Document:

Exhibit

10.33

 

AMENDED AND RESTATED

SUBCLASS B-1 NOTE PURCHASE AGREEMENT

 

 

among

 

 

WILLIS ENGINE FUNDING

LLC,

as Issuer

 

 

WILLIS LEASE FINANCE

CORPORATION,

as Servicer

 

 

FORTIS BANK (NEDERLAND)

N.V.,

as a Subclass B-1 Note Purchaser

 

 

and

 

 

BARCLAYS BANK PLC,

as a Subclass B-1 Note Purchaser and as Purchasers’ Agent

 

 

dated as of December13,

2002

 

 

TABLE OF CONTENTS

 

	

  ARTICLE

  I DEFINITIONS

  
	

  SECTION 1.01. Certain Defined Terms.

  
	

  SECTION 1.02. Other Definitional

  Provisions.

  
	

   

  
	

  ARTICLE II PURCHASE AND

  SALE

  
	

  SECTION 2.01. Sale and Delivery of the

  Subclass B-1 Notes.

  
	

  SECTION 2.02. Acceptance and Custody of

  Series 2002-1 Subclass B-1 Notes.

  
	

  SECTION 2.03. Funding of Loans.

  
	

  SECTION 2.04. The Initial Funding and

  Fundings.

  
	

  SECTION 2.05. Reduction of the Subclass

  B-1 Maximum Limit.

  
	

  SECTION 2.06. Determination of

  Interest.

  
	

  SECTION 2.07. Payments, Computations,

  Etc.

  
	

  SECTION 2.08. Increased Costs.

  
	

  SECTION 2.09. Increased Capital.

  
	

  SECTION 2.10. Taxes.

  
	

   

  
	

  ARTICLE

  III CONDITIONS PRECEDENT TO OBLIGATION OF THE PURCHASER

  
	

  SECTION 3.01. Reserved.

  
	

  SECTION 3.02. Conditions Precedent to

  All Fundings

  
	

  SECTION 3.03. Conditions Precedent Each

  Funding.

  
	

   

  
	

  ARTICLE IV

  REPRESENTATIONS AND WARRANTIES

  
	

  SECTION 4.01. Representations and

  Warranties of the Issuer.

  
	

  SECTION 4.02. Representations and

  Warranties and Agreements of WLFC.

  
	

   

  
	

  ARTICLE

  V REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

  
	

  SECTION 5.01. Organization.

  
	

  SECTION 5.02. Authority, etc.

  
	

  SECTION 5.03. Securities Act. 16

  
	

  SECTION 5.04. Investment Company Act.

  
	

   

  
	

  ARTICLE VI COVENANTS

  OF THE ISSUER

  
	

  SECTION 6.01. [Reserved].

  
	

  SECTION 6.02. Information from the

  Issuer.

  
	

  SECTION 6.03. Access to Information.

  
	

  SECTION 6.04. Security Interests;

  Further Assurances.

  
	

  SECTION 6.05. Covenants.

  
	

  SECTION 6.06. Securities Act.

  
	

   

  
	

  ARTICLE VII

  MUTUAL COVENANTS AND AGREEMENTS

  
	

  SECTION 7.01. Legal Conditions to Closing.

  
	

  SECTION 7.02. Expenses and Fees.

  
	

  SECTION 7.03. Mutual Obligations.

  

 

i

 

	

  ARTICLE VIII

  INDEMNIFICATION

  
	

  SECTION 8.01. Indemnification by the

  Issuer.

  
	

  SECTION 8.02. Procedure.

  
	

  SECTION 8.03. Defense of Claims.

  
	

   

  
	

  ARTICLE IX THE

  PURCHASERS’ AGENT

  
	

  SECTION 9.01. Authorization and Action.

  
	

  SECTION 9.02. Purchasers’ Agent’s

  Reliance, Etc.

  
	

  SECTION 9.03. Purchasers’ Agent and

  Affiliate.

  
	

  SECTION 9.04. Indemnification.

  
	

  SECTION 9.05. Purchase Decision.

  
	

  SECTION 9.06. Successor Purchasers’

  Agent.

  
	

   

  
	

  ARTICLE

  X MISCELLANEOUS

  
	

  SECTION 10.01. Amendments.

  
	

  SECTION 10.02. Notices.

  
	

  SECTION 10.03. No Waiver; Remedies.

  
	

  SECTION 10.04. Binding Effect;

  Assignability.

  
	

  SECTION 10.05. [Reserved].

  
	

  SECTION 10.06. GOVERNING LAW;

  JURISDICTION.

  
	

  SECTION 10.07. No Proceedings.

  
	

  SECTION 10.08. Execution in

  Counterparts.

  
	

  SECTION 10.09. No Recourse.

  
	

  SECTION 10.10. Limited Recourse.

  
	

  SECTION 10.11. Survival.

  
	

  SECTION 10.12. Third-Party

  Beneficiaries.

  
	

  SECTION 10.13. Appointment of Agent for

  Service of Process.

  
	

  SECTION 10.14. Effect on Original Note

  Purchase Agreement.

  

 

ii

 

	

  SCHEDULES

  	

   

  
	

   

  	

   

  
	

  SCHEDULE

  1

  	

  Percentage

  Interests and Addresses for Delivery of Payments

  
	

   

  	

   

  
	

  SCHEDULE 2

  	

  Conditions Precedent to Initial Purchase

  
	

   

  	

   

  
	

  EXHIBITS

  	

   

  
	

   

  	

   

  
	

  EXHIBIT A

  	

  Form of Loan Request

  

 

iii

 

AMENDED AND RESTATED SUBCLASS B-1 NOTE PURCHASE

AGREEMENT (“Subclass B-1 Note Purchase Agreement”) dated as of December

13, 2002, among WILLIS ENGINE FUNDING LLC (the “Issuer”), WILLIS LEASE

FINANCE CORPORATION (the “Servicer”), FORTIS BANK (NEDERLAND) N.V. (a “Subclass

B-1 Note Purchaser”) and BARCLAYS BANK PLC, as a Subclass B-1 Note

Purchaser (in such capacity, a “Subclass B-1 Note Purchaser” and,

together with Fortis Bank (Nederland) N.V., the “Subclass B-1 Note

Purchasers”) and as the Purchasers’ Agent (in such capacity, the “Purchasers’

Agent”).

 

The Issuer, the Servicer, the Subclass B-1 Note

Purchasers and the Purchasers Agent are party to the Class B Note Purchase

Agreement dated as of September 12, 2002 (the “Original Note Purchase

Agreement”).

 

The parties hereto have agreed to amend and restate

the Original Note Purchase Agreement as follows:

 

ARTICLE I

DEFINITIONS

 

SECTION 1.01. 

Certain Defined Terms. 

Capitalized terms used herein without definition shall have the meanings

set forth in Exhibit B to the Indenture (as defined below), as applicable.  Additionally, the following terms shall have

the following meanings:

 

“Affected Person” means the Purchasers’ Agent,

each Owner, and each of their respective Affiliates, successors and assigns.

 

“Base Indenture” means the Amended and Restated

Indenture dated as of December13, 2002 between the Issuer, as issuer, and the

Indenture Trustee, as indenture trustee.

 

“Class A Notes” means, collectively, the

$180,000,000 in stated principal amount of the Issuer’s Subclass A-1 Notes

dated December 13, 2002 and issued pursuant to the Subclass A-1 Note Purchase

Agreement and $45,000,000 in stated principal amount of the Issuer’s Subclass

A-2 Notes dated December 13, 2002 and issued pursuant to the Subclass A-2 Note

Purchase Agreement.

 

“Class B Notes” means, collectively, the

$20,000,000 in stated principal amount of the Issuer’s Subclass B-1 Notes dated

December 13, 2002 and issued pursuant to this Subclass B-1 Note Purchase

Agreement, and the $5,000,000 in stated principal amount of the Issuer’s

Subclass B-2 Notes dated December 13_, 2002 and issued pursuant to the Subclass

B-2 Note Purchase Agreement.

 

“Commercial Paper Notes” means short-term

promissory notes issued or to be issued by Sheffield Receivables Corporation.

 

“Commitment Termination Date” means September

11, 2003 or such later date to which the Commitment Termination Date may be

extended (if extended) in the sole discretion of the Subclass B-1 Note

Purchasers in accordance with the terms of Section 2.03(b) hereof.

 

 

“Deal Documents” means the Series 2002-1

Transaction Documents and each other document, agreement, certificate, schedule

or other writing entered into or delivered in connection with the foregoing, as

the same may be amended, supplemented, restated, replaced or otherwise modified

from time to time.

 

“Dollars” or “$” means the lawful

currency of the United States of America.

 

“Exchange Act” means the Securities Exchange

Act of 1934, as amended.

 

“Excluded Taxes” has the meaning specified in

Section 2.10(a) hereof.

 

“Federal Bankruptcy Code” means the bankruptcy

code of the United States of America codified in Title 11 of the United States

Code.

 

“Funding” means a funding by the Subclass B-1

Note Purchasers of a Loan to the Issuer pursuant to Article II.

 

“Funding Date” means as to any Funding, any

Business Day that is (i) at least one (1) calendar week following the

immediately preceding Funding Date and (ii) two (2) Business Days immediately

following the receipt by the Purchasers’ Agent of a written request by the

Issuer to obtain a Loan, such notice to be in the form of Exhibit A

hereto and to conform to requirements of Section 3.02 hereof.

 

“Governmental Actions” means any and all

consents, approvals, permits, orders, authorizations, waivers, exceptions,

variances, exemptions or licenses of, or registrations, declarations or filings

with, any Governmental Authority required under any Governmental Rules.

 

“Governmental Rules” means any and all laws,

statutes, codes, rules, regulations, ordinances, orders, writs, decrees and

injunctions, of any Governmental Authority and any and all legally binding

conditions, standards, prohibitions, requirements and judgments of any

Governmental Authority.

 

“Increased Costs” has the meaning specified in

Section 2.08 hereof.

 

“Indemnified Party” has the meaning specified

in Section 8.01 hereof.

 

“Indenture” means the Base Indenture, as

supplemented by the Indenture Supplement, as the same may be amended and

supplemented from time to time.

 

“Indenture Supplement” means the Amended and

Restated Series 2002-1 Supplement dated as of December 13, 2002, between the

Issuer and the Indenture Trustee, as the same may be amended, supplemented or

otherwise modified from time to time.

 

“Interpretation” as used in Sections 2.08

and 2.09 hereof with respect to any law or regulation means the interpretation

or application of such law or regulation by any governmental authority

(including, without limitation, any entity exercising executive, legislative,

judicial, regulatory or administrative functions of or pertaining to

government), 

 

2

 

central bank, accounting standards board, financial services industry

advisory body or any comparable entity.

 

“Investment Company Act” means the United States

Investment Company Act of 1940, as amended.

 

“Issuer Documents” has the meaning specified in

Section 4.01(ii) hereof.

 

“Loan Request” means any request by the Issuer

pursuant to Section 2.04(b) and in the form of Exhibit A.

 

“Losses” has the meaning specified in Section

8.01 hereof.

 

“Notes” means the Class A Notes and the Class B

Notes.

 

“Other Taxes” means any present or future stamp

or documentary taxes or any other excise or property taxes, charges or similar

levies that arise from any payment or deposit required to be made hereunder,

under the Indenture or from the execution, delivery or registration of, or

otherwise with respect to, any of the foregoing.

 

“Owner” shall mean each Subclass B-1 Note

Purchaser.

 

“Percentage Interest” means, with respect to

any Subclass B-1 Note, a percentage equal to (x) the maximum principal balance

of such Subclass B-1 Note divided by (y) the maximum aggregate principal amount

of all Subclass B-1 Notes.

 

“Purchase” means the initial purchase by the

Subclass B-1 Note Purchasers of the Subclass B-1 Notes from the Issuer.

 

“Purchasers” means the Subclass B-1 Note

Purchasers.

 

“Purchasers’ Agent” means Barclays Bank PLC.

 

“Requirement of Law” means, as to any Person,

any law (statutory or common), treaty, rule or regulation or determination of

an arbitrator or of a Governmental Authority, in each case applicable to or

binding upon such Person or any of its property or to which such Person or any

of its property is subject.

 

“Section 2.10(a) Amount” has the meaning

specified in Section 2.10(a) hereof.

 

“Subclass B-1 Increased Costs” shall mean, with

respect to any Interest Accrual Period, an amount equal to the sum of (a) the

aggregate amount payable to all Affected Persons pursuant to Sections 2.08,

2.09 and 2.10 of this Agreement in respect of such Interest Accrual Period and

(b) the aggregate of such amounts with respect to prior Interest Accrual

Periods which remain unpaid.

 

“Subclass B-1 Note Purchasers” means Fortis

Bank (Nederland) N.V. and Barclays Bank PLC, in its capacity as a Subclass B-1

Note Purchaser.

 

3

 

“Taxes” has the meaning specified in Section

2.10(a) hereof.

 

“Termination Date” means the earliest of (a)

the date of the occurrence of an Early Amortization Event and (b) the

Commitment Termination Date.

 

“Third Party Claim” has the meaning specified

in Section 8.02 hereof.

 

“United States” means the United States of

America.

 

“WLFC Documents” has the meaning specified in

Section 4.02(i) hereof.

 

SECTION 1.02.  Other

Definitional Provisions.

 

(a)           All

terms defined in this Subclass B-1 Note Purchase Agreement shall have the

defined meanings when used in any certificate or other document made or

delivered pursuant hereto unless otherwise defined therein.

 

(b)           As

used herein and in any certificate or other document made or delivered pursuant

hereto or thereto, accounting terms not defined in Section 1.01, have the

meanings assigned to them in accordance with generally accepted accounting

principles in the United States.

 

(c)           The

words “hereof,” “herein” and “hereunder” and words of similar import when used

in this Subclass B-1 Note Purchase Agreement shall refer to this Subclass B-1

Note Purchase Agreement as a whole and not to any particular provision of this

Subclass B-1 Note Purchase Agreement; and Section, subsection, Schedule and

Exhibit references contained in this Subclass B-1 Note Purchase Agreement are

references to Sections, subsections, Schedules and Exhibits in or to this

Subclass B-1 Note Purchase Agreement unless otherwise specified.

 

ARTICLE II

PURCHASE AND SALE

 

SECTION 2.01.  Sale

and Delivery of the Subclass B-1 Notes. 

In reliance on the representations, warranties and agreements set forth

in the Original Note Purchase Agreement, the Issuer sold, and the Subclass B-1

Note Purchasers purchased, on the Closing Date,  the Subclass B-1 Notes with

a maximum aggregate principal amount of $20,000,000 and in the Percentage

Interests specified on Schedule 1 hereto, which Subclass B-1 Notes were duly

executed by the Issuer, duly authenticated by the Indenture Trustee and

registered in the name of the Purchasers’ Agent on behalf of the Subclass B-1

Note Purchasers.  The actual outstanding

principal balance of the Subclass B-1 Notes will be increased and decreased from

time to time in accordance with the terms hereof and of the Indenture

Supplement.

 

SECTION 2.02.  Acceptance

and Custody of Series 2002-1 Subclass B-1 Notes.  On the Closing Date, the Purchasers’ Agent took delivery of the

Subclass B-1 Notes and has maintained custody thereof on behalf of the Subclass

B-1 Note Purchasers.

 

4

 

SECTION 2.03.  Funding

of Loans.

 

(a)           On

the terms and conditions hereinafter set forth, the Issuer may, at its option,

request Loans from the Subclass B-1 Note Purchasers.  The Purchasers’ Agent may act on behalf of and for the benefit of

the Subclass B-1 Note Purchasers in this regard.  The Subclass B-1 Note Purchasers shall fund Loans from time to

time according to their respective Percentage Interests in the Subclass B-1

Notes during the period from the date hereof to but not including the

Termination Date; provided, however, that no Loan shall be funded

under this Agreement unless on the applicable Funding Date a Loan is funded under

the Subclass A-1 Note Purchase Agreement in an amount that is nine (9) times

the amount of the Loan funded under this Agreement.  Under no circumstances shall the Subclass B-1 Note Purchasers

fund any Loan if after giving effect to such Funding, (i) the aggregate

Subclass B-1 Note Principal Balance outstanding hereunder would either (A)

exceed the Subclass B-1 Note Commitment or (B) exceed the product of (y)

one-ninth (1/9) and (z) the aggregate Subclass A-1 Note Principal Balance

outstanding under the Subclass A-1 Note Purchase Agreement after giving effect

to the Funding made thereunder on the same date, (ii) the Class B Note

Principal Balance exceeds the Class B Note Commitments or (iii) the Aggregate

Note Principal Balance exceeds the sum of the Class A Note Commitments and the

Class B Note Commitments.

 

(b)           The

Issuer may, within 60 days, but no later than 45 days, prior to the then

existing Commitment Termination Date, by written notice to the Purchasers’

Agent, make written request for the Subclass B-1 Note Purchasers to extend the

Commitment Termination Date for an additional period of 364 days.  The Purchasers’ Agent will give prompt

notice to the Subclass B-1 Note Purchasers and the Subclass A-1 Note Purchasers

of its receipt of such request for extension of the Commitment Termination

Date.  The Subclass B-1 Note Purchasers

shall make a collective determination, in their sole discretion and after a

full credit review, not more than 30 days and not less than 15 days prior to

the then applicable Commitment Termination Date as to whether or not it will

agree to extend the Commitment Termination Date; provided, however,

that the failure of the Subclass B-1 Note Purchasers to make a timely response

to the Issuer’s request for extension of the Commitment Termination Date shall

be deemed to constitute a refusal by the Subclass B-1 Note Purchasers to extend

the Commitment Termination Date.  It

shall be a condition to the extension of the Commitment Termination Date that

the commitment under the Subclass A-1 Note Purchase Agreement be extended to

the same date.

 

SECTION 2.04.  The

Fundings.

 

(a)           The

Subclass B-1 Notes shall bear interest at the applicable Interest Rate as

provided in the Indenture.  Subject to

the conditions described in Sections 2.03, 3.01 and 3.02, as applicable, each

Funding shall be made in accordance with the procedures described in Section

2.04(b).

 

(b)           Each

Funding shall be made, after receipt by the Subclass B-1 Note Purchasers of a

Loan Request delivered by the Issuer to the Purchasers’ Agent at least two

Business Days prior to such proposed Funding Date and each such notice shall

specify (i) the aggregate amount of such Funding which amount must satisfy

the applicable minimum requirement set forth in the following sentence and (ii)

the date of such Funding.  The Issuer

shall deliver no more than two such notices in any calendar month, and each

amount specified in any such notice must satisfy the following minimum

requirements, as applicable, as a condition 

 

5

 

to the related Funding the Funding shall be in an amount equal to

$100,000 or an integral multiple of $1,000 in excess thereof; provided,

however, that if such Funding is to be made hereunder at a time when there is

no outstanding Commercial Paper Notes issued in respect of a Funding under the

Subclass A-1 Note Purchase Agreement of $4,500,000 or an integral multiple of

$9,000 in excess thereof, then such Funding under this Subclass B-1 Note

Purchase Agreement shall be in an amount equal to $500,000 or an integral

multiple of $1,000 in excess thereof. 

Each notice delivered by the Issuer pursuant to this Section 2.04 shall

be irrevocable.  Following receipt of

such notice, the Funding will be made by the Subclass B-1 Note Purchasers in

accordance with their respective Percentage Interests in the Subclass B-1

Notes.  On the date of such Funding the

Subclass B-1 Note Purchasers shall, upon satisfaction of the applicable

conditions set forth in Article III, make available to the Issuer by wire

transfer in immediately available funds, at such bank or other location

reasonably designated by Issuer in its Loan Request given pursuant to this

Section 2.04(b), in accordance with their respective Percentage Interests in

the Subclass B-1 Notes, an amount equal to the amount of such Loan related to

such Funding.  Notwithstanding any other

provision of this Section 2.04(b), following the consummation of the Term

Securitization, the Subclass B-1 Note Purchasers shall not be obligated to fund

a Loan under this Agreement and the Series 2002-1 Supplement until the Issuer

and the Subclass B-1 Note Purchasers have agreed in writing regarding the

Spread for such Loan.

 

SECTION 2.05.      Reduction

of the Subclass B-1 Maximum Limit. 

The Issuer may, upon at least five Business Days’ notice to the

Purchasers’ Agent, terminate in whole or reduce in part the portion of the

Subclass B-1 Maximum Limit that exceeds the sum of the aggregate Subclass B-1

Note Principal Balance and interest accrued and to accrue thereon through the

date of payment; provided, however, that each partial reduction

of the Subclass B-1 Maximum Limit shall be in an aggregate amount equal to

$100,000 or an integral multiple thereof; provided further, however,

that each partial reduction of the Subclass B-1 Maximum Limit shall be

accompanied by a partial reduction of the Subclass A-1 Maximum Limit under the

Subclass A-1 Note Purchase Agreement in an amount equal to nine (9) times the

amount of the partial reduction hereunder, provided  further  however

that the Subclass B-1 Maximum Limit may not be reduced by the Issuer if the

Subclass B-2 Maximum Limit is greater than zero (-0-).  Each notice of reduction or termination

pursuant to this Section 2.05 shall be irrevocable.

