, becomes the beneficial owner of shares of the Company having 50% or
more of the total number of votes that may be cast for the election of
Directors of the Company;

 

ii.             On the effective date of and immediately prior to:  (i) the closing of any agreement for a
merger or consolidation of the Company with another entity, provided that there
shall be no change of control if the persons and entities who were the
stockholders of the Company immediately before such merger or consolidation
continue to own, directly or indirectly, shares of the corporation resulting
from such merger or consolidation (“Newco”) having more than 70% of the total
number of votes that may be cast for the election of directors of Newco, in
substantially the same proportion as their ownership of the voting securities
of the Company outstanding immediately before such merger or consolidation; or (ii) the
closing of any sale, exchange or other disposition of all or substantially all
of the Company’s assets; or (iii) a dissolution or liquidation of the
Company’s assets; or

 

iii.            On the effective date of any sale, exchange or other
disposition of 50% or more in fair market value of the Company’s assets, other
than in the ordinary course of business, whether in a single transaction or a
series of related transactions.

 

iv.            In determining whether clause (i) of the
preceding provision has been satisfied, the third person owning shares must be
someone other than a person or an affiliate of a person that, as of the
effective date, was the beneficial owner of shares of the Company having 20% or
more of the total number of votes that may be cast for the election of
Directors of the Company.

 

d.     Executive Attorney Fees. 
The Company shall pay Executive’s attorney’s fees, up to $10,000, for
all legal expenses incurred in connection with the negotiation, drafting,
review and analysis of this Amendment and related documentation.

 

e.     State Board of Accountancy.  For twenty four (24) months from the
Resignation Date, the Company shall pay all fees and costs required to keep
Executive’s Certified Public Accountant license current and effective,
including all fees and costs for CPE courses and any associated attorneys’
fees, which fees shall not exceed $7,500.

 

f.      Health Club Membership. 
For twenty four (24) months from the Resignation Date, the Company shall
pay all fees and costs related to Executive’s health club membership at Gold’s
Gym.

 

g.     NSP Product Credit. 
For twenty four (24) months from the Resignation Date, Executive shall
receive a Company product credit equal to the credit received by Executive
prior to the Resignation Date.

 

7.     Successor and Assign. 
In the event of the death or incapacity of Executive, this Amendment
shall inure to the benefit of his estate, spouse, heirs, successor or assigns.

 

3

 

8.     Interpretation. 
The Employment Agreement shall be construed, to the extent possible, so
as to be consistent with this Amendment. 
In any conflict between the Employment Agreement, the Consulting
Agreement, or any other agreements between the Company and Executive and this
Amendment, the terms of this Amendment shall prevail.  In particular, the parties agree that Section 5.4
of the Employment Agreement, “Resignation by Executive” is void by virtue of
this Amendment and superseded by the terms herein; and that the provisions of Section 6
of the Employment Agreement will remain in effect except for the extension of
the Restricted Period to 24 months as referenced in Section 1, above.

 

9.     Legal Counsel and Code Section 409A.  Executive acknowledges that he has consulted
with an attorney regarding the terms of this Amendment, the Release and the
Consulting Agreement, and any ancillary issues related to these agreements,
including, but not limited, issues related to compliance with Internal Revenue
Code Section 409A (“Code Section 409A”).  The parties intend
that this Amendment comply with the requirements of Code Section 409A. 
To the extent there is any ambiguity as to whether any provision of the
Amendment would otherwise contravene one or more requirements or limitations of
Code Section 409A, such provision shall be interpreted and applied in a
manner that does not result in a violation of the applicable requirements or
limitations of Code Section 409A and the Treasury Regulations
thereunder.  For purposes of Section 409A, the right to receive one
or more payments or benefits under this Amendment shall be treated as a right
to a series of separate payments.

 

10.   Delayed Commencement Date.  Notwithstanding any
provision to the contrary in the Employment Agreement, this Amendment, the
Release, or the Consultant Agreement (together, the “Agreements”), no payments
or benefits to which Executive becomes entitled in accordance with the
Agreements shall be made or paid to Executive prior to the earlier of (i) the
first day of the seventh (7th) month following the date of his separation from
service or (ii) the date of his death, if Executive is deemed, pursuant to
the procedures established by the Company’s Compensation Committee in
accordance with the applicable standards of Code Section 409A and the
Treasury Regulations thereunder and applied on a consistent basis for all
non-qualified deferred compensation plans of the Employer Group subject to Code
Section 409A, to be a “specified  employee” within the meaning of
Code Section 409A at the time of such separation from service and such
delayed commencement is otherwise required in order to avoid a prohibited
distribution under Code Section 409A(a)(2). Upon the expiration of the
applicable deferral period, all payments deferred pursuant to this Section 10
shall be paid to Executive in a lump sum, and any remaining payments due under
the Agreements shall be paid in accordance with the normal payment dates
specified in the Agreements.

