Document:

Exhibit 10.30

 

EXECUTION

COPY

 

 

CLASS

B NOTE PURCHASE AGREEMENT

 

 

among

 

 

WILLIS

ENGINE FUNDING LLC,

as Issuer

 

 

WILLIS

LEASE FINANCE CORPORATION,

as Servicer

 

 

FORTIS

BANK (NEDERLAND) N.V.,

as a Class B Note Purchaser

 

 

and

 

 

BARCLAYS

BANK PLC,

as a Class B Note Purchaser and as Purchasers’ Agent

 

 

dated

as of September 12, 2002

 

 

TABLE OF CONTENTS

 

	

  ARTICLE I

  
	

  DEFINITIONS

  
	

  SECTION 1.01.

  	

  Certain Defined

  Terms

  
	

  SECTION

  1.02.

  	

  Other Definitional

  Provisions

  
	

   

  	

   

  
	

  ARTICLE II

  
	

  PURCHASE AND SALE

  
	

  SECTION

  2.01.

  	

  Sale

  and Delivery of the Class B Notes

  
	

  SECTION

  2.02.

  	

  Acceptance

  and Custody of Series 2002-1 Class B Notes

  
	

  SECTION 2.03.

  	

  Funding of Loans

  
	

  SECTION

  2.04.

  	

  The

  Initial Funding, Subsequent Fundings and Incremental Fundings

  
	

  SECTION

  2.05.

  	

  Reduction

  of the Class B Maximum Limit

  
	

  SECTION 2.06.

  	

  Determination

  of Interest

  
	

  SECTION

  2.07.

  	

  Payments,

  Computations, Etc.

  
	

  SECTION 2.08.

  	

  Increased Costs

  
	

  SECTION 2.09.

  	

  Increased Capital

  
	

  SECTION 2.10.

  	

  Taxes

  
	

   

  	

   

  
	

  ARTICLE III

  
	

  CONDITIONS

  PRECEDENT TO OBLIGATION OF THE PURCHASER

  
	

  SECTION

  3.01.

  	

  Conditions

  Precedent to Initial Purchase

  
	

  SECTION

  3.02.

  	

  Conditions

  Precedent to All Fundings

  
	

  SECTION

  3.03.

  	

  Conditions

  Precedent to Initial Funding and Each Incremental Funding

  
	

   

  	

   

  
	

  ARTICLE IV

  
	

  REPRESENTATIONS AND

  WARRANTIES

  
	

  SECTION

  4.01.

  	

  Representations

  and Warranties of the Issuer

  
	

  SECTION

  4.02.

  	

  Representations

  and Warranties and Agreements of WLFC

  
	

   

  	

   

  
	

  ARTICLE V

  
	

  REPRESENTATIONS

  AND WARRANTIES OF THE PURCHASER

  
	

  SECTION 5.01.

  	

  Organization

  
	

  SECTION 5.02.

  	

  Authority, etc

  
	

  SECTION 5.03.

  	

  Securities Act

  
	

  SECTION 5.04.

  	

  Investment

  Company Act

  
	

   

  	

   

  
	

  ARTICLE VI

  
	

  COVENANTS

  OF THE ISSUER

  
	

  SECTION 6.01.

  	

  [Reserved]

  
	

  SECTION

  6.02.

  	

  Information

  from the Issuer

  
	

  SECTION 6.03.

  	

  Access to

  Information

  
	

  SECTION

  6.04.

  	

  Security

  Interests; Further Assurances

  
	

  SECTION 6.05.

  	

  Covenants

  
	

  SECTION 6.06.

  	

  Securities Act

  

 

i

 

	

  ARTICLE VII

  
	

  MUTUAL COVENANTS AND

  AGREEMENTS

  
	

  SECTION

  7.01.

  	

  Legal

  Conditions to Closing

  
	

  SECTION 7.02.

  	

  Expenses and Fees

  
	

  SECTION 7.03.

  	

  Mutual Obligations

  
	

   

  	

   

  
	

  ARTICLE VIII

  
	

  INDEMNIFICATION

  
	

  SECTION

  8.01.

  	

  Indemnification

  by the Issuer

  
	

  SECTION 8.02.

  	

  Procedure

  
	

  SECTION 8.03.

  	

  Defense of Claims

  
	

   

  	

   

  
	

  ARTICLE IX

  
	

  THE

  PURCHASERS’ AGENT

  
	

  SECTION 9.01.

  	

  Authorization

  and Action

  
	

  SECTION

  9.02.

  	

  Purchasers’

  Agent’s Reliance, Etc.

  
	

  SECTION

  9.03.

  	

  Purchasers’

  Agent and Affiliate

  
	

  SECTION 9.04.

  	

  Indemnification

  
	

  SECTION 9.05.

  	

  Purchase Decision

  
	

  SECTION

  9.06.

  	

  Successor

  Purchasers’ Agent

  
	

   

  	

   

  
	

  ARTICLE X

  
	

  MISCELLANEOUS

  
	

  SECTION 10.01.

  	

  Amendments

  
	

  SECTION

  10.02.

  	

  Notices

  
	

  SECTION 10.03.

  	

  No Waiver;

  Remedies

  
	

  SECTION

  10.04.

  	

  Binding

  Effect; Assignability

  
	

  SECTION 10.05.

  	

  Provision of Documents and

  Information

  
	

  SECTION

  10.06.

  	

  GOVERNING

  LAW; JURISDICTION

  
	

  SECTION 10.07.

  	

  No Proceedings

  
	

  SECTION

  10.08.

  	

  Execution in

  Counterparts

  
	

  SECTION 10.09.

  	

  No Recourse

  
	

  SECTION 10.10.

  	

  Limited Recourse

  
	

  SECTION

  10.11.

  	

  Survival

  
	

  SECTION 10.12.

  	

  Third-Party

  Beneficiaries

  
	

  SECTION 10.13.

  	

  Appointment of Agent

  for Service of Process

  

 

ii

 

	

  SCHEDULES

  	

   

  
	

   

  	

   

  
	

  SCHEDULE

  1

  	

  Percentage

  Interests and Addresses for Delivery of Payments

  
	

   

  	

   

  
	

  SCHEDULE

  2

  	

  Conditions

  Precedent to Initial Purchase

  
	

   

  	

   

  
	

  EXHIBITS

  	

   

  
	

   

  	

   

  
	

  EXHIBIT A

  	

  Form of Loan Request

  

 

iii

 

CLASS B NOTE PURCHASE AGREEMENT (“Class B Note

Purchase Agreement”) dated as of September 12, 2002, among WILLIS ENGINE

FUNDING LLC (the “Issuer”), WILLIS LEASE FINANCE CORPORATION (the “Servicer”),

FORTIS BANK (NEDERLAND) N.V. (a “Class B Note Purchaser”) and BARCLAYS

BANK PLC, as a Class B Note Purchaser (in such capacity, a “Class B Note

Purchaser” and, together with Fortis Bank (Nederland) N.V., the “Class B

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

Agent”).

 

The parties hereto agree as follows:

 

ARTICLE I

DEFINITIONS

 

SECTION 1.01.  Certain Defined Terms.  Capitalized terms

used herein without definition shall have the meanings set forth in the Indenture

(as defined below), as applicable. 

Additionally, the following terms shall have the following meanings:

 

“Administration Agreement” means,

the Administration Agreement dated as of September 12, 2002, among the Issuer

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

otherwise modified from time to time.

 

“Affected Person” means the Purchasers’ Agent,

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

 

“Base Indenture” means the

Indenture dated as of September 12, 2002, between the Issuer, as issuer, and

the Indenture Trustee, as indenture trustee.

 

“Class A Note Purchase Agreement”

means the Class A Note Purchase Agreement, dated as of September 12, 2002,

among the Issuer, the Servicer, Sheffield Receivables Corporation and Barclays

Bank PLC.

 

“Class A Note Purchasers” has the

meaning specified in the Class A Note Purchase Agreement.

 

“Class A Notes” means $165,343,500

initial principal amount of the Issuer’s Class A Notes dated September 12,

2002.

 

“Class B Increased Costs” shall mean, with

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

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

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

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

Periods which remain unpaid.

 

“Class B Note Purchasers” means

Fortis Bank (Nederland) N.V. and Barclays Bank PLC, in its capacity as a Class

B Note Purchaser.

 

“Class B Notes” means $18,371,500

initial principal amount of the Issuer’s Class B Notes dated September 12,

2002.

 

 

“Commercial Paper Notes” means any

commercial paper notes issued by the Class A Note Purchaser.

 

“Commitment Termination Date” means

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

may be extended (if extended) in the sole discretion of the Class B Note

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

 

“Deal Documents” means the Series

2002-1 Transaction Documents and each other document, agreement, certificate,

schedule or other writing entered into or delivered in connection with the

foregoing, as the same may be amended, supplemented, restated, replaced or

otherwise modified from time to time.

 

“Dollars” or “$” means the

lawful currency of the United States of America.

 

“Exchange Act” means the Securities

Exchange Act of 1934, as amended.

 

“Excluded Taxes”

has the meaning specified in Section 2.10(a) hereof.

 

“Federal Bankruptcy Code” means the

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

United States Code.

 

“Funding” means a funding by the

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

 

“Funding Date” means as to the

initial Funding, the Closing Date, and as to any Incremental Funding, any

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

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

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

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

hereto and to conform to requirements of Section 3.02 hereof.

 

“Governmental Actions” means any

and all consents, approvals, permits, orders, authorizations, waivers,

exceptions, variances, exemptions or licenses of, or registrations,

declarations or filings with, any Governmental Authority required under any

Governmental Rules.

 

“Governmental Authority” means any

nation or government, any state or other political subdivision thereof, any

central bank (or similar monetary or regulatory authority) thereof, any entity

exercising executive, legislative, judicial, regulatory or administrative

functions of or pertaining to government, and any corporation or other entity

owned or controlled, through stock or capital ownership or otherwise by any of

the foregoing.

 

“Governmental Rules” means any and

all laws, statutes, codes, rules, regulations, ordinances, orders, writs,

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

binding conditions, standards, prohibitions, requirements and judgments of any

Governmental Authority.

 

“Increased Costs” has the meaning

specified in Section 2.08 hereof.

 

2

 

“Incremental Funding” means any

Funding that increases the aggregate outstanding Class B Note Principal

Balance.

 

“Indemnified Party” has the meaning

specified in Section 8.01 hereof.

 

“Indenture” means the Base

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

amended and supplemented from time to time.

 

“Indenture Supplement” means the

Series 2002-1 Supplement dated as of September 12, 2002, between the Issuer and

the Indenture Trustee, as the same may be amended, supplemented or otherwise

modified from time to time.

 

“Indenture Trustee” means The Bank

of New York, as trustee under the Indenture.

 

“Interpretation” as used in Sections 2.08

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

or application of such law or regulation by any governmental authority

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

judicial, regulatory or administrative functions of or pertaining to

government), central bank, accounting standards board, financial services

industry advisory body or any comparable entity.

 

“Investment Company Act” means the

United States Investment Company Act of 1940, as amended.

 

“Issuer” means Willis Engine

Funding LLC, a Delaware limited liability company.

 

“Issuer Documents” has the meaning

specified in Section 4.01(ii) hereof.

 

“Loan Request” means any request by

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

 

“Losses” has the meaning specified

in Section 8.01 hereof.

 

“Notes” means the Class A Notes and

the Class B Notes.

 

“Other Taxes” means any present or future stamp

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

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

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

otherwise with respect to, any of the foregoing.

 

“Owner” shall mean each Class B Note Purchaser.

 

“Percentage Interest” means, with respect to

any Class B Note, a percentage equal to (x) the maximum principal balance of

such Class B Note divided by (y) the maximum aggregate principal amount of all

Class B Notes.

 

3

 

“Purchase” means the initial

purchase by the Class B Note Purchasers of the Class B Notes from the Issuer.

 

“Purchasers” means the Class B Note

Purchasers.

 

“Purchasers’ Agent” means Barclays

Bank PLC.

 

“Requirement of Law” means, as to

any Person, any law (statutory or common), treaty, rule or regulation or

determination of an arbitrator or of a Governmental Authority, in each case

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

such Person or any of its property is subject.

 

“Section 2.10(a) Amount” has the meaning

specified in Section 2.10(a) hereof.

 

“Securities Act” means the Securities

Act of 1933, as amended.

 

“Servicer” means Willis Lease

Finance Corporation.

 

“Taxes” has the

meaning specified in Section 2.10(a) hereof.

 

“Termination Date” means the

earliest of (a) the date of the occurrence of an Early Amortization Event and

(b) the Commitment Termination Date.

 

“Third Party Claim” has the meaning

specified in Section 8.02 hereof.

 

“UCC” means the Uniform Commercial Code as in effect in the

applicable jurisdiction.

 

“United States” means the United States of America.

 

“WLFC Documents” has the meaning specified in Section

4.02(i) hereof.

 

SECTION 1.02.  Other Definitional Provisions.

 

(a)           All terms defined in this Class B Note

Purchase Agreement shall have the defined meanings when used in any certificate

or other document made or delivered pursuant hereto unless otherwise defined

therein.

 

(b)           As used herein and in any certificate or

other document made or delivered pursuant hereto or thereto, accounting terms

not defined in Section 1.01, have the meanings assigned to them in accordance

with generally accepted accounting principles in the United States.

 

(c)           The words “hereof,” “herein” and

“hereunder” and words of similar import when used in this Class B Note Purchase

Agreement shall refer to this Class B Note Purchase Agreement as a whole and

not to any particular provision of this Class B Note Purchase Agreement; and

Section, subsection, Schedule and Exhibit references contained in this Class B 

 

4

 

Note Purchase Agreement are references to

Sections, subsections, Schedules and Exhibits in or to this Class B Note

Purchase Agreement unless otherwise specified.

 

ARTICLE II

PURCHASE AND SALE

 

SECTION 2.01.  Sale and Delivery of the Class B Notes.   In

reliance on the representations, warranties and agreements set forth in this

Agreement and subject to the terms and conditions herein set forth, the Issuer

agrees to sell, transfer and deliver to the Purchasers’ Agent on behalf of the

Class B Note Purchasers on the Closing Date,  the Class B Notes with a

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

Interests specified on Schedule 1 hereto, which Class B Notes shall be duly

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

registered in the name of the Purchasers’ Agent on behalf of the Class B Note

Purchaser.  The actual outstanding

principal balance of the Class B Notes will be increased and decreased from

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

Supplement.  The Class B Notes will be

delivered to the Purchasers’ Agent against payment of the amount of the

Loan related to the initial Funding made pursuant to Section 2.04.

 

SECTION 2.02.  Acceptance and Custody of Series 2002-1 Class B Notes.  On

the Closing Date, the Purchasers’ Agent shall take delivery of the Class B

Notes and maintain custody thereof on behalf of the Class B Note Purchasers.

 

SECTION 2.03.  Funding

of Loans.

 

(a)           On

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

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

the Class B Note Purchasers in this regard. 

The Class B Note Purchasers shall fund Loans from time to time according

to their respective Percentage Interests in the Class B Notes during the period

from the date hereof to but not including the Termination Date; provided,

however, that no Loan shall be funded under this Agreement unless on the

applicable Funding Date a Loan is funded under the Class A Note Purchase

Agreement in an amount that is nine (9) times the amount of the Loan funded

under this Agreement.  Under no

circumstances shall the Class B Note Purchasers fund any Loan if after giving

effect to such Funding or Incremental Funding, the aggregate Class B Note

Principal Balance outstanding hereunder would (i) exceed the Class B Note

Commitment or (ii) exceed the product of (y) one-ninth (1/9) and (z) the

aggregate Class A Note Principal Balance outstanding under the Class A Note

Purchase Agreement after giving effect to the Funding or Incremental Funding

made thereunder on the same date.

 

(b)           The

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

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

Agent, make written request for the Class B Note Purchasers to extend the

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

notice to the Class B Note Purchasers and the Class A Note Purchaser of its

receipt of such request for extension of the Commitment Termination Date.  The Class B Note Purchasers shall make a

collective determination, in their sole discretion and after a full credit

review, not more than 30 days and 

 

5

 

not less than 15 days prior to the then applicable

Commitment Termination Date as to whether or not it will agree to extend the

Commitment Termination Date; provided, however, that the failure

of the Class B Note Purchasers to make a timely response to the Issuer’s

request for extension of the Commitment Termination Date shall be deemed to

constitute a refusal by the Class B Note Purchasers to extend the Commitment

Termination Date.  It shall be a

condition to the extension of the Commitment Termination Date that the

commitment under the Class A Note Purchase Agreement be extended to the same

date.

 

SECTION 2.04.  The Initial Funding and Incremental

Fundings.

 

(a)           The

Class B Notes shall bear interest at the applicable Interest Rate as provided

in the Indenture.  Subject to the

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

initial Funding and each Incremental Funding shall be made in accordance with

the procedures described in Section 2.04(b).

 

(b)           The

initial Funding and each Incremental Funding shall be made, after receipt by

the Class B Note Purchasers of a Loan Request delivered by the Issuer to the

Purchasers’ Agent at least two Business Days prior to such proposed Funding

Date and each such notice shall specify (i) the aggregate amount of such

initial Funding or Incremental Funding which amount must satisfy the applicable

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

such Funding or Incremental Funding. 

The Issuer shall deliver no more than two such notices in any calendar

month, and each amount specified in any such notice must satisfy the following

minimum requirements, as applicable, as a condition to the related

Funding:  (i) the initial Funding shall

be in an amount equal to $500,000 or an integral multiple of $1,000 in excess

thereof; (ii) each Incremental Funding hereunder shall be in an amount equal to

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

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

when there is no outstanding Commercial Paper Notes issued in respect of a

Funding under the Class A Note Purchase Agreement of $4,500,000 or an integral

multiple of $9,000 in excess thereof, then such Incremental Funding under this

Class B Note Purchase Agreement shall be in an amount equal to $500,000 or an

integral multiple of $1,000 in excess thereof. 

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

be irrevocable.  Following receipt of

such notice, the initial Funding or Incremental Funding will be made by the

Class B Note Purchasers in accordance with their respective Percentage

Interests in the Class B Notes.  On the

date of such Funding or Incremental Funding, as the case may be, the Class B

Note Purchasers shall, upon satisfaction of the applicable conditions set forth

in Article III, make available to the Issuer by wire transfer in immediately

available funds, at such bank or other location reasonably designated by Issuer

in its Loan Request given pursuant to this Section 2.04(b), in accordance with

their respective Percentage Interests in the Class B Notes, an amount equal to

the amount of such Loan related to such initial Funding or Incremental Funding,

as the case may be.  Notwithstanding any

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

Securitization, the Class B Note Purchasers shall not be obligated to fund a

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

the Class B Note Purchasers have agreed in writing regarding the Spread for

such Loan.

 

SECTION 2.05.  Reduction of the Class B Maximum Limit.  The

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

terminate in whole or reduce 

 

6

 

in part the portion of

the Class B Maximum Limit that exceeds the sum of the aggregate Class B Note

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

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

Class B Maximum Limit shall be in an aggregate amount equal to $100,000 or an

integral multiple thereof; and provided further, however, that

each partial reduction of the Class B Maximum Limit shall be accompanied by a

partial reduction of the Class A Maximum Limit under the Class A Note Purchase

Agreement in an amount equal to nine (9) times the amount of the partial

reduction hereunder.  Each notice of

reduction or termination pursuant to this Section 2.05 shall be

irrevocable.

 

SECTION 2.06.  Determination

of Interest.  The

Purchasers’ Agent shall determine the Interest (including unpaid Interest, if

any, due and payable on a prior Payment Date) on the Class B Notes to be paid

on each Payment Date for the applicable Interest Accrual Period and shall

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

York City time) on the related Determination Date.

 

SECTION 2.07.  Payments, Computations, Etc.

 

(a)           Unless

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

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

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

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

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

hereto, or such other accounts designated from time to time by the Class B Note

Purchasers.  The Issuer shall, to the

extent permitted by law, pay to the Class B Note Purchasers Default Interest at

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

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

applicable law.  All computations of

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

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

day) elapsed.

 

(b)           Whenever

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

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

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

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

 

(c)           If

any Funding or Incremental Funding requested by the Issuer and approved by the

Class B Note Purchasers pursuant to Section 2.04, is not, for any reason

whatsoever related to a default or nonperformance by the Issuer, made or

effectuated, as the case may be, on the date specified therefor, the Issuer

shall indemnify the Class B Note Purchasers against any reasonable loss, cost

or expense incurred by the Class B Note Purchasers, including, without

limitation, any loss (excluding loss of anticipated profits), cost or expense

incurred by reason of the liquidation or reemployment of deposits or other

funds acquired by the Class B Note Purchasers to fund or maintain such Funding

or Incremental Funding, as the case may be, during such Interest Accrual

Period.

 

SECTION 2.08.  Increased

Costs.   If

due to the introduction of or any change (including, without limitation, any

change by way of imposition or increase of reserve requirements) in or in the

Interpretation of any law or regulation or the imposition of any 

 

7

 

guideline or request from any central bank or other Governmental

Authority after the date hereof reflecting such change, there shall be an

increase in the cost to an Affected Person of making or maintaining any

investment in the Class B Notes or any interest therein or of agreeing to

purchase or invest in the Class B Notes or any interest therein, as the case

may be (other than by reason of any Interpretation of or introduction of or

change in laws or regulations relating to Taxes or Excluded Taxes), such

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

Person is not the Purchasers’ Agent, the Purchasers’ Agent, a certificate

setting forth in reasonable detail, the calculation of such increased costs

incurred by such Affected Person.  In

determining such amount, such Affected Person may use any reasonable averaging

and attribution methods, consistent with the averaging and attribution methods

generally used by such Affected Person in determining amounts of this

type.  The amount of increased costs set

forth in such certificate (which certificate shall, in the absence of manifest

error, be prima facie evidence as to such amount) shall be included in the

Class B Increased Costs for the Interest Accrual Period immediately succeeding

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

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

Accrual Period) and to the extent remaining outstanding, each Interest Accrual

Period thereafter until paid in full. 

The Purchasers’ Agent, out of amounts received by it in respect of Class

B Increased Costs for Affected Persons for any Interest Accrual Period, shall

pay such increased costs to such Affected Persons; provided, however,

that if the amount so distributable in respect of the Class B Increased Costs

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

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

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

amount owed to each).

 

SECTION 2.09.  Increased

Capital.  If the

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

regulation or the imposition of any guideline or request from any central bank

or other governmental authority reflecting such change after the date hereof

affects or would affect the amount of capital required or expected to be

maintained by any Affected Person, and such Affected Person determines that the

amount of such capital is increased as a result of (i) the existence of the

Class B Note Purchasers’ agreement to make or maintain an investment in the

Class B Notes or any interest therein and other similar agreements or

facilities, or (ii) the existence of any agreement by Affected Persons to make

or maintain an investment in the Class B Notes or any interest therein or to

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

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

Person is not the Purchasers’ Agent, the Purchasers’ Agent, a certificate

setting forth in reasonable detail, the calculation of the additional amounts

required to compensate such Affected Person in light of such

circumstances.  In determining such

amount, such Affected Person may use any reasonable averaging and attribution

methods, consistent with the averaging and attribution methods generally used

by such Affected Person in determining amounts of this type.  The amount set forth in such certificate (which

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

to such amount) shall be included in the Class B Increased Costs for the

Interest Accrual Period immediately succeeding the date on which such

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

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

extent remaining outstanding, each Accrual Period thereafter until paid in

full.  The Purchasers’ Agent, out of

amounts received by it in respect of Class B Increased Costs for Affected

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

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

distributable in respect of the Class B Increased Costs is less than the

aggregate amount payable 

 

8

 

to all such Affected Persons pursuant to Sections

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

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

 

SECTION 2.10.  Taxes.

 (a) Any and all payments and deposits

required to be made under this Agreement, the Class B Notes or the Indenture by

the Issuer or the Indenture Trustee to or for the benefit of an Owner shall be

made, to the extent allowed by law, free and clear of and without deduction for

any and all present or future taxes, levies, imposts, deductions, charges or

withholdings, and all liabilities with respect thereto, now or hereafter

imposed, levied, collected, withheld or assessed by any Governmental

Authority.  If, as a result of any

change in law, treaty or regulation or in the interpretation or administration

thereof by any governmental or regulatory agency or body charged with the

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

regulation, any taxes, levies, imposts, duties, charges or fees are required to

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

payable to such Owner shall be increased to the extent necessary to yield to

such Owner (after payment of all taxes, levies, imposts, duties, charges or

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

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

Amount”); provided, however, that this sentence shall not apply

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

taxes, minimum taxes and taxes computed under alternative methods, at least one

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

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

Owner, in each case, as a result of a present or former connection (other than

any connection arising out of the transactions contemplated by this Agreement)

between the jurisdiction of the government or taxing authority imposing such

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

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

and keep current any certification or other documentation permitted by

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

exemption from or reduced rate thereof; (iii) any taxes, levies, imposts,

duties, charges or fees imposed as a result of a change by any Owner of the

office through which the Class B Notes or any interest therein hereunder is

acquired, accounted for or booked as a result of the sale, transfer or

assignment by any Owner of its interest hereunder, other than any such taxes,

levies, imposts, duties, charges or fees imposed as a result of any such change

or adoption occurring after any such Class B Notes or interest therein is

acquired, accounted for or booked; (iv) taxes measured by income, gross

receipts, assets or capital of any Owner by the taxing authority of the

jurisdiction where such Owner is organized, incorporated, managed, controlled

or is considered to be doing business or in which it maintains an office,

branch or agency (other than Taxes imposed on the gross amount of any payments made

to under this Agreement without regard to such place of origination or

incorporation, such management or control, the conduct of such business or the

maintenance of such office, branch or agency); (v) any Taxes imposed on such

Owner as a result of payments not related to this Agreement; and (vi) any

withholding tax with respect to any Owner (all such exclusions being

hereinafter called “Excluded Taxes” and all other taxes, levies, imposts,

duties, charges or fees being hereinafter called “Taxes”).  To the extent that any Owner actually

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

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

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

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

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

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

 

9

 

provided, however, that for purposes of reimbursing

the Issuer, such Owner shall calculate the amount of the Tax Benefit realized

that is attributable to the Issuer’s or the Indenture Trustee’s payment of such

Taxes on behalf of such Owner as if such Owner realized or received such Tax

Benefit pro rata with all other Tax Benefits available to it for such year.

 

(b)           Each

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

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

income franchise taxes, it will treat the Class B Notes as indebtedness.  Each Owner not organized under the laws of

the United States or a State thereof covenants that to the extent that it is

entitled to receive payments under this Agreement without deduction or

withholding of any United States federal income taxes (other than Withholding

Taxes) because such income is effectively connected with a United States trade

or business, it will continue to hold the Class B Notes in connection with a

United States trade or business for so long as it is an Owner.

 

(c)           Any

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

Class B Increased Costs (i) for the Interest Accrual Period in respect of which

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

outstanding, each Interest Accrual Period thereafter until paid in full.  The Purchasers’ Agent, out of amounts

received by it in respect of Class B Increased Costs for Affected Persons for

any Interest Accrual Period, shall pay such increased costs to such Affected

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

in respect of the Class B Increased Costs is less than the aggregate amount

payable to all such Affected Persons pursuant to Sections 2.08, 2.09 and 2.10

hereof, the resulting shortfall shall be allocated among such Affected Persons

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

 

ARTICLE III

CONDITIONS

PRECEDENT TO OBLIGATION OF THE PURCHASER

 

SECTION 3.01.  Conditions Precedent to Initial Purchase.  The initial Purchase hereunder is subject to

the condition precedent that the Purchasers’ Agent shall have received on or

before the date of such purchase the items listed in Schedule 2, each

(unless otherwise indicated) dated such date, in form and substance

satisfactory to the Purchasers’ Agent and the Class B Note Purchasers.

 

SECTION 3.02.  Conditions Precedent to All Fundings.

 Each Funding (including the initial Funding)

by the Class B Note Purchasers and each Incremental Funding (each, a

“Transaction”) shall be subject to the further conditions precedent that (a)

with respect to any Funding (including the initial Funding) or Incremental

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

prior to the date of such Funding or Incremental Funding in form and substance

satisfactory to the Purchasers’ Agent, a Loan Request substantially in the form

of Exhibit A, and containing such additional information as may be

reasonably requested by the Purchasers’ Agent; (b) on the date of such

Transaction the following statements shall be true and the Issuer shall be

deemed to have certified that:

 

(i)            The representations and warranties

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

as though made on and as of such date;

 

10

 

(ii)           No event has occurred and is

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

Amortization Event;

 

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

effect to such Transaction, the outstanding Class B Note Principal Balance does

not exceed the Class B Note Commitment and the outstanding Aggregate Note

Principal Balance does not exceed the sum of the Class B Note Commitment and

the Class A Note Commitment;

 

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

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

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

 

(v)           No law or regulation shall prohibit,

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

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

making of such Loan, remittance of collections or Incremental Funding by the

Class B Note Purchasers in accordance with the provisions hereof;

 

(vi)          McAfee & Taft shall have delivered

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

Date, which shall state that it may be relied upon by subsequent Class B Noteholders,

in form and substance satisfactory to the Purchasers’ Agent and the Class B

Note Purchasers, with respect to FAA and recordation matters; and

 

(vii)         on the date of such Transaction, the

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

documents as the Purchasers’ Agent may reasonably require.

 

SECTION 3.03.  Conditions Precedent to Initial Funding

and Each Incremental Funding.  The initial Funding and each Incremental Funding are subject to

the condition precedent, in addition to the conditions precedent set forth in

Section 3.02 hereof, that the Issuer shall have delivered, or shall have caused

to be delivered, to each designated recipient named in Schedule G to the

Indenture Supplement, each of the Funding Deliverables scheduled to be

delivered thereunder on or before the Funding Date of such Funding.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

 

SECTION 4.01.  Representations and Warranties of the

Issuer.  The Issuer represents (as of the Effective

Date and as of each date on which a Loan is made by the Class B Noteholders

pursuant to the Supplement, unless otherwise indicated) and warrants to, and

agrees with, the Class B Note Purchasers that:

 

(i)            The Issuer is a limited liability

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

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

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

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

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

where its 

 

11

 

ownership of property or the conduct of its activities

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

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

enforceability of the Class B Notes or the ability of the Issuer to perform its

obligations under this Agreement and the other Related Documents to which it is

a party.  One hundred percent of the

beneficial ownership of the Issuer is owned by Willis Lease Finance Corporation

(“WLFC”).  The Issuer has no

subsidiaries other than WLFC Funding (Ireland) Limited;

 

(ii)           The Issuer has the power, authority

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

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

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

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

necessary action, the Issuer Documents, other than the Class B Notes and the

Class A Note, have been duly executed and delivered by the Issuer, and each of

the Class B Notes and the Class A Note, when issued in accordance with the

terms hereof and of the Indenture and the Supplement, will have been duly

executed and delivered;

 

(iii)          Each of the Issuer Documents (other

than the Class B Notes), assuming due authorization, execution and delivery by

the other parties thereto, constitutes, and each of the Class B Notes and the

Class A Note, when issued and authenticated in accordance with the terms of the

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

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

that such enforcement may be limited by (A) bankruptcy, insolvency,

reorganization, moratorium or other similar laws (whether statutory, regulatory

or decisional) now or hereafter in effect relating to creditors’ rights

generally and (B) general principles of equity (regardless of whether such

enforceability is considered in a proceeding in equity or at law);

 

(iv)          The consummation of the transactions

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

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

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

default under the certificate of formation or limited liability company

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

commitment letter or funding arrangement with any lending institution or

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

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

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

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

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

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

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

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

governmental instrumentality having jurisdiction over the Issuer or any of its

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

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

in a material modification or revocation thereof;

 

12

 

(v)           There are no litigation, proceedings

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

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

regulatory body, administrative agency or other tribunal or governmental

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

Class A Note or the other Issuer Documents, (B) seeking to prevent the issuance

of the Class B Notes or the consummation of any of the transactions

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

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

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

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

 

(vi)          All approvals, authorizations,

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

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

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

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

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

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

 

(vii)         No written materials delivered to the

Class B Note Purchaser by or on behalf of the Issuer in connection with the

sale of the Class B Notes contain any untrue statement of a material fact or

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

herein not misleading.  There is no fact

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

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

disclosed to the Purchasers’ Agent in writing which materially adversely

affects or, so far as the Issuer can now reasonably foresee, will materially

adversely affect the ability of the Issuer to perform the transactions

contemplated hereby and by the other Related Documents;

 

(viii)        The List of Engines to be created as of

the Closing Date and each supplement thereto will be available to the

Purchasers’ Agent by the Issuer and will be complete as of the date thereof and

will include an accurate (in all material respects) description of the Engines;

 

(ix)           The representations and warranties

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

respects and the Class B Note Purchaser shall be entitled to rely on such

representations and warranties;

 

(x)            Any taxes, fees and other

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

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

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

Class A Note, have been paid;

 

(xi)           To the extent the Exchange Act may be

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

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

limitation thereof; the use of the proceeds from the sale of the Class B Notes)

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

regulations issued pursuant thereto;

 

13

 

(xii)          Concurrently with the execution and

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

agreement with respect to the Class B Notes;

 

(xiii)         The Issuer is not an “investment

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

 

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

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

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

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

 

(xv)         The Issuer has not taken and will not

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

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

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

 

(xvi)        To the extent that the Securities Act

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

neither the Issuer nor any affiliate (as defined in Rule 501(b) of Regulation D

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

through any agent, including, without limitation, the Purchasers’ Agent, (i)

sold, offered for sale, solicited offers to buy or otherwise negotiated in

respect of; any security (as defined in the Securities Act) which is or will be

integrated with the sale of the Class B Notes and the Class A Note in a manner

that would render the issuance and sale of the Class B Notes or the Class A

Note a violation of the Securities Act or require the registration of the Class

B Notes or the Class A Note under the Securities Act or (ii) engaged in any

form of general solicitation or general advertising (within the meaning of

Regulation D) in connection with the offering of the Class B Notes and the

Class A Note;

 

(xvii)       To the extent that the Securities Act may

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

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

Notes in the manner contemplated by this Agreement or the Class A Note in the

manner contemplated by the Class A Note Purchase Agreement to register the

Class B Notes or the Class A Note under the Securities Act assuming that the

Class B Note Purchaser is an “accredited investor” as defined in Regulation D

under the Securities Act;

 

(xviii)      No event has occurred and is continuing

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

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

Indenture.  The Issuer is not in

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

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

 

(xix)         The aggregate amount of Scheduled

Payments payable by the Lessees under the Lease Agreements during each

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

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

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

 

14

 

(xx)          The Issuer agrees that it will not

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

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

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

Section 5 of the Securities Act.