 

SECTION 2.06.      Determination

of Interest.  The Purchasers’ Agent

shall determine the Interest (including unpaid Interest, if any, due and

payable on a prior Payment Date) on the Subclass B-1 Notes to be paid on each

Payment Date for the applicable Interest Accrual Period and shall advise the

Issuer and the Indenture Trustee thereof prior to 2:00 p.m. (New York City

time) on the related Determination Date.

 

SECTION 2.07.  Payments,

Computations, Etc.

 

(a)           Unless

otherwise expressly provided herein, all amounts to be paid or deposited by the

Issuer or the Servicer hereunder shall be paid or deposited in accordance with

the terms hereof no later than 11:00 a.m. (New York City time) on the day when

due in lawful money of the United States in immediately available funds to

accounts maintained by the Subclass B-1 Note Purchasers as shown on Schedule 1

hereto, or such other accounts designated from time to time by the Subclass B-1

Note Purchasers.  The Issuer shall, to

the extent permitted 

 

6

 

by law, pay to the Subclass B-1 Note Purchasers Default Interest at the

Overdue Rate as provided in the Indenture; provided, however, that such

interest rate shall not at any time exceed the maximum rate permitted by

applicable law.  All computations of

interest and other fees hereunder shall be made on the basis of a year of 360

days for the actual number of days (including the first but excluding the last

day) elapsed.

 

(b)           Whenever

any payment hereunder shall be stated to be due on a day other than a Business

Day, such payment shall be made on the next succeeding Business Day, and such

extension of time shall in such case be included in the computation of payment

of Interest or any fee payable hereunder, as the case may be.

 

(c)           If

any Funding requested by the Issuer and approved by the Subclass B-1 Note

Purchasers pursuant to Section 2.04, is not, for any reason whatsoever related

to a default or nonperformance by the Issuer, made or effectuated, as the case

may be, on the date specified therefor, the Issuer shall indemnify the Subclass

B-1 Note Purchasers against any reasonable loss, cost or expense incurred by

the Subclass B-1 Note Purchasers, including, without limitation, any loss

(excluding loss of anticipated profits), cost or expense incurred by reason of

the liquidation or reemployment of deposits or other funds acquired by the

Subclass B-1 Note Purchasers to fund or maintain such Funding during such

Interest Accrual Period.

 

SECTION 2.08.      Increased

Costs.  If due to the introduction

of or any change (including, without limitation, any change by way of

imposition or increase of reserve requirements) in or in the Interpretation of

any law or regulation or the imposition of any guideline or request from any

central bank or other Governmental Authority after the date hereof reflecting

such change, there shall be an increase in the cost to an Affected Person of

making or maintaining any investment in the Subclass B-1 Notes or any interest

therein or of agreeing to purchase or invest in the Subclass B-1 Notes or any

interest therein, as the case may be (other than by reason of any

Interpretation of or introduction of or change in laws or regulations relating

to Taxes or Excluded Taxes), such Affected Person shall promptly submit to the

Issuer, the Servicer and, if such Person is not the Purchasers’ Agent, the

Purchasers’ Agent, a certificate setting forth in reasonable detail, the

calculation of such increased costs incurred by such Affected Person.  In determining such amount, such Affected

Person may use any reasonable averaging and attribution methods, consistent

with the averaging and attribution methods generally used by such Affected

Person in determining amounts of this type. 

The amount of increased costs set forth in such certificate (which

certificate shall, in the absence of manifest error, be prima facie evidence as

to such amount) shall be included in the Subclass B-1 Increased Costs for the

Interest Accrual Period immediately succeeding the date on which such

certificate was delivered (or if such certificate was delivered during the last

Interest Accrual Period, for such last Interest Accrual Period) and to the

extent remaining outstanding, each Interest Accrual Period thereafter until

paid in full.  The Purchasers’ Agent,

out of amounts received by it in respect of Subclass B-1 Increased Costs for

Affected Persons for any Interest Accrual Period, shall pay such increased

costs to such Affected Persons; provided, however, that if the

amount so distributable in respect of the Subclass B-1 Increased Costs is less

than the aggregate amount payable to all such Affected Persons pursuant to

Sections 2.08, 2.09 and 2.10 hereof, the resulting shortfall shall be allocated

among such Affected Persons on a pro rata basis (determined by the amount owed

to each).

 

7

 

SECTION 2.09.      Increased

Capital.  If the introduction of or

any change in or in the Interpretation of any law or regulation or the

imposition of any guideline or request from any central bank or other governmental

authority reflecting such change after the date hereof affects or would affect

the amount of capital required or expected to be maintained by any Affected

Person, and such Affected Person determines that the amount of such capital is

increased as a result of (i) the existence of the Subclass B-1 Note Purchasers’

agreement to make or maintain an investment in the Subclass B-1 Notes or any

interest therein and other similar agreements or facilities, or (ii) the

existence of any agreement by Affected Persons to make or maintain an

investment in the Subclass B-1 Notes or any interest therein or to fund any

such investment and any other commitments of the same type, such Affected

Person shall promptly submit to the Issuer, the Servicer and, if such Person is

not the Purchasers’ Agent, the Purchasers’ Agent, a certificate setting forth

in reasonable detail, the calculation of the additional amounts required to

compensate such Affected Person in light of such circumstances.  In determining such amount, such Affected

Person may use any reasonable averaging and attribution methods, consistent

with the averaging and attribution methods generally used by such Affected

Person in determining amounts of this type. 

The amount set forth in such certificate (which certificate shall, in

the absence of manifest error, be prima facie evidence as to such amount) shall

be included in the Subclass B-1 Increased Costs for the Interest Accrual Period

immediately succeeding the date on which such certificate was delivered (or if

such certificate was delivered during the last Interest Accrual Period, for

such last Interest Accrual Period), and to the extent remaining outstanding,

each Accrual Period thereafter until paid in full.  The Purchasers’ Agent, out of amounts received by it in respect

of Subclass B-1 Increased Costs for Affected Persons for any Interest Accrual

Period, shall pay such increased costs to such Affected Persons; provided,

however, that if the amount so distributable in respect of the Subclass

B-1 Increased Costs is less than the aggregate amount payable to all such

Affected Persons pursuant to Sections 2.08, 2.09 and 2.10 hereof, the resulting

shortfall shall be allocated among such Affected Persons on a pro rata basis

(determined by the amount owed to each).

 

SECTION 2.10.      Taxes.  (a) Any and all payments and deposits

required to be made under this Agreement, the Subclass B-1 Notes or the

Indenture by the Issuer or the Indenture Trustee to or for the benefit of an

Owner shall be made, to the extent allowed by law, free and clear of and

without deduction for any and all present or future taxes, levies, imposts,

deductions, charges or withholdings, and all liabilities with respect thereto,

now or hereafter imposed, levied, collected, withheld or assessed by any

Governmental Authority.  If, as a result

of any change in law, treaty or regulation or in the interpretation or

administration thereof by any governmental or regulatory agency or body charged

with the administration or interpretation thereof, or the adoption of any law,

treaty or regulation, any taxes, levies, imposts, duties, charges or fees are

required to be withheld from any amount payable to any Owner hereunder, the

amount so payable to such Owner shall be increased to the extent necessary to

yield to such Owner (after payment of all taxes, levies, imposts, duties,

charges or fees) the amount stated to be payable to such Owner hereunder (such

increase and any similar increase described in Section 2.10(d), a “Section

2.10(a) Amount”); provided, however, that this sentence shall not

apply with respect to (i) income taxes (including, without limitation, branch

profits taxes, minimum taxes and taxes computed under alternative methods, at

least one of which is based on net income) and franchise taxes that are based

on income or any other tax upon or measured by income or gross receipts imposed

on any Owner, in each case, as a result of a present or former connection

(other than any connection arising out of the transactions contemplated by this

Agreement) between the 

 

8

 

jurisdiction of the government or taxing authority imposing such tax

and such Owner; (ii) any taxes, levies, imposts, duties, charges or fees that

would not have been imposed but for the failure by such Owner to provide and

keep current any certification or other documentation permitted by applicable

law to be delivered by such Owner and required to qualify for an exemption from

or reduced rate thereof; (iii) any taxes, levies, imposts, duties, charges or

fees imposed as a result of a change by any Owner of the office through which

the Subclass B-1 Notes or any interest therein hereunder is acquired, accounted

for or booked as a result of the sale, transfer or assignment by any Owner of

its interest hereunder, other than any such taxes, levies, imposts, duties,

charges or fees imposed as a result of any such change or adoption occurring

after any such Subclass B-1 Notes or interest therein is acquired, accounted

for or booked; (iv) taxes measured by income, gross receipts, assets or capital

of any Owner by the taxing authority of the jurisdiction where such Owner is

organized, incorporated, managed, controlled or is considered to be doing

business or in which it maintains an office, branch or agency (other than Taxes

imposed on the gross amount of any payments made to under this Agreement

without regard to such place of origination or incorporation, such management

or control, the conduct of such business or the maintenance of such office,

branch or agency); (v) any Taxes imposed on such Owner as a result of payments

not related to this Agreement; and (vi) any withholding tax with respect to any

Owner (all such exclusions being hereinafter called “Excluded Taxes” and all

other taxes, levies, imposts, duties, charges or fees being hereinafter called

“Taxes”).  To the extent that any Owner

actually realizes a tax benefit on its income tax returns (whether by reason of

a deduction, credit or otherwise) (a “Tax Benefit”) for a given year that is

attributable to the payment by the Issuer or the Indenture Trustee of any such

Taxes on behalf of such Owner, such Owner shall reimburse the Issuer for the

amount of such Tax Benefit, it being understood that the taking of any action

to realize any Tax Benefit shall be within the sole discretion of such Owner;

provided, however, that for purposes of reimbursing the Issuer, such Owner

shall calculate the amount of the Tax Benefit realized that is attributable to

the Issuer’s or the Indenture Trustee’s payment of such Taxes on behalf of such

Owner as if such Owner realized or received such Tax Benefit pro rata with all

other Tax Benefits available to it for such year.

 

(b)           Each

of the Issuer and, to the extent not prohibited by applicable law (including

the Code), each Owner agrees that, with respect to all Federal, state and local

income franchise taxes, it will treat the Subclass B-1 Notes as

indebtedness.  Each Owner not organized

under the laws of the United States or a State thereof covenants that to the

extent that it is entitled to receive payments under this Agreement without

deduction or withholding of any United States federal income taxes (other than

Withholding Taxes) because such income is effectively connected with a United

States trade or business, it will continue to hold the Subclass B-1 Notes in

connection with a United States trade or business for so long as it is an

Owner.

 

(c)           Any

Section 2.10(a) Amounts payable to an Owner hereunder shall be included in the

Subclass B-1 Increased Costs (i) for the Interest Accrual Period in respect of

which the payment subject to withholding is made and (ii) to the extent

remaining outstanding, each Interest Accrual Period thereafter until paid in

full.  The Purchasers’ Agent, out of

amounts received by it in respect of Subclass B-1 Increased Costs for Affected

Persons for any Interest Accrual Period, shall pay such increased costs to such

Affected Persons; provided, however, that if the amount so

distributable in respect of the Subclass B-1 Increased Costs is less than the

aggregate amount payable to all such Affected Persons pursuant to Sections

2.08, 2.09 and 2.10 

 

9

 

hereof, the resulting shortfall shall be allocated among such Affected

Persons on a pro rata basis (determined by the amount owed to each).

 

ARTICLE III

CONDITIONS PRECEDENT TO OBLIGATION OF THE PURCHASER

 

SECTION 3.01.  Reserved.

 

SECTION 3.02.      Conditions

Precedent to All Fundings.  Each

Funding by the Subclass B-1 Note Purchasers (each, a “Transaction”) shall be

subject to the conditions precedent that (a) with respect to any Funding, the

Servicer shall have delivered to the Purchasers’ Agent, on or prior to the date

of such Funding in form and substance satisfactory to the Purchasers’ Agent, a

Loan Request substantially in the form of Exhibit A, and containing such

additional information as may be reasonably requested by the Purchasers’ Agent;

(b) on the date of such Transaction the following statements shall be true and

the Issuer shall be deemed to have certified that:

 

(i)            The representations and warranties

contained in Sections 4.01 and 4.02 are true and correct on and as of such day

as though made on and as of such date;

 

(ii)           No event has occurred and is

continuing, or would result from such Transaction which constitutes an Early

Amortization Event;

 

(iii)          On and as of such day, after giving

effect to such Transaction, the outstanding Subclass B-1 Note Principal Balance

does not exceed the Subclass B-1 Note Commitment and the outstanding Aggregate

Note Principal Balance does not exceed the sum of the Class B Note Commitments

and the Class A Note Commitments;

 

(iv)          On and as of such day, the Issuer and

the Servicer each has performed all of the agreements contained in this

Agreement to be performed by such person at or prior to such day;

 

(v)           No law or regulation shall prohibit,

and no order, judgment or decree of any federal, state or local court or

governmental body, agency or instrumentality shall prohibit or enjoin, the

making of such Loan, remittance of collections or Funding by the Subclass B-1

Note Purchasers in accordance with the provisions hereof;

 

(vi)          McAfee & Taft shall have delivered

to the Purchasers’ Agent its written opinion, dated the applicable Transfer

Date, which shall state that it may be relied upon by subsequent Subclass B-1

Noteholders, in form and substance satisfactory to the Purchasers’ Agent and

the Subclass B-1 Note Purchasers, with respect to FAA and recordation matters;

and

 

(vii)         on the date of such Transaction, the

Purchasers’ Agent shall have received such other approvals, opinions or

documents as the Purchasers’ Agent may reasonably require.

 

10

 

SECTION 3.03.      Conditions

Precedent To Each Funding.  Each

Funding is subject to the condition precedent, in addition to the conditions

precedent set forth in Section 3.02 hereof, that the Issuer shall have

delivered, or shall have caused to be delivered, to each designated recipient

named in Schedule G to the Indenture Supplement, each of the Funding

Deliverables scheduled to be delivered thereunder on or before the Funding Date

of such Funding.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

 

SECTION 4.01.      Representations

and Warranties of the Issuer.  The

Issuer represents (as of the Effective Date and as of each date on which a Loan

is made by a Subclass B-1 Noteholder pursuant to the Supplement, unless

otherwise indicated) and warrants to, and agrees with, the Subclass B-1 Note

Purchasers that:

 

(i)            The Issuer is a limited liability company

duly organized, validly existing and in good standing under the laws of the

State of Delaware, with its chief executive office located at 2320 Marinship

Way, Suite 300, Sausalito, California 94965, and has the power to own its

assets and to engage in the activities in which it is presently engaged and is

duly qualified and in good standing under the laws of each jurisdiction where

its ownership of property or the conduct of its activities requires such

qualification, if the failure to so qualify would have a material adverse

effect on the financial condition of the Issuer or on the enforceability of the

Subclass B-1 Notes or the ability of the Issuer to perform its obligations

under this Agreement and the other Related Documents to which it is a party.  One hundred percent of the beneficial

ownership of the Issuer is owned by Willis Lease Finance Corporation

(“WLFC”).  The Issuer has no

subsidiaries other than WLFC Funding (Ireland) Limited;

 

(ii)           The Issuer has the power, authority

and legal right to execute, deliver and perform its obligations under this

Agreement and the other Related Documents to which it is a party (collectively,

the “Issuer Documents”); the execution, delivery, and performance of the Issuer

Documents by the Issuer have been duly authorized by the Issuer by all

necessary action, the Issuer Documents, other than the Subclass B-2 Notes and

the Subclass A-2 Notes, have been duly executed and delivered by the Issuer,

and each of the Subclass B-2 Notes and the Subclass A-2 Notes, when issued in

accordance with the terms hereof and of the Indenture and the Supplement, will

have been duly executed and delivered;

 

(iii)          Each of the Issuer Documents (other

than the Subclass B-2 Notes and the Subclass A-2 Notes), assuming due

authorization, execution and delivery by the other parties thereto,

constitutes, and each of the Subclass B-2 Notes and the Subclass A-2 Notes,

when issued and authenticated in accordance with the terms of the Indenture,

will constitute, a legal, valid and binding obligation of the Issuer,

enforceable against the Issuer in accordance with its terms, except that such

enforcement may be limited by (A) bankruptcy, insolvency, reorganization,

moratorium or other similar laws (whether statutory, regulatory or decisional)

now or hereafter in effect relating to creditors’ rights 

 

11

 

generally and (B) general principles of equity

(regardless of whether such enforceability is considered in a proceeding in

equity or at law);

 

(iv)          The consummation of the transactions

contemplated by the Issuer Documents and the fulfillment of the terms therein

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

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

default under the certificate of formation or limited liability company

agreement of the Issuer, or any indenture, agreement, mortgage, deed of trust,

commitment letter or funding arrangement with any lending institution or

investment bank or other instrument to which the Issuer is a party or by which

it is bound, or result in the creation or imposition of any lien, claim or

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

agreement, mortgage, deed of trust, commitment letter or funding arrangement

with any lending institution or investment bank or other such instrument, other

than as created pursuant to the Indenture and the Supplement, or violate any

law or, any order, rule or regulation applicable to the Issuer of any court or

of any federal or state regulatory body, administrative agency or other

governmental instrumentality having jurisdiction over the Issuer or any of its

properties and there are no legal or governmental proceedings pending or, to

the best knowledge of the Issuer, threatened or contemplated that would result

in a material modification or revocation thereof;

 

(v)           There are no litigation, proceedings

or investigations to which the Issuer, or any Affiliate of the Issuer, is a

party pending, or, to the knowledge of Issuer, threatened, before any court,

regulatory body, administrative agency or other tribunal or governmental

instrumentality (A) asserting the invalidity of the Class B Notes or the Class

A Notes or the other Issuer Documents, (B) seeking to prevent the issuance of

the Subclass B-1 Notes or the consummation of any of the transactions

contemplated by the other Issuer Documents, or (C) seeking any determination or

ruling that would materially and adversely affect the performance by the Issuer

of its obligations under, or the validity or enforceability of, the Class B

Notes or the Class A Notes or the other Issuer Documents;

 

(vi)          All approvals, authorizations,

consents, orders or other actions of any person, corporation or other

organization, or of any court, governmental agency or body or official,

required in connection with the execution and delivery of the Issuer Documents

by the Issuer and with the valid and proper authorization, issuance and sale of

the Class B Notes and the Class A Notes pursuant to this Agreement, have been

or will be taken or obtained on or prior to the Effective Date;

 

(vii)         No written materials delivered to the

Subclass B-1 Note Purchaser by or on behalf of the Issuer in connection with

the sale of the Subclass B-1 Notes contain any untrue statement of a material

fact or omit a material fact necessary to make the statements contained therein

or herein not misleading.  There is no

fact peculiar to the Issuer or any Affiliate of the Issuer or, to the knowledge

of the Issuer, any Lease Agreement, Lessee or Engine which the Issuer has not

disclosed to the Purchasers’ Agent in writing which materially adversely

affects or, so far as the Issuer can now reasonably 

 

12

 

foresee, will materially adversely affect the ability

of the Issuer to perform the transactions contemplated hereby and by the other

Related Documents;

 

(viii)        Each supplement to the List of Engines

will be made available to the Purchasers’ Agent by the Issuer and will be

complete as of the date thereof and will include an accurate (in all material

respects) description of the Engines;

 

(ix)           The representations and warranties

made by the Issuer in the Issuer Documents are true and correct in all material

respects and the Subclass B-1 Note Purchaser shall be entitled to rely on such

representations and warranties;

 

(x)            Any taxes, fees and other

governmental charges payable by the Issuer in connection with the execution and

delivery of the Issuer Documents, the pledge of the Collateral to the Indenture

Trustee, and the execution, delivery and sale of the Class B Notes and the

Class A Notes, have been paid;

 

(xi)           To the extent the Exchange Act may be

deemed to apply to the Class B Notes and the Class A Notes and the Loans, none

of the transactions contemplated in the Issuer Documents (including, without

limitation thereof; the use of the proceeds from the sale of the Subclass B-1

Notes) will violate or result in a violation of Section 7 of the Exchange Act,

or any regulations issued pursuant thereto;

 

(xii)          Concurrently with the execution and

delivery of this Agreement, the Issuer is executing no other note purchase

agreement with respect to Subclass B-1 Notes;

 

(xiii)         The Issuer is not an “investment

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

 

(xiv)        For so long as the Series 2002-1 Class A

and Class B Notes are the only Notes outstanding under the Indenture, each of

the Indenture and the Supplement need not be qualified as an “indenture” pursuant

to the terms of the Trust Indenture Act of 1939, as amended;

 

(xv)         The Issuer has not taken and will not

take, directly or indirectly, any action, prohibited by Rules 101 and 102 under

Regulation M of the Securities and Exchange Commission in connection with the

offering of the Class B Notes and the Class A Notes;

 

(xvi)        To the extent that the Securities Act

may be deemed to apply to the Class B Notes and the Class A Notes and the

Loans, neither the Issuer nor any affiliate (as defined in Rule 501(b) of

Regulation D under the Securities Act (“Regulation D”)) of the Issuer has

directly, or through any agent, including, without limitation, the Purchasers’

Agent, (i) sold, offered for sale, solicited offers to buy or otherwise

negotiated in respect of, any security (as defined in the Securities Act) which

is or will be integrated with the sale of the Class B Notes or the Class A

Notes in a manner that would render the issuance and sale of the Class B Notes

and the Class A Notes a violation of the Securities Act or require the

registration of the Class B Notes or the Class A Notes under the Securities Act

or (ii) engaged in any form of general solicitation or general advertising

(within the 

 

13

 

meaning of Regulation D) in connection with the

offering of the Class B Notes and the Class A Notes;

 

(xvii)       To the extent that the Securities Act may

be deemed to apply to the Class B Notes and the Class A Notes and the Loans, it

is not necessary in connection with the offer, sale and delivery of the Class B

Notes in the manner contemplated by this Agreement or the Subclass B-2 Note

Purchase Agreement or the Class A Notes in the manner contemplated by the Class

A Note Purchase Agreements to register the Class B Notes or the Class A Notes

under the Securities Act assuming that the Subclass B-1 Note Purchaser is an

“accredited investor” as defined in Regulation D under the Securities Act;

 

(xviii)      No event has occurred and is continuing

that constitutes, or with the passage of time or the giving of notice or both

would constitute, an Early Amortization Event under, and as defined in, the

Indenture.  The Issuer is not in

violation of any agreement, charter instrument, bylaw or other instrument to

which they are a party or by which they are or may be bound;

 

(xix)         The aggregate amount of Scheduled

Payments payable by the Lessees under the Lease Agreements during each

Collection Period is sufficient to pay the monthly Servicing Fee, and the

principal and interest on the Class B Notes and the Class A Notes, as such

payments become due and payable, in accordance with the Indenture;

 

(xx)          The Issuer agrees that it will not

directly or indirectly, sell or offer to sell the Class B Notes or the Class A

Notes or similar security in a manner that would render the issuance and sale

of the Class B Notes or the Class A Notes pursuant to this Agreement a

violation of Section 5 of the Securities Act.

