Document:

Exhibit 10.26

TERM NOTE

 

	

  $1,250,000.00

  	

   

  	

   

  	

   

  	

  McLean, Virginia 

  
	

   

  	

   

  	

   

  	

   

  	

  September

      , 2002

  

 

FOR VALUE RECEIVED, ON-SITE

SOURCING, INC., a Delaware corporation (the “Borrower”), having an address at

832 North Henry Street, Alexandria, Virginia 22314, promises to pay to the

order of Wachovia Bank, National Association, a national banking association,

formerly known as First Union National Bank (the “Lender”), the principal sum

of One Million, Two Hundred Fifty Thousand and No/100 Dollars ($1,250,000.00),

together with interest thereon at the rate or rates hereinafter provided, in

accordance with the following terms:

1.             Interest. 

Commencing as of the date hereof and continuing until repayment in full

of all sums due hereunder, the unpaid principal sum owing hereunder shall bear

interest at a fluctuating annual rate equal to the LIBOR Market Index Rate

(hereinafter defined) in effect from time to time, plus two and one half

percentage points (2.50%).    The LIBOR

Market Index Rate, for any day, is the rate for 1 month U.S. dollar deposits as

reported on Telerate page 3750 as of 11:00 a.m., London time, on such day, or

if such day is not a London business day, then the immediately preceding London

business day (or if  not  so 

reported,  then  as determined by Lender from another

recognized source or interbank quotation). 

Absent manifest error, the Lender’s determination of the LIBOR Market

Index Rate for any day shall be conclusive.

The rate of interest that

shall accrue under this Note shall change immediately upon any change in the

LIBOR Market Index Rate.

If the LIBOR Market Index

Rate is discontinued or unavailable, interest on the outstanding principal

balance shall accrue at an annual rate equal to the Prime Rate (hereinafter

defined) plus one-half of one percentage point (0.5 %).

The Prime Rate is a

fluctuating rate announced by the Lender from time to time, in the Lender’s

sole discretion, as the Lender’s Prime Rate. 

Changes in the Prime Rate will be effective, without prior notice, as of

the date any change is announced.  The

Prime Rate is a reference rate only; it is not necessarily the most favorable

rate of interest that the Lender charges to any borrower or class of borrowers.

All interest payable under

the terms of this Note shall be calculated by applying a daily interest rate,

determined by multiplying the outstanding principal balance by the applicable

annual interest rate and dividing the resulting product by 360, to the actual

number of days principal is outstanding.

2.             Payments and Maturity. 

The unpaid principal balance, together with interest thereon at the rate

or rates provided above, shall be payable as follows:

(a)           Principal shall be paid in thirty six

(36) consecutive monthly installments of Thirty Four Thousand Seven Hundred

Twenty Two and 22/100 Dollars ($34,722.22)

 

 

each,

commencing on November 1, 2002 , and being due on the first day of each month

thereafter.

(b)           Interest shall be due and payable monthly, commencing on

November 1, 2002, and being due on the first day of each month thereafter.

(c)           Unless sooner paid, the unpaid principal balance, together

with all interest accrued and unpaid thereon, and all other amounts owing under

this Note shall be due and payable in full on October 1, 2005 (the “Maturity

Date”).

3.                                       Automatic Debit of Checking Account for Payments in Respect of

Reimbursement

Obligations.  Borrower authorizes Lender to debit its demand deposit account

number 2000003778052 and any other account with Lender designated in writing by

Borrower, beginning November 1, 2002 for any payments due hereunder or under

any other Loan Documents.  Borrower

further certifies that Borrower holds legitimate ownership of this account and

preauthorizes this periodic debit as part of its right under said ownership.

4.             Default Interest.  Upon the occurrence of an Event of Default

(as hereinafter defined), the unpaid principal balance shall bear interest

thereafter, until the Event of Default is cured, at a rate of two percent

(2.0%) per annum in excess of the rate or rates of interest that would

otherwise be in effect under this Note.

5.             Late Charges.  If

the Borrower fails to make any payment under the terms of this Note within ten

(10) days after the date such payment is due, the Borrower shall pay to the

Lender on demand a late charge equal to five percent (5.0%) of such payment.

6.             Application and Place of Payments.  Except as otherwise provided in the Loan

Agreement (hereinafter defined), all payments, made on account of this Note

shall be applied first to the payment of accrued and unpaid interest then due

hereunder, second to the unpaid principal balance and the remainder, if any,

shall be applied to any other amounts which remain owing hereunder.  All payments on account of this Note shall

be paid in lawful money of the United States of America in immediately

available funds during regular business hours of the Lender at its office at

1970 Chain Bridge Road, McLean, Virginia 22102, or at such other times and

places as the Lender may at any time and from time to time designate in writing

to the Borrower.

7.             Loan Agreement.  This Note is the “$1,250,000.00 Term Note”

described in an Amended and Restated Revolving Line of Credit Loan Agreement,

Term Loans Agreement and Security Agreement, dated as of May 30, 2001, by and

between the Borrower and the Lender, as modified by that certain First

Modification of Amended and Restated Revolving Line of Credit Loan Agreement,

Term Loans Agreement and Security Agreement, dated as of July 2, 2001, and as

further modified by that certain Second Modification of Amended and Restated

Revolving Line of Credit Loan Agreement, Term Loans Agreement and Security

Agreement dated as of May 23, 2002, and as further modified by that certain

Third Modification of Amended and

 

 

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Restated Revolving Line of

Credit Loan Agreement, Term Loans Agreement and Security Agreement of even date

herewith (as so amended, the “Loan Agreement”).  The indebtedness evidenced by this Note is included within the

meaning of the term “Debt” as defined in the Loan Agreement.  The term “Loan Documents” as used in this

Note shall have the meaning ascribed to that term in the Loan Agreement.  Capitalized terms used in this Note but not

defined herein have the meanings ascribed to them in the Loan Agreement.

8.             Security.  This Note is secured by the Collateral

described in the Loan Agreement.

9.             Events of Default. 

The occurrence of any one or more of the following events shall

constitute an event of default (individually, an “Event of Default” and

collectively, the “Events of Default”) under the terms of this Note:

(a)           The failure of the Borrower to pay to the Lender when due

any amounts payable under this Note or to fully and timely perform any

obligations under this Note; or

(b)           The occurrence of an event of default under the terms and

conditions of any of the other Loan Documents.

10.           Remedies.  Upon the occurrence of an Event of Default,

at the option of the Lender, all principal, accrued interest and other amounts

payable by the Borrower to the Lender under the terms of this Note shall become

immediately due and payable, and the Lender shall have all of the rights,

powers, and remedies available under the terms of this Note, any of the other

Loan Documents and all applicable laws. 

The Borrower hereby waives presentment, protest and demand, notice of

protest, notice of demand and of dishonor and non-payment of this Note, and

expressly agrees that this Note or any payment hereunder may be extended from

time to time without in any way affecting the liability of the Borrower.

11.           Expenses.  The Borrower promises to pay to the Lender

on demand by the Lender all costs and expenses incurred by the Lender in

connection with the collection and enforcement of this Note, including, without

limitation, all attorneys’ fees and expenses, all court costs and all

arbitration fees and costs.

12.           Notices.  Any notice, request, or demand to or upon

the Borrower or the Lender shall be deemed to have been properly given or made

when delivered in accordance with the Loan Agreement.

13.           Miscellaneous.  Each right, power, and remedy of the Lender

as provided for in this Note or any of the other Loan Documents, or now or

hereafter existing under any applicable law or otherwise shall be cumulative

and concurrent and shall be in addition to every other right, power, or remedy

provided for in this Note or any of the other Loan Documents or now or

hereafter existing under any applicable law, and the exercise or beginning of

the exercise by the Lender of any one or more of such rights, powers, or

remedies shall not preclude the

 

 

3

 

simultaneous or later

exercise by the Lender of any or all such other rights, powers, or remedies. No

failure or delay by the Lender to insist upon the strict performance of any

term, condition, covenant, or agreement of this Note or any of the other Loan

Documents, or to exercise any right, power, or remedy consequent upon a breach

thereof, shall constitute a waiver of any such term, condition, covenant, or

agreement or of any such breach, or preclude the Lender from exercising any

such right, power, or remedy at a later time or times.  By accepting payment after the due date of

any amount payable under the terms of this Note, the Lender shall not be deemed

to waive the right either to require prompt payment when due of all other

amounts payable under the terms of this Note or to declare an Event of Default

for the failure to effect such prompt payment of any such other amount.  No course of dealing or conduct shall be

effective to amend, modify, waive, release, or change any provisions of this

Note.

14.           Partial

Invalidity.  If any term

or provision of this Note or the application thereof to any person or

circumstance shall be invalid or unenforceable to any extent, the remainder of

this Note and the application of such term or provision to persons or

circumstances other than those as to which it is held invalid or unenforceable,

shall not be affected thereby, and each term and provision of this Note shall

be valid and be enforceable to the fullest extent permitted by law.

15.           Captions.  The captions herein set forth are for

convenience only and shall not be deemed to define, limit, or describe the

scope or intent of this Note.

16.           Governing

Law.  The provisions of

this Note shall be construed, interpreted and enforced in accordance with the

laws of the Commonwealth of Virginia (excluding Virginia’s choice of law

rules).

17.           Consent

to Jurisdiction. 