 

SECTION 4.02.  Representations

and Warranties and Agreements of WLFC. 

WLFC hereby represents (as of the Effective Date and

as of each date on which a Loan is made by a Class B Noteholder pursuant to the

Indenture Supplement, unless otherwise indicated) and warrants to, and agrees

with, the Class B Note Purchasers that:

 

(i)            The representations and warranties

made by WLFC in this Class B Note Purchase Agreement, the Class A Note Purchase

Agreement, the Guaranty, the Contribution and Sale Agreement, the Servicing

Agreement and any other Related Document to which it is a party (collectively,

the “WLFC Documents”) are true and correct in all material respects and the

Class B Note Purchaser shall be entitled to rely on such representations and

warranties;

 

(ii)           No written materials delivered to the

Class B Note Purchasers by or on behalf of WLFC in connection with the sale of

the Class B Notes or the Class A Note contain any untrue statement of a

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

contained therein or herein not misleading. 

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

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

disclosed to the Purchasers’ Agent in writing which materially affects

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

adversely the ability of WLFC to perform the transactions contemplated hereby

and by the Base Indenture, the Indenture Supplement, the Servicing Agreement,

the Class B Notes and the Class A Note;

 

(iii)          Any taxes, fees and other governmental

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

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

on or prior to the Effective Date;

 

(iv)          To the extent that the Exchange Act

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

none of the transactions contemplated herein or in the Class A Note Purchase

Agreement (including, without limitation thereof; the use of the proceeds from

the sale of the Class B Notes and the Class A Note) will violate or result in a

violation of Section 7 of the Exchange Act or any regulations issued pursuant

thereto including, without limitation, Regulations T, U and X of the Federal

Reserve Board, 12 C.F.R., Chapter II. 

WLFC will not use any distribution from the Issuer of proceeds received

by the Issuer from the sale of the Class B Notes and the Class A Note to purchase

or carry, directly or indirectly, margin stock;

 

(v)           No event has occurred and is

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

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

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

Indenture, respectively.  WLFC is not in

violation in any material 

 

15

 

respect of any term of any agreement, charter

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

or may be bound;

 

(vi)          The aggregate amount of Scheduled

Payments payable by the Lessees under the Lease Agreements during each

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

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

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

 

(vii)         To the extent that the Securities Act

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

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

WLFC has directly, or through any agent, including, without limitation, the

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

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

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

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

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

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

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

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

Class B Notes and the Class A Note.  It

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

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

under the Securities Act.

 

ARTICLE V

REPRESENTATIONS

AND WARRANTIES OF THE PURCHASER

 

Each of the Class B Note Purchasers hereby

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

as of the Closing Date:

 

SECTION 5.01.  Organization.

 Such Class B Note Purchaser has been duly

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

the laws of its jurisdiction of incorporation, with power and authority to own

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

such Class B Note Purchaser is duly qualified to do business and is in good

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

requires it to be so qualified.

 

SECTION 5.02.  Authority, etc.  Such Class B Note Purchaser has all

requisite power and authority to enter into and perform its obligations under

this Class B Note Purchase Agreement and to  consummate the

transactions contemplated hereby.  The

execution and delivery by such Class B Note Purchaser of this Class B Note

Purchase Agreement and the consummation by such Class B Note Purchaser of the

transactions contemplated hereby have been duly and validly authorized by all

necessary corporate action on the part of such Class B Note Purchaser.  This Class B Note Purchase Agreement has

been duly and validly executed and delivered by such Class B Note Purchaser and

constitutes a legal, valid and binding obligation of such Class B Note

Purchaser, enforceable against such Class B Note Purchaser in accordance with

its terms, subject as to enforcement to bankruptcy, reorganization, insolvency,

moratorium and other similar laws of general applicability relating to or

affecting creditors’ rights and to 

 

16

 

general

principles of equity.  Neither the

execution and delivery by such Class B Note Purchaser of this Class B Note

Purchase Agreement nor the consummation by such Class B Note Purchaser of any

of the transactions contemplated hereby, nor the fulfillment by such Class B

Note Purchaser of the terms hereof, will conflict with, or violate, result in a

breach of or constitute a default under (i) any term or provision of the

Articles of Incorporation or By–laws of such Class B Note Purchaser or

any Governmental Rule applicable to such Class B Note Purchaser or (ii) any

term

or provision of any indenture or other agreement or

instrument, to which such Class B Note Purchaser is a party or by which such

Class B Note Purchaser or any portion of its properties are bound.  No Governmental Action which has not been

obtained is required by or with respect to such Class B Note Purchaser in

connection with the execution and delivery of this Class B Note Purchase

Agreement by such Class B Note Purchaser or the consummation by such Class B

Note Purchaser of the transactions contemplated hereby or thereby.

 

SECTION 5.03.  Securities Act.

 

(a)           The Class B Notes purchased by the

Class B Note Purchasers pursuant to this Class B Note Purchase Agreement will

be acquired for investment only and not with a view to any public distribution

thereof, and each Class B Note Purchaser (as to itself) will not offer to sell

or otherwise dispose of its Class B Notes (or any interest therein) in

violation of any of the registration requirements of the Securities Act or any

applicable state or other securities laws. 

The Class B Note Purchasers acknowledges that it has no right to require

the Issuer to register the Class B Notes under the Securities Act or any other

securities law.  Each of the Class B

Note Purchasers agrees that the Class B Notes may not be reoffered, resold,

pledged or otherwise transferred except in compliance with the Securities Act

and to a person that such Class B Note Purchaser reasonably believes is a

Qualified Institutional Buyer within the meaning of  Rule 144A (a “QIB”) purchasing for its own account or a QIB

purchasing for the account of a QIB, and whom the holder has informed, in each

case, that the reoffer, resale or pledge or other transfer is being made in

reliance on Rule 144A under the Securities Act.  Neither the Class B Note Purchasers nor any of their Affiliates

nor any persons acting on their behalf have engaged or will engage in any

general solicitation or general advertising with respect to the Class B Notes.

 

(b)           Each

of the Class B Note Purchasers (as to itself) is aware of the following:  (i) there are significant restrictions on

and conditions to the transferability of the Class B Notes (and the Class B

Notes will bear legends referring to such restrictions) and there is no market

for the Class B Notes and no market is expected to develop for the Class B

Notes, and accordingly, it may not be possible for a Class B Note Purchaser to

liquidate such Class B Note Purchaser’s investment in the Class B Notes; (ii)

no governmental agency has made any findings as to the fairness of the terms of

this Agreement or the terms and conditions of the Class B Notes; (iii) there

are numerous risks and uncertainties involved in such Class B Note Purchaser’s

acquisition of the Class B Notes and such Class B Note Purchaser has been

advised of and understands such risks and uncertainties; and (iv) any

projections or predictions that may have been made available to such Class B

Note Purchaser are based on estimates, assumptions, and forecasts which may

prove to be incorrect; and no assurance is given that actual results will

correspond with the results contemplated by the various projections.

 

17

 

(c)           Each

Class B Note Purchaser (as to itself) has knowledge and experience in financial

and business matters, is capable of evaluating the merits and risks of an

investment in the Class B Notes and has carefully considered the suitability of

an investment in such Notes and has determined that the Class B Notes are a

suitable investment.  Such Class B Note

Purchaser has received and carefully read the Transaction Documents and such

Class B Note Purchaser confirms that all documents, records and books

pertaining to the Class B Notes, the Issuer and its assets and the other

parties to the Transaction Documents which are relevant to such Class B Note

Purchaser’s investment decision have been made available to such Class B Note

Purchaser.  Such Class B Note Purchaser

is capable of bearing the risks and burdens of its investment in the Class B

Notes and is aware that an early redemption of the Class B Notes may occur and

that no premium will be paid upon any early redemption.

 

SECTION 5.04.  Investment Company Act.

 

(a)           Neither of the Class B Note Purchasers

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

“investment company” nor is either of the Class B Note Purchasers or the

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

the Investment Company Act.

 

(b)           The

Class B Note Purchasers and the Purchasers’ Agent acknowledge that the Issuer

has not registered as an investment company under the Investment Company

Act.  In connection with the exclusion

of the Issuer from classification as an investment company under the Investment

Company Act, each Class B Note Purchaser represents as to itself that it

constitutes no more than seven “beneficial owners” of the Class B Notes for

purposes of Section 3(c)(1) of the Investment Company Act.  Such Class B Note Purchaser further

represents that:  (i) it is investing no

more than 40% of its assets in the Class B Notes; (ii) it was not formed for

the purpose of investing in the Class B Notes; (iii) (a) the shareholders,

partners or other holders of equity or beneficial interests in such Class B

Note Purchaser are not able to decide individually whether to acquire the Class

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

defined contribution or similar benefit plan that allows participants to

determine whether or how much will be invested in investments on their behalf; (iv) it is

acquiring the Class B Notes in a principal amount of not less than the minimum

denominations set forth in the Indenture; and (v) it is acquiring the Class B

Notes for investment and not for sale in connection with any distribution

thereof.  Such Class B Note Purchaser

further understands and agrees that it will not permitted to

transfer any or all of the Class B Notes or any interest

therein unless the Issuer has consented

to such transfer and the transferee has delivered to the Issuer and the Indenture Trustee

an investment letter making representations and warranties substantially the

same as the foregoing representations and warranties in

this Section 5.04(b).  The Issuer will

not consent to any proposed

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

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

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

except as provided in Section 5.05 of this Agreement, it will not hold the

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

beneficial owner of the Class B Notes for all purposes and it will not sell

participation interests therein or enter into any arrangement pursuant to which

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

Class B Notes.

 

18

 

ARTICLE VI

COVENANTS OF THE ISSUER

 

SECTION 6.01.  [Reserved].

 

SECTION 6.02.  Information from the Issuer.  So long as the Class B Note Purchasers

shall own the Class B Notes, the Issuer will furnish to the Class B Note

Purchasers and the Purchasers’ Agent:

 

(a)           a copy of each certificate, report,

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

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

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

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

under the Indenture;

 

(b)           such other information, documents,

records or reports respecting the Collateral or the Issuer, as either Class B

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

without unreasonable expense to the Issuer;

 

(c)           such publicly available information,

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

operations, financial or otherwise of the Issuer as either Class B Note

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

 

(d)           as soon as possible and in any event

within five Business Days after the occurrence thereof, notice of

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

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

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

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

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

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

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

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

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

obligations under the Deal Documents; and

 

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

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

pursuant to Section 5.10 of the Servicing Agreement.

 

SECTION 6.03.  Access to Information.  So long as the

Class B Note Purchaser shall own any Notes, the Issuer will, at any time and

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

Issuer, permit the Class B Note Purchaser or the Purchasers’ Agent, or its

agents or representatives to:

 

(a)           examine all books, records and documents

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

the Issuer relating to the Collateral, and

 

(b)           visit the offices and property of the

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

above.

 

Except as provided in Section 10.05 hereof, any information

obtained by either Class B Note Purchaser or the Purchasers’ Agent pursuant to

this Section 6.03 shall be held in confidence by 

 

19

 

the Class B Note Purchasers or Purchasers’ Agent unless such

information (i) has become available to the public, (ii) is required or

requested by any Governmental Authority or in any court proceeding, or (iii) is

required by any Governmental Rule to be disclosed or otherwise made available

and, in the case of (ii) and (iii) such disclosure shall be only to the extent

required.

 

SECTION 6.04.  Security Interests; Further Assurances. 

The Issuer will take all action necessary to maintain the Indenture

Trustee’s first priority perfected security interest in the Collateral.

 

SECTION 6.05.  Covenants. 

The Issuer will duly observe and perform each of its covenants set forth

in the Indenture.

 

SECTION 6.06.  Securities Act.  The

Issuer agrees not to sell, offer for sale or solicit offers to buy or otherwise

negotiate in respect of any security (as defined in the Securities Act) that

would be integrated with the sale of the Class B Notes and the Class A Note in

a manner that would require the registration under the Securities Act of the

sale to the Class B Note Purchasers and the Class A Note Purchaser of the Class

B Notes and the Class A Note, respectively.

 

ARTICLE VII

MUTUAL

COVENANTS AND AGREEMENTS

 

SECTION 7.01.  Legal Conditions to Closing. 

The Class B Note Purchasers, the Purchasers’ Agent, the Issuer, and the

Servicer will take all reasonable actions necessary to comply promptly with all

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

Closing (including satisfaction of the conditions contained in this Class B

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

information to one another in connection with any such legal requirements.  The Class B Note Purchasers, the Purchasers’

Agent, the Issuer, and the Servicer will take all reasonable action necessary

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

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

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

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

by this Class B Note Purchase Agreement.

 

SECTION 7.02.  Expenses and Fees.  Subject to Section

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

incurred in connection with the  entering into

this Class B Note Purchase Agreement and the transactions contemplated hereby

shall  be paid by the Issuer.

 

SECTION 7.03.  Mutual Obligations.  On and after the

date of this Class B Note Purchase Agreement, the Class B Note Purchasers, the

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

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

reasonably require in order to carry out the intent of this Class B Note

Purchase Agreement.

 

20

 

ARTICLE VIII

INDEMNIFICATION

 

SECTION 8.01.  Indemnification by the Issuer. 

The Issuer agrees to indemnify and hold harmless the Class B Note

Purchasers and the Purchasers’ Agent, and any other Owners and any of their

respective officers, directors, employees, agents, representatives, assignees

and Affiliates (each an “Indemnified Party”) against any and all losses,

claims, damages, liabilities or expenses (including legal and accounting fees)

(collectively, “Losses”), as incurred (payable promptly upon written request),

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

representation, warranty or covenant of the Issuer in this Class B Note

Purchase Agreement or in any certificate or other written material delivered

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

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

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

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

settlement of any proceeding effected without its written consent

 

SECTION 8.02.  Procedure. 

In order for any Indemnified Party to be entitled to any indemnification

provided for under this Class B Note Purchase Agreement in respect of, arising

out of, or involving a claim made by any Person against the Indemnified Party

(a “Third Party Claim”), such Indemnified Party must notify the Issuer in

writing of the Third Party Claim within five Business Days of receipt of a

summons, complaint or other notice of the commencement of litigation and within

ten Business Days after receipt by such  Indemnified

Party of any other written notice of the Third Party

Claim.  Thereafter, the Indemnified

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

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

(including court papers) received by the Indemnified Party relating to the

Third Party Claim.

 

SECTION 8.03.  Defense of Claims.  If a Third Party

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

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

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

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

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

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

such claim in full.  Should the Issuer

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

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

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

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

respects with the Issuer in connection with such defense and (ii) not admit any

liability with respect to, or settle, compromise or discharge, such Third Party

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

the Indemnified Party shall be entitled to participate in (but not control)

such defense with its own counsel at its own expense.  If the Issuer does not assume the defense of any such Third Party

Claim, the Indemnified Party may defend the same in such manner as it may deem

appropriate, including settling such claim or litigation after giving notice to

the Issuer of such terms and, the Issuer will promptly reimburse the

Indemnified Party upon written request.

 

21

 

ARTICLE IX

THE PURCHASERS’ AGENT

 

SECTION 9.01.  Authorization and Action. 

Each Owner hereby accepts the appointment of Barclays Bank PLC, as

Purchasers’ Agent hereunder, and authorizes the Purchasers’ Agent to take such

action as agent on its behalf and to exercise such powers as are delegated to

the Purchasers’ Agent by the terms hereof, together with such powers as are

reasonably incidental thereto.  The

Purchasers’ Agent reserves the right, in its sole discretion, to take any

actions, exercise any rights or remedies under this Class B Note Purchase

Agreement and any related agreements and documents.  Except for actions which the Purchasers’ Agent is expressly

required to take pursuant to this Class B Note Purchase Agreement, the

Purchasers’ Agent shall not be required to take any action which exposes the

Purchasers’ Agent to personal liability or which is contrary to applicable law

unless the Purchasers’ Agent shall receive further assurances to its

satisfaction from the Owners of the indemnification obligations under Section

9.04 hereof against any and all liability and expense which may be incurred in

taking or continuing to take such action. 

The Purchasers’ Agent agrees to give to each Owner prompt notice of each

notice and determination given to it by the Issuer, the Servicer and the

Indenture Trustee, pursuant to the terms of this Class B Note Purchase

Agreement or the Indenture.  Subject to

Section 9.06 hereof, the appointment and authority of the Purchasers’ Agent

hereunder shall terminate upon the payment to (a) each  Sheffield Owner

of all amounts owing to such Owner hereunder and (b) the Purchasers’ Agent of

all amounts due hereunder.

 

SECTION 9.02.  Purchasers’ Agent’s Reliance, Etc. 

Neither the Purchasers’ Agent nor any of its directors, officers, agents

or employees shall be liable for any action taken or omitted to be taken by it

or them as Purchasers’ Agent under or in connection with this Class B Note

Purchase Agreement or any related agreement or document, except for its or

their own gross negligence or willful misconduct.  Without limiting the foregoing, the Purchasers’ Agent:  (i) may consult with legal counsel,

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

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

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

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

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

Servicer or the Indenture Trustee in connection with this Class B Note Purchase

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

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

Class B Note Purchase Agreement on the part of the Issuer, the Servicer or the  Indenture

Trustee or to inspect the property (including the books and records) of the

Issuer, the Servicer or the Indenture Trustee; (iv) shall not be responsible to

any Owner for the due execution, legality, validity, enforceability,

genuineness, sufficiency or value of this Class B Note Purchase Agreement or

any other instrument or document furnished pursuant hereto; and (v) shall incur

no liability under or in respect of this Class B Note Purchase Agreement by

acting upon any notice (including notice by telephone), consent, certificate or

other instrument or writing (which may be by telex) believed by it in good

faith to be genuine and signed or sent by the proper party or parties.

 

SECTION 9.03.  Purchasers’ Agent and Affiliate.  Barclays Bank PLC

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

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

business with or own securities of the 

 

22

 

Issuer or the

Servicer or any of its Affiliates, all as if Barclays Bank PLC were not the

Purchasers’ Agent and without any duty to account therefor to the Owners.

 

SECTION 9.04.  Indemnification.  Each Owner severally

agrees to indemnify the Purchasers’ Agent (to the extent not reimbursed by the

Issuer or the Servicer), from and against any and all liabilities, obligations,

losses, damages, penalties, actions, judgments, suits, costs, or reasonable

out-of-pocket expenses or disbursements of any kind or nature whatsoever which

may be imposed on, incurred by, or asserted against the Purchasers’ Agent in

any way relating to or arising out of this Class B Note Purchase Agreement or

any action taken or omitted by the Purchasers’ Agent under this Class B Note

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

portion of such liabilities, obligations, losses, damages, penalties, actions,

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

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

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

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

approved by the Class B Note Purchasers. 

Without limitation of the generality of the foregoing, each Owner agrees

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

expenses (including reasonable counsel fees) incurred by the Purchasers’ Agent

in connection with the administration, modification, amendment or enforcement

(whether through negotiations, legal proceedings or otherwise) of, or legal

advice in respect of rights or responsibilities under, this Class B Note

Purchase Agreement; provided, that no Owner shall be responsible for the costs

and expenses of the Purchasers’ Agent in defending itself against any

claim alleging the gross negligence or willful

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

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

non-appealable decision.

 

SECTION 9.05.  Purchase Decision.  Each Owner

acknowledges that it has, independently and without reliance upon the

Purchasers’ Agent, any other Owner or any of their respective Affiliates, and

based on such documents and information as it has deemed appropriate, made its

own evaluation and decision to enter into this Class B Note Purchase Agreement

and to purchase an interest in the Class B Notes.  Each Owner also acknowledges that it will, independently and

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

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

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

not taking

action under this Class B Note Purchase Agreement or

any related agreement, instrument or other document.

 

SECTION 9.06.  Successor Purchasers’ Agent.  (a) The

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

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

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

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

delayed).  If no successor Purchasers’

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

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

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

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

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

subject to the Issuer’s prior written consent. 

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

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

succeed to and become vested with all of the rights, 

 

23

 

powers,

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

Purchasers’ Agent shall be discharged from its duties and obligations under

this Class B Note Purchase Agreement. 

After any retiring Purchasers’ Agent’s resignation or removal hereunder

as Purchasers’ Agent, the provisions of this Article IX shall inure to its

benefit as to any actions taken or omitted to be taken by it while it was an

Purchasers’ Agent under this Class B Note Purchase Agreement.

 

ARTICLE X

MISCELLANEOUS

 

SECTION

10.01.  Amendments.  No amendment or

waiver of any provision of this Class B Note Purchase Agreement shall in any

event be effective unless the same shall be in writing and signed by all of the

parties hereto, and then such amendment, waiver or consent shall be effective

only in the specific instance and for the specific purpose for which given.

 

SECTION

10.02.  Notices.  All notices and

other communications provided for hereunder shall, unless otherwise stated

herein, be in writing (including telecopies) or delivered by overnight courier

service, as to each party hereto, at its address set forth below or at such

other address as shall be designated by such party in a written notice to the

other parties hereto.  All such notices

and communications shall, when telecopied or sent by overnight delivery

service, be effective with respect to telecopy notices, when the sending

machine receives confirmation of the transmission, and with respect to

overnight delivery service when confirmed by signed receipt.

 

	

  If to the

  Class B Note Purchasers:

  
	

   

  
	

  Barclays

  Bank PLC

  
	

  222

  Broadway

  
	

  New York,

  New York 10038

  
	

  Attention:  Asset Securitization Group

  
	

  Telephone

  No.  (212) 412-3266

  
	

  Facsimile

  No. (212) 412-6846

  
	

   

  
	

  Fortis Bank

  (Nederland) N.V.

  
	

  Coolsingel

  93

  
	

  3012 AE

  Rotterdam

  
	

  Attention:  Maarten Schipper

  
	

  Telephone

  No. (31) 10 401 9522

  
	

  Facsimile

  No. (31) 10 401 6118

  

 

24

 

	

   

  
	

  If to the

  Issuer:

  
	

   

  
	

  Willis

  Engine Funding LLC

  
	

  2320 Marinship

  Way

  
	

  Suite 300

  
	

  Sausalito,

  California 94965

  
	

  Telephone

  No.  (415) 331-5281

  
	

  Facsimile

  No.  (415) 331-5167

  
	

   

  
	

  If to

  Purchasers’ Agent:

  
	

   

  
	

  Barclays

  Bank PLC

  
	

  222

  Broadway

  
	

  New York,

  New York 10038

  
	

  Attention:  Asset Securitization Group

  
	

  Telephone

  No.  (212) 412-3266

  
	

  Facsimile

  No.  (212) 412-6846

  

 

SECTION

10.03.  No Waiver; Remedies.  No failure on the

part of any party hereto to exercise, and no delay in exercising, any right

hereunder shall operate as a waiver thereof; nor shall any single or partial

exercise of any right hereunder preclude any other or  further exercise

thereof or the exercise of any other right. 

The remedies herein provided are cumulative and not exclusive of any

remedies provided by law.

 

SECTION

10.04.  Binding Effect; Assignability.  This Class B Note Purchase Agreement shall be binding upon and

inure to the benefit of the Issuer, the Purchasers’ Agent and the Class B Note

Purchasers and their respective successors and assigns (including any subsequent

holders of the Class B Notes); provided, however, that the Issuer shall not

have the right to assign its rights hereunder

or any interest herein (by operation of law or

otherwise) without the prior written consent of the Class B Note

Purchasers.  The Issuer acknowledges

that the Class B Note Purchasers may at any time assign any and all of its

rights hereunder to the Owners.  This

Class B Note Purchase Agreement shall create and constitute the continuing

obligation of the parties hereto in accordance with its terms, and shall remain

in full force and effect until such time as all amounts payable with respect to

the Class B Notes shall have been paid in full.

 

SECTION 10.05. 

[Reserved].

 

SECTION

10.06.  GOVERNING LAW; JURISDICTION. 

THIS CLASS B NOTE PURCHASE AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED

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

CONFLICT OF LAW PROVISIONS.  EACH OF THE

PARTIES TO  THIS CLASS B NOTE PURCHASE AGREEMENT HEREBY

AGREES TO THE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN

DISTRICT OF NEW YORK AND ANY APPELLATE COURT HAVING JURISDICTION TO REVIEW THE

JUDGMENTS THEREOF.  EACH OF THE PARTIES

HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS AND ANY OBJECTION TO 

 

25

 

VENUE OF ANY

ACTION INSTITUTED HEREUNDER IN ANY OF THE AFOREMENTIONED COURTS AND CONSENTS TO

THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH

COURT.

 

SECTION 10.07. 

No Proceedings.  Each of the Class B Note Purchasers and the

Purchasers’ Agent agrees that so long as any of the Class B Notes shall be

outstanding or there shall not have elapsed one year plus one day since the

last day on which any of the Class B Notes shall have been outstanding, it

shall not file, or join in the filing of, a petition against the Issuer under

the Federal Bankruptcy Code, or join in the commencement of any bankruptcy,

reorganization, arrangement, insolvency, liquidation or other similar

proceeding against the Issuer.

 

SECTION 10.08.  Execution in Counterparts.  This Class B Note

Purchase Agreement may be executed in any number of counterparts and by

different parties hereto in separate counterparts, each of which when so

executed shall be deemed to be an original and all of which when taken together

shall constitute one and the same agreement.

 

SECTION

10.09.  No Recourse.  The obligations of

the Class B Note Purchasers under this Class B Note Purchase Agreement, or any

other agreement, instrument, document or certificate executed and delivered by

or issued by the Class B Note Purchasers or any officer thereof are solely the

corporate obligations of the Class B Note Purchasers.  No recourse shall be had for payment of any fee or other obligation

or claim arising out of or relating to this Class B Note Purchase Agreement or

any other agreement, instrument, document or certificate executed and delivered

or issued by a Class B Note Purchaser or any officer thereof in connection

therewith, against any stockholder, employee, officer, director or incorporator

of a Class B Note Purchaser.

 

SECTION

10.10.  Limited Recourse.  The obligations of

the Issuer under this Class B Note Purchase Agreement shall be payable only out

of the Collateral and the Class B Note Purchasers shall not look to any

property or assets of the Issuer, other than to the Collateral remaining after

all obligations of the Issuer under the Indenture are satisfied. To the extent

that the proceeds of the Collateral after application in accordance with the

provisions of the Indenture are insufficient to satisfy the obligations of the

Issuer under the Indenture and under this Agreement, the Issuer shall have no

further obligation in respect hereof and any remaining outstanding obligation

shall be extinguished.

 

SECTION

10.11.  Survival.  All

representations, warranties, guaranties and indemnifications (including the

payment obligations in Section 9.04 hereof) contained in this Class B Note

Purchase Agreement and in any document, certificate or statement delivered

pursuant hereto or in connection herewith shall survive the sale and transfer

of the Class B Notes.

 

SECTION 10.12.  Third-Party Beneficiaries.  The parties

hereto agree and acknowledge that the Owners are and shall be third-party

beneficiaries under this Class B Note Purchase Agreement.

 

26

 

SECTION 10.13.  Appointment of Agent for Service of Process. 

The Issuer hereby appoints CT Corporation Systems having

an address at 1633 Broadway, New York, New York 10019 as its agent for service of process in the State of New

York.

 

27

 

IN WITNESS WHEREOF, the parties have

caused this Class B Note Purchase Agreement to be executed by their respective

officers thereunto duly authorized, as of the date first above written.

 

	

   

  	

  WILLIS ENGINE FUNDING LLC
 as Issuer,

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/

  	

   MONICA J. BURKE

  	

   

  
	

   

  	

   

  	

  Name:  Monica J. Burke

  
	

   

  	

   

  	

  Title:  Chief Financial Officer

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  WILLIS LEASE FINANCE CORPORATION,
 as Servicer,

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/

  	

  DONALD A. NUNEMAKER

  	

   

  
	

   

  	

   

  	

  Name: Donald A.

  Nunemaker

  
	

   

  	

   

  	

  Title: Executive

  Vice President,

  Chief Operating Officer

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  FORTIS BANK (NEDERLAND) N.V.,
 as a Class B Note Purchaser

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/

  	

  M.H. SCHIPPER

  	

   

  
	

   

  	

   

  	

  Name:  M.

  H. Schipper

  
	

   

  	

   

  	

  Title:  Senior

  Manager

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/

  	

  PRG Zaman

  	

   

  
	

   

  	

   

  	

  Name:  PRG Zaman

  
	

   

  	

   

  	

  Title:  Deputy Director

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  BARCLAYS BANK PLC,
  as a Class B Note Purchaser and as
  Purchasers’ Agent

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/

  	

  PIERRE DULEYRIE

  	

   

  
	

   

  	

   

  	

  Name:   Pierre

  Duleyrie

  
	

   

  	

   

  	

  Title:  Director

  

 

1

 

SCHEDULE 1

 

Percentage

Interests in Class B Notes:

 

Barclays Bank PLC:  50%

Fortis Bank (Nederland) N.V.: 

50%

 

Account to which cash payments shall be made to Barclays Bank PLC:

 

	

  Barclays Bank PLC

  
	

  ABA #:  026-00-2574

  
	

  Account Number: 

  050-791-516

  
	

  Account Name:  Sheffield

  4(2) Funding Account

  
	

  Ref:  Willis Engine

  Finance

  
	

  Telephone:  (212)

  412-2932

  
	

  Fax:  (212) 412-6846

  
	

  e-mail: 

  pierre.duleyrie@barcap.com

  

 

Account to which cash payments shall be made to Fortis Bank

(Nederland) N.V.:

 

	

  ABN AMRO

  Bank N.V., New York

  
	

  Swift address:

  	

   

  	

  ABNAUS33

  
	

  ABA Number:

  	

   

  	

  026009580

  
	

  Account

  Number:

  	

   

  	

  63 70 70 34

  27 41

  
	

  Account

  Name:

  	

   

  	

  Fortis Bank

  (Nederland) N.V.

  
	

  Swift

  Address:

  	

   

  	

  MeesNL2A

  
	

  Reference

  	

   

  	

  For the further credit to Account Number

  25.66.24.267 / ref.: Willis Engine Funding

  

 

	

  Fortis Bank

  (Nederland) N.V.

  
	

  Coolsingel

  93, 3012

  
	

  AE

  Rotterdam

  
	

  Attention:  Maarten Schipper

  
	

  Telephone:  (31) 10 401 9522

  
	

  Fax:  (31) 10 401 6118

  

 

 

 

SCHEDULE 2

 

Conditions of the Class B

Note Purchasers’ Obligation.  The Class B Note Purchasers’ obligation to make

the initial Loan shall be subject to the accuracy in all material respects of

the representations and warranties of the Issuer and WLFC in each of the Series

2002-1 Transaction Documents, to the performance in all material respects by

WLFC and the Issuer of their respective obligations thereunder, to the

satisfaction of all of the conditions precedent set forth in Sections 5.1 and

5.2 of the Indenture Supplement and to the following additional conditions:

 

(a)           All

of the respective representations and warranties of the Issuer under the Issuer

Documents and of WLFC under the WLFC Documents shall be true and correct in all

material respects as of the date made, and no event shall have occurred which,

with notice or the passage of time, would constitute an Event of Default under

the Indenture or an Early Amortization Event under the Indenture and each of

such Issuer Documents and WLFC Documents shall have been duly authorized,

executed and delivered and shall be in full force and effect;

 

(b)           Cooley

Godward LLP shall have delivered to the Purchasers’ Agent its written opinion,

dated the Closing Date, which shall state that it may be relied upon by

subsequent Class B Noteholders, in form and substance satisfactory to the

Purchasers’ Agent and the Class B Note Purchasers, with respect to the Deal

Documents;

 

(c)           Ray

Quinney & Nebeker shall have delivered to the Purchasers’ Agent its written

opinion, dated the initial Transfer Date, which shall state that it may be

relied upon by subsequent Class B Noteholders, in form and substance

satisfactory to the Purchasers’ Agent and the Class B Note Purchasers, with

respect to the Owner Trust Documents related to each Contributed Engine

conveyed on the initial Transfer Date;

 

(d)           Gibson,

Dunn & Crutcher LLP, counsel to the Issuer, shall have furnished to the

Purchasers’ Agent its written opinions, dated the Closing Date, in form and

substance satisfactory to the Purchasers’ Agent and the Class B Note

Purchasers;

 

(e)           Gibson,

Dunn & Crutcher LLP, counsel for WLFC and the Issuer, shall have delivered

to the Purchasers’ Agent its written opinions, dated the Closing Date, in form

and substance satisfactory to the Purchasers’ Agent and the Class B Note

Purchasers;

 

(f)            Emmet,

Marvin & Martin, counsel to the Indenture Trustee, shall have furnished to

the Purchasers’ Agent and to the Issuer its written opinion, dated the Closing

Date, in form and substance satisfactory to the Purchasers’ Agent and the Class

B Note Purchasers;

 

(g)           The

Issuer shall have furnished to the Purchasers’ Agent on the Closing Date a

certificate, dated the Closing Date, signed by an authorized officer, to the

effect that:

 

(i)            The

representations and warranties made by the Issuer in the Issuer Documents are

true and correct in all material respects on the Closing Date;

 

 

 

(ii)           The

Issuer has complied with all of the agreements and satisfied all the conditions

on its part to be performed or satisfied on or prior to the Closing Date

pursuant to the terms of the Issuer Documents; and

 

(iii)          The

written information supplied by the Issuer to the Class B Note Purchasers

(other than projections and other estimates) did not contain any untrue

statement of a material fact, and any estimates or projections so supplied to

the Class B Note Purchaser were based on assumptions which the Issuer believed

to be reasonable (except as otherwise disclosed therein).