 

SECTION 4.02.      Representations

and Warranties and Agreements of WLFC. 

WLFC hereby represents (as of the Effective Date and as of each date on

which a Loan is made by a Subclass B-1 Noteholder pursuant to the Indenture

Supplement, unless otherwise indicated) and warrants to, and agrees with, the

Subclass B-1 Note Purchasers that:

 

(i)            The representations and warranties

made by WLFC in this Subclass B-1 Note Purchase Agreement, the Subclass B-2

Note Purchase Agreement, the Class A Note Purchase Agreements, the Guaranty,

the Contribution and Sale Agreement, the Servicing Agreement and any other Related

Document to which it is a party (collectively, the “WLFC Documents”) are true

and correct in all material respects and the Subclass B-1 Note Purchaser shall

be entitled to rely on such representations and warranties;

 

(ii)           No written materials delivered to the

Subclass B-1 Note Purchasers by or on behalf of WLFC in connection with the

sale of the Class B Notes or the Class A Notes contain any untrue statement of

a material fact or omit a material fact necessary to make the statements

contained therein or herein not misleading. 

There is no fact peculiar to WLFC or any Affiliate of WLFC or, to the

knowledge of WLFC, any Lease Agreement, Lessee or Engine which WLFC had not

disclosed to the Purchasers’ Agent in writing which materially affects

adversely or, so far as WLFC can now reasonably foresee, will materially affect

adversely the ability of WLFC to perform the transactions contemplated 

 

14

 

hereby and by the Base Indenture, the Indenture

Supplement, the Servicing Agreement, the Class B Notes or the Class A Notes;

 

(iii)          Any taxes, fees and other governmental

charges payable by WLFC on or prior to the Effective Date in connection with

the execution and delivery of the WLFC Documents, have been, or will be, paid

on or prior to the Effective Date;

 

(iv)          To the extent that the Exchange Act

may be deemed to apply to the Class B Notes and the Class A Notes and the

Loans, none of the transactions contemplated herein, in the Subclass B-2 Note

Purchase Agreement or in the Class A Note Purchase Agreements (including,

without limitation thereof; the use of the proceeds from the sale of the Class

B Notes and the Class A Notes) will violate or result in a violation of Section

7 of the Exchange Act or any regulations issued pursuant thereto including,

without limitation, Regulations T, U and X of the Federal Reserve Board, 12

C.F.R., Chapter II.  WLFC will not use

any distribution from the Issuer of proceeds received by the Issuer from the

sale of the Class B Notes and the Class A Notes to purchase or carry, directly

or indirectly, margin stock;

 

(v)           No event has occurred and is

continuing that constitutes, or with the passage of time or the giving of

notice or both would constitute a Servicer Event of Default or an Early

Amortization Event under, and as defined in, the Servicing Agreement or the

Indenture, respectively.  WLFC is not in

violation in any material respect of any term of any agreement, charter

instrument, bylaw or other instrument to which it is a party or by which it is

or may be bound;

 

(vi)          The aggregate amount of Scheduled

Payments payable by the Lessees under the Lease Agreements during each

Collection Period is sufficient to cover the monthly Servicing Fee, and pay the

principal and interest on the Class B Notes and the Class A Notes, as such

payments become due and payable, in accordance with the Indenture; and

 

(vii)         To the extent that the Securities Act

may be deemed to apply to the Class B Notes and the Class A Notes and the

Loans, neither WLFC nor any affiliate (as defined in Rule 501(b) of Regulation

D) of WLFC has directly, or through any agent, including, without limitation,

the Purchasers’ Agent, (i) sold, offered for sale, solicited offers to buy or

otherwise negotiated in respect of, any security (as defined in the Securities

Act) which is or will be integrated with the sale of the Class B Notes and the

Class A Notes in a manner that would render the issuance and sale of the Class

B Notes and the Class A Notes a violation of the Securities Act or require the

registration of the Class B Notes or the Class A Notes under the Securities Act

or (ii) engaged in any form of general solicitation or general advertising

(within the meaning of Regulation D) in connection with the offering of the

Class B Notes and the Class A Notes.  It

is not necessary in connection with the offer, sale and delivery of the Class B

Notes and the Class A Notes to register the Class B Notes or the Class A Notes

under the Securities Act.

 

15

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

 

Each of the Subclass B-1 Note Purchasers hereby makes

the following representations and warranties as to itself to the Issuer as of

the Closing Date:

 

SECTION 5.01.      Organization.  Such Subclass B-1 Note Purchaser has been

duly organized and is validly existing and in good standing as a corporation

under the laws of its jurisdiction of incorporation, with power and authority

to own its properties and to transact the business in which it is now engaged,

and such Subclass B-1 Note Purchaser is duly qualified to do business and is in

good standing in each State of the United States where the nature of its

business requires it to be so qualified.

 

SECTION 5.02.      Authority,

etc.  Such Subclass B-1 Note

Purchaser has all requisite power and authority to enter into and perform its

obligations under this Subclass B-1 Note Purchase Agreement and to consummate

the transactions contemplated hereby. 

The execution and delivery by such Subclass B-1 Note Purchaser of this

Subclass B-1 Note Purchase Agreement and the consummation by such Subclass B-1

Note Purchaser of the transactions contemplated hereby have been duly and

validly authorized by all necessary corporate action on the part of such

Subclass B-1 Note Purchaser.  This

Subclass B-1 Note Purchase Agreement has been duly and validly executed and

delivered by such Subclass B-1 Note Purchaser and constitutes a legal, valid

and binding obligation of such Subclass B-1 Note Purchaser, enforceable against

such Subclass B-1 Note Purchaser in accordance with its terms, subject as to

enforcement to bankruptcy, reorganization, insolvency, moratorium and other

similar laws of general applicability relating to or affecting creditors’

rights and to general principles of equity. 

Neither the execution and delivery by such Subclass B-1 Note Purchaser

of this Subclass B-1 Note Purchase Agreement nor the consummation by such

Subclass B-1 Note Purchaser of any of the transactions contemplated hereby, nor

the fulfillment by such Subclass B-1 Note Purchaser of the terms hereof, will

conflict with, or violate, result in a breach of or constitute a default under

(i) any term or provision of the Articles of Incorporation or By-laws of such

Subclass B-1 Note Purchaser or any Governmental Rule applicable to such

Subclass B-1 Note Purchaser or (ii) any term or provision of any indenture or

other agreement or instrument, to which such Subclass B-1 Note Purchaser is a

party or by which such Subclass B-1 Note Purchaser or any portion of its

properties are bound.  No Governmental

Action which has not been obtained is required by or with respect to such

Subclass B-1 Note Purchaser in connection with the execution and delivery of

this Subclass B-1 Note Purchase Agreement by such Subclass B-1 Note Purchaser

or the consummation by such Subclass B-1 Note Purchaser of the transactions

contemplated hereby or thereby.

 

SECTION 5.03.  Securities

Act.

 

(a)           The Subclass B-1 Notes purchased by

the Subclass B-1 Note Purchasers pursuant to this Subclass B-1 Note Purchase

Agreement will be acquired for investment only and not with a view to any

public distribution thereof, and each Subclass B-1 Note Purchaser (as to

itself) will not offer to sell or otherwise dispose of its Subclass B-1 Notes

(or any interest therein) in violation of any of the registration requirements

of the Securities Act or any applicable state or other securities laws.  The Subclass B-1 Note Purchasers

acknowledges that it 

 

16

 

has no right to require the Issuer to register the

Subclass B-1 Notes under the Securities Act or any other securities law.  Each of the Subclass B-1 Note Purchasers

agrees that the Subclass B-1 Notes may not be reoffered, resold, pledged or

otherwise transferred except in compliance with the Securities Act and to a

person that such Subclass B-1 Note Purchaser reasonably believes is a Qualified

Institutional Buyer within the meaning of 

Rule 144A (a “QIB”) purchasing for its own account or a QIB purchasing for

the account of a QIB, and whom the holder has informed, in each case, that the

reoffer, resale or pledge or other transfer is being made in reliance on Rule

144A under the Securities Act.  Neither

the Subclass B-1 Note Purchasers nor any of their Affiliates nor any persons

acting on their behalf have engaged or will engage in any general solicitation

or general advertising with respect to the Subclass B-1 Notes.

 

(b)           Each of the Subclass B-1 Note

Purchasers (as to itself) is aware of the following:  (i) there are significant restrictions on and conditions to the

transferability of the Subclass B-1 Notes (and the Subclass B-1 Notes will bear

legends referring to such restrictions) and there is no market for the Subclass

B-1 Notes and no market is expected to develop for the Subclass B-1 Notes, and

accordingly, it may not be possible for a Subclass B-1 Note Purchaser to

liquidate such Subclass B-1 Note Purchaser’s investment in the Subclass B-1

Notes; (ii) no governmental agency has made any findings as to the fairness of

the terms of this Agreement or the terms and conditions of the Subclass B-1

Notes; (iii) there are numerous risks and uncertainties involved in such

Subclass B-1 Note Purchaser’s acquisition of the Subclass B-1 Notes and such

Subclass B-1 Note Purchaser has been advised of and understands such risks and

uncertainties; and (iv) any projections or predictions that may have been made

available to such Subclass B-1 Note Purchaser are based on estimates,

assumptions, and forecasts which may prove to be incorrect; and no assurance is

given that actual results will correspond with the results contemplated by the

various projections.

 

(c)           Each Subclass B-1 Note Purchaser (as

to itself) has knowledge and experience in financial and business matters, is

capable of evaluating the merits and risks of an investment in the Subclass B-1

Notes and has carefully considered the suitability of an investment in such

Notes and has determined that the Subclass B-1 Notes are a suitable investment.  Such Subclass B-1 Note Purchaser has

received and carefully read the Transaction Documents and such Subclass B-1

Note Purchaser confirms that all documents, records and books pertaining to the

Subclass B-1 Notes, the Issuer and its assets and the other parties to the Transaction

Documents which are relevant to such Subclass B-1 Note Purchaser’s investment

decision have been made available to such Subclass B-1 Note Purchaser.  Such Subclass B-1 Note Purchaser is capable

of bearing the risks and burdens of its investment in the Subclass B-1 Notes

and is aware that an early redemption of the Subclass B-1 Notes may occur and

that no premium will be paid upon any early redemption.

 

SECTION 5.04.  Investment

Company Act.

 

(a)           Neither of the Subclass B-1 Note

Purchasers (as to itself) nor the Purchasers’ Agent is required to register as

an “investment company” nor is either of the Subclass B-1 Note Purchasers or

the Purchasers’ Agent controlled by an “investment company” within the meaning

of the Investment Company Act.

 

17

 

(b)           The Subclass B-1 Note Purchasers and

the Purchasers’ Agent acknowledge that the Issuer has not registered as an

investment company under the Investment Company Act.  In connection with the exclusion of the Issuer from

classification as an investment company under the Investment Company Act, each

Subclass B-1 Note Purchaser represents as to itself that it constitutes no more

than seven “beneficial owners” of the Subclass B-1 Notes for purposes of

Section 3(c)(1) of the Investment Company Act. 

Such Subclass B-1 Note Purchaser further represents that:  (i) it is investing no more than 40% of its

assets in the Subclass B-1 Notes; (ii) it was not formed for the purpose of

investing in the Subclass B-1 Notes; (iii) (a) the shareholders, partners or

other holders of equity or beneficial interests in such Subclass B-1 Note

Purchaser are not able to decide individually whether to acquire the Subclass

B-1 Notes or to determine the extent of such acquisition and (b) it is not a

defined contribution or similar benefit plan that allows participants to

determine whether or how much will be invested in investments on their behalf;

(iv) it is acquiring the Subclass B-1 Notes in a principal amount of not less

than the minimum denominations set forth in the Indenture; and (v) it is

acquiring the Subclass B-1 Notes for investment and not for sale in connection

with any distribution thereof.  Such

Subclass B-1 Note Purchaser further understands and agrees that it will not

permitted to transfer any or all of the Subclass B-1 Notes or any interest

therein unless the Issuer has consented to such transfer and the transferee has

delivered to the Issuer and the Indenture Trustee an investment letter making

representations and warranties substantially the same as the foregoing

representations and warranties in this Section 5.04(b).  The Issuer will not consent to any proposed

transfer which, after giving effect to such proposed transfer, would result in the

Issuer’s outstanding securities being owned by more than 100 beneficial owners

for purposes of Section 3(c)(1) of the Investment Company Act; and, except as

provided in Section 5.05 of this Agreement, it will not hold the Subclass B-1

Notes for the benefit of any person or account and it will be the sole

beneficial owner of the Subclass B-1 Notes for all purposes and it will not

sell participation interests therein or enter into any arrangement pursuant to

which any other person or account shall be entitled to a beneficial interest in

the Subclass B-1 Notes.

 

ARTICLE VI

COVENANTS OF THE ISSUER

 

SECTION 6.01.  [Reserved].

 

SECTION 6.02.      Information

from the Issuer.  So long as the

Subclass B-1 Note Purchasers shall own the Subclass B-1 Notes, the Issuer will

furnish to the Subclass B-1 Note Purchasers and the Purchasers’ Agent:

 

(a)           a copy of each certificate, report,

statement, notice or other communication (other than investment instructions)

furnished by or on behalf of the Issuer to the Indenture Trustee under the

Indenture concurrently therewith, and promptly after receipt thereof, a copy of

each notice, demand or other communication received by or on behalf of the

Issuer under the Indenture;

 

(b)           such other information, documents,

records or reports respecting the Collateral or the Issuer, as either Subclass

B-1 Note Purchaser or Purchasers’ Agent may from time to time reasonably

request without unreasonable expense to the Issuer;

 

18

 

(c)           such publicly available information,

documents, records or reports respecting the Issuer or the condition or

operations, financial or otherwise of the Issuer as either Subclass B-1 Note

Purchaser or Purchasers’ Agent may from time to time reasonably request;

 

(d)           as soon as possible and in any event

within five Business Days after the occurrence thereof, notice of (i) the

occurrence of any Event of Default, (ii) the occurrence of any Early

Amortization Event, (iii) any fact, condition or event which, with the

giving of notice or the passage of time or both, would become an Event of

Default, (iv) any fact, condition or event which, with the giving of

notice or the passage of time or both, would become an Early Amortization

Event, (v) the failure of the Issuer to observe any of its material

undertakings under the Deal Documents or (vi) any change in the status or

condition of the Issuer or the Servicer that would reasonably be expected to

adversely affect the Issuer’s or the Servicer’s ability to perform its

obligations under the Deal Documents; and

 

(e)           on or before April 30 of each year,

beginning April 30, 2003, the report required to be delivered by the Servicer

pursuant to Section 5.10 of the Servicing Agreement.

 

SECTION 6.03.      Access

to Information.  So long as the

Subclass B-1 Note Purchaser shall own any Notes, the Issuer will, at any time

and from time to time during regular business hours, on reasonable notice to

the Issuer, permit the Subclass B-1 Note Purchaser or the Purchasers’ Agent, or

its agents or representatives to:

 

(a)           examine all books, records and

documents (including computer tapes and disks) in the possession or under the

control of the Issuer relating to the Collateral, and

 

(b)           visit the offices and property of the

Issuer for the purpose of examining the materials described in clause (a) above.

 

Except as provided in Section 10.05 hereof, any information obtained by

either Subclass B-1 Note Purchaser or the Purchasers’ Agent pursuant to this

Section 6.03 shall be held in confidence by the Subclass B-1 Note Purchasers or

Purchasers’ Agent unless such information (i) has become available to the

public, (ii) is required or requested by any Governmental Authority or in any

court proceeding, or (iii) is required by any Governmental Rule to be disclosed

or otherwise made available and, in the case of (ii) and (iii) such disclosure

shall be only to the extent required.

 

SECTION 6.04.      Security

Interests; Further Assurances.  The

Issuer will take all action necessary to maintain the Indenture Trustee’s first

priority perfected security interest in the Collateral.

 

SECTION 6.05.      Covenants.  The Issuer will duly observe and perform

each of its covenants set forth in the Indenture.

 

SECTION 6.06.      Securities

Act.  The Issuer agrees not to sell,

offer for sale or solicit offers to buy or otherwise negotiate in respect of

any security (as defined in the Securities Act) that would be integrated with

the sale of the Class B Notes and the Class A Notes in a manner that would

require the registration under the Securities Act of the sale to the Class B 

 

19

 

Note Purchasers and the Class A Note Purchasers of the Class B Notes

and the Class A Notes, respectively.

 

ARTICLE VII

MUTUAL COVENANTS AND AGREEMENTS

 

SECTION 7.01.      Legal

Conditions to Closing.  The Subclass

B-1 Note Purchasers, the Purchasers’ Agent, the Issuer, and the Servicer will

take all reasonable actions necessary to comply promptly with all legal

requirements which may be imposed on any of them with respect to the Closing

(including satisfaction of the conditions contained in this Subclass B-1 Note

Purchase Agreement), and will promptly cooperate with and furnish information

to one another in connection with any such legal requirements.  The Subclass B-1 Note Purchasers, the

Purchasers’ Agent, the Issuer, and the Servicer will take all reasonable action

necessary to obtain (and will cooperate with one another in obtaining) any

consent, authorization, permit, license, franchise, order or approval of, or

any exemption by, any Governmental Authority or any other Person, required to

be obtained or made by it in connection with any of the transactions

contemplated by this Subclass B-1 Note Purchase Agreement.

 

SECTION 7.02.      Expenses and

Fees.  Subject to Section 10.10,

except as otherwise expressly provided herein, all costs and expenses incurred

in connection with the entering into this Subclass B-1 Note Purchase Agreement

and the transactions contemplated hereby shall 

be paid by the Issuer.

 

SECTION 7.03.      Mutual

Obligations.  On and after the date

of this Subclass B-1 Note Purchase Agreement, the Subclass B-1 Note Purchasers,

the Purchasers’ Agent, the Issuer and the Servicer will do, execute and perform

all such other acts, deeds and documents as the other party may from time to

time reasonably require in order to carry out the intent of this Subclass B-1

Note Purchase Agreement.

 

ARTICLE VIII

INDEMNIFICATION

 

SECTION 8.01.      Indemnification

by the Issuer.  The Issuer agrees to

indemnify and hold harmless the Subclass B-1 Note Purchasers and the

Purchasers’ Agent, and any other Owners and any of their respective officers,

directors, employees, agents, representatives, assignees and Affiliates (each

an “Indemnified Party”) against any and all losses, claims, damages,

liabilities or expenses (including legal and accounting fees) (collectively,

“Losses”), as incurred (payable promptly upon written request), for or on

account of or arising from or in connection with any breach of any

representation, warranty or covenant of the Issuer in this Subclass B-1 Note

Purchase Agreement or in any certificate or other written material delivered

pursuant hereto; provided, however, that the Issuer shall not be so required to

indemnify any such Person or otherwise be liable to any such Person hereunder

for any Losses arising from such Person’s negligence, willful misconduct or bad

faith. Notwithstanding the foregoing, the Issuer shall not be liable for any

settlement of any proceeding effected without its written consent

 

20

 

SECTION 8.02.      Procedure.  In order for any Indemnified Party to be

entitled to any indemnification provided for under this Subclass B-1 Note

Purchase Agreement in respect of, arising out of, or involving a claim made by

any Person against the Indemnified Party (a “Third Party Claim”), such

Indemnified Party must notify the Issuer in writing of the Third Party Claim

within five Business Days of receipt of a summons, complaint or other notice of

the commencement of litigation and within ten Business Days after receipt by

such Indemnified Party of any other written notice of the Third Party

Claim.  Thereafter, the Indemnified

Party shall deliver to the Issuer, within a reasonable time after the

Indemnified Party’s receipt thereof, copies of all notices and documents (including

court papers) received by the Indemnified Party relating to the Third Party

Claim.