Provisions of the Loan Agreement concerning the Borrower’s consent to

the jurisdiction of state and federal courts sitting in the Commonwealth of

Virginia are incorporated into this Note by reference and shall have the same

force and effect as if fully set forth in this Note.

18.           Waiver

of Trial by Jury. 

Provisions of the Loan Agreement concerning the Borrower’s and Lender’s

mutual waiver of trial by jury in disputes between the Borrower and the Lender

are incorporated into this Note by reference and shall have the same force and

effect as if fully set forth in this Note.

19.           ARBITRATION.  PROVISIONS OF THE LOAN AGREEMENT SPECIFYING

THAT CERTAIN DISPUTES BETWEEN THE BORROWER AND THE LENDER SHALL BE RESOLVED BY

BINDING ARBITRATION ARE INCORPORATED INTO THIS NOTE BY REFERENCE AND SHALL HAVE

THE SAME FORCE AND EFFECT AS IF FULLY SET FORTH IN THIS NOTE.

 

 

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IN WITNESS WHEREOF, the

Borrower has caused this instrument to be executed by duly authorized officer

or officers as of the date first written above.

	

   

  	

  ON-SITE SOURCING, INC., a

  Delaware corporation

  
	

   

  	

  By:

  	

   

  	

  (SEAL)

  
	

   

  	

  Name:

  	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
					

 

	

  State of Virginia

  	

   

  	

  )

  
	

  County of 

  	

   

  	

  )To Wit:

  
				

 

Acknowledged before me by

                   

as

                     

of On-Site Sourcing, Inc., this      day of September,

2002.

[SEAL]                                                                                   ___________________________

Notary

Public

My commission

expires:                            

 

 

 

 

5Exhibit

10.25

 

EXECUTION

COPY

 

 

 

CONTRIBUTION AND SALE

AGREEMENT*

 

 

 

 

between

 

 

WILLIS LEASE FINANCE

CORPORATION,

 

 

and

 

 

WILLIS ENGINE FUNDING LLC

 

 

 

 

 

Dated as

of

 

September 12, 2002

 

 

*              Portions

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

confidential treatment, and the redacted material has been filed separately

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

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

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

to a request for confidential treatment.

 

 

TABLE

OF CONTENTS

	

  ARTICLE I

  	

  DEFINITIONS

  
	

   

  	

   

  
	

  Section 1.01.  Definitions

  
	

   

  
	

  ARTICLE II

  	

  TRANSFER

  OF ENGINES AND BENEFICIAL INTERESTS

  
	

   

  	

   

  
	

  Section 2.01.  Transfer of Initial Contributed Assets

  
	

  Section 2.02.  Conveyance and Repurchase of Engines and

  Related Assets after the Initial Transfer Date

  
	

  Section 2.03.  Required Financing Statements; Marking of

  Records.

  
	

  Section 2.04.  Servicing of Contributed Assets

  
	

  Section 2.05.  Security Agreement.

  
	

  Section 2.06.  Additional Capital Contributions

  
	

  Section 2.07.  Contributed Engine Requirements

  
	

   

  
	

  ARTICLE III

  	

  REPRESENTATIONS AND

  WARRANTIES

  
	

   

  	

   

  
	

  Section 3.01.  Representations and Warranties of the

  Seller

  
	

  Section 3.02.  Representations and Warranties of the

  Issuer

  
	

   

  
	

  ARTICLE IV

  	

  COVENANTS OF THE

  SELLER AND THE ISSUER

  
	

   

  	

   

  
	

  Section 4.01.  Seller Covenants

  
	

  Section 4.02.  Issuer Covenants.

  
	

  Section 4.03.  Transfer of Contributed Assets

  
	

   

  
	

  ARTICLE V

  	

  CONDITIONS PRECEDENT

  
	

   

  	

   

  
	

  Section 5.01.  Conditions to the Issuer’s Obligations

  
	

  Section 5.02.  Conditions to the Seller’s Obligations

  
	

   

  
	

  ARTICLE VI

  	

  TERMINATION

  
	

   

  	

   

  
	

  Section 6.01.  Termination

  
	

  Section 6.02.  Effect of Termination

  
	

   

  
	

  ARTICLE VII

  	

  MISCELLANEOUS PROVISIONS

  
	

   

  	

   

  
	

  Section 7.01.  Amendment

  
	

  Section 7.02.  Governing Law

  
	

  Section 7.03.  Notices

  
	

  Section 7.04.  Severability of Provisions

  
	

  Section 7.05.  Assignment

  

 

i

 

	

  Section 7.06.  Further Assurances

  
	

  Section 7.07.  No Waiver; Cumulative Remedies

  
	

  Section 7.08.  Counterparts

  
	

  Section 7.09.  Binding Effect

  
	

  Section 7.10.  Merger and Integration

  
	

  Section 7.11.  Headings

  
	

  Section 7.12.  Schedules and Exhibits

  
	

  Section 7.13.  General Interpretive Principles

  
	

  Section 7.14.  Third-Party Beneficiaries

  
	

   

  
	

  EXHIBIT A

  	

  Initial List of

  Engines and Lease Agreements

  
	

  EXHIBIT B

  	

  Form of Engine

  or Beneficial Interest Transfer Certificate

  
	

   

  	

   

  
	

  SCHEDULE 1

  	

  Certain Terms

  

 

ii

 

CONTRIBUTION AND SALE AGREEMENT

 

THIS CONTRIBUTION

AND SALE AGREEMENT, dated as of September 12, 2002 (this “Agreement”), is

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

organized and existing under the laws of Delaware located at 2320 Marinship

Way, Suite 300, Sausalito, California 94965 and WILLIS ENGINE FUNDING LLC

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

laws of Delaware located at 2320 Marinship Way, Suite 300, Sausalito,

California 94965.

 

W I T N E

S S E T H:

 

WHEREAS, the

Seller wishes to transfer and convey on the initial Transfer Date the initial

Contributed Assets to the Issuer for a purchase price equal to the Aggregate

Net Purchase Price for such initial Contributed Assets (as such capitalized

terms are defined below); and

 

WHEREAS,

hereafter, from time to time, the Seller may transfer and convey to the Issuer,

and the Issuer may transfer and convey to the Seller additional or existing

Contributed Assets, as the case may be, upon the terms and conditions

hereinafter set forth; and

 

WHEREAS, the

Contributed Assets transferred hereunder will be pledged by the Issuer to the

Indenture Trustee as collateral for the Notes to be issued from time to time

pursuant to the terms of the Indenture; and

 

WHEREAS, the

Seller and the Issuer agree that all representations, warranties, covenants and

agreements made by the Seller and the Issuer herein shall be for the benefit of

the Series Enhancer, if any, the Noteholders and the Indenture Trustee;

 

NOW, THEREFORE, in

consideration of the mutual covenants contained herein and other good and

valuable consideration, the receipt and adequacy of which is hereby

acknowledged, the parties hereto agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

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

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

Indenture or, if not defined therein, in the Series 2002-1 Supplement.  Otherwise, terms defined herein shall have

the following  meanings and the definitions of such terms

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

 

Aggregate Net

Purchase Price:  With

respect to Contributed Assets conveyed by the Seller to the Issuer on any

Transfer Date means the sum of the aggregate Net Purchase Price of the

Contributed Engines and the net book value of the Related Assets.

 

Beneficial

Interest:  With respect

to any Engine, a Beneficial Interest in an Owner Trust created by the Issuer to

hold such Engine.

 

1

 

Contributed Assets:  Contributed Engines and Related Assets.

 

Contributed

Engines:  Engines transferred

by the Seller to the Issuer and then by the Issuer to Owner Trusts, as more

particularly described in the List of Engines.

 

Contribution

Percentage:  This term

is defined in Schedule 1 attached hereto.

 

Engine:  Any aircraft engine manufactured by one of

the manufacturers and constituting one of the engine types set forth in Exhibit

A to the Indenture.

 

Engine or

Beneficial Interest Transfer Certificate:  An Engine or Beneficial Interest Transfer

Certificate, substantially in the form of Exhibit B hereto, executed and

delivered by the Seller and the Issuer in accordance with the terms of this

Agreement.

 

Engine

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

of the Seller as set forth in paragraphs (o) through (ii) inclusive

of Section 3.01 of this Agreement.

 

Event of Default:  The occurrence of any of the events or

conditions set forth in Section 801 of the Indenture.

 

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

 

Governmental

Authority.  Any of the

following:  (a) any federal, state,

county, municipal or foreign government, or political subdivision thereof,

(b) any governmental or quasi-governmental agency, authority, board,

bureau, commission, department, instrumentality or public body, (c) any

court or administrative tribunal or (d) with respect to any Person, any

arbitration tribunal or other non-governmental authority to whose jurisdiction

that Person has consented.

 

Indenture:  The Indenture, dated as of September 12,

2002, between the Issuer and the Indenture Trustee and all amendments and

supplements thereto.

 

Lease Agreement:  Any lease agreement entered into from time

to time by, or assigned to, the Issuer and, in each case, then assigned by the

Issuer to an Owner Trust, pursuant to which the Issuer or such Owner Trust

leases one or more Engines, as identified on Exhibit A hereto, as

supplemented from time to time, and any substitutions and replacements therefor

made in accordance with the Series 2002-1 Transaction Documents.

 

Lien:  Any security interest, lien, charge, pledge,

equity or encumbrance of any kind.