 

(h)           WLFC

shall have furnished to the Purchasers’ Agent on the Closing Date a

certificate, dated the Closing Date, signed by an authorized officer, to the

effect that:

 

(i)            The

representations and warranties made by WLFC in the WLFC Documents are true and

correct in all material respects on the Closing Date;

 

(ii)           WLFC

has complied with all of the agreements and satisfied all the conditions on its

part to be performed or satisfied on or prior to the Closing Date pursuant to

the terms of the WLFC Documents; and

 

(iii)          The

written factual information supplied by WLFC to the Class B Note Purchasers

(other than projections and other estimates) did not contain any untrue statement

of a material fact in light of the circumstances under which they were made,

and any estimates or projections so supplied to the Class B Note Purchasers

were based on assumptions which WLFC believed to be reasonable (except as

otherwise disclosed therein);

 

(i)            Any

taxes, fees and other governmental charges which are due and payable prior to

the Effective Date and the Closing Date by WLFC or the Issuer in connection

with the execution, delivery and performance of the Issuer Documents and WLFC

Documents shall have been paid at or prior to the Effective Date or the Closing

Date, as the case may be;

 

(j)            As

of the related Transfer Date, the Issuer has good title to, and is the sole

owner of, the Collateral, free and clear from any Lien except for the rights of

the Lessees under the Lease Agreements and the Lien of the Indenture Trustee

and, if applicable, the Owner Trustee, and shall not have assigned to any

Person other than the Indenture Trustee or, if applicable, the Owner Trustee,

any of its right, title or interest in the Lease Agreements, the Engines or any

other Transferred Assets;

 

(k)           The

Indenture Trustee or its agent shall have received, to be held in trust

pursuant to the Indenture and the Indenture Supplement, the Transferred Assets

including the Lease Agreements and all documents, instruments and other assets

required by the Indenture and the Indenture Supplement to be delivered to the

Indenture Trustee with respect thereto as of the Closing Date and as of each

related Transfer Date, as applicable;

 

(l)            No

fact or condition shall exist under applicable law or applicable regulations

thereunder or interpretations thereof by any regulatory authority which in the

Class B Note Purchasers’ reasonable opinion would make it illegal for the

Issuer to issue and sell the 

 

2

 

Class B Notes or for the

Issuer or any of the other parties thereto to perform their respective

obligations under any Related Document;

 

(m)          The

Asset Base as of the Closing Date shall be not less than the Outstanding

Obligation and the Subordinate Asset Base as of the Closing Date shall be not

less than the Outstanding Obligations in respect of the Class B Note;

 

(n)           The

Issuer, WLFC, the Class B Note Purchasers and the Indenture Trustee shall each

have received a fully executed counterpart original and any required conformed

copies of all Related Documents delivered at or prior to the Closing Date;

 

(o)           All

corporate, trust and other proceedings in connection with the sale of the Class

B Notes and the transactions contemplated hereby and all documents and

certificates incident thereto shall be satisfactory in form and substance to

the Class B Note Purchasers and its counsel, and the Class B Note Purchasers

shall have received such other documents and certificates incident to such

transaction as the Class B Note Purchasers or such counsel shall reasonably

request;

 

(p)           WLFC

shall have furnished to the Class B Note Purchasers or to the Purchasers’ Agent

(a) a consolidated statement of income of WLFC for the fiscal quarter ended

June 30, 2002 and a consolidated balance sheet of WLFC dated as of June 30,

2002, each of which shall be in form and substance satisfactory to the Class B

Note Purchasers and the Purchasers’ Agent, and (b) from the independent

accounting firm which regularly audits WLFC’s financial statements, a

consolidated statement of income of WLFC for the fiscal year ended December 31,

2001 and a consolidated balance sheet of WLFC dated as of December 31, 2001,

each of which shall be in form and substance satisfactory to the Class B Note

Purchasers and the Purchasers’ Agent and be certified by such accounting firm

to fairly present the financial condition of WLFC, to have been prepared in

accordance with Generally Accepted Accounting Principles applied on a basis

consistent with that of the preceding fiscal year and to have been based upon

an audit by such accounting firm made in accordance with generally accepted

auditing standards;

 

(q)           The

Class B Note Purchasers or the Purchasers’ Agent shall have received the

following, in each case in form and substance satisfactory to them and their

special counsel:

 

(i)            a

copy of resolutions of the Board of Directors of the Issuer, certified by the

Secretary or an Assistant Secretary of the Issuer as of the Effective Date,

duly authorizing the issuance, sale and delivery of the Class B Notes by the

Issuer and the execution, delivery and performance by the Issuer of the Issuer

Documents and any other Related Documents to which it is a party and any other

documents executed by or on behalf of the Issuer in connection with the

transactions contemplated hereby; and an incumbency certificate of the Issuer

as to the person or persons executing and delivering each such document;

 

(ii)           a

copy of resolutions of the Board of Directors of WLFC, certified by the

Secretary or an Assistant Secretary of WLFC as of the Effective Date, duly

authorizing the execution, delivery and performance by WLFC of the WLFC

Documents 

 

3

 

and any other Related Documents to which it is a party

and any other documents executed by or on behalf of WLFC in connection with the

transactions contemplated hereby; and an incumbency certificate of WLFC as to

the person or persons executing and delivering each such document; and

 

(iii)          such

other documents and evidence with respect to WLFC, the Issuer and the Indenture

Trustee as the Class B Note Purchasers may reasonably request in order to

establish the corporate existence and good standing of each thereof; the proper

taking of all appropriate corporate proceedings in connection with the

transactions contemplated hereby and the compliance with the conditions set

forth herein; and

 

(r)            The

Class B Note Purchasers shall receive on or before the Closing Date and each

Transfer Date, as the case may be, evidence that UCC-1 financing statements and

FAA recordations set forth in Section 2.03 of the Contribution and Sale

Agreement have been filed in the appropriate filing offices, reflecting the interest

of the Issuer and the Indenture Trustee in the Collateral;

 

(s)           [Reserved];

 

(t)            No

action or proceeding shall have been instituted nor shall any governmental

action be threatened before any court or government agency nor shall any order,

judgment or decree have been issued or proposed to be issued by any court or

governmental agency to set aside, restrain, enjoin or prevent the performance

of the Contribution and Sale Agreement, the Indenture, the other Related

Documents or any of the other agreements or the transactions contemplated

hereby;

 

(u)           [Reserved];

 

(v)           All

actions, approvals, consents, waivers, exemptions, variances, franchises,

orders, permits, authorizations, rights and licenses required to be taken,

given or obtained by or from any Federal, state or other governmental authority

or agency, or by or from any trustee or holder of any indebtedness or

obligation of WLFC or the Issuer, or that are necessary or, in the opinion of

the Class B Note Purchaser’s special counsel, advisable in connection with the

transactions contemplated herein shall have been delivered to the Class B Note

Purchasers.

 

4Exhibit

10.31

 

EXECUTION COPY

 

 

WILLIS ENGINE FUNDING LLC

 

Issuer

 

 

and

 

 

THE BANK OF NEW YORK

 

Indenture Trustee

 

 

INDENTURE

 

 

Dated as of September 12, 2002

 

 

TABLE OF CONTENTS

 

	

  ARTICLE I  DEFINITIONS

  
	

   

  
	

   

  	

  Section 101.

  	

  Defined Terms

  
	

   

  	

  Section

  102.

  	

  Other Definitional

  Provisions

  
	

   

  	

  Section 103.

  	

  Computation

  of Time Periods

  
	

   

  	

  Section

  104.

  	

  Duties of

  Administrative Agent

  
	

   

  	

   

  	

   

  
	

  ARTICLE II  THE NOTES

  
	

   

  	

   

  	

   

  
	

   

  	

  Section 201.

  	

  Authorization of

  Notes

  
	

   

  	

  Section 202.

  	

  Form of Notes

  
	

   

  	

  Section

  203.

  	

  Execution;

  Recourse Obligation

  
	

   

  	

  Section

  204.

  	

  Certificate

  of Authentication

  
	

   

  	

  Section

  205.

  	

  Registration;

  Registration of Transfer and Exchange of Notes

  
	

   

  	

  Section

  206.

  	

  Mutilated,

  Destroyed, Lost and Stolen Notes

  
	

   

  	

  Section

  207.

  	

  Delivery,

  Retention and Cancellation of Notes

  
	

   

  	

   

  	

   

  
	

  ARTICLE

  III  PAYMENT OF NOTES; STATEMENTS TO

  NOTEHOLDERS

  
	

   

  	

   

  	

   

  
	

   

  	

  Section 301.

  	

  Principal and

  Interest

  
	

   

  	

  Section 302.

  	

  Direction to

  Lessees

  
	

   

  	

  Section 303.

  	

  Trust Account

  
	

   

  	

  Section

  304.

  	

  Investment

  of Monies Held in the Trust Account, the Restricted Cash Account, Engine

  Reserve Account, the Security Deposit Account and Series Accounts

  
	

   

  	

  Section 305.

  	

  Reports to

  Noteholders

  
	

   

  	

  Section 306.

  	

  Records

  
	

   

  	

  Section 307.

  	

  Restricted Cash

  Account

  
	

   

  	

  Section 308.

  	

  Engine Reserve

  Account

  
	

   

  	

  Section 309.

  	

  Security Deposit

  Account

  
	

   

  	

  Section 310.

  	

  Securities Accounts

  
	

   

  	

   

  	

   

  
	

  ARTICLE IV  COLLATERAL

  
	

   

  	

   

  	

   

  
	

   

  	

  Section 401.

  	

  Collateral

  
	

   

  	

  Section 402.

  	

  Pro Rata Interest

  
	

   

  	

  Section

  403.

  	

  Indenture

  Trustee’s Appointment as Attorney-in-Fact

  
	

   

  	

  Section 404.

  	

  Release of

  Security Interest

  
	

   

  	

  Section 405.

  	

  Administration

  of Collateral

  
	

   

  	

  Section 406.

  	

  Quiet Enjoyment

  
	

   

  	

  Section 407.

  	

  Acknowledgment

  

 

i

 

	

  ARTICLE

  V  RIGHTS OF NOTEHOLDERS; ALLOCATION

  AND APPLICATION OF COLLECTIONS; REQUISITE GLOBAL MAJORITY

  
	

   

  	

   

  	

   

  
	

   

  	

  Section 501.

  	

  Rights of

  Noteholders

  
	

   

  	

  Section 502.

  	

  Collections

  and Allocations

  
	

   

  	

  Section

  503.

  	

  Determination

  of Requisite Global Majority

  
	

   

  	

   

  	

   

  
	

  ARTICLE VI  COVENANTS

  
	

   

  	

   

  	

   

  
	

   

  	

  Section

  601.

  	

  Payment

  of Principal and Interest; Payment of Taxes

  
	

   

  	

  Section 602.

  	

  Maintenance of

  Office

  
	

   

  	

  Section 603.

  	

  Corporate Existence

  
	

   

  	

  Section 604.

  	

  Protection of

  Collateral

  
	

   

  	

  Section 605.

  	

  Performance

  of Obligations

  
	

   

  	

  Section 606.

  	

  Negative Covenants

  
	

   

  	

  Section 607.

  	

  Non-Consolidation

  of Issuer

  
	

   

  	

  Section 608.

  	

  No Bankruptcy

  Petition

  
	

   

  	

  Section

  609.

  	

  Liens

  
	

   

  	

  Section 610.

  	

  Other Debt

  
	

   

  	

  Section

  611.

  	

  Guarantees,

  Loans, Advances and Other Liabilities

  
	

   

  	

  Section

  612.

  	

  Consolidation,

  Merger and Sale of Assets

  
	

   

  	

  Section 613.

  	

  Other Agreements

  
	

   

  	

  Section 614.

  	

  Charter Documents

  
	

   

  	

  Section 615.

  	

  Capital

  Expenditures

  
	

   

  	

  Section 616.

  	

  Permitted Activities

  
	

   

  	

  Section 617.

  	

  Investment Company

  Act

  
	

   

  	

  Section 618.

  	

  Payments of

  Collateral

  
	

   

  	

  Section 619.

  	

  Notices

  
	

   

  	

  Section 620.

  	

  Books and Records

  
	

   

  	

  Section

  621.

  	

  Taxes

  
	

   

  	

  Section 622.

  	

  Subsidiaries

  
	

   

  	

  Section 623.

  	

  Investments

  
	

   

  	

  Section 624.

  	

  Use of Proceeds

  
	

   

  	

  Section 625.

  	

  Asset Base

  Certificate

  
	

   

  	

  Section 626.

  	

  Financial

  Statements

  
	

   

  	

  Section 627.

  	

  Servicer Report

  
	

   

  	

  Section 628.

  	

  Cash Receipts Report

  
	

   

  	

  Section 629.

  	

  Annual Portfolio

  Appraisal

  
	

   

  	

   

  	

   

  
	

  ARTICLE

  VII  DISCHARGE OF INDENTURE;

  PREPAYMENTS

  
	

   

  	

   

  	

   

  
	

   

  	

  Section 701.

  	

  Full Discharge

  
	

   

  	

  Section 702.

  	

  Prepayment of Notes

  
	

   

  	

  Section 703.

  	

  Unclaimed Funds

  

 

ii

 

	

  ARTICLE

  VIII  DEFAULT PROVISIONS AND REMEDIES

  
	

   

  	

   

  	

   

  
	

   

  	

  Section 801.

  	

  Event of Default

  
	

   

  	

  Section

  802.

  	

  Acceleration

  of Stated Maturity; Rescission and Annulment

  
	

   

  	

  Section 803.

  	

  Collection of

  Indebtedness

  
	

   

  	

  Section 804.

  	

  Remedies

  
	

   

  	

  Section

  805.

  	

  Indenture

  Trustee May Enforce Claims Without Possession of Notes

  
	

   

  	

  Section

  806.

  	

  Allocation

  of Money Collected

  
	

   

  	

  Section 807.

  	

  Limitation on Suits

  
	

   

  	

  Section

  808.

  	

  Unconditional

  Right of Holders to Receive Principal and Interest

  
	

   

  	

  Section

  809.

  	

  Restoration

  of Rights and Remedies

  
	

   

  	

  Section

  810.

  	

  Rights

  and Remedies Cumulative

  
	

   

  	

  Section

  811.

  	

  Delay or

  Omission Not Waiver

  
	

   

  	

  Section

  812.

  	

  Control

  by the Control Party of the Affected Series

  
	

   

  	

  Section 813.

  	

  Waiver of Past

  Defaults

  
	

   

  	

  Section 814.

  	

  Undertaking for

  Costs

  
	

   

  	

  Section

  815.

  	

  Waiver

  of Stay or Extension Laws

  
	

   

  	

  Section 816.

  	

  Sale of Collateral

  
	

   

  	

  Section 817.

  	

  Action on Notes

  
	

   

  	

   

  	

   

  
	

  ARTICLE

  IX  CONCERNING THE INDENTURE TRUSTEE

  
	

   

  	

   

  	

   

  
	

   

  	

  Section 901.

  	

  Duties of

  Indenture Trustee

  
	

   

  	

  Section

  902.

  	

  Certain

  Matters Affecting the Indenture Trustee

  
	

   

  	

  Section 903.

  	

  Indenture

  Trustee Not Liable

  
	

   

  	

  Section

  904.

  	

  Indenture

  Trustee May Own Notes

  
	

   

  	

  Section

  905.

  	

  Indenture

  Trustee’s Fees and Expenses

  
	

   

  	

  Section

  906.

  	

  Eligibility

  Requirements for Indenture Trustee

  
	

   

  	

  Section

  907.

  	

  Resignation

  and Removal of Indenture Trustee

  
	

   

  	

  Section 908.

  	

  Successor

  Indenture Trustee

  
	

   

  	

  Section

  909.

  	

  Merger

  or Consolidation of Indenture Trustee

  
	

   

  	

  Section

  910.

  	

  Separate

  Indenture Trustees, Co-Indenture Trustees and Custodians

  
	

   

  	

  Section

  911.

  	

  Representations,

  Warranties and Covenants

  
	

   

  	

  Section 912.

  	

  Indenture

  Trustee Offices

  
	

   

  	

  Section 913.

  	

  Notice of

  Event of Default

  
	

   

  	

   

  	

   

  
	

  ARTICLE X  SUPPLEMENTAL INDENTURES

  
	

   

  	

   

  	

   

  
	

   

  	

  Section

  1001.

  	

  Supplemental

  Indentures Not Creating a New Series Without Consent of Holders

  
	

   

  	

  Section

  1002.

  	

  Supplemental

  Indentures Not Creating a New Series with Consent of Holders

  
	

   

  	

  Section

  1003.

  	

  Execution

  of Supplemental Indentures

  
	

   

  	

  Section

  1004.

  	

  Effect

  of Supplemental Indentures

  
	

   

  	

  Section

  1005.

  	

  Reference

  in Notes to Supplemental Indentures

  
	

   

  	

  Section

  1006.

  	

  Issuance of

  Series of Notes

  

 

iii

 

	

  ARTICLE XI  HOLDERS LISTS

  
	

   

  	

   

  	

   

  
	

   

  	

  Section

  1101.

  	

  Issuer to

  Furnish Indenture Trustee Names and Addresses of Holders

  
	

   

  	

  Section

  1102.

  	

  Preservation

  of Information; Communications to Holders

  
	

   

  	

   

  	

   

  
	

  ARTICLE XII  EARLY AMORTIZATION EVENT

  
	

   

  	

   

  	

   

  
	

   

  	

  Section 1201.

  	

  Early

  Amortization Event

  
	

   

  	

  Section

  1202.

  	

  Other

  Series

  
	

   

  	

   

  	

   

  
	

  ARTICLE

  XIII  MISCELLANEOUS PROVISIONS

  
	

   

  	

   

  	

   

  
	

   

  	

  Section

  1301.

  	

  Compliance

  Certificates and Opinions

  
	

   

  	

  Section

  1302.

  	

  Form

  of Documents Delivered to Indenture Trustee

  
	

   

  	

  Section 1303.

  	

  Acts of Holders

  
	

   

  	

  Section 1304.

  	

  Inspection

  
	

   

  	

  Section 1305.

  	

  Limitation of

  Rights

  
	

   

  	

  Section 1306.

  	

  Severability

  
	

   

  	

  Section 1307.

  	

  Notices

  
	

   

  	

  Section 1308.

  	

  Consent to

  Jurisdiction

  
	

   

  	

  Section 1309.

  	

  Captions

  
	

   

  	

  Section 1310.

  	

  Governing Law

  
	

   

  	

  Section 1311.

  	

  No Petition

  
	

   

  	

  Section

  1312.

  	

  General

  Interpretive Principles

  
	

   

  	

  Section

  1313.

  	

  Effective

  Date of Transaction

  
	

   

  	

  Section 1314.

  	

  Counterparts

  
	

   

  	

   

  	

   

  
	

  EXHIBIT A - Eligible Engines and Economic Life

  
	

  EXHIBIT B - Intentionally Omitted

  
	

  EXHIBIT C - Intentionally Omitted

  
	

  EXHIBIT D - Transfer Certificate (Rule 144A)

  
	

  EXHIBIT E - Transfer Certificate (other than Rule

  144A)

  
	

  EXHIBIT F - Form of Non-Recourse Release

  

 

iv

 

This Indenture, dated as of September 12, 2002 (as

amended or supplemented from time to time as permitted hereby, the

“Indenture”), between Willis Engine Funding LLC, a limited liability company

organized and existing under the laws of the State of Delaware (the “Issuer”)

and The Bank of New York, a New York banking corporation, as Indenture Trustee

(the “Indenture Trustee”).

 

W

I T N E S S E T H:

 

In consideration

of the mutual agreements herein contained, each party agrees as follows for the

benefit of the other parties, the Noteholders and any Series Enhancer.

 

GRANTING

CLAUSE

 

To secure the payment of the Outstanding Obligations

of each Series and amounts owing by the Issuer under any Interest Rate Hedge

Agreement and the performance of all of the Issuer’s covenants and agreements in

this Indenture and the related Supplement, the Issuer hereby grants, assigns,

conveys, mortgages, pledges, hypothecates and transfers to the Indenture

Trustee, for the benefit of the Noteholders of all Series, any Series Enhancer

and any Interest Rate Hedge Provider, a security interest in and to all of the

Issuer’s right, title and interest in, to and under the following, whether now

existing or hereafter created (i) all Engines, related Lease Agreements (other

than indemnification payments), other Contributed Assets identified in the

Contribution and Sale Agreement, the “Collateral” (as such term is defined in

each Owner Trustee Mortgage executed, delivered and outstanding from time to

time), and the “Collateral” (as such term is defined in each Beneficial

Interest Pledge Agreement executed, delivered and outstanding from time to

time), (ii) the Trust Account, the Restricted Cash Account, the Engine Reserve

Account, the Security Deposit Account and the Series Accounts and all amounts

and Eligible Investments on deposit from time to time in any such account to

the extent that such amounts (including Excess Cash Available for Distribution)

and Eligible Investments therein are specifically identified or allocated to

such Series in accordance with the terms of this Indenture or the related

Supplement, (iii) the Contribution and Sale Agreement and the Servicing

Agreement, the Administration Agreement, in each case, as such agreements

relate to an Eligible Engine specifically identified or allocated to a particular

Series in accordance with the terms of this Indenture and the related

Supplement, (iv) all Excess Cash Available for Distribution, (v) all income,

payments and proceeds of the foregoing and of the items identified in clause

(vi), and (vi) all of the following which arise out of or in any way relate to

(but only to the extent they relate to) an Eligible Engine identified in the

related Supplement

 

(a)           All

Accounts;

 

(b)           All

Chattel Paper;

 

(c)           All

Contracts;

 

(d)           All

Documents;

 

(e)           All

General Intangibles;

 

(f)            All

Instruments;

 

 

(g)           All

Inventory;

 

(h)           All

property of the Issuer held by the Indenture Trustee including, without

limitation, all property of every description now or hereafter in the

possession or custody of or in transit to the Indenture Trustee for any

purpose, including, without limitation, safekeeping, collection or pledge, for

the account of the Issuer, or as to which the Issuer may have any right or

power;

 

(i)            To

the extent not included above and without limiting the foregoing, all Chattel

Paper, all Leases and all schedules, supplements, amendments, modifications,

renewals, extensions, and guarantees thereof in every case whether now owned or

hereafter acquired and all amounts, rentals, proceeds and other sums of money

due and to become due under the Engine Related Agreements, including (in each

case only to the extent related to an Eligible Engine), without limitation, (i)

all rentals, payments and other moneys, including all insurance payments and

claims for losses due and to become due to the Issuer under, and all claims for

damages arising out of the breach of, any Engine Related Agreement; (ii) the

right of the Issuer to terminate, perform under, or compel performance of the

terms of the Engine Related Agreements; and (iii) any guarantee of the Engine

Related Agreements and any rights of the Issuer in respect of any subleases or

assignments permitted under the Engine Related Agreements;

 

(j)            All

insurance proceeds of the Collateral (other than proceeds of liability

insurance), all proceeds of the voluntary or involuntary disposition of the

Collateral or such proceeds;

 

(k)           Any

and all payments made or due to the Issuer in connection with any requisition,

confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral

by any Governmental Authority and any other cash or non-cash receipts from the

sale, exchange, collection or other disposition of the Collateral;

 

(l)            To

the extent not otherwise included, all income and Proceeds of each of the

foregoing and all accessions to, substitutions and replacements for, and rents,

profits and products of each of the foregoing.

 

All of the

property described in this Granting Clause is herein collectively called the

“Collateral” and as such is security for the Aggregate Outstanding Obligations.

 

ARTICLE I

DEFINITIONS

 

Section 101.  Defined

Terms. 

Capitalized terms used in this Indenture shall have the following

meanings and the definitions of such terms shall be equally applicable to both

the singular and plural forms of such terms:

 

Account

Debtor:  Any “account

debtor,” as such term is defined in Section 9-102(a)(3) of the UCC.

 

6

 

Accounts:  Any “account,” as such term is defined in

Section 9-102(a)(2) of the UCC, arising out of or in any way related to an

Eligible Engine and, in any event, shall include, without limitation, all

accounts receivable, book debts and other forms of obligations (other than

forms of obligations evidenced by Chattel Paper, Documents or Instruments) now

owned or hereafter received or acquired by or belonging or owing to the Issuer

(including, without limitation, under any trade name, style or division

thereof) whether arising out of goods sold or services rendered by the Issuer

or from any other transaction, whether or not the same involves the sale of

goods or services by the Issuer (including, without limitation, any such

obligation which may be characterized as an account or contract right under the

UCC) and all of the Issuer’s rights in, to and under all purchase orders or

receipts now owned or hereafter acquired by it for goods or services, and all

of the Issuer’s rights to any goods represented by any of the foregoing

(including, without limitation, unpaid seller’s rights of rescission, replevin,

reclamation and stoppage in transit and rights to returned, reclaimed or

repossessed goods), and all monies due or to become due to the Issuer under all

purchase orders and contracts for the sale of goods or the performance of

services or both by the Issuer (whether or not yet earned by performance on the

part of the Issuer or in connection with any other transaction), now in

existence or hereafter occurring, including, without limitation, the right to

receive the proceeds of said purchase orders and contracts, and all collateral

security and guarantees of any kind given by any Person with respect to any of

the foregoing.

 

Administration

Agreement:  The

Administration Agreement, dated as of September 12, 2002,  among the Issuer, the Servicer, the Administrative

Agent and the Indenture Trustee, as such agreement shall be modified or

supplemented from time to time in accordance with its terms.

 

Administrative

Agent:  Barclays Bank

PLC and its permitted successors and assigns.

 

Affiliate:  With respect to any Person, any other Person

directly or indirectly controlling, controlled by or under direct or indirect

common control with such specified Person. 

For the purposes of this definition, “control”, when used with respect

to any specified Person, means the power to direct the management and policies

of such Person, directly or indirectly, whether through the ownership of voting

securities, by contract or otherwise; and the terms “controlling” and

“controlled” have meanings correlative to the foregoing.

 

Aggregate

Net Book Value:  As of

any date of determination, an amount equal to the sum of the Net Book Values of

all Eligible Engines.

 

Aggregate

Outstanding Obligations: 

As of any date of determination, an amount equal to the sum of the

Outstanding Obligations for all Series of Notes then Outstanding.

 

Applicable

Percentage:  With

respect to any Series, this term is defined in Schedule 1 to the related

Supplement.

 

Appraisal:  An appraisal by one or more widely

recognized independent appraisers selected by the Servicer and acceptable to

the Administrative Agent.

 

7

 

Appraised

Value:  With respect

to an Engine, means an amount based on a minimum of one Appraisal, or, with the

consent of the Administrative Agent, two or more appraisals.  The amount determined by each Appraisal

shall be based upon the current fair market value of the Engine that would be

obtained in an arm’s-length cash transaction between willing, able and knowledgeable

parties, acting prudently, with an absence of duress and with a reasonable time

period available for marketing, adjusted to account for the maintenance status

of each Engine (which shall reflect any existing maintenance reserves).  In determining such value in the case of an

Engine, it will be assumed that (i) no value will be attributed to lease

payments made under the related Lease Agreement and (ii) no value shall be

attributed to any security deposit under the related Lease Agreement.

 

Asset

Base:  With respect to

any Series, as of any Payment Date, an amount equal to (1) the sum of (a) the

product of (i) the Applicable Percentage and (ii) the sum of (x) the Aggregate

Net Book Value as of the end of the immediately preceding Collection Period of

all Eligible Engines pledged to such Series and (y) an amount calculated as of

the end of the immediately preceding Collection Period by applying the

Depreciation Policy to Capital Improvements made to the Eligible Engines

pledged to such Series, and (b) the amount on deposit in the related Restricted

Cash Account for such Series on such Payment Date, after giving effect to all

deposits to and withdrawals from such Restricted Cash Account on such Payment

Date, minus (2) the sum of (a) any Maintenance Reserve Payments and Security

Deposits relating to such Eligible Engines pledged to such Series that are not

then on deposit in the related Engine Reserve Account and the related Security

Deposit Account, respectively, and (b) the Excess Concentration Amount (as

defined in the related Supplement).

 

Asset

Base Certificate:  A

certificate with appropriate insertions setting forth the components of the

Asset Base as of the last day of the month for which such certificate is

submitted, which certificate shall be substantially in the form of Exhibit E to

the related Supplement and shall be certified by an Authorized Signatory.

 

Authorized

Signatory:  Any Person

designated by written notice delivered to the Indenture Trustee and any Series

Enhancer as authorized to execute documents and instruments on behalf of a

Person.

 

Available

Amounts:  This term is

defined in Section 401 hereof.

 

Bankruptcy

Code:  Title 11 of the

United States Code (11 U.S.C. §§101 et  seq.) as amended from time

to time, and any successor statute.

 

Beneficial

Interest:  This term

shall have the meaning set forth in the Contribution and Sale Agreement.

 

Beneficial

Interest Pledge Agreement: 

The Beneficial Interest Pledge and Security Agreement in form and

substance satisfactory to the Administrative Agent.

 

Benefit

Plan:  This term is defined

in Section 205(e) hereof.

 

Business

Day:  Any day other

than a Saturday, a Sunday or a day on which banking institutions in New York,

New York, Sausalito, California, Rotterdam, The Netherlands,

 

8

 

or the city in which the

Corporate Trust Office of the Indenture Trustee is located, are authorized or

are obligated by law, executive order or governmental decree to be closed.

 

Capital

Improvements:  Any

capital improvements made to Eligible Engines in accordance with Section

3.01(f) of the Servicing Agreement.

 

Casualty

Loss:  (i) Any of

the following events with respect to an Eligible Engine which is not subject to

a Lease Agreement:  (a) the actual

total loss or compromised total loss of such Eligible Engine, (b) the

Issuer’s knowledge that such Eligible Engine has become lost, stolen or

destroyed, (c) 60 days following the Issuer’s determination that such

Eligible Engine is damaged beyond repair or permanently rendered unfit for use

for any reason whatsoever or (d) the seizure, condemnation or confiscation

of such Eligible Engine for a period exceeding thirty (30) days and

(ii) if such Eligible Engine is subject to a Lease Agreement, such

Eligible Engine shall have been deemed under its Lease Agreement to have

suffered a casualty loss as to the entire Eligible Engine.

 

Casualty

Proceeds:  Any payment

to, or on behalf of, the Issuer in connection with a Casualty Loss.

 

Change

of Control:  means

(i) (a) any “person” or group (as defined in Rules 13d-3 and 13-5

under the Securities Act), is or becomes the “beneficial owner” (as defined in

Rules 13d-3 and 13d-5 under the Securities Act) of a larger number of shares of

common stock of the Seller than the number of shares of common stock of the

Seller of which CHARLES F. WILLIS, IV and members of his family (including

wife, children, brothers and sisters) is the beneficial owner (as defined in

Rules 13d-3 and 13d-5 under the Securities Act) and (b) at any time during any

consecutive two-year period, individuals who at the beginning of such period

constituted the Board of Directors of the Seller (together with any new

directors whose elections by the shareholders of the Seller was approved by a

vote of 66-2/3% of the directors then still in office who were either directors

at the beginning of such period or whose election or nomination for election

was previously so approved) cease for any reason to constitute a majority of

the Board of Directors of the Seller then in office; or (ii) any “person” or

group (as defined in Rules 13d- 3 and 13-5 under the Securities Act) other than

CHARLES F. WILLIS IV, and members of his family (including wife, children,

brothers and sisters) is or becomes the “beneficial owner” (as defined in Rules

13d-3 and 13-5 under the Securities Act) of 50% or more of the shares of common

stock of the Seller.

 

Chattel

Paper:  Any lease

(including any Lease or any Lease Agreement) or other “chattel paper,” as such

term is defined in Section 9-102(a)(11) of the UCC, arising out of or in any

way related to the Eligible Engines and now owned or hereafter acquired by the

Issuer.

 

Class:  With respect to any Series, all Notes having

the same rights to payment under the related Supplement.

 

Closing

Date:  This term shall

have the meaning set forth in the related Supplement for a Series.

 

Code:  The Internal Revenue Code of 1986, as

amended, or any successor statute thereto.

 

9

 

Collateral:  This term shall have the meaning set forth

in the Granting Clause of this Indenture.

 

Collection

Period:  With respect

to the first Payment Date, the period commencing on the Closing Date and ending

on the last day of the next succeeding calendar month and thereafter for any

subsequent Payment Date the period from the first day of the calendar month

immediately preceding the month in which such Payment Date occurs through the

last day of such calendar month.

 

Collections:  With respect to any Collection Period, all

payments actually received by the Issuer with respect to the Eligible Engines

or the other items of Collateral, including, without limitation, all Engine

Revenues, Casualty Proceeds, Sales Proceeds and Warranty Purchase Amounts.  Collections for any Collection Period shall

include any of the foregoing amounts which are received in any Collection

Period but which are deposited in the Trust Account in the next month within

the time required by Section 303(a) hereof.

 

Contracts:  All contracts, undertakings, franchise

agreements or other agreements (other than rights evidenced by Chattel Paper,

Documents or Instruments), arising out of or in any way related to an Eligible

Engine or to the related Series of Notes, in or under which the Issuer may now

or hereafter have any right, title or interest, including, without limitation,

the Servicing Agreement, the Contribution and Sale Agreement, any Interest Rate

Hedge Agreements, each Beneficial Interest Pledge Agreement, each Owner Trustee

Guaranty, each Owner Trustee Mortgage, the Trust Agreement, and any related

agreements, security interests or UCC or other financing statements and, with

respect to an Account, any agreement relating to the terms of payment or the

terms of performance thereof.

 

Contributed

Assets:  This term

shall have the meaning set forth in the Contribution and Sale Agreement.

 

Contribution

and Sale Agreement: 

The Contribution and Sale Agreement, dated as of September 12, 2002,

between the Seller and the Issuer, and all amendments and supplements thereto.

 

Control

Party:  With respect

to a Series, Noteholders of such Series representing more than sixty-eight

percent (68%) of the then unpaid principal balance of all Notes Outstanding

within such Series, unless otherwise specified in the Supplement related to

such Series.  As long as Fortis Bank and

Barclays Bank PLC, or any of their Affiliates, own all of the Series 2002-1

Notes, Control Party shall mean both (1) Fortis Bank or an Affiliate designated

by it and (2) Barclays Bank PLC or an Affiliate designated by it.

To the extent that there exist only two Noteholders

for a given Series, Control Party for such Series shall mean all of such

Noteholders.

 

Corporate

Trust Office:  The

principal office of the Indenture Trustee at which at any particular time its

corporate trust business shall be administered, which office shall initially be

located at 101 Barclay Street, 8th Floor West, Asset Backed Finance

Unit, New York, New York 10286.