 

11.   Authorization.  Each
person executing this Agreement represents and warrants that they have been
duly authorized and directed to execute, deliver, and perform the terms of this
Amendment, and that they have the authority to bind the entity on whose behalf
the Agreement is executed.

 

 

4

	
   

  	
   

  
	
  Nature’s
  Sunshine Products, Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Stephen M. Bunker

  	
   

  
	
  By:

  	
  Stephen M. Bunker

  	
   

  
	
  Its:

  	
  Chief
  Financial Officer

  	
   

  
	
   

  	
   

  	
   

  
	
  Executive

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Douglas Faggioli

  	
   

  
	
  Douglas
  Faggioli

  	
   

  
					

 

 

5

 

EXHIBIT 1

 

CONSULTING AGREEMENT

 

This
Consulting Agreement (“Consulting Agreement”) is made and entered into as of July 1,
2010 (“Effective Date”), by and between Nature’s Sunshine Products, Inc. (“Company”),
and Douglas Faggioli (“Consultant”) (together, the “Parties”).  Company desires to retain Consultant as an
independent contractor to perform consulting services for Company and
Consultant is willing to perform such services, on terms set forth more fully
below.  In consideration of the mutual
promises contained herein, the parties agree as follows:

 

1.     SERVICES AND COMPENSATION

 

Services.  Consultant shall perform for the Company the
services mutually agreed to between the Parties as and when reasonably
requested by the Company’s new CEO (“Services”).

 

Fees.  The Company shall pay Consultant at the rate
of $466,818.18 per year on a pro rata monthly basis.  Company will further pay for Consultant’s
reasonable travel and other travel-related expenses incurred in connection with
Consultant’s performance of the Services.

 

2.     CONFIDENTIALITY

 

Definition.  “Confidential Information” means any Company
proprietary information, technical data, trade secrets or know-how, including,
but not limited to, research, product plans, products, services, customers,
customer lists, markets, software, developments, inventions, processes,
formulas, technology, designs, drawings, engineering, hardware configuration
information, marketing, finances or other business information disclosed by Company
either directly or indirectly in writing, orally or by drawings or inspection
of parts or equipment.

 

Non-Use and Non-Disclosure.  Consultant shall not, during or subsequent to
the term of this Consulting Agreement, use Company’s Confidential Information
for any purpose whatsoever other than the performance of the Services on behalf
of Company or disclose Company’s Confidential Information to any third
party.  It is understood that said
Confidential Information will remain the sole property of Company.  Consultant further shall take all reasonable
precautions to prevent any unauthorized disclosure of such Confidential
Information.

 

Third Party Confidential Information.  Consultant recognizes that Company has
received and in the future will receive from third parties their confidential
or proprietary information subject to a duty on Company’s part to maintain the
confidentiality of such information and to use it only for certain limited
purposes.  Consultant agrees that
Consultant owes Company and such third parties, during the term of this
Consulting Agreement and thereafter, a duty to hold all such confidential or
proprietary information in the strictest confidence and not to disclose it to
any person, firm or corporation or to use it except as necessary in carrying
out the Services for Company consistent with Company’s agreement with such
third party.

 

Return of Materials.  Upon the termination of this Consulting
Agreement, or upon Company’s earlier request, Consultant shall deliver to
Company all of Company’s property or Confidential Information that Consultant
may have in Consultant’s possession or control.

 

 

 

3.     OWNERSHIP

 

Assignment.  Consultant agrees that all copyrightable
material, notes, records, drawings, designs, inventions, improvements, developments,
discoveries and trade secrets conceived, made or discovered by Consultant,
solely or in collaboration with others, during the term of this Consulting
Agreement which relate in any manner to the business of Company that Consultant
may be directed to undertake, investigate or experiment with, or which
Consultant may become associated with in work, investigation or experimentation
in the line of business of Company in performing the Services hereunder
(collectively, “Work Product”), are the sole property of Company.  Consultant further shall assign (or cause to
be assigned) and does hereby assign fully to Company all Work Product and any
copyrights, patents, mask work rights or other intellectual property rights relating
thereto.