 

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

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

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

Date.  The List of Engines delivered on

the initial Transfer Date (attached hereto as Exhibit A) will include

the following information for each such Engine as of the initial Transfer

Date:  (i) its Manufacturer’s

serial number, (ii) the Model of Engine, (iii) the manufacturer of

the Engine, (iv) if on-hire, the lessee to whom such Engine is leased and

the related Lease Agreement; (v) if off-hire, the location of the Engine

and (vi) identification of the

 

2

 

Series to which such Engine is pledged.  Supplements to the List of Engines will be attached to the Engine

or Beneficial Interest Transfer Certificate, and will contain the

Manufacturer’s serial number for each Engine and identification of the Series

to which such Engine is pledged.  As of

the date of this Agreement, the List of Engines is as set forth on Exhibit A

hereto.

 

Owner Trust:  With respect to an Engine, an owner trust

that is established pursuant to a trust agreement substantially in the form

attached to the Series 2002-1 Supplement as Exhibit H-1 solely to hold such

Engine and related Lease Agreement in connection with the Indenture.

 

Related Assets:  With respect to any Engine, all of the

following:  (i) all Casualty

Proceeds, Sales Proceeds, Maintenance Reserve Payments, Security Deposits and

Engine Revenues related thereto, (ii) all right, title and interest of the

Seller, the Issuer or the Owner Trust which owns such Engine in and to any

agreement with (A) the manufacturer of such Engine, (B) each

predecessor owner (other than the manufacturer) of such Engine and each

immediately succeeding owner up to and including the Seller or such Owner

Trust, and (C) each predecessor lessor of the related Lease Agreement (as

more particularly described in the List of Engines) and each immediately

succeeding lessor up to and including the Seller or such Owner Trust, and all

amendments, additions and supplements thereto hereafter made with respect to

such Engines and Lease Agreements, (iii) all right, title and interest in

and to any Lease Agreement to the extent related to such Engine transferred and

(iv) all payments, proceeds and income of the foregoing or related

thereto.

 

Released Assets:  Released Engines, Released Beneficial

Interests and Related Assets with respect to such Released Engines.

 

Released

Beneficial Interest: 

A Beneficial Interest in an Owner Trust that owns a Released Engine and

Related Assets.

 

Released Engine:  An Engine repurchased from the Issuer by the

Seller pursuant to Section 2.02(b).

 

Series 2002-1

Supplement:  The

Supplement to the Indenture, dated as of September 12, 2002, between the Issuer

and the Indenture Trustee.

 

Transfer Date:  The date on which an Engine is contributed

or sold by the Seller to the Issuer pursuant to the terms of this Agreement.

 

Warranty Purchase

Amount:  With respect

to any Engine and Related Assets, or Beneficial Interest in an Owner Trust that

owns such Engine and Related Assets, repurchased from the Issuer by the Seller

pursuant to Section 2.02(b) hereof, the sum of the Net Purchase Price of such

Engine and the net book value of the Related Assets, in each case on the

Transfer Date on which such Engine and Related Assets were transferred by the

Seller to the Issuer.

 

3

 

ARTICLE II

 

TRANSFER OF ENGINES AND BENEFICIAL

INTERESTS

 

Section 2.01.          Transfer of Initial Contributed

Assets.  On the initial Transfer

Date, the Seller shall sell, transfer and convey to the Issuer and the Issuer

shall acquire from the Seller all of the Seller’s right, title and interest in,

to and under the initial Contributed Assets at a purchase price equal to the

Aggregate Net Purchase Price for such initial Contributed Assets; provided, however,

that the excess of (x) the Aggregate Net Purchase Price for

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

price of the initial Contributed Assets paid by the Issuer to the Seller on

such initial Transfer Date shall constitute a capital contribution to the

Issuer.  The cash portion of the

purchase price of the initial Contributed Assets shall be equal to the

Contribution Percentage of the aggregate Net Book Value of the Contributed

Engines.

 

Section 2.02.          Conveyance and Reconveyance of

Engines and Related Assets after the Initial Transfer Date.

 

(a)           After the initial Transfer Date, the

Seller may sell, transfer and convey to the Issuer additional Contributed

Assets for consideration equal to the Aggregate Net Purchase Price for such

additional Contributed Assets; provided, however, that the excess of

(x) the Aggregate Net Purchase Price for such Contributed Assets over

(y) the cash portion of the purchase price of such Contributed Assets paid

by the Issuer to the Seller on such Transfer Date shall constitute a capital

contribution to the Issuer.  The cash

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

Contribution Percentage of the aggregate Net Book Value of the Contributed

Engines.

 

(b)           Upon discovery by the Seller or the

Issuer (or any of its successors or assigns) of a breach of any of the Engine

Representations and Warranties relating to any Engine, the party (including any

such successor or assign) discovering such breach shall give prompt written

notice to the other party, the trustee of the Owner Trust, if any, which owns

the applicable Engine, the Indenture Trustee and the Administrative Agent.  If such breach materially and adversely

affects the interest of the Issuer (or any of its successors or assigns), the

Owner Trust, the Noteholders or the Indenture Trustee, then, unless such breach

shall have been cured or waived by the Control Party with respect to the

related Supplement for a Series within ninety days after the Seller’s discovery

or receipt of written notice of such breach, the Issuer shall reconvey to the

Seller, and the Seller shall acquire (i) the affected Engines and Related

Assets or (ii) the Beneficial Interest in the Owner Trusts that own such

Engines and Related Assets, for (A) consideration in cash equal to the

aggregate Warranty Purchase Amount for such Engines and Related Assets or such

Beneficial Interests, as applicable or (B) additional Contributed Engines

which in each such case (i) satisfy each of the Engine Representations and

Warranties as of such date of transfer, (ii) have an aggregate Appraised

Value that equals or exceeds such aggregate Warranty Purchase Amount and

(iii) are satisfactory to the Administrative Agent.  In the event of a repurchase of an Engine and

Related Assets or the related Beneficial Interests the Seller shall deposit the

cash portion of the Warranty Purchase Amount for each such Engine and Related

Assets, or Beneficial Interest in an Owner Trust that owns such Engine and

Related Assets, to be repurchased in the Trust Account prior to 10:00 a.m.

(New York City time) on the ninetieth day after the Seller’s discovery of or

receipt of written notice of, any such breach. The

 

4

 

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

Warranty Purchase Amount paid by the Seller to the Issuer shall constitute a

dividend from the Issuer to the Seller. 

The cash portion of any Warranty Purchase Amount shall equal the cash

portion of the purchase price paid by the Issuer to the Seller in connection

with the Issuer’s acquisition of such Engines and Related Assets from the

Seller.

 

(c)           In connection with any transfer of

Contributed Assets or Released Assets pursuant to the terms of this Agreement

on the initial Transfer Date and on any Transfer Date after the initial

Transfer Date, the Seller and the Issuer shall execute (on such Transfer Date,

in the case of clause (i) below, and on or before the third Business Day

following such Transfer Date, in the case of clause (iii) below) each of

the following:

 

(i)            A completed Engine or Beneficial

Interest Transfer Certificate with respect to each Contributed Engine being

transferred to the Issuer and with respect to each Released Engine and Related

Assets or Released Beneficial Interest being retransferred to the Seller;

 

(ii)           [Reserved]; and

 

(iii)          A supplement to the List of Engines

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

is transferred to the Issuer by the Engine or Beneficial Interest Transfer

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

an Owner Trust the Beneficial Interest in which is a Released Beneficial

Interest, as the case may be, and identification of the Series to which such

Engine, Released Engine or Released Beneficial Interest, as the case may be, is

or was pledged.  Upon delivery of such

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

incorporate the information contained in such supplement.

 

(d)           Each Engine or Beneficial Interest

Transfer Certificate with respect to each Contributed Engine and  each Released Engine and Released Beneficial

Interest, as the case may be, shall operate as an assignment, without recourse,

representation, or warranty, except (in the case of transfers by the Seller)

for the warranty of good title and other representations and warranties

specifically set forth in this Agreement, of all the transferor’s right, title,

and interest in and to such Contributed Assets or Released Assets, as the case

may be, such assignment being an outright assignment and not for security; and

the transferee will thereupon own such Contributed Assets or Released Assets,

as the case may be, free of any claims of or further obligations to the transferor,

in its capacity as transferor, with respect thereto.  All transfers of Released Assets by Issuer to Seller hereunder

shall be without recourse to, or representation or warranty of, Issuer of any

kind.

 

Section 2.03.          Required Financing Statements; Marking

of Records.

 

(a)           In connection with the transfer on

the initial Transfer Date, the Seller agrees to record and file, at its own

expense, the following Uniform Commercial Code (the “UCC”) financing statements

and Federal Aviation Administration (the “FAA”) recordations:

 

(i)            UCC financing statements naming the

Seller, as debtor/seller, the Issuer, as secured party/purchaser, the Indenture

Trustee, as assignee of the secured party, and any

 

5

 

“accounts”, “chattel

paper” or “general intangible” (as defined under the UCC) which are included in

the initial Contributed Assets, as collateral. 

Such UCC financing statements shall be filed in the appropriate filing

offices as required by the jurisdiction in which the Seller is “located” for

purposes of the UCC;

 

(ii)           UCC financing statements naming the

Issuer, as debtor, the Indenture Trustee, as secured party, and the Collateral,

as collateral.  Such UCC financing

statements shall be filed in the appropriate filing offices as required by the

jurisdiction in which the Issuer is “located” for purposes of the UCC;

 

(iii)          UCC financing statements naming the

Owner Trust or the Owner Trustee, as the case may be under applicable law, as

debtor, the Indenture Trustee, as secured party, and the Contributed Engines

and Related Assets as collateral.  Such

UCC financing statements shall be filed in the appropriate filing offices as

required by the jurisdiction in which the Owner Trustee is “located” for

purposes of the UCC.