 

10

 

Corporate

Trust Officer:  Any

Assistant Treasurer, Assistant Trust Officer, Trust Officer, Assistant Vice

President, Vice President or Senior Vice President of the Indenture Trustee or

any other officer who customarily performs functions similar to those performed

by the Persons who at the time shall be such officers to whom any corporate

trust matter is referred because of their knowledge of and familiarity with the

particular subject.

 

Deal

Agent:  With respect

to a Series, the meaning set forth in the related Supplement.

 

Default

Interest:  The

interest specified in the related Supplement payable by the Issuer resulting

from the occurrence of an Event of Default.

 

Deficiency

Amount:  This term is

defined in Section 401 hereof.

 

Deficient

Series:  This term is

defined in Section 401 hereof.

 

Depreciation

Expense:  As of any

date of determination shall mean the depreciation expense of the Eligible

Engines for the immediately preceding four (4) fiscal quarters through the most

recently completed fiscal quarter, which depreciation expense shall be

calculated in accordance with the Depreciation Policy.

 

Depreciation

Percentage:  With

respect to any Series, this term is defined in the related Supplement.

 

Depreciation

Policy:  As of the

date hereof, (i) with respect to the Eligible Engines, straight line monthly

depreciation to the Salvage Value specified in Exhibit A over the Depreciation

Period specified in Exhibit A, and (ii) with respect to Capital Improvements

made to the Eligible Engines, straight line monthly depreciation over a period

commencing on the date on which such Capital Improvement is made to the related

Eligible Engine and ending on the last day of the Depreciation Period for such

Eligible Engine as provided in Exhibit A, depreciated to an assumed value equal

to the product of (A) the percentage specified in Exhibit A for the related

Eligible Engine under the heading “Salvage Value as % of Initial Net Book

Value” times (B) the cost of such Capital Improvement, as determined in

accordance with GAAP on the date on which such Capital Improvement is made.  As of any date other than the date hereof,

the Issuer may modify the Depreciation Policy with the prior written consent of

the Administrative Agent.

Determination

Date:  This term shall

have the meaning set forth in the related Supplement for a Series.

 

Documents:  Any “documents,” as such term is defined in

Section 9-102(a)(30) of the UCC, arising out of or in any way related to an

Eligible Engine and now owned or hereafter acquired by the Issuer.

 

Early

Amortization Event: 

The occurrence of any of the events or conditions set forth in Article

XII hereof.

 

EBIT:  For any period, earnings (loss) before Net

Interest Expense, taxes, gains and losses from the sale of plant, property and

equipment and foreign exchange transactions.

 

11

 

EBIT

Ratio:  For the

Issuer, the ratio of (a) EBIT to (b) Net Interest Expense, in each case for the

most recently concluded four (4) fiscal quarters (except for the first three

fiscal quarters of the Issuer following the Effective Date of the first Series,

EBIT and Net Interest Expense through the end of any quarter under

consideration will, for purposes of this calculation, be calculated on an

annualized basis by multiplying actual EBIT or Net Interest Expense for the

fiscal quarters which have been completed since the Effective Date of the first

Series by a fraction, the numerator of which is four (4) and the denominator of

which is the number of full fiscal quarters then completed).

 

Effective

Date:  This term shall

have the meaning set forth in the related Supplement for a Series.

 

Eligible

Account:  Either (a) a

segregated account with an Eligible Institution or (b) a segregated trust

account with the corporate trust department of a depository institution

organized under the laws of the United States of America or any of the states

thereof, including the District of Columbia (or any domestic branch of a

foreign bank), and acting as a trustee for funds deposited in such account, so

long as the senior securities of such depository institution shall have a

credit rating from each Rating Agency in one of its generic credit rating

categories no lower than “A3” or “A-”, as the case may be, or (c) any account

held with the Indenture Trustee.

 

Eligible

Engine:  This term

shall have the meaning set forth in the related Supplement for a Series.

 

Eligible

Institution:  Any one

or more of the following institutions: 

(i) the corporate trust department of the Indenture Trustee, or (ii) a

depositary institution organized under the laws of the United States of America

or any one of the states thereof or the District of Columbia (or any domestic

branch of a foreign bank), (a) which has both (x) a long-term unsecured senior

debt rating of not less than “A-” by Standard & Poor’s and “A3” by Moody’s

and (y) a short-term unsecured senior debt rating rated in the highest rating

category by each Rating Agency and (b) whose deposits are insured by the

Federal Deposit Insurance Corporation.

 

Eligible

Investments:  One or

more of the following:

 

(i)            direct obligations of, and obligations

fully guaranteed as to the timely payment of principal and interest by, the

United States or obligations of any agency or instrumentality thereof when such

obligations are backed by the full faith and credit of the United States;

 

(ii)           certificates of deposit and bankers’

acceptances (which shall each have an original maturity of not more than 365

days) of any United States depository institution or trust company incorporated

under the laws of the United States or any State and subject to supervision and

examination by federal and/or State authorities, provided that the long-term

unsecured senior debt obligations of such depository institution or trust

company at the date of acquisition thereof have been rated “A-”/”A3” or better

by the Rating Agencies, or the short-term unsecured senior debt obligations of

such depository institution or trust company are rated by each Rating Agency in

its highest rating category;

 

12

 

(iii)          commercial paper (having original

maturities of not more than 270 days) of any corporation incorporated under the

laws of the United States or any State thereof which on the date of acquisition

has been rated by each Rating Agency in the highest short-term unsecured

commercial paper rating category;

 

(iv)          any money market fund that has been

rated by each Rating Agency in its highest rating category (including any

designations of “plus” or “minus”) or that invests solely in Eligible

Investments;

 

(v)           eurodollar deposits (which shall each

have an original maturity of not more than 365 days) of any depository

institution or trust company, provided that the long-term unsecured senior debt

obligations of such depository institution or trust company at the date of

acquisition thereof have been rated “A-”/”A3” or better by the Rating Agencies,

or the short-term unsecured senior debt obligations of such depository

institution or trust company are rated by each Rating Agency in its highest

rating category; and (vi) other obligations or securities that are acceptable

to the related Series Enhancers and each Rating Agency as an Eligible

Investment hereunder and will not result in a reduction or withdrawal in the

then current rating of the Notes as evidenced by a letter to such effect from

each Rating Agency and the related Series Enhancers.

 

Eligible

Lease:  This term

shall have the meaning set forth in the related Supplement for a Series.

 

Engine:  Any aircraft engine manufactured by one of

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

A hereto.

 

Engine

Related Agreement: 

Any agreement relating to an Eligible Engine or agreements relating to

the use or management of an Eligible Engine whether in existence on any Series

Issuance Date or thereafter acquired, including, but not limited to, all

Leases, the Servicing Agreement, the Contribution and Sale Agreement and the

Chattel Paper.

 

Engine

Representations and Warranties:  This term shall have the meaning set forth in the Contribution

and Sale Agreement.

 

Engine

Reserve Account:  Any

deposit, trust, escrow or similar account maintained for the benefit of the

Noteholder of any Series or Class and any related Series Enhancer in accordance

with the provisions of Section 308 hereof.

 

Engine

Revenues:  For any

Collection Period, all amounts paid to and received by the Issuer which are

attributable to an Eligible Engine, including but not limited to (i) any

Scheduled Payment and other amounts payable by a Lessee pursuant to the related

Lease Agreement; (ii) amounts received from the manufacturers or sellers

of an Eligible Engine for breach of sale warranties relating thereto or in

settlement of any claims, losses, disputes or proceedings relating to such

Eligible Engine; (iii) amounts received from any other Person in settlement

of any claims, losses, disputes or proceedings relating to an Eligible Engine,

including insurance proceeds relating thereto; and (iv) any insurance

premiums relating to an Eligible Engine which have been refunded by the

insurer.  Notwithstanding the foregoing,

Engine Revenues do not include Sales Proceeds, Casualty Proceeds, Maintenance

Reserve Payments or

 

13

 

Security Deposits

(unless, and to the extent that, such Security Deposit is applied toward payment

of any Lessee payment obligation under the related Lease Agreement).

 

Enhancement

Agreement:  Any

agreement, instrument or document governing the terms of any Series Enhancement

or pursuant to which any Series Enhancement is issued or outstanding.

 

ERISA:  The Employee Retirement Income Security Act

of 1974, as amended.

 

ERISA

Affiliate:  With

respect to any Person, any other Person meeting the requirements of Section

414(b), (c), (m) or (o) of the Code.

 

Event

of Default:  With

respect to any Series, the occurrence of any of the events or conditions set

forth in Section 801 of this Indenture.

 

Excess

Cash Available for Distribution:  With respect to any Series on any Payment Date, the amount of

funds remaining in the related Series Account following distribution on such

Payment Date of all payments which, pursuant to the terms of the related

Supplement, have a payment priority greater than the distribution of funds to

the Issuer.

 

FAA:  The Federal Aviation Administration or any

successor organization thereto.

 

Final

Payment Date:  With

respect to any Series, the date on which the principal balance of the

Outstanding Notes of such Series is payable in full.  The Final Payment Date for a Series shall be set forth in the

related Supplement.

 

Fitch:  Fitch, Inc., a statistical rating agency, or

any successor thereto.

 

Fortis

Bank:  means Fortis

Bank (Nederland) N.V., a Dutch banking association.

 

General

Intangibles:  Any

“general intangibles,” as such term is defined in Section 9-102(a)(42) of the

UCC, arising out of or in any way related to an Eligible Engine and now owned

or hereafter acquired by the Issuer and, in any event, shall include, without

limitation, all right, title and interest which the Issuer may now or hereafter

have in or under any Contract, interests in partnerships, joint ventures and

other business associations, licenses, permits, software, data bases, data,

materials and records, claims in or under insurance policies, including

unearned premiums, uncertificated securities, deposit accounts, rights to

receive tax refunds and other payments and rights of indemnification.

 

Generally

Accepted Accounting Principles or GAAP:  With respect to any Person, those generally

accepted accounting principles and practices which are recognized as such by

(i) the American Institute of Certified Public Accountants acting through

its Accounting Principles Board or by the Financial Accounting Standards Board

or through other appropriate boards or committees thereof consistently applied

as to the party in question or (ii) such other equivalent entit(ies)

having authority for promulgatory accounting principles and practices

applicable to such Person.

 

14

 

Governmental

Authority:  This term

shall mean (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

nongovernmental authority to whose jurisdiction that Person has consented.

 

Guaranty

Fee:  A fee or premium

payable to a Series Enhancer or to another Person specified in the related

Supplement or Enhancement Agreement for guaranteeing all or a portion of the

Notes of a Series (or a Class thereof).

 

Holder:  See Noteholder.

 

Indebtedness:  With respect to any Person means, without

duplication, (a) any obligation of such Person for borrowed money,

including, without limitation, (i) any obligation incurred through the

issuance and sale of bonds, debentures, notes or other similar debt

instruments, and (ii) any obligation for borrowed money which is

non-recourse to the credit of such Person but which is secured by any asset of

such Person, (b) any obligation of such Person on account of deposits or

advances, (c) any obligation of such Person for the deferred purchase

price of any property or services, except accounts payable arising in the

ordinary course of such Person’s business, (d) any obligation of such

Person as lessee under a capital lease, (e) any Indebtedness of another

secured by a Lien on any asset of such Person, whether or not such Indebtedness

is assumed by such Person and (f) any obligation in respect of interest

rate or foreign exchange hedging agreements.

 

Indenture:  This Indenture, dated as of September 12,

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

and supplements hereto, including, with respect to any Series or Class, of the

related Supplement.

 

Indenture

Trustee:  The Person

performing the duties of the Indenture Trustee under this Indenture.

 

Indenture

Trustee’s Fees:  The

amounts payable as fees to the Indenture Trustee pursuant to the first sentence

of Section 905 of this Indenture.

 

Independent

Accountants:  KPMG LLP

or other independent certified public accountants of internationally recognized

standing selected by the Issuer and acceptable to the Administrative Agent and

each Series Enhancer.

 

Insolvency

Law:  The Bankruptcy

Code or similar law in any applicable jurisdiction.

 

Insolvency

Proceeding:  Any

Proceeding under any applicable Insolvency Law.

 

Instruments:  Any “instrument,” as such term is defined in

Section 9-102(a)(47) of the UCC arising out of or in any way related to an

Eligible Engine and now owned or hereafter acquired by the Issuer, including,

without limitation, all notes, certificated securities,

 

15

 

and other evidences of

indebtedness, other than instruments that constitute, or are a part of a group

of writings that constitute, Chattel Paper.

 

Interest

Arrearages:  With

respect to any Series on any Payment Date, any amounts that are payable as

interest on the Outstanding Notes of such Series which are not paid from

amounts then on deposit in the related Series Account.

 

Interest

Rate Hedge Agreement: 

Any interest rate swap agreement, cap agreement or other similar

agreement entered into by the Issuer with an Interest Rate Hedge Provider.

 

Interest

Rate Hedge Provider: 

Any counterparty to an Interest Rate Hedge Agreement entered into by the

Issuer or the Indenture Trustee that has a long-term rating of at least A- from

Standard & Poor’s and A3 from Moody’s and a short-term rating of at least

A1 from Standard & Poor’s and P1 from Moody’s.

 

Inventory:  Any “inventory,” as such term is defined in

Section 9-102(a)(48) of the UCC, wherever located, arising out of or in any way

related to an Eligible Engine and now or hereafter owned or acquired (whether

as lessee or otherwise) by the Issuer and, in any event, shall include, without

limitation, all inventory, merchandise, goods and other personal property which

are held by or on behalf of the Issuer for sale or lease or are furnished or

are to be furnished under a contract of service or which constitute raw

materials, work in process or materials used or consumed or to be used or

consumed in the Issuer’s business, or the processing, packaging, promotion,

delivery or shipping of the same, and all furnished goods whether or not such

inventory is listed on any schedules, assignments or reports furnished to

Indenture Trustee from time to time and whether or not the same is in transit

or in the constructive, actual or exclusive occupancy or possession of the

Issuer or is held by the Issuer or by others for the Issuer’s account,

including, without limitation, all goods covered by purchase orders and

contracts with suppliers and all goods billed and held by suppliers and all

inventory which may be located on premises of the Issuer or of any carriers,

forwarding agents, warehousemen, vendors, selling agents or other persons.

 

Investment:  When used in connection with any Person, any

investment by or of that Person, whether by means of purchase or other

acquisition of securities of any other Person or by means of loan, advance,

capital contribution, guaranty or other debt or equity participation or

interest, or otherwise, in any other Person, including any partnership and

joint venture interests of such Person in any other Person.  The amount of any Investment shall be the

original principal or capital amount thereof less all returns of principal or

equity thereon (and without adjustment by reason of the financial condition of

such other Person) and shall, if made by the transfer or exchange of property

other than cash, be deemed to have been made in an original principal or

capital amount equal to the fair market value of such property.

 

Issuer:  Willis Engine Funding LLC, a limited liability

company organized and existing under the laws of the State of Delaware.

 

Lease:  Each and every item of chattel paper,

installment sales agreement, equipment lease or rental agreement (including

progress payment authorizations) to which an

 

16

 

Eligible Engine is

subject.  The term “Lease” includes

(a) all payments to be made thereunder, (b) all rights of the Issuer

therein, and (c) any and all amendments, renewals, extensions or

guaranties thereof.

 

Lease

Agreement:  This term

shall have the meaning set forth in the related Supplement for a Series.

 

Lessee:  The obligor under a Lease Agreement

(including any guarantor of the obligations of the user of an Engine).

 

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

equity or encumbrance of any kind.

 

Maintenance

Reserve Payments: 

With respect to any Lease Agreement, any amounts paid by the Lessee to

Lessor pursuant to the terms of such Lease Agreement to cover the maintenance,

repair or similar payments and expenses for the related Engines.

 

Material

Adverse Change:  Any

set of circumstances or events which (a) has or would reasonably be

expected to have any material adverse effect whatsoever upon the validity or

enforceability of any Related Document or the security for any of the Notes,

(b) is or would reasonably be expected to be material and adverse to the

condition (financial or otherwise) or business operations of the Issuer,

Guarantor or Servicer, individually or taken together as a whole, (c) materially

impairs or would reasonably be expected to materially impair the ability of the

Issuer, Guarantor or Servicer to perform its obligations under the Related

Documents, or (d) materially impairs or would reasonably be expected to

materially impair the ability of the Indenture Trustee or any Series Enhancer

to enforce any of its or their legal rights or remedies pursuant to the Related

Documents.

 

Minimum

Servicing Fee Percentage: 

With respect to any Series, this term is defined in the related

Supplement.

 

Moody’s:  Moody’s Investors Service, Inc., a

statistical rating agency, or any successor thereto.

 

Net

Book Value:  With

respect to an Engine, the amount calculated by applying the Depreciation Policy

to the lesser of (i) the Appraised Value of such Engine on the Transfer

Date and (ii) the net book value of such Engine as reflected on the books

of the Seller on the Transfer Date.

 

Net

Purchase Price:  With

respect to an Engine as of any date of determination, an amount equal to the

Appraised Value of such Engine on the Transfer Date.

 

Net

Interest Expense:  For

any period, the net finance costs as shown for such period on the statement of

operations of the Issuer.

 

Notes:  Any one of the Notes or other securities

executed by the Issuer, and authenticated by or on behalf of the Indenture

Trustee, substantially in the form attached to the related Supplement.

 

17

 

Noteholder:  The person in whose name a Note is

registered in the Note Register, except that, solely for the purposes of giving

any consent, waiver, request or demand, the interest evidenced by any Note

registered in the name of the Seller or the Issuer or any Affiliate of any of

them known to be such an Affiliate by the Indenture Trustee shall not be taken

into account in determining whether the requisite percentage of the aggregate

principal balance of the Outstanding Notes necessary to effect any such

consent, waiver, request or demand is represented unless the Issuer owns 100%

of the Notes.

 

Note

Purchase Agreement: 

Any underwriting agreement or other agreement for the Notes of any

Series or Class.

 

Note

Register:  The

register maintained by the Indenture Trustee pursuant to Section 205 of this

Indenture.

 

Officer’s

Certificate:  A

certificate signed by a duly authorized officer of the Person who is required

to sign such certificate.

 

One

Year Lease Expiry Concentration Percentage:  As of any date of determination a fraction

(expressed as a percentage) the numerator of which shall be the sum of the Net

Book Values of all Eligible Engines subject to Lease Agreements having a

remaining lease term that will expire in the immediately succeeding twelve (12)

months and the denominator of which shall be the Aggregate Net Book Value.

 

Opinion

of Counsel:  A written

opinion of counsel, who, unless otherwise specified, may be counsel employed by

the Issuer, the Seller or the Servicer, in each case reasonably acceptable to

the Person or Persons to whom such Opinion of Counsel is to be delivered.  The counsel rendering such opinion may rely

(i) as to factual matters on a certificate of a Person whose duties relate to

the matters being certified, and (ii) insofar as the opinion relates to local

law matters, upon opinions of local counsel.

 

Outstanding:  When used with reference to the Notes and as

of any particular date, any Note theretofore and thereupon being authenticated

and delivered except:

 

(i)            any Note cancelled by the Indenture

Trustee or proven to the satisfaction of the Indenture Trustee to have been

duly cancelled by the Issuer at or before said date;

 

(ii)           any Note, or portion thereof, called

for payment or redemption for which monies equal to the principal amount or

redemption price thereof, as the case may be, with interest to the date of

maturity or redemption, shall have theretofore been deposited with the

Indenture Trustee (whether upon or prior to maturity or the redemption date of

such Note);

 

(iii)          any Note in lieu of or in substitution

for which another Note shall subsequently have been authenticated and

delivered; and

 

(iv)          any Note held by the Issuer, the

Seller or any Affiliate of either the Issuer or the Seller.

 

18

 

Notwithstanding the foregoing, any Note on which any

portion of principal or interest has been paid by a Series Enhancer pursuant to

an Enhancement Agreement, shall be Outstanding until the Series Enhancer has

been reimbursed in full therefor in accordance with the related Series

Enhancement Agreement.

 

Outstanding

Obligations:  As of any

date of determination for any Series of Notes issued under this Indenture or

any Supplement thereto, all accrued interest payable on, and the then

outstanding principal balance of, such Series of Notes and all other amounts

owing to Noteholders of such Series or to any Person under the Indenture or any

Supplement hereto, including without limitation any amounts owed to any related

Series Enhancer.

 

Overdue

Rate:  The rate of

interest specified in the related Supplement applicable to a Note then earning Default

Interest.

 

Owner

Trustee:  A bank or

trust company reasonably satisfactory to the Administrative Agent acting as

trustee under a Trust Agreement.

 

Owner

Trustee Guaranty: 

Each Owner Trustee Guaranty in the form and substance satisfactory to

the Administrative Agent which is made by any Owner Trustee for the benefit of

any Indenture Trustee under a Trust Agreement.

 

Owner

Trustee Mortgage: 

Each Mortgage and Security Agreement in the form and substance

satisfactory to the Administrative Agent which is made by any Owner Trustee in

favor of any Indenture Trustee under a Trust Agreement.

 

Payment

Date:  With respect to

any Series, this term shall have the meaning set forth in the related

Supplement.

 

Permitted

Encumbrance:  With

respect to the Collateral, any of the following:  (i) Liens for taxes not yet due or which are being contested

in good faith by appropriate Proceedings and for the payment of which adequate

reserves are provided by the Servicer; (ii) carriers’, warehousemen’s,

mechanic’s, or other like Liens arising in the ordinary course of business and

relating to amounts not yet due or which shall not have been overdue for a

period of more than sixty (60) days or which are being contested in good faith

by appropriate proceedings and for the payment of which adequate reserves are

provided by the Servicer; (iii) Lease Agreements entered into in the

ordinary course of business providing for the leasing of Eligible Engines;

(iv) Liens created by this Indenture and (v) any encumbrance

permitted under the Lease Agreement which is commercially acceptable for

comparable transactions; provided however, that Proceedings described in (i)

and (ii) above could not reasonably subject any Series Enhancer, the Indenture

Trustee or the Noteholders to any civil or criminal penalty or liability or

involve any risk of material loss, sale or forfeiture of any of the Collateral.

 

Person:  An individual, a partnership, a limited

liability company, a corporation, a joint venture, an unincorporated

association, a joint-stock company, a trust, or other entity or a Governmental

Authority.

 

19

 

Plan:  An “employee benefit plan,” as such term is

defined in ERISA, established or maintained by the Issuer or any ERISA

Affiliate or as to which the Issuer or any ERISA Affiliate contributes or is a

member or otherwise may have any liability.

 

Prepayment:  Any mandatory or optional prepayment of

principal of any Class of Notes including without limitation any prepayment

pursuant to Section 702 of this Indenture.

 

Principal

Arrearages:  With

respect to any Series on any Payment Date, any amounts that are payable as

principal on the Outstanding Notes of such Series which are not paid from

amounts then on deposit in the related Series Account.

 

Principal

Terms:  With respect

to any Series, (i) the name or designation of such Series; (ii) the initial

principal amount of the Notes to be issued for such Series (or method for

calculating such amount); (iii) the interest rate to be paid with respect to

each Class of Notes for such Series (or method for the determination thereof);

(iv) the Payment Date and the date or dates from which interest shall accrue

and principal shall be paid; (v) the designation of any Series Accounts and the

terms governing the operation of any such Series Accounts; (vi) the terms of

any form of Series Enhancement with respect thereto; (vii) the Final Payment

Date for the Series; (viii) the number of Classes of Notes of the Series and,

if the Series consists of more than one Class, the rights and priorities of

each such Class; (ix) the priority of the Series with respect to any other

Series; (x) the Control Party with respect to such Series; (xi) the Eligible

Engines that will serve as collateral security for the Notes and other

obligations of such Series; and (xii) any other terms of such Series.

 

Proceeding:  Any suit in equity, action at law, or other

judicial or administrative proceeding.

 

Proceeds:  “Proceeds,” as such term is defined in

Section 9-102(a)(64) of the UCC and, in any event, shall include, without

limitation, (a) any and all Accounts, Chattel Paper, Instruments, cash or other

proceeds payable to the Issuer from time to time in respect of the Collateral,

(b) any and all proceeds of any insurance, indemnity, warranty or guaranty

payable to the Issuer from time to time with respect to any of the Collateral,

(c) any and all payments (in any form whatsoever) made or due and payable to

the Issuer from time to time in connection with any requisition, confiscation,

condemnation, seizure or forfeiture of all or any part of the Collateral above

by any Governmental Authority (or any Person acting under color of Governmental

Authority), and (d) any and all other amounts from time to time paid or payable

under or in connection with any of the Collateral.

 

Rated

Institutional Noteholder: 

An institutional Noteholder whose long term unsecured debt obligations

are then rated “BBB-” or better by Standard & Poor’s and “Baa3” or better

by Moody’s.

 

Rating

Agency or Rating Agencies: 

With respect to any outstanding Series or Class, shall mean each

statistical rating agency selected by the Issuer (with the approval of any

Series Enhancer for such Series) to rate such Series or Class and that has an

outstanding rating with respect to such Series or Class, if any.

 

20

 

Rating

Agency Condition: 

With respect to any action shall mean that each Rating Agency shall have

notified the Issuer, the Servicer, the Administrative Agent, any related Series

Enhancer and the Indenture Trustee in writing that such action will not result

in a reduction or withdrawal of any rating at issuance of any Outstanding Notes

with respect to which it is a Rating Agency, including any underlying rating

issued to a Series Enhancer of such Notes as if such Notes were issued without

the benefit of any credit enhancement provided by such Series Enhancer.

 

Record

Date:  With respect to

any Payment Date, the last Business Day of the month preceding the month in

which the related Payment Date occurs, except as otherwise provided with

respect to a Series in the related Supplement.

 

Related

Documents:  With

respect to any Series, the Contribution and Sale Agreement, this Indenture, the

related Supplement, the Notes of such Series, the Servicing Agreement, the

Guaranty, the related Series Enhancement Agreement, the related Note Purchase

Agreements, each related Owner Trustee Guaranty, each related Owner Trustee

Mortgage, each related Beneficial Interest Pledge Agreement and each other

document or instrument executed in connection with the issuance to any Series.

 

Reportable

Event:  This term

shall have the meaning given to such term in ERISA.

 

Requisite

Global Majority:  As

of any date of determination, the determination of whether a Requisite Global

Majority exists with respect to a particular course of action shall be

determined in accordance with Section 503 of this Indenture.

 

Restricted

Cash Account:  This

term shall have the meaning set forth in Section 307 of this Indenture.

 

Rule

144A:  Rule 144A under

the Securities Act, as such Rule may be amended from time to time.

 

Sale:  This term shall have the meaning set forth

in Section 816 of this Indenture.

 

Sales

Proceeds:  The gross

proceeds of the sale or other disposition of an Eligible Engine or Casualty

Proceeds, if any, received by, or on behalf of, the Issuer in respect of an

Eligible Engine, less commissions, administrative fees, handling charges or

other amounts paid or to be paid to third parties in connection with the sale

or other disposition as determined in the sole discretion of the Servicer.

 

Scheduled

Payment:  With respect

to any Lease Agreement, the monthly, quarterly or other periodic rent payment

scheduled to be paid by the Lessee pursuant to the terms of such Lease

Agreement.

 

Securities

Accounts:  The

Restricted Cash Account and Series Accounts.

 

Securities

Act:  The Securities

Act of 1933, as amended from time to time.

 

21

 

Security

Deposit:  Any deposit

collected from, or on behalf of, a Lessee as a security deposit at the time of

origination of the Lease Agreement.

 

Security

Deposit Account:  Any

deposit, trust, escrow or similar account maintained for the benefit of the

Noteholders of any Series or Class and any related Series Enhancer in

accordance with Section 309 hereof.

 

Securities

Intermediary:  The

Bank of New York, a New York banking corporation, as securities intermediary

(as such term is defined under UCC Section 8-102(a)(14)) with respect to the Securities

Accounts.

 

Seller:  Willis Lease Finance Corporation, a

corporation organized and existing under the laws of the State of Delaware.

 

Series:  Any series of Notes established pursuant to

a Supplement.

 

Series

Account:  Any deposit,

trust, securities, escrow or similar account maintained for the benefit of the

Noteholders of any Series or Class and any related Series Enhancer as specified

in the related Supplement.

 

Series

Collateral:  This term

shall have the meaning set forth in the related Supplement for a Series.

 

Series

Enhancement:  The

rights and benefits provided to the Noteholders of any Series or Class pursuant

to any letter of credit, surety bond, financial guaranty insurance policy,

insurance agreement, cash collateral or reserve account, spread account,

guaranteed rate agreement, maturity liquidity facility, tax protection

agreement, interest rate swap agreement, interest rate cap agreement or other

similar arrangement.  The subordination

of any Class to another Class shall not be deemed to be a Series Enhancement.

 

Series

Enhancement Agreement: 

Any Enhancement Agreement for any Series.

 

Series

Enhancer:  The Person

then providing any Series Enhancement, other than the Noteholders of any Class

which is subordinated to another Class.

 

Series

Issuance Date:  With

respect to any Series, the date on which the Notes of such Series are to be

originally issued in accordance with Section 1006 of this Indenture and the

related Supplement.

 

Servicer:  The Person performing the duties of the

Servicer under the Servicing Agreement: initially, Willis Lease Finance

Corporation, a corporation organized under the laws of the State of Delaware.

 

Servicer

Default:  The

occurrence of any of the events or conditions set forth in Section 7.01 of the

Servicing Agreement.

 

Servicer

Report:  A written

informational statement in the form attached as Exhibit A to the Servicing

Agreement to be provided by the Servicer in accordance with the

 

22

 

Servicing Agreement and furnished

to the Indenture Trustee, the Administrative Agent and each Series Enhancer.

 

Servicer

Termination Notice:  A

written notice to be provided to the Servicer pursuant to Section 405(b) of

this Indenture with a copy to each Series Enhancer.

 

Servicing

Agreement:  The

Servicing Agreement, dated as of September 12, 2002, entered into by and

between the Servicer and the Issuer, as such agreement shall be amended,

supplemented or modified from time to time in accordance with its terms.

 

Servicing

Fee:  For any

Collection Period, the amount calculated as set forth in the related

Supplement.

 

Servicing

Fee Arrearage:  For

any Payment Date, an amount equal to any unpaid Servicing Fee from all prior

Collection Periods.

 

Servicing

Officer:  Any

representative of the Servicer involved in, or responsible for, the management

of the day-to-day operations of the Issuer and the administration and servicing

of the Eligible Engines and the other Collateral whose name appears on a list

of managing officers furnished to the Issuer, each Series Enhancer and the

Indenture Trustee by the Servicer, as such list may from time to time be

amended.

 

Standard

& Poor’s: 

Standard & Poor’s Ratings Services, a division of The McGraw-Hill

Companies, Inc., a statistical rating agency, or any successor thereto.

 

State:  Any state of the United States of America

and, in addition, the District of Columbia.

 

Subsidiary:  A subsidiary of a Person means any

corporation, association, partnership, limited liability company, joint venture

or other business entity of which more than fifty percent (50.0%) of the voting

stock or other equity interests (in the case of Persons other than

corporations) is owned or controlled directly or indirectly by such Person, or

one or more of the Subsidiaries of such Person, or a combination thereof.

 

Supplement:  Any supplement to the Indenture executed in

accordance with Article X of this Indenture.

 

Transfer

Date:  The date on

which an Engine is contributed or sold by the Seller to the Issuer pursuant to

the terms of the Contribution and Sale Agreement.

 

Trust

Account:  The account

or accounts established by the Issuer and WLFC Funding (Ireland) Limited for

the benefit of the Indenture Trustee pursuant to Section 303 hereof.

 

Trust

Agreement:  A Trust

Agreement in the form and substance satisfactory to the Administrative Agent to

be executed by each Owner Trustee having the Issuer as the sole beneficiary.

 

23

 

Two

Year Lease Expiry Concentration Percentage:  As of any date of determination a fraction

(expressed as a percentage) the numerator of which shall be the sum of the Net

Book Values of all Eligible Engines subject to Lease Agreements having a

remaining lease term that will expire in the immediately succeeding twenty-four

(24) months and the denominator of which shall be the Aggregate Net Book Value.

 

UCC:  The Uniform Commercial Code as the same may,

from time to time, be in effect in the State of New York; provided, however, in

the event that, by reason of mandatory provisions of law, any or all of the

attachment, perfection or priority of the Indenture Trustee’s security interest

in any Collateral is governed by the Uniform Commercial Code as in effect in a

jurisdiction other than the State of New York, the term “UCC” shall mean the

Uniform Commercial Code as in effect in such other jurisdiction for purposes of

the provisions hereof relating to such attachment, perfection or priority and

for purposes of definitions related to such provisions.

 

Warranty

Purchase Amount:  This

term shall have the meaning set forth in the Contribution and Sale Agreement.

 

Weighted

Average Lease Rate Factor: 

As of any date of determination shall mean a fraction (expressed as a

percentage) the numerator of which shall be equal to the sum of the Scheduled

Payments due in the current month under all Lease Agreements then in effect

with respect to the Eligible Engines and the denominator of which shall be

equal to the Aggregate Net Book Value as of such date of determination.

 

Wide

Body Aircraft:  Shall

mean aircraft commonly known as Boeing 747, 767 or 777, McDonnell Douglas

DC-10, MD-11 or Airbus A300, A310, A330, A340.

 

WLFC

Funding (Ireland) Limited: 

means WLFC Funding (Ireland) Limited, a company organized under the laws

of the Republic of Ireland, and a wholly owned subsidiary of the Issuer.

 

Section 102.  Other

Definitional Provisions. 

(a)  With respect to any Series,

all terms used herein and not otherwise defined herein shall have meanings

ascribed to them in the related Supplement.

 

(b)           All terms defined in this Indenture

shall have the defined meanings when used in any agreement, certificate or

other document made or delivered pursuant hereto, including any Supplement,

unless otherwise defined therein.

 

(c)           As used in this Indenture and in any

certificate or other document made or delivered pursuant hereto or thereto,

accounting terms not defined in this Indenture or in any such certificate or

other document, and accounting terms partly defined in this Indenture or in any

such certificate or other document to the extent not defined, shall have the

respective meanings given to them under GAAP consistently applied.  To the extent that the definitions of

accounting terms in this Indenture or in any such certificate or other document

are inconsistent with the meanings of such terms under GAAP or regulatory

accounting principles, the definitions contained in this Indenture or in any

such certificate or other document shall control.