 

Further Assurances.  Consultant shall assist Company, or its
designee, at Company’s expense, in every proper way to secure Company’s rights
in the Work Product and any copyrights, patents, mask work rights or other
intellectual property rights relating thereto in any and all countries,
including the disclosure to Company of all pertinent information and data with
respect thereto, the execution of all applications, specifications, oaths,
assignments and all other instruments that Company deems necessary in order to
apply for and obtain such rights and in order to assign and convey to Company,
its successors, assigns and nominees the sole and exclusive right, title and
interest in and to such Work Product, and any copyrights, patents, mask work
rights or other intellectual property rights relating thereto.  Consultant further agrees that Consultant’s
obligation to execute or cause to be executed, when it is in Consultant’s power
to do so, any such instrument or papers will continue after the termination of
this Consulting Agreement.

 

Pre-Existing Materials.  Consultant agrees that if in the course of
performing the Services, Consultant incorporates into any Invention developed
hereunder any invention, improvement, development, concept, discovery or other
proprietary information owned by Consultant or in which Consultant has an
interest, (1) Consultant shall inform Company, in writing before
incorporating such invention, improvement, development, concept, discovery or
other proprietary information into any Invention; and (2) Company is
hereby granted and shall have a nonexclusive, royalty-free, perpetual,
irrevocable, worldwide license to make, have made, modify, use and sell such
item as part of or in connection with such Invention.  Consultant shall not incorporate any
invention, improvement, development, concept, discovery or other proprietary
information owned by any third party into any Invention without Company’s prior
written permission.

 

Attorney in Fact.  Where Company is unable because of Consultant’s
unavailability, dissolution, mental or physical incapacity, or for any other
reason, to secure Consultant’s signature to apply for or to pursue any
application for any United States or foreign patents or mask work or copyright
registrations covering the Work Product assigned to Company above, then
Consultant hereby irrevocably designates and appoints Company and its duly
authorized officers and agents as Consultant’s agent and attorney in fact, to
act for and in Consultant’s behalf and stead to execute and file any such
applications and to do all other lawfully permitted acts to 

 

2

 

further the prosecution and issuance of patents, copyright and mask
work registrations thereon with the same legal force and effect as if executed
by Consultant.

 

4.     CONFLICTING OBLIGATIONS

 

Conflicting Obligations/Restrictive Covenants.  Consultant certifies that Consultant has no
outstanding agreement or obligation that is in conflict with any of the
provisions of this Consulting Agreement, or that would preclude Consultant from
complying with the provisions hereof, and further certifies that Consultant
will not enter into any such conflicting agreement during the term of this
Consulting Agreement.  Consultant explicitly
agrees that during the Term of this Consulting Agreement (as defined under Section 5,
below), Consultant shall not, other than on behalf of the Company or with the
prior written consent of the Company, (i) serve as a partner, employee,
independent contractor, consultant, advisor, officer, director, proprietor,
manager, agent, associate, or (ii) directly or indirectly, own (except for
passive ownership of one percent (2%) or less of any entity whose securities
have been registered under the Securities Act of 1933 or Section 12 of the
Securities Exchange Act of 1934), purchase, invest in, organize or take
preparatory steps for the organization of, or (iii) directly or
indirectly, build, design, finance, acquire, lease, control, operate, manage,
invest in, work or consult for, or otherwise affiliate himself with, any firm,
partnership, corporation, entity or business that is a Competing Business.  For purposes of this Consulting Agreement, a “Competing
Business” is any business enterprise that distributes through a multilevel
marketing program or that engages in any activity that competes anywhere in the
world with any activity in which the Company is then engaged, including sales
or distribution of herbs, vitamins or nutritional supplements or any product,
which the Company sells or distributes at the time of Executive’s
termination.  Moreover, Consultant agrees
not to influence or attempt to influence any employee, sales leader, manager,
coordinator, consultant, supplier, licensor, licensee, contractor, agent,
strategic partner, distributor, customer or other person to terminate his or
her employment with the Company or modify any written or oral agreement,
relationship, arrangement or course of dealing the Company; nor will consultant
solicit for employment or employ or retain (or arrange to have any other person
or entity employ or retain) any person who has been employed or retained by any
member of the Company within the preceding twelve (12) months.

