10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2002

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 0-28774

WILLIS LEASE FINANCE CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	68-0070656
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
2320 Marinship Way, Suite 300 Sausalito, CA	94965
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (415) 331-5281

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes  ý  No  o

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Title of Each Class	Outstanding at November 5, 2002
Common Stock, $0.01 Par Value	8,833,978

WILLIS LEASE FINANCE CORPORATION
AND SUBSIDIARIES

INDEX

PART I	FINANCIAL INFORMATION
Item 1.  Consolidated Financial Statements
	Consolidated Balance Sheets As of September 30, 2002 and December 31, 2001
	Consolidated Statements of Income Three and Nine months ended September 30, 2002 and 2001
	Consolidated Statements of Shareholders’ Equity and Comprehensive Income Nine months ended September 30, 2001 and 2002
	Consolidated Statements of Cash Flows Nine months ended September 30, 2002 and 2001
	Notes to Consolidated Financial Statements
Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3.  Quantitative and Qualitative Disclosures About Market Risk
Item 4.  Controls and Procedures
Part II	OTHER INFORMATION
Item 6.  Exhibits and Reports on Form 8-K

2

WILLIS LEASE FINANCE CORPORATION
AND SUBSIDIARIES

Consolidated Balance Sheets

(In thousands, except share data)

(Unaudited)

	September 30, 2002			December 31, 2002
ASSETS
Cash and cash equivalents including restricted cash of $22,339 and $20,351 at September 30, 2002 and December 31, 2001, respectively	$	30,038		$	24,817
Equipment held for operating lease, less accumulated depreciation of $54,073 and $40,097 at September 30, 2002 and December 31, 2001, respectively	496,495			488,042
Net investment in direct finance lease	6,955			7,299
Operating lease related receivable, net of allowances of $303 and $175 at September 30, 2002 and December 31, 2001, respectively	2,701			2,488
Net assets of discontinued operations	—			1,130
Investments	1,480			1,480
Assets under derivative instruments	304			—
Other assets	8,943			7,197
Total assets	$	546,916		$	532,453
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Accounts payable and accrued expenses	$	4,061		$	4,450
Liabilities under derivative instruments	1,948			2,906
Deferred income taxes	23,898			22,804
Notes payable	368,339			359,547
Maintenance reserves	34,846			31,761
Security deposits	3,805			3,496
Unearned lease revenue	6,456			5,908
Total liabilities	443,353			430,872
Shareholders’ equity:
Preferred stock ($0.01 par value, 5,000,000 shares authorized; none outstanding)	—			—
Common stock, ($0.01 par value, 20,000,000 shares authorized; 8,833,978 and 8,825,953 shares issued and outstanding as of September 30, 2002 and December 31, 2001, respectively)	88			88
Paid-in capital in excess of par	61,572			61,532
Accumulated other comprehensive loss, net of tax of $885 and $1,091 as of September 30, 2002 and December 31, 2001, respectively	(1,449		)	(1,815		)
Retained earnings	43,352			41,776
Total shareholders’ equity	103,563			101,581
Total liabilities and shareholders’ equity	$	546,916		$	532,453

See accompanying notes to the consolidated financial statements.

3

WILLIS LEASE FINANCE CORPORATION
AND SUBSIDIARIES

Consolidated Statements of Income

(In thousands, except per share data)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2002			2001			2002			2001
REVENUE
Lease revenue	$	14,005		$	15,806		$	41,182		$	45,933
(Loss)/gain on sale of leased equipment	—			394			583			6,591
Total revenue	14,005			16,200			41,765			52,524
EXPENSES
Depreciation expense	5,017			4,255			14,525			12,316
General and administrative	3,611			3,331			10,389			10,210
Total expenses	8,628			7,586			24,914			22,526
Earnings from operations	5,377			8,614			16,851			29,998
Interest expense	5,432			5,767			14,730			18,521
Interest income	(107		)	(233		)	(342		)	(757		)
Residual share	—			204			—			393
Net interest and finance costs	5,325			5,738			14,388			18,157
Income from continuing operations before income taxes	52			2,876			2,463			11,841
Income taxes	(19		)	(1,121		)	(887		)	(4,618		)
Income from continuing operations	33			1,755			1,576			7,223
DISCONTINUED OPERATIONS
Income from discontinued operations (net of income tax expense of $29 and $19 for three and nine months ended September 30, 2001, respectively)	—			45			—			30
Loss on disposal of discontinued operations (net of income tax benefit of $493 for nine months ended September 30, 2001)	—			—			—			(770		)
	—			45			—			(740		)
Net income	$	33		$	1,800		$	1,576		$	6,483
Basic earnings per common share:
Income from continuing operations	$	0.00		$	0.20		$	0.18		$	0.83
Discontinued operations	—			—			—			(0.09		)
Net income	$	0.00		$	0.20		$	0.18		$	0.74
Diluted earnings per common share:
Income from continuing operations	$	0.00		$	0.20		$	0.18		$	0.81
Discontinued operations	—			—			—			(0.08		)
Net income	$	0.00		$	0.20		$	0.18		$	0.73
Average common shares outstanding	8,832			8,812			8,830			8,752
Diluted average common shares outstanding	8,841			8,954			8,848			8,915

See accompanying notes to the consolidated financial statements.

4

WILLIS LEASE FINANCE CORPORATION
AND SUBSIDIARIES

Consolidated Statements of Shareholders’ Equity and Comprehensive Income

Nine Months Ended September 30, 2001 and 2002

(In thousands)

(Unaudited)

	Issued and outstanding shares of common stock	Common Stock		Paid-in Capital in Excess of par		Accumulated Other Comprehensive Loss (net)			Retained earnings		Total shareholders’ equity
Balances at December 31, 2000	8,705	$	87	$	60,771	$	—		$	34,832	$	95,690
Net income	—	—		—		—			6,483		6,483
Other comprehensive loss
Transition adjustment for hedging instruments as of January 1, 2001, net of tax of $290	—	—		—		(453		)	—		(453		)
Net loss on cashflow hedging instruments, net of tax of $1,093	—	—		—		(1,711		)	—		(1,711		)
Total comprehensive income											4,319
Shares issued	121	1		671		—			—		672
Balances at September 30, 2001	8,826	$	88	$	61,442	$	(2,164	)	$	41,315	$	100,681
Balances at December 31, 2001	8,826	$	88	$	61,532	$	(1,815	)	$	41,776	$	101,581
Net income	—	—		—		—			1,576		1,576
Other comprehensive income
Net gain on cashflow hedging instruments, net of tax of $206	—	—		—		366			—		366
Total comprehensive income											1,942
Shares issued	8	—		40		—			—		40
Balances at September 30, 2002	8,834	$	88	$	61,572	$	(1,449	)	$	43,352	$	103,563

See accompanying notes to the consolidated financial statements.

5

WILLIS LEASE FINANCE CORPORATION
AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

		Nine Months Ended
		2002			2001
Cash flows from operating activities:
Net income		$	1,576		$	6,483
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense		14,525			12,864
Allowances and provisions		128			—
Stock option compensation		—			162
Loss on derivative instruments		99			—
Gain on sale of leased equipment		(583		)	(6,591		)
Loss on sale of discontinued operations		—			613
Write off of deferred costs		781			—
Changes in assets and liabilities:
Receivables		(301		)	1,850
Other assets		812			(114		)
Accounts payable and accrued expenses		(404		)	10,508
Deferred income taxes		887			5,934
Residual share payable		—			(2,598		)
Maintenance deposits		3,085			7,678
Security deposits		296			351
Unearned lease revenue		437			20
Net cash provided by operating activities		21,338			37,160
Cash flows from investing activities:
Proceeds from sale of equipment held for operating lease (net of selling expenses)		13,344			28,692
Adjustment to proceeds from sale of discontinued operations		—			771
Purchase of equipment held for operating lease		(35,805		)	(107,461		)
Purchase of property, equipment and furnishings		(207		)	(632		)
Investment at cost		—			(700		)
Principal payments received on direct finance lease		345			492
Net cash used in investing activities		(22,323		)	(78,838		)
Cash flows from financing activities:
Proceeds from issuance of notes payable		33,368			129,801
Debt issuance cost		(1,837		)	(1,898		)
Purchase of derivative instruments		(789		)	—
Proceeds from issuance of common stock		40			510
Principal payments on notes payable		(24,576		)	(80,522		)
Net cash provided by financing activities		6,206			47,891
Increase in cash and cash equivalents		5,221			6,213
Cash and cash equivalents at beginning of period including restricted cash of $20,351 and $16,666 at December 31, 2001 and 2000, respectively		24,817			25,371
Cash and cash equivalents at end of period including restricted cash of $22,339 and $25,359 at September 30, 2002 and 2001, respectively		$	30,038		$	31,584
Supplemental disclosures of cash flow information:
Net cash paid for:	Interest	$	13,245		$	17,661
	Income Taxes	$	11		$	59

See accompanying notes to the consolidated financial statements

6

WILLIS LEASE FINANCE CORPORATION
AND SUBSIDIARIES

Notes to Consolidated Financial Statements

1.Basis of Presentation

Consolidated Financial Statements

The accompanying unaudited consolidated financial statements of Willis Lease Finance Corporation and its subsidiaries (the “Company”) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission for reporting on Form 10-Q.  Pursuant to such rules and regulations, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  The accompanying unaudited interim financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations, contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal and recurring adjustments) necessary to present fairly the financial position of the Company as of September 30, 2002, and December 31, 2001, and the results of its operations for the three and nine month periods ended September 30, 2002 and 2001 and its cash flows for the nine month periods ended September 30, 2002 and 2001.  The results of operations and cash flows for the period ended September 30, 2002 are not necessarily indicative of the results of operations or cash flows which may be reported for the remainder of 2002.

Management considers the continuing operations of the Company to operate in one reportable segment.

2.Management Estimates

These financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.

The preparation of consolidated financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.  On an ongoing basis, the Company evaluates its estimates, including those related to residual values, estimated asset lives, bad debts, income taxes, and contingencies and litigation.  The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates under different assumptions or conditions.

3.Commitments

The Company has two leases for its office space.  The annual lease rental commitment for the Sausalito, California premises is approximately $365,000 and the lease expires on May 31, 2003.  The Company also leases office space from its former parts subsidiary in San Diego, California.  This annual lease rental commitment is approximately $71,000 and the lease expires on November 30, 2002, negotiations are in process for a lease extension for a further year.

Under the terms of the Sichuan Snecma joint venture (see note 4 below), the Company is committed to fund not more than an additional $1.5 million to the joint venture over the next three years.

The Company has committed to purchase an engine and engine equipment totaling approximately $6.7 million during the fourth quarter of 2002.

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4.Investments

In July 1999, the Company entered into an agreement to participate in a joint venture formed as a limited company - Sichuan Snecma Aero-engine Maintenance Co. Ltd (“Sichuan Snecma”).  Sichuan Snecma focuses on providing maintenance services for CFM56 series engines.  Other participants in the joint venture are China Southwest Airlines, Snecma Services and Beijing Kailan Aviation Technology Development and Services Corporation.  The Company’s investment in Sichuan Snecma at September 30, 2002 is $1.5 million.  This investment represents approximately a 7% interest in the venture.  The investment is recorded at cost and reviewed for impairment quarterly.  No adjustment to the carrying value is required at September 30, 2002.