 

24

 

(d)           With respect to any Collection

Period, the “related Record Date,” the “related Determination Date,” and the

“related Payment Date,” shall mean the Record Date occurring on the last

Business Day of such Collection Period and the Determination Date and Payment

Date next following the end of such Collection Period.

 

(e)           With respect to any Series of Notes,

the “related Supplement” shall mean the Supplement pursuant to which such

Series of Notes is issued and the “related Series Enhancer” shall mean the Series

Enhancer for such Series of Notes.

 

(f)            References to the Servicer’s

financial statements shall mean the consolidated financial statements of the

Servicer and its consolidated subsidiaries.

 

(g)           With respect to any ratio analysis

required to be performed as of the most recently completed fiscal quarter, the

most recently completed fiscal quarter shall mean the fiscal quarter for which

financial statements were required hereunder to have been delivered.

 

(h)           With respect to the calculations of

the ratios set forth in this Indenture, the components of such calculations are

to be determined in accordance with GAAP, consistently applied, with respect to

the Issuer or the Servicer, as the case may be.

 

(i)            References to (a) the ability of the

Administrative Agent to waive any requirement of the Indenture, any related

document or any obligation imposed on the Issuer, the Seller or the Servicer,

or (b) any provision of the Indenture or any related document that requires the

consent or approval of the Administrative Agent shall be deemed to mean that in

determining whether to grant such waiver, consent or approval, the

Administrative Agent, shall be obligated to act in a timely manner.

 

(j)            References to the transfer of an

Engine on any Transfer Date shall be deemed to include the transfer of the

Beneficial Interest in an Owner Trust which owns the applicable Engine, and

which is transferred on such Transfer Date.

 

Section 103.  Computation

of Time Periods. 

Unless otherwise stated in this Indenture  or any Supplement issued pursuant to the terms hereof, in the

computation of a period of time from a specified date to a later specified

date, the word “from” means “from and including” and the words “to” and “until”

each means “to but excluding.”

 

Section 104.  Duties of

Administrative Agent.  All of

the duties and responsibilities of the Administrative Agent set forth in this

Indenture and any Supplement issued pursuant hereto are subject in all respects

to the terms and conditions of the Administration Agreement.  Each of the Issuer, the Indenture Trustee

and, by acceptance of its Notes, each Noteholder hereby acknowledge the terms

of the Administration Agreement and agree to cooperate with the Administrative

Agent in its execution of its duties and responsibilities.  Each Noteholder, by acceptance of its Notes,

(i) authorizes and instructs the Indenture Trustee to enter into the

Administration Agreement on its behalf; (ii) acknowledges and approves the

appointment of the Administrative Agent and (iii) agrees that the Indenture

Trustee should have no liability for the acts or omissions of the

Administrative Agent.

 

25

 

ARTICLE II

THE NOTES

 

Section 201.  Authorization

of Notes. 

(a)  The number of Series or

Classes of Notes which may be created by this Indenture is not limited; provided,

however, that the Outstanding Obligations of each Series (in each

case calculated after giving effect to the issuance of each such Series) shall

not exceed an amount equal to the Asset Base for such Series.  The aggregate principal amount of Notes of

each Series which may be issued, authenticated and delivered under this

Indenture is not limited except as shall be set forth in any Supplement and as

restricted by the provisions of this Indenture.

 

(b)           The Notes issuable under this

Indenture shall be issued in such Series, and such  Class or Classes within a Series, as may from time to time be

created by Supplement pursuant to this Indenture.  Each Series shall be created by a different Supplement and shall

be designated to differentiate the Notes of such Series from the Notes of any

other Series.

 

(c)           Upon satisfaction of and compliance

with the requirements and conditions to closing set forth in the related

Supplement, Notes of the Series to be executed and delivered on a particular

Series Issuance Date pursuant to such related Supplement may be executed by the

Issuer and delivered to the Indenture Trustee for authentication following the

execution and delivery of the related Supplement creating such Series or from

time to time thereafter, and the Indenture Trustee shall authenticate and

deliver Notes upon an Issuer request set forth in an Officer’s Certificate of

the Issuer signed by one of its Authorized Signatories, without further action

on the part of the Issuer.

 

Section 202.  Form

of Notes.  Notes

of any Series or Class may be issued, authenticated and delivered in fully

registered form and shall be substantially in the form of the exhibits attached

to the related Supplement.  Notes of each

Series shall be dated the date of their authentication and shall bear interest

at such rate, be payable as to principal, premium, if any, and interest on such

date or dates, and shall contain such other terms and provisions as shall be

established in the related Supplement. 

Except as otherwise provided in any Supplement, the Notes shall be

issued in minimum denominations of $1,000,000 and in integral multiples of

$100,000 in excess thereof; provided that one Note of each Class may be issued

in a nonstandard denomination.

 

Section 203.  Execution;

Recourse Obligation. 

The Notes shall be executed on behalf of the Issuer by an Authorized

Signatory of the Issuer.

 

In case any Authorized Signatory of the Issuer whose

signature shall appear on the Notes shall cease to be an Authorized Signatory

of the Issuer before the authentication and delivery of such Notes, such

signature or facsimile signature shall nevertheless be valid and sufficient for

all purposes.

 

All Notes and the interest thereon shall be full recourse

obligations of the Issuer and shall be secured by all of the Issuer’s right,

title and interest in the Collateral. 

The Notes shall never constitute obligations of the Indenture Trustee,

the Seller (except to the extent that the Seller guarantees the Notes of a

Series) or of any shareholder or any Affiliate of the Seller (other

 

26

 

than the Issuer) or any

officers, directors, employees or agents of any thereof, and no recourse may be

had under or upon any obligation, covenant or agreement of this Indenture, any

Supplement or of any Notes, or for any claim based thereon or otherwise in

respect thereof, against any incorporator or against any past, present, or

future owner, partner of an owner or any officer, employee or director thereof

or of any successor entity, or any other Person, either directly or through the

Issuer, whether by virtue of any constitution, statute or rule of law, or by

the enforcement of any assessment or penalty or otherwise; it being expressly

agreed that this Indenture and the obligations issued hereunder are solely

obligations of the Issuer, and that no such personal liability whatever shall

attach to, or is or shall be incurred by, any other Person under or by reason

of this Indenture, any Supplement or any Notes or implied therefrom, or for any

claim based thereon or in respect thereof, all such liability and any and all

such claims being hereby expressly waived and released as a condition of, and

as a consideration for, the execution of this Indenture and the issuance of

such Notes.  Except as provided in any

Supplement, no Person other than the Issuer shall be liable for any obligation

of the Issuer under this Indenture or any Note or any losses incurred by any

Noteholder.

 

Section 204.  Certificate

of Authentication. 

No Notes shall be secured hereby or entitled to the benefit hereof or

shall be or become valid or obligatory for any purpose unless there shall be

endorsed thereon a certificate of authentication by the Indenture Trustee,

substantially in the form set forth in the form of Note attached to the related

Supplement.  Such certificate of

authentication on any Note issued by the Issuer shall be conclusive evidence

and the only competent evidence that it has been duly authenticated and

delivered hereunder.

 

At the written direction of the Issuer, the Indenture

Trustee shall authenticate and deliver the Notes.  It shall not be necessary that the same Authorized Signatory of

the Indenture Trustee execute the certificate of authentication on each of the

Notes.

 

Section 205.  Registration;

Registration of Transfer and Exchange of Notes.  (a) 

The Indenture Trustee shall keep at its Corporate Trust Office books for

the registration and transfer of the Notes (the “Note Register”).  The Issuer hereby appoints the Indenture

Trustee as its registrar and transfer agent to keep such books and make such

registrations and transfers as are hereinafter set forth in this Section 205

and also authorizes and directs the Indenture Trustee to provide a copy of such

registration record to the Administrative Agent, the Issuer and the Seller upon

request.  The names and addresses of the

Holders of all Notes and all transfers of, and the names and addresses of the

transferee of, all Notes will be registered in such Note Register.  The Person in whose name any Note is

registered shall be deemed and treated as the owner and Holder thereof for all

purposes of this Indenture, and the Indenture Trustee, the related Series

Enhancer and the Issuer shall not be affected by any notice or knowledge to the

contrary.  If a Person other than the

Indenture Trustee is appointed by the Issuer to maintain the Note Register, the

Issuer will give the Indenture Trustee and the Administrative Agent prompt

written notice of such appointment and of the location, and any change in the

location, of the successor note registrar, and the Indenture Trustee, the

Issuer, the Servicer and the related Series Enhancer shall have the right to

inspect the Note Register at all reasonable times and to obtain copies thereof,

and the Indenture Trustee shall have the right to rely upon a certificate

executed on behalf of the note registrar by an officer thereof as to the names

and addresses of the Noteholders and the principal amounts and number of such

Notes.

 

27

 

(b)           Payments of principal, premium, if

any, and interest on any Note shall be 

payable on each Payment Date only to the registered Holder thereof on

the Record Date immediately preceding such Payment Date.  The principal of, premium, if any, and

interest on each Note shall be payable at the Corporate Trust Office of the

Indenture Trustee in immediately available funds in such coin or currency of the

United States of America as at the time for payment shall be legal tender for

the payment of public and private debts. 

Except as set forth in any Supplement, all interest payable on the Notes

shall be computed on the basis of a year of 360 days for the actual number of

days (including the first but excluding the last day) elapsed.  Notwithstanding the foregoing or any

provision in any Note to the contrary, if so requested by the registered Holder

of any Note by written notice to the Indenture Trustee received by the

Indenture Trustee at least 5 Business Days prior to the Payment Date, all

amounts payable to such registered Holder may be paid either (i) by crediting

the amount to be distributed to such registered Holder to an account maintained

by such registered Holder with the Indenture Trustee or by transferring such

amount by wire to such other bank in the United States, including a Federal

Reserve Bank, as shall have been specified in such notice, for credit to the

account of such registered Holder maintained at such bank, or (ii) by mailing a

check to such address as such Holder shall have specified in such notice, in

either case without any presentment or surrender of such Note to the Indenture

Trustee at the Corporate Trust Office of the Indenture Trustee.

 

(c)           Except as otherwise set forth in a

Supplement, any Note is transferable only upon the surrender to the Indenture

Trustee of such Note together with (i) an assignment (executed by the existing

Holder or its duly authorized attorney) in form reasonably satisfactory to the

Indenture Trustee and (ii) the documents required pursuant to Sections 205(e),

(f) and (g) hereof.  Upon satisfaction

of the requirements set forth in the preceding sentence, each Holder of a Note

shall have the right, upon surrender of such Note to the Indenture Trustee, to

require a new Note or Notes of the same Series and Class to be issued to it or

to a prospective Holder, in a minimum denomination of the lesser of (x)

$1,000,000 (or such other amount as shall be set forth in the related

Supplement) or (y) the entire principal balance of the Note being surrendered,

in substitution of the Note being surrendered.

 

(d)           Any service charge made or expense

incurred by the Indenture Trustee for any 

such registration, discharge from registration or exchange referred to

in this Section 205 shall be paid by the Noteholder.  The Indenture Trustee or the Issuer may require payment by the

Holder of a sum sufficient to cover any tax, expense or other governmental

charge payable in connection therewith.

 

(e)           Each prospective initial Noteholder

acquiring a Note, each prospective owner acquiring a Note and each prospective

owner (or transferee thereof) of a beneficial interest in Notes acquiring such

beneficial interest shall represent and warrant in writing to the Indenture

Trustee, the Issuer, the Servicer and any successor Servicer that one of the

following statements is true and correct: (i) the purchaser is not an “employee

benefit plan” within the meaning of Section 3(3) of ERISA or a “plan” within

the meaning of Section 4975(e)(1) of the Code (“Benefit Plan”) and it is not

directly or indirectly acquiring the Notes on behalf of, as investment manager

of, as named fiduciary of, as trustee of, or with assets of, a Benefit Plan,

(ii) the acquisition will qualify for a statutory or administrative prohibited

transaction exemption under ERISA and the Code and will not give rise to a

non-exempt transaction described in

 

28

 

Section 406 of ERISA or

Section 4975(c) of the Code, (iii) the source of funds (the “Source”) to be

used by the Purchaser to pay the purchase price of the Notes is a guaranteed

benefit policy within the meaning of Section 401(b)(2)(B) of ERISA, or (iv) the

Source to be used by the purchaser to pay the purchase price of the Notes is an

“insurance company general account” within the meaning of Department of Labor

Prohibited Transaction Class Exemption (“PTCE”) 95-60 (issued July 12, 1995),

and there is no “employee benefit plan” or “plan” (within the meaning of

Section 3(3) of ERISA or Section 4975(e)(1) of the Code as applicable, and

treating as a single plan, all plans maintained by the same employer (or an

affiliate within the meaning of Section V(a)(1) of PTCE 95-60) or employee

organization) with respect to which the amount of the reserves and liabilities

for the general account contracts held by or on behalf of such plan, as defined

by the annual statement for life insurance companies approved by the National

Association of Insurance Commissioners (the “NAIC Annual Statement”), exceed

ten percent (10%) of the total reserves and liabilities of such general account

(exclusive of separate account liabilities) plus surplus, as set forth in the

NAIC Annual Statement filed with the purchaser’s state of domicile.

 

(f)            No

transfer of any Note shall be made unless such transfer is made in a  transaction which does not require

registration under the Securities Act and pursuant to an effective registration

or qualification under any State securities or “Blue Sky” laws, or in a transaction

which does not require such registration or qualification.  If such a transfer is to be made in reliance

upon an exemption from the Securities Act other than Rule 144A under the

Securities Act, the prospective owner shall furnish to the Indenture Trustee a

certificate substantially in the form of Exhibit E hereto.  If such transfer is to be made in reliance

upon Rule 144A under the Securities Act, the prospective owner shall furnish to

the Indenture Trustee a certificate, substantially in the form of Exhibit D

hereto.  The Issuer (or Servicer as

agent for the Issuer) shall promptly furnish to any Holder, or any prospective

owners designated by a Holder, the information required to be delivered to any

Holder and prospective owner in connection with a resale of the Notes to permit

compliance with Rule 144A in connection with such resale.  No Note may be subdivided (including any

assignment or transfer of a participation or beneficial interest therein) for

resale or other transfer into a unit smaller than a unit the initial offering

price of which would have been $1,000,000 (or such other amount as shall be set

forth in the related Supplement).

 

(g)           No

transfer of any Note shall be made unless (A) the prospective transferee of

such Note shall represent and warrant in writing to the Indenture Trustee, the

Issuer, the Servicer and any successor Servicer that:  (i) it constitutes no more than [insert number] “beneficial

owners” of the Notes for purposes of Section 3(c)(1) of the Investment Company

Act; (ii) it is investing no more than 40% of its assets in any Notes issued

under this Indenture; (iii) it was not formed for the purpose of investing in

any Notes issued under this Indenture; (iv) (a) the shareholders, partners or

other holders of equity or beneficial interests in the prospective transferee

are not able to decide individually whether to acquire such Note or to

determine the extent of such acquisition and (b) it is not a defined

contribution or similar benefit plan that allows participants to determine

whether or how much will be invested in investments on their behalf; (v) it is

acquiring such Note in a principal amount of not less than the minimum

denominations set forth in the Indenture; and (vi) it is acquiring the Notes

for investment and not for sale in connection with any distribution thereof;

and (B) the Issuer has consented to such

 

29

 

transfer; and (C) after

the proposed transfer, the total number of “beneficial owners” of all Notes

issued under this Indenture shall not exceed 100.

 

Section 206.  Mutilated,

Destroyed, Lost and Stolen Notes.  (a) 

If (i) any mutilated  Note is

surrendered to the Indenture Trustee, or the Indenture Trustee receives

evidence to its satisfaction of the destruction, loss or theft of any Note, and

(ii) there is delivered to the Indenture Trustee such security or indemnity as

it and the Issuer may require to hold the Issuer, the Servicer and the

Indenture Trustee harmless (the unsecured indemnity of a Rated Institutional

Noteholder being deemed satisfactory for such purpose unless the Indenture

Trustee provides written notice to the contrary), then the Issuer shall execute

and the Indenture Trustee shall authenticate and deliver, in exchange for or in

lieu of any such mutilated, destroyed, lost or stolen Note, a replacement Note

of the same Series and Class and maturity and of like terms as the mutilated,

destroyed, lost or stolen Note; provided, however, that if any such

destroyed, lost or stolen Note, but not a mutilated Note, shall have become, or

within seven days shall be, due and payable, or shall have been called for

redemption, the Issuer may pay such destroyed, lost or stolen Note when so due

or payable instead of issuing a replacement Note.

 

(b)           If,

after the delivery of such replacement Note, or payment of a destroyed,

lost  or stolen Note pursuant to the

proviso in the preceding sentence, a bona fide purchaser of the original Note

in lieu of which such replacement Note was issued presents for payment such

original Note, the Issuer and the Indenture Trustee shall be entitled to

recover upon the security or indemnity provided therefor to the extent of any

loss, damage, cost or expense incurred by the Issuer or the Indenture Trustee

in connection therewith.

 

(c)           The

Indenture Trustee and the Issuer may, for each new Note authenticated and  delivered under the provisions of this

Section 206, require the advance payment by the Noteholder of the expenses,

including counsel fees, service charges and any tax or governmental charge

which may be incurred by the Indenture Trustee or the Issuer.  Any Note issued under the provisions of this

Section 206 in lieu of any Note alleged to be destroyed, mutilated, lost or

stolen, shall be equally and proportionately entitled to the benefits of this

Indenture with all other Notes of the same Series and Class.  The provisions of this Section 206 are

exclusive and shall preclude (to the extent lawful) all other rights and

remedies with respect to the replacement or payment of mutilated, destroyed,

lost or stolen Notes.

 

Section 207.  Delivery,

Retention and Cancellation of Notes.  Each Noteholder is  required, and hereby agrees, to return to the Indenture Trustee,

within 30 days after the Final Payment Date, any Note on which the final payment

due thereon has been made.  Any such

Note as to which the Indenture Trustee has made or holds the final payment

thereon shall be deemed cancelled and shall no longer be Outstanding or

outstanding for any purpose of this Indenture, whether or not such Note is ever

returned to the Indenture Trustee unless any unreimbursed payment on such Note

has been made by a Series Enhancer. 

Matured Notes delivered upon final payment to the Indenture Trustee and

any Notes transferred or exchanged for other Notes shall be cancelled and

disposed of by the Indenture Trustee in accordance with its policy of disposal

and the Indenture Trustee shall promptly deliver to the Issuer such cancelled

Notes upon request; provided, however, that the Indenture

Trustee shall not be required to destroy cancelled Notes.  If the Indenture Trustee, for its own

account, shall acquire any of the Notes, such acquisition shall not operate as

a redemption or satisfaction of the indebtedness represented by such

Notes.  If the

 

30

 

Issuer shall acquire any

of the Notes, such acquisition shall operate as a redemption or satisfaction of

the indebtedness represented by such Notes. 

Notes which have been cancelled by the Indenture Trustee shall be deemed

paid and discharged for all purposes under this Indenture.

 

ARTICLE III

PAYMENT OF NOTES; STATEMENTS TO NOTEHOLDERS

 

Section 301.  Principal

and Interest. 

Distributions of principal and interest on any Series or Class of Notes

shall be made to Noteholders of each Series and Class as set forth in this

Indenture and the related Supplement. 

The maximum Overdue Rate under any Series shall be 2.00% plus the

applicable interest rate for such Note prior to the default.  If interest or principal amounts are paid by

a Series Enhancer, then the Overdue Rate shall be applicable to any Class of

Notes only if the related Series Enhancer has failed to make payment of such

amounts in accordance with the terms of any applicable Series Enhancement

Agreement.

 

Section 302.  Direction

to Lessees.  On or

prior to each Transfer Date, the Issuer 

shall (or shall cause the Servicer to) mail a notice to each Lessee

under the Lease Agreements contributed to the Issuer pursuant to the

Contribution and Sale Agreement on such Transfer Date informing such Lessee

that all payments including, without limitation, all Scheduled Payments,

Maintenance Reserve Payments and Security Deposits, with respect to the related

Lease Agreement should be submitted directly to the Trust Account; provided,

however, that such notice shall provide that any indemnification

payments and liability insurance payments shall not be deposited in the Trust

Account but shall be paid directly to the person entitled to such

indemnification or insurance payment.

 

Section 303.  Trust

Account.  (a)  On or prior to the Effective Date of the

first Series, the Issuer shall, and will cause WLFC Funding (Ireland) Limited

to, establish and maintain the Trust Account into which all Collections (other

than amounts received from manufacturers or sellers of an Eligible Engine for

breach of sale warranties or in settlement of any claims, losses, disputes or

proceedings related thereto for which a corresponding amount has previously

been paid by the Issuer, WLFC Funding (Ireland) Limited, Seller or Servicer to

the Trust Account), Prepayments after an Early Amortization Event, Prepayments

designated by the Issuer or WLFC Funding (Ireland) Limited to be deposited in

the Trust Account prior to the occurrence of an Early Amortization Event,

Warranty Purchase Amounts and other payments required by this Indenture shall

be deposited.  Such Trust Account shall

be established and maintained with the Corporate Trust Office of the Indenture

Trustee in trust for the Indenture Trustee, on behalf of the Noteholders and

any Series Enhancer, until the Aggregate Outstanding Obligations are paid in

full.  The Trust Account shall be an

Eligible Account and shall be pledged to the Indenture Trustee pursuant to the

terms of this Indenture (or, in the case of the Trust Account maintained by

WLFC Funding (Ireland) Limited, pursuant to an instrument in form and substance

satisfactory to the Deal Agent for each Series which the Issuer will cause WLFC

Funding (Ireland) Limited to execute and deliver).  Promptly upon receipt thereof (but in no event later than two

Business Days after receipt), the Servicer shall deposit into the Trust Account

those amounts that have been remitted directly to the Servicer that the

Servicer ascertains to be Engine Revenues, Sales Proceeds or Casualty Proceeds

in respect of any of the Eligible Engines; provided, however, that indemnification

payments and liability insurance payments received by the Issuer, WLFC Funding

(Ireland) Limited or the Servicer shall not be

 

31

 

deposited in the Trust

Account but shall be paid directly to the Person entitled to such

indemnification or insurance payment. 

The Issuer will not, and will not permit WLFC Funding (Ireland) Limited

to, establish any additional Trust Accounts without prior written notice to the

Indenture Trustee.

 

(b)           By not later than each Determination

Date, the Servicer, pursuant to the 

Servicing Agreement, shall instruct in writing the Indenture Trustee to

allocate all Collections and Prepayments for the related Collection Period then

on deposit in the Trust Account to each Series Account (provided, however, that the

Servicer shall instruct in writing the Indenture Trustee to allocate any

Maintenance Reserve Payments and Security Deposits directly to each Engine

Reserve Account and Security Deposit Account, respectively, for each Series) by

specifically identifying such Collections and Prepayments (and such Maintenance

Reserve Payments and Security Deposits) to a particular Eligible Engine and

then instructing in writing the Indenture Trustee to allocate all of such

amounts to the Series Account, the Engine Reserve Account and the Security

Deposit Account for the Series to which such Eligible Engine is pledged.  In addition, the Servicer shall instruct in

writing the Indenture Trustee to allocate any earnings on Eligible Investments

in the Trust Account to the Series Account for each Series then Outstanding in

the same proportion as the ratio of the Outstanding Obligations of such Series

to the Aggregate Outstanding Obligations.

 

(c)           If any Series has more than one Class

of Notes then Outstanding, then the 

portion of the investment earnings in the Trust Account allocable to

such Series pursuant to Section 303(b) shall be calculated without giving

effect to the payment priorities of the Classes of such Series.  Once such Collections and investment

earnings have been allocated to each Series, then that portion of the

Collections allocable to such Series shall be paid to each Class of Noteholders

of such Series in accordance with the priority of payments set forth in the

related Supplement.

 

Section 304.  Investment

of Monies Held in the Trust Account, the Restricted Cash Account, Engine

Reserve Account, the Security Deposit Account and Series Accounts.  The Indenture Trustee shall invest any cash

deposited in the Trust Account, the Engine Reserve Account, the Security

Deposit Account, the Restricted Cash Account and each Series Account in such

Eligible Investments as the Servicer shall direct in writing or by telephone,

confirmed in writing.  Each Eligible

Investment (including reinvestment of the income and proceeds of Eligible

Investments) shall be held to its maturity and shall mature or shall be payable

on demand not later than the Business Day immediately preceding the next

succeeding Payment Date.  If the

Indenture Trustee has not received written instructions from the Servicer by

2:30 p.m. (New York time) on the day such funds are received as to the

investment of funds then on deposit in any of the aforementioned accounts, the

Issuer hereby instructs the Indenture Trustee to, and will cause WLFC Funding

(Ireland) Limited to instruct the Indenture Trustee to,  invest such funds in overnight investments

of the type described in clause (ii) of the definition of Eligible

Investments.  Any funds in the Trust

Account, the Engine Reserve Account, the Security Deposit Account, the

Restricted Cash Account and each Series Account not so invested must be fully

insured by the Federal Deposit Insurance Corporation.  Eligible Investments shall be made in the name of the Indenture

Trustee for the benefit of the Noteholders and any Series Enhancer.  Any earnings on Eligible Investments in the

Trust Account, the Engine Reserve Account, the Security Deposit Account, the

Restricted Cash Account and each Series Account shall be

 

32

 

retained in each such

account and be distributed in accordance with the terms of this Indenture or

any related Supplement.  The Indenture

Trustee shall not be liable or responsible for losses on any investments made

by it pursuant to this Section 304.

 

Section 305.  Reports

to Noteholders. 

The Indenture Trustee shall promptly upon  request furnish to each Noteholder and each Series Enhancer a

copy of all reports, financial statements and notices received by the Indenture

Trustee pursuant to the Contribution and Sale Agreement or the Servicing

Agreement.

 

Section 306.  Records.  The Indenture Trustee shall cause to be kept

and maintained  adequate records

pertaining to the Trust Account, each Restricted Cash Account, each Engine

Reserve Account, each Security Deposit Account and each Series Account and all

receipts and disbursements therefrom. 

The Indenture Trustee shall deliver at least monthly an accounting

thereof in the form of a trust statement to the Issuer, the Seller and the

Servicer and each Series Enhancer.

 

Section 307.  Restricted

Cash Account.  The

Issuer shall establish and maintain an 

account with the Corporate Trust Office of the Indenture Trustee with

subaccounts for each Series, as provided in the related Supplement for a

Series, which shall be designated the restricted cash account (the “Restricted

Cash Account”) for each such Series and which shall be pledged to the Indenture

Trustee pursuant to this Indenture and the related Supplement.  Any and all monies remitted by the Issuer,

or Servicer on its behalf, to the Restricted Cash Account from the Trust

Account, together with any Eligible Investments in which such monies are or

will be invested or reinvested, shall be held in the Restricted Cash Account

subaccount for each such Series.

 

Section 308.  Engine

Reserve Account. 

(a)  The Issuer shall establish

and maintain an account with the Corporate Trust Office of the Indenture

Trustee with subaccounts for each Series, as provided in the related Supplement

for a Series, which shall be designated the engine reserve account (the “Engine

Reserve Account”) for each such Series and which shall be pledged to the

Indenture Trustee pursuant to this Indenture and the related Supplement.  The Maintenance Reserve Payments remitted by

the Issuer, the Servicer on its behalf or by the Lessees, as provided in the

related Supplement for a Series, to the Engine Reserve Account from the Trust

Account, together with any Eligible Investments in which such monies are or

will be invested or reinvested, shall be held in the Engine Reserve Account

subaccount for each such Series.

 

(b)           The Issuer shall maintain (or shall

cause the Servicer to maintain) records that 

will identify amounts on deposit in the Engine Reserve Account

subaccount to a specific Eligible Engine. 

The Servicer shall be entitled to withdraw funds from the Engine Reserve

Account for the payment of maintenance expenses with respect to the related

Eligible Engine, at the times and subject to the further conditions set forth

in the Servicing Agreement; provided, however, that so long as a

Servicer Default is then in effect, the Servicer shall not be entitled to make

such withdrawal except upon presentation of supporting documentation reasonably

determined by the Administrative Agent to comply with the terms of the

applicable Lease Agreement (which shall evidence its determination by written

instrument delivered to the Indenture Trustee).

 

33

 

Section 309.  Security

Deposit Account. 

(a)  The Issuer shall establish

and maintain an account with the Corporate Trust Office of the Indenture

Trustee with subaccounts for each Series, as provided in the related Supplement

for a Series, which shall be designated the security deposit account (the

“Security Deposit Account”) for each such Series and which shall be pledged to

the Indenture Trustee pursuant to this Indenture and the related Supplement.  The Security Deposits remitted by the

Issuer, the Servicer on its behalf or by the Lessees, as provided in the

related Supplement for a Series, to the Security Deposit Account from the Trust

Account, together with any Eligible Investments in which such monies are or

will be invested or reinvested, shall be held in the Security Deposit Account

subaccount for each such Series.

 

(b)           The Issuer shall maintain (or shall

cause the Servicer to maintain) records that 

will identify amounts on deposit in the Security Deposit Account

subaccount to a specific Eligible Engine. 

The Servicer shall be entitled to withdraw funds from the Security

Deposit Account in accordance with the terms of the applicable Lease Agreement

with respect to the related Eligible Engine, subject to the further conditions

set forth in the Servicing Agreement; provided, however, that so long as a

Servicer Default is then in effect, the Servicer shall not be entitled to make

such withdrawal except upon presentation of supporting documentation reasonably

determined by the Administrative Agent to comply with the terms of the

applicable Lease Agreement (which shall evidence its determination by written

instrument delivered to the Indenture Trustee).

 

Section 310.  Securities

Accounts.

 

(a)           Notwithstanding any other provision

of this Indenture or any Supplement, with respect to each of the Securities

Accounts, the Securities Intermediary hereby agrees that it will comply with

entitlement orders (as such term is defined under UCC Section 8-102(a)(8))

originated by the Indenture Trustee without further consent by the Issuer.

 

(b)           Each of the Issuer, the Securities

Intermediary and the Indenture Trustee intends that the provisions of Section

310(a) will give the Indenture Trustee “control” over the Securities Accounts

(as the term “control” is defined under UCC Section 8-106(d)), without

prejudice to any other provision of the UCC that also would be deemed to give

the Indenture Trustee such control.

 

ARTICLE IV

COLLATERAL

 

Section 401.  Collateral.  (a) 

The Notes and the obligations of the Issuer hereunder shall be an

obligation of the Issuer as provided in Section 203 hereof.  The Indenture Trustee, for the benefit of

the Noteholders of all Series, and the Noteholders of a particular Series and

the Series Enhancer (if any) of such Series, all in accordance with the

Supplement for such Series, shall also have the benefit of, and the Notes of

such Series shall be secured by and be payable from, the Issuer’s right, title

and interest in that portion of the Collateral allocated or identified to such

Series in accordance with the terms of this Indenture and the Supplement

pursuant to which such Notes were issued.

 

34

 

(b)           Notwithstanding anything contained in

this Indenture to the contrary, the Issuer expressly agrees that it shall

remain liable under each of its Contracts to observe and perform all the

conditions and obligations to be observed and performed by it thereunder and

that it shall perform all of its duties and obligations thereunder, all in

accordance with and pursuant to the terms and provisions of each such Contract.

 

(c)           Pursuant to the Servicing Agreement

the Issuer shall cause the Servicer to collect the Accounts in accordance with

the Servicer’s normal business practice; provided, however, that the Indenture

Trustee, with the consent of, or at the direction of, the Requisite Global

Majority, may, without notice, limit or terminate such authority upon (i) the

occurrence of an Event of Default described in Section 801(ii) hereof, or (ii)

any Sale of the Collateral pursuant to Section 816 hereof or (iii) the

occurrence of a Servicer Default.  Any

Proceeds subsequently received in payment of any such Account or in payment for

any of the Eligible Engines or on account of any of its Contracts shall be

promptly deposited by the Issuer in precisely the form received (with all

necessary endorsements) in the Trust Account as hereinafter provided, and until

so turned over shall be deemed to be held in trust by the Issuer for and as the

Indenture Trustee’s property.  Such

Proceeds, when deposited, shall continue to be collateral security for all of

the obligations secured by this Indenture and shall not constitute payment

thereof until applied as hereinafter provided. 

Upon (i) the occurrence of an Event of Default described in Section

801(ii), or (ii) any Sale of the Series Collateral pursuant to Section 816

hereof or (iii) the occurrence of a Servicer Default, the Issuer shall at the

request of the Indenture Trustee, with the consent of or at the direction of

the Requisite Global Majority, to the extent practicable, deliver to the

Indenture Trustee (or such other Person as the Indenture Trustee may direct)

all original Lease Agreements and any other documents evidencing, and relating

to, the sale, lease and delivery of the Eligible Engines and the Issuer shall,

to the extent practicable, deliver all original and other documents evidencing

and relating to, the performance of any labor, maintenance, remarketing or

other service which gave rise to such Accounts, including, without limitation,

all original orders, invoices and shipping receipts.

 

(d)           On each Payment Date under each

Supplement for a Series, after payment of all other amounts then payable to the

Indenture Trustee, any Noteholder or any other Person entitled thereto (except

the Issuer), all Excess Cash Available for Distribution shall be paid to the

Indenture Trustee for payment to the Noteholders under all other Series (each,

a “Deficient Series”) of the amount (the “Deficiency Amount”) by which the

amounts on deposit in the related Series Account are insufficient for the

payment in full of all Outstanding Obligations then due and payable.  Such Excess Cash Available for Distribution

shall be paid to the Indenture Trustee(s) for each such Deficient Series in the

proportion that the Outstanding Obligations for each such Deficient Series

bears to the aggregate amount of Outstanding Obligations for all such Deficient

Series.  Only after all Deficiency Amounts

existing on such Payment Date have been paid in full shall any such Excess Cash

Available for Distribution be paid to the Issuer.

 

Section 402.  Pro

Rata Interest. 

(a)  Each Supplement pursuant to

which a Series of Notes is issued shall identify the Eligible Engines and other

Series Collateral that will be pledged as collateral security for the Notes and

other Obligations for such Series.  All

Notes of a particular Series shall be equally and ratably entitled to the

benefits of this Indenture without preference, priority or distinction, except

as provided in the related Supplement. 