 

5.     TERM AND TERMINATION

 

Term.  This Consulting Agreement will commence on
the Effective Date and will continue until the earlier of (1) the one year
anniversary of the Effective Date or (2) termination as provided below.

 

Termination.  Consultant may terminate this Consulting
Agreement without cause upon giving one (1) month’s prior written notice
thereof to the Company in accordance with Section 6 of this Consulting
Agreement.  If Consultant terminates this
Consulting Agreement under the prior sentence, Company shall pay to Consultant
the fees for any Services performed before the effective date of termination
and the rights of Executive under Section 6 of the Amendment to Consultant’s
Employment Agreement shall remain in full force and effect.  Either party may terminate this Consulting
Agreement prior to the expiration of its term in the event of a material breach
of the terms or conditions of this Consulting Agreement by the other party,
which breach is not cured within 30 days of written notice from the party not
in breach.  In addition to these 

 

 

3

 

rights of termination, each party will have the right, in the event of
an uncured breach by the other party, to avail itself of all remedies or causes
of action, in law or equity, for damages as a result of such breach. A material
provision of this Consulting Agreement shall include but is not limited to Section 2.2
(Non-Use and Non-Disclosure), Section 4.1 of this Consulting Agreement
(Conflicting Obligations), and Section 6.9 (Confidentiality of Consulting
Agreement).  Company may terminate this
Consulting Agreement without cause at any time, provided that upon such
termination all payments owing to Consultant for the remainder of the Term
shall be paid monthly to Consultant through the end of the term (12 months).

 

Survival.  Upon such termination all rights and duties
of the parties toward each other will cease except:

 

a.                                       Company shall
pay amounts it is otherwise obligated to pay, including payments for the
remainder of the term as specified above; and

 

b.                                      Sections 2
(Confidentiality), 3 (Ownership), 4 (Conflicting Obligations), and 6
(Miscellaneous) will survive termination of this Consulting Agreement.

 

6.     MISCELLANEOUS

 

Services and Information Prior to Effective Date.  All Services performed by Consultant and all
information and other materials disclosed between the parties prior to the
Effective Date shall be governed by the terms of this Consulting Agreement,
except where those Services are covered by a separate agreement between
Consultant and Company.

 

Nonassignment/Binding Consulting Agreement.  The parties acknowledge that the unique
nature of Consultant’s services is substantial consideration for the parties’
entering into this Consulting Agreement. 
Neither this Consulting Agreement nor any rights under this Consulting
Agreement may be assigned or otherwise transferred by Consultant, in whole or
in part, whether voluntarily or by operation of law, without the prior written
consent of Company.  Subject to the
foregoing, this Consulting Agreement will be binding upon and will inure to the
benefit of the parties and their respective successors and assigns.  Any assignment in violation of the foregoing
will be null and void.

 

Non-Solicitation.  Consultant agrees, during the term of this
Consulting Agreement and for a period of twelve (12) months immediately
following the termination of this Consulting Agreement, not to directly or
indirectly solicit any of the Company’s employees to leave their employment at
the Company.

 

Indemnity.  Consultant agrees to indemnify and hold
harmless the Company and its directors, officers and employees from and against
all taxes, losses, damages, liabilities, costs and expenses, including
attorneys’ fees and other legal expenses, arising directly or indirectly from
or in connection with (i) any grossly negligent, reckless or intentionally
wrongful act of Consultant or Consultant’s assistants, employees or agents, (ii) any
material breach by the Consultant or Consultant’s assistants, employees or
agents of any of the covenants contained in this Consulting Agreement, (iv) any
material failure of Consultant to perform the Services in accordance with all
applicable laws, rules and regulations, or (v) any material violation
or 

 

4

 

claimed violation of a third party’s rights resulting in whole or in
part from the Company’s use of the work product of Consultant under this
Consulting Agreement.

 

Notices.  Any notice required or permitted under the
terms of this Consulting Agreement or required by law must be in writing and
must be (a) delivered in person, (b) sent by first class registered
mail, or air mail, as appropriate, or (c) sent by overnight air courier,
in each case properly posted and fully prepaid to the appropriate address as
follows:

 

	
  For
  the Company:

  	
   

  	
  Nature’s
  Sunshine Products, Inc.