5.Discontinued Operations

In November 2000, the Company sold its membership interests in its engine maintenance, repair and testing joint venture with Chromalloy Gas Turbine Corporation, Pacific Gas Turbine Center LLC (“PGTC LLC”), and its aircraft parts and components subsidiary, Willis Aeronautical Services, Inc. (“WASI”), to SRT Group America.  SRT Group America is an affiliate of FlightTechnics, LLC, an entity that owns 15% of the Company’s common stock.

As part of these transactions, the Company agreed to retain the lease portfolio of engines maintained and managed by WASI.  These engines are not generally considered part of the Company’s core portfolio and either will be sold or are subject to put option arrangements where, at the option of the Company, these engines can be sold to WASI, now renamed avioserv, an SRT Group America affiliate, for part-out at pre-determined prices.

At December 31, 2001, there were 4 engines with a book value of $1.2 million classified as Net Assets of Discontinued Operations. As of January 1, 2002 these assets have been reclassified to Equipment held for operating lease. However, the Company has given notice of its intent to exercise its put options in respect of 2 of these engines, which have a book value equal to the option price. At September 30, 2002, the sale was scheduled to close in the fourth quarter.  The results of operations from these assets are included in continuing operations under the appropriate line items (previously disclosed as Discontinued Operations in 2001).

In the three and nine months ended September 30, 2001, net income from discontinued operations were $45,000 and $30,000 respectively.  In the three and nine months ended September 30, 2001, the losses on disposal of discontinued operations were $0 and $770,000, respectively.

6.Notes Payable

At September 30, 2002, notes payable consists of bank loans totaling $368.3 million payable over periods of 1 to 10 years with interest rates varying between approximately 3.8% and 8.6% (excluding the effect of the Company’s interest rate hedges). The significant facilities are described below.

At September 30, 2002, the Company had a $125.0 million revolving credit facility to finance the acquisition of aircraft engines, aircraft and spare parts for lease as well as for general working capital purposes.  As of September 30, 2002, $22.7 million was available under this facility. The facility matures in May, 2004. The interest rate on this facility at September 30, 2002 is LIBOR plus 2.00%.

During the quarter ended September 30, 2002, the Company replaced its $190.0 million debt warehouse facility with a $200.0 million debt warehouse facility on similar terms but with a different group of lenders. A wholly-owned special purpose entity, Willis Engine Funding LLC was created for the financing of jet aircraft engines acquired by such finance subsidiary from the Company. The facility has a 1-year revolving period ending September 11, 2003, followed, if not renewed, by a 4-year amortization period. The facility’s structure is designed to facilitate public or private securitized notes issuances by the special purpose finance subsidiary. The facility notes are divided into $180.0 million Class A notes and $20.0 million Class B notes. The Company has a guarantee to the Class B Noteholders determined by a formula in the debt agreement. The maximum amount of the guarantee is $20.0 million. At September 30, 2002, the guarantee is approximately $19.0 million.  The assets of Willis Engine Funding LLC and any associated Owner Trust are not available to satisfy the obligations of the Company or any of its affiliates. The subsidiary is consolidated for financial statement presentation purposes.

At September 30, 2002, $10.0 million is available under the Facility. Interest on the Class A note is a commercial paper rate plus a weighted average spread of approximately 1.41%.  Interest on the Class B Note is LIBOR + 4.01%.

At September 30, 2002, the Company had a $25.1 million term loan facility available to a wholly-owned consolidated special purpose subsidiary of the Company, WLFC-AC1 Inc., for the financing of jet aircraft engines sold by the Company to such subsidiary.  The facility is a five-year term loan with final maturity of June 30, 2005.  The interest rate is LIBOR plus 2.05%.  This facility is fully

8

drawn.

At September 30, 2002, the Company had a $35.0 million revolving credit facility with a financial institution. Borrowings under the facility accrue interest at a rate of LIBOR plus 2.00% per annum and are secured by specific engines and leases pledged to the lender.  The facility has a 12-month revolving period which may be renewed annually by agreement between the Company and the lender.  Borrowings under the facility have maturities that coincide with the maturities of the individual leases serving as collateral. The facility is fully drawn.

At September 30, 2002, LIBOR was 1.81% and the commercial paper rate was approximately 1.69%. At September 30, 2001, the rates were approximately 2.63% and 3.67%, respectively.

The following is a summary of the aggregate maturities of notes payable on September 30, 2002 (dollars in thousands):

Year Ending December 31,

2002	$	5,462
2003	7,738
2004	126,917
2005	47,564
2006	23,288
2007 and thereafter	157,370
	$	368,339

7.Derivative Instruments

The Company holds a number of interest rate swaps to mitigate its exposure to changes in interest rates, in particular LIBOR, as a large portion of the Company’s borrowings are at variable rates.  In addition, Willis Engine Funding LLC is required under its credit agreement to hedge a portion of its borrowings.  These swaps have been documented and designated as cash flow hedges under SFAS 133 “Accounting for Derivative Instruments and Hedging Activities” (as amended by SFAS 137 and 138).  At September 30, 2002, the Company was a party to interest rate swap agreements with notional outstanding amounts of $50.0 million, remaining terms of between 1 and 20 months and fixed rates of between 5.8% and 6.405%.  The fair value of these swaps at September 30, 2002, was negative $1.9 million and represented the estimated amount the Company would have to pay to terminate the swaps.  The Company purchased a number of forward-commencing interest rate caps, documented and designated as cash flow hedges, during the second quarter of 2002. These caps have notional amounts of $60.0 million, with 3 year terms, and effective dates commencing in 2003 and rates capped at 5.5%. At September 30, 2002, the fair value of the caps was positive $304,000.

The Company reviews the effectiveness of its interest rate hedges on a quarterly basis and adjusts the fair value of the interest rate hedges through either Other Comprehensive Loss and/or Earnings for the period.  For the nine months ended September 30, 2002, the change in fair value of the interest rate hedges recorded to Other Comprehensive Loss was $0.4 million (net of tax of $0.2 million) and approximately $0.1 million change in fair value recognized in earnings. For the nine months ended September 30, 2001, the change in fair value of the interest rate hedges recorded to Other Comprehensive Loss was $1.7 million (net of tax of $1.1 million) and on January 1, 2001, upon adoption of Statement SFAS 133, a transition adjustment of $0.5 million (net of tax of $0.3 million) was also recorded to Other Comprehensive Loss. Interest expense for the three months ended September 30, 2002 and 2001, was increased due to the Company’s interest rate hedges by approximately $0.7 million and $0.6 million, respectively. Interest expense for the nine months ended September 30, 2002 and 2001 was increased due to the Company’s interest rate hedges by approximately $2.4 million and $1.0 million, respectively. Reclassification into earnings in future periods may occur if the effectiveness of the interest rate hedges is reduced or they are terminated ahead of their maturity.  It is not possible to ascertain the effect on earnings for the remainder of 2002 of a reduction in effectiveness at this time and it is the Company’s intention to hold the interest rate hedges until their maturity.

9

Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

The Company’s core business is acquiring and leasing, primarily pursuant to operating leases, commercial aircraft spare engines and related aircraft equipment; and the selective purchase, sale and resale of commercial aircraft engines (collectively “equipment”).

Critical Accounting Policies and Estimates

The preparation of consolidated financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.  On an ongoing basis, the Company evaluates its estimates, including those related to residual values, estimated asset lives, bad debts, income taxes, contingencies and litigation.  The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements:

Leasing Related Activities: Revenue from leasing of equipment is recognized as operating lease or finance lease revenue over the terms of the applicable lease agreements.  Where collection cannot be reasonably assured, for example, upon a lessee bankruptcy, the Company does not recognize revenue.  The Company also estimates and charges to income a provision for bad debts based on its experience in the business and with each specific customer and the level of past due accounts.  The financial condition of the Company’s customers may deteriorate and result in actual losses exceeding the estimated allowances.  In addition, any deterioration in the financial condition of the Company’s customers may adversely affect future lease revenues. The vast majority of the Company’s leases are accounted for as operating leases.  Under an operating lease, the Company retains title to the leased equipment, thereby retaining the potential benefit and assuming the risk of the residual value of the leased equipment.

The Company generally depreciates engines on a straight-line basis over 15 years to a 55% residual value.  Spare parts packages are generally depreciated on a straight-line basis over 15 years to a 25% residual value.  Aircraft are generally depreciated on a straight-line basis over 13-20 years to a 15%-17% residual value. For equipment that is leased with the intent to disassemble upon lease termination, the Company depreciates the equipment over its estimated lease term to a residual value based on an estimate of the wholesale value of the parts after disassembly.  If useful lives or residual values are lower than those estimated by the Company, upon sale of the equipment, a loss may be realized.

At the commencement of a lease, the Company often collects security deposits (normally equal to at least one month’s lease payment) and, both at lease commencement and on an on-going basis, maintenance reserves from the lessee based on the creditworthiness of the lessee. The security deposit is returned to the lessee after all lease obligations have been met.  Maintenance reserves are accumulated in accounts maintained by the Company or the Company’s lenders and are used when normal repair associated with engine use or maintenance is required.  In many cases, to the extent that cumulative maintenance reserves are inadequate to fund normal repairs required prior to return of the engine to the Company, the lessee is obligated to cover the shortfall.  Recovery is therefore dependent on the financial condition of the lessee.

10

Sales Related Activities: For equipment sold out of the Company’s lease portfolio or which was acquired for resale, the Company recognizes the gain or loss associated with the sale or the gross proceeds from equipment acquired for resale as revenue.  Gain consists of sales proceeds less the net book value of the equipment sold and any costs directly associated with the sale.  Additionally, to the extent that any deposits or reserves are not included in the sale and the purchaser of the equipment assumes any liabilities associated therewith, such deposits and reserves are included in the gain on sale. If useful lives or residual values (which estimates effect the net book value of the equipment) are lower than those estimated by the Company, upon sale of the equipment, a loss may be realized.

Asset Valuation: The Company regularly reviews its portfolio of equipment for impairment in accordance with SFAS144, “Accounting for the Impairment or Disposal of Long-lived Assets”.  Such review necessitates estimates of future cash flows over the useful life of the asset including residual values and component values.  The estimates are based on currently available market data and are subject to fluctuation from time to time.  The Company initiates its review whenever events or changes in circumstances indicate that the carrying amount of equipment that is a long-lived asset may not be recoverable.  Recoverability of equipment is measured by comparison of its carrying amount to the expected future undiscounted cash flows (without interest charges) that the equipment is expected to generate.  Any impairment to be recognized is measured by the amount by which the carrying amount of the equipment exceeds its fair market value.  Significant management judgment is required in the forecasting of future operating results which are used in the preparation of projected undiscounted cash flows and should different conditions prevail, material write downs may occur.

Results of Operations

Three months ended September 30, 2002 compared to the three months ended September 30, 2001:

Leasing Related Activities.  Lease related revenue from continuing operations for the quarter ended September 30, 2002 decreased 11% to $14.0 million from $15.8 million for the comparable period in 2001.  This decrease mainly reflects an increased amount of equipment off-lease and reduced average lease rate factors, partially offset by an increase in the lease portfolio. At September 30, 2002 and 2001, respectively, approximately 14% and 10% of equipment by book value were off-lease due mainly to the downturn in the aviation industry.  The aggregate of net book value of leased equipment and net investment in direct finance lease at September 30, 2002 and 2001 was $503.5 million and $489.4 million, respectively.