 

(iv)          UCC financing statements evidencing

the termination of the security interest of any other Person with respect to

any of the initial Contributed Assets and Collateral;

 

(v)           Evidence of recordation of

(A) this Agreement, the Indenture, the Series 2002-1 Supplement and each

Lease Agreement with respect to each Engine transferred on such date with the

FAA and (B) with respect to Engines leased to Lessees outside of the United

States and not owned by an Owner Trust appropriate documents with all Government

Authorities of the country in which the chief executive office of such Lessee

is located, where necessary to perfect the lien or security interest of the

Indenture Trustee in such Engines; and

 

(vi)          UCC-1 financing statements naming each

lease originator which is an Affiliate of the Seller, as debtor, the Seller, as

secured party, the Indenture Trustee, as assignee of the secured party, and the

Lease Agreements being transferred to the Issuer on the initial Transfer Date,

as Collateral, in the appropriate filing offices as required by the

jurisdiction in which the lease originator is “located” for purposes of the

UCC.

 

(b)           In connection with all transfers

after the initial Transfer Date, the Seller agrees to record and file, at its

own expense, the following UCC financing statements (and/or amendments to

previously filed UCC financing statements) and FAA recordations:

 

(i)            UCC financing statements naming the

Seller, as debtor/seller, the Issuer, as secured party/purchaser, the Indenture

Trustee, as assignee of the secured party, and any “accounts”, “chattel paper”

or “general intangible” (as defined under the UCC) which are included in the

Contributed Assets transferred since the most recent filing as collateral.  Such UCC financing statements shall be filed

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

Seller is “located” for purposes of the UCC;

 

(ii)           UCC financing statements naming the

Issuer, as debtor, the Indenture Trustee, as secured party, and the Collateral,

as collateral.  Such UCC financing

statements shall be filed in the appropriate filing offices as required by the

jurisdiction in which the Issuer is “located” for purposes of the UCC;

 

6

 

(iii)          UCC financing statements naming the

Owner Trust or the Owner Trustee, as the case may be under applicable law, as

debtor, the Indenture Trustee, as secured party, and the Contributed Engines

and Related Assets as collateral.  Such

UCC financing statements shall be filed in the appropriate filing offices as

required by the jurisdiction in which the Owner Trust is “located” for purposes

of the UCC.

 

(iv)          Evidence of recordation of

(A) this Agreement, the Indenture, the Series 2002-1 Supplement and each

Lease Agreement with respect to each Contributed Engine transferred on such

date, together with any amendments and supplements hereto or thereto, with the

FAA, and (B) with respect to Contributed Engines leased to Lessees

domiciled outside the United States, appropriate documents with all Government

Authorities of the country in which the chief executive office of such Lessee

is located, where necessary to perfect the lien or security interest of the

Indenture Trustee in such Contributed Engines;

 

(v)           UCC-1 financing statements naming each

lease originator which is an Affiliate of the Seller, as debtor, the Seller, as

secured party, the Indenture Trustee, as assignee of the secured party, and the

Lease Agreements being transferred to the Issuer after the initial Transfer

Date, as Collateral, in the appropriate filing offices as required by the

jurisdiction in which the lease originator is “located” for purposes of the

UCC;

 

(vi)          any other UCC-1 financing statements

reasonably requested by the Deal Agent to perfect the security interest of the

Indenture Trustee in the Collateral; and

 

(vii)         UCC financing statements evidencing the

termination of the security interest of any other Person with respect to any of

the Contributed Assets being transferred to the Issuer.

 

(c)           All such UCC financing statements and

recordations shall meet the requirements of applicable law.  The Seller shall, on or prior to the

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

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

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

in the event that a file-stamped copy of such UCC financing statements cannot

be obtained in any given jurisdiction, a certificate signed by the relevant

filing agent indicating that he/she filed such UCC financing statements with

the relevant governmental authority in such jurisdiction, and (ii) with

respect to such recordations, evidence of submission of the applicable recorded

documents.  Such file-stamped copies of

such UCC financing statements (or certificates signed by the relevant filing

agent, if applicable) and evidences of submission of the applicable recorded

documents delivered pursuant to the immediately preceding sentence on any given

Transfer Date shall constitute the “Evidence of Filing” for such Transfer

Date.  Nothing contained in this Section

2.03 shall limit the Seller’s obligation to file continuation or termination

statements in accordance with Section 4.01(k) of this Agreement and any

applicable law.

 

(d)           In connection with each transfer and

conveyance of Contributed Engines and Related Assets, the Seller shall, on or

prior to each Transfer Date, at its own expense (i) cause its computer

records to be marked to show that the Contributed Engines and Related Assets

have been transferred to the Issuer and, in the case of Contributed Engines and

 

7

 

Related Assets that have

been transferred by the Issuer to Owner Trusts, that the applicable Contributed

Engines and Related Assets have been transferred to the applicable Owner Trusts

and then pledged to the Indenture Trustee and (ii) prepare and hold, in

its capacity as Servicer, the List of Engines.

 

(e)           In connection with each transfer and

conveyance of Engines and Related Assets, the Seller shall take, and shall

cause the Issuer to take, all steps necessary to perfect the Issuer’s and the

Indenture Trustee’s perfected first priority interest in the Collateral under

the laws of any applicable foreign jurisdiction.

 

Section 2.04.          Servicing of Contributed Assets.  The Issuer and the Seller intend that,

following each conveyance of the Contributed Assets pursuant to this Agreement,

the Contributed Assets and any assets owned by an Owner Trust the Beneficial

Interest in which is owned by the Issuer will be serviced by the Seller (and

its successors and assigns), as Servicer, pursuant to the terms of the

Servicing Agreement.

 

Section 2.05.          Security Agreement.

 

(a)           The Seller and the Issuer intend that

the transfer by the Seller of the initial Contributed Assets pursuant to

Section 2.01 hereof and each subsequent transfer by the Seller of

additional Contributed Assets pursuant to Section 2.02 hereof shall each

constitute a valid sale, transfer and conveyance by the Seller of the

Contributed Assets and that the Contributed Assets shall not be part of the

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

 

(b)           The Seller and the Issuer intend that

their operations and business would not be substantively consolidated in the

event of the bankruptcy or insolvency of the Seller and that the separate

existence of the Seller and the Issuer would not be disregarded in the event of

the insolvency or the bankruptcy of the Seller.  In the event that (i) any such Contributed Assets are held

to be property of the Seller’s bankruptcy estate or (ii) this Agreement is

held or deemed to create a security interest in the Contributed Assets, then

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

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

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

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

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

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

has been assigned to the Indenture Trustee pursuant to Section 4.03 hereof

and which security interest will be deemed to have been granted directly to the

Indenture Trustee from the Seller in the event of the consolidation of the

Seller and the Issuer in any Insolvency Proceeding.  In furtherance of the foregoing, (i) the Issuer shall have

all of the rights of a secured party with respect to the Contributed Assets

pursuant to applicable law and (ii) the Seller shall execute all

documents, including but not limited to UCC financing statements, as the Issuer

may reasonably require to effectively perfect and evidence the Issuer’s first

priority security interest in the Contributed Assets and each Owner Trust’s

ownership interest in the Engines, Lease Agreements and other Related Assets

owned or purported to be owned by such Owner Trust.  The Seller also covenants not to pledge, assign or grant any

interest to any other party in any Contributed Assets other than the leasehold

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

Agreement.

 

Section 2.06.          Additional Capital Contributions.  Any transfer of cash by the Seller to the

Issuer (other than any such transfers by the Seller as initial Servicer in

accordance with the terms

 

8

 

of the Servicing

Agreement) shall constitute a capital contribution to the Issuer.  As of the date of any such transfer of cash,

the Seller shall not be insolvent under the Insolvency Law and will not be

rendered insolvent by any such transfer.

 

Section 2.07.          Contributed Engine Requirements.  Each Contributed Engine must satisfy the

Engine Representations and Warranties.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

 

Section 3.01.          Representations and Warranties of

the Seller.  The Seller hereby makes

the following representations and warranties for the benefit of the Indenture

Trustee, the Noteholders and the Issuer, on which the Issuer relies in

accepting the conveyance of the Contributed Assets.  Such representations and warranties are made as of each Transfer

Date with respect to the Contributed Assets transferred to the Issuer on such

date unless otherwise indicated, but shall survive each transfer and conveyance

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

Contributed Assets to the Indenture Trustee until the Notes have been paid in

full.