 

SECTION 8.03.      Defense of

Claims.  If a Third Party Claim is

made against an Indemnified Party, (a) the Issuer will be entitled to

participate in the defense thereof and, (b) if it so chooses, to assume

the defense thereof with counsel selected by the Issuer, provided that in

connection with such assumption (i) such counsel is not reasonably objected to

by the Indemnified Party and (ii) the Issuer first admits in writing its

liability to indemnify the Indemnified Party with respect to all elements of

such claim in full.  Should the Issuer

so elect to assume the defense of a Third Party Claim, none of the Issuer will

be liable to the Indemnified Party for any legal expenses subsequently incurred

by the Indemnified Party in connection with the defense thereof.  If the Issuer elects to assume the defense

of a Third Party Claim, the Indemnified Party will (i) cooperate in all

reasonable respects with the Issuer in connection with such defense and (ii)

not admit any liability with respect to, or settle, compromise or discharge,

such Third Party Claim without the Issuer’s prior written consent.  If the Issuer shall assume the defense of any

Third Party Claim, the Indemnified Party shall be entitled to participate in

(but not control) such defense with its own counsel at its own expense.  If the Issuer does not assume the defense of

any such Third Party Claim, the Indemnified Party may defend the same in such

manner as it may deem appropriate, including settling such claim or litigation

after giving notice to the Issuer of such terms and, the Issuer will promptly

reimburse the Indemnified Party upon written request.

 

ARTICLE IX

THE PURCHASERS’ AGENT

 

SECTION 9.01.      Authorization

and Action.  Each Owner hereby

accepts the appointment of Barclays Bank PLC, as Purchasers’ Agent hereunder,

and authorizes the Purchasers’ Agent to take such action as agent on its behalf

and to exercise such powers as are delegated to the Purchasers’ Agent by the

terms hereof, together with such powers as are reasonably incidental

thereto.  The Purchasers’ Agent reserves

the right, in its sole discretion, to take any actions, exercise any rights or

remedies under this Subclass B-1 Note Purchase Agreement and any related

agreements and documents.  Except for

actions which the Purchasers’ Agent is expressly required to take pursuant to

this Subclass B-1 Note Purchase Agreement, the Purchasers’ Agent shall not be

required to take any action which exposes the Purchasers’ Agent to personal

liability or which is contrary to applicable law unless the Purchasers’ Agent

shall receive further assurances to its satisfaction from the Owners of the

indemnification obligations under Section 9.04 hereof against any and all liability

and expense which may be incurred in taking or continuing to take such

action.  The Purchasers’ Agent agrees to

give to each Owner prompt notice of each notice and determination given to it

by the Issuer, the Servicer and the 

 

21

 

Indenture Trustee, pursuant to the terms of this Subclass B-1 Note

Purchase Agreement or the Indenture. 

Subject to Section 9.06 hereof, the appointment and authority of the

Purchasers’ Agent hereunder shall terminate upon the payment to (a) each

Sheffield Owner of all amounts owing to such Owner hereunder and (b) the

Purchasers’ Agent of all amounts due hereunder.

 

SECTION 9.02.      Purchasers’

Agent’s Reliance, Etc.  Neither the

Purchasers’ Agent nor any of its directors, officers, agents or employees shall

be liable for any action taken or omitted to be taken by it or them as

Purchasers’ Agent under or in connection with this Subclass B-1 Note Purchase

Agreement or any related agreement or document, except for its or their own

gross negligence or willful misconduct. 

Without limiting the foregoing, the Purchasers’ Agent:  (i) may consult with legal counsel,

independent public accountants and other experts selected by it and shall not

be liable for any action taken or omitted to be taken in good faith by it in

accordance with the advice of such counsel, accountants or experts; (ii) makes

no warranty or representation to any Owner and shall not be responsible to any

Owner for any statements, warranties or representations made by the Issuer, the

Servicer or the Indenture Trustee in connection with this Subclass B-1 Note

Purchase Agreement; (iii) shall not have any duty to ascertain or to inquire as

to the performance or observance of any of the terms, covenants or conditions

of this Subclass B-1 Note Purchase Agreement on the part of the Issuer, the

Servicer or the Indenture Trustee or to inspect the property (including the

books and records) of the Issuer, the Servicer or the Indenture Trustee; (iv)

shall not be responsible to any Owner for the due execution, legality,

validity, enforceability, genuineness, sufficiency or value of this Subclass

B-1 Note Purchase Agreement or any other instrument or document furnished

pursuant hereto; and (v) shall incur no liability under or in respect of this

Subclass B-1 Note Purchase Agreement by acting upon any notice (including

notice by telephone), consent, certificate or other instrument or writing

(which may be by telex) believed by it in good faith to be genuine and signed

or sent by the proper party or parties.

 

SECTION 9.03.      Purchasers’

Agent and Affiliate.  Barclays Bank

PLC and its Affiliates may generally engage in any kind of business with the

Issuer or the Servicer, any of their respective Affiliates and any Person who

may do business with or own securities of the Issuer or the Servicer or any of

its Affiliates, all as if Barclays Bank PLC were not the Purchasers’ Agent and

without any duty to account therefor to the Owners.

 

SECTION 9.04.      Indemnification.  Each Owner severally agrees to indemnify the

Purchasers’ Agent (to the extent not reimbursed by the Issuer or the Servicer),

from and against any and all liabilities, obligations, losses, damages,

penalties, actions, judgments, suits, costs, or reasonable out-of-pocket

expenses or disbursements of any kind or nature whatsoever which may be imposed

on, incurred by, or asserted against the Purchasers’ Agent in any way relating

to or arising out of this Subclass B-1 Note Purchase Agreement or any action

taken or omitted by the Purchasers’ Agent under this Subclass B-1 Note Purchase

Agreement; provided, that (i) an Owner shall not be liable for any portion of

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

suits, costs, expenses or disbursements resulting or arising from the

Purchasers’ Agent’s gross negligence or willful misconduct and (ii) an Owner

shall not be liable for any amount in respect of any compromise or settlement

or any of the foregoing unless such compromise or settlement is approved by the

Subclass B-1 Note Purchasers.  Without

limitation of the generality of the foregoing, each Owner agrees to reimburse

the Purchasers’ Agent, promptly upon demand, for any reasonable out-of-pocket 

 

22

 

expenses (including reasonable counsel fees) incurred by the

Purchasers’ Agent in connection with the administration, modification,

amendment or enforcement (whether through negotiations, legal proceedings or

otherwise) of, or legal advice in respect of rights or responsibilities under,

this Subclass B-1 Note Purchase Agreement; provided, that no Owner shall be

responsible for the costs and expenses of the Purchasers’ Agent in defending

itself against any claim alleging the gross negligence or willful misconduct of

the Purchasers’ Agent to the extent such gross negligence or willful misconduct

is determined by a court of competent jurisdiction in a final and

non-appealable decision.

 

SECTION 9.05.      Purchase

Decision.  Each Owner acknowledges

that it has, independently and without reliance upon the Purchasers’ Agent, any

other Owner or any of their respective Affiliates, and based on such documents

and information as it has deemed appropriate, made its own evaluation and

decision to enter into this Subclass B-1 Note Purchase Agreement and to

purchase an interest in the Subclass B-1 Notes.  Each Owner also acknowledges that it will, independently and

without reliance upon the Purchasers’ Agent, any other Owner or any of their

respective Affiliates, and based on such documents and information as it shall

deem appropriate at the time, continue to make its own decisions in taking or

not taking action under this Subclass B-1 Note Purchase Agreement or any

related agreement, instrument or other document.

 

SECTION 9.06.      Successor

Purchasers’ Agent.  (a) The

Purchasers’ Agent may resign at any time by giving sixty days’ written notice

thereof to the Owners, the Issuer, the Servicer and the Indenture Trustee.  Upon any such resignation, a majority of the

Owners shall have the right to appoint a successor Purchasers’ Agent approved

by the Issuer (which approval will not be unreasonably withheld or

delayed).  If no successor Purchasers’

Agent shall have been so appointed by a majority of the Owners and shall have

accepted such appointment, within sixty days after the retiring Purchasers’

Agent’s giving of notice or resignation, then the retiring Purchasers’ Agent

may, on behalf of the Owners appoint a successor Purchasers’ Agent.  If such successor Purchasers’ Agent is not

an Affiliate of Barclays Bank PLC, such successor Purchasers’ Agent shall be

subject to the Issuer’s prior written consent. 

Upon the acceptance of any appointment as Purchasers’ Agent hereunder by

a successor Purchasers’ Agent, such successor Purchasers’ Agent shall thereupon

succeed to and become vested with all of the rights, powers, privileges and

duties of the retiring Purchasers’ Agent, and the retiring Purchasers’ Agent

shall be discharged from its duties and obligations under this Subclass B-1

Note Purchase Agreement.  After any

retiring Purchasers’ Agent’s resignation or removal hereunder as Purchasers’

Agent, the provisions of this Article IX shall inure to its benefit as to any

actions taken or omitted to be taken by it while it was an Purchasers’ Agent

under this Subclass B-1 Note Purchase Agreement.

 

ARTICLE X

MISCELLANEOUS

 

SECTION 10.01.    Amendments.  No amendment or waiver of any provision of

this Subclass B-1 Note Purchase Agreement shall in any event be effective

unless the same shall be in writing and signed by all of the parties hereto,

and then such amendment, waiver or consent shall be effective only in the

specific instance and for the specific purpose for which given.

 

23

 

SECTION 10.02.    Notices.  All notices and other communications

provided for hereunder shall, unless otherwise stated herein, be in writing

(including telecopies) or delivered by overnight courier service, as to each

party hereto, at its address set forth below or at such other address as shall

be designated by such party in a written notice to the other parties

hereto.  All such notices and

communications shall, when telecopied or sent by overnight delivery service, be

effective with respect to telecopy notices, when the sending machine receives

confirmation of the transmission, and with respect to overnight delivery

service when confirmed by signed receipt.

 

If to the Subclass B-1 Note Purchasers:

 

Barclays Bank PLC

222 Broadway

New York, New York 10038

Attention:    

Asset Securitization Group

Telephone No. 

(212) 412-3266

Facsimile No. (212) 412-6846

 

Fortis Bank (Nederland) N.V.

Coolsingel 93

3012 AE Rotterdam

Attention: Maarten Schipper

Telephone No. (31) 10 401 9522

Facsimile No. (31) 10 401 6118

 

If to the Issuer:

 

Willis Engine Funding LLC

2320 Marinship Way

Suite 300

Sausalito, California 94965

Telephone No. 

(415) 331-5281

Facsimile No. 

(415) 331-5167

 

If to Purchasers’ Agent:

 

Barclays Bank PLC

222 Broadway

New York, New York 10038

Attention:    

Asset Securitization Group

Telephone No. 

(212) 412-3266

Facsimile No. 

(212) 412-6846

 

SECTION 10.03.    No Waiver; Remedies.  No failure on the part of any party hereto

to exercise, and no delay in exercising, any right hereunder shall operate as a

waiver thereof; nor shall any single or partial exercise of any right hereunder

preclude any other or 

 

24

 

further exercise thereof or the exercise of any other right.  The remedies herein provided are cumulative

and not exclusive of any remedies provided by law.

 

SECTION 10.04.    Binding Effect;

Assignability.  This Subclass B-1

Note Purchase Agreement shall be binding upon and inure to the benefit of the

Issuer, the Purchasers’ Agent and the Subclass B-1 Note Purchasers and their

respective successors and assigns (including any subsequent holders of the

Subclass B-1 Notes); provided, however, that the Issuer shall not have the

right to assign its rights hereunder or any interest herein (by operation of

law or otherwise) without the prior written consent of the Subclass B-1 Note

Purchasers.  The Issuer acknowledges

that the Subclass B-1 Note Purchasers may at any time assign any and all of its

rights hereunder to the Owners.  This

Subclass B-1 Note Purchase Agreement shall create and constitute the continuing

obligation of the parties hereto in accordance with its terms, and shall remain

in full force and effect until such time as all amounts payable with respect to

the Subclass B-1 Notes shall have been paid in full.

 

SECTION 10.05.  [Reserved].

 

SECTION 10.06.    GOVERNING LAW;

JURISDICTION.  THIS SUBCLASS B-1

NOTE PURCHASE AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,

THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW

PROVISIONS.  EACH OF THE PARTIES TO THIS

SUBCLASS B-1 NOTE PURCHASE AGREEMENT HEREBY AGREES TO THE JURISDICTION OF THE

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND ANY

APPELLATE COURT HAVING JURISDICTION TO REVIEW THE JUDGMENTS THEREOF.  EACH OF THE PARTIES HEREBY WAIVES ANY

OBJECTION BASED ON FORUM NON CONVENIENS AND ANY OBJECTION TO VENUE OF ANY

ACTION INSTITUTED HEREUNDER IN ANY OF THE AFOREMENTIONED COURTS AND CONSENTS TO

THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH

COURT.

 

SECTION 10.07.    No

Proceedings.  Each of the Subclass

B-1 Note Purchasers and the Purchasers’ Agent agrees that so long as any of the

Subclass B-1 Notes shall be outstanding or there shall not have elapsed one

year plus one day since the last day on which any of the Subclass B-1 Notes

shall have been outstanding, it shall not file, or join in the filing of, a

petition against the Issuer under the Federal Bankruptcy Code, or join in the

commencement of any bankruptcy, reorganization, arrangement, insolvency, liquidation

or other similar proceeding against the Issuer.

 

SECTION 10.08.    Execution

in Counterparts.  This Subclass B-1

Note Purchase Agreement may be executed in any number of counterparts and by

different parties hereto in separate counterparts, each of which when so

executed shall be deemed to be an original and all of which when taken together

shall constitute one and the same agreement.

 

SECTION 10.09.    No

Recourse.  The obligations of the

Subclass B-1 Note Purchasers under this Subclass B-1 Note Purchase Agreement,

or any other agreement, instrument, document or certificate executed and

delivered by or issued by the Subclass B-1 Note Purchasers or any officer

thereof are solely the corporate obligations of the Subclass B-1 Note

Purchasers.  No recourse shall be had

for payment of any fee or other obligation or claim 

 

25

 

arising out of or relating to this Subclass B-1 Note Purchase Agreement

or any other agreement, instrument, document or certificate executed and

delivered or issued by a Subclass B-1 Note Purchaser or any officer thereof in

connection therewith, against any stockholder, employee, officer, director or

incorporator of a Subclass B-1 Note Purchaser.

 

SECTION 10.10.    Limited

Recourse.  The obligations of the

Issuer under this Subclass B-1 Note Purchase Agreement shall be payable only

out of the Collateral and the Subclass B-1 Note Purchasers shall not look to

any property or assets of the Issuer, other than to the Collateral remaining

after all obligations of the Issuer under the Indenture are satisfied. To the

extent that the proceeds of the Collateral after application in accordance with

the provisions of the Indenture are insufficient to satisfy the obligations of

the Issuer under the Indenture and under this Agreement, the Issuer shall have

no further obligation in respect hereof and any remaining outstanding

obligation shall be extinguished.

 

SECTION 10.11.    Survival.  All representations, warranties, guaranties

and indemnifications (including the payment obligations in Section 9.04 hereof)

contained in this Subclass B-1 Note Purchase Agreement and in any document,

certificate or statement delivered pursuant hereto or in connection herewith

shall survive the sale and transfer of the Subclass B-1 Notes.

 

SECTION 10.12.    Third-Party

Beneficiaries.  The parties hereto

agree and acknowledge that the Owners are and shall be third–party

beneficiaries under this Subclass B-1 Note Purchase Agreement.

 

SECTION 10.13.    Appointment

of Agent for Service of Process. 

The Issuer hereby appoints CT Corporation Systems having an address at

1633 Broadway, New York, New York 10019 as its agent for service of process in

the State of New York.

 

SECTION 10.14.    Effect

on Original Note Purchase Agreement. 

The Issuer and the Subclass B-1 Note Purchasers hereby agree that as of

the Effective Date (i) the terms and provisions of the Original Note Purchase

Agreement shall be and hereby are amended and restated in their entirety by the

terms and provisions of this Subclass B-1 Note Purchase Agreement and (ii) the

execution and delivery of this Subclass B-1 Note Purchase Agreement shall not

constitute or effect or be deemed to constitute or effect a novation,

refinancing, discharge, extinguishment or refunding or any of the “Outstanding

Obligations” (as defined in the Original Indenture).

 

26

 

IN WITNESS WHEREOF, the parties have caused this

Subclass B-1 Note Purchase Agreement to be executed by their respective

officers thereunto duly authorized, as of the date first above written.

 

	

   

  	

  WILLIS ENGINE FUNDING

  LLC

  as Issuer,

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ MONICA J. BURKE

  	

   

  
	

   

  	

   

  	

  Name:

  	

  Monica J. Burke

  
	

   

  	

   

  	

  Title:

  	

  Chief Financial Officer

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  WILLIS LEASE FINANCE

  CORPORATION,

  as Servicer,

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ DONALD A. NUNEMAKER

  	

   

  
	

   

  	

   

  	

  Name:

  	

  Donald A. Nunemaker

  
	

   

  	

   

  	

  Title:

  	

  Executive Vice President

  Chief Operating Officer

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  FORTIS BANK (NEDERLAND)

  N.V.,

  as a Subclass B-1 Note Purchaser

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ M.H. SCHIPPER

  	

   

  
	

   

  	

   

  	

  Name:

  	

  M.H. Schipper

  
	

   

  	

   

  	

  Title:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  BARCLAYS BANK PLC,

  as a Subclass B-1 Note Purchaser and as

  Purchasers’ Agent

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ PIERRE DULEYRIE

  	

   

  
	

   

  	

   

  	

  Name:

  	

  Pierre Duleyrie

  
	

   

  	

   

  	

  Title:

  	

  Director

  
					

 

Signature Page 1

to

Subclass B-1 Note Purchase Agreement

 

 

SCHEDULE

1

 

Percentage Interests in Subclass B-1 Notes:

 

Barclays Bank PLC:  50%

Fortis Bank (Nederland) N.V.:  50%

 

Account to which cash payments shall be made to Barclays Bank PLC:

 

Barclays Bank PLC

ABA #: 

026-00-2574

Account Number: 

050-791-516

Account Name: 

Sheffield 4(2) Funding Account

Ref:  Willis

Engine Finance

Telephone: 

(212) 412-2932

Fax:  (212)

412-6846

e-mail: 

pierre.duleyrie@barcap.com

 

Account to which cash payments shall be made to Fortis Bank (Nederland)

N.V.:

 

	

  ABN AMRO Bank N.V., New York

  
	

  Swift address:

  	

   

  	

  ABNAUS33

  
	

  ABA Number:

  	

   

  	

  026009580

  
	

  Account Number:

  	

   

  	

  63 70 70 34 27 41

  
	

  Account Name:

  	

   

  	

  Fortis Bank (Nederland) N.V.

  
	

  Swift Address:

  	

   

  	

  MeesNL2A

  
	

  Reference

  	

   

  	

  For the further credit to Account Number

  25.66.24.267 / ref.: Willis Engine Funding

  

 

 

Fortis Bank (Nederland) N.V.

Coolsingel 93, 3012

AE Rotterdam

Attention: Maarten Schipper

Telephone: 

(31) 10 401 9522

Fax:  (31) 10

401 6118Exhibit 10.34

 

SUBCLASS

B-2 NOTE PURCHASE AGREEMENT

 

 

among

 

 

WILLIS

ENGINE FUNDING LLC,

as Issuer

 

 

WILLIS

LEASE FINANCE CORPORATION,

as Servicer

 

 

and

 

 

BARCLAYS

BANK PLC,

as Subclass B-2 Note Purchaser and as Purchaser’s Agent

 

 

dated

as of December 13, 2002

 

 

TABLE

OF CONTENTS

 

	

  ARTICLE I

  
	

  DEFINITIONS

  
	

  SECTION 1.01.

  	

  Certain Defined Terms

  
	

  SECTION 1.02.

  	

  Other Definitional

  Provisions.

  
	

   

  	

   

  
	

  ARTICLE II

  
	

  PURCHASE AND

  SALE

  
	

  SECTION

  2.01.

  	

  Sale and

  Delivery of the Subclass B-2 Note

  
	

  SECTION

  2.02.

  	

  Acceptance

  and Custody of Series 2002-1 Subclass B-2 Note

  
	

  SECTION 2.03.

  	

  Funding of Loans.

  
	

  SECTION

  2.04.

  	

  The

  Initial Funding, Subsequent Fundings and Incremental Fundings.

  
	

  SECTION

  2.05.

  	

  Reduction

  of the Subclass B-2 Maximum Limit

  
	

  SECTION 2.06.

  	

  Determination of Interest

  
	

  SECTION

  2.07.

  	

  Payments,

  Computations, Etc.

  
	

  SECTION 2.08.

  	

  Increased Costs

  
	

  SECTION 2.09.

  	

  Increased Capital.

  
	

  SECTION

  2.10.

  	

  Taxes.

  
	

   

  	

   

  
	

  ARTICLE III

  
	

  CONDITIONS

  PRECEDENT TO OBLIGATION OF THE PURCHASER

  
	

  SECTION 3.01.

  	

  Conditions

  Precedent to Initial Purchase

  
	

  SECTION 3.02.

  	

  Conditions

  Precedent to All Fundings

  
	

  SECTION 3.03.