During the quarter ended September 30, 2002, the Company added $9.1 million of equipment and capitalizable costs to its lease portfolio.

During the quarter ended September 30, 2001, 2 engines were added to the Company’s lease portfolio at a cost of $22.5 million.  The Company sold one engine to a third party from the lease portfolio.  The engine sold had a net book value of $2.1 million and realized a gain of $0.4 million.

Depreciation Expense.  Depreciation expense increased 18% to $5.0 million for the quarter ended September 30, 2002 from the comparable period in 2001, mainly due to the increase in the lease portfolio, accelerated depreciation on certain engine types, and the reclassification of engines previously disclosed as discontinued operations.

General and Administrative Expenses.  General and administrative expenses increased 8% to $3.6 million for the quarter ended September 30, 2002, from the comparable period in 2001, mainly due to increased legal and consulting costs including $0.1 million of deferred costs written off on repayment of the prior warehouse credit facility.

11

Net interest and finance costs.  Overall, net interest and finance costs, which is comprised of interest expense, residual sharing expense and interest income, decreased 7% to $5.3 million for the quarter ended September 30, 2002 from the comparable period in 2001. Interest expense decreased 6% to $5.4 million for the quarter ended September 30, 2002 from the comparable period in 2001, due to a decrease in interest rates, partially offset by an increase in average debt and approximately $0.7 million in deferred loan fees written off on repayment of the prior warehouse credit facility. Residual sharing expense related to debt was zero for the quarter ended September 30, 2002 compared with $0.2 million for the same period in 2001.  There were no residual sharing arrangements applicable to the Company’s engines as of September 30, 2002 (in 2001, one engine was subject to a residual sharing arrangement).  Interest income for the quarter ended September 30, 2002 was $0.1 million compared to $0.2 million for the comparable period in 2001 due mainly to the reduction in interest rates.  Interest is earned on cash and deposits held.

Income Taxes.  Income tax expense for continuing operations for the quarter ended September 30, 2002 was $0 compared to $1.1 million for the comparable period in 2001 due mainly to lower pre-tax income. The effective tax rates for the quarters ended September 30, 2002 and 2001 were 36% and 39%, respectively, due to the Company’s election, in the fourth quarter of 2001, for Extraterritorial Income Exclusion relief relating to certain qualifying assets.

Nine months ended September 30, 2002 compared to the nine months ended September 30, 2001:

Leasing Related Activities.  Lease related revenue from continuing operations for the nine months ended September 30, 2002 decreased 10% to $41.2 million from $45.9 million for the comparable period in 2001.  This decrease mainly reflects an increased amount of equipment off-lease and reduced average lease rate factors, offset by an increase in the lease portfolio. At September 30, 2002 and 2001, respectively, approximately 14% and 10% of equipment by book value were off-lease due mainly to the downturn in the aviation industry.  The aggregate of net book value of leased equipment and net investment in direct finance lease at September 30, 2002 and 2001 was $503.5 million and $489.4 million, respectively.

During the nine months ended September 30, 2002, three engines from the lease portfolio were sold.  The engines sold had a total net book value of $12.7 million and realized a gain of $0.6 million. During the nine months ended September 30, 2002, the Company added $35.8 million of equipment and capitalizable costs to its lease portfolio.

During the nine months ended September 30, 2001, 17 engines were added to the Company’s lease portfolio at a cost of $107.5 million which includes capitalized costs.  The Company sold 5 engines from the lease portfolio to third parties.  The engines sold had a net book value of $22.1 million and realized a gain of $6.6 million.

Depreciation Expense.  Depreciation expense increased 18% to $14.5 million for the nine months ended September 30, 2002 from the comparable period in 2001, mainly due to the increase in the lease portfolio, accelerated depreciation on certain engine types, and the reclassification of engines previously disclosed as discontinued operations.

General and Administrative Expenses.  General and administrative expenses increased 2% to $10.4 million for the nine months ended September 30, 2002, from the comparable period in 2001 mainly due to increased insurance and legal fees offset by reduced staffing and marketing costs.

Net interest and finance costs.  Overall, net interest and finance costs, which comprises interest expense, residual sharing expense and interest income, decreased 21% to $14.4 million for the nine months ended September 30, 2002 from the comparable period in 2001. Interest expense decreased 20% to $14.7 million for the nine months ended September 30, 2002 from the comparable period in 2001, due to a decrease in interest rates, partially offset by an increase in average debt and approximately $0.7 million in deferred loan fees written off on repayment of the prior warehouse credit facility. Residual sharing expense related to debt was zero for the nine months ended September 30, 2002 compared with $0.4 million for the same period in 2001.  There were no residual sharing arrangements applicable to the Company’s engines as of September 30, 2002 (in 2001, one engine was subject to a residual sharing arrangement).  Interest income for the nine months ended September 30, 2002 was $0.3 million compared to $0.8 million for the comparable period in 2001 due mainly to the reduction in interest rates.  Interest is earned on cash and deposits held.

Income Taxes.  Income tax expense for continuing operations for the nine months ended September 30, 2002 was $0.9 million compared to $4.6 million for the comparable period in 2001 mainly due to lower pre-tax income. The effective tax rates for the nine months ended September 30, 2002 and 2001 were 36% and 39%, respectively due to the Company’s election, in the fourth quarter of 2001, for Extraterritorial Income Exclusion relief relating to certain qualifying assets.

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Accounting Pronouncements

In June 2001, FASB issued SFAS 141, “Business Combinations,” SFAS 142, “Goodwill and Other Intangible Assets” and SFAS 143 “Accounting for Asset Retirement Obligations.”  Statement 141 addresses financial accounting and reporting for business combinations and supercedes APB Opinion No. 16, “Business Combinations,” and SFAS 38, “Accounting for Preacquisition Contingencies of Purchased Enterprises.”  Under Statement 141, all business combinations are to be accounted for using one method, the purchase method.  The provisions of Statement 141 apply to all business combinations instituted after September 30, 2001.

Statement 142 addresses financial accounting and reporting for acquired goodwill and other intangible assets and supercedes APB Opinion No. 17, “Intangible Assets.”  Statement 142 addresses how intangible assets that are acquired individually or with a group of other assets (excluding those acquired in a business combination) should be accounted for on their acquisition and also how they should be accounted for after they have been initially recognized.  The provisions of Statement 142 became effective beginning January 1, 2002, except for goodwill and intangible assets acquired after September 30, 2001 which became immediately subject to the non-amortization and amortization provisions of the Statement. Statement 142 requires that goodwill and all identifiable intangible assets that have an indeterminable life be recognized as assets but not amortized. These assets will be assessed for impairment annually.

Statement 143 addresses the financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and associated retirement costs.  The Statement requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made.  The Statement in effect is for fiscal years beginning after June 15, 2002.

The Company did not undertake any transactions during the quarter ended September 30, 2002, nor has any assets that are affected by any of these Statements.

In August 2001, FASB issued SFAS 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.”  This Statement supercedes SFAS 121, “Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of” and elements of APB 30, “Reporting the Results of Operations-Reporting the Effects on Disposal of a Segment of a Business, and Extraordinary, Unusual or Infrequently Occurring Events and Transactions.”

Statement 144 establishes a single-accounting model for long-lived assets to be disposed of while maintaining many of the provisions relating to impairment testing and valuation.  The Statement became effective from January 1, 2002. The adoption of this Statement will not materially change the way the Company reviews and calculates asset impairment charges.  During the nine months ended September 30, 2002, as a result of its review, the Company recorded impairment charges of $154,000 (recorded under Depreciation in the Income Statement).  No charge was made during the quarter ended September 30, 2002.

In April 2002, FASB issued SFAS 145, “Rescission of Statements No. 4, 44 and 64, Amendment of FASB Statement 13, and Technical Corrections.”  This Statement rescinds Statement 4, “Reporting Gains and Losses from Extinguishment of Debt,” Statement 64, “Extinguishments of Debt made to Satisfy Sinking-Fund Requirements” and Statement 44, “Accounting for Intangible Assets of Motor Carriers” and amends Statement 13, “Accounting for Leases.”  Statement 44 was issued to cover accounting for the transition to the Motor Carrier Act of 1980, which, having been completed, renders the Statement unnecessary.  As a result of rescission of Statements 4 and 64, gains or losses on extinguishment of debt should be classified as Extraordinary Items only if they meet the criteria in ABP Opinion 30, “Reporting the Results of Operations.”  The amendments to Statement 13 are to improve consistency between accounting for sale-leaseback transactions and transactions that have similar economic effects as sale-leaseback transactions.

In June 2002, FASB issued SFAS 146, “Accounting for Costs Associated with Exit or Disposal Activities.”  Statement 146 requires that a liability for a cost associated with an exit or disposal activity be recognized and measured initially at fair value only when the liability is incurred.

The Company has not undertaken any transactions that are affected by Statements 145 and 146.

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Liquidity and Capital Resources

Historically, the Company has financed its growth through borrowings secured by its equipment lease portfolio, operating cash flow and the issuance of stock.  Cash of approximately $33.4 million and $129.8 million, in the nine-month periods ended September 30, 2002 and 2001, respectively, was derived from borrowings.  Cash flow from operating activities provided $21.3 million and $35.3 million in the nine-month periods ended September 30, 2002 and 2001, respectively.  In these same time periods, $24.6 million and $80.5 million, respectively, of cash was used to repay debt.

The Company’s primary use of funds is for the purchase of equipment for lease.  Approximately $35.8 million (including capitalized costs) and $107.5 million (including capitalized costs) of funds were used for these purposes in the nine-month periods ended September 30, 2002 and 2001, respectively.

Cash flows from operations are driven significantly by changes in revenue.  While the Company has experienced some deterioration in lease rates, these have been offset by reductions in interest rates such that the spread between lease rates and interest rates has remained relatively constant throughout the period.  The lease revenue stream, in the short-term, is at fixed rates while a substantial amount of the Company’s debt is at variable rates. If interest rates increase the Company may not be able to increase lease rates in the short-term and this would cause a reduction in the Company’s earnings. Utilization has also decreased with approximately 14%, by book value, of the Company’s assets off-lease at September 30, 2002, compared to approximately 10% at September 30, 2001.  Further decreases in utilization, as well as deterioration in lease rates that are not offset by reductions in interest rates, would  have a negative impact on earnings and cash flows from operations.  It is possible in the short-term that utilization may decrease.

At September 30, 2002, notes payable consists of bank loans totaling $368.3 million payable over periods of 1 to 10 years with current interest rates varying between approximately 3.8% and 8.6% (excluding the effect of the Company’s interest rate hedges). The significant facilities are described below.

At September 30, 2002, the Company had a $125.0 million revolving credit facility to finance the acquisition of aircraft engines, aircraft and spare parts for lease as well as for general working capital purposes.  As of September 30, 2002, $22.7 million was available under this facility. The facility matures in May, 2004. The interest rate on this facility at September 30, 2002 is LIBOR plus 2.00%.