  
	
   

  	
   

  	
  Attn:
  General Counsel

  
	
   

  	
   

  	
  P.O. Box
  19005

  
	
   

  	
   

  	
  75
  East 1700 South

  
	
   

  	
   

  	
  Provo,
  UT 84605-9005

  
	
   

  	
   

  	
   

  
	
  For
  Executive:

  	
   

  	
  Douglas
  Faggioli

  
	
   

  	
   

  	
  1314
  East 660 North

  
	
   

  	
   

  	
  Orem,
  UT 84097

  

 

Either party may change its address for
notices by notice to the other party given in accordance with this
Section.  Notices will be deemed given at
the time of actual delivery in person, three (3) business days after
deposit in the mail as set forth above, or one (1) day after delivery to
an overnight air courier service.

 

Waiver.  Any waiver of the provisions of this
Consulting Agreement or of a party’s rights or remedies under this Consulting
Agreement must be in writing to be effective. 
Failure, neglect, or delay by a party to enforce the provisions of this
Consulting Agreement or its rights or remedies at any time, will not be
construed as a waiver of such party’s rights under this Consulting Agreement
and will not in any way affect the validity of the whole or any part of this
Consulting Agreement or prejudice such party’s right to take subsequent
action.  No exercise or enforcement by
either party of any right or remedy under this Consulting Agreement will
preclude the enforcement by such party of any other right or remedy under this
Consulting Agreement or that such party is entitled by law to enforce.

 

Severability.  If any term, condition, or provision in this
Consulting Agreement is found to be invalid, unlawful or unenforceable to any
extent, the parties shall endeavor in good faith to agree to such amendments that
will preserve, as far as possible, the intentions expressed in this Consulting
Agreement.  If the parties fail to agree
on such an amendment, such invalid term, condition or provision will be severed
from the remaining terms, conditions and provisions, which will continue to be
valid and enforceable to the fullest extent permitted by law.

 

Integration.  This Consulting Agreement, contain the entire
agreement of the parties with respect to the subject matter of this Consulting
Agreement and supersedes all previous communications, representations,
understandings and agreements, either oral or written, between the parties with
respect to said subject matter.  This
Consulting Agreement may not be amended, except by a writing signed by both
parties.

 

5

 

Counterparts.  This Consulting Agreement may be executed in
counterparts, each of which so executed will be deemed to be an original and
such counterparts together will constitute one and the same agreement.

 

Governing Law.  This Consulting Agreement will be interpreted
and construed in accordance with the laws of the State of Utah and the United
States of America, without regard to conflict of law principles.

 

Independent Contractor.  It is the express intention of the parties
that Consultant is an independent contractor. 
Nothing in this Consulting Agreement, including the election of the Rules in
the arbitration provision, will in any way be construed to constitute
Consultant as an agent, employee or representative of Company, but Consultant
shall perform the Services hereunder as an independent contractor.  Without limiting the generality of the
foregoing, Consultant is not authorized to bind the Company to any liability or
obligation or to represent that Consultant has any such authority.  Consultant shall furnish all tools and
materials necessary to accomplish this contract, and will incur all expenses
associated with performance.  Consultant
acknowledges and agrees that Consultant is obligated to report as income all
compensation received by Consultant pursuant to this Consulting Agreement, and
Consultant acknowledges its obligation to pay all self-employment and other
taxes thereon.

 

Benefits.  Consultant acknowledges that Consultant will
receive no Company-sponsored benefits from Company that are available to
employees, including without limitation paid vacation, sick leave, medical
insurance, and 401K participation.  If
Consultant is reclassified by a state or federal agency or court as an
employee, Consultant will become a reclassified employee and will receive no
benefits except those mandated by state or federal law, even if by the terms of
Company’s benefit plans in effect at the time of such reclassification
Consultant would otherwise be eligible for such benefits.

 

Attorney’s Fees.  In any court action at law or equity which is
brought by one of the parties to enforce or interpret the provisions of this
Consulting Agreement, the prevailing party will be entitled to reasonable
attorney’s fees, in addition to any other relief to which that party may be
entitled.