All Notes of a particular Class within a Series are and are to be, to

the extent (including any exceptions)

 

35

 

provided in this

Indenture and the related Supplement, equally and ratably secured by this

Indenture without preference, priority or distinction on account of the actual

time or times of the authentication or delivery of the Notes so that all Notes

of a particular Series and Class at any time Outstanding shall have the same

right, Lien and preference under this Indenture and shall all be equally and

ratably secured hereby with like effect as if they had all been executed,

authenticated and delivered simultaneously on the date hereof.

 

(b)           With respect to each Series of Notes,

the execution and delivery of the related 

Supplement shall be upon the express condition that if the conditions

specified in Section 701 of this Indenture are met with respect to such Series

of Notes, the security interest and all other estate and rights granted by this

Indenture with respect to such Series of Notes shall cease and become null and

void and all of the property, rights and interest granted as security for the

Notes of such Series shall revert to and revest in the Issuer without any other

act or formality whatsoever.

 

Section 403.  Indenture

Trustee’s Appointment as Attorney-in-Fact.  (a) 

The Issuer hereby irrevocably constitutes and appoints the Indenture

Trustee, and any officer or agent thereof, with full power of substitution, as

its true and lawful attorney-in-fact with full irrevocable power and authority

in the place and stead of the Issuer and in the name of the Issuer or in its

own name, from time to time at the Indenture Trustee’s discretion, for the

purpose of carrying out the terms of this Indenture, to take any and all

appropriate action and to execute and deliver any and all documents and

instruments which may be necessary or desirable to accomplish the purposes of

this Indenture; provided, however, that the Indenture Trustee has no

obligation or duty to determine whether to perfect, file, record or maintain

any perfected, filed or recorded document or instrument in connection with the

grant or security interest in the Collateral hereunder.

 

(b)           Except upon the occurrence of an

Event of Default, the Indenture Trustee shall not exercise the power of

attorney or any rights granted to the Indenture Trustee pursuant to this

Section 403.  The Issuer hereby ratifies,

to the extent permitted by law, all that said attorney shall lawfully do or

cause to be done by virtue hereof.  The

power of attorney granted pursuant to this Section 403 is a power coupled with

an interest and shall be irrevocable until all Series of Notes are paid and

performed in full.

 

(c)           The powers conferred on the Indenture

Trustee hereunder are solely to protect the Indenture Trustee’s interests in

the Collateral and shall not impose any duty upon it to exercise any such

powers except as set forth herein.  The Indenture

Trustee shall be accountable only for amounts that it actually receives as a

result of the exercise of such powers and neither it nor any of its officers,

directors, employees, agents or representatives shall be responsible to the

Issuer for any act or failure to act, except for its own negligence or willful

misconduct.

 

(d)           The Issuer also authorizes the

Indenture Trustee, at any time and from time to time upon the occurrence of any

Event of Default (subject to the quiet enjoyment rights of any lessee of any

Collateral), to (i) communicate in its own name, or to direct any other Person,

including the Servicer or a successor Servicer, to communicate with any party

to any Contract with regard to the assignment of the right, title and interest

of the Issuer in and under the Contracts hereunder and other matters relating

thereto and (ii) execute, in connection with the

 

36

 

sale of Collateral

provided for in Article VIII hereof, any endorsements, assignments or other

instruments of conveyance or transfer with respect to the Collateral.

 

(e)           If the Issuer fails to perform or

comply with any of its agreements contained herein and the Indenture Trustee,

with the consent of or at the direction of the Requisite Global Majority, shall

perform or comply, or otherwise cause performance or compliance, with such

agreement, the reasonable expenses, including attorneys’ fees, of the Indenture

Trustee incurred in connection with such performance or compliance together with

interest thereon at the rate specified in the related Supplement, shall be

payable by the Issuer to the Indenture Trustee on demand and shall constitute

obligations secured hereby.

 

Section 404.  Release

of Security Interest. 

The Indenture Trustee, at the written direction of the Servicer (and

with the prior written consent of the Administrative Agent if an Early

Amortization Event shall have occurred), shall release from the security

interest created pursuant to the terms of this Indenture, any Eligible Engine,

the related Lease Agreement and any other Related Assets sold or transferred

pursuant to Section 606(a) hereof.  In

effectuating such release, the Indenture Trustee shall be entitled to rely on a

certificate of the Servicer (provided, however, that after the

occurrence of an Early Amortization Event, the Administrative Agent in its sole

discretion shall be entitled to deliver such certification) identifying each

Eligible Engine, the related Lease Agreement or other items to be released from

the Lien of this Indenture in accordance with the provisions of this Section

404 accompanied by an Asset Base Certificate and stating that such release is

in compliance with Sections 404 and 606(a) hereof.

 

The Indenture Trustee will, promptly upon receipt of such

certificate from the Servicer or the Administrative Agent and at the Issuer’s

expense, execute and deliver to the Issuer, the Seller or the Servicer, as

appropriate, and each Series Enhancer, a non-recourse certificate of release

substantially in the form of Exhibit F hereto and such additional documents and

instruments as that Person may reasonably request (including UCC termination

statements and appropriate filings with the FAA or other Governmental

Authority) to evidence the termination and release from the Lien of this

Indenture of such Eligible Engine, the related Lease Agreement and the other

related items of Collateral.

 

Section 405.  Administration

of Collateral. 

(a)  The Indenture Trustee hereby

acknowledges the appointment by the Issuer of the Servicer to service and

administer the Collateral in accordance with the provisions of the Servicing

Agreement and agrees to provide the Servicer with such documentation, and to

take all such actions, as the Servicer may reasonably request in accordance

with the provisions of the Servicing Agreement or as the Issuer may request.

 

(b)           The Indenture Trustee shall as

promptly as practicable notify the Noteholders, each Series Enhancer and the

Administrative Agent of any Servicer Default of which it has prior actual

knowledge, and at the direction of the Requisite Global Majority, shall deliver

to the Servicer a Servicer Termination Notice terminating the Servicer of its

responsibilities in accordance with the terms of the Servicing Agreement.  If the Administrative Agent is unable to

locate and qualify a successor Servicer within sixty (60) days after the date

of delivery of the Servicer Termination Notice, then the Indenture Trustee may

appoint, or petition a court of competent jurisdiction to appoint, a company

acceptable to the Requisite Global

 

37

 

Majority, and whose

regular business includes equipment leasing, as the successor to the Servicer

of all or any part of the responsibilities, duties or liabilities of the

Servicer under the Servicing Agreement, for such portion of the Servicing Fee

as the Requisite Global Majority shall determine in its sole discretion.  The Servicer shall continue to fulfill its

duties and responsibilities as Servicer until such time as its replacement is

appointed and has assumed such responsibilities.  The replaced Servicer shall not be entitled to receive any

compensation for any period after the effective date of such replacement, but

shall be entitled to receive compensation for services rendered through the

effective date of such replacement except to the extent that it is unable to

fulfill such duties pending the appointment of a successor Servicer.  If the Servicer is unable to fulfill such

duties pending the appointment of a successor Servicer, the Administrative

Agent may (but shall not be required to) take such actions which it is

reasonably capable of performing and that have been directed by the Requisite

Global Majority; provided, however, that as a condition precedent to taking

any such action, the Requisite Global Majority shall provide the Administrative

Agent with (i) indemnification, reasonably satisfactory to the Administrative

Agent, with respect to such actions and (ii) reimbursement of any out-of-pocket

costs incurred by the Administrative Agent in taking such actions which have

been approved by the Requisite Global Majority.  In connection with the appointment of a successor Servicer, the

Indenture Trustee or Administrative Agent may, with the written consent of the

Requisite Global Majority, make such arrangements for the compensation of such

replacement out of Collections as the Indenture Trustee, the Administrative

Agent and such successor Servicer shall agree; provided, however, that no

such revised compensation shall be in excess of the Servicing Fees permitted

the Servicer under the Servicing Agreement and the arrangement for

reimbursement of expenses shall be no more favorable than that set forth in the

Servicing Agreement unless (i) the Indenture Trustee (with the prior written

consent of the Requisite Global Majority) shall approve such higher amounts or

(ii) the outgoing Servicer shall agree to pay, out of its own funds, the

successor Servicer any such excess compensation and reimbursement; provided, further,

that in no event shall either the Indenture Trustee or the Administrative Agent

be liable to any successor Servicer for the Servicing Fees or any additional

amounts (including expenses and indemnifications) payable to such successor

Servicer, either pursuant to the Servicing Agreement or otherwise.  The Indenture Trustee and such successor

shall take such action, consistent with the Servicing Agreement, as shall be

necessary to effectuate any such succession.

 

(c)           The Indenture Trustee may, and shall

if directed by the Requisite Global Majority, at any time, upon the occurrence

of any Servicer Default, after first notifying the Issuer of its intention to

do so, notify Account Debtors of the Issuer, parties to the Contracts of the

Issuer, obligors in respect of Instruments of the Issuer and obligors in

respect of Chattel Paper of the Issuer that the Accounts and the right, title

and interest of the Issuer in and under such Contracts, Instruments, and

Chattel Paper (to the extent related to the Eligible Engines) have been

assigned to the Indenture Trustee and that payments shall be made directly to

the Indenture Trustee; provided that a successor Servicer appointed pursuant to

this Section 405 shall unless otherwise directed by the Requisite Global Majority,

exercise all of the foregoing rights, and that pending appointment of such

successor Servicer, the then current Servicer shall unless otherwise directed

by the Requisite Global Majority be permitted to exercise such rights until the

successor Servicer assumes the responsibility of the Servicer.  Upon the request of the Requisite Global

Majority, the Issuer or Servicer shall so notify such Account Debtors, parties

to such Contracts, obligors in respect of such Instruments and obligors in

respect of such Chattel Paper.  Upon the

occurrence of a Servicer Default, the Indenture Trustee shall at the direction

of the Requisite

 

38

 

Global Majority

communicate with such Account Debtors, parties to such Contracts, obligors in

respect of such Instruments and obligors in respect of such Chattel Paper to

verify with such parties, to the Indenture Trustee’s satisfaction, the

existence, amount and terms of any such Accounts, Contracts, Instruments or

Chattel Paper.

 

(d)           Upon the breach of any Engine

Representations and Warranties giving rise to repurchase or substitution

obligations of the Seller pursuant to Section 2.02 of the Contribution and Sale

Agreement, the Issuer shall cause the Seller to fully satisfy such repurchase

or substitution obligations and cause to be deposited in the Trust Account in

accordance with the provisions of Section 2.02 of the Contribution and Sale

Agreement, the Warranty Purchase Amounts received from, or on behalf of, the

Seller with respect to such repurchase obligation.  Upon obtaining actual knowledge or the receipt of notice by the

Indenture Trustee that any repurchase or substitution obligations of the Seller

under Section 2.02 of the Contribution and Sale Agreement have arisen, the

Indenture Trustee shall notify the Series Enhancer, if any, for the Series to

which the Engines to be repurchased or substituted are pledged, each Rating

Agency and all Noteholders of the Series to which such Engines are pledged of

such event and shall enforce such repurchase or substitution obligations at the

direction of the Control Party for the affected Series.

 

Section 406.  Quiet

Enjoyment.  The

security interest hereby granted to the Indenture Trustee by the Issuer is

subject to the rights of any lessee under the related Lease Agreement so long

as such lessee is not in default under the Lease Agreement therefor and the

Servicer under the Servicing Agreement (or the Indenture Trustee, as provided

in Section 405(c)) continues to receive all amounts payable under the related

Contract.

 

Section 407.  Acknowledgment.  The Indenture Trustee agrees to execute any

and all acknowledgments that the Issuer or the Seller may require with respect

to the Lessee’s right to continued quiet enjoyment of the related Engine.

 

ARTICLE V

 

RIGHTS OF

NOTEHOLDERS; ALLOCATION AND APPLICATION OF

COLLECTIONS;

REQUISITE GLOBAL MAJORITY

 

Section 501.  Rights

of Noteholders. 

The Noteholders of each Series shall have the right to receive, to the

extent necessary to make the required payments with respect to the Notes of

such Series at the times and in the amounts specified in the related

Supplement, (i) the portion of Collections allocable to Noteholders of such

Series pursuant to this Indenture and the related Supplement, (ii) funds on deposit

in the Trust Account and any Restricted Cash Account, and (iii) funds on

deposit in any Series Account for such Series or Class, or payable with respect

to any Series Enhancement for such Series or Class.  Each Noteholder, by acceptance of its Notes, (a) acknowledges and

agrees that (except as expressly provided herein and in a Supplement entered

into in accordance with Section 1006(b) hereof) the Noteholders of a Series or

Class shall not have any interest in any Series Collateral, Series Account or Series

Enhancement for the benefit of any other Series or Class and (b) ratifies and

confirms the terms of this Indenture and the Related Documents executed in

connection with such Series.

 

39

 

Section 502.  Collections

and Allocations. 

With respect to each Collection Period, Collections on deposit in the

Trust Account will be allocated to each Series then Outstanding in accordance

with Article III of this Indenture and the Supplements.

 

Section 503.  Determination

of Requisite Global Majority.  A Requisite Global Majority shall exist with respect to any

action proposed to be taken pursuant to the terms of this Indenture or any

Supplement if (a) the Control Party or Control Parties representing more than

sixty-eight percent (68%) of the Outstanding Obligations of all Series then

Outstanding shall approve or direct such proposed action (in making such a

determination, each Control Party shall be deemed to have voted the entire

Outstanding Obligations of the related Series either in favor or in opposition

to such action, as the case may be) and (b) each Series Enhancer shall approve

or direct such proposed action.

 

ARTICLE VI

 

COVENANTS

 

As of the Effective Date of the first Series and for

so long as any obligation of the Issuer under this Indenture, any Supplement or

any Series of Notes remains unpaid, the Issuer shall observe each of the

following covenants:

 

Section 601.  Payment

of Principal and Interest; Payment of Taxes.  (a) 

The Issuer will duly and punctually pay the principal of and interest on

the Notes in accordance with the terms of the Notes, this Indenture and the

related Supplement.

 

(b)           The Issuer will take all actions as

are necessary to insure that all taxes and governmental claims, if any, in respect

of the Issuer’s activities and assets are promptly paid.

 

Section 602.  Maintenance

of Office.  The

chief executive office of the Issuer is located at 2320 Marinship Way, 300,

Sausalito, CA 94965.  The Issuer shall

give the Indenture Trustee, each Rating Agency, the Administrative Agent and

each Series Enhancer notice of any relocation of its chief executive

office.  The Issuer shall not change its

state of formation unless (i) it shall have given to the Indenture Trustee,

each Rating Agency, the Administrative Agent and each Series Enhancer not less

than thirty (30) days’ prior written notice of its intention so to do, clearly

describing such new location and providing such other information in connection

therewith as the Indenture Trustee or any Series Enhancer may reasonably

request, and (ii) with respect to such new location, it shall have taken at its

own cost all action necessary so that such change of location does not impair

the security interest of the Indenture Trustee in the Collateral, or the

perfection of the sale or contribution to the Issuer of any Eligible Engine,

the related Lease Agreements or any other Related Asset, and shall have

delivered to the Indenture Trustee and each Series Enhancer copies of all

filings required in connection therewith together with an Opinion of Counsel,

satisfactory to the Indenture Trustee and the Series Enhancers, to the effect

that such change of location does not impair such security interest and

perfection.

 

Section 603.  Corporate

Existence.  The

Issuer will keep in full effect its existence, rights and franchises as a

limited liability company under the laws of the State of Delaware, and will

obtain and preserve its qualification as a foreign limited liability company in

 

40

 

each jurisdiction in

which such qualification is necessary to protect the validity and

enforceability of this Indenture, any Supplements issued hereunder and the

Notes.

 

Section 604.  Protection

of Collateral. 

The Issuer will from time to time execute and deliver all amendments

hereto and all such financing statements, continuation statements, instruments

of further assurance and other instruments, and will, upon the reasonable

request of the Servicer, the Indenture Trustee or any Series Enhancer, take

such other reasonable action necessary or advisable to:

 

(a)           grant more effectively the security

interest in all or any portion of the Collateral;

 

(b)           maintain or preserve the Lien of this

Indenture (and the priority thereof) or carry out more effectively the purposes

hereof including executing and filing such documents as may be required under

any international convention for the perfection of interests in Engines that

may be adopted subsequent to the date of this Indenture;

 

(c)           perfect, publish notice of, or

protect the validity of the security interest in the Collateral created

pursuant to this Indenture;

 

(d)           enforce any of the items of the

Collateral;

 

(e)           preserve and defend its right, title

and interest to the Collateral and the rights of the Indenture Trustee in such

Collateral against the claims of all Persons (other than the Noteholders or any

Person claiming through the Noteholders);

 

(f)            pay any and all taxes levied or

assessed upon all or any part of the Collateral unless contested in good faith

and such contest will not pose any risk of forfeiture; or

 

(g)           pay any and all fees, taxes and other

charges payable in connection with the registration of this Indenture, any

Supplement or any required financing statements with any applicable

Governmental Authority.

 

Section 605.  Performance

of Obligations. 

Except as otherwise permitted by this Indenture, the Servicing Agreement

or the Contribution and Sale Agreement, the Issuer will not take, or fail to

take, any action, and will use its best efforts not to permit any action to be

taken by others, which would release any Person from any of such Person’s

covenants or obligations under any agreement or instrument included in the

Collateral, or which would result in the amendment, hypothecation,

subordination, termination or discharge of, or impair the validity or

effectiveness of, any such agreement or instrument.

 

Section 606.  Negative

Covenants.  The

Issuer will not, without the consent of the Control Party with respect to a

Series:

 

(a)           sell, transfer, exchange or otherwise

dispose of any of the related Series Collateral, except (i) in connection with

a sale pursuant to Section 816 hereof, or (ii) sales in the normal course of

business so long as an Early Amortization Event or Event of Default does not

then exist or would not exist immediately after such sale (with the giving of

notice and/or the

 

41

 

lapse of time).  The Sales Proceeds of any such sale or other

disposition shall not, unless an Early Amortization Event shall have occurred

and be continuing, be less than the Net Book Value of the subject Eligible

Engines;

 

(b)           claim any credit on, make any

deduction from the principal, premium, if any, or interest payable in respect

of the Notes of a Series (other than amounts properly withheld from such

payments under any applicable law) or assert any claim against any present or

former Noteholder of such Series by reason of the payment of any taxes levied

or assessed upon any of the related Series Collateral;

 

(c)           (i) permit the validity or

effectiveness of this Indenture to be impaired, or (ii) permit the Lien of this

Indenture with respect to the Series Collateral to be subordinated, terminated

or discharged, except as permitted in accordance with Section 404 or Article

VII hereof, or (iii) permit any Person to be released from any covenants or

obligations with respect to such Series Collateral, except as may be expressly

permitted by the Servicing Agreement;

 

(d)           permit any Lien (except any Permitted

Encumbrance) to be created on or extend to or otherwise arise upon or burden

the Collateral or the Series Collateral or any part thereof or any interest

therein or the proceeds thereof other than the Lien created pursuant to this

Indenture;

 

(e)           and permit the Lien of this Indenture

not to constitute a valid first priority perfected security interest in the

Series Collateral.

 

Section 607.  Non-Consolidation

of Issuer.  The

Issuer represents, warrants and covenants to take the following actions to

maintain its existence separate and apart from any other Person:  (i) maintain books of account in

accordance with generally accepted accounting principles and maintain its

accounts, books and records separate from any other person or entity; provided,

that the Issuer’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 the Issuer’s assets are

not available to satisfy the obligations of such affiliate; (ii) not

commingle its funds or assets with those of any other entity; (iii) hold

its assets in its own name; (iv) conduct its business solely in its own

name; (v) pay its own liabilities out of its own funds and assets;

(vi) observe all corporate formalities; (vii) maintain an

arm’s-length relationship with its affiliates; (viii) not 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, and

will not permit any other person to assume or guarantee or become obligated for

its debts or hold out its credit as being available to satisfy its obligations

except with respect to (A) obligations of the Seller under the Guaranty and (B)

obligations of the Seller to Lessees arising by operation of law under Eligible

Leases with respect to which the consent of such Lessees has not been obtained

prior to the transfer of such Eligible Leases to Issuer by Seller pursuant to

the Contribution and Sale Agreement; (ix) not acquire obligations or

securities of its stockholders; (x) 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; (xi) 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; (xii) correct any known misunderstanding

regarding its separate identity; (xiii) not make loans to any person

 

42

 

or entity; (xiv) not

identify its stockholders, or any affiliates of any of them, as a division or

part of itself; (xv) not 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 (xvi) pay the salaries of its own employees, if

any, from its own funds.

 

Section 608.  No

Bankruptcy Petition. 

The Issuer shall not (1) commence any Insolvency Proceeding seeking to

have an order for relief entered with respect to it, or seeking reorganization,

arrangement, adjustment, wind-up, liquidation, dissolution, composition or

other relief with respect to it or its debts, (2) seek appointment of a

receiver, trustee, custodian or other similar official for it or any part of

its assets, (3) make a general assignment for the benefit of creditors, or (4)

take any action in furtherance of, or consenting or acquiescing in, any of the

foregoing.

 

Section 609.  Liens.  The Issuer shall not contract for, create, incur,

assume or suffer to exist any Lien upon any of its property or assets,

including, without limitation, any Capital Improvements, whether now owned or

hereafter acquired, except for the Lien created pursuant to the terms of this

Indenture.

 

Section 610.  Other

Debt.  The Issuer

shall not contract for, create, incur, assume or suffer to exist any

Indebtedness other than any Notes issued pursuant to this Indenture or any

Supplement issued hereunder and other than under any Interest Rate Hedge

Agreement, except trade payables and expense accruals incurred in the ordinary

course and which are incidental to the purposes permitted pursuant to the

Issuer’s charter documents.

 

Section 611.  Guarantees,

Loans, Advances and Other Liabilities.  The Issuer will not make any loan, advance

or credit to, or guarantee (directly or indirectly or by an instrument having

the effect of assuring another’s payment or performance on any obligation or

capability of so doing, or otherwise), endorse (except for the endorsement of checks

for collection or deposit) or otherwise become contingently liable, directly or

indirectly, in connection with the obligations, stock or dividends of, or own,

purchase, repurchase or acquire (or agree contingently to do so) any stock,

obligations or securities of, or any other interest in, or make any capital

contribution to, any other Person.

 

Section 612.  Consolidation,

Merger and Sale of Assets.  The Issuer shall not consolidate with or merge with or into any

other Person or convey or transfer to any Person all or substantially all of

its assets without the prior written consent of each Control Party for each

Series.  The obligations of the Issuer

hereunder shall not be assignable nor shall any Person succeed to the

obligations of the Issuer hereunder except in each case in accordance with the

provisions of this Indenture.

 

Section 613.  Other

Agreements.  The

Issuer will not enter into or become a party to any agreements or instruments

other than this Indenture, the Supplements, the Contribution and Sale

Agreement, the Note Purchase Agreements, or any other agreement(s) or

amendments contemplated by this Indenture, any Supplement or the Contribution

and Sale Agreement.  Notwithstanding the

foregoing sentence, the Issuer may enter into any agreement(s) for

 

43

 

disposition of any

Contributed Assets or a Beneficial Interest in an Owner Trust which owns a

Contributed Engine so long as such disposition is permitted by Sections 606(a),

612, 804 or 816 hereof.  In addition,

the Issuer will not amend, modify or waive any provision of the Contribution

and Sale Agreement or give any approval or consent or permission provided for

therein without the prior written consent of the requisite Persons set forth

therein.

 

Section 614.  Charter

Documents.  The

Issuer will not amend or modify its certificate of formation or by-laws without

the prior written consent of the Control Party of each Series and otherwise in

accordance with the provisions of such certificate of formation and by-laws.

 

Section 615.  Capital

Expenditures.  The

Issuer will not make any expenditure (by long-term or operating lease or

otherwise) for capital assets (both realty and personalty), except for (i)

acquisition of additional Eligible Engines from the Seller pursuant to the

Contribution and Sale Agreement, (ii) any Capital Improvements and (iii)

ordinary course expenditures for office equipment and similar or other related

items.

 

Section 616.  Permitted

Activities.  The

Issuer will not engage in any activity or enter into any transaction except as

permitted under its charter documents as in effect on the date on which this

Indenture is executed.

 

Section 617.  Investment

Company Act.  The

Issuer will conduct its operation in a manner which will not subject it to

registration as an “investment company” under the Investment Company Act of

1940, as amended.

 

Section 618.  Payments

of Collateral.  If

the Issuer or WLFC Funding (Ireland) Limited shall receive from any Person any

payments with respect to the Collateral (to the extent such Collateral has not

been released from the Lien of this Indenture in accordance with Section 404

hereof), the Issuer shall (and shall cause WLFC Funding (Ireland) Limited to)

receive such payment in trust for the Indenture Trustee, as secured party

hereunder, and subject to the Indenture Trustee’s security interest and shall

immediately deposit such payment in the Trust Account.

 

Section 619.  Notices.  The Issuer shall notify the Indenture

Trustee, the Administrative Agent, each Rating Agency and each Series Enhancer

in writing of any of the following immediately upon learning of the occurrence

thereof, describing the same and, if applicable, the steps being taken by the

Person(s) affected with respect thereto:

 

(a)           Event of Default.  The occurrence of an Event of Default or any

event or condition which, with the giving of notice or the passage of time or

both, would constitute an Event of Default;

 

(b)           Litigation.  The institution of any litigation, arbitration proceeding or

Proceeding before any Governmental Authority which might have or result in a

Material Adverse Change;

 

(c)           Material Adverse Change.  The occurrence of a Material Adverse Change;

 

44

 

(d)           Other Events.  The occurrence of an Early Amortization

Event or such other events that may, with the giving of notice or the passage

of time or both, constitute an Early Amortization Event.

 

Section 620.  Books

and Records.  The

Issuer shall maintain complete and accurate books and records in which full and

correct entries in conformity with GAAP shall be made of all dealings and

transactions in relation to its business and activities.

 

Section 621.  Taxes.  The Issuer shall pay when due, all of its

taxes, unless and only to the extent that Issuer is contesting such taxes in

good faith and by appropriate proceedings and the Issuer has set aside on its

books such reserves or other appropriate provisions therefor as may be required

by GAAP.

 

Section 622.  Subsidiaries.  The Issuer shall not create any Subsidiaries

other than WLFC Funding (Ireland) Limited.

 

Section 623.  Investments.  Except as permitted by the provisions of

Section 622 hereof, the Issuer shall not make or permit to exist any Investment

in any Person except for Investments in Eligible Investments made in accordance

with the terms of this Indenture.

 

Section 624.  Use

of Proceeds.  The

Issuer shall use the proceeds of the Notes only for the purchase of Eligible

Engines and the other Related Assets and for the payment of related

expenses.  In addition, the Issuer shall

not permit any proceeds of the Notes to be used, either directly or indirectly,

for the purpose, whether immediate, incidental or ultimate, of “purchasing or

carrying any margin stock” within the meaning of Regulation U of the Board of

Governors of the Federal Reserve System, as amended from time to time, and

shall furnish to each Holder, upon its request, a statement in conformity with

the requirements of Regulation U.

 

Section 625.  Asset

Base Certificate. 

With respect to each Series, the Issuer shall prepare (or cause to be

prepared) an Asset Base Certificate (if applicable) and deliver (if applicable)

such Asset Base Certificate to the Indenture Trustee, each Series Enhancer,

each Rating Agency, the Noteholders and the Administrative Agent by not later

than (i) the Business Day prior to the Payment Date and (ii) each date on which

any Loan (as defined in a Supplement for a Series), if any, is made.

 

Section 626.  Financial

Statements.  The

Issuer shall prepare and deliver to the Indenture Trustee, each Series

Enhancer, each Rating Agency and the Administrative Agent, or shall cause the

Servicer to prepare and deliver pursuant to the Servicing Agreement, promptly

upon their becoming available, copies of Forms 8-K, 10-K and 10-Q filed with

the Securities and Exchange Commission relating to the Issuer or the Servicer; provided,

however, that in no event will the Forms 10-K be provided later than

120 days following the end of the period covered, and in no event will the

Forms 10-Q be provided later than 60 days following the end of the period

covered.  All financial statements shall

be prepared in accordance with GAAP.

 

Section 627.  Servicer

Report.  The

Issuer shall cause the Servicer to prepare and deliver to the Indenture

Trustee, each Series Enhancer (if applicable), each Rating Agency (if

applicable) and the Administrative Agent within 19 days of the end of each

month (but no later than 1:00 p.m. New York City time on such date), commencing

the month immediately 

 

45

 

following the first

delivery of Collateral, a Servicer Report (as defined in the Servicing

Agreement).

 

Section 628.  Cash

Receipts Report. 

The Issuer shall (or shall cause the Servicer to) prepare and deliver to

the Indenture Trustee, each Series Enhancer (if applicable), each Rating Agency

(if applicable) and the Administrative Agent by not later than the 15th day of

each month, a report detailing all cash receipts deposited into the Trust

Account during the preceding month, which report shall also detail the source

of such cash deposits and the Series Account to which such cash receipt was

allocated.

 

Section 629.  Annual

Portfolio Appraisal. 

The Issuer shall (or shall cause the Servicer to) prepare and deliver to

the Indenture Trustee, each Series Enhancer (if applicable), each Rating Agency

(if applicable) and the Administrative Agent by no later than 60 days prior to

the Conversion Date (whether or not extended) and 60 days prior to each

anniversary of the Conversion Date, an annual appraisal of its portfolio.

 

ARTICLE VII

 

DISCHARGE OF

INDENTURE; PREPAYMENTS

 

Section 701.  Full

Discharge.  With

respect to each Series of Notes, upon payment in full of the Outstanding

Obligations of such Series, the Indenture Trustee shall, at the request and at

the expense of the Issuer, execute and deliver to the Issuer such deeds or

other instruments as shall be requisite to evidence the satisfaction and

discharge of this Indenture and the security hereby created with respect to

such Series, and to release the Issuer from its covenants contained in this

Indenture and the related Supplement with respect to such Series in connection

with the satisfaction and discharge of the Indenture.  The Indenture Trustee shall be entitled to receive an Opinion of

Counsel stating that such satisfaction and discharge is authorized and

permitted.  All Eligible Engines

supporting a Series for which the Outstanding Obligations of such Series have

been paid in full shall be released from the lien of this Indenture in

accordance with Section 404 hereof.

 

Section 702.  Prepayment

of Notes. 

(a)  Optional Prepayments.  The Issuer may, from time to time, upon at

least two (2) Business Days’ prior written notice to the applicable Deal Agent,

make an optional prepayment of principal of the Notes of any Series in whole or

in part without premium or penalty except as may be set forth in any

Supplement; provided,

however, that any partial prepayment of principal shall be in a

minimum aggregate amount of One Million Dollars ($1,000,000).  Each notice of prepayment pursuant to this

Section 702(a) shall be irrevocable. 

The Issuer shall promptly confirm any telephonic notice of prepayment in

writing.  Any optional Prepayment of

principal made by the Issuer pursuant to this Section 702(a) shall also include

accrued interest to the date of the prepayment on the amount being

prepaid.  So long as no Early

Amortization Event is continuing, any optional prepayment of a Series of Notes

pursuant to this Section 702(a) may be accomplished by a deposit of funds

directly into the related Series Account.

 

46

 

(b)           After an Early Amortization Event,

Prepayments will be deposited into the Trust Account and will be allocated to

each Series based on Outstanding Obligations at the time of such Early

Amortization Event.

 

Section 703.  Unclaimed

Funds.  In the

event that any amount due to any Noteholder remains unclaimed, the Issuer

shall, at its expense, cause to be published once, in the eastern edition of The

Wall Street Journal, notice that such money remains unclaimed.  Any such unclaimed amounts shall not be

invested by the Indenture Trustee (notwithstanding the provisions of Section

303 hereof) and no additional interest shall accrue on the related Note

subsequent to the date on which such funds were available for distribution to

such Noteholder.  Any such unclaimed

amounts shall be held by the Indenture Trustee in trust until the latest of (i)

two years after the date of the publication described in the second preceding

sentence, (ii) the date all other registered Noteholders of such Series shall

have received full payment of all principal, interest, premium, if any, and

other sums payable to them on such Notes or the Indenture Trustee shall hold

(and shall have notified the registered Noteholders that it holds) in trust for

that purpose an amount sufficient to make full payment thereof when due and

(iii) the date the Issuer shall have fully performed and observed all of its

covenants and obligations contained in this Indenture and the related

Supplement with respect to such Series of Notes.  Thereafter any such unclaimed amounts shall be paid to the Issuer

by the Indenture Trustee on demand; and thereupon the Indenture Trustee shall

be released from all further liability with respect to such monies, and

thereafter the registered Noteholders in respect of which such monies were so

paid to the Issuer shall have no rights in respect thereof except to obtain payment

of such monies from the Issuer.

 

ARTICLE VIII

 

DEFAULT PROVISIONS

AND REMEDIES

 

Section 801.  Event

of Default. 