During the quarter ended September 30, 2002, the Company replaced its $190.0 million debt warehouse facility with a $200.0 million debt warehouse facility on similar terms but with a different group of lenders. A wholly-owned special purpose entity, Willis Engine Funding LLC was created for the financing of jet aircraft engines acquired by such finance subsidiary from the Company. The facility has a 1-year revolving period ending September 11, 2003, followed, if not renewed, by a 4-year amortization period. The facility’s structure is designed to facilitate public or private securitized notes issuances by the special purpose finance subsidiary. The facility notes are divided into $180.0 million Class A notes and $20.0 million Class B notes. The Company has a guarantee to the Class B Noteholders determined by a formula in the debt agreement. The maximum amount of the guarantee is $20.0 million. At September 30, 2002 the guarantee is approximately $19.0 million. The assets of Willis Engine Funding LLC and any associated Owner Trust are not available to satisfy the obligations of the Company or any of its affiliates.  The subsidiary is consolidated for financial statement presentation purposes.

At September 30, 2002, $10.0 million is available under the Facility. Interest on the Class A note is a commercial paper rate plus a weighted average spread of approximately 1.41%. Interest on the Class B Note is LIBOR + 4.01%

At September 30, 2002, the Company had a $25.1 million term loan facility available to a wholly-owned consolidated special purpose subsidiary of the Company, WLFC-AC1 Inc., for the financing of jet aircraft engines sold by the Company to such subsidiary.  The facility is a five-year term loan with final maturity of June 30, 2005.  The interest rate is LIBOR plus 2.05%.  This facility is fully drawn.

At September 30, 2002, the Company had a $35.0 million revolving credit facility with a financial institution. Borrowings under the facility accrue interest at a rate of LIBOR plus 2.00% per annum and are secured by specific engines and leases pledged to the lender.  The facility has a 12-month revolving period which may be renewed annually by agreement between the Company and the lender.  Borrowings under the facility have maturities that coincide with the maturities of the individual leases serving as collateral. The facility is fully drawn.

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At September 30, 2002, LIBOR was 1.81% and the commercial paper rate was approximately 1.69%. At September 30, 2001, the rates were 2.63% and 3.67%, respectively.

Approximately $5.5 million of the Company’s debt is repayable during the remainder of 2002.  Such repayments consist of scheduled installments due under term loans.  The table below summarizes the Company’s contractual commitments at September 30, 2002.

Contractual Payments Due (in thousands)

	Three months ending,		Twelve months ending,
			December 31,
Contractual Obligation	2002		2003	2004	2005	2006	Thereafter	Total
Debt	$	5,462	7,738	126,917	47,564	23,288	157,370	$	368,339
Operating leases on Company premises	$	103	152	—	—	—	—	$	255

Approximately $352 million of the above debt is subject to the Company continuing to comply with the covenants of each financing, including debt/equity ratios, minimum tangible net worth and minimum interest coverage ratios, and other eligibility criteria including customer and geographic concentration restrictions. In addition, the Company can typically borrow between 80% to 100% of an engine purchase price and between 50% to 80% of an aircraft or spare parts purchase price under these facilities, so the Company must have other available funds for the balance of the purchase price of any new equipment to be purchased or it will not be permitted to draw on these facilities for a particular purchase. The facilities are also cross-defaulted.  If the Company does not comply with the covenants or eligibility requirements, the Company may not be permitted to borrow additional funds and accelerated payments may become necessary.  Additionally, debt is secured by engines on lease to customers and to the extent that engines are returned from lease early or are sold, repayment of that portion of the debt could be accelerated.  At September 30, 2002, the Company was in compliance with all covenants, except trailing four-quarter interest coverage due in large part to the write-off of fees associated with the refinancing of the warehouse credit facility and also due to lower net income during the measurement period. A waiver from complying with this covenant was obtained from the respective banks.

As a result of the floating rate structure of the majority of the Company’s borrowings, the Company’s interest expense associated with borrowings will vary with market rates.  In addition, commitment fees are payable on the unused portion of the facilities.

The Company also holds a 7% interest, accounted for under the Cost method, in a joint venture in China, Sichuan Snecma Aero-Engine Maintenance Co. Ltd.  The Company has invested $1.5 million to date and has a commitment to fund not more than an additional $1.5 million over the next three years.

The Company believes that its current equity base, internally generated funds and existing debt facilities are sufficient to maintain the Company’s current level of operations. A decline in either the level of internally generated funds, that could result if portfolio utilization rates decrease, or the availability under the Company’s existing debt facilities would impair the Company’s ability to sustain its current level of operations.  The Company is currently discussing additions to its debt base with its commercial and investment banks.  If the Company is not able to access additional debt, its ability to continue to grow its asset base consistent with historical trends will be impaired and its future growth limited to that which can be funded from internally generated capital.

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Management of Interest Rate Exposure

At September 30, 2002, $354 million of the Company’s borrowings were on a variable rate basis at various interest rates tied to LIBOR or commercial paper rates.  The Company’s equipment leases are generally structured at fixed rental rates for specified terms.  Increases in interest rates could narrow or eliminate the spread, or result in a negative spread, between the rental revenue the Company realizes under its leases and the interest rate that the Company pays under its borrowings.

To mitigate exposure to interest rate changes, the Company has entered into interest rate swap agreements which have notional outstanding amounts of $50.0 million, with remaining terms of between 1 and 20 months and fixed rates of between 5.8% and 6.405%.  The Company has also purchased a number of forward-commencing caps with notional amounts totaling $60.0 million, terms of 3 years, effective dates commencing in 2003 and rates capped at 5.5%.

Interest expense for the three-month period ended September 30, 2002, was increased due to the Company’s interest rate hedges by approximately $0.7 million compared to $0.6 million in the comparable period in 2001.  For the nine months ended September 30, 2002 and 2001, interest expense was increased due to the hedges by $2.4 million and $1.0 million, respectively. The Company will be exposed to risk in the event of non-performance of the interest rate hedge counter-parties. The Company anticipates that it may hedge additional amounts of its floating rate debt during the next several months.

Related Party and Similar Transactions

The Company continues to use PGTC LLC’s services to repair/refurbish engines prior to sale or re-lease.  The Company also sells engines to avioserv. The Company has also entered into put option arrangements regarding certain engines scheduled to be run to the end of their useful lives to sell them at the Company’s discretion, to avioserv at pre-determined prices.  The Company notified avioserv of its intention in January, 2002 to exercise put options with respect to two engines and expects to close the puts during the fourth quarter of 2002. The Company also leases office space from avioserv with the lease term expiring November 30, 2002, negotiations are in process for a lease extension for a further year.

The Company entered into a business cooperation period with Flightlease AG and SR Technics Group (SRT) ending on November 30, 2003, however Flightlease is now in liquidation.  Under the agreement, SRT has price discounts and lowest price guarantees on short-term and long-term engine leases from the Company.  SRT in turn will provide the Company with access to spare engines, will promote the Company’s engine leasing efforts and the development of other products, and will facilitate business opportunities among the Company and SRT’s other business partners.  Flightlease and SRT are members of FlightTechnics, LLC, an entity that owns 15% of the Company’s common stock.  During the three and nine months ended September 30, 2002 and 2001, respectively, there were no transactions initiated by either party under the cooperation agreement.

The Company leases engines to SR Technics Switzerland having a book value of approximately $40.6 million with lease terms expiring in up to eight years. The lease revenue represents approximately 10% of total revenues and SR Technics Switzerland is the single largest lessee of the Company. SAir Group recently agreed to sell  SR Technics Switzerland to a group consisting of 3i (an investment company) and management.

The Company entered into a contractor’s agreement with a former executive of Flightlease and current Director of the Company, Hans Jorg Hunziker. The agreement is for a one-year term to provide strategic advice and investigation into additional sources of capital.

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Factors That May Affect Future Results

Except for historical information contained herein, the discussion in this report contains forward-looking statements that involve risks and uncertainties, such as statements of the Company’s plans, objectives, expectations and intentions.  Forward-looking statements give the Company’s expectations about the future and are not guarantees.  Forward-looking statements speak only as of the date they are made, and the Company does not undertake any obligation to update them to reflect changes that occur after that date.  The Company’s actual results could differ materially from those discussed herein.  Factors that could cause or contribute to such differences include those discussed below and in the Company’s report on Form 10-K for the year ended December 31, 2001.  The cautionary statements made in this report should be read as being applicable to all related forward-looking statements wherever they appear in this report or in other written or oral statements by the Company.

The business in which the Company is engaged is capital intensive.  Accordingly, the Company’s ability to successfully execute its business strategy and to sustain its operations is dependent, in large part, on the availability of debt and equity capital.  There can be no assurance that the necessary amount of capital will continue to be available to the Company on favorable terms or at all.  The Company’s inability to obtain sufficient capital, or to renew its credit facilities could result in increased funding costs and would limit the Company’s ability to: (i) add new equipment to its portfolio, (ii) fund its working capital needs, and (iii) finance possible future acquisitions.  The Company’s inability to obtain sufficient capital would have a material adverse effect on the Company’s business, financial condition and/or results of operations.

The Company retains title to the equipment that it leases to third parties.  Upon termination of a lease, the Company will seek to re-lease or sell the equipment.  The Company also engages in the selective purchase and resale of commercial aircraft engines.  On occasion, the Company purchases engines without having a firm commitment for their lease or sale.  Numerous factors, many of which are beyond the Company’s control, may have an impact on the Company’s ability to re-lease or sell equipment on a timely basis, including the following: (i) general market conditions, (ii) the condition of the equipment upon termination of the lease, (iii) the maintenance services performed during the lease term and, as applicable, the number of hours remaining until the next major maintenance is required, (iv) regulatory changes (particularly those imposing environmental, maintenance and other requirements on the operation of aircraft engines), (v) changes in the supply of, or demand for, or cost of aircraft engines, and (vi) technological developments.  There is no assurance that the Company will be able to re-lease or sell equipment on a timely basis or on favorable terms.  The failure to re-lease or sell aircraft equipment on a timely basis or on favorable terms could have a material adverse effect on the Company’s business, financial condition and/or results of operations.

The Company experiences fluctuations in its operating results.  Such fluctuations may be due to a number of factors, including: (i) general economic conditions, (ii) the timing of sales of engines, (iii) financial difficulties experienced by airlines, (iv) interest rates, (v) downturns in the air transportation industry, including the impact of September 11, 2001 events and changes in fuel prices (vi) unanticipated early lease termination or a default by a lessee, (vii) the timing of engine acquisitions, (viii) engine marketing activities, (ix) fluctuations in market prices for the Company’s assets, and (x) the present possibility of war in the Middle East.  The Company anticipates that fluctuations from period to period will continue in the future.  As a result, the Company believes that comparisons to results of operations for preceding periods are not necessarily meaningful and that results of prior periods should not be relied upon as an indication of future performance.

On July 30, 2002, Vanguard Airlines, a lessee that leased 3 engines with a book value of approximately $10.0 million, on short-term leases, filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code. All 3 leases were rejected by Vanguard in September and October and the engines have been returned.  Two of the engines have already been leased to other  customers. On November 7, 2002, National Airlines which leased one engine from the Company ceased operations. National was  already operating under Chapter 11 of the United States Bankruptcy Code and was current on its rental obligations to October 31, 2002. The Company is initiating steps to recover the engine.