 

(a)           Organization and Good Standing.  The Seller is a company duly organized,

validly existing and in compliance under the laws of the state of its

incorporation, with corporate power and authority to own its properties and to

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

is currently conducted, had at all relevant times, and now has, power,

authority, and legal right to acquire and to own the Contributed Assets and to

perform its obligations hereunder and under any Related Document to which it is

a party, and has had the same legal name for the past nine months and does not

do business under any other name;

 

(b)           Due Qualification.  The Seller is qualified as a foreign

corporation in each jurisdiction where failure to be so qualified would have a

material adverse effect upon its business and has obtained all necessary

licenses and approvals as required under Applicable Law, in each case, where

the failure to be so qualified, licensed or approved, could adversely affect

the ability of (i) the Seller to perform its obligations under and comply

with the terms of this Agreement and any other Related Document to which it is

a party or (ii) the Issuer to enforce its rights under any Lease Agreement

or with respect to any Contributed Assets or any Owner Trust to enforce its

rights under any Lease Agreement or with respect to any Engine or Related Asset

owned or purportedly owned by it;

 

(c)           Power and Authority.  The Seller has the corporate power and

authority to execute and deliver this Agreement and any other Related Documents

to which it is a party and to carry out their terms; the Seller has duly

authorized the transfer and conveyance to the Issuer of the Contributed Assets

by all necessary corporate action; the execution, delivery, and performance of

this Agreement, any other Related Document and any Lease Agreement to which it

is a party has been duly authorized by the Seller by all necessary corporate

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

to which it is a party have been duly executed and delivered by the Seller and

each applicable Owner Trust;

 

9

 

(d)           Valid Assignment; Binding

Obligations.  This Agreement

constitutes a valid sale, transfer and conveyance to the Issuer of all right,

title and interest of the Seller in, to and under the Contributed Assets and

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

any Person claiming through or under the Seller, except for (i) Permitted

Encumbrances, (ii) the Lien created by the Indenture and (iii) Liens

which may be created under this Agreement; and this Agreement and each other

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

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

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

terms subject as to enforceability to applicable bankruptcy, reorganization,

insolvency, moratorium, fraudulent conveyance or other laws affecting

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

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

 

(e)           No Violation.  The consummation of the transactions

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

Documents to which the Seller is a party will not conflict with, result in any

breach of any of the terms and provisions of, or constitute (with or without

notice or lapse of time or both) a default under, the charter documents or

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

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

by which it is bound, or result in the creation or imposition of any Lien upon

any of its properties pursuant to the terms of any such indenture, agreement,

mortgage, deed of trust, or other instrument, other than this Agreement and the

Indenture, or violate any law or any order, rule, or regulation applicable to

the Seller of any court or of any federal or state regulatory body,

administrative agency, or other Governmental Authority having jurisdiction over

the Seller or any of its properties;

 

(f)            No Proceedings or Injunctions.  There are (i) no proceedings or

investigations pending, or, to the knowledge of the Seller, threatened, before

any court, regulatory body, administrative agency, or other tribunal or

Governmental Authority (A) asserting the invalidity of this Agreement or

any other Related Document to which it is a party, (B) seeking to prevent

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

any other Related Document to which it is a party or (C) seeking any

determination or ruling that might materially and adversely affect the

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

enforceability of, this Agreement or any other Related Document to which it is

a party and (ii) no injunctions, writs, restraining orders or other orders

in effect against the Seller that would adversely affect its ability to perform

under this Agreement or any other Related Document to which it is a party;

 

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

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

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

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

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

transfer of any Contributed Assets;

 

(h)           Principal Place of Business and

State of Incorporation.  As of the

date hereof, the Seller’s principal place of business and chief executive

office are each at 2320 Marinship Way, Suite 300, Sausalito, California

94965 and the Seller has maintained such addresses for the immediately

preceding four months.  As of the date

hereof, the Seller’s state of incorporation is the State of Delaware.

 

10

 

(i)            Accounting and Tax Treatment.  The Seller will treat the transfer of the

Contributed Assets to the Issuer pursuant to this Agreement as a capital

contribution (in part) and sale (in part) of such Contributed Assets (which

allocation between capital contribution and sale will be determined in

accordance with Section 2.01 and Section 2.02 hereof) for financial

reporting, accounting and all income tax purposes;

 

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

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

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

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

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

hereof,

 

(k)           Financial Statements.  The consolidated balance sheet of the Seller

at December 31, 2001 and the consolidated statements of income, retained

earnings and cash flows for the fiscal years ended on such dates, are

accompanied by reports thereon containing opinions without qualification,

except as therein noted, by the independent accountants, have been prepared in

accordance with generally accepted accounting principles consistently applied,

and present fairly the financial position of the Seller and its subsidiaries as

of such dates and the results of their operations for such periods;

 

Since

December 31, 2001, there has been no change in the business or condition

(financial or otherwise) of the Seller except changes in the ordinary course of

business, and those changes which were reported in the Seller’s public filings

with the Securities and Exchange Commission, none of which individually or in

the aggregate has been materially adverse. 

Neither the Seller nor any of its subsidiaries (other than the Issuer)

has any material liabilities or obligations other than those disclosed in the

financial statements referred to in the preceding paragraph or for which

adequate reserves are reflected in such financial statements.  The Issuer does not have any material liabilities

or obligations other than under the Related Documents;

 

(l)            Governmental Consent.  With the exception of a Current Report on

Form 8-K which the Seller shall promptly file with the SEC regarding the

execution and delivery of this Agreement and the other Transaction Documents to

which it is a party, no consent, approval or authorization of, or filing,

registration or qualification with, any Governmental Authority is or will be

necessary or required on the part of the Seller in connection with the

execution and delivery of this Agreement or the transfer and conveyance of the

Contributed Assets hereunder;

 

(m)          Investment Company.  The Seller is not an “investment company” or

a company “controlled” by an “investment company” within the meaning of the

Investment Company Act of 1940, as amended;

 

(n)           Valid Business Purpose.  The Seller has valid business reasons for

selling, transferring and conveying the Contributed Assets to the Issuer;

 

(o)           Title to Contributed Assets.  Immediately prior to the transfer of any

Contributed Asset to the Issuer pursuant to the terms of this Agreement, the

Seller had good and marketable title to such Contributed Asset free and clear

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

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

 

11

 

each such Contributed Asset, free and clear of all Liens, except

Permitted Encumbrances and the Liens in favor of the Indenture Trustee;

 

(p)           Delivery of Required Financing

Statements.  The Seller has filed on

or prior to each Transfer Date all of the filings pursuant to

Sections 2.03(a) or (b), as the case may be, and (c) hereof with respect

to the Contributed Assets for such Transfer Date.

 

(q)           Casualty Loss.  No Contributed Engine shall have suffered a

Casualty Loss on or prior to the related Transfer Date;

 

(r)            No Violation of Lease Agreements.  The transfer and conveyance to the Issuer of

the Contributed Assets will not violate the terms or provisions of any Lease

Agreement or any other agreement to which the Seller then is a party or by

which it is bound;

 

(s)           Rights to Lease Agreements are

Assignable.  The rights of the

Seller with respect to each Lease Agreement transferred pursuant to this

Agreement are assignable by the Seller without the consent of any Person other

than consents which will have been obtained prior to the related Transfer Date;

 

(t)            All Necessary Action Taken.  Immediately after each of the transfers and

conveyances to the Issuer as contemplated in this Agreement, (i) all

necessary action will have been taken by the Seller to validly transfer and

convey to the Issuer free and clear of all Liens except Permitted Encumbrances

and, (A) all right, title and interest of the Seller in and to each Lease

Agreement and the payments due and to become due thereunder to the extent

related to a Contributed Engine and all scheduled lease payments to become due

thereunder which related to a Contributed Engine and (B) all right, title

and interest of the Seller in and to any Contributed Engines and Related Assets

which are transferred hereunder and (ii) all necessary action will have

been taken by the relevant parties to grant to the Indenture Trustee a

perfected, first priority security interest in the Collateral (except, with respect

to Contributed Engines leased to Lessees domiciled outside the United States,

only to the extent reasonably available);

 

(u)           Origination and Collection

Practices.  To the best of the

Seller’s knowledge, the origination, acquisition and collection practices used

by the Seller with respect to each Lease Agreement have been in all respects

legal, proper, prudent and in accordance with the standards it uses for its own

portfolio;

 

(v)           Reserved;

 

(w)          Owner Trust.  The Owner Trust that will hold such Engine

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

state of its formation, as indicated in the applicable Engine or Beneficial

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

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

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

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

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

as described in the applicable Engine or Beneficial Interest Transfer

Certificate and to perform its obligations under any Related Document to which

it is a party, and has not at any time had any other legal name except as set

forth in the applicable Engine or Beneficial Interest Transfer Certificate;

 

12

 

(x)            Reserved;

 

(y)           Ordinary Course of Business.  All Lease Agreements related to Contributed

Engines and Contributed Beneficial Interests were originated in the ordinary

course of business of the Seller’s business;

 

(z)            No Adverse Selection

Procedures:  Eligible Engines.  No adverse selection procedures have been

used by the Seller in selecting any Contributed Engine (and related Lease

Agreement) and each Contributed Engine and each Lease Agreement is an Eligible

Engine and an Eligible Lease, respectively;

 

(aa)         Ordinary Course.  The transactions contemplated by this

Agreement are being consummated by the Seller in good faith and in furtherance of

the Seller’s ordinary business purposes and constitute a practical and

reasonable course of action by the Seller designed to improve the financial

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

to hinder, delay or defraud any of its present or future creditors;

 

(bb)         To the best of the Seller’s knowledge,

each Lease Agreement and all accompanying documents are complete and authentic

and all signatures thereon are genuine;

 

(cc)         Each Lease Agreement arose from a bona

fide transaction, complying with all applicable laws and regulations of

Governmental Authorities, with persons having legal capacity to contract and

was duly authorized, executed and delivered by the Seller;

 

(dd)         All amounts represented to be payable

under each Lease Agreement are, in fact, payable in accordance with the

provisions of each Lease Agreement;

 

(ee)         No Event of Default (as defined in the

Lease Agreement) has occurred under any Lease Agreement;

 

(ff)           Each Contributed Engine conforms to

the description thereof as set forth on the List of Engines and any applicable

Engine or Beneficial Interest Transfer Certificate;

 

(gg)         The items in each Collateral File that

are required to be delivered on the applicable Transfer Date have been

delivered to the Custodian and each of such items delivered on the applicable

Transfer Date complies with the terms herein and in the Indenture;

 

(hh)         Each Lease Agreement requires Lessee to

pay, and indemnify, defend and hold Lessor and Lessor’s lender (which term

includes the Noteholders and the Indenture Trustee) harmless on a net after tax

basis from and against any and all taxes of whatever kind or nature, including

costs or expenses incurred in connection therewith, which may be assessed

against, chargeable to or collectible from any of Lessee, Lessor’s lender or

lessor by any taxing authority, foreign, federal, state or local, and which are

based upon, levied or assessed with respect to the lease of any Engine or the

operation, possession or use of such Engine while under any Lease, except taxes

based on the net income of Lessor; and

 

(ii)           Each Lease Agreement is

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

such requirement is waived in writing by the Administrative Agent.