  	

  Conditions

  Precedent to Initial Funding and Each Incremental Funding

  
	

   

  	

   

  
	

  ARTICLE IV

  
	

  REPRESENTATIONS AND

  WARRANTIES

  
	

  SECTION

  4.01.

  	

  Representations

  and Warranties of the Issuer

  
	

  SECTION

  4.02.

  	

  Representations

  and Warranties and Agreements of WLFC

  
	

   

  	

   

  
	

  ARTICLE V

  
	

  REPRESENTATIONS

  AND WARRANTIES OF THE PURCHASER

  
	

  SECTION 5.01.

  	

  Organization

  
	

  SECTION

  5.02.

  	

  Authority, etc

  
	

  SECTION 5.03.

  	

  Securities Act.

  
	

  SECTION 5.04.

  	

  Investment Company Act.

  
	

   

  	

   

  
	

  ARTICLE VI

  
	

  COVENANTS

  OF THE ISSUER

  
	

  SECTION

  6.01.

  	

  [Reserved]

  
	

  SECTION 6.02.

  	

  Information from the Issuer

  
	

  SECTION 6.03.

  	

  Access to Information

  
	

  SECTION 6.04.

  	

  Security

  Interests; Further Assurances

  
	

  SECTION

  6.05.

  	

  Covenants

  
	

  SECTION 6.06.

  	

  Securities Act

  

 

i

 

	

  ARTICLE VII

  
	

  MUTUAL COVENANTS AND

  AGREEMENTS

  
	

  SECTION

  7.01.

  	

  Legal

  Conditions to Closing

  
	

  SECTION 7.02.

  	

  Expenses and Fees

  
	

  SECTION 7.03.

  	

  Mutual Obligations

  
	

   

  	

   

  
	

  ARTICLE VIII

  
	

  INDEMNIFICATION

  
	

  SECTION 8.01.

  	

  Indemnification by the

  Issuer

  
	

  SECTION

  8.02.

  	

  Procedure

  
	

  SECTION 8.03.

  	

  Defense of Claims

  
	

   

  	

   

  
	

  ARTICLE IX

  
	

  THE

  PURCHASERS’ AGENT

  
	

  SECTION 9.01.

  	

  Authorization and Action

  
	

  SECTION 9.02.

  	

  Purchaser’s Agent’s Reliance, Etc

  
	

  SECTION 9.03.

  	

  Purchaser’s Agent and

  Affiliate

  
	

  SECTION

  9.04.

  	

  Indemnification

  
	

  SECTION 9.05.

  	

  Purchase Decision

  
	

  SECTION 9.06.

  	

  Successor Purchaser’s Agent

  
	

   

  	

   

  
	

  ARTICLE X

  
	

  MISCELLANEOUS

  
	

  SECTION 10.01.

  	

  Amendments

  
	

  SECTION

  10.02.

  	

  Notices

  
	

  SECTION 10.03.

  	

  No Waiver; Remedies

  
	

  SECTION 10.04.

  	

  Binding Effect;

  Assignability

  
	

  SECTION

  10.05.

  	

  Provision of Documents and Information

  
	

  SECTION 10.06.

  	

  GOVERNING LAW; JURISDICTION

  
	

  SECTION 10.07.

  	

  No Proceedings.

  
	

  SECTION 10.08.

  	

  Execution in Counterparts

  
	

  SECTION 10.09.

  	

  No Recourse

  
	

  SECTION 10.10.

  	

  Limited Recourse

  
	

  SECTION

  10.11.

  	

  Survival

  
	

  SECTION 10.12.

  	

  Third-Party Beneficiaries

  
	

  SECTION

  10.13.

  	

  Appointment

  of Agent for Service of Process

  

 

ii

 

	

  SCHEDULES

  	

   

  
	

   

  	

   

  
	

  SCHEDULE 1

  	

  Addresses for Delivery of Payments

  
	

   

  	

   

  
	

  SCHEDULE 2

  	

  Conditions Precedent to Initial Purchase

  
	

   

  	

   

  
	

  EXHIBITS

  	

   

  
	

   

  	

   

  
	

  EXHIBIT A

  	

  Form of Loan Request

  

 

iii

 

SUBCLASS B-2

NOTE PURCHASE AGREEMENT (“Subclass B-2 Note Purchase Agreement”) dated

as of December 13, 2002, among WILLIS ENGINE FUNDING LLC (the “Issuer”),

WILLIS LEASE FINANCE CORPORATION (the “Servicer”), and BARCLAYS BANK

PLC, as a Subclass B-2 Note Purchaser (in such capacity, a “Subclass B-2

Note Purchaser”) and as the Purchaser’s Agent (in such capacity, the “Purchaser’s

Agent”).

 

The parties

hereto agree as follows:

 

ARTICLE I

DEFINITIONS

 

SECTION 1.01.  Certain

Defined Terms.  Capitalized terms used herein without

definition shall have the meanings set forth in Exhibit B to the Indenture (as

defined below), as applicable. 

Additionally, the following terms shall have the following meanings:

 

“Affected Person” means the Purchaser’s Agent,

each Owner, and each

of their respective Affiliates, successors and assigns.

 

“Base

Indenture” means the Amended and Restated Indenture dated as of December

13, 2002, between the Issuer, as issuer, and the Indenture Trustee, as

indenture trustee.

 

“Class A

Notes” means, collectively, the $180,000,000 in stated principal amount of

the Issuer’s Subclass A-1 Notes dated December 13, 2002 and issued pursuant to

the Subclass A-1 Note Purchase Agreement and the $45,000,000 in stated

principal amount of the Issuer’s Subclass A-2 Notes dated December 13, 2002 and

issued pursuant to the Subclass A-2 Note Purchase Agreement.

 

“Class B

Notes” means, collectively, the $20,000,000 in stated principal amount of

the Issuer’s Subclass B-1 Notes dated December 13, 2002 and issued pursuant to

the Subclass B-1 Note Purchase Agreement and the $5,000,000 in stated principal

amount of the Issuer’s Subclass B-2 Notes dated December 13, 2002 and issued

pursuant to this Subclass B-2 Note Purchase Agreement.

 

“Commercial

Paper Notes” means short-term promissory notes issued or to be issued by

Sheffield Receivables Corporation.

 

“Commitment

Termination Date” means March 31, 2003.

 

“Deal

Documents” means the Series 2002-1 Transaction Documents and each other

document, agreement, certificate, schedule or other writing entered into or

delivered in connection with the foregoing, as the same may be amended,

supplemented, restated, replaced or otherwise modified from time to time.

 

“Dollars”

or “$” means the lawful currency of the United States of America.

 

“Exchange

Act” means the Securities

Exchange Act of 1934, as amended.

 

“Excluded Taxes” has the meaning specified in

Section 2.10(a) hereof.

 

 

“Federal

Bankruptcy Code” means the bankruptcy code of the United States of America

codified in Title 11 of the United States Code.

 

“Funding”

means a funding by the Subclass B-2 Note Purchaser of a Loan to the Issuer

pursuant to Article II.

 

“Funding

Date” means as to the initial Funding, the Effective Date, and as to any

Incremental Funding, any Business Day that is (i) at least one (1) calendar

week following the immediately preceding Funding Date and (ii) two (2) Business

Days immediately following the receipt by the Purchaser’s Agent of a written

request by the Issuer to obtain a Loan, such notice to be in the form of Exhibit

A hereto and to conform to requirements of Section 3.02 hereof.

 

“Governmental

Actions” means any and all consents, approvals, permits, orders,

authorizations, waivers, exceptions, variances, exemptions or licenses of, or

registrations, declarations or filings with, any Governmental Authority

required under any Governmental Rules.

 

“Governmental

Rules” means any and all laws, statutes, codes, rules, regulations,

ordinances, orders, writs, decrees and injunctions, of any Governmental

Authority and any and all legally binding conditions, standards, prohibitions,

requirements and judgments of any Governmental Authority.

 

“Increased

Costs” has the meaning specified in Section 2.08 hereof.

 

“Incremental

Funding” means any Funding that increases the aggregate outstanding

Subclass B-2 Note Principal Balance.

 

“Indemnified

Party” has the meaning specified in Section 8.01 hereof.

 

“Indenture”

means the Base Indenture, as supplemented by the Indenture Supplement, as the

same may be amended and supplemented from time to time.

 

“Indenture

Supplement” means the Amended and Restated Series 2002-1 Supplement dated

as of December 13, 2002, between the Issuer and the Indenture Trustee, as the

same may be amended, supplemented or otherwise modified from time to time.

 

“Interpretation” as used in Sections 2.08

and 2.09 hereof with respect to any law or regulation means the interpretation

or application of such law or regulation by any governmental authority

(including, without limitation, any entity exercising executive, legislative,

judicial, regulatory or administrative functions of or pertaining to

government), central bank, accounting standards board, financial services

industry advisory body or any comparable entity.

 

“Investment

Company Act” means the United States Investment Company Act of 1940, as

amended.

 

“Issuer

Documents” has the meaning specified in Section 4.01(ii) hereof.

 

2

 

“Loan

Request” means any request by the Issuer pursuant to Section 2.04(b) and in

the form of Exhibit A.

 

“Losses”

has the meaning specified in Section 8.01 hereof.

 

“Notes”

means the Class A Notes and the Class B Notes.

 

“Other Taxes” means any present or future stamp

or documentary taxes or any other excise or property taxes, charges or similar

levies that arise from any payment or deposit required to be made hereunder,

under the Indenture or from the execution, delivery or registration of, or

otherwise with respect to, any of the foregoing.

 

“Owner” shall mean each Subclass B-2 Note

Purchaser.

 

“Purchase”

means the initial purchase by the Subclass B-2 Note

Purchaser of the Subclass B-2 Note from the Issuer.

 

“Purchaser”

means Barclays Bank PLC.

 

“Purchaser’s

Agent” means Barclays Bank PLC.

 

“Requirement

of Law” means, as to any Person, any law (statutory or common), treaty,

rule or regulation or determination of an arbitrator or of a Governmental Authority, in each case applicable to or binding upon such

Person or any of its property or to which such Person or any of its property is

subject.

 

“Section 2.10(a) Amount” has the meaning

specified in Section 2.10(a) hereof.

 

“Subclass B-2 Increased Costs” shall mean, with

respect to any Interest Accrual Period, an amount equal to the sum of (a) the

aggregate amount payable to all Affected Persons pursuant to Sections 2.08,

2.09 and 2.10 of this Agreement in respect of such Interest Accrual Period and

(b) the aggregate of such amounts with respect to prior Interest Accrual

Periods which remain unpaid.

 

“Subclass

B-2 Note Purchaser” means Barclays Bank PLC, in its

capacity as a Subclass B-2 Note Purchaser.

 

“Taxes” has the meaning specified in Section

2.10(a) hereof.

 

“Termination

Date” means the earliest of (a) the date of the occurrence of an Early

Amortization Event and (b) the Commitment Termination Date.

 

“Third

Party Claim” has the meaning specified in Section 8.02

hereof.

 

“United

States” means the United States of America.

 

“WLFC Documents” has the meaning specified in Section 4.02(i)

hereof.

 

3

 

SECTION 1.02.  Other

Definitional Provisions.

 

(a)        All terms defined in this Subclass B-2

Note Purchase Agreement shall have the defined meanings when used in any

certificate or other document made or delivered pursuant hereto unless

otherwise defined therein.

 

(b)        As used herein and in any certificate or other document

made or delivered pursuant hereto or thereto, accounting terms not defined in

Section 1.01, have the meanings assigned to them in accordance with generally

accepted accounting principles in the United States.

 

(c)        The words “hereof,” “herein” and “hereunder” and words of

similar import when used in this Subclass B-2 Note Purchase Agreement shall

refer to this Subclass B-2 Note Purchase Agreement as a whole and not to any

particular provision of this Subclass B-2 Note Purchase Agreement; and Section,

subsection, Schedule and Exhibit references contained in this Subclass B-2 Note

Purchase Agreement are references to Sections, subsections, Schedules and

Exhibits in or to this Subclass B-2 Note Purchase Agreement unless otherwise

specified.

 

ARTICLE II

PURCHASE AND SALE

 

SECTION 2.01.  Sale and Delivery of the Subclass B-2

Note.  In

reliance on the representations, warranties and agreements set forth in this

Agreement and subject to the terms and conditions herein set forth, the Issuer

agrees to sell, transfer and deliver to the Purchaser’s Agent on behalf of the

Subclass B-2 Note Purchaser on the Effective Date,  the Subclass B-2 Note with a

maximum aggregate principal amount of $5,000,000, which Subclass B-2 Note shall

be duly executed by the Issuer, duly authenticated by the Indenture Trustee and

registered in the name of the Purchaser’s Agent on behalf of the Subclass B-2

Note Purchaser.  The actual outstanding

principal balance of the Subclass B-2 Note will be increased and decreased from

time to time in accordance with the terms hereof and of the Indenture Supplement.  The Subclass B-2 Note will be delivered to

the Purchaser’s Agent against payment of the amount of the Loan related to the

initial Funding made pursuant to Section 2.04.

 

SECTION 2.02.  Acceptance and Custody of Series 2002-1

Subclass B-2 Note.  On

the Effective Date, the Purchaser’s Agent shall take delivery of the Subclass

B-2 Note and maintain custody thereof on behalf of the Subclass B-2 Note

Purchaser.

 

SECTION 2.03.  Funding of Loans.  On the terms

and conditions hereinafter set forth, the Issuer may, at its option, request

Loans from the Subclass B-2 Note Purchaser. 

The Purchaser’s Agent may act on behalf of and for the benefit of the

Subclass B-2 Note Purchaser in this regard. 

The Subclass B-2 Note Purchaser shall fund Loans from time to time during

the period from the date hereof to but not including the Termination Date; provided,

however, that no Loan shall be funded under this Agreement unless on the

applicable Funding Date a Loan is funded under the Subclass A-2 Note Purchase

Agreement in an amount that is nine (9) times the amount of the Loan funded

under this Agreement.  Under no

circumstances shall the Subclass B-2 Note Purchaser fund any Loan if after

giving effect to such Funding or Incremental Funding, (i) the aggregate

Subclass B-2 Note Principal Balance outstanding hereunder would (a) exceed

 

4

 

the Subclass B-2 Note Commitment, or (b) exceed the product of (y)

one-ninth (1/9) and (z) the aggregate Subclass A-2 Note Principal Balance

outstanding under the Subclass A-2 Note Purchase Agreement after giving effect

to the Funding or Incremental Funding made thereunder on the same date or (ii)

the Class B Note Principal Balance exceeds the Class B Note Commitments or

(iii) the Aggregate Note Principal Balance exceeds the sum of the Class A Note

Commitments and the Class B Note Commitments.

 

SECTION 2.04.  The Initial Funding and Incremental

Fundings.

 

(a)        The Subclass B-2 Note shall bear

interest at the applicable Interest Rate as provided in the Indenture.  Subject to the conditions described in

Sections 2.03, 3.01 and 3.02, as applicable, the initial Funding and each

Incremental Funding shall be made in accordance with the procedures described

in Section 2.04(b).

 

(b)        The initial Funding and each Incremental

Funding shall be made, after receipt by the Subclass B-2 Note Purchaser of a

Loan Request delivered by the Issuer to the Purchaser’s Agent at least two

Business Days prior to such proposed Funding Date and each such notice shall

specify (i) the aggregate amount of such initial Funding or Incremental

Funding which amount must satisfy the applicable minimum requirement set forth

in the following sentence and (ii) the date of such Funding or Incremental

Funding.  The Issuer shall deliver no

more than two such notices in any calendar month, and each amount specified in

any such notice must satisfy the following minimum requirements, as applicable,

as a condition to the related Funding, the initial Funding and each Incremental

Funding shall be in an amount equal to $100,000 or an integral multiple of

$1,000 in excess thereof.  Each notice

delivered by the Issuer pursuant to this Section 2.04 shall be

irrevocable.  Following receipt of such

notice, the initial Funding or Incremental Funding will be made by the Subclass

B-2 Note Purchaser.  On the date of such

Funding or Incremental Funding, as the case may be, the Subclass B-2 Note

Purchaser shall, upon satisfaction of the applicable conditions set forth in

Article III, make available to the Issuer by wire transfer in immediately

available funds, at such bank or other location reasonably designated by Issuer

in its Loan Request given pursuant to this Section 2.04(b) an amount equal to

the amount of such Loan related to such initial Funding or Incremental Funding,

as the case may be.  Notwithstanding any

other provision of this Section 2.04(b), the Subclass B-2 Note Purchaser shall

not be obligated to fund a Loan under this Agreement from and after the Termination

Date.

 

SECTION 2.05.  Reduction of the Subclass B-2 Maximum

Limit.  The Issuer may, upon at least five Business

Days’ notice to the Purchaser’s Agent, terminate in whole or reduce in part the

portion of the Subclass B-2 Maximum Limit that exceeds the sum of the aggregate

Subclass B-2 Note Principal Balance and interest accrued and to accrue thereon

through the date of payment; provided, however, that each partial

reduction of the Subclass B-2 Maximum Limit shall be in an aggregate amount

equal to $100,000 or an integral multiple thereof; and provided further,

however, that each partial reduction of the Subclass B-2 Maximum Limit

shall be accompanied by a partial reduction of the Subclass A-2 Maximum Limit

under the Subclass A-2 Note Purchase Agreement in an amount equal to nine (9)

times the amount of the partial reduction hereunder.  Each notice of reduction or termination pursuant to this

Section 2.05 shall be irrevocable.

 

5

 

SECTION 2.06.  Determination of Interest.  The Purchaser’s Agent shall determine the

Interest (including unpaid Interest, if any, due and payable on a prior Payment

Date) on the Subclass B-2 Note to be paid on each Payment Date for the

applicable Interest Accrual Period and shall advise the Issuer and the

Indenture Trustee thereof prior to 2:00 p.m. (New York City time) on the

related Determination Date.

 

SECTION 2.07.  Payments,

Computations, Etc.

 

(a)        Unless otherwise expressly provided

herein, all amounts to be paid or deposited by the Issuer or the Servicer

hereunder shall be paid or deposited in accordance with the terms hereof no

later than 11:00 a.m. (New York City time) on the day when due in lawful money

of the United States in immediately available funds to accounts maintained by

the Subclass B-2 Note Purchaser as shown on Schedule 1 hereto, or such other

accounts designated from time to time by the Subclass B-2 Note Purchaser.  The Issuer shall, to the extent permitted by

law, pay to the Subclass B-2 Note Purchaser Default Interest at the Overdue

Rate as provided in the Indenture; provided, however, that such interest rate

shall not at any time exceed the maximum rate permitted by applicable law.  All computations of interest and other fees

hereunder shall be made on the basis of a year of 360 days for the actual

number of days (including the first but excluding the last day) elapsed.

 

(b)        Whenever any payment hereunder shall be

stated to be due on a day other than a Business Day, such payment shall be made

on the next succeeding Business Day, and such extension of time shall in such

case be included in the computation of payment of Interest or any fee payable

hereunder, as the case may be.

 

(c)        If any Funding or Incremental Funding

requested by the Issuer and approved by the Subclass B-2 Note Purchaser

pursuant to Section 2.04, is not, for any reason whatsoever related to a

default or nonperformance by the Issuer, made or effectuated, as the case may

be, on the date specified therefor, the Issuer shall indemnify the Subclass B-2

Note Purchaser against any reasonable loss, cost or expense incurred by the

Subclass B-2 Note Purchaser, including, without limitation, any loss (excluding

loss of anticipated profits), cost or expense incurred by reason of the

liquidation or reemployment of deposits or other funds acquired by the Subclass

B-2 Note Purchaser to fund or maintain such Funding or Incremental Funding, as

the case may be, during such Interest Accrual Period.

 

SECTION 2.08.  Increased Costs.  If due to the

introduction of or any change (including, without limitation, any change by way

of imposition or increase of reserve requirements) in or in the Interpretation

of any law or regulation or the imposition of any guideline or request from any

central bank or other Governmental Authority after the date hereof reflecting

such change, there shall be an increase in the cost to an Affected Person of

making or maintaining any investment in the Subclass B-2 Note or any interest

therein or of agreeing to purchase or invest in the Subclass B-2 Note or any

interest therein, as the case may be (other than by reason of any

Interpretation of or introduction of or change in laws or regulations relating

to Taxes or Excluded Taxes), such Affected Person shall promptly submit to the

Issuer, the Servicer and, if such Person is not the Purchaser’s Agent, the

Purchaser’s Agent, a certificate setting forth in reasonable detail, the

calculation of such increased costs incurred by such Affected Person.  In determining such amount, such Affected

Person may use any reasonable

 

6

 

averaging and attribution methods, consistent with the averaging and

attribution methods generally used by such Affected Person in determining

amounts of this type.  The amount of

increased costs set forth in such certificate (which certificate shall, in the

absence of manifest error, be prima facie evidence as to such amount) shall be

included in the Subclass B-2 Increased Costs for the Interest Accrual Period

immediately succeeding the date on which such certificate was delivered (or if

such certificate was delivered during the last Interest Accrual Period, for

such last Interest Accrual Period) and to the extent remaining outstanding,

each Interest Accrual Period thereafter until paid in full.  The Purchaser’s Agent, out of amounts

received by it in respect of Subclass B-2 Increased Costs for Affected Persons

for any Interest Accrual Period, shall pay such increased costs to such

Affected Persons; provided, however, that if the amount so

distributable in respect of the Subclass B-2 Increased Costs is less than the

aggregate amount payable to all such Affected Persons pursuant to Sections

2.08, 2.09 and 2.10 hereof, the resulting shortfall shall be allocated among

such Affected Persons on a pro rata basis (determined by the amount owed to

each).