A lessee may default in performance of its lease obligations and the Company may be unable to enforce its remedies under a lease.  The Company’s inability to collect receivables due under a lease or to repossess aircraft equipment in the event of a default by a lessee could have a material adverse effect on the Company’s business, financial condition and/or results of operations.  Various airlines have experienced financial difficulties in the past, certain airlines have filed for bankruptcy and a number of such airlines have ceased operations.  In the United States where a debtor seeks protection under Chapter 11 of Title 11 of the United States Code (the Bankruptcy Code), creditors are automatically stayed from enforcing their rights.  In the case of United States certified airlines, Section 1110 of the Bankruptcy Code provides certain relief to lessors of aircraft equipment.  The scope of Section 1110 has been the subject of significant litigation and there is no assurance that the provisions of Section 1110 will protect the Company’s investment in an aircraft, aircraft engines or parts in the event of a lessee’s bankruptcy.  In addition, Section 1110 does not apply to lessees located outside of the United States and applicable foreign laws may not provide comparable protection.  Leases of spare parts may involve additional risks.  For example, it is likely to be more difficult to recover parts in the event of a lessee default and the residual value of parts may be less ascertainable than an engine.

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The Company’s leases are generally structured at fixed rental rates for specified terms while many of the Company’s borrowings are at floating rates.  Increases in interest rates could narrow or eliminate the spread, or result in a negative spread, between the rental revenue the Company realizes under its leases and the interest rate the Company pays under its borrowings, and have a material adverse effect on the Company’s business, financial condition and/or results of operations.

For the nine months ended September 30, 2002, 83% of the Company’s lease revenue was generated by leases to foreign customers.  Such international leases may present greater risks to the Company because certain foreign laws, regulations and judicial procedures may not be as protective of lessor rights as those which apply in the United States. All leases require payment in United States (U.S.) currency.  If these lessees’ currency devalues against the U.S. dollar, the lessees could potentially encounter difficulty in making the U.S. dollar denominated payment.  The Company is also subject to the timing and access to courts and the remedies local laws impose in order to collect its lease payments and recover its assets.  In addition, political instability abroad and changes in international policy also present risk of expropriation of the Company’s leased engines.  Furthermore, many foreign countries have currency and exchange laws regulating the international transfer of currencies.

The Company’s lease portfolio has grown significantly in recent years.  The Company’s growth has placed, and is expected to continue to place, a significant strain on the Company’s managerial, operational and financial resources.  There is no assurance that the Company will be able to effectively manage the expansion of its operations, or that the Company’s systems, procedures or controls will be adequate to support the Company’s operations, in which event the Company’s business, financial condition and/or results of operations could be adversely affected.  The Company may also acquire businesses that would complement or expand the Company’s existing businesses.  Any acquisition or expansion made by the Company may result in one or more of the following events: (i) the incurrence of additional debt, (ii) future charges to earnings related to the impairment of goodwill and other intangible assets, (iii) difficulties in the assimilation of operations, services, products and personnel, (iv) an inability to sustain or improve historical revenue levels, (v) diversion of management’s attention from ongoing business operations, and (vi) potential loss of key employees.  Any of the foregoing factors could have a material adverse effect on the Company’s business, financial condition and/or results of operations.

The markets for the Company’s products and services are extremely competitive, and the Company faces competition from a number of sources.  These include aircraft, engine and aircraft parts manufacturers, aircraft and aircraft engine lessors and airline and aircraft service and repair companies.  Certain of the Company’s competitors have substantially greater resources than the Company, including greater name recognition, a broader range of material, complementary lines of business and greater financial, marketing and other resources.  In addition, equipment manufacturers, and other aviation aftermarket suppliers may vertically integrate into the markets that the Company serves, thereby significantly increasing industry competition.  There can be no assurance that competitive pressures will not materially and adversely affect the Company’s business, financial condition and/or results of operations.

The Company’s leasing activities generate significant depreciation allowances that provide the Company with substantial tax benefits on an ongoing basis.  In addition, the Company’s lessees currently enjoy favorable accounting and tax treatment by entering into operating leases.  Any change to current tax laws or accounting principles that make operating lease financing less attractive or affect the Company’s recognition of revenue or expense would have a material impact on the Company’s business, financial condition and/or results of operations.

The Company obtains a substantial portion of its inventories of aircraft and engines from airlines, overhaul facilities and other suppliers.  There is no organized market for aircraft and engines, and the Company must rely on field representatives and personnel, advertisements and its reputation as a buyer of surplus inventory in order to generate opportunities to purchase such equipment.  The market for bulk sales of surplus aircraft and engines is highly competitive, in some instances involving a bidding process.  While the Company has been able to purchase surplus inventory in this manner successfully in the past, there is no assurance that surplus aircraft and engines of the type required by the Company’s customers will be available on acceptable terms when needed in the future or that the Company will continue to compete effectively in the purchase of such surplus equipment.

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Item 3.    Quantitative and Qualitative Disclosures about Market Risk

The Company’s primary market risk exposure is that of interest rate risk.  A change in the U.S. prime interest rate, LIBOR rate, or cost of funds based on commercial paper market rates, would affect the rate at which the Company could borrow funds under its various borrowing facilities.  Increases in interest rates to the Company, which may cause the Company to raise the implicit rates charged to its customers, could result in a reduction in demand for the Company’s leases.  Certain of the Company’s credit facilities are variable rate debt.  The Company estimates a one percent increase or decrease in the Company’s variable rate debt would result in an increase or decrease (including hedges), respectively, in interest expense of $2.7 million per annum (in 2001, the effect would have been $3.0 million).  The Company estimates a two percent increase or decrease in the Company’s variable rate debt would result in an increase or decrease (including hedges), respectively, in interest expense of $5.3 million per annum (in 2001, the effect would have been $6.4 million). The foregoing effect of interest rate changes, including interest rate hedges, on per annum interest expense is estimated as constant due to the terms of the Company’s variable rate borrowings, which generally provide for the maintenance of borrowing levels given adequacy of collateral and compliance with other loan conditions.

The Company hedges a portion of its borrowings, effectively fixing the rate of these borrowings (refer to “Management of Interest Rate Exposure” for more details of the Company’s hedging arrangements and Note 7 for its accounting treatment). Such hedging activities may limit the Company’s ability to participate in the benefits of any decrease in interest rates, but may also protect the Company from increases in interest rates.  Other financial assets and liabilities are at fixed rates.

The Company is also exposed to currency devaluation risk.  During the six month period ended September 30, 2002, 83% of the Company’s total lease revenues came from non-United States domiciled lessees.  All of the leases require payment in United States (U.S.) currency.  If these lessees’ currency devalues against the U.S. dollar, the lessees could potentially encounter difficulty in making the U.S. dollar denominated lease payments.

Item 4     Controls and Procedures

Within the 90 days prior to the date of this report, the company carried out an evaluation, under the supervision and with the participation of the company’s management, including the company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the company’s disclosure controls and procedures are effective in timely alerting them to material information relating to the company (including its consolidated subsidiaries) required to be included in the company’s periodic SEC filings.

There have been no significant changes in the Company’s internal controls or in other factors that could affect the controls since the date of the last evaluation of internal controls.

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PART II - OTHER INFORMATION

Item 6.    Exhibits and Reports on Form 8-K

(a)            Exhibits

Exhibit Number	Description
3.1	Certificate of Incorporation, filed on March 12, 1998 together with Certificate of Amendment of Certificate of Incorporation filed on May 6, 1998.  Incorporated by reference to Exhibits 4.01 and 4.02 of the Company’s report on Form 8-K filed on June 23, 1998.
3.2	Bylaws.  Incorporated by reference to Exhibit 4.03 of the Company’s report on Form 8-K filed on June 23, 1998.
4.1	Specimen of Common Stock Certificate.  Incorporated by reference to Exhibit 4.1 of the Company’s report on Form 10-Q for the quarter ended June 30, 1998.
4.2	Rights Agreement dated September 24, 1999, by and between the Company and American Stock Transfer and Trust Company, as Rights Agent.  Incorporated by reference to Exhibit 4.1 of the Company’s report on Form 8-K filed on October 4, 1999.
4.3	First Amendment to Rights Agreement, dated as of November 30, 2000, by and between the Company and American Stock Transfer and Trust Company.  Incorporated by reference to Exhibit 10.1 of the Company’s report on Form 8-K filed December 15, 2000.
10.1	Form of Indemnification Agreement entered into between the Company and its directors and officers.  Incorporated by reference to Exhibit 10.3 to Registration Statement No. 333-5126-LA filed on June 21, 1996.
10.2	Employment Agreement between the Company and Charles F. Willis IV dated November 7, 2000. Incorporated by reference to Exhibit 10.2 of the Company’s report on Form 10-K for the year ended December 31, 2000.
10.3	Employment Agreement between the Company and Donald A. Nunemaker dated November 21, 2000. Incorporated by reference to Exhibit 10.3 of the Company’s report on Form 10-K for the year ended December 31, 2000.
10.4	Separation Agreement dated February 28, 2002 between the Company and Nicholas J. Novasic. Incorporated by reference to Exhibit 10.7 to the Company’s report on Form 10-Q for the quarter ended March 31, 2002.
10.5	Employment contract between the Company and Monica J. Burke dated June 21, 2002.  Incorporated by reference to Exhibit 10.5 to the Company’s report on Form 10-Q for the quarter ended June 30, 2002.
10.6*	Indenture dated as of September 1, 1997, between WLFC Funding Corporation and The Bank of New York, as Indenture Trustee.  Incorporated by reference to Exhibit 10.16 to the Company’s Report on Form 10-K for the year ended December 31, 1997.