 

13

 

Section 3.02.          Representations and Warranties of

the Issuer.  The Issuer hereby makes

the following representations and warranties, for the benefit of the Seller,

the Indenture Trustee, the Noteholders and any Series Enhancer, if any, on

which the Seller relies in transferring the Contributed Assets to the

Issuer.  Such representations and

warranties speak as of each Transfer Date with respect to the Contributed

Assets transferred to the Issuer on such date, unless otherwise indicated, but

shall survive each transfer and conveyance of the respective Contributed Assets

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

Trustee until the Notes have been paid in full.

 

(a)           Organization and Good Standing.  The Issuer is a limited liability company

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

with full power and authority to own and operate its properties and to conduct

its business as presently conducted and to enter into and perform its

obligations under this Agreement and each other Related Document to which it is

a party and the transactions contemplated hereby and thereby;

 

(b)           Due Qualification.  The Issuer is duly qualified to do business

as a foreign limited liability company in good standing, and has obtained all

necessary licenses and approvals in all jurisdictions in which the ownership or

lease of property or the conduct of its business requires such qualification,

except to the extent that the failure to be so qualified, licensed or approved

would not, in the aggregate, materially and adversely affect the ability of

(i) the Issuer to perform its obligations under and comply with the terms

of this Agreement or any other Related Documents to which it is a party or

(ii) the Indenture Trustee to enforce its rights under any Lease

Agreement, this Agreement or any other Related Document;

 

(c)           Power and Authority.  The Issuer has the power and authority to

execute and deliver this Agreement and to carry out its terms; and the execution,

delivery and performance of this Agreement have been duly authorized by the

Issuer by all necessary action; the Issuer will have the power and authority to

acquire and will have acquired whatever right, title and interest in the

Contributed Assets as was conveyed to it by the Seller; and the Issuer will

have duly authorized, executed and delivered the Notes, this Agreement and the

other Related Documents to which it is a party;

 

(d)           Binding Obligations.  This Agreement and each other Related Document

to which the Issuer is a party, when duly executed and delivered by the other

parties hereto or thereto, will constitute a legal, valid and binding

obligation of the Issuer enforceable in accordance with its terms subject as to

enforceability to applicable bankruptcy, reorganization, insolvency, moratorium

or other laws affecting creditors’ rights generally and to general principles

of equity (regardless of whether enforcement is sought in a proceeding in

equity or at law);

 

(e)           No Violation.  The consummation of the transactions

contemplated by and the fulfillment of the terms of this Agreement will not

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

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

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

which the Issuer is a party or by which its assets may be bound;

 

(f)            No Proceedings or Injunctions.  There are (i) no proceedings or

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

pending, or, to the knowledge of the

 

14

 

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

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

invalidity of the Notes, this Agreement or the other Related Documents to which

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

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

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

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

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

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

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

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

any Lease Agreement, this Agreement or any other Related Document and (ii) no

injunctions, writs, restraining orders or other orders in effect against the

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

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

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

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

Agreement or any other Related Document;

 

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

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

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

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

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

hereof;

 

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

Insolvency Law;

 

(i)            Principal Place of Business and

State of Formation; Trade Names. 

The Issuer has only one place of business and its chief executive office

is located at the address set forth in the preamble hereto.  The Issuer’s state of formation is the State

of Delaware.  The Issuer has not been

known by any name other than “Willis Engine Funding LLC”;

 

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

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

no Subsidiaries; and

 

(k)           Ordinary Course.  The transactions contemplated by this

Agreement are being consummated by the Issuer in good faith and in furtherance

of the Issuer’s ordinary business purposes and constitute a practical and

reasonable course of action by the Issuer designed to improve the financial

position of the Issuer, with no contemplation of insolvency and with no intent

to hinder, delay or defraud any of its present or future creditors.

 

ARTICLE IV

 

COVENANTS OF THE SELLER AND THE

ISSUER

 

Section 4.01.          Seller Covenants.  The Seller hereby covenants and agrees with

the Issuer, the Noteholders and the Indenture Trustee as follows:

 

(a)           Merger or Consolidation of, or

Assumption of the Obligations of, the Seller.  Notwithstanding anything in this Agreement to the contrary, any

corporation (i) into which the Seller may be merged or consolidated,

(ii) resulting from any merger, conversion or consolidation to which the

Seller shall be party or (iii) succeeding to the business of the Seller

 

15

 

substantially as a whole, will be the successor to the Seller under

this Agreement, without the execution or filing of any document or any further

act on the part of any of the parties to this Agreement; provided, however,

that (x) immediately after giving effect to such transaction, no Event of

Default shall result therefrom and no representation or warranty made pursuant

to Section 3.01 shall have been breached, (y) the Seller shall have

delivered to the Issuer, the Administrative Agent and each Rating Agency, if

any, an Officer’s Certificate and an Opinion of Counsel each stating that such

consolidation, merger or succession and such agreement of assumption comply

with this Section 4.01 and that all conditions precedent, if any, provided

for in this Agreement relating to such transaction have been complied with and

(z) the Seller shall have delivered to the Issuer, the Administrative

Agent and each Rating Agency an Opinion of Counsel either (1) stating

that, in the opinion of such counsel, all UCC financing statements and

amendments thereto have been executed and filed that are necessary fully to

preserve and protect the interests of the Issuer, the Indenture Trustee and any

Series Enhancer, if any, in the Contributed Assets, or (2) stating that,

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

and protect such interests.

 

(b)           Limitation on Liability of the

Seller and Others.  The Seller and

any director, officer, employee or agent of the Seller may rely in good faith

on any document of any kind, prima  facie properly executed and

submitted by any Person respecting any matters arising under this Agreement;

provided, however, that any such limitation does not affect the obligation of

the Seller to accept reconveyance of certain Contributed Engines and the

Related Assets, or Beneficial Interests in Owner Trusts that own such

Contributed Engines and the Related Assets and pay the consideration therefor

pursuant to Section 2.02 hereof. 

The Seller shall not be under any obligation to appear in, prosecute or

defend any legal action that is not incidental to its obligations as the transferor

of the Contributed Assets under this Agreement, any Engine or Beneficial

Interest Transfer Certificate and that in its reasonable opinion may involve it

in any expense or liability.

 

(c)           Preservation of Security Interest.  The Seller shall execute and file such UCC

financing statements in such manner and in such places as may be required by

law fully to preserve, maintain and protect the interest of the Issuer under

this Agreement and the security interest of the Noteholders and the Indenture

Trustee in the Contributed Assets.

 

(d)           Preservation of Name, etc.  The Seller will not change its name,

identity or corporate structure in any manner unless (i) the Seller shall

have given the Issuer, the Indenture Trustee, each Series Enhancer, if any, the

Administrative Agent and the Noteholders at least 30 days’ prior written notice

thereof and (ii) the Seller shall have filed any necessary UCC financing

statements necessary to continue the effectiveness of any UCC financing

statement referred to in paragraph (c) above.

 

(e)           Preservation of Office.  The Seller will give the Issuer, each Series

Enhancer, if any, the Administrative Agent, the Indenture Trustee and the

Noteholders at least 30 days’ prior written notice of any relocation of its

chief executive office.

 

(f)            Books and Records.  The Seller will, at its own cost and

expense, mark its books and records to the effect that each Contributed Engine

and Related Asset has been transferred to the Issuer and subsequently pledged

to the Indenture Trustee pursuant to the Indenture.

 

16

 

(g)           Obligations with Respect to

Engines and Beneficial Interests. 

The Seller will do nothing to impair the rights of the Issuer, the Owner

Trusts, the Noteholders or the Indenture Trustee in the Contributed Engines,

Contributed Beneficial Interests and the Related Assets, as the case may be,

other than as permitted by the Servicing Agreement.

 

(h)           Compliance with Law.  The Seller will comply, in all material

respects, with all acts, rules, regulations, orders, decrees and directions of

any Governmental Authority applicable to the Contributed Assets or any part

thereof, provided, however, that the Seller may contest any act,

rule, regulation, order, decree or direction in any reasonable manner which

shall not materially and adversely affect the rights of the Issuer, the

Noteholders or the Indenture Trustee in any of the Contributed Assets.