 

SECTION 2.09.  Increased

Capital.  If the introduction of

or any change in or in the Interpretation of any law or regulation or the

imposition of any guideline or request from any central bank or other

governmental authority reflecting such change after the date hereof affects or

would affect the amount of capital required or expected to be maintained by any

Affected Person, and such Affected Person determines that the amount of such

capital is increased as a result of (i) the existence of the Subclass B-2 Note

Purchaser’ agreement to make or maintain an investment in the Subclass B-2 Note

or any interest therein and other similar agreements or facilities, or (ii) the

existence of any agreement by Affected Persons to make or maintain an

investment in the Subclass B-2 Note or any interest therein or to fund any such

investment and any other commitments of the same type, such Affected Person

shall promptly submit to the Issuer, the Servicer and, if such Person is not

the Purchaser’s Agent, the Purchaser’s Agent, a certificate setting forth in

reasonable detail, the calculation of the additional amounts required to

compensate such Affected Person in light of such circumstances.  In determining such amount, such Affected

Person may use any reasonable averaging and attribution methods, consistent

with the averaging and attribution methods generally used by such Affected

Person in determining amounts of this type. 

The amount set forth in such certificate (which certificate shall, in

the absence of manifest error, be prima facie evidence as to such amount) shall

be included in the Subclass B-2 Increased Costs for the Interest Accrual Period

immediately succeeding the date on which such certificate was delivered (or if

such certificate was delivered during the last Interest Accrual Period, for

such last Interest Accrual Period), and to the extent remaining outstanding,

each Accrual Period thereafter until paid in full.  The Purchaser’s Agent, out of amounts received by it in respect

of Subclass B-2 Increased Costs for Affected Persons for any Interest Accrual

Period, shall pay such increased costs to such Affected Persons; provided,

however, that if the amount so distributable in respect of the Subclass

B-2 Increased Costs is less than the aggregate amount payable to all such

Affected Persons pursuant to Sections 2.08, 2.09 and 2.10 hereof, the resulting

shortfall shall be allocated among such Affected Persons on a pro rata basis

(determined by the amount owed to each).

 

SECTION 2.10.  Taxes.  (a)

Any and all payments and deposits required to be made under this

Agreement, the Subclass B-2 Note or the Indenture by the Issuer or the

Indenture Trustee to or for the benefit of an Owner shall be made, to the

extent allowed by law, free and clear of and without deduction for any and all

present or future taxes, levies, imposts,

 

7

 

deductions, charges or withholdings, and all liabilities with respect

thereto, now or hereafter imposed, levied, collected, withheld or assessed by

any Governmental Authority.  If, as a

result of any change in law, treaty or regulation or in the interpretation or

administration thereof by any governmental or regulatory agency or body charged

with the administration or interpretation thereof, or the adoption of any law,

treaty or regulation, any taxes, levies, imposts, duties, charges or fees are

required to be withheld from any amount payable to any Owner hereunder, the

amount so payable to such Owner shall be increased to the extent necessary to

yield to such Owner (after payment of all taxes, levies, imposts, duties,

charges or fees) the amount stated to be payable to such Owner hereunder (such

increase and any similar increase described in Section 2.10(d), a “Section

2.10(a) Amount”); provided, however, that this sentence shall not

apply with respect to (i) income taxes (including, without limitation, branch

profits taxes, minimum taxes and taxes computed under alternative methods, at

least one of which is based on net income) and franchise taxes that are based

on income or any other tax upon or measured by income or gross receipts imposed

on any Owner, in each case, as a result of a present or former connection

(other than any connection arising out of the transactions contemplated by this

Agreement) between the jurisdiction of the government or taxing authority

imposing such tax and such Owner; (ii) any taxes, levies, imposts, duties,

charges or fees that would not have been imposed but for the failure by such

Owner to provide and keep current any certification or other documentation

permitted by applicable law to be delivered by such Owner and required to

qualify for an exemption from or reduced rate thereof; (iii) any taxes, levies,

imposts, duties, charges or fees imposed as a result of a change by any Owner

of the office through which the Subclass B-2 Note or any interest therein

hereunder is acquired, accounted for or booked as a result of the sale,

transfer or assignment by any Owner of its interest hereunder, other than any such

taxes, levies, imposts, duties, charges or fees imposed as a result of any such

change or adoption occurring after any such Subclass B-2 Note or interest

therein is acquired, accounted for or booked; (iv) taxes measured by income,

gross receipts, assets or capital of any Owner by the taxing authority of the

jurisdiction where such Owner is organized, incorporated, managed, controlled

or is considered to be doing business or in which it maintains an office,

branch or agency (other than Taxes imposed on the gross amount of any payments

made to under this Agreement without regard to such place of origination or

incorporation, such management or control, the conduct of such business or the

maintenance of such office, branch or agency); (v) any Taxes imposed on such

Owner as a result of payments not related to this Agreement; and (vi) any

withholding tax with respect to any Owner (all such exclusions being

hereinafter called “Excluded Taxes” and all other taxes, levies, imposts,

duties, charges or fees being hereinafter called “Taxes”).  To the extent that any Owner actually

realizes a tax benefit on its income tax returns (whether by reason of a

deduction, credit or otherwise) (a “Tax Benefit”) for a given year that is attributable

to the payment by the Issuer or the Indenture Trustee of any such Taxes on

behalf of such Owner, such Owner shall reimburse the Issuer for the amount of

such Tax Benefit, it being understood that the taking of any action to realize

any Tax Benefit shall be within the sole discretion of such Owner; provided,

however, that for purposes of reimbursing the Issuer, such Owner shall

calculate the amount of the Tax Benefit realized that is attributable to the

Issuer’s or the Indenture Trustee’s payment of such Taxes on behalf of such

Owner as if such Owner realized or received such Tax Benefit pro rata with all

other Tax Benefits available to it for such year.

 

(b)           Each of the Issuer and, to the extent

not prohibited by applicable law (including the Code), each Owner agrees that,

with respect to all Federal, state and local income franchise taxes, it will

treat the Subclass B-2 Note as indebtedness. 

Each Owner not organized

 

8

 

under the laws of the

United States or a State thereof covenants that to the extent that it is

entitled to receive payments under this Agreement without deduction or

withholding of any United States federal income taxes (other than Withholding

Taxes) because such income is effectively connected with a United States trade

or business, it will continue to hold the Subclass B-2 Note in connection with

a United States trade or business for so long as it is an Owner.

 

(c)           Any Section 2.10(a) Amounts payable

to an Owner hereunder shall be included in the Subclass B-2 Increased Costs (i)

for the Interest Accrual Period in respect of which the payment subject to

withholding is made and (ii) to the extent remaining outstanding, each Interest

Accrual Period thereafter until paid in full. 

The Purchaser’s Agent, out of amounts received by it in respect of

Subclass B-2 Increased Costs for Affected Persons for any Interest Accrual Period,

shall pay such increased costs to such Affected Persons; provided, however,

that if the amount so distributable in respect of the Subclass B-2 Increased

Costs is less than the aggregate amount payable to all such Affected Persons

pursuant to Sections 2.08, 2.09 and 2.10 hereof, the resulting shortfall shall

be allocated among such Affected Persons on a pro rata basis (determined by the

amount owed to each).

 

ARTICLE III

CONDITIONS

PRECEDENT TO OBLIGATION OF THE PURCHASER

 

SECTION 3.01.  Conditions Precedent to Initial Purchase.  The initial Purchase hereunder is subject to

the condition precedent that the Purchaser’s Agent shall have received on or

before the date of such purchase the items listed in

Schedule 2, each (unless otherwise indicated) dated such date, in form and

substance satisfactory to the Purchaser’s Agent and the Subclass B-2 Note

Purchaser.

 

SECTION 3.02.  Conditions Precedent to All Fundings.  Each Funding (including the initial Funding) by

the Subclass B-2 Note Purchaser and each Incremental Funding (each, a

“Transaction”) shall be subject to the further conditions precedent that (a)

with respect to any Funding (including the initial Funding) or Incremental

Funding, the Servicer shall have delivered to the Purchaser’s Agent, on or

prior to the date of such Funding or Incremental Funding in form and substance

satisfactory to the Purchaser’s Agent, a Loan Request substantially in the form

of Exhibit A, and containing such additional information as may be

reasonably requested by the Purchaser’s Agent; (b) on the date of such

Transaction the following statements shall be true and the Issuer shall be

deemed to have certified that:

 

(i)            The representations and warranties

contained in Sections 4.01 and 4.02 are true and correct on and as of such day

as though made on and as of such date;

 

(ii)           No event has occurred and is

continuing, or would result from such Transaction which constitutes an Early Amortization

Event;

 

(iii)          On and as of such day, after giving

effect to such Transaction, the outstanding Subclass B-2 Note Principal Balance

does not exceed the Subclass B-2 Note Commitment and the outstanding Aggregate

Note Principal Balance does not exceed the sum of the Class B Note Commitments

and the Class A Note Commitments;

 

9

 

(iv)          On and as of such day, the Issuer and

the Servicer each has performed all of the agreements contained in this

Agreement to be performed by such person at or prior to such day;

 

(v)           No law or regulation shall prohibit,

and no order, judgment or decree of any federal, state or local court or

governmental body, agency or instrumentality shall prohibit or enjoin, the

making of such Loan, remittance of collections or Incremental Funding by the

Subclass B-2 Note Purchaser in accordance with the provisions hereof;

 

(vi)          McAfee & Taft shall have delivered

to the Purchaser’s Agent its written opinion, dated the applicable Transfer Date,

which shall state that it may be relied upon by subsequent Subclass B-2

Noteholders, in form and substance satisfactory to the Purchaser’s Agent and

the Subclass B-2 Note Purchaser, with respect to FAA and recordation matters;

and

 

(vii)         on the date of such Transaction, the

Purchaser’s Agent shall have received such other approvals, opinions or

documents as the Purchaser’s Agent may reasonably require.

 

SECTION 3.03.  Conditions

Precedent to Initial Funding and Each Incremental Funding.  The initial Funding and each Incremental

Funding are subject to the condition precedent, in addition to the conditions

precedent set forth in Section 3.02 hereof, that the Issuer shall have

delivered, or shall have caused to be delivered, to each designated recipient named

in Schedule G to the Indenture Supplement, each of the Funding Deliverables

scheduled to be delivered thereunder on or before the Funding Date of such

Funding.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

 

SECTION 4.01.  Representations and Warranties of the

Issuer.  The Issuer represents (as of the Effective

Date and as of each date on which a Loan is made by the Subclass B-2

Noteholders pursuant to the Supplement, unless otherwise indicated) and

warrants to, and agrees with, the Subclass B-2 Note Purchaser that:

 

(i)            The Issuer is a limited liability

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

the State of Delaware, with its chief executive office located at 2320

Marinship Way, Suite 300, Sausalito, California 94965, and has the power to own

its assets and to engage in the activities in which it is presently engaged and

is duly qualified and in good standing under the laws of each jurisdiction

where its ownership of property or the conduct of its activities requires such

qualification, if the failure to so qualify would have a material adverse

effect on the financial condition of the Issuer or on the enforceability of the

Subclass B-2 Note or the ability of the Issuer to perform its obligations under

this Agreement and the other Related Documents to which it is a party.  One hundred percent of the beneficial

ownership of the Issuer is owned by Willis Lease Finance Corporation

(“WLFC”).  The Issuer has no

subsidiaries other than WLFC Funding (Ireland) Limited;

 

10

 

(ii)           The Issuer has the power, authority

and legal right to execute, deliver and perform its obligations under this

Agreement and the other Related Documents to which it is a party (collectively,

the “Issuer Documents”); the execution, delivery, and performance of the Issuer

Documents by the Issuer have been duly authorized by the Issuer by all

necessary action, the Issuer Documents, other than the Subclass B-2 Notes and

the Subclass A-2 Notes, have been duly executed and delivered by the Issuer,

and each of the Subclass B-2 Notes and the Subclass A-2 Notes, when issued in

accordance with the terms hereof and of the Indenture and the Supplement, will

have been duly executed and delivered;

 

(iii)          Each of the Issuer Documents (other

than the Subclass B-2 Notes and the Subclass A-2 Notes), assuming due

authorization, execution and delivery by the other parties thereto,

constitutes, and the Subclass B-2 Notes and the Subclass A-2 Notes, when issued

and authenticated in accordance with the terms of the Indenture, will

constitute, a legal, valid and binding obligation of the Issuer, enforceable

against the Issuer in accordance with its terms, except that such enforcement

may be limited by (A) bankruptcy, insolvency, reorganization, moratorium or

other similar laws (whether statutory, regulatory or decisional) now or

hereafter in effect relating to creditors’ rights generally and (B) general

principles of equity (regardless of whether such enforceability is considered

in a proceeding in equity or at law);

 

(iv)          The consummation of the transactions

contemplated by the Issuer Documents and the fulfillment of the terms therein

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

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

default under the certificate of formation or limited liability company

agreement of the Issuer, or any indenture, agreement, mortgage, deed of trust,

commitment letter or funding arrangement with any lending institution or

investment bank or other instrument to which the Issuer is a party or by which

it is bound, or result in the creation or imposition of any lien, claim or

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

agreement, mortgage, deed of trust, commitment letter or funding arrangement

with any lending institution or investment bank or other such instrument, other

than as created pursuant to the Indenture and the Supplement, or violate any

law or, any order, rule or regulation applicable to the Issuer of any court or

of any federal or state regulatory body, administrative agency or other

governmental instrumentality having jurisdiction over the Issuer or any of its

properties and there are no legal or governmental proceedings pending or, to

the best knowledge of the Issuer, threatened or contemplated that would result

in a material modification or revocation thereof;

 

(v)           There are no litigation, proceedings

or investigations to which the Issuer, or any Affiliate of the Issuer, is a

party pending, or, to the knowledge of Issuer, threatened, before any court,

regulatory body, administrative agency or other tribunal or governmental

instrumentality (A) asserting the invalidity of the Class B Notes or the Class

A Notes or the other Issuer Documents, (B) seeking to prevent the issuance of

the Subclass B-2 Note or the consummation of any of the transactions

contemplated by the other Issuer Documents, or (C) seeking any determination or

ruling that would materially and adversely affect the performance by the Issuer

of its obligations under, or the validity

 

11

 

or enforceability of, the Class B Notes or the Class A

Notes or the other Issuer Documents;

 

(vi)          All approvals, authorizations,

consents, orders or other actions of any person, corporation or other

organization, or of any court, governmental agency or body or official,

required in connection with the execution and delivery of the Issuer Documents

by the Issuer and with the valid and proper authorization, issuance and sale of

the Class B Notes and the Class A Notes pursuant to this Agreement, have been

or will be taken or obtained on or prior to the Effective Date;

 

(vii)         No written materials delivered to the

Subclass B-2 Note Purchaser by or on behalf of the Issuer in connection with

the sale of the Subclass B-2 Note contain any untrue statement of a material

fact or omit a material fact necessary to make the statements contained therein

or herein not misleading.  There is no

fact peculiar to the Issuer or any Affiliate of the Issuer or, to the knowledge

of the Issuer, any Lease Agreement, Lessee or Engine which the Issuer has not

disclosed to the Purchaser’s Agent in writing which materially adversely

affects or, so far as the Issuer can now reasonably foresee, will materially

adversely affect the ability of the Issuer to perform the transactions

contemplated hereby and by the other Related Documents;

 

(viii)        Each supplement to the List of Engines

will be made available to the Purchaser’s Agent by the Issuer and will be

complete as of the date thereof and will include an accurate (in all material

respects) description of the Engines;

 

(ix)           The representations and warranties

made by the Issuer in the Issuer Documents are true and correct in all material

respects and the Subclass B-2 Note Purchaser shall be entitled to rely on such

representations and warranties;

 

(x)            Any taxes, fees and other

governmental charges payable by the Issuer in connection with the execution and

delivery of the Issuer Documents, the pledge of the Collateral to the Indenture

Trustee, and the execution, delivery and sale of the Class B Notes and the

Class A Notes, have been paid;

 

(xi)           To the extent the Exchange Act may be

deemed to apply to the Class B Notes and the Class A Notes and the Loans, none

of the transactions contemplated in the Issuer Documents (including, without

limitation thereof; the use of the proceeds from the sale of the Subclass B-2

Note) will violate or result in a violation of Section 7 of the Exchange Act,

or any regulations issued pursuant thereto;

 

(xii)          Concurrently with the execution and

delivery of this Agreement, the Issuer is executing no other note purchase

agreement with respect to the Subclass B-2 Note;

 

(xiii)         The Issuer is not an “investment

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

 

(xiv)        For so long as the Series 2002-1 Class A

and Class B Notes are the only Notes outstanding under the Indenture, each of

the Indenture and the Supplement need

 

12

 

not be qualified as an

“indenture” pursuant to the terms of the Trust Indenture Act of 1939, as

amended;

 

(xv)         The Issuer has not taken and will not

take, directly or indirectly, any action, prohibited by Rules 101 and 102 under

Regulation M of the Securities and Exchange Commission in connection with the

offering of the Class B Notes and the Class A Notes;

 

(xvi)        To the extent that the Securities Act

may be deemed to apply to the Class B Notes and the Class A Notes and the

Loans, neither the Issuer nor any affiliate (as defined in Rule 501(b) of

Regulation D under the Securities Act (“Regulation D”)) of the Issuer has

directly, or through any agent, including, without limitation, the Purchaser’s

Agent, (i) sold, offered for sale, solicited offers to buy or otherwise

negotiated in respect of; any security (as defined in the Securities Act) which

is or will be integrated with the sale of the Class B Notes and the Class A

Notes in a manner that would render the issuance and sale of the Subclass B-2

Note a violation of the Securities Act or require the registration of the Class

B Notes and the Class A Notes under the Securities Act or (ii) engaged in any

form of general solicitation or general advertising (within the meaning of

Regulation D) in connection with the offering of the Class B Notes and the

Class A Notes;

 

(xvii)       To the extent that the Securities Act may

be deemed to apply to the Class B Notes and the Class A Notes and the Loans, it

is not necessary in connection with the offer, sale and delivery of the Class B

Notes and the Class A Notes in the manner contemplated by this Agreement or the

Subclass B-1 Note Purchase Agreement or the Class A Notes in the manner

contemplated by the Class A Note Purchase Agreements to register the Class B

Notes or the Class A Notes under the Securities Act assuming that the Subclass

B-2 Note Purchaser is an “accredited investor” as defined in Regulation D under

the Securities Act;

 

(xviii)      No event has occurred and is continuing

that constitutes, or with the passage of time or the giving of notice or both

would constitute, an Early Amortization Event under, and as defined in, the

Indenture.  The Issuer is not in

violation of any agreement, charter instrument, bylaw or other instrument to

which they are a party or by which they are or may be bound;

 

(xix)         The aggregate amount of Scheduled

Payments payable by the Lessees under the Lease Agreements during each

Collection Period is sufficient to pay the monthly Servicing Fee, and the

principal and interest on the Class B Notes and the Class A Notes, as such

payments become due and payable, in accordance with the Indenture;

 

(xx)          The Issuer agrees that it will not

directly or indirectly, sell or offer to sell the Class B Notes or the Class A

Notes or similar security in a manner that would render the issuance and sale

of the Class B Notes and the Class A Notes pursuant to this Agreement a

violation of Section 5 of the Securities Act.

 

13

 

SECTION 4.02.  Representations and Warranties and

Agreements of WLFC.  WLFC hereby represents (as of the Effective

Date and as of each date on which a Loan is made by a Subclass B-2 Noteholder

pursuant to the Indenture Supplement, unless otherwise indicated) and warrants

to, and agrees with, the Subclass B-2 Note Purchaser that:

 

(i)            The representations and warranties

made by WLFC in this Subclass B-2 Note Purchase Agreement, the Subclass B-1

Note Purchase Agreement, the Class A Note Purchase Agreements, the Guaranty,

the Contribution and Sale Agreement, the Servicing Agreement and any other

Related Document to which it is a party (collectively, the “WLFC Documents”)

are true and correct in all material respects and the Subclass B-2 Note

Purchaser shall be entitled to rely on such representations and warranties;

 

(ii)           No written materials delivered to the

Subclass B-2 Note Purchaser by or on behalf of WLFC in connection with the sale

of the Class B Notes or the Class A Notes contain any untrue statement of a

material fact or omit a material fact necessary to make the statements

contained therein or herein not misleading. 