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10.7	Note Purchase Agreement (Series 1997-1 Notes) dated February 11, 1999.  Incorporated by reference to Exhibit 10.1 of the Company’s report on Form 10-Q for the quarter ended March 31, 1999.
10.8*	Amended and Restated Series 1997-1 Supplement dated February 11, 1999.  Incorporated by reference to Exhibit 10.2 to the Company’s report on Form 10-Q for the quarter ended March 31, 1999.
10.9*	Administration Agreement dated as of September 1, 1997 between WLFC Funding Corporation, the Company, First Union Capital Markets Corp. and The Bank of New York.  Incorporated by reference to Exhibit 10.19 to the Company’s Report on Form 10-K for the year ended December 31, 1997.
10.10	The Company’s 1996 Stock Option/Stock Issuance Plan, as amended and restated as of May 22, 2001.  Incorporated by reference to the Company’s Proxy Statement dated May 1, 2001.
10.11*	Second Amendment to Amended and Restated Series 1997-1 Supplement.  Incorporated by reference to Exhibit 10.1 of the Company’s report on Form 10-Q for the quarter ended March 31, 2000.*
10.12*	Amended and Restated Credit Agreement as of February 10, 2000.  Incorporated by reference to Exhibit 10.2 of the Company’s report on Form 10-Q for the quarter ended March 31, 2000.
10.13	Investment Agreement, dated as of November 7, 2000, by and among the Company, FlightTechnics LLC, Flightlease AG, SR Technics Group and SR Technics Group America, Inc.  Incorporated by reference to Exhibit 10.1 of the Company’s report on Form 8-K filed on November 13, 2000.
10.14	Membership Interest Purchase Agreement, dated as of November 7, 2000, by and between the Company and SR Technics Group America, Inc.  Incorporated by reference to Exhibit 10.3 of the Company’s report on Form 8-K filed on November 13, 2000.
10.15	Share Purchase Agreement, dated as of November 7, 2000, by and between the Company and SR Technics Group America, Inc.  Incorporated by reference to Exhibit 10.4 of the Company’s report on Form 8-K filed on November 13, 2000.
10.16*	Cooperation Agreement, dated as of November 7, 2000, by and among the Company, Flightlease AG and SR Technics Group.  Incorporated by reference to Exhibit 10.6 of the Company’s report on Form 8-K filed on November 13, 2000.
10.17	Stockholders’ Agreement, dated as of November 7, 2000, by and among the Company, Charles F. Willis, IV, CFW Partners, L.P., Austin Chandler Willis 1995 Irrevocable Trust and FlightTechnics LLC.  Incorporated by reference to Exhibit 10.8 on Form 8-K filed on November 13, 2000.
10.18	Third Amendment to Note Purchase Agreement dated February 7, 2001. Incorporated by reference to Exhibit 10.21 of the Company’s report on Form 10-Q for the quarter ended March 31, 2001.
10.19*	Third Amended and Restated Series 1997-1 Supplement dated February 7, 2001. Incorporated by reference to Exhibit 10.22 of the Company’s report on Form 10-Q for the quarter ended March 31, 2001.
10.20	Fourth Amendment to Amended and Restated Series 1997-1 Supplement dated May 31, 2001. Incorporated by reference to Exhibit 10.23 of the Company’s report on Form 10-Q for the quarter ended June 30, 2001.
10.21*	Credit Agreement dated May 1, 2001 among Willis Lease Finance Corporation, certain banking institutions, National City Bank and Fortis Bank (Netherland) N.V. Incorporated by reference to Exhibit 10.24 of the Company’s report on Form 10-Q for the quarter ended June 30, 2001.
10.22*	Credit Agreement dated September 21, 2001 between Willis Lease Finance Corporation and ABB Credit Finance AB (publ.). Incorporated by reference to Exhibit 10.25 to the Company’s report on Form 10-Q for the quarter ended September 30, 2001.
10.23*	Amended and Restated Eighth Amendment to Amended and Restated Series 1997-1 Supplement dated May 3, 2002. Incorporated by reference to Exhibit 10.23 to the Company’s report on form 10-Q for the quarter ended June 30, 2002.

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10.24	Eighth Amendment to the Note Purchase Agreement, dated as of May 3, 2002, by and among the Company, WLFC Funding Corporation and Variable Funding Capital Corporation.  Incorporated by reference to Exhibit 10.24 to the Company’s report on form 10-Q for the quarter ended June 30, 2002.
10.25*	Contribution and Sale Agreement between the Company and Willis Engine Funding LLC dated as of September 12, 2002.
10.26*	Series 2002-1 Supplement dated September 12, 2002 to Indenture between Willis Engine Funding LLC and The Bank of New York, Indenture Trustee.
10.27	Guaranty between the Company, Barclays Bank plc and Fortis Bank (Nederland) N.V. dated as of September 12, 2002.
10.28*	Administration Agreement among Willis Engine Funding LLC, Willis Lease Finance Corporation, Barclay’s Bank plc, and The Bank of New York, dated as of September 12, 2002.
10.29	Class A Note Purchase Agreement among Willis Engine Funding LLC, Willis Lease Finance Corporation, Sheffield Receivables Corporation and Barclay’s Bank plc dated as of September 12, 2002.
10.30	Class B Note Purchase Agreement among Willis Engine Funding LLC, Willis Lease Finance Corporation, Fortis Bank (Nederland) N.V., and Barclay’s Bank plc dated as of September 12, 2002.
10.31	Indenture Agreement between Willis Engine Funding LLC and The Bank of New York dated as of September 12, 2002.
10.32	Custodial Agreement by and among BNY Midwest Trust Company, Willis Engine Funding LLC, Willis Lease Finance Corporation, The Bank of New York and Barclay’s Bank plc dated as of September 12, 2002.
10.33	Servicing Agreement between Willis Lease Finance Corporation and Willis Engine Funding LLC dated as of September 12, 2002.
10.34	Independent Contractor Agreement between the Company and Hans Jorg Hunziker dated September 13, 2002.
10.35	Amendment No. 1 to Credit Agreement by and between the Company and ABB New Finance AB (publ) dated November 12, 2002.
10.36	Amendment No. 2 to Credit Agreement among the Company, certain banking institutions, National City Bank and Fortis Bank (Nederland) N.V. dated as of November 13, 2002.
11.1	Statement regarding computation of per share earnings.
99.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* Portions of this exhibit have been omitted pursuant to a request for confidential treatment and the redacted material has been filed separately with the Commission.

(b)Reports on Form 8-K

On July 12, 2002, the Company filed Form 8-K disclosing under Item 5: Other Events the Appointment of Monica J. Burke as Chief Financial Officer and Executive Vice President, effective July 15, 2002.

On September 17, 2002, the Company filed Form 8-K disclosing under Item 5: Other Events that it had entered into a new revolving credit facility.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: November 14, 2002

Willis Lease Finance Corporation
By:	/s/ Monica J. Burke
	Monica J. Burke
	Chief Financial Officer

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CERTIFICATIONS

I, Charles F. Willis IV, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Willis Lease Finance Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: November 14, 2002

/s/ Charles F. Willis, IV

Charles F. Willis, IV

Chief Executive Officer and President

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I, Monica J. Burke, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Willis Lease Finance Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: November 14, 2002

/s/ Monica J. Burke

Monica J. Burke

Chief Financial Officer and Executive Vice President

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EX-10.25

Exhibit 10.25

EXECUTION COPY

CONTRIBUTION AND SALE AGREEMENT*

between

WILLIS LEASE FINANCE CORPORATION,

and

WILLIS ENGINE FUNDING LLC

Dated as of

September 12, 2002

*              Portions of the material in this Exhibit have been redacted pursuant to a request for confidential treatment, and the redacted material has been filed separately with the Securities and Exchange Commission (the "Commission").  An asterisk has been placed in the precise places in this Agreement where we have redacted information, and the asterisk is keyed to a legend which states that the material has been omitted pursuant to a request for confidential treatment.

TABLE OF CONTENTS

ARTICLE I	DEFINITIONS
Section 1.01.  Definitions
ARTICLE II	TRANSFER OF ENGINES AND BENEFICIAL INTERESTS
Section 2.01.  Transfer of Initial Contributed Assets
Section 2.02.  Conveyance and Repurchase of Engines and Related Assets after the Initial Transfer Date
Section 2.03.  Required Financing Statements; Marking of Records.
Section 2.04.  Servicing of Contributed Assets
Section 2.05.  Security Agreement.
Section 2.06.  Additional Capital Contributions
Section 2.07.  Contributed Engine Requirements
ARTICLE III	REPRESENTATIONS AND WARRANTIES
Section 3.01.  Representations and Warranties of the Seller
Section 3.02.  Representations and Warranties of the Issuer
ARTICLE IV	COVENANTS OF THE SELLER AND THE ISSUER
Section 4.01.  Seller Covenants
Section 4.02.  Issuer Covenants.
Section 4.03.  Transfer of Contributed Assets
ARTICLE V	CONDITIONS PRECEDENT
Section 5.01.  Conditions to the Issuer’s Obligations
Section 5.02.  Conditions to the Seller’s Obligations
ARTICLE VI	TERMINATION
Section 6.01.  Termination
Section 6.02.  Effect of Termination
ARTICLE VII	MISCELLANEOUS PROVISIONS
Section 7.01.  Amendment
Section 7.02.  Governing Law
Section 7.03.  Notices
Section 7.04.  Severability of Provisions
Section 7.05.  Assignment

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Section 7.06.  Further Assurances
Section 7.07.  No Waiver; Cumulative Remedies
Section 7.08.  Counterparts
Section 7.09.  Binding Effect
Section 7.10.  Merger and Integration
Section 7.11.  Headings
Section 7.12.  Schedules and Exhibits
Section 7.13.  General Interpretive Principles
Section 7.14.  Third-Party Beneficiaries
EXHIBIT A	Initial List of Engines and Lease Agreements
EXHIBIT B	Form of Engine or Beneficial Interest Transfer Certificate
SCHEDULE 1	Certain Terms

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CONTRIBUTION AND SALE AGREEMENT

THIS CONTRIBUTION AND SALE AGREEMENT, dated as of September 12, 2002 (this “Agreement”), is entered into between WILLIS LEASE FINANCE CORPORATION (the “Seller”), a company organized and existing under the laws of Delaware located at 2320 Marinship Way, Suite 300, Sausalito, California 94965 and WILLIS ENGINE FUNDING LLC (the “Issuer”), a limited liability company organized and existing under the laws of Delaware located at 2320 Marinship Way, Suite 300, Sausalito, California 94965.

W I T N E S S E T H:

WHEREAS, the Seller wishes to transfer and convey on the initial Transfer Date the initial Contributed Assets to the Issuer for a purchase price equal to the Aggregate Net Purchase Price for such initial Contributed Assets (as such capitalized terms are defined below); and

WHEREAS, hereafter, from time to time, the Seller may transfer and convey to the Issuer, and the Issuer may transfer and convey to the Seller additional or existing Contributed Assets, as the case may be, upon the terms and conditions hereinafter set forth; and

WHEREAS, the Contributed Assets transferred hereunder will be pledged by the Issuer to the Indenture Trustee as collateral for the Notes to be issued from time to time pursuant to the terms of the Indenture; and

WHEREAS, the Seller and the Issuer agree that all representations, warranties, covenants and agreements made by the Seller and the Issuer herein shall be for the benefit of the Series Enhancer, if any, the Noteholders and the Indenture Trustee;

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

Section 1.01.          Definitions.  Capitalized terms used in this Agreement but not defined herein shall have the meaning assigned to such terms in the Indenture or, if not defined therein, in the Series 2002-1 Supplement.  Otherwise, terms defined herein shall have the following meanings and the definitions of such terms shall be equally applicable to the singular and plural forms of such terms:

Aggregate Net Purchase Price:  With respect to Contributed Assets conveyed by the Seller to the Issuer on any Transfer Date means the sum of the aggregate Net Purchase Price of the Contributed Engines and the net book value of the Related Assets.

Beneficial Interest:  With respect to any Engine, a Beneficial Interest in an Owner Trust created by the Issuer to hold such Engine.

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Contributed Assets:  Contributed Engines and Related Assets.

Contributed Engines:  Engines transferred by the Seller to the Issuer and then by the Issuer to Owner Trusts, as more particularly described in the List of Engines.

Contribution Percentage:  This term is defined in Schedule 1 attached hereto.

Engine:  Any aircraft engine manufactured by one of the manufacturers and constituting one of the engine types set forth in Exhibit A to the Indenture.

Engine or Beneficial Interest Transfer Certificate:  An Engine or Beneficial Interest Transfer Certificate, substantially in the form of Exhibit B hereto, executed and delivered by the Seller and the Issuer in accordance with the terms of this Agreement.

Engine Representations and Warranties:  With respect to each Engine, the representations and warranties of the Seller as set forth in paragraphs (o) through (ii) inclusive of Section 3.01 of this Agreement.

Event of Default:  The occurrence of any of the events or conditions set forth in Section 801 of the Indenture.