 

(i)            Conveyance of Contributed Assets;

Security Interests.  Except for the

transfers and conveyances hereunder and the security interest created pursuant

to the Indenture, the Seller will not pledge, assign or transfer to any other

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

Permitted Encumbrances on, any Contributed Asset (or any interest therein)

other than the rights of a lessee under a Lease Agreement and the Seller shall

defend the right, title and interest of the Issuer and its successors and

assigns in, to and under the Contributed Assets against all claims of third

parties claiming through or under the Seller.

 

(j)            Notification of Breach.  The Seller will advise the Issuer, the

Administrative Agent and the Indenture Trustee promptly, in reasonable detail,

upon discovery of the occurrence of any breach by the Seller of any of its

representations, warranties and covenants contained herein.

 

(k)           Further Assurances.  The Seller will make, execute or endorse,

acknowledge and file or deliver to the Issuer, the Owner Trusts and each Series

Enhancer, if any, from time to time such UCC financing statements (including

any termination or continuation statements), schedules, confirmatory

assignments, conveyances, transfer endorsements, powers of attorney,

certificates, reports and other assurances or instruments and take such further

steps relating to the Contributed Assets and other rights covered by this

Agreement, as the Issuer, the Owner Trusts or each Series Enhancer, if any, may

request and reasonably require.  The

Seller shall take all steps necessary to perfect the Issuer’s and the Indenture

Trustee’s interest in the Contributed Assets under any international perfection

standards that may be adopted after the date of this Agreement to the extent

practicable and without unreasonable cost.

 

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

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

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

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

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

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

or is based upon a breach by the Seller of its covenants contained in

Section 4.01, or any information certified in any schedule delivered by

the Seller hereunder being untrue in any material respect as of the date of

such certification.  The obligations of

the Seller under this Section 4.01(l) shall be considered to have been relied

upon by the Issuer, the Owner Trusts, the Noteholders, the Administrative Agent

and the Indenture Trustee and shall survive the execution, delivery, and

performance of this Agreement regardless of any investigation made by the

Issuer or on its behalf.

 

17

 

(m)          Notice of Liens.  The Seller shall notify the Issuer promptly

after becoming aware of any Lien other than Permitted Encumbrances on the

Contributed Assets or on any assets owned by any Owner Trust.

 

(n)           Transfer Taxes.  The Seller shall, immediately upon

(i) receipt of notice from any applicable Governmental Authority that a

tax or related fine is due or (ii) the imposition of any related Lien on

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

(including attorney’s fees) incurred or required to be paid by the Seller or

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

Assets from the Seller to the Issuer and from the Issuer to the Owner Trusts,

and acknowledges that the Issuer shall have no responsibility with respect

thereto.

 

(o)           No Bankruptcy Petition Against the

Issuer or the Owner Trusts.  The

Seller will not, prior to the date that is one year and one day after the

payment in full of all amounts owing pursuant to the Indenture, this Agreement

and the Related Documents, institute against the Issuer or any Owner Trust, or

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

bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings

or similar proceedings under the laws of any applicable jurisdiction.  This subsection 4.01(o) shall survive the

termination of this Agreement.

 

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

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

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

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

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

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

Plan.

 

(q)           Substantive Consolidation.  The Seller will be operated in such a manner

so that it would not be substantively consolidated with the Issuer or any Owner

Trust, so that the separate existence of the Seller, on the one hand, and the

Issuer and each Owner Trust, on the other hand, would not be disregarded in the

event of a bankruptcy or insolvency of the Seller or the Issuer or any Owner

Trust, and in such regard, among other things:

 

(i)            the Seller, on the one hand, will

not be involved in the day-to-day management of the Issuer or any Owner Trust,

on the other hand;

 

(ii)           the Seller, on the one hand, will

maintain separate corporate records and books of account from the Issuer and

each Owner Trust, on the other hand, and otherwise will observe corporate

formalities and have a separate area from the Issuer for its business;

 

(iii)          the financial statements and books and

records of the Seller will be prepared after the date of creation of the Issuer

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

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

may be included in a consolidated financial statement issued by an Affiliate of

the Issuer; provided, however, that any such consolidated financial statement

will make clear that the Issuer’s and the Owner Trust’s assets are not

available to satisfy the obligations of such Affiliate;

 

(iv)          the Seller, on the one hand, will

maintain its assets separately from the assets of the Issuer and each Owner

Trust, on the other hand (including through the maintenance of a separate bank

account), and the Seller’s assets, and records relating thereto, have not been,

are not and will not be, commingled with those of the Issuer or any Owner

Trust;

 

18

 

(v)           all of the Seller’s business

correspondence and other communications will be conducted in the Seller’s own

name and on its own respective stationery;

 

(vi)          the Seller does not act as an agent

for the Issuer or any Owner Trust, other than in its capacity as the Servicer,

and in connection therewith, will present itself to the public as an agent for

the Issuer and each Owner Trust and as a corporation separate from the Issuer

and each Owner Trust;

 

(vii)         the Seller does not conduct any of the

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

 

(viii)        the Seller does not pay any liabilities

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

 

(ix)           the Seller maintains an arm’s-length

relationship with the Issuer and each Owner Trust except with respect to the

making of the Guaranty;

 

(x)            the Seller will not assume or

guarantee or become obligated for the debts of the Issuer or any Owner Trust or

hold out its credit as being available to satisfy the obligations of the Issuer

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

the Guaranty and (B) obligations of the Seller to Lessees arising by operation

of law under Eligible Leases with respect to which the consent of such Lessees

has not been obtained prior to the transfer of such Eligible Leases to Issuer

by Seller pursuant to this Agreement;

 

(xi)           the Seller will not acquire

obligations of the Issuer or any Owner Trust;

 

(xii)          the Seller will allocate fairly and

reasonably overhead or other expenses that are properly shared with the Issuer,

including without limitation, shared office space;

 

(xiii)         the Seller will identify and hold

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

Trust;

 

(xiv)        the Seller will correct any known

misunderstanding regarding its separate identity from the Issuer and each Owner

Trust;

 

(xv)         the Seller will not identify the Issuer

or any Owner Trust as a division or part of itself,

 

(xvi)        the Seller will not enter into, or be a

party to, any transaction with the Issuer or any Owner Trust except in the

ordinary course of its business and on terms which are intrinsically fair and

are no less favorable to it than would be obtained in a comparable arm’s-length

transaction with an unrelated third party, other than with respect to the

making of the Guaranty; and

 

(xvii)       the Seller does not pay the salaries of

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

 

19

 

Section 4.02.          Issuer

Covenants.

 

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

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

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

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

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

Seller, and in such regard, among other things:

 

(i)            the Issuer will not be involved in

the day-to-day management of the Seller;

 

(ii)           the Issuer (A) will, on its behalf

and on behalf of each Owner Trust, maintain separate records and books of

account from the Seller and otherwise will observe all formalities and have a

separate area from the Seller for its business and (B) will cause to be

maintained, on behalf of each Owner Trust, separate trust records and financial

records which may be produced upon demand identifying the assets, liabilities,

revenues and expenses of such Owner Trust separately from those of the Issuer

and;

 

(iii)          the financial statements and books and

records of the Issuer and the financial records of each Owner Trust, on the one

hand, will reflect its separate existence from the Seller, on the other hand,

provided, that the Issuer’s and the Owner Trust’s assets and liabilities may be

included in a consolidated financial statement issued by an Affiliate of the

Issuer; provided, however, that any such consolidated financial statement will

make clear that the Issuer’s and the Owner Trust’s assets are not available to

satisfy the obligations of such Affiliate;

 

(iv)          the Issuer will and will cause each

Owner Trust to maintain its assets separately from the assets of the Seller and

records relating thereto, have not been, are not and will not be commingled

with those of the Seller’s assets;

 

(v)           all of the Issuer’s and each Owner

Trust’s business correspondence and other communications will be conducted in

its own name and on its own stationery;

 

(vi)          the Issuer will not and will not

permit any Owner Trust to act as an agent of the Seller in any capacity and

will present itself to the public as a corporation or Trust separate from the

Seller;

 

(vii)         the Issuer will and will cause each

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

 

(viii)        the Issuer will and will cause each

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

 

(ix)           the Issuer will and will cause each

Owner Trust to maintain an arm’s-length relationship with its Affiliates;

 

(x)            the Issuer will not and will not

permit any Owner Trust to assume or guarantee or become obligated for the debts

of any other entity or hold out its credit as being available to satisfy the

obligation of any other entity, (in each case other than guarantees or other

obligations of any Owner Trust in respect of obligations of the Issuer) and

will not permit any

 

20

 

other person to assume or guarantee or become obligated for its debts

or hold out its credit as being available to satisfy its obligations, except

with respect to (A) obligations of the Seller under the Guaranty and (B)

obligations of the Seller to Lessees arising by operation of law under Eligible

Leases with respect to which the consent of such Lessees has not been obtained

prior to the transfer of such Eligible Leases to Issuer by Seller pursuant to

this Agreement;

 

(xi)           the Issuer will not acquire

obligations or securities of its stockholders;

 

(xii)          the Issuer will allocate fairly and

reasonably overhead or other expenses that are properly shared with any other

person or entity, including without limitation, shared office space, and use

separate stationery, invoices and checks;

 

(xiii)         the Issuer will and will cause each

Owner Trust to identify and hold itself out as a separate and distinct entity

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

 

(xiv)        the Issuer will and will cause each

Owner Trust to correct any known misunderstanding regarding its separate

identity;

 

(xv)         the Issuer will not and will not permit

any Owner Trust to make loans to any person or entity;

 

(xvi)        the Issuer will not identify its

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

itself;

 

(xvii)       the Issuer will not and will not permit

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

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

and on terms which are intrinsically fair and are no less favorable to it than

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

third party; and

 

(xviii)      the Issuer will pay the salaries of its

own employees, if any, from its own funds.