 

Voluntary Nature of
Consulting Agreement.  The parties
hereto acknowledge and agree that they are executing this Consulting Agreement
voluntarily and without any duress or undue influence.  The parties further acknowledge and agree
that they have carefully read this Consulting Agreement and that they have
asked any questions needed to fully understand the terms, consequences and
binding effect of this Consulting Agreement. 
The parties further agree that they have been provided an opportunity to
seek the advice of an attorney of their choice before signing this Consulting
Agreement.

 

6

 

The parties have executed this Consulting Agreement below to indicate
their acceptance of its terms.

 

	
  DOUGLAS FAGGIOLI

  	
   

  	
  NATURE’S SUNSHINE PRODUCTS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Douglas Faggioli

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address: 

  	
  1314 East 660 North

  	
   

  	
  Address:

  	
  75 E 1700 South

  
	
   

  	
  Orem, UT 84097

  	
   

  	
   

  	
  Provo, Utah 84040

  
	
   

  	
   

  	
   

  

 

 

7

 

EXHIBIT A

 

RELEASE AGREEMENT

 

THIS RELEASE AGREEMENT (this “Release”) is
made by and between Douglas Faggioli (the “Executive”) and
Nature Sunshine Products, Inc. (the “Company”).

 

WHEREAS, Executive’s employment as an executive of the Company has
terminated; and

 

WHEREAS, pursuant to the Employment Agreement as amended by the First
Amendment to Faggioli Employment Agreement, by and between the Company and
Executive (the “Amended Agreement”), the Company has agreed to pay Executive
certain amounts and to provide him with certain rights and benefits, and to
enter into a Consulting Agreement with Executive (the “Consulting Agreement”)
subject to the execution of this Release.

 

NOW THEREFORE, in consideration of these promises and the mutual promises
contained herein, and intending to be legally bound hereby, the parties agree
as follows:

 

1.             Consideration. Executive acknowledges that: (i) the
payments, rights and benefits set forth in  the Amended Agreement
constitute full settlement of all his/her rights under the Agreement, and (ii) except
as otherwise provided specifically in this Release, the Company does not and
will not have any other liability or obligation to Executive under the Amended
Agreement. Executive further acknowledges that, in the absence of his execution
of this Release, the benefits and payments specified in the Amended Agreement
(other than those specified) would not otherwise be due to him/her.

 

2.             Release and Covenant Not to Sue.

 

2.1           Subject to the
obligations of Company in the Amended Agreement and the Consulting Agreement,
Executive and the Company each hereby fully and forever releases and discharges
the other, and all of their respective predecessors and successors, assigns,
stockholders, subsidiaries, parents, affiliates, officers, directors, trustees,
employees, agents and attorneys, past and present and in their respective
capacities as such (the Company and Executive and each such respective person
or entity is each referred to as a “Released Person”)
from any and all claims, demands, liens, agreements, contracts, covenants,
actions, suits, causes of action, obligations, controversies, debts, costs,
expenses, damages, judgments, orders and liabilities, of whatever kind or
nature, direct or indirect, in law, equity or otherwise, whether known or
unknown, arising through the date of this Release, including those arising out
of Executive’s employment by the Company or the termination thereof, including,
but not limited to, any claims for relief or causes of action under the Age
Discrimination in Employment Act, 29 U.S.C. §  621 et seq., or any other
federal, state or local statute, ordinance or regulation regarding
discrimination in employment and any claims, demands or actions based upon
alleged wrongful or retaliatory discharge or breach of contract under any state
or federal law.

 

2.2           Executive and the
Company expressly represent that they have not filed a lawsuit or initiated any
other administrative proceeding against a Released Person and that 

 

 

 

neither has assigned any
claim against a Released Person. Executive and the Company each further promise
not to initiate a lawsuit or to bring any other claim against the other or any
Released Person arising out of or in any way related to Executive’s employment
by the Company or the termination of that employment.  This Release will not prevent Executive from
filing a charge with the Equal Employment Opportunity Commission (or similar
state agency) or participating in any investigation conducted by the Equal
Employment Opportunity Commission (or similar state agency); provided, however, that any claims by
Executive for personal relief in connection with such a charge or investigation
(such as reinstatement or monetary damages) would be barred.  This Release shall not affect Executive’s
rights under the Age Discrimination in Employment Act or the Older Workers
Benefit Protection Act to have a judicial determination of the validity of this
release and waiver.

 

3.             Restrictive Covenants.  Executive acknowledges that the restrictive covenants
contained in the Amended Agreement will survive the termination of his
employment. Executive affirms that those restrictive covenants are reasonable
and necessary to protect the legitimate interests of the Company, that he
received adequate consideration in exchange for agreeing to those restrictions
and that he will abide by those restrictions.