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

Governmental Authority.  Any of the following:  (a) any federal, state, county, municipal or foreign government, or political subdivision thereof, (b) any governmental or quasi-governmental agency, authority, board, bureau, commission, department, instrumentality or public body, (c) any court or administrative tribunal or (d) with respect to any Person, any arbitration tribunal or other non-governmental authority to whose jurisdiction that Person has consented.

Indenture:  The Indenture, dated as of September 12, 2002, between the Issuer and the Indenture Trustee and all amendments and supplements thereto.

Lease Agreement:  Any lease agreement entered into from time to time by, or assigned to, the Issuer and, in each case, then assigned by the Issuer to an Owner Trust, pursuant to which the Issuer or such Owner Trust leases one or more Engines, as identified on Exhibit A hereto, as supplemented from time to time, and any substitutions and replacements therefor made in accordance with the Series 2002-1 Transaction Documents.

Lien:  Any security interest, lien, charge, pledge, equity or encumbrance of any kind.

List of Engines:  A printed list of the Engines transferred by the Seller to the Issuer and certified by an Authorized Signatory, which includes a true and complete list of all Engines to be conveyed on any Transfer Date.  The List of Engines delivered on the initial Transfer Date (attached hereto as Exhibit A) will include the following information for each such Engine as of the initial Transfer Date:  (i) its Manufacturer’s serial number, (ii) the Model of Engine, (iii) the manufacturer of the Engine, (iv) if on-hire, the lessee to whom such Engine is leased and the related Lease Agreement; (v) if off-hire, the location of the Engine and (vi) identification of the

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Series to which such Engine is pledged.  Supplements to the List of Engines will be attached to the Engine or Beneficial Interest Transfer Certificate, and will contain the Manufacturer’s serial number for each Engine and identification of the Series to which such Engine is pledged.  As of the date of this Agreement, the List of Engines is as set forth on Exhibit A hereto.

Owner Trust:  With respect to an Engine, an owner trust that is established pursuant to a trust agreement substantially in the form attached to the Series 2002-1 Supplement as Exhibit H-1 solely to hold such Engine and related Lease Agreement in connection with the Indenture.

Related Assets:  With respect to any Engine, all of the following:  (i) all Casualty Proceeds, Sales Proceeds, Maintenance Reserve Payments, Security Deposits and Engine Revenues related thereto, (ii) all right, title and interest of the Seller, the Issuer or the Owner Trust which owns such Engine in and to any agreement with (A) the manufacturer of such Engine, (B) each predecessor owner (other than the manufacturer) of such Engine and each immediately succeeding owner up to and including the Seller or such Owner Trust, and (C) each predecessor lessor of the related Lease Agreement (as more particularly described in the List of Engines) and each immediately succeeding lessor up to and including the Seller or such Owner Trust, and all amendments, additions and supplements thereto hereafter made with respect to such Engines and Lease Agreements, (iii) all right, title and interest in and to any Lease Agreement to the extent related to such Engine transferred and (iv) all payments, proceeds and income of the foregoing or related thereto.

Released Assets:  Released Engines, Released Beneficial Interests and Related Assets with respect to such Released Engines.

Released Beneficial Interest:  A Beneficial Interest in an Owner Trust that owns a Released Engine and Related Assets.

Released Engine:  An Engine repurchased from the Issuer by the Seller pursuant to Section 2.02(b).

Series 2002-1 Supplement:  The Supplement to the Indenture, dated as of September 12, 2002, between the Issuer and the Indenture Trustee.

Transfer Date:  The date on which an Engine is contributed or sold by the Seller to the Issuer pursuant to the terms of this Agreement.

Warranty Purchase Amount:  With respect to any Engine and Related Assets, or Beneficial Interest in an Owner Trust that owns such Engine and Related Assets, repurchased from the Issuer by the Seller pursuant to Section 2.02(b) hereof, the sum of the Net Purchase Price of such Engine and the net book value of the Related Assets, in each case on the Transfer Date on which such Engine and Related Assets were transferred by the Seller to the Issuer.

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ARTICLE II

TRANSFER OF ENGINES AND BENEFICIAL INTERESTS

Section 2.01.          Transfer of Initial Contributed Assets.  On the initial Transfer Date, the Seller shall sell, transfer and convey to the Issuer and the Issuer shall acquire from the Seller all of the Seller’s right, title and interest in, to and under the initial Contributed Assets at a purchase price equal to the Aggregate Net Purchase Price for such initial Contributed Assets; provided, however, that the excess of (x) the Aggregate Net Purchase Price for such initial Contributed Assets over (y) the cash portion of the purchase price of the initial Contributed Assets paid by the Issuer to the Seller on such initial Transfer Date shall constitute a capital contribution to the Issuer.  The cash portion of the purchase price of the initial Contributed Assets shall be equal to the Contribution Percentage of the aggregate Net Book Value of the Contributed Engines.

Section 2.02.          Conveyance and Reconveyance of Engines and Related Assets after the Initial Transfer Date.

(a)           After the initial Transfer Date, the Seller may sell, transfer and convey to the Issuer additional Contributed Assets for consideration equal to the Aggregate Net Purchase Price for such additional Contributed Assets; provided, however, that the excess of (x) the Aggregate Net Purchase Price for such Contributed Assets over (y) the cash portion of the purchase price of such Contributed Assets paid by the Issuer to the Seller on such Transfer Date shall constitute a capital contribution to the Issuer.  The cash portion of the purchase price of such Contributed Assets shall be equal to the Contribution Percentage of the aggregate Net Book Value of the Contributed Engines.

(b)           Upon discovery by the Seller or the Issuer (or any of its successors or assigns) of a breach of any of the Engine Representations and Warranties relating to any Engine, the party (including any such successor or assign) discovering such breach shall give prompt written notice to the other party, the trustee of the Owner Trust, if any, which owns the applicable Engine, the Indenture Trustee and the Administrative Agent.  If such breach materially and adversely affects the interest of the Issuer (or any of its successors or assigns), the Owner Trust, the Noteholders or the Indenture Trustee, then, unless such breach shall have been cured or waived by the Control Party with respect to the related Supplement for a Series within ninety days after the Seller’s discovery or receipt of written notice of such breach, the Issuer shall reconvey to the Seller, and the Seller shall acquire (i) the affected Engines and Related Assets or (ii) the Beneficial Interest in the Owner Trusts that own such Engines and Related Assets, for (A) consideration in cash equal to the aggregate Warranty Purchase Amount for such Engines and Related Assets or such Beneficial Interests, as applicable or (B) additional Contributed Engines which in each such case (i) satisfy each of the Engine Representations and Warranties as of such date of transfer, (ii) have an aggregate Appraised Value that equals or exceeds such aggregate Warranty Purchase Amount and (iii) are satisfactory to the Administrative Agent.  In the event of a repurchase of an Engine and Related Assets or the related Beneficial Interests the Seller shall deposit the cash portion of the Warranty Purchase Amount for each such Engine and Related Assets, or Beneficial Interest in an Owner Trust that owns such Engine and Related Assets, to be repurchased in the Trust Account prior to 10:00 a.m. (New York City time) on the ninetieth day after the Seller’s discovery of or receipt of written notice of, any such breach. The

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excess of such Warranty Purchase Amount over the cash portion of such Warranty Purchase Amount paid by the Seller to the Issuer shall constitute a dividend from the Issuer to the Seller.  The cash portion of any Warranty Purchase Amount shall equal the cash portion of the purchase price paid by the Issuer to the Seller in connection with the Issuer’s acquisition of such Engines and Related Assets from the Seller.

(c)           In connection with any transfer of Contributed Assets or Released Assets pursuant to the terms of this Agreement on the initial Transfer Date and on any Transfer Date after the initial Transfer Date, the Seller and the Issuer shall execute (on such Transfer Date, in the case of clause (i) below, and on or before the third Business Day following such Transfer Date, in the case of clause (iii) below) each of the following:

(i)            A completed Engine or Beneficial Interest Transfer Certificate with respect to each Contributed Engine being transferred to the Issuer and with respect to each Released Engine and Related Assets or Released Beneficial Interest being retransferred to the Seller;

(ii)           [Reserved]; and

(iii)          A supplement to the List of Engines setting forth the Manufacturer’s serial numbers of (A) each Engine which is transferred to the Issuer by the Engine or Beneficial Interest Transfer Certificate and (B) each Engine which is a Released Engine or which is owned by an Owner Trust the Beneficial Interest in which is a Released Beneficial Interest, as the case may be, and identification of the Series to which such Engine, Released Engine or Released Beneficial Interest, as the case may be, is or was pledged.  Upon delivery of such supplement, the List of Engines shall be deemed to have been amended to incorporate the information contained in such supplement.

(d)           Each Engine or Beneficial Interest Transfer Certificate with respect to each Contributed Engine and  each Released Engine and Released Beneficial Interest, as the case may be, shall operate as an assignment, without recourse, representation, or warranty, except (in the case of transfers by the Seller) for the warranty of good title and other representations and warranties specifically set forth in this Agreement, of all the transferor’s right, title, and interest in and to such Contributed Assets or Released Assets, as the case may be, such assignment being an outright assignment and not for security; and the transferee will thereupon own such Contributed Assets or Released Assets, as the case may be, free of any claims of or further obligations to the transferor, in its capacity as transferor, with respect thereto.  All transfers of Released Assets by Issuer to Seller hereunder shall be without recourse to, or representation or warranty of, Issuer of any kind.

Section 2.03.          Required Financing Statements; Marking of Records.

(a)           In connection with the transfer on the initial Transfer Date, the Seller agrees to record and file, at its own expense, the following Uniform Commercial Code (the “UCC”) financing statements and Federal Aviation Administration (the “FAA”) recordations:

(i)            UCC financing statements naming the Seller, as debtor/seller, the Issuer, as secured party/purchaser, the Indenture Trustee, as assignee of the secured party, and any

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“accounts”, “chattel paper” or “general intangible” (as defined under the UCC) which are included in the initial Contributed Assets, as collateral.  Such UCC financing statements shall be filed in the appropriate filing offices as required by the jurisdiction in which the Seller is “located” for purposes of the UCC;

(ii)           UCC financing statements naming the Issuer, as debtor, the Indenture Trustee, as secured party, and the Collateral, as collateral.  Such UCC financing statements shall be filed in the appropriate filing offices as required by the jurisdiction in which the Issuer is “located” for purposes of the UCC;

(iii)          UCC financing statements naming the Owner Trust or the Owner Trustee, as the case may be under applicable law, as debtor, the Indenture Trustee, as secured party, and the Contributed Engines and Related Assets as collateral.  Such UCC financing statements shall be filed in the appropriate filing offices as required by the jurisdiction in which the Owner Trustee is “located” for purposes of the UCC.

(iv)          UCC financing statements evidencing the termination of the security interest of any other Person with respect to any of the initial Contributed Assets and Collateral;

(v)           Evidence of recordation of (A) this Agreement, the Indenture, the Series 2002-1 Supplement and each Lease Agreement with respect to each Engine transferred on such date with the FAA and (B) with respect to Engines leased to Lessees outside of the United States and not owned by an Owner Trust appropriate documents with all Government Authorities of the country in which the chief executive office of such Lessee is located, where necessary to perfect the lien or security interest of the Indenture Trustee in such Engines; and

(vi)          UCC-1 financing statements naming each lease originator which is an Affiliate of the Seller, as debtor, the Seller, as secured party, the Indenture Trustee, as assignee of the secured party, and the Lease Agreements being transferred to the Issuer on the initial Transfer Date, as Collateral, in the appropriate filing offices as required by the jurisdiction in which the lease originator is “located” for purposes of the UCC.