There is no fact peculiar to WLFC or any Affiliate of WLFC or, to the

knowledge of WLFC, any Lease Agreement, Lessee or Engine which WLFC had not

disclosed to the Purchaser’s Agent in writing which materially affects

adversely or, so far as WLFC can now reasonably foresee, will materially affect

adversely the ability of WLFC to perform the transactions contemplated hereby

and by the Base Indenture, the Indenture Supplement, the Servicing Agreement,

the Class B Notes or the Class A Notes;

 

(iii)          Any taxes, fees and other governmental

charges payable by WLFC on or prior to the Effective Date in connection with

the execution and delivery of the WLFC Documents, have been, or will be, paid

on or prior to the Effective Date;

 

(iv)          To the extent that the Exchange Act

may be deemed to apply to the Class B Notes and the Class A Notes and the

Loans, none of the transactions contemplated herein, in the Subclass B-1 Note

Purchase Agreement or in the Class A Note Purchase Agreements (including,

without limitation thereof, the use of the proceeds from the sale of the Class

B Notes and the Class A Notes) will violate or result in a violation of Section

7 of the Exchange Act or any regulations issued pursuant thereto including,

without limitation, Regulations T, U and X of the Federal Reserve Board, 12

C.F.R., Chapter II.  WLFC will not use

any distribution from the Issuer of proceeds received by the Issuer from the

sale of the Class B Notes and the Class A Notes to purchase or carry, directly

or indirectly, margin stock;

 

(v)           No event has occurred and is

continuing that constitutes, or with the passage of time or the giving of

notice or both would constitute a Servicer Event of Default or an Early

Amortization Event under, and as defined in, the Servicing Agreement or the

Indenture, respectively.  WLFC is not in

violation in any material respect of any term of any agreement, charter

instrument, bylaw or other instrument to which it is a party or by which it is

or may be bound;

 

(vi)          The aggregate amount of Scheduled

Payments payable by the Lessees under the Lease Agreements during each

Collection Period is sufficient to cover the

 

14

 

monthly Servicing Fee,

and pay the principal and interest on the Class B Notes and the Class A Notes,

as such payments become due and payable, in accordance with the Indenture; and

 

(vii)         To the extent that the Securities Act

may be deemed to apply to the Class B Notes and the Class A Notes and the

Loans, neither WLFC nor any affiliate (as defined in Rule 501(b) of Regulation

D) of WLFC has directly, or through any agent, including, without limitation,

the Purchaser’s Agent, (i) sold, offered for sale, solicited offers to buy or

otherwise negotiated in respect of, any security (as defined in the Securities

Act) which is or will be integrated with the sale of the Class B Notes and the

Class A Notes in a manner that would render the issuance and sale of the Class

B Notes or the Class A Notes a violation of the Securities Act or require the

registration of the Class B Notes or the Class A Notes under the Securities Act

or (ii) engaged in any form of general solicitation or general advertising

(within the meaning of Regulation D) in connection with the offering of the

Class B Notes and the Class A Notes.  It

is not necessary in connection with the offer, sale and delivery of the Class B

Notes or the Class A Notes to register the Class B Notes or the Class A Notes

under the Securities Act.

 

ARTICLE V

REPRESENTATIONS

AND WARRANTIES OF THE PURCHASER

 

The Subclass

B-2 Note Purchaser hereby makes the following representations and warranties as

to itself to the Issuer as of the Effective Date:

 

SECTION 5.01.  Organization. 

The Subclass B-2 Note Purchaser has been duly organized and is validly

existing and in good standing as a corporation under the laws of its

jurisdiction of incorporation, with power and authority to own

its properties and to transact the business in which it is now engaged, and the

Subclass B-2 Note Purchaser is duly qualified to do business and is in good

standing in each State of the United States where the nature of its business

requires it to be so qualified.

 

SECTION 5.02.  Authority, etc.  The Subclass B-2 Note Purchaser has all

requisite power and authority to enter into and perform its obligations under

this Subclass B-2 Note Purchase Agreement and to  consummate the transactions contemplated hereby.  The execution and delivery by the Subclass

B-2 Note Purchaser of this Subclass B-2 Note Purchase Agreement and the

consummation by the Subclass B-2 Note Purchaser of the transactions

contemplated hereby have been duly and validly authorized by all necessary

corporate action on the part of the Subclass B-2 Note Purchaser.  This Subclass B-2 Note Purchase Agreement

has been duly and validly executed and delivered by the Subclass B-2 Note

Purchaser and constitutes a legal, valid and binding obligation of the Subclass

B-2 Note Purchaser, enforceable against the Subclass B-2 Note Purchaser in

accordance with its terms, subject as to enforcement to bankruptcy,

reorganization, insolvency, moratorium and other similar laws of general

applicability relating to or affecting creditors’ rights and to general

principles of equity.  Neither the

execution and delivery by the Subclass B-2 Note Purchaser of this Subclass B-2

Note Purchase Agreement nor the consummation by the Subclass B-2 Note Purchaser

of any of the transactions contemplated hereby, nor the fulfillment by the

Subclass B-2 Note Purchaser of the terms hereof, will conflict with, or

violate, result in a breach of or constitute a default under (i)

 

15

 

any term or provision of the Articles of

Incorporation or By-laws of the Subclass B-2 Note Purchaser or any Governmental

Rule applicable to the Subclass B-2 Note Purchaser or (ii) any term or provision of any indenture or other agreement or

instrument, to which the Subclass B-2 Note Purchaser is a party or by which the

Subclass B-2 Note Purchaser or any portion of its properties are bound.  No Governmental Action which has not been

obtained is required by or with respect to the Subclass B-2 Note Purchaser in

connection with the execution and delivery of this Subclass B-2 Note Purchase

Agreement by the Subclass B-2 Note Purchaser or the consummation by the

Subclass B-2 Note Purchaser of the transactions contemplated hereby or thereby.

 

SECTION 5.03.  Securities Act.

 

(a)        The

Subclass B-2 Note purchased by the Subclass B-2 Note Purchaser pursuant

to this Subclass B-2 Note Purchase Agreement will be acquired for investment

only and not with a view to any public distribution thereof, and each Subclass

B-2 Note Purchaser (as to itself) will not offer to sell or otherwise dispose

of its Subclass B-2 Note (or any interest therein) in violation of any of the

registration requirements of the Securities Act or any applicable state or

other securities laws.  The Subclass B-2

Note Purchaser acknowledges that it has no right to require the Issuer to

register the Subclass B-2 Note under the Securities Act or any other securities

law.  Each of the Subclass B-2 Note

Purchaser agrees that the Subclass B-2 Note may not be reoffered, resold,

pledged or otherwise transferred except in compliance with the Securities Act

and to a person that the Subclass B-2 Note Purchaser reasonably believes is a

Qualified Institutional Buyer within the meaning of  Rule 144A (a “QIB”) purchasing for its own account or a QIB

purchasing for the account of a QIB, and whom the holder has informed, in each

case, that the reoffer, resale or pledge or other transfer is being made in

reliance on Rule 144A under the Securities Act.  Neither the Subclass B-2 Note Purchaser nor any of their Affiliates

nor any persons acting on their behalf have engaged or will engage in any

general solicitation or general advertising with respect to the Subclass B-2

Note.

 

(b)        Each of the Subclass B-2 Note Purchaser

(as to itself) is aware of the following: 

(i) there are significant restrictions on and conditions to the

transferability of the Subclass B-2 Note (and the Subclass B-2 Note will bear

legends referring to such restrictions) and there is no market for the Subclass

B-2 Note and no market is expected to develop for the Subclass B-2 Note, and

accordingly, it may not be possible for a Subclass B-2 Note Purchaser to

liquidate the Subclass B-2 Note Purchaser’s investment in the Subclass B-2

Note; (ii) no governmental agency has made any findings as to the fairness of

the terms of this Agreement or the terms and conditions of the Subclass B-2

Note; (iii) there are numerous risks and uncertainties involved in the Subclass

B-2 Note Purchaser’s acquisition of the Subclass B-2 Note and the Subclass B-2

Note Purchaser has been advised of and understands such risks and

uncertainties; and (iv) any projections or predictions that may have been made

available to the Subclass B-2 Note Purchaser are based on estimates,

assumptions, and forecasts which may prove to be incorrect; and no assurance is

given that actual results will correspond with the results contemplated by the

various projections.

 

(c)        Each Subclass B-2 Note Purchaser (as to

itself) has knowledge and experience in financial and business matters, is

capable of evaluating the merits and risks of an investment in the Subclass B-2

Note and has carefully considered the suitability of an investment

 

16

 

in such Notes and has

determined that the Subclass B-2 Note are a suitable investment.  Such Subclass B-2 Note Purchaser has

received and carefully read the Transaction Documents and the Subclass B-2 Note

Purchaser confirms that all documents, records and books pertaining to the

Subclass B-2 Note, the Issuer and its assets and the other parties to the

Transaction Documents which are relevant to the Subclass B-2 Note Purchaser’s

investment decision have been made available to the Subclass B-2 Note

Purchaser.  Such Subclass B-2 Note

Purchaser is capable of bearing the risks and burdens of its investment in the

Subclass B-2 Note and is aware that an early redemption of the Subclass B-2

Note may occur and that no premium will be paid upon any early redemption.

 

SECTION 5.04.  Investment Company Act.

 

(a)        Neither of the Subclass B-2 Note Purchaser (as to itself)

nor the Purchaser’s Agent is required to register as an “investment company”

nor is either of the Subclass B-2 Note Purchaser or the Purchaser’s Agent

controlled by an “investment company” within the meaning of the Investment Company Act.

 

(b)        The Subclass B-2 Note Purchaser and the Purchaser’s Agent

acknowledge that the Issuer has not registered as an investment company under the Investment Company Act.  In connection with the exclusion of the

Issuer from classification as an investment company under the Investment

Company Act, each Subclass B-2 Note Purchaser represents as to itself that it

constitutes no more than seven “beneficial owners” of the Subclass B-2 Note for

purposes of Section 3(c)(1) of the Investment Company Act.  Such Subclass B-2 Note Purchaser further

represents that:  (i) it is investing no

more than 40% of its assets in the Subclass B-2 Note; (ii) it was not formed

for the purpose of investing in the Subclass B-2 Note; (iii) (a) the

shareholders, partners or other holders of equity or beneficial interests in

the Subclass B-2 Note Purchaser are not able to decide individually whether to

acquire the Subclass B-2 Note or to determine the extent of such acquisition

and (b) it is not a defined contribution or similar benefit plan that allows

participants to determine whether or how much will be invested in investments

on their behalf; (iv) it is acquiring the Subclass B-2 Note in a principal

amount of not less than the minimum denominations set forth in the Indenture;

and (v) it is acquiring the Subclass B-2 Note for investment and not for sale

in connection with any distribution thereof. 

Such Subclass B-2 Note Purchaser further understands and agrees that it will not permitted to transfer any or all of the Subclass B-2 Note or

any interest therein unless the Issuer has consented to such

transfer and the transferee has delivered to the

Issuer and the Indenture Trustee an investment letter making representations

and warranties substantially the same as the foregoing representations and

warranties in this Section 5.04(b).  The Issuer will not consent to any proposed transfer which, after giving effect to such proposed

transfer, would result in the Issuer’s outstanding securities being owned by

more than 100 beneficial owners for purposes of Section 3(c)(1) of the

Investment Company Act; and,

except as provided in Section 5.05 of this Agreement, it will not hold the

Subclass B-2 Note for the benefit of any person or account and it will be the

sole beneficial owner of the Subclass B-2 Note for all purposes and it will not

sell participation interests therein or enter into any arrangement pursuant to

which any other person or account shall be entitled to a beneficial interest in

the Subclass B-2 Note.

 

17

 

ARTICLE VI

COVENANTS OF THE ISSUER

 

SECTION 6.01.  [Reserved].

 

SECTION 6.02.  Information from the Issuer.  So long as the Subclass B-2 Note Purchaser

shall own the Subclass B-2 Note, the Issuer will furnish to the Subclass B-2

Note Purchaser and the Purchaser’s Agent:

 

(a)        a copy of each certificate, report, statement, notice or

other communication (other than investment instructions) furnished by or on

behalf of the Issuer to the Indenture Trustee under the Indenture concurrently

therewith, and promptly after receipt thereof, a copy of each notice, demand or

other communication received by or on behalf of the Issuer under the Indenture;

 

(b)        such other information, documents, records or reports

respecting the Collateral or the Issuer, as either Subclass B-2 Note Purchaser

or Purchaser’s Agent may from time to time reasonably request without

unreasonable expense to the Issuer;

 

(c)        such publicly available information, documents, records or

reports respecting the Issuer or the condition or operations, financial or

otherwise of the Issuer as either Subclass B-2 Note Purchaser or Purchaser’s

Agent may from time to time reasonably request;

 

(d)        as soon as possible and in any event within five Business

Days after the occurrence thereof, notice of (i) the

occurrence of any Event of Default, (ii) the occurrence of any Early

Amortization Event, (iii) any fact, condition or event which, with the

giving of notice or the passage of time or both, would become an Event of

Default, (iv) any fact, condition or event which, with the giving of

notice or the passage of time or both, would become an Early Amortization

Event, (v) the failure of the Issuer to observe any of its material

undertakings under the Deal Documents or (vi) any change in the status or

condition of the Issuer or the Servicer that would reasonably be expected to

adversely affect the Issuer’s or the Servicer’s ability to perform its

obligations under the Deal Documents; and

 

(e)        on or before April 30 of each year, beginning April 30,

2003, the report required to be delivered by the Servicer pursuant to Section

5.10 of the Servicing Agreement.

 

SECTION 6.03.  Access to Information. 

So long as the Subclass B-2 Note Purchaser shall own any Notes, the

Issuer will, at any time and from time to time during regular business hours,

on reasonable notice to the Issuer, permit the Subclass B-2 Note Purchaser or

the Purchaser’s Agent, or its agents or representatives

to:

 

(a)        examine all books, records and documents (including computer

tapes and disks) in the possession or under the control of the Issuer relating

to the Collateral, and

 

(b)        visit the offices and property of the Issuer for the

purpose of examining the materials described in clause (a) above.

 

Except as provided in Section 10.05

hereof, any information obtained by either Subclass B-2 Note Purchaser or the

Purchaser’s Agent pursuant to this Section 6.03 shall be held in confidence

 

18

 

by the Subclass B-2 Note Purchaser or Purchaser’s

Agent unless such information (i) has become available to the public, (ii) is

required or requested by any Governmental Authority or in any court proceeding,

or (iii) is required by any Governmental Rule to be disclosed or otherwise made

available and, in the case of (ii) and (iii) such disclosure shall be only to

the extent required.

 

SECTION 6.04.  Security Interests; Further Assurances.  The Issuer will take all action necessary to

maintain the Indenture Trustee’s first priority perfected security interest in the Collateral.

 

SECTION 6.05.  Covenants. 

The Issuer will duly observe and perform each of its covenants set forth

in the Indenture.

 

SECTION 6.06.  Securities

Act. 

The Issuer agrees not to sell, offer for sale or solicit offers to buy

or otherwise negotiate in respect of any security (as defined in the Securities

Act) that would be integrated with the sale of the Class B Notes or the Class A

Notes in a manner that would require the registration under the Securities Act

of the sale to the Class B Note Purchasers and the Class A Note Purchasers of

the Class B Notes and the Class A Notes, respectively.

 

ARTICLE VII

MUTUAL

COVENANTS AND AGREEMENTS

 

SECTION 7.01.  Legal Conditions to Effectiveness of this

Agreement.  The Subclass B-2 Note Purchaser, the

Purchaser’s Agent, the Issuer, and the Servicer will take all reasonable

actions necessary to comply promptly with all legal requirements which may be

imposed on any of them with respect to the conditions to the making of any

Loans hereunder (including satisfaction of the conditions contained in this

Subclass B-2 Note Purchase Agreement), and will promptly cooperate with and

furnish information to one another in connection with any such legal

requirements.  The Subclass B-2 Note

Purchaser, the Purchaser’s Agent, the Issuer, and the Servicer will take all

reasonable action necessary to obtain (and will cooperate with one another in

obtaining) any consent, authorization, permit, license, franchise, order or

approval of, or any exemption by, any Governmental Authority or any other

Person, required to be obtained or made by it in connection with any of the

transactions contemplated by this Subclass B-2 Note Purchase Agreement.

 

SECTION 7.02.  Expenses and Fees. 

Subject to Section 10.10, except as otherwise expressly provided herein,

all costs and expenses incurred in connection with the  entering into

this Subclass B-2 Note Purchase Agreement and the transactions contemplated

hereby shall  be paid by the Issuer.

 

SECTION 7.03.  Mutual Obligations. 

On and after the date of this Subclass B-2 Note Purchase Agreement, the

Subclass B-2 Note Purchaser, the Purchaser’s Agent, the Issuer and the Servicer

will do, execute and perform all such other acts, deeds and documents as the

other party may from time to time reasonably require in order to carry out the

intent of this Subclass B-2 Note Purchase Agreement.

 

19

 

ARTICLE VIII

INDEMNIFICATION

 

SECTION 8.01.  Indemnification by the Issuer.  The Issuer agrees to indemnify and

hold harmless the Subclass B-2 Note Purchaser and the Purchaser’s Agent, and

any other Owners and any of their respective officers, directors, employees,

agents, representatives, assignees and Affiliates (each an “Indemnified

Party”) against any and all losses, claims, damages, liabilities or

expenses (including legal and accounting fees) (collectively, “Losses”), as

incurred (payable promptly upon written request), for or on account of or

arising from or in connection with any breach of any representation, warranty

or covenant of the Issuer in this Subclass B-2 Note Purchase Agreement or in

any certificate or other written material delivered pursuant hereto; provided,

however, that the Issuer shall not be so required to indemnify any such Person

or otherwise be liable to any such Person hereunder for any Losses arising from

such Person’s negligence, willful misconduct or bad faith. Notwithstanding the

foregoing, the Issuer shall not be liable for any settlement of any proceeding

effected without its written consent

 

SECTION 8.02.  Procedure. 

In order for any Indemnified Party to be entitled to any indemnification

provided for under this Subclass B-2 Note Purchase Agreement in respect of,

arising out of, or involving a claim made by any Person against the Indemnified

Party (a “Third Party Claim”), such Indemnified Party must notify the Issuer in

writing of the Third Party Claim within five Business Days of receipt of a

summons, complaint or other notice of the commencement of litigation and within

ten Business Days after receipt by such  Indemnified  Party of any other

written notice of the Third Party Claim. 

Thereafter, the Indemnified Party shall deliver to the Issuer, within a

reasonable time after the Indemnified Party’s receipt thereof, copies of all

notices and documents (including court papers) received by the Indemnified

Party relating to the Third Party Claim.

 

SECTION 8.03.  Defense of Claims. 

If a Third Party Claim is made against an Indemnified Party, (a) the

Issuer will be entitled to participate in the defense thereof and, (b) if

it so chooses, to assume the defense thereof with counsel selected by the

Issuer, provided that in connection with such assumption (i) such counsel is

not reasonably objected to by the Indemnified Party and (ii) the Issuer first

admits in writing its liability to indemnify the Indemnified Party with respect

to all elements of such claim in full. 

Should the Issuer so elect to assume the defense of a Third Party Claim,

none of the Issuer will be liable to the Indemnified Party for any legal

expenses subsequently incurred by the Indemnified Party in connection with the

defense thereof.  If the Issuer elects

to assume the defense of a Third Party Claim, the Indemnified Party will (i)

cooperate in  all reasonable respects with the Issuer

in connection with such defense and (ii) not admit any liability with respect

to, or settle, compromise or discharge, such Third Party Claim without the

Issuer’s prior written consent.  If the

Issuer shall assume the defense of any Third Party Claim, the Indemnified Party

shall be entitled to participate in (but not control) such defense with its own

counsel at its own expense.  If the

Issuer does not assume the defense of any such Third Party Claim, the

Indemnified Party may defend the same in such manner as it may deem

appropriate, including settling such claim or litigation after giving notice to

the Issuer of such terms and, the Issuer will promptly reimburse the

Indemnified Party upon written request.

 

20

 

ARTICLE IX

THE PURCHASERS’ AGENT

 

SECTION 9.01.  Authorization and Action.  Each Owner hereby accepts the appointment of

Barclays Bank PLC, as Purchaser’s Agent hereunder, and authorizes the

Purchaser’s Agent to take such action as agent on its behalf and to exercise

such powers as are delegated to the Purchaser’s Agent by the terms hereof,

together with such powers as are reasonably incidental thereto.  The Purchaser’s Agent reserves the right, in

its sole discretion, to take any actions, exercise any rights or remedies under

this Subclass B-2 Note Purchase Agreement and any related agreements and

documents.  Except for actions which the

Purchaser’s Agent is expressly required to take pursuant to this Subclass B-2

Note Purchase Agreement, the Purchaser’s Agent shall not be required to take

any action which exposes the Purchaser’s Agent to personal liability or which

is contrary to applicable law unless the Purchaser’s Agent shall receive

further assurances to its satisfaction from the Owners of the indemnification

obligations under Section 9.04 hereof against any and all liability and expense

which may be incurred in taking or continuing to take such action.  The Purchaser’s Agent agrees to give to each

Owner prompt notice of each notice and determination given to it by the Issuer,

the Servicer and the Indenture Trustee, pursuant to the terms of this Subclass

B-2 Note Purchase Agreement or the Indenture. 

Subject to Section 9.06 hereof, the appointment and authority of the

Purchaser’s Agent hereunder shall terminate upon the payment to (a) each  Sheffield Owner of all amounts owing to such Owner hereunder and

(b) the Purchaser’s Agent of all amounts due hereunder.