“Event of Default”, wherever used herein with respect to any Series of

Notes, means any one of the following events (whatever the reason for such

Event of Default and whether it shall be voluntary or involuntary or be

effected by operation of law or pursuant to any judgment, decree or order of

any court or any order, rule or regulation of any Governmental Authority):

 

(i)            (A) default in (x) the payment of

principal of the Notes of any Series on the Final Payment Date of such Series,

or (y) if the related Supplement so specifies, the payment of the principal

balance of the Notes on a Payment Date prior to the Final Payment Date for a

period of ten calendar days without having been cured, or (z) the payment when

due of any amount payable by the Issuer under any Series Enhancement; or

 

(B) default in

the payment of Guaranty Fees, if applicable, Indenture Trustee’s Fees or

payment of interest or premium on the Notes of any Series for more than three

(3) Business Days after the same shall have become due and payable in

accordance with the terms of such Notes, this Indenture and the related

Supplement; provided,

however, that the three (3) Business Day grace period set forth

above shall be applicable only to the first three payment defaults pursuant to

this clause (B);

 

47

 

(ii)           default in any material respect in

the performance, or breach in any material respect, of any covenant of the

Issuer in this Indenture (other than a covenant or agreement a breach of which

or default in the performance of which breach is elsewhere in this Section

specifically dealt with), the related Supplement or if any representation or

warranty of the Issuer made in this Indenture, the related Supplement, or any

other Related Documents or in any certificate or other writing delivered

pursuant hereto or thereto or in connection herewith with respect to or

affecting the Notes of such Series shall prove to be inaccurate in any material

respect as of the time when the same shall have been made, and, except for

breaches of any covenants set forth in Section 406 of any related Supplement

for a Series, if such breach or default or inaccuracy is curable, continuance

of such default or breach or inaccuracy for a period of 60 days after the

earlier to occur of (i) actual knowledge of such default or breach or

inaccuracy by the Issuer or (ii) the date on which there has been given to the Issuer

by the Indenture Trustee, or to the Issuer and the Indenture Trustee by the

Series Enhancer or any Noteholder of such Series, a written notice specifying

such default or breach or inaccuracy and requiring it to be remedied;

 

(iii)          the entry of a decree or order for

relief by a court having jurisdiction in respect of the Issuer or the Seller in

any involuntary case under any applicable Insolvency Law, or other similar law

now or hereafter in effect, or appointing a receiver, liquidator, assignee,

custodian, trustee, or sequestrator (or other similar official) for the Issuer

or the Seller, as the case may be, or for any substantial part of their

respective properties, or ordering the winding-up or liquidation of their

respective affairs, and the continuance of any such decree or order unstayed

and in effect for a period of 60 consecutive days;

 

(iv)          the commencement by the Issuer or the

Seller of a voluntary case under any (iv) applicable Insolvency Law, or other

similar law now or hereafter in effect, or the consent by the Issuer or the

Seller, as the case may be, to the appointment of or taking possession by a

receiver, liquidator, assignee, custodian, trustee or sequestrator (or other

similar official) of the Issuer or the Seller, as the case may be, or any

substantial part of their respective properties, or the making by the Issuer or

the Seller, as the case may be, of any general assignment for the benefit of

creditors, or the failure by the Issuer or the Seller, as the case may be

generally to pay its debts as they become due, or the taking of corporate

action by the Issuer in furtherance of any such action;

 

(v)           any of the Related Documents for such

Series ceases to be in full force and effect except to the extent that they are

terminated in accordance with their terms after all payments have been made

thereunder;

 

(vi)          the occurrence of a reportable event

(within the meaning of Section 4043 of ERISA) with respect to any Plan, or the

occurrence of any event or condition with respect to a Plan which actually

results in the imposition of a Lien on the Collateral.

 

The occurrence of an Event of Default with respect to

one Series of Notes (that has not been waived by the related Control Party)

shall constitute an Event of Default with respect to all other Series of Notes

then Outstanding unless the related Supplement with respect to each such other

Series of Notes shall specifically provide to the contrary.

 

48

 

Section 802.  Acceleration

of Stated Maturity; Rescission and Annulment.  (a) 

If an Event of Default under Section 801 occurs and is continuing, then

and in every such case the Control Party for a Series may declare the

Outstanding Obligations for such Series to be due and payable immediately, by a

notice in writing to the Issuer and to the Indenture Trustee given by such

Control Party, and upon any such declaration such Outstanding Obligations for

such Series shall become immediately due and payable.

 

(b)           At any time after such a declaration

of acceleration has been made and before a judgment or decree for payment of

the money due has been obtained by the Indenture Trustee as hereinafter in this

Article provided, such Control Party, by written notice to the Issuer and the

Indenture Trustee, may rescind and annul such declaration and its consequences

if:

 

(i)            the Issuer has paid or deposited

with the Indenture Trustee a sum sufficient to pay:

 

(A)          all of the installments of interest,

premium and principal on all Notes which were overdue prior to the date of such

acceleration;

 

(B)           to the extent that payment of such

interest is lawful, interest at the applicable Overdue Rate on the amounts set

forth in clause (A) above;

 

(C)           all sums paid or advanced by the

Indenture Trustee hereunder or the Servicer and the reasonable compensation,

out-of-pocket expenses, disbursements and advances of the Indenture Trustee,

its agents and counsel incurred in connection with the enforcement of this

Indenture;

 

(D)          all amounts due to any Series Enhancer

(if applicable); and

 

(ii)           all Events of Default, other than the

nonpayment of the principal of or interest on Notes which have become due

solely by such declaration of acceleration, have been cured or waived as

provided in Section 813 hereof.

 

No such rescission with respect to any Event of

Default shall affect any subsequent Event of Default or impair any right

consequent thereon.

 

Section 803.  Collection

of Indebtedness. 

The Issuer covenants that, if an Event of Default occurs and is

continuing and a declaration of acceleration has been made under Section 802

with respect to a Series and not rescinded, the Issuer will, upon demand of the

Indenture Trustee, pay to the Indenture Trustee, for the benefit of the

Noteholders of such Series then Outstanding and any Series Enhancers of such

Series, an amount equal to the sum of (i) the Outstanding Obligations of such

Series including the costs and out-of-pocket expenses of collection, including

the reasonable compensation, expenses, disbursements and advances of the

Indenture Trustee, its agents and counsel incurred in connection with the

enforcement of this Indenture and (ii) to the extent that the payment of such

interest is lawful, interest on the amount set forth in clause (i) at the

applicable Overdue Rate.

 

Section 804.  Remedies.  If an Event of Default shall occur and be

continuing, the Indenture Trustee, by such officer or agent as it may appoint,

shall notify the applicable Rating

 

49

 

Agencies, if any, of such

Event of Default and shall, if instructed by the Control Party of a Series:

 

(i)            institute any Proceedings, in its

own name and as trustee of an express trust, for the collection of all amounts

then due and payable on the Notes of such Series or under this Indenture or the

related Supplement with respect thereto, whether by declaration or otherwise,

enforce any judgment obtained, and collect from the related Series Collateral

and any other assets of the Issuer any monies adjudged due;

 

(ii)           subject to the quiet enjoyment rights

of any Lessee under a Lease Agreement, sell, hold or lease the related Series

Collateral or any portion thereof or rights or interest therein, at one or more

public or private transactions conducted in any manner permitted by law;

 

(iii)          institute any Proceedings from time to

time for the complete or partial foreclosure of the Lien created by this

Indenture and the related Supplement with respect to the related Series

Collateral;

 

(iv)          institute such other appropriate

Proceedings to protect and enforce any other rights, whether for the specific

enforcement of any covenant or agreement in this Indenture or in aid of the

exercise of any power granted herein, or to enforce any other proper remedy;

 

(v)           exercise any remedies of a secured

party under the UCC or any applicable law and take any other appropriate action

to protect and enforce the rights and remedies of the Indenture Trustee or the

Noteholders of a Series hereunder; and

 

(vi)          appoint a receiver or a manager over

the Issuer or its assets.

 

Section 805.  Indenture

Trustee May Enforce Claims Without Possession of Notes.  (a) 

In all Proceedings brought by the Indenture Trustee (and also any

Proceedings involving the interpretation of any provision of this Indenture to

which the Indenture Trustee shall be a party), the Indenture Trustee shall be

held to represent all of the Noteholders of the affected Series, and it shall

not be necessary to make any affected Noteholder a party to any such

Proceedings.

 

(b)           All rights of action and claims under

this Indenture, the related Supplement or such Notes may be prosecuted and

enforced by the Indenture Trustee without the possession of any of the Notes or

the production thereof in any Proceeding relating thereto, and any such

Proceeding instituted by the Indenture Trustee shall be brought in its own name

as trustee of an express trust, and any recovery whether by judgment,

settlement or otherwise shall, after provision for the payment of the

reasonable compensation, expenses, and disbursements incurred and advances

made, by the Indenture Trustee, its agents and counsel, be for the ratable

benefit of the Holders of the Notes of the affected Series, subject to the

subordination of payments among Classes of a particular Series as set forth in

the related Supplement.

 

Section 806.  Allocation

of Money Collected. 

If the Notes of a Series have been declared due and payable following an

Event of Default and such declaration and its

 

50

 

consequences have not

been rescinded or annulled, any money collected by the Indenture Trustee

pursuant to this Article or otherwise and any other monies that may be held or

thereafter received by the Indenture Trustee as security for the Notes of such

Series shall be applied, to the extent permitted by law, in the following

order, at the date or dates fixed by the Indenture Trustee:

 

FIRST:             To the payment of all amounts due

the Indenture Trustee under Section 905 hereof; and

 

SECOND:        To the payment of all management fees or

other servicing fees as more particularly provided in each Supplement and in

accordance with the terms of the related Servicing Agreement:  provided, however, that in no event shall

the Servicing Fee then payable pursuant to each Supplement be less than the

Minimum Servicing Fee Percentage of Engine Revenues of the Engines pledged

pursuant to such Supplement.

 

THIRD:            Any remaining amounts shall be

distributed in accordance with Section 3.02 (II) of each Supplement (or such

other or additional related sections or clauses as may be provided in any

particular Supplement) hereof but without duplication of any amounts specified

in Section 3.02(II) of a Supplement that is also set forth in Section 806

(First) or (Second) above.

 

Section 807.  Limitation

on Suits.  Except

to the extent provided in Section 808 hereof, no Noteholder of a Series shall

have the right to institute any Proceeding, with respect to this Indenture, or

for the appointment of a receiver or trustee, or for any other remedy

hereunder, unless:

 

(i)            such Holder has previously given

written notice to the Indenture Trustee of a continuing Event of Default;

 

(ii)           the Control Party of such Series

shall have made written request to the Indenture Trustee to institute

Proceedings in respect of such Event of Default in its own name as Indenture

Trustee hereunder;

 

(iii)          such Holder or Holders have offered to

the Indenture Trustee reasonable security or indemnity against the costs,

expenses and liabilities to be incurred in compliance with such request (the

unsecured indemnity of a Rated Institutional Noteholder being deemed

satisfactory for such purpose);

 

(iv)          the Indenture Trustee has, for 30 days

after its receipt of such notice, request and offer of security or indemnity,

failed to institute any such Proceeding; and

 

(v)           no direction inconsistent with such

written request has been given to the Indenture Trustee during such 30 day

period by the Control Party of such Series;

 

it being

understood and intended that no one or more Noteholders shall have any right in

any manner whatsoever by virtue of, or by availing of, any provision of this

Indenture to affect, disturb or prejudice the rights of any other Noteholder,

or to obtain or to seek to obtain priority or preference over any other

Noteholder (except to the extent provided in the related

 

51

 

Supplement) or to

enforce any right under this Indenture, except in the manner herein provided

and for the benefit of all Noteholders of a Series.

 

Section 808.  Unconditional

Right of Holders to Receive Principal and Interest.  Notwithstanding any other provision of this

Indenture, each Noteholder shall have the right, which is absolute and

unconditional, to receive payment of the principal of and interest on such Note

as such principal and interest becomes due and payable and to institute any

Proceeding for the enforcement of such payment, and such rights shall not be

impaired without the consent of such Holder.

 

Section 809.  Restoration

of Rights and Remedies. 

If the Indenture Trustee, any Series Enhancer or any Holder has

instituted any Proceeding to enforce any right or remedy under this Indenture

or the related Supplement and such Proceeding has been discontinued or

abandoned for any reason, or has been determined adversely to the Indenture

Trustee, any Series Enhancer or to such Holder, then and in every such case,

subject to any determination in such Proceeding, the Issuer, the Indenture

Trustee, such Series Enhancer (if applicable) and the Holders shall be restored

severally and respectively to their former positions hereunder and thereafter

all rights and remedies of the Indenture Trustee, such Series Enhancer (if

applicable) and the Holders shall continue as though no such Proceeding had

been instituted.

 

Section 810.  Rights

and Remedies Cumulative. 

No right or remedy conferred upon or reserved to the Indenture Trustee,

any Series Enhancer (if applicable) or to the Holders pursuant to this

Indenture or any Supplement is intended to be exclusive of any other right or

remedy, and every right and remedy shall, to the extent permitted by law, be

cumulative and in addition to every other right and remedy given hereunder or

now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or

remedy hereunder, or otherwise, shall not prevent the concurrent assertion or

employment of any other appropriate right or remedy.

 

Section 811.  Delay

or Omission Not Waiver. 

No delay or omission of the Indenture Trustee, of any Series Enhancer or

of any Holder of any Note to exercise any right or remedy accruing upon any

Event of Default shall impair any such right or remedy or constitute a waiver

of any such Event of Default or an acquiescence therein.  Every right and remedy given by this Article

or by law to the Indenture Trustee or to the Holders may be exercised from time

to time, and as often as may be deemed expedient, by the Indenture Trustee or

by the Holders, as the case may be.

 

Section 812.  Control

by the Control Party of the Affected Series.  Upon the occurrence of an Event of Default

with respect to a Series, the Control Party of the affected Series shall have

the right to direct the time, method and place of conducting any Proceeding for

any remedy available to the Indenture Trustee or exercising any trust or power

conferred on the Indenture Trustee, provided that (i) such direction shall not

be in conflict with any rule of law or with this Indenture, including, without

limitation, Section 804 hereof, (ii) such Control Party has offered to the Indenture

Trustee reasonable security or indemnity against costs, expenses and

liabilities which it might incur in connection therewith as provided in Section

902(iii) hereof, and (iii) the Indenture Trustee may take any other action

deemed proper by the Indenture Trustee which is not inconsistent with such

direction.

 

52

 

Section 813.  Waiver

of Past Defaults. 

(a)  The Control Party of a

Series may, on behalf of all Noteholders of such Series, waive any past Event

of Default with respect to such Series and its consequences, except an Event of

Default with respect to such Series:

 

(i)            in the payment of (x) the principal

balance of any Note on the Final Payment Date or (y) any required interest

payment on any Note of any Series on any Payment Date, or

 

(ii)           in respect of a covenant or provision

hereof which cannot be modified or amended without the consent of all the

Noteholders of all Series pursuant to Section 1002 of this Indenture.

 

(b)           Upon any such waiver, such Event of

Default shall cease to exist and shall be deemed to have been cured and not to

have occurred for every purpose of this Indenture; provided, however,

that no such waiver shall extend to any subsequent or other Event of Default or

impair any right consequent thereon.

 

Section 814.  Undertaking

for Costs.  All

parties to this Indenture agree, and each Holder of any Note by acceptance

thereof shall be deemed to have agreed, that any court may in its discretion

require, in any suit for the enforcement of any right or remedy under this

Indenture, or in any suit against the Indenture Trustee for any action taken,

suffered or omitted by it as Indenture Trustee, the filing by any party

litigant in such suit of an undertaking to pay the costs of such suit, and that

such court may in its discretion assess reasonable costs, including reasonable

attorneys’ fees, against any party litigant in such suit, having due regard to

the merits and good faith of the claims or defenses made by such party

litigant; provided,

however, that the provisions of this Section 814 shall not apply (i)

to any suit instituted by the Indenture Trustee or any Holder or group of

Holders, holding in the aggregate more than 10% of the aggregate principal

balance of the Notes of all Series then Outstanding, or (ii) to any suit

instituted by any Holder for the enforcement of (x) the payment of interest or

principal on any Notes on any Payment Date or (y) the payment of the principal

of any Note on or after the Final Payment Date of such Note.

 

Section 815.  Waiver

of Stay or Extension Laws.  The Issuer covenants (to the extent that it may lawfully do so)

that it will not at any time insist upon, or plead, or in any manner whatsoever

claim or take the benefit or advantage of, any stay or extension law wherever

enacted, now or at any time hereafter in force, which may affect the covenants

or the performance of this Indenture; and the Issuer (to the extent that it may

lawfully do so) hereby expressly waives all benefit or advantage of any such law

and covenants that it will not hinder, delay or impede the execution of any

power herein granted to the Indenture Trustee, but will suffer and permit the

execution of every such power as though no such law had been enacted.

 

Section 816.  Sale

of Collateral. 

(a)  The power to effect any sale

(a “Sale”) of any portion of the Series Collateral pursuant to Section 804

hereof shall not be exhausted by any one or more Sales as to any portion of the

Series Collateral remaining unsold, but shall continue unimpaired until the

entire Series Collateral shall have been sold or the Outstanding Obligations of

the related Series shall have been paid in full.  The Indenture Trustee at the direction of the

 

53

 

Control Party of the

related Series may from time to time postpone any Sale by public announcement

made at the time and place of such Sale.

 

(b)           Upon any Sale, whether made under the

power of sale hereby given or under judgment, order or decree in any Proceeding

for the foreclosure or involving the enforcement of this Indenture:  (i) the Indenture Trustee, at the direction

of the Control Party of the related Series, may bid for and purchase the

property being sold, and upon compliance with the terms of such Sale may hold,

retain and possess and dispose of such property in accordance with the terms of

this Indenture; and (ii) the receipt of the Indenture Trustee or of any officer

thereof making such Sale shall be a sufficient discharge to the purchaser or

purchasers at such Sale for its or their Purchase money, and such purchaser or

purchasers, and its or their assigns or personal representatives, shall not,

after paying such purchase money and receiving such receipt of the Indenture

Trustee or of such officer therefor, be obliged to see to the application of

such purchase money or be in any way answerable for any loss, misappropriation

or non-application thereof.

 

(c)           The Indenture Trustee shall execute

and deliver an appropriate instrument of conveyance transferring its interest

in any portion of the Collateral in connection with a Sale thereof.  In addition, the Indenture Trustee is hereby

irrevocably appointed the agent and attorney-in-fact of the Issuer to transfer

and convey its interest (subject to lessee’s rights of quiet enjoyment) in any

portion of the Collateral in connection with a Sale thereof, and to take all

action necessary to effect such Sale. 

No purchaser or transferee at such a Sale shall be bound to ascertain the

Indenture Trustee’s authority, inquire into the satisfaction of any conditions

precedent or see to the application of any monies.

 

Section 817.  Action

on Notes.  The

Indenture Trustee’s right to seek and recover judgment on the Notes or under

this Indenture or any Supplement shall not be affected by the seeking,

obtaining or application of any other relief under or with respect to this

Indenture or any Supplement.  Neither

the Lien of this Indenture nor any rights or remedies of the Indenture Trustee,

any Series Enhancer or the Noteholders shall be impaired by the recovery of any

judgment by the Indenture Trustee against the Issuer or by the levy of any

execution under such judgment upon any portion of the Collateral or upon any of

the assets of the Issuer.

 

ARTICLE IX

 

CONCERNING THE

INDENTURE TRUSTEE

 

Section 901.  Duties

of Indenture Trustee. 

The Indenture Trustee, prior to the occurrence of an Event of Default

with respect to any Series or after the curing of any Event of Default with

respect to any Series which may have occurred, undertakes to perform such

duties and only such duties as are specifically set forth in this Indenture and

the related Supplement.  If an Event of

Default with respect to any Series has occurred and is continuing, the Indenture

Trustee, at the direction of the Control Party of the related Series, shall

exercise such of the rights and powers vested in it by this Indenture and the

related Supplement, and use the same degree of care and skill in its exercise

as a prudent Person would exercise or use under the circumstances in the

conduct of such Person’s own affairs.

 

54

 

The Indenture Trustee, upon receipt of all

resolutions, certificates, statements, opinions, reports, documents, orders or

other instruments furnished to the Indenture Trustee which are specifically

required to be furnished pursuant to any provisions of this Indenture and any

applicable Supplement, shall determine whether they are in the form required by

this Indenture and any applicable Supplement; provided, however, that the

Indenture Trustee shall not be responsible for the accuracy or content of any

such resolution, certificate, statement, opinion, report, document, order or

other instrument furnished pursuant to this Indenture and any applicable

Supplement.

 

No provision of this Indenture or any Supplement shall

be construed to relieve the Indenture Trustee from liability for its own

negligent action, its own negligent failure to act or its own willful

misconduct; provided,

however, that:

 

(i)            Prior to the occurrence of an Event

of Default and after the curing of any Event of Default which may have

occurred, the duties and obligations of the Indenture Trustee shall be

determined solely by the express provisions of this Indenture and any

Supplements issued pursuant to the terms hereof.  The Indenture Trustee shall not be liable except for the

performance of such duties and obligations as are specifically set forth in

this Indenture and any Supplements issued pursuant to the terms hereof, and no

implied covenants or obligations shall be read into this Indenture against the

Indenture Trustee and, in the absence of bad faith on the part of the Indenture

Trustee, the Indenture Trustee may conclusively rely, as to the truth of the

statements and the correctness of the opinions expressed therein, upon any

Opinion of Counsel, certificates, statements, reports, documents, orders,

opinions, appraisals, bonds or other documents or instruments believed by it to

be genuine and to have been signed or presented by the proper party or parties

and conforming to the requirements of this Indenture and any Supplements issued

pursuant to the terms hereof;

 

(ii)           The Indenture Trustee shall not be

liable for an error of judgment made in good faith by a Corporate Trust Officer

or Corporate Trust Officers of the Indenture Trustee, unless it shall be proved

that the Indenture Trustee was negligent in ascertaining the pertinent facts;

and

 

(iii)          The Indenture Trustee shall not be

personally liable with respect to any action taken, suffered or omitted to be

taken by it in good faith in accordance with the direction of the Control Party

of a Series relating to the time, method and place of conducting any Proceeding

for any remedy available to the Indenture Trustee, or exercising any trust or

power conferred upon the Indenture Trustee, under this Indenture.

 

No provisions of this Indenture shall require the

Indenture Trustee to expend or risk its own funds or otherwise incur any

financial liability in the performance of its duties hereunder, or in the

exercise of any of its rights or powers, if it shall have reasonable grounds

for believing that repayment of such funds or adequate security or indemnity

against such risk or liability is not reasonably assured to it (the unsecured

indemnity of (A) a Rated Institutional Noteholder being deemed satisfactory for

such purpose unless the Indenture Trustee provides written notice to the

contrary, or (B) any Series Enhancer, if applicable (so long as its claims

 

55

 

paying ability is rated

“AAA” or “Aaa”, as applicable) being deemed satisfactory for such purpose).

 

Whether or not therein expressly so provided, every

provision of this Indenture relating to the conduct or affecting the liability

of or affording protection to the Indenture Trustee shall be subject to the

provisions of this Section 901.

 

Section 902.  Certain

Matters Affecting the Indenture Trustee.  Except as otherwise provided in Section 901

hereof:

 

(i)            The Indenture Trustee may consult

with counsel of its selection and any advice of such counsel shall be full and

complete authorization and protection in respect of any action taken or

suffered or omitted by it hereunder in good faith and in accordance in reliance

thereof;

 

(ii)           The Indenture Trustee shall be under

no obligation to institute, conduct or defend any litigation or proceeding

hereunder or in relation hereto at the request, order or direction of the

Control Party of a Series, pursuant to the provisions of this Indenture, unless

the such Control Party shall have offered to the Indenture Trustee reasonable

security or indemnity against the costs, expenses and liabilities which may be

incurred therein or thereby (the unsecured indemnity of (A) a Rated

Institutional Noteholder being deemed satisfactory for such purpose, unless the

Indenture Trustee provides written notice to the contrary or (B) any Series

Enhancer if applicable (so long as its claims paying ability is rated “AAA” or

“Aaa”, as applicable) being deemed satisfactory for such purpose);

 

(iii)          The Indenture Trustee shall not be

liable for any action taken, suffered or omitted by it in good faith and

believed by it to be authorized or within the discretion or rights or powers

conferred upon it by this Indenture;

 

(iv)          The Indenture Trustee shall not be

bound to make any investigation into the facts or matters stated in any

resolution, certificate, statement, instrument, opinion, report, notice,

request, consent, order, approval, bond or other paper or document, unless

requested in writing to do so by the Control Party of a Series; provided,

however, that the Indenture Trustee may require reasonable security

or indemnity against any cost, expense or liability likely to be incurred in

making such investigation as a condition to so proceeding (the unsecured

indemnity of (A) a Rated Institutional Noteholder being deemed satisfactory for

such purposes unless the Indenture Trustee provides written notice to the

contrary) or (B) any Series Enhancer (so long as its claims paying ability is

rated “AAA” or “Aaa,” as applicable) being deemed satisfactory for such

purpose).  The reasonable expense of any

such examination shall be paid, on a pro rata basis, by the Noteholders of the

applicable Series requesting such examination or, if paid by the Indenture

Trustee, shall be reimbursed by such Noteholders upon demand;

 

(v)           The Indenture Trustee may execute any

of the trusts or powers hereunder or perform any duties hereunder either

directly or by or through its agents or attorneys, provided that the Indenture

Trustee shall not be responsible for any misconduct or

 

56

 

negligence on the part of any agent or attorney

appointed by it with due care hereunder; and

 

(vi)          The Indenture Trustee shall not be

charged with knowledge of any Default or Event of Default unless either a

Corporate Trust Officer of the Indenture Trustee shall have actual knowledge or

written notice of such shall have been given to a Corporate Trust Officer of

the Indenture Trustee.

 

The Indenture Trustee shall be under no obligation to

exercise any of the rights or powers vested in it by this Indenture at the

request or direction of any of the Holders pursuant to this Indenture, unless

such Holders shall have offered to the Indenture Trustee security or indemnity

satisfactory to the Indenture Trustee against the costs, expenses and

liabilities which might be incurred by it in compliance with such request or

direction.  The rights, privileges, protections,

immunities and benefits given to the Indenture Trustee, including, without

limitation, its right to be indemnified, are extended to, and shall be

enforceable by, the Indenture Trustee in each of its capacities hereunder, and

each agent, custodian and other Person employed to act hereunder.  The Indenture Trustee may request that the

Issuer deliver an Officer’s Certificate setting forth the names of individuals

and/or titles of officers authorized at such time to take specified actions

pursuant to this Indenture, which Officer’s Certificate may be signed by any

person authorized to sign an Officer’s Certificate, including any person

specified as so authorized in any such certificate previously delivered and not

superseded.

 

The provisions of this Section 902 shall be applicable

to the Indenture Trustee in its capacity as Indenture Trustee under this

Indenture.

 

Section 903.  Indenture

Trustee Not Liable. 

The recitals contained herein (other than the representations and

warranties contained in Section 911 hereof), in any Supplement and in the Notes

(other than the certificate of authentication on the Notes) shall be taken as

the statements of the Issuer, and the Indenture Trustee assumes no

responsibility for their correctness. 

The Indenture Trustee makes no representations as to the validity or

sufficiency of this Indenture, any Supplement, the Notes, the Collateral or of

any related document.  The Indenture

Trustee shall not be accountable for the use or application by the Issuer of

any of the Notes or of the proceeds thereof, or for the use or application of

any funds paid to the Issuer or the Servicer in respect of the Collateral.  The Indenture Trustee will be deemed to have

appointed Barclays Bank PLC to act as Administrative Agent under the terms of

the Administration Agreement without negligence or willful misconduct.

 

(a)           The Indenture Trustee shall have no

responsibility or liability for or with respect to the existence or validity of

any Engine, the perfection of any security interest (whether as of the date

hereof or at any future time), the maintenance of or the taking of any action

to maintain such perfection, the validity of the assignment of any portion of

the Collateral to the Indenture Trustee or of any intervening assignment, the

compliance by the Seller or the Servicer with any covenant or the breach by the

Seller or the Servicer of any warranty or representation made hereunder, in any

Supplement or in any related document or the accuracy of such warranty or

representation, any investment of monies in the Trust Account, the Restricted

Cash Account or any Series Account or any loss resulting therefrom (provided

that such investments are made in accordance with the provisions of Section 303

hereof), the acts or omissions of the Seller or

 

57

 

the Servicer taken in the

name of the Indenture Trustee, or the acts or omissions of the Administrative

Agent.

 

(b)           Except as expressly provided herein

or in any Supplement, the Indenture Trustee shall not have any obligation or

liability under any Contract by reason of or arising out of this Indenture or

the granting of a security interest in such Contract hereunder or the receipt

by the Indenture Trustee of any payment relating to any Contract pursuant

hereto, nor shall the Indenture Trustee be required or obligated in any manner

to perform or fulfill any of the obligations of the Issuer, the Seller or the

Servicer under or pursuant to any Contract, or to make any payment, or to make

any inquiry as to the nature or the sufficiency of any payment received by it,

or the sufficiency of any performance by any party, under any Contract.

 

Section 904.  Indenture

Trustee May Own Notes. 

The Indenture Trustee in its individual or any other capacity may become

the owner or pledgee of Notes with the same rights it would have if it were not

Indenture Trustee; provided that such transaction shall not result in the

disqualification of the Indenture Trustee for purposes of Rule 3a-7 under the

Investment Company Act of 1940.

 

Section 905.  Indenture

Trustee’s Fees and Expenses.  The fees of the Indenture Trustee shall be paid by the Issuer in

accordance with Section 3.02 of a related Supplement for a Series.  The Issuer shall indemnify the Indenture

Trustee and each of its officers, directors and employees for, and hold them

harmless against, any loss, liability, damage, claim or expense incurred

without negligence or willful misconduct on their part, arising out of or in

connection with the acceptance or administration of this trust, including the

costs and expenses of defending itself both individually and in its

representative capacity against any claim or liability in connection with the

exercise or performance of any of its powers or duties hereunder (including,

but not limited to, loss, liability, damage, claim or expense incurred by

reason of the appointment of Barclays Bank PLC to act as Administrative Agent).

 

The obligations of the Issuer under this Section 905

to compensate the Indenture Trustee, to pay or reimburse the Indenture Trustee

for expenses, disbursements and advances and to indemnify and hold harmless the

Indenture Trustee shall constitute Outstanding Obligations hereunder and shall

survive the resignation or removal of the Indenture Trustee and the

satisfaction and discharge of this Indenture.

 

When the Indenture Trustee incurs expenses or renders

services in connection with an Event of Default specified in Section 801(iii)

or Section 801(iv), the expenses and the compensation for the services are

intended to constitute expenses of administration under any bankruptcy law.

 

Anything in this Indenture to the contrary

notwithstanding, in no event shall the Indenture Trustee be liable under or in

connection with this Indenture for indirect, special, incidental, punitive or

consequential losses or damages of any kind whatsoever, including but not

limited to lost profits, whether or not foreseeable, even if the Indenture

Trustee has been advised of the possibility thereof and regardless of the form

of action in which such damages are sought.

 

58

 

Section 906.  Eligibility

Requirements for Indenture Trustee.  The Indenture Trustee hereunder shall at all

times be a national banking association or a corporation, organized and doing

business under the laws of the United States of America or any State, and

authorized under such laws to exercise corporate trust powers.  In addition, the Indenture Trustee or its

parent corporation shall at all times (i) have a combined capital and surplus

of at least $250,000,000, (ii) be subject to supervision or examination by

Federal or state authority and (iii) have a long-term unsecured senior debt

rating of “A2” or better by Moody’s or a long-term unsecured senior debt rating

of “A” by Standard & Poor’s and short-term unsecured senior debt rating of

“P-1” or better by Moody’s or a short-term unsecured senior debt rating of

“A-2” by Standard & Poor’s.  If such

corporation publishes reports of condition at least annually, pursuant to law

or to the requirements of such supervising or examining authority, then, for

the purposes of this Section 906, the combined capital and surplus of such

corporation shall be deemed to be its combined capital and surplus as set forth

in its most recent report of condition so published.  In case at any time the Indenture Trustee shall cease to be

eligible in accordance with the provisions of this Section 906, the Indenture

Trustee shall resign immediately in the manner and with the effect specified in

Section 907 hereof.  In lieu of the

foregoing eligibility requirements for the Indenture Trustee, The Bank of New

York shall be an eligible Indenture Trustee.

 

Section 907.  Resignation

and Removal of Indenture Trustee.  The Indenture Trustee may at any time resign

and be discharged from the trusts hereby created by giving written notice

thereof to the Issuer, the Servicer, the Administrative Agent, each Series

Enhancer if applicable and the Noteholders. 

Upon receiving such notice of resignation, the Issuer shall promptly

appoint a successor trustee by written instrument, in duplicate, one copy of

which instrument shall be delivered to the resigning Indenture Trustee and each

Series Enhancer if applicable, and one copy to the successor Indenture

Trustee.  If no successor Indenture

Trustee shall have been so appointed and have accepted appointment within 30

days after the giving of such notice of resignation, the Requisite Global

Majority may appoint a successor trustee or, if it does not do so within 30

days thereafter, the resigning Indenture Trustee, with the consent of each

Series Enhancer, may petition any court of competent jurisdiction for the

appointment of a successor trustee, which successor trustee shall meet the

eligibility standards set forth in Section 906.

 

If at any time the Indenture Trustee shall cease to be

eligible in accordance with the provisions of Section 906 hereof and shall fail

to resign after written request therefor by the Issuer, any Series Enhancer if

applicable or the Servicer, or if at any time the Indenture Trustee shall become

incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver

of the Indenture Trustee or of its property shall be appointed, or any public

officer shall take charge or control of the Indenture Trustee or of its

property or affairs for the purpose of rehabilitation, conservation or

liquidation, then the Issuer shall remove the Indenture Trustee and appoint a

successor Indenture Trustee by written instrument, in duplicate, one copy of

which instrument shall be delivered to the Indenture Trustee so removed and one

copy to the successor Indenture Trustee.

 

Any resignation or removal of the Indenture Trustee

and appointment of a successor trustee pursuant to any of the provisions of

this Section shall become effective upon acceptance of appointment by the

successor trustee as provided in Section 908 hereof.

 

59

 

Section 908.  Successor

Indenture Trustee. 

Any successor Indenture Trustee appointed as provided in Section 907

hereof shall execute, acknowledge and deliver to the Issuer and to its

predecessor Indenture Trustee an instrument accepting such appointment

hereunder, and thereupon the resignation or removal of the predecessor

Indenture Trustee shall become effective and such successor Indenture Trustee,

without any further act, deed or conveyance, shall become fully vested with all

the rights, powers, duties and obligations of its predecessor hereunder, with

like effect as if originally named as the Indenture Trustee herein.  The predecessor Indenture Trustee shall

deliver to the successor Indenture Trustee all documents relating to the

Collateral, if any, delivered to it, together with any amount remaining in the

Trust Account, Restricted Cash Account and any other Series Accounts.  In addition, the predecessor Indenture

Trustee and, upon request of the successor Indenture Trustee, the Issuer shall

execute and deliver such instruments and do such other things as may reasonably

be required for more fully and certainly vesting and confirming in the

successor Indenture Trustee all such rights, powers, duties and obligations.