 

Section 4.03.          Transfer of Contributed Assets.  The Seller understands that the Issuer

intends to assign the Contributed Assets and its rights under this Agreement to

the Indenture Trustee under the Indenture, and hereby consents to the

assignment of all or any portion of this Agreement by the Issuer to such

Indenture Trustee.  The Seller agrees

that upon such assignment the Indenture Trustee may exercise the rights of the

Issuer hereunder and shall be entitled to all of the benefits of the Issuer

hereunder.

 

ARTICLE V

 

CONDITIONS PRECEDENT

 

Section 5.01.          Conditions to the Issuer’s

Obligations.  The obligations of the

Issuer to acquire Contributed Assets on any Transfer Date shall be subject to

the satisfaction of the following conditions (in addition to the procedures

required by Section 2.02 (d)):

 

21

 

(a)           All representations and warranties of

the Seller contained in this Agreement shall be true and correct on the

Transfer Date (including without limitation the Engine Representations and

Warranties) with the same effect as though such representations and warranties

had been made on such date;

 

(b)           All information concerning the

Contributed Assets provided to the Issuer shall be true and correct in all

material respects;

 

(c)           The Seller shall have performed all

other obligations required to be performed by the provisions of this Agreement

and the other Related Documents;

 

(d)           All corporate and legal proceedings

and all instruments in connection with the transactions contemplated by this

Agreement shall be satisfactory in form and substance to the Issuer, and the

Issuer shall have received from the Seller copies of all documents (including

without limitation records of corporate proceedings) relevant to the

transactions herein contemplated as the Issuer may reasonably have requested;

and

 

(e)           No Event of Default or Early

Amortization Event shall have occurred and then be continuing or result from

the acquisitions of such Contributed Assets.

 

Section 5.02.          Conditions to the Seller’s

Obligations.  The obligations of the

Seller to convey and contribute the Contributed Assets on the initial Transfer

Date and on each subsequent Transfer Date shall be subject to the satisfaction

of the following conditions (in addition to the procedures required by section

2.02(d)):

 

(a)           All representations and warranties of

the Issuer contained in this Agreement shall be true and correct with the same

effect as though such representations and warranties had been made on such

date; and

 

(b)           All limited liability company and

legal proceedings and all instruments in connection with the transactions

contemplated by this Agreement shall be satisfactory in form and substance to

the Seller, and the Seller shall have received from the Issuer copies of all

documents (including without limitation records of limited liability company

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

reasonably have requested.

 

ARTICLE VI

 

TERMINATION

 

Section 6.01.          Termination.  The respective obligations and

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

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

 

Section 6.02.          Effect of Termination.  No termination or rejection or failure to

assume the executory obligations of this Agreement in the bankruptcy of the

Seller or the Issuer shall be deemed to impair or affect the obligation

pertaining to any executed conveyance or executed obligations, including

without limitation breaches of representations and warranties by the Seller or

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

 

22

 

prior to termination, neither the failure of the

parties to execute and to deliver an Engine or Beneficial Interest Transfer

Certificate pursuant to Section 2.02, nor the failure of the Seller to pay

in cash or kind the compensation therefor shall render such transfer or

obligation executory, nor shall the continued duties of the parties pursuant to

Article 4 or Section 7.06 of this Agreement render an executed

conveyance executory.

 

ARTICLE VII

 

MISCELLANEOUS PROVISIONS

 

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

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

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

prior notice to each Rating Agency, if any. 

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

the Administrative Agent and the Rating Agencies, if any.

 

Section 7.02.          Governing Law.  This Agreement and any amendment hereof

pursuant to Section 7.01 shall be construed in accordance with and

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

principles) applicable to agreements made and to be performed therein and the

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

determined in accordance with such laws.

 

Section 7.03.          Notices.  All demands, notices and communications

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

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

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

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

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

2320 Marinship Way, Suite 300, Sausalito, California 94965 and

(c) the Indenture Trustee, the  Noteholders, the Rating Agencies and the

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

set forth in the related Supplement. 

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

being delivered to the courier service, if sent by courier, (b) upon

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

delivered, if delivered by hand.  Either

party may alter the address to which communications are to be sent by giving

notice of such change of address in conformity with the provisions of this

Section 7.03 for giving notice and by otherwise complying with any

applicable terms of this Agreement.

 

Wherever notice or

a report is required to be given or delivered to or from any party pursuant to

this Agreement, a copy of such notice or report shall also be given or

delivered to the Administrative Agent.

 

Section 7.04.          Severability of Provisions.  If any one or more of the covenants,

agreements, provisions or terms of this Agreement shall be for any reason

whatsoever held invalid, then such covenants, agreements, provisions or terms

shall be deemed severable from the  remaining covenants,

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

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

or terms of this Agreement.

 

23

 

Section 7.05.          Assignment.  Notwithstanding anything to the contrary

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

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

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

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

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

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

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

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

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

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

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

Enhancer, if any, and the Noteholders.

 

Section 7.06.          Further Assurances.  Each of the Seller and the Issuer agrees to

do such further acts and things and to execute and deliver such additional

assignments, agreements, powers and instruments as are reasonably required to

carry into effect the purposes of this Agreement or to better assure and

confirm unto the Indenture Trustee, the Series Enhancers, if any, or the

Noteholders their rights, powers and remedies hereunder.

 

Section 7.07.          No Waiver; Cumulative Remedies.  No failure to exercise and no delay in exercising,

on the part of the Issuer or the Seller, any right, remedy, power or privilege

hereunder, shall operate as a waiver thereof, nor shall any single or partial

exercise of any right, remedy, power or privilege hereunder preclude any other

or further exercise hereof or the exercise of any other right, remedy, power or

privilege.  The rights, remedies, powers

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

remedies, powers and privileges provided by law.

 

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

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

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

instrument.

 

Section 7.09.          Binding Effect.  This Agreement will inure to the benefit of

and be binding upon the parties hereto and, upon the transfer contemplated by

Section 4.03 hereof, the Indenture Trustee, the Noteholders and their

respective successors and permitted assigns.

 

Section 7.10.          Merger and Integration.  Except as specifically stated otherwise

herein, this Agreement sets forth the entire understanding of the parties

relating to the subject matter hereof, and all prior understandings, written or

oral, are superseded by this Agreement. 

This Agreement may not be modified, amended, waived or supplemented

except as provided herein.

 

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

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

any provision hereof

 

Section 7.12.          Schedules and Exhibits.  The schedules and exhibits attached hereto

and referred to herein shall constitute a part of this Agreement and are

incorporated into this Agreement for all purposes.

 

Section 7.13.          General Interpretive Principles.  For purposes of this Agreement except as

otherwise expressly provided or unless the context otherwise requires:

 

24

 

(a)           the terms defined in this Agreement

have the meanings assigned to them in this Agreement and include the plural as

well as the singular, and the use of any gender herein shall be deemed to

include the other gender;

 

(b)           accounting terms not otherwise

defined herein have the meanings assigned to them in accordance with generally

accepted accounting principles as in effect on the date hereof;

 

(c)           references herein to “Articles”,

“Sections”, “Subsections”, “paragraphs” and other subdivisions without

reference to a document are to designated Articles, Sections, Subsections,

paragraphs and other subdivisions of this Agreement;

 

(d)           a reference to a Subsection section

without further reference to a Section is a reference to such Subsection

section as contained in the same Section in which the reference appears,

and this rule shall also apply to paragraphs and other subdivisions;

 

(e)           the words “herein”, “hereof”,

“hereunder” and other words of similar import refer to this Agreement as a

whole and not to any particular provision; and

 

(f)            the term “include” or “including”

shall mean without limitation by reason of enumeration.

 

Section 7.14.          Third-Party Beneficiaries.  This Agreement will inure to the benefit of

and be binding upon the parties hereto, the Indenture Trustee and the

Noteholders, and their respective successors and permitted assigns.

 

25

 

IN WITNESS WHEREOF, the Seller and the Issuer have

caused this Contribution and Sale Agreement to be duly executed by their

respective officers as of the day and year first above written.

 

	

   

  	

  WILLIS LEASE FINANCE CORPORATION

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

  /s/ DONALD A. NUNEMAKER

  	

   

  
	

   

  	

   

  	

   

  	

  Name: Donald A.

  Nunemaker

  	

   

  
	

   

  	

   

  	

   

  	

  Title: Executive Vice

  President,

  Chief Operating Officer

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

  WILLIS ENGINE FUNDING

  LLC

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

  /s/ DONALD A. NUNEMAKER

  	

   

  
	

   

  	

   

  	

   

  	

  Name: Donald A.

  Nunemaker

  	

   

  
	

   

  	

   

  	

   

  	

  Title: Vice President

  	

   

  
						

 

26

 

SCHEDULE 1 to

Contribution And Sale

Agreement

 

“Contribution

Percentage” means

                 

percent (      %).*

 

*              This redacted material has been omitted pursuant to a

request for confidential treatment, and the material has been filed separately

with the Commission.

 

27

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00045-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00045-of-00352.parquet"}]]