 

SECTION 9.02.  Purchaser’s Agent’s Reliance, Etc.  Neither the Purchaser’s Agent nor any of its

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

or omitted to be taken by it or them as Purchaser’s Agent under or in

connection with this Subclass B-2 Note Purchase Agreement or any related

agreement or document, except for its or their own gross negligence or willful

misconduct.  Without limiting the

foregoing, the Purchaser’s Agent:  (i)

may consult with legal counsel, independent public accountants and other

experts selected by it and shall not be liable for any action taken or omitted

to be taken in good faith by it in accordance with the advice of such counsel,

accountants or experts; (ii) makes no warranty or representation to any Owner

and shall not be responsible to any Owner for any statements, warranties or

representations made by the Issuer, the Servicer or the Indenture Trustee in

connection with this Subclass B-2 Note Purchase Agreement; (iii) shall not have

any duty to ascertain or to inquire as to the performance or observance of any

of the terms, covenants or conditions of this Subclass B-2 Note Purchase

Agreement on the part of the Issuer, the Servicer or the  Indenture Trustee

or to inspect the property (including the books and records) of the Issuer, the

Servicer or the Indenture Trustee; (iv) shall not be responsible to any Owner

for the due execution, legality, validity, enforceability, genuineness,

sufficiency or value of this Subclass B-2 Note Purchase Agreement or any other

instrument or document furnished pursuant hereto; and (v) shall incur no

liability under or in respect of this Subclass B-2 Note Purchase Agreement by

acting upon any notice (including notice by telephone), consent, certificate or

other instrument or writing (which may be by telex) believed by it in good

faith to be genuine and signed or sent by the proper party or parties.

 

SECTION 9.03.  Purchaser’s Agent and Affiliate.  Barclays Bank PLC and its Affiliates may

generally engage in any kind of business with the Issuer or the Servicer, any

of their respective Affiliates and any Person who may do business with or own

securities of the

 

21

 

Issuer or the

Servicer or any of its Affiliates, all as if Barclays Bank PLC were not the

Purchaser’s Agent and without any duty to account therefor to the Owners.

 

SECTION 9.04.  Indemnification.  Each Owner severally agrees to indemnify the

Purchaser’s Agent (to the extent not reimbursed by the Issuer or the Servicer),

from and against any and all liabilities, obligations, losses, damages,

penalties, actions, judgments, suits, costs, or reasonable out-of-pocket

expenses or disbursements of any kind or nature whatsoever which may be imposed

on, incurred by, or asserted against the Purchaser’s Agent in any way relating

to or arising out of this Subclass B-2 Note Purchase Agreement or any action

taken or omitted by the Purchaser’s Agent under this Subclass B-2 Note Purchase

Agreement; provided, that (i) an Owner shall not be liable for any portion of

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

suits, costs, expenses or disbursements resulting or arising from the

Purchaser’s Agent’s gross negligence or willful misconduct and (ii) an Owner

shall not be liable for any amount in respect of any compromise or settlement

or any of the foregoing unless such compromise or settlement is approved by the

Subclass B-2 Note Purchaser.  Without

limitation of the generality of the foregoing, each Owner agrees to reimburse

the Purchaser’s Agent, promptly upon demand, for any reasonable  out-of-pocket expenses (including reasonable counsel fees)

incurred by the Purchaser’s Agent in connection with the administration,

modification, amendment or enforcement (whether through negotiations, legal

proceedings or otherwise) of, or legal advice in respect of rights or

responsibilities under, this Subclass B-2 Note Purchase Agreement; provided,

that no Owner shall be responsible for the costs and expenses of the

Purchaser’s Agent in defending itself against any  claim alleging the

gross negligence or willful misconduct of the Purchaser’s Agent to the extent

such gross negligence or willful misconduct is determined by a court of

competent jurisdiction in a final and non-appealable decision.

 

SECTION 9.05.  Purchase Decision. 

Each Owner acknowledges that it has, independently and without reliance

upon the Purchaser’s Agent, any other Owner or any of their respective

Affiliates, and based on such documents and information as it has deemed

appropriate, made its own evaluation and decision to enter into this Subclass

B-2 Note Purchase Agreement and to purchase an interest in the Subclass B-2

Note.  Each Owner also acknowledges that

it will, independently and without reliance upon the Purchaser’s Agent, any other

Owner or any of their respective Affiliates, and based on such documents and

information as it shall deem appropriate at the time, continue to make its own

decisions in taking or not taking  action under this

Subclass B-2 Note Purchase Agreement or any related agreement, instrument or

other document.

 

SECTION 9.06.  Successor Purchaser’s Agent.  (a) The Purchaser’s Agent may resign at any

time by giving sixty days’ written notice thereof to the Owners, the Issuer,

the Servicer and the Indenture Trustee. 

Upon any such resignation, a majority of the Owners shall have the right

to appoint a successor Purchaser’s Agent approved by the Issuer (which approval

will not be unreasonably withheld or delayed). 

If no successor Purchaser’s Agent shall have been so appointed by a

majority of the Owners and shall have accepted such appointment, within sixty

days after the retiring Purchaser’s Agent’s giving of notice or resignation,

then the retiring Purchaser’s Agent may, on behalf of the Owners appoint a

successor Purchaser’s Agent.  If such

successor Purchaser’s Agent is not an Affiliate of Barclays Bank PLC, such

successor Purchaser’s Agent shall be subject to the Issuer’s prior written

consent.  Upon the acceptance of

 

22

 

any appointment as Purchaser’s Agent

hereunder by a successor Purchaser’s Agent, such successor Purchaser’s Agent

shall thereupon succeed to and become vested with all of the rights, powers,

privileges and duties of the retiring Purchaser’s Agent, and the retiring

Purchaser’s Agent shall be discharged from its duties and obligations under

this Subclass B-2 Note Purchase Agreement. 

After any retiring Purchaser’s Agent’s resignation or removal hereunder

as Purchaser’s Agent, the provisions of this Article IX shall inure to its

benefit as to any actions taken or omitted to be taken by it while it was an

Purchaser’s Agent under this Subclass B-2 Note Purchase Agreement.

 

ARTICLE X

MISCELLANEOUS

 

SECTION

10.01.  Amendments. 

No amendment or waiver of any provision of this Subclass B-2 Note Purchase

Agreement shall in any event be effective unless the same shall be in writing

and signed by all of the parties hereto, and then such amendment, waiver or

consent shall be effective only in the specific instance and for the specific

purpose for which given.

 

SECTION

10.02.  Notices. 

All notices and other communications provided for hereunder shall,

unless otherwise stated herein, be in writing (including telecopies) or

delivered by overnight courier service, as to each party hereto, at its address

set forth below or at such other address as shall be designated by such party

in a written notice to the other parties hereto.  All such notices and communications shall, when telecopied or

sent by overnight delivery service, be effective with respect to telecopy

notices, when the sending machine receives confirmation of the transmission,

and with respect to overnight delivery service when confirmed by signed

receipt.

 

	

  If to the Subclass B-2 Note Purchaser:

  
	

   

  
	

  Barclays Bank PLC

  
	

  222 Broadway

  
	

  New York, New York 10038

  
	

  Attention:  Asset Securitization Group

  
	

  Telephone No.  (212) 412-3266

  
	

  Facsimile No. (212) 412-6846

  
	

   

  
	

  If to the Issuer:

  
	

   

  
	

  Willis Engine Funding LLC

  
	

  2320 Marinship Way

  
	

  Suite 300

  
	

  Sausalito, California 94965

  
	

  Telephone No.  (415) 331-5281

  
	

  Facsimile No.  (415) 331-5167

  

 

23

 

	

  If to Purchaser’s Agent:

  
	

   

  
	

  Barclays Bank PLC

  
	

  222 Broadway

  
	

  New York, New York 10038

  
	

  Attention:  Asset Securitization Group

  
	

  Telephone No.  (212) 412-3266

  
	

  Facsimile No.  (212) 412-6846

  

 

SECTION

10.03.  No Waiver; Remedies. 

No failure on the part of any party hereto to exercise, and no delay in

exercising, any right hereunder shall operate as a waiver thereof; nor shall

any single or partial exercise of any right hereunder preclude any other or  further exercise

thereof or the exercise of any other right. 

The remedies herein provided are cumulative and not exclusive of any

remedies provided by law.

 

SECTION

10.04.  Binding Effect; Assignability.  This Subclass B-2 Note Purchase Agreement

shall be binding upon and inure to the benefit of the Issuer, the Purchaser’s

Agent and the Subclass B-2 Note Purchaser and their respective successors and

assigns (including any subsequent holders of the Subclass B-2 Note); provided,

however, that the Issuer shall not have the right to assign its rights

hereunder  or any interest herein (by operation of

law or otherwise) without the prior written consent of the Subclass B-2 Note

Purchaser.  The Issuer acknowledges that

the Subclass B-2 Note Purchaser may at any time assign any and all of its

rights hereunder to the Owners.  This

Subclass B-2 Note Purchase Agreement shall create and constitute the continuing

obligation of the parties hereto in accordance with its terms, and shall remain

in full force and effect until such time as all amounts payable with respect to

the Subclass B-2 Note shall have been paid in full.

 

SECTION

10.05.  [Reserved].

 

SECTION

10.06.  GOVERNING LAW; JURISDICTION.  THIS SUBCLASS B-2 NOTE PURCHASE AGREEMENT

SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE

OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS.  EACH OF THE PARTIES TO  THIS SUBCLASS B-2 NOTE PURCHASE AGREEMENT HEREBY AGREES TO THE

JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF

NEW YORK AND ANY APPELLATE COURT HAVING JURISDICTION TO REVIEW THE JUDGMENTS

THEREOF.  EACH OF THE PARTIES HEREBY

WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS AND ANY OBJECTION TO VENUE

OF ANY ACTION INSTITUTED HEREUNDER IN ANY OF THE AFOREMENTIONED COURTS AND

CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED

APPROPRIATE BY SUCH COURT.

 

SECTION

10.07.  No Proceedings. 

Each of the Subclass B-2 Note Purchaser and the Purchaser’s Agent agrees

that so long as any of the Subclass B-2 Note shall be outstanding or there

shall not have elapsed one year plus one day since the last day on which any of

the Subclass B-2 Note shall have been outstanding, it shall not file, or join

in the filing of, a petition against the Issuer under the Federal Bankruptcy

Code, or join in the commencement of any

 

24

 

bankruptcy, reorganization, arrangement, insolvency, liquidation

or other similar proceeding against the Issuer.

 

SECTION

10.08.  Execution in Counterparts.  This Subclass B-2 Note Purchase Agreement

may be executed in any number of counterparts and by different parties hereto

in separate counterparts, each of which when so executed shall be deemed to be

an original and all of which when taken together shall constitute one and the

same agreement.

 

SECTION

10.09.  No Recourse. 

The obligations of the Subclass B-2 Note Purchaser under this Subclass

B-2 Note Purchase Agreement, or any other agreement, instrument, document or

certificate executed and delivered by or issued by the Subclass B-2 Note

Purchaser or any officer thereof are solely the corporate obligations of the

Subclass B-2 Note Purchaser.  No

recourse shall be had for payment of any fee or other obligation or claim

arising out of or relating to this Subclass B-2 Note Purchase Agreement or any

other agreement, instrument, document or certificate executed and delivered or

issued by a Subclass B-2 Note Purchaser or any officer thereof in connection

therewith, against any stockholder, employee, officer, director or incorporator

of a Subclass B-2 Note Purchaser.

 

SECTION

10.10.  Limited Recourse. 

The obligations of the Issuer under this Subclass B-2 Note Purchase

Agreement shall be payable only out of the Collateral and the Subclass B-2 Note

Purchaser shall not look to any property or assets of the Issuer, other than to

the Collateral remaining after all obligations of the Issuer under the

Indenture are satisfied. To the extent that the proceeds of the Collateral

after application in accordance with the provisions of the Indenture are

insufficient to satisfy the obligations of the Issuer under the Indenture and

under this Agreement, the Issuer shall have no further obligation in respect

hereof and any remaining outstanding obligation shall be extinguished.

 

SECTION

10.11.  Survival. 

All representations, warranties, guaranties and indemnifications

(including the payment obligations in Section 9.04 hereof) contained in this

Subclass B-2 Note Purchase Agreement and in any document, certificate or

statement delivered pursuant hereto or in connection herewith shall survive the

sale and transfer of the Subclass B-2 Note.

 

SECTION

10.12.  Third-Party Beneficiaries.  The parties hereto agree and acknowledge

that the Owners are and shall be third-party beneficiaries under this Subclass

B-2 Note Purchase Agreement.

 

SECTION

10.13.  Appointment of Agent for Service of

Process.  The Issuer hereby appoints CT Corporation Systems having an address

at 1633 Broadway, New York, New York 10019 as its agent for service of process in the State of New

York.

 

25

 

IN WITNESS

WHEREOF, the parties have caused this Subclass B-2 Note Purchase Agreement to

be executed by their respective officers thereunto duly authorized, as of the

date first above written.

 

	

   

  	

  WILLIS

  ENGINE FUNDING LLC

  as Issuer,

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

  /s/ MONICA J. BURKE

  	

   

  
	

   

  	

   

  	

  Name:

  	

  Monica J. Burke

  	

   

  
	

   

  	

   

  	

  Title:

  	

  Chief Financial Officer

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  WILLIS

  LEASE FINANCE CORPORATION,

  as Servicer,

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

  /s/ DONALD A. NUNEMAKER

  	

   

  
	

   

  	

   

  	

  Name:

  	

  Donald A. Nunemaker

  	

   

  
	

   

  	

   

  	

  Title:

  	

  Executive Vice President

  	

   

  
	

   

  	

   

  	

   

  	

  Chief Operating Officer

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  BARCLAYS

  BANK PLC,

  as a Subclass B-2 Note Purchaser and as

  Purchaser’s Agent

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

  /s/ PIERRE DULEYRIE

  	

   

  
	

   

  	

   

  	

  Name:

  	

  Pierre Duleyrie

  	

   

  
	

   

  	

   

  	

  Title:

  	

  Director

  	

   

  

 

Signature Page 1

to

Subclass B-2 Note Purchase Agreement

 

 

SCHEDULE 1

 

Account to which cash payments shall be

made to Barclays Bank PLC:

 

Barclays Bank

PLC

ABA #:  026-00-2574

Account

Number:  050-791-516

Account

Name:  Sheffield 4(2) Funding Account

Ref:  Willis Engine Finance

Telephone:  (212) 412-2932

Fax:  (212) 412-6846

e-mail:  pierre.duleyrie@barcap.com

 

 

SCHEDULE 2

 

Conditions of the

Subclass B-2 Note Purchaser’s Obligation.  The Subclass

B-2 Note Purchaser’s obligation to make the initial Loan shall be subject to

the accuracy in all material respects of the representations and warranties of

the Issuer and WLFC in each of the Series 2002-1 Transaction Documents, to the

performance in all material respects by WLFC and the Issuer of their respective

obligations thereunder, to the satisfaction of all of the conditions precedent

set forth in Sections 5.1 and 5.2 of the Indenture Supplement and to the

following additional conditions:

 

(a)        All of the respective representations

and warranties of the Issuer under the Issuer Documents and of WLFC under the

WLFC Documents shall be true and correct in all material respects as of the

date made, and no event shall have occurred which, with notice or the passage

of time, would constitute an Event of Default under the Indenture or an Early

Amortization Event under the Indenture and each of such Issuer Documents and

WLFC Documents shall have been duly authorized, executed and delivered and

shall be in full force and effect;

 

(b)       Gibson, Dunn & Crutcher LLP, counsel

to WLFC and the Issuer, shall have delivered to the Purchaser’s Agent its

written opinions, dated the Effective Date, in form and substance satisfactory

to the Purchaser’s Agent and the Subclass B-2 Note Purchaser;

 

(c)         The Issuer shall have furnished to the Purchaser’s

Agent on the Effective Date a certificate, dated the Effective Date, signed by

an authorized officer, to the effect that:

 

(i)           The representations and warranties

made by the Issuer in the Issuer Documents are true and correct in all material

respects on the Effective Date;

 

(ii)          The Issuer has complied with all of

the agreements and satisfied all the conditions on its part to be performed or

satisfied on or prior to the Effective Date pursuant to the terms of the Issuer

Documents; and

 

(iii)         The written information supplied by the

Issuer to the Subclass B-2 Note Purchaser (other than projections and other

estimates) did not contain any untrue statement of a material fact, and any

estimates or projections so supplied to the Subclass B-2 Note Purchaser were

based on assumptions which the Issuer believed to be reasonable (except as

otherwise disclosed therein).

 

(d)     WLFC shall have furnished to the

Purchaser’s Agent on the Effective Date a certificate, dated the Effective

Date, signed by an authorized officer, to the effect that:

 

(i)           The representations and warranties

made by WLFC in the WLFC Documents are true and correct in all material

respects on the Effective Date;

 

(ii)          WLFC has complied with all of the

agreements and satisfied all the conditions on its part to be performed or

satisfied on or prior to the Effective Date pursuant to the terms of the WLFC

Documents; and

 

 

(iii)         The written factual information

supplied by WLFC to the Subclass B-2 Note Purchaser (other than projections and

other estimates) did not contain any untrue statement of a material fact in

light of the circumstances under which they were made, and any estimates or

projections so supplied to the Subclass B-2 Note Purchaser were based on

assumptions which WLFC believed to be reasonable (except as otherwise disclosed

therein);

 

(e)      Any taxes, fees and other governmental

charges which are due and payable prior to the Effective Date by WLFC or the

Issuer in connection with the execution, delivery and performance of the Issuer

Documents and WLFC Documents shall have been paid at or prior to the Effective

Date;

 

(f)      As of the related Transfer Date, the

Issuer has good title to, and is the sole owner of, the Collateral, free and

clear from any Lien except for the rights of the Lessees under the Lease

Agreements and the Lien of the Indenture Trustee and, if applicable, the Owner

Trustee, and shall not have assigned to any Person other than the Indenture

Trustee or, if applicable, the Owner Trustee, any of its right, title or

interest in the Lease Agreements, the Engines or any other Transferred Assets;

 

(g)     No fact or condition shall exist under

applicable law or applicable regulations thereunder or interpretations thereof

by any regulatory authority which in the Subclass B-2 Note Purchaser’s

reasonable opinion would make it illegal for the Issuer to issue and sell the

Subclass B-2 Note or for the Issuer or any of the other parties thereto to

perform their respective obligations under any Related Document;

 

(h)     The Asset Base as of the Effective Date

shall be not less than the Outstanding Obligation and the Subordinate Asset

Base as of the Effective Date shall be not less than the Outstanding

Obligations in respect of the Subclass B-2 Note;

 

(i)       The Issuer, WLFC, the Subclass B-2 Note

Purchaser and the Indenture Trustee shall each have received a fully executed

counterpart original and any required conformed copies of all Related Documents

delivered at or prior to the Effective Date;

 

(j)       All corporate, trust and other

proceedings in connection with the sale of the Subclass B-2 Note and the

transactions contemplated hereby and all documents and certificates incident

thereto shall be satisfactory in form and substance to the Subclass B-2 Note

Purchaser and its counsel, and the Subclass B-2 Note Purchaser shall have

received such other documents and certificates incident to such transaction as

the Subclass B-2 Note Purchaser or such counsel shall reasonably request;

 

(k)      The Subclass B-2 Note Purchaser or the

Purchaser’s Agent shall have received the following, in each case in form and

substance satisfactory to them and their special counsel:

 

(i)           a copy of resolutions of the Board of

Directors of the Issuer, certified by the Secretary or an Assistant Secretary

of the Issuer as of the Effective Date, duly authorizing the issuance, sale and

delivery of the Subclass B-2 Note by the Issuer and the execution, delivery and

performance by the Issuer of the Issuer Documents and

 

 

any other Related Documents to which it is a party and

any other documents executed by or on behalf of the Issuer in connection with

the transactions contemplated hereby; and an incumbency certificate of the

Issuer as to the person or persons executing and delivering each such document;

 

(ii)          a copy of resolutions of the Board of

Directors of WLFC, certified by the Secretary or an Assistant Secretary of WLFC

as of the Effective Date, duly authorizing the execution, delivery and

performance by WLFC of the WLFC Documents and any other Related Documents to

which it is a party and any other documents executed by or on behalf of WLFC in

connection with the transactions contemplated hereby; and an incumbency

certificate of WLFC as to the person or persons executing and delivering each

such document; and

 

(iii)         such other documents and evidence with

respect to WLFC, the Issuer and the Indenture Trustee as the Subclass B-2 Note

Purchaser may reasonably request in order to establish the corporate existence

and good standing of each thereof; the proper taking of all appropriate

corporate proceedings in connection with the transactions contemplated hereby

and the compliance with the conditions set forth herein; and

 

(l)       No action or proceeding shall have been

instituted nor shall any governmental action be threatened before any court or

government agency nor shall any order, judgment or decree have been issued or

proposed to be issued by any court or governmental agency to set aside,

restrain, enjoin or prevent the performance of the Contribution and Sale

Agreement, the Indenture, the other Related Documents or any of the other

agreements or the transactions contemplated hereby; and

 

(m)     All actions, approvals, consents, waivers,

exemptions, variances, franchises, orders, permits, authorizations, rights and

licenses required to be taken, given or obtained by or from any Federal, state

or other governmental authority or agency, or by or from any trustee or holder

of any indebtedness or obligation of WLFC or the Issuer, or that are necessary

or, in the opinion of the Subclass B-2 Note Purchaser’s special counsel,

advisable in connection with the transactions contemplated herein shall have

been delivered to the Subclass B-2 Note Purchaser.

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