 

No successor Indenture Trustee shall accept

appointment as provided in this Section 908 unless at the time of such

acceptance such successor Indenture Trustee shall be eligible under the

provisions of Section 906 hereof and shall be acceptable to the Requisite

Global Majority.

 

Upon acceptance of appointment by a successor

Indenture Trustee as provided in this Section 908, the Issuer shall mail notice

of the succession of such Indenture Trustee hereunder to all Noteholders at

their addresses as shown in the registration books maintained by the Indenture

Trustee.  If the Issuer fails to mail

such notice within 10 days after acceptance of appointment by the successor

Indenture Trustee, the successor Indenture Trustee shall cause such notice to

be mailed at the expense of the Issuer.

 

Section 909.  Merger

or Consolidation of Indenture Trustee.  Any corporation into which the Indenture

Trustee may be merged or converted or with which it may be consolidated, or any

corporation resulting from any merger, conversion or consolidation to which the

Indenture Trustee shall be a party, or any corporation succeeding to the

business of the Indenture Trustee, shall be the successor of the Indenture

Trustee hereunder, provided such corporation shall be eligible under the

provisions of Section 906 hereof, without the execution or filing of any paper

or any further act on the part of any of the parties hereto, anything herein to

the contrary notwithstanding.

 

Section 910.  Separate

Indenture Trustees, Co-Indenture Trustees and Custodians.  If the Indenture Trustee is not capable of

acting outside the United States of America, it shall have the power from time

to time to appoint one or more Persons or corporations to act either as

co-trustees jointly with the Indenture Trustee, or as separate trustees, or as

custodians, for the purpose of holding title to, foreclosing or otherwise

taking action with respect to any of the Collateral, when such separate trustee

or co-trustee is necessary or advisable under any applicable laws or for the

purpose of otherwise conforming to any legal requirement, restriction or

condition in any applicable jurisdiction. 

The separate trustees, co-trustees, or custodians so appointed shall be

trustees, co-trustees, or custodians for the benefit of all Noteholders and

shall have such powers, rights and remedies as shall be specified in the

instrument of appointment; provided, however, that no such

appointment shall, or shall be deemed to, constitute the

 

60

 

appointee an agent of the

Indenture Trustee.  The Issuer shall

join in any such appointment, but such joining shall not be necessary for the

effectiveness of such appointment.

 

Every separate trustee, co-trustee and custodian

shall, to the extent permitted by law, be appointed and act subject to the

following provisions and conditions:

 

(i)            all powers, duties, obligations and

rights conferred upon the Indenture Trustee in respect of the receipt, custody

and payment of moneys shall be exercised solely by the Indenture Trustee;

 

(ii)           all other rights, powers, duties and

obligations conferred or imposed upon the Indenture Trustee shall be conferred

or imposed upon and exercised or performed by the Indenture Trustee and such

separate trustee, co-trustee, or custodian jointly, except to the extent that

under any law of any jurisdiction in which any particular act or acts are to be

performed the Indenture Trustee shall be incompetent or unqualified to perform

such act or acts, in which event such rights, powers, duties and obligations

(including the holding of title to the Collateral or any portion thereof in any

such jurisdiction) shall be exercised and performed by such separate trustee,

co-trustee or custodian;

 

(iii)          no trustee or custodian hereunder

shall be personally liable by reason of any act or omission of any other

trustee or custodian hereunder; and

 

(iv)          the Issuer or the Indenture Trustee

may at any time accept the resignation of or remove any separate trustee,

co-trustee or custodian so appointed by it or them if such resignation or

removal does not violate the other terms of this Indenture.

 

Any notice, request or other writing given to the

Indenture Trustee shall be deemed to have been given to each of the then

separate trustees and co-trustees, as effectively as if given to each of

them.  Every instrument appointing any

separate trustee, co-trustee, or custodian shall refer to this Indenture and

the conditions of this Article.  Each

separate trustee and co-trustee, upon its acceptance of the trusts conferred,

shall be vested with the estates or property specified in its instrument of

appointment, either jointly with the Indenture Trustee or separately, as may be

provided therein, subject to all the provisions of this Indenture, specifically

including every provision of this Indenture relating to the conduct of,

affecting the liability of, or affording protection to, the Indenture Trustee.  Every such instrument of appointment shall

be furnished to the Indenture Trustee and each Series Enhancer.

 

Any separate trustee, co-trustees, or custodian may,

at any time, constitute the Indenture Trustee, its agent or attorney-in-fact,

with full power and authority, to the extent not prohibited by law, to do any

lawful act under or in respect of this Indenture on its behalf and in its

name.  If any separate trustee,

co-trustee, or custodian shall die, become incapable of acting, resign or be removed,

all of its estates, properties, rights, remedies and trusts shall vest in and

be exercised by the Indenture Trustee, to the extent permitted by law, without

the appointment of a new or successor trustee or custodian.

 

No separate trustee, co-trustee or custodian hereunder

shall be required to meet the terms of eligibility as a successor trustee under

Section 906 hereof and no notice to Noteholders of the appointment thereof

shall be required under Section 908 hereof.

 

61

 

The Indenture Trustee agrees to instruct the

co-trustees, if any, to the extent necessary to fulfill the Indenture Trustee’s

obligations hereunder.

 

Section 911.  Representations,

Warranties and Covenants.  The Indenture Trustee hereby represents, warrants and covenants

as of the Effective Date of each Series that:

 

(a)           Organization and Good Standing.  The Indenture Trustee is a New York banking

corporation duly organized, validly existing and in good standing under the

laws of the State of New York, and has the power to own its assets and to

transact the business in which it is presently engaged;

 

(b)           Authorization.  The Indenture Trustee has the power,

authority and legal right to execute, deliver and perform this Indenture and

each Supplement and to authenticate the Notes, and the execution, delivery and

performance of this Indenture and each Supplement and the authentication of the

Notes has been duly authorized by the Indenture Trustee by all necessary

corporate action;

 

(c)           Binding Obligations.  This Indenture and each Supplement, assuming

due authorization, execution and delivery by the Issuer, constitutes the legal,

valid and binding obligations of the Indenture Trustee, enforceable against the

Indenture Trustee in accordance with its terms, except that (i) such enforcement

may be subject to bankruptcy, insolvency, reorganization, moratorium or other

similar laws (whether statutory, regulatory or decisional) now or hereafter in

effect relating to creditors’ rights generally and the rights of trust

companies in particular and (ii) the remedy of specific performance and

injunctive and other forms of equitable relief may be subject to certain

equitable defenses and to the discretion of the court before which any

proceeding therefor may be brought, whether in a proceeding at law or in

equity;

 

(d)           No Violation.  The performance by the Indenture Trustee of

its obligations under this Indenture and each Supplement will not conflict

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

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

documents or bylaws of the Indenture Trustee;

 

(e)           No Proceedings.  There are no proceedings or investigations

to which the Indenture Trustee is a party pending, or, to the knowledge of the

Indenture Trustee, threatened, before any court, regulatory body,

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

the invalidity of this Indenture or the Notes, (B) seeking to prevent the

issuance of the Notes or the consummation of any of the transactions

contemplated by this Indenture or (C) seeking any determination or ruling that

would materially and adversely affect the performance by the Indenture Trustee

of its obligations under, or the validity or enforceability of, this Indenture

or the Notes; and

 

(f)            Approvals.  Neither the execution or delivery by the

Indenture Trustee of this Indenture nor the consummation of the transactions by

the Indenture Trustee contemplated hereby requires the consent or approval of,

the giving of notice to, the registration with or the taking of any other

action with respect to any Governmental Authority under any existing federal or

State of New York law governing the banking or trust powers of the Indenture

Trustee.

 

62

 

(g)           Securities Accounts.  (i) The Indenture Trustee is a bank which

regularly accepts in the ordinary course of its business securities of the same

type as the applicable Collateral as a custodial service for its customers and

maintains in the State of New York deposit accounts and securities accounts for

its customers; (ii) the Indenture Trustee will at all times be acting solely in

the capacity of a Securities Intermediary with respect to items of Collateral

identified on its books and records; (iii) the Indenture Trustee will maintain

its offices and books and records with respect to its securities accounts in

the State of New York; (iv) the Indenture Trustee will at all times maintain an

account with and be a member of The Federal Reserve Bank; and (v) the Indenture

Trustee will act in accordance with, and fulfill its obligations under the

terms of this Indenture and any Supplement hereto, on its part to be performed

or observed, including, without limitation, crediting each Financial Asset (as

defined in Section 8-102(a)(9) of the New York UCC) and any other property it

receives in accordance thereunder to the appropriate Securities Account.

 

Section 912.  Indenture

Trustee Offices. 

The Indenture Trustee shall maintain in the State of New York an office

or offices or agency or agencies where Notes may be surrendered for

registration of transfer or exchange, which office shall initially be located

at 101 Barclay Street, New York, New York 10286, and shall promptly notify the

Issuer, the Servicer and the Noteholders of any change of such location.

 

Section 913.  Notice

of Event of Default.  If the Indenture Trustee shall have actual knowledge of an Event

of Default with respect to any Series, the Indenture Trustee shall give prompt

written notice thereof to the Noteholders and any Series Enhancer of such

Series.  For all purposes of this

Indenture, in the absence of actual knowledge by a Corporate Trust Officer of

the Indenture Trustee, the Indenture Trustee shall not be deemed to have actual

knowledge of any Event of Default unless notified in writing thereof by the

Issuer, the Seller, the Servicer, any Series Enhancer or any Noteholder, and

such notice references the applicable Series of Notes generally, the Issuer,

this Indenture or the applicable Supplement.

 

Section 914.  Assignment of Rights, Not Assumption of Duties.  Anything herein contained to the contrary

notwithstanding, (a) the Issuer shall remain liable under each of the

agreements to which it is a party to the extent set forth therein to perform

all of its duties and obligations thereunder to the same extent as if this

Indenture had not been executed, (b) the exercise by the Indenture Trustee or

the Noteholders of any of their rights, remedies or powers hereunder shall not release

the Issuer from any of its duties or obligations under each of the agreements

to which it is a party and (c) neither the Noteholders nor the Indenture

Trustee shall have any obligation or liability under any of the agreements to

which the Issuer is a party by reason of or arising out of this Indenture, nor

shall the Noteholders or the Indenture Trustee be obligated to perform any of

the obligations or duties of the Issuer thereunder or, except as expressly

provided herein with respect to the Indenture Trustee, to take any action to

collect or enforce any claim for payment assigned hereunder or otherwise or

except as expressly provided in the applicable Note Purchase Agreement with

respect to the Noteholders.

 

63

 

ARTICLE X

 

SUPPLEMENTAL

INDENTURES

 

Section 1001.  Supplemental

Indentures Not Creating a New Series Without Consent of Holders.  (a) 

Without the consent of any Holder and based on an Opinion of Counsel to

the effect that such Supplement is for one of the purposes set forth in clauses

(i) through (vii) below, the Issuer and the Indenture Trustee, at any time and

from time to time, may, with the consent of the Series Enhancers if applicable,

enter into one or more Supplements in form satisfactory to the Indenture

Trustee, for any of the following purposes:

 

(i)            to add to the covenants of the

Issuer in this Indenture for the benefit of the Holders of one or more Series

then Outstanding or of one or more Series Enhancers if applicable, or to

surrender any right or power conferred upon the Issuer in this Indenture;

 

(ii)           to cure any ambiguity, to correct or

supplement any provision in this Indenture which may be inconsistent with any

other provision in this Indenture, or to make any other provisions with respect

to matters or questions arising under this Indenture;

 

(iii)          to correct or amplify the description

of any property at any time subject to the Lien of this Indenture, or better to

assure, convey and confirm unto the Indenture Trustee any property subject or

required to be subjected to the Lien of this Indenture, or to subject

additional property to the Lien of this Indenture;

 

(iv)          to add to the conditions, limitations

and restrictions on the authorized amount, terms and purposes of issue, authentication

and delivery of the Notes, as herein set forth, or additional conditions,

limitations and restrictions thereafter to be observed by the Issuer;

 

(v)           to convey, transfer, assign, mortgage

or pledge any additional property to or with the Indenture Trustee;

 

(vi)          to evidence the succession of the

Indenture Trustee pursuant to Article IX; or

 

(vii)         to add any additional Events of

Default.

 

Prior to the execution of any Supplement issued

pursuant to this Section 1001, the Issuer shall provide written notice to each

Rating Agency setting forth in general terms the substance of any such

Supplement.

 

(b)           Promptly after the execution by the

Issuer and the Indenture Trustee of any Supplement pursuant to this Section

1001, the Indenture Trustee shall mail to all Noteholders of any affected Class

then Outstanding, each Rating Agency if applicable, of any affected Series and

each affected Series Enhancer if applicable a notice setting forth in general

terms the substance of such Supplement, together with a copy of the text of

such Supplement.

 

64

 

Any failure of the Issuer

to mail such notice, or any defect therein, shall not, however, in any way

impair or affect the validity of any such Supplement.

 

Section 1002.  Supplemental

Indentures Not Creating a New Series with Consent of Holders.  (a) 

With the prior written consent of the Control Party of each affected

Series, the Issuer and the Indenture Trustee may enter into a Supplement hereto

for the purpose of adding any provisions to or changing in any manner or

eliminating any of the provisions of this Indenture or of modifying in any

manner the rights of the Holders under this Indenture; provided, however, that no

such Supplement shall, without the consent of the Holder of each Outstanding

Note affected thereby:

 

(i)            reduce the principal amount of any

Note or the rate of interest thereon, change the priority of any payments

required pursuant to this Indenture or any Supplement, or the date on which, or

the place of payment where, or the coin or currency in which, any Note or the

interest thereon is payable, or impair the right to institute suit for the

enforcement of any such payment on or after the Final Payment Date thereof;

 

(ii)           reduce the percentage of Outstanding

Notes required for (a) the consent of any Supplement to this Indenture, (b) the

consent required for any waiver of compliance with certain provisions of this

Indenture or certain Events of Default hereunder and their consequences as

provided for in this Indenture or (c) the consent required to waive any payment

default on the Notes;

 

(iii)          modify any of the provisions of this

Section 1002 except to increase any percentage provided herein, or to provide

that certain other provisions of this Indenture cannot be modified or waived

without the consent of the Holder of each Outstanding Note affected thereby;

 

(iv)          modify or alter the definition of the

terms “Outstanding,” “Requisite Global Majority”, “Control Party”, or “Asset

Base” or “Depreciation Policy”;

 

(v)           impair or adversely affect the

Collateral except as otherwise permitted herein;

 

(vi)          permit the creation of any Lien

ranking prior to or on a parity with the Lien of this Indenture with respect to

any part of the Collateral or terminate the Lien of this Indenture on any

property at any time subject hereto or deprive the Holder of any Note of the

security afforded by the Lien of this Indenture; or

 

(vii)         modify any of the provisions of this

Indenture in such a manner as to affect the amount or timing of any payments of

interest or principal due on any Note.

 

Prior to the execution of any Supplement issued

pursuant to this Section 1002, the Issuer shall provide a written notice to

each Rating Agency (if applicable) setting forth in general terms the substance

of any such Supplement.

 

(b)           Promptly after the execution by the

Issuer and the Indenture Trustee of any Supplement pursuant to this Section

1002, the Issuer shall mail to all Noteholders of any

 

65

 

affected Class, each

Rating Agency of an affected Class (if applicable) and the Series Enhancer (if

applicable), a notice setting forth in general terms the substance of such

Supplement, together with a copy of the text of such Supplement.  Any failure of the Issuer to mail such

notice, or any defect therein, shall not, however, in any way impair or affect

the validity of any such Supplement.

 

Section 1003.  Execution

of Supplemental Indentures.  In executing, or accepting the additional trusts created by, a Supplement

permitted by this Article or the modification thereby of the trusts created by

this Indenture, the Indenture Trustee shall be entitled to receive, and shall

be fully protected in relying upon, an Opinion of Counsel stating that the

execution of such Supplement is authorized or permitted by this Indenture.  The Indenture Trustee may, but shall not be

obligated to, enter into any such Supplement which affects the Indenture

Trustee’s own rights, duties or immunities under this Indenture or otherwise.

 

Section 1004.  Effect

of Supplemental Indentures.  Upon the execution of any Supplement under this Article, this

Indenture shall be modified in accordance therewith, and such Supplement shall

form a part of this Indenture for all purposes, and every Holder of Notes

theretofore or thereafter authenticated and delivered hereunder shall be bound

thereby.

 

Section 1005.  Reference

in Notes to Supplemental Indentures.  Notes authenticated and delivered after the

execution of any Supplement pursuant to this Article may, and shall if required

by the Issuer, bear a notation in form approved by the Indenture Trustee as to

any matter provided for in such Supplement. 

If the Issuer shall so determine, new Notes so modified as to conform,

in the opinion of the Indenture Trustee, may be prepared and executed by the

Issuer and authenticated and delivered by the Indenture Trustee in exchange for

Outstanding Notes.

 

Section 1006.  Issuance

of Series of Notes. 

(a)  The Issuer may from time to

time direct the Indenture Trustee to execute and authenticate one or more

Series of Notes (each, a “Series”).

 

(b)           On or before the Series Issuance Date

relating to any Series, the parties hereto will execute and deliver a

Supplement which will specify the Principal Terms of such Series.  No Series of Notes shall be subordinated, in

right of payment or otherwise, to any other Series without the prior written

consent of each Noteholder of such Series. 

The terms of such Supplement may modify or amend the terms of this

Indenture solely as applied to such Series, and, with the consent of the

Control Party for any other Series, may amend this Indenture as applicable to

such other Series, in accordance with Section 1002 hereof.  The obligation of the Indenture Trustee to

authenticate, execute and deliver the Notes of such Series and to execute and

deliver the related Supplement is subject to the satisfaction of the following

conditions:

 

(i)            on or before the tenth Business Day

immediately preceding the Series Issuance Date (unless the parties to be

notified agree to a shorter notice period), the Issuer shall have given the

Indenture Trustee, the Servicer, each Rating Agency for such Series and any

Series Enhancer entitled thereto pursuant to the relevant Supplement notice of

the Series and the Series Issuance Date;

 

66

 

(ii)           the Issuer shall have delivered to

the Indenture Trustee the related Supplement, in form satisfactory to the

Indenture Trustee, executed by each party hereto other than the Indenture

Trustee;

 

(iii)          the Issuer shall have delivered to the

Indenture Trustee any related Enhancement Agreement executed by each of the

parties thereto and the Series Enhancer under such Enhancement Agreement shall

have acknowledged in writing the terms of the Administration Agreement;

 

(iv)          if such Series would modify the terms

of any other Series previously issued and then Outstanding, then (i) the

Control Party of each affected Series shall have given its prior written

consent, (ii) the terms and conditions of Section 1002 shall have been complied

with and (iii) the Rating Agency Condition shall have been satisfied with

respect to the other affected Series;

 

(v)           the Issuer shall have delivered to

the Indenture Trustee, each Rating Agency (if applicable), each Series Enhancer

(if applicable) and, if required, any Noteholder, any Opinions of Counsel

required by the related Supplement, including without limitation with respect

to true sale, enforceability, non-consolidation and security interest perfection

issues; and

 

(vi)          such other conditions as shall be

specified in the related Supplement.

 

Upon satisfaction

of the above conditions, the Indenture Trustee shall execute the Supplement and

authenticate, execute and deliver the Notes of such Series.

 

ARTICLE XI

 

HOLDERS LISTS

 

Section 1101. 

Issuer to Furnish Indenture Trustee Names and Addresses of Holders.  Unless otherwise provided in the related

Supplement, the Issuer will furnish or cause to be furnished to the Indenture

Trustee and each Series Enhancer (as applicable) (but only with respect to any

Series for which such Series Enhancer (as applicable) has provided enhancement)

(i) not more than 10 days after receipt of a request from the Indenture

Trustee, a list, in such form as the Indenture Trustee may reasonably require,

of the names and addresses and tax identification numbers of the Holders of

Notes as of such Date, and (ii) at such other times as the Indenture Trustee

may request in writing, within 30 days after the receipt by the Issuer of any

such request, a list of similar form and content as of a date not more than 15

days prior to the time such list is furnished; provided, however, that so

long as the Indenture Trustee maintains the Note Register, no such lists shall

be required to include the names and addresses received by the Indenture

Trustee in such capacity.

 

Section 1102. 

Preservation of Information; Communications to Holders.  The Indenture Trustee shall preserve, in as

current a form as is reasonably practicable, the names and addresses of Holders

contained in the most recent list furnished to the Indenture Trustee as

provided in Section 1101 and the names and addresses of Holders received by the

Indenture

 

67

 

Trustee in its capacity

as note registrar.  The Indenture

Trustee may destroy any list furnished to it as provided in Section 1101 upon

receipt of a new list so furnished.

 

ARTICLE XII

 

EARLY AMORTIZATION

EVENT

 

Section 1201. 

Early Amortization Event. 

With respect to any Series, as of any date of determination, the

existence of any one of the following events or conditions:

 

(1)                                  The

Outstanding Obligations of such Series on any Payment Date (after giving effect

to all payments of principal to be paid on such Payment Date) exceeds the Asset

Base of such Series for a period of 10 consecutive Business Days without having

been cured; or

 

(2)                                  The

occurrence of an additional Early Amortization Event as specified in the

related Supplement for any Series.

 

The occurrence of an Early Amortization Event with

respect to one Series of Notes (that has not been waived by the related Control

Party) shall constitute an Early Amortization Event with respect to all other

Series of Notes then Outstanding unless waived by the Control Party for such

other Series or unless the related Supplement with respect to each such other

Series of Notes shall specifically provide to the contrary.  If an Early Amortization Event with respect

to any Series exists on any Payment Date, then such Early Amortization Event shall

be deemed to continue until the Business Day on which the related Control Party

waives in writing such Early Amortization Event.

 

Section 1202. 

Other Series.  If an Early

Amortization Event with respect to any Series exists on any Payment Date, any Excess

Cash Available for Distribution shall be paid, pro rata in accordance with the

Outstanding Obligations of all other Series, on such Payment Date for

application to all Outstanding Obligations until paid in full.

 

ARTICLE XIII

 

MISCELLANEOUS

PROVISIONS

 

Section 1301.  Compliance

Certificates and Opinions.  (a)  Upon any application

or request by the Issuer to the Indenture Trustee to take any action under any

provision of this Indenture or any Supplement, the Issuer shall furnish to the

Indenture Trustee a certificate stating that all conditions precedent, if any,

provided for in this Indenture and any relevant Supplement relating to the

proposed action have been complied with and, if deemed reasonably necessary by

the Indenture Trustee or if required pursuant to the terms of this Indenture,

an Opinion of Counsel stating that in the opinion of such counsel all such

conditions precedent, if any, have been complied with, except that in the case

of any such application or request as to which the furnishing of such documents

is specifically required by any provision of this Indenture relating to such

particular application or request, no additional certificate or opinion need be

furnished.

 

68

 

(b)           Every certificate or opinion with

respect to compliance with a condition or covenant provided for in this

Indenture shall include:

 

(i)            a statement that each individual

signing such certificate or opinion has read such covenant or condition and the

definitions herein relating thereto;

 

(ii)           a brief statement as to the nature

and scope of the examination or investigation upon which the statements or

opinions contained in such certificate or opinion are based;

 

(iii)          a statement that, in the opinion of

each such individual, he has made such examination or investigation as is

necessary to enable him to express an informed opinion as to whether such

covenant or condition has been complied with;

 

(iv)          and a statement as to whether, in the

opinion of each such individual, such condition or covenant has been complied

with.

 

Section 1302.  Form

of Documents Delivered to Indenture Trustee.  (a) 

In any case where several matters are required to be certified by, or

covered by an opinion of, any specified Person, it is not necessary that all

such matters be certified by, or covered by the opinion of, only one such

Person, or that they be so certified or covered by only one document, but one

such Person may certify or give an opinion with respect to some matters and one

or more other such Persons as to other matters, and any such Person may certify

or give an opinion as to such matters in one or several documents.

 

(b)           Any certificate or opinion may be

based, insofar as it relates to legal matters, upon a certificate or opinion

of, or representations by, counsel, unless such officer knows that the

certificate or opinion or representations with respect to the matters upon

which his certificate or opinion is based are erroneous

 

(c)           Where any Person is required to make,

give or execute two or more applications, requests, consents, certificates,

statements, opinions or other instruments under this Indenture, they may, but

need not, be consolidated and form one instrument.

 

Section 1303.  Acts

of Holders. 

(a)  Any request, demand,

authorization, direction, notice, consent, waiver or other action provided by

this Indenture or any Supplement to be given or taken by Holders may be (i)

embodied in and evidenced by one or more instruments of substantially similar

tenor signed by such Holders in person or by an agent duly appointed in

writing, (ii) evidenced by the written consent or direction of Holders of the

specified percentage of the principal amount of the Notes, or (iii) evidenced

by a combination of such instrument or instruments; and, except as herein

otherwise expressly provided, such action shall become effective when such

instrument or instruments and record are delivered to the Indenture Trustee

and, where it is hereby expressly required, to the Issuer.  Proof of execution of any such instrument or

of a writing appointing any such agent shall be sufficient for any purpose of

this Indenture and conclusive in favor of the Indenture Trustee and the Issuer,

if made in the manner provided in this Section 1303.

 

69

 

(b)           The fact and date of the execution by

any Person of any such instrument or writing may be proved by the affidavit of

a witness of such execution or by a certificate of a notary public or other

officer authorized by law to take acknowledgements of deeds, certifying that

the individual signing such instrument or writing acknowledged to him the

execution thereof.  Where such execution

is by a signer acting in a capacity other than his individual capacity, such

certificate or affidavit shall also constitute sufficient proof of his

authority.  The fact and date of the

execution of any such instrument or writing, or the authority of the Person

executing the same, may also be proved in any other manner which the Indenture

Trustee deems sufficient.

 

(c)           The ownership of Notes shall be

proved by the Note Register.

 

(d)           Any request, demand, authorization,

direction, notice, consent, waiver or other Act of the Holder of any Note shall

bind every future Holder of the same Note and the Holder of every Note issued

upon the registration of transfer thereof or in exchange therefor or in lieu

thereof in respect of anything done, omitted or suffered to be done by the

Indenture Trustee or the Issuer in reliance thereon, whether or not notation of

such action is made upon such Note.

 

Section 1304.  Inspection.  (a) 

Upon reasonable request, the Issuer agrees that it shall make available

to any representative of the Indenture Trustee, any Series Enhancer (if

applicable) or the Administrative Agent and their duly authorized

representatives, attorneys or accountants, for inspection and copying its books

of account, records and reports relating to the Eligible Engines, the related

Lease Agreements and the other items of Collateral, all in the format which the

Servicer uses for its own operations. 

Such inspections shall be conducted during normal business hours and

shall not unreasonably disrupt the Servicer’s business.  Any expense incident to the reasonable

exercise by the Indenture Trustee, the Administrative Agent, each Series

Enhancer (if applicable) or any Noteholder of any right under this Section 1304

shall be borne by the Person exercising such right unless an Event of Default

shall have occurred and then be continuing in which case such expenses shall be

borne by the Issuer.

 

(b)           The Issuer also agrees (i) to make

available on a reasonable basis upon reasonable request to the Indenture

Trustee, Administrative Agent, any Series Enhancer (if applicable) or any

prospective owner a Servicing Officer for the purpose of answering reasonable

questions respecting recent developments affecting the Issuer and (ii) to

instruct the Servicer to allow the Indenture Trustee, Administrative Agent, any

Series Enhancer (if applicable) or any prospective owner to inspect the

Servicer’s facilities upon reasonable request during normal business hours.

 

Section 1305.  Limitation

of Rights.  Except

as expressly set forth in this Indenture, this Indenture shall be binding upon

the Issuer, the Noteholders and their respective successors and permitted

assigns and shall not inure to the benefit of any Person other than the parties

hereto, the Noteholders and the Servicer as provided herein.  Notwithstanding the previous sentence, the

parties hereto, the Seller and the Servicer acknowledge that any Series

Enhancer (if applicable) for a Series of Notes is an express third party

beneficiary hereof entitled to enforce its rights hereunder as if actually a

party hereto.

 

70

 

Section 1306.  Severability.  If any provision of this Indenture is held

to be in conflict with any applicable statute or rule of law or is otherwise

held to be unenforceable for any reason whatsoever, such circumstances shall

not have the effect of rendering the provision in question inoperative or

unenforceable in any other case or circumstance, or of rendering any other

provision or provisions herein contained invalid, inoperative, or unenforceable

to any extent whatsoever.

 

The invalidity of any one or more phrases, sentences,

clauses or Sections of this Indenture shall not affect the remaining portions

of this Indenture, or any part thereof.

 

Section 1307.  Notices.  All demands, notices and communications

hereunder shall be in writing, personally delivered, or by facsimile (with

subsequent telephone confirmation of receipt thereof), or sent by

internationally recognized overnight courier service, (a) in the case of the

Indenture Trustee, at the following address: 

101 Barclay Street, 8th Floor West, Asset Backed Finance Unit, New York,

New York 10286, (b) in the case of the Servicer, at the following address:  2320 Marinship Way, Suite 300, Sausalito,

California 94965, (c) in the case of the Issuer, at the following address:  2320 Marinship Way, Suite 300, Sausalito, California

94965, with a copy to the Servicer at the address set forth in clause (b), (d)

in the case of each Rating Agency (if applicable), at its address set forth in

the related Supplement, in the case of any Series Enhancer (if applicable), at

its address set forth in the related Supplement, or at other such address as

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

parties.  Any notice required or

permitted to be given to a Noteholder shall be given by certified first class

mail, postage prepaid (return receipt requested), or by courier, or by

facsimile, with subsequent telephone confirmation of receipt thereof, in each

case at the address of such Holder as shown in the Note Register or to the

telephone and fax number furnished by such Noteholder.  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 telecopy,

or (c) when delivered, if delivered by hand.  Any rights to notices conveyed to a Rating Agency (if applicable)

pursuant to the terms of this Indenture with respect to any Series or Class

shall terminate immediately if such Rating Agency (if applicable) no longer has

a rating outstanding with respect to such Series or Class.

 

Section 1308.  Consent

to Jurisdiction. 

Any legal suit, action or proceeding against the Issuer arising out of

or relating to this Indenture, or any transaction contemplated hereby, may be

instituted in any federal or state court in The City of New York, State of New

York and the Issuer hereby waives any objection which it may now or hereafter

have to the laying of venue of any such suit, action or proceeding, and, solely

for the purposes of enforcing this Indenture, the Issuer hereby irrevocably

submits to the non-exclusive jurisdiction of any such court in any such suit,

action or proceeding.  The Issuer hereby

irrevocably appoints and designates CT Corporation Systems having an address at

1633 Broadway, New York, New York 10019, its true and lawful attorney-in-fact

and duly authorized agent for the limited purpose of accepting servicing of

legal process and the Issuer agrees that service of process upon such party

shall constitute personal service of such process on such Person.  The Issuer shall maintain the designation

and appointment of such authorized agent until all amounts payable under this

Indenture shall have been paid in full. 

If such agent shall cease to so act, each of the Agent and the Seller

shall immediately designate and appoint another such agent satisfactory to the

 

71

 

Indenture Trustee and

shall promptly deliver to the Indenture Trustee evidence in writing of such

other agent’s acceptance of such appointment.

 

Section 1309.  Captions.  The captions or headings in this Indenture

are for convenience only and in no way define, limit or describe the scope or

intent of any provisions or sections of this Indenture.

 

Section 1310.  Governing

Law.  This

Indenture shall be governed by and interpreted in accordance with the laws of

the State of New York, without giving effect to the principles of conflicts of

law.

 

Section 1311.  No

Petition.  The

Indenture Trustee, on its own behalf, hereby covenants and agrees, and each Noteholder

by its acquisition of a Note shall be deemed to covenant and agree, that it

will not institute against the Issuer any bankruptcy, reorganization,

arrangement, insolvency or liquidation proceedings, or other proceedings under

any federal or state bankruptcy or similar law, at any time other than on a

date which is at least one year and one day after the last date on which any

Note of any Series was Outstanding.

 

Section 1312.  General

Interpretive Principles. 

For purposes of this Indenture except as otherwise expressly provided or

unless the context otherwise requires:

 

(a)           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 Indenture;

 

(b)           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;

 

(c)           the words “herein”, “hereof”,

“hereunder” and other words of similar import refer to this Indenture as a

whole and not to any particular provision; and

 

(d)           the term “include” or “including”

shall mean without limitation by reason of enumeration.

 

Section 1313.  Effective

Date of Transaction. 

Notwithstanding that this Indenture is dated as of September 12, 2002,

the various transfers, conveyances and transactions set forth in this

Indenture, including, without limitation, the security interests granted

pursuant to Section 401 hereof, shall not be effective until the date on which

the Series 2002-1 Notes, Class A and Class B, are executed and delivered

pursuant to the Series 2002-1 Supplement to this Indenture, between the Issuer

and the Indenture Trustee, which shall be evidenced by, among other things, the

fact that a counterpart of such Series 2002-1 Supplement is filed with the

Federal Aviation Administration for recordation.

 

Section 1314.  Counterparts.  This Indenture may be executed

simultaneously in any number of counterparts. 

Each counterpart shall be deemed to be an original, and all such

counterparts shall constitute one and the same instrument.

 

72

 

IN WITNESS WHEREOF, the Issuer and the Indenture

Trustee have caused this Indenture to be duly executed and delivered by their

respective officers thereunto duly authorized, all as of the day and year first

above written.

 

 

	

   

  	

  WILLIS ENGINE FUNDING

  LLC, as issuer

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ DONALD A. NUNEMAKER

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  Name: Donald A. Nunemaker

  
	

   

  	

   

  
	

   

  	

  Title: Vice President

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  THE BANK OF NEW YORK,

  as indenture trustee

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ SCOTT J. TEPPER

  	

   

  
	

   

  	

   

  
	

   

  	

  Name: Scott J.

  Tepper

  
	

   

  	

   

  
	

   

  	

  Title: Assistant

  Vice President

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  THE BANK OF NEW YORK,

  as securities

  intermediary

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ SCOTT J. TEPPER

  	

   

  
	

   

  	

   

  
	

   

  	

  Name: Scott J.

  Tepper

  
	

   

  	

   

  
	

   

  	

  Title: Assistant

  Vice President

  

 

73

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