 

4.             Non-Disparagement.  Executive will not disparage the Company or
any of its Released Persons or otherwise take any action which could reasonably
be expected to adversely affect the personal or professional reputation of the
Company or its Released Persons.  The
Company’s Senior Management and Board of Directors will not disparage Executive
or otherwise take any action which could reasonably be expected to adversely
affect the personal or professional reputation of Executive.

 

5.             Cooperation.  Executive further agrees that, subject to
reimbursement of his reasonable expenses, he will cooperate fully with the
Company and its counsel with respect to any matter (including litigation,
investigations, or governmental proceedings) in which Executive was in anyway
involved during his employment with the Company. Executive shall render such
cooperation in a timely manner on reasonable notice from the Company.

 

6.             Rescission Right. 
Executive expressly acknowledges and recites that (a) he has read
and understands the terms of this Release in its entirety, (b) he has
entered into this Release knowingly and voluntarily, without any duress or
coercion; (c) he has been advised orally and is hereby advised in writing
to consult with an attorney with respect to this Release before signing it; (d) he
was provided twenty-one (21) calendar days after receipt of the Release to
consider its terms before signing it; (e) should he nevertheless elect to
execute this Agreement sooner than 21 days after he has received it, he
specifically and voluntarily waives the right to claim or allege that he has
not been allowed by the Company or by any circumstances beyond his control to
consider this Agreement for a full 21 days; and (f) he is provided seven (7) calendar
days from the date of signing to terminate and revoke this Release, in which
case this Release shall be unenforceable, null and void. Executive may revoke
this Release during those seven (7) days by providing written notice of
revocation to the Company.

 

7.             Challenge. 
If Executive violates or challenges the enforceability of any provisions
of the Restrictive Covenants or this Release, no further payments, rights or
benefits 

 

 

2

 

under the Amended Agreement
will be due to Executive (except where such provision would be prohibited by
applicable law, rule or regulation).

 

8.             Miscellaneous.

 

8.1           No Admission of
Liability.  This Release is not to
be construed as an admission of any violation of any federal, state or local
statute, ordinance or regulation or of any duty owed by the Company to
Executive. There have been no such violations, and the Company specifically
denies any such violations.

 

8.2           No Reinstatement.
Executive agrees that he will not without the consent of the Company apply for
reinstatement with the Company or seek in any way to be reinstated, re-employed
or hired by the Company in the future,

 

8.3           Successors and
Assigns. This Release shall inure to the benefit of and be binding upon the
Company and Executive and their respective successors, permitted assigns,
executors, administrators and heirs. Executive shall not may make any
assignment of this Release or any interest herein, by operation of law or
otherwise. The Company may assign this Release to any successor to all or
substantially all of its assets and business by means of liquidation,
dissolution, merger, consolidation, transfer of assets, or otherwise.

 

8.4           Severability.
Whenever possible, each provision of this Release will be interpreted in such
manner as to be effective and valid under applicable law. However, if any
provision of this Release is held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability will not affect
any other provision, and this Release will be reformed, construed and enforced
as though the invalid, illegal or unenforceable provision had never been herein
contained.

 

8.5           Entire Agreement:
Amendments. Except as otherwise provided herein, this Release contains the
entire agreement and understanding of the parties hereto relating to the
subject matter hereof, and merges and supersedes all prior and contemporaneous
discussions, agreements and understandings of every nature relating to the
subject matter hereof.  This Release may
not be changed or modified, except by an agreement in writing signed by each of
the parties hereto.

 

8.6           Governing Law.
This Release shall be governed by, and enforced in accordance with, the laws of
the State of Utah, without regard to the application of the principles of
conflicts of laws.

 

8.7           Counterparts and
Facsimiles. This Release may be executed, including execution by facsimile
signature, in multiple counterparts, each of which shall be deemed an original,
and all of which together shall be deemed to be one and the same instrument.

 

[SIGNATURE PAGE FOLLOWS]

 

 

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  NATURE’S
  SUNSHINE PRODUCTS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  
	
   

  	
  Title:
  

  	
   

  
	
   

  	
  Date:
  

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DOUGLAS
  FAGGIOLI

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Executive

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Date

  

 

 

4

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