(b)           In connection with all transfers after the initial Transfer Date, the Seller agrees to record and file, at its own expense, the following UCC financing statements (and/or amendments to previously filed UCC financing statements) and FAA recordations:

(i)            UCC financing statements naming the Seller, as debtor/seller, the Issuer, as secured party/purchaser, the Indenture Trustee, as assignee of the secured party, and any “accounts”, “chattel paper” or “general intangible” (as defined under the UCC) which are included in the Contributed Assets transferred since the most recent filing as collateral.  Such UCC financing statements shall be filed in the appropriate filing offices as required by the jurisdiction in which the Seller is “located” for purposes of the UCC;

(ii)           UCC financing statements naming the Issuer, as debtor, the Indenture Trustee, as secured party, and the Collateral, as collateral.  Such UCC financing statements shall be filed in the appropriate filing offices as required by the jurisdiction in which the Issuer is “located” for purposes of the UCC;

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(iii)          UCC financing statements naming the Owner Trust or the Owner Trustee, as the case may be under applicable law, as debtor, the Indenture Trustee, as secured party, and the Contributed Engines and Related Assets as collateral.  Such UCC financing statements shall be filed in the appropriate filing offices as required by the jurisdiction in which the Owner Trust is “located” for purposes of the UCC.

(iv)          Evidence of recordation of (A) this Agreement, the Indenture, the Series 2002-1 Supplement and each Lease Agreement with respect to each Contributed Engine transferred on such date, together with any amendments and supplements hereto or thereto, with the FAA, and (B) with respect to Contributed Engines leased to Lessees domiciled outside the United States, appropriate documents with all Government Authorities of the country in which the chief executive office of such Lessee is located, where necessary to perfect the lien or security interest of the Indenture Trustee in such Contributed Engines;

(v)           UCC-1 financing statements naming each lease originator which is an Affiliate of the Seller, as debtor, the Seller, as secured party, the Indenture Trustee, as assignee of the secured party, and the Lease Agreements being transferred to the Issuer after the initial Transfer Date, as Collateral, in the appropriate filing offices as required by the jurisdiction in which the lease originator is “located” for purposes of the UCC;

(vi)          any other UCC-1 financing statements reasonably requested by the Deal Agent to perfect the security interest of the Indenture Trustee in the Collateral; and

(vii)         UCC financing statements evidencing the termination of the security interest of any other Person with respect to any of the Contributed Assets being transferred to the Issuer.

(c)           All such UCC financing statements and recordations shall meet the requirements of applicable law.  The Seller shall, on or prior to the applicable Transfer Date, deliver to the Issuer (with copies to the Indenture Trustee and the Administrative Agent), (i) with respect to such UCC financing statements, a file-stamped copy of such UCC financing statements or, in the event that a file-stamped copy of such UCC financing statements cannot be obtained in any given jurisdiction, a certificate signed by the relevant filing agent indicating that he/she filed such UCC financing statements with the relevant governmental authority in such jurisdiction, and (ii) with respect to such recordations, evidence of submission of the applicable recorded documents.  Such file-stamped copies of such UCC financing statements (or certificates signed by the relevant filing agent, if applicable) and evidences of submission of the applicable recorded documents delivered pursuant to the immediately preceding sentence on any given Transfer Date shall constitute the “Evidence of Filing” for such Transfer Date.  Nothing contained in this Section 2.03 shall limit the Seller’s obligation to file continuation or termination statements in accordance with Section 4.01(k) of this Agreement and any applicable law.

(d)           In connection with each transfer and conveyance of Contributed Engines and Related Assets, the Seller shall, on or prior to each Transfer Date, at its own expense (i) cause its computer records to be marked to show that the Contributed Engines and Related Assets have been transferred to the Issuer and, in the case of Contributed Engines and

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Related Assets that have been transferred by the Issuer to Owner Trusts, that the applicable Contributed Engines and Related Assets have been transferred to the applicable Owner Trusts and then pledged to the Indenture Trustee and (ii) prepare and hold, in its capacity as Servicer, the List of Engines.

(e)           In connection with each transfer and conveyance of Engines and Related Assets, the Seller shall take, and shall cause the Issuer to take, all steps necessary to perfect the Issuer’s and the Indenture Trustee’s perfected first priority interest in the Collateral under the laws of any applicable foreign jurisdiction.

Section 2.04.          Servicing of Contributed Assets.  The Issuer and the Seller intend that, following each conveyance of the Contributed Assets pursuant to this Agreement, the Contributed Assets and any assets owned by an Owner Trust the Beneficial Interest in which is owned by the Issuer will be serviced by the Seller (and its successors and assigns), as Servicer, pursuant to the terms of the Servicing Agreement.

Section 2.05.          Security Agreement.

(a)           The Seller and the Issuer intend that the transfer by the Seller of the initial Contributed Assets pursuant to Section 2.01 hereof and each subsequent transfer by the Seller of additional Contributed Assets pursuant to Section 2.02 hereof shall each constitute a valid sale, transfer and conveyance by the Seller of the Contributed Assets and that the Contributed Assets shall not be part of the Seller’s estate in the event of the insolvency or bankruptcy of the Seller.

(b)           The Seller and the Issuer intend that their operations and business would not be substantively consolidated in the event of the bankruptcy or insolvency of the Seller and that the separate existence of the Seller and the Issuer would not be disregarded in the event of the insolvency or the bankruptcy of the Seller.  In the event that (i) any such Contributed Assets are held to be property of the Seller’s bankruptcy estate or (ii) this Agreement is held or deemed to create a security interest in the Contributed Assets, then (x) this Agreement shall constitute a security agreement within the meaning of Article 8 and Article 9 of the UCC as in effect in the State of New York and (y) the conveyances provided for in Section 2.01 and Section 2.02 hereof shall constitute a grant by the Seller to the Issuer of a valid first priority perfected security interest in all of the Seller’s right, title and interest in and to the Contributed Assets, which security interest has been assigned to the Indenture Trustee pursuant to Section 4.03 hereof and which security interest will be deemed to have been granted directly to the Indenture Trustee from the Seller in the event of the consolidation of the Seller and the Issuer in any Insolvency Proceeding.  In furtherance of the foregoing, (i) the Issuer shall have all of the rights of a secured party with respect to the Contributed Assets pursuant to applicable law and (ii) the Seller shall execute all documents, including but not limited to UCC financing statements, as the Issuer may reasonably require to effectively perfect and evidence the Issuer’s first priority security interest in the Contributed Assets and each Owner Trust’s ownership interest in the Engines, Lease Agreements and other Related Assets owned or purported to be owned by such Owner Trust.  The Seller also covenants not to pledge, assign or grant any interest to any other party in any Contributed Assets other than the leasehold interest which is granted to a Lessee pursuant to the applicable Lease Agreement.

Section 2.06.          Additional Capital Contributions.  Any transfer of cash by the Seller to the Issuer (other than any such transfers by the Seller as initial Servicer in accordance with the terms

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of the Servicing Agreement) shall constitute a capital contribution to the Issuer.  As of the date of any such transfer of cash, the Seller shall not be insolvent under the Insolvency Law and will not be rendered insolvent by any such transfer.

Section 2.07.          Contributed Engine Requirements.  Each Contributed Engine must satisfy the Engine Representations and Warranties.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

Section 3.01.          Representations and Warranties of the Seller.  The Seller hereby makes the following representations and warranties for the benefit of the Indenture Trustee, the Noteholders and the Issuer, on which the Issuer relies in accepting the conveyance of the Contributed Assets.  Such representations and warranties are made as of each Transfer Date with respect to the Contributed Assets transferred to the Issuer on such date unless otherwise indicated, but shall survive each transfer and conveyance of the respective Contributed Assets to the Issuer and the pledge of such Contributed Assets to the Indenture Trustee until the Notes have been paid in full.

(a)           Organization and Good Standing.  The Seller is a company duly organized, validly existing and in compliance under the laws of the state of its incorporation, with corporate power and authority to own its properties and to conduct its business as such properties are currently owned and such business is currently conducted, had at all relevant times, and now has, power, authority, and legal right to acquire and to own the Contributed Assets and to perform its obligations hereunder and under any Related Document to which it is a party, and has had the same legal name for the past nine months and does not do business under any other name;

(b)           Due Qualification.  The Seller is qualified as a foreign corporation in each jurisdiction where failure to be so qualified would have a material adverse effect upon its business and has obtained all necessary licenses and approvals as required under Applicable Law, in each case, where the failure to be so qualified, licensed or approved, could adversely affect the ability of (i) the Seller to perform its obligations under and comply with the terms of this Agreement and any other Related Document to which it is a party or (ii) the Issuer to enforce its rights under any Lease Agreement or with respect to any Contributed Assets or any Owner Trust to enforce its rights under any Lease Agreement or with respect to any Engine or Related Asset owned or purportedly owned by it;

(c)           Power and Authority.  The Seller has the corporate power and authority to execute and deliver this Agreement and any other Related Documents to which it is a party and to carry out their terms; the Seller has duly authorized the transfer and conveyance to the Issuer of the Contributed Assets by all necessary corporate action; the execution, delivery, and performance of this Agreement, any other Related Document and any Lease Agreement to which it is a party has been duly authorized by the Seller by all necessary corporate action and this Agreement, any other Related Document and any Lease Agreement to which it is a party have been duly executed and delivered by the Seller and each applicable Owner Trust;

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(d)           Valid Assignment; Binding Obligations.  This Agreement constitutes a valid sale, transfer and conveyance to the Issuer of all right, title and interest of the Seller in, to and under the Contributed Assets and the Contributed Assets will be held by the Issuer free and clear of any Lien of any Person claiming through or under the Seller, except for (i) Permitted Encumbrances, (ii) the Lien created by the Indenture and (iii) Liens which may be created under this Agreement; and this Agreement and each other Related Document to which it is a party, when duly executed and delivered by the other parties thereto, will constitute a legal, valid and binding obligation of the Seller enforceable against the Seller in accordance with its terms subject as to enforceability to applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent conveyance or other laws affecting creditors’ rights generally and to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law);

(e)           No Violation.  The consummation of the transactions contemplated by and the fulfillment of the terms of this Agreement and the Related Documents to which the Seller is a party will not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under, the charter documents or by-laws of the Seller, or any material term of any indenture, agreement, mortgage, deed of trust, or other instrument to which the Seller is a party or by which it is bound, or result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement, mortgage, deed of trust, or other instrument, other than this Agreement and the Indenture, or violate any law or any order, rule, or regulation applicable to the Seller of any court or of any federal or state regulatory body, administrative agency, or other Governmental Authority having jurisdiction over the Seller or any of its properties;

(f)            No Proceedings or Injunctions.  There are (i) no proceedings or investigations pending, or, to the knowledge of the Seller, threatened, before any court, regulatory body, administrative agency, or other tribunal or Governmental Authority (A) asserting the invalidity of this Agreement or any other Related Document to which it is a party, (B) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any other Related Document to which it is a party or (C) seeking any determination or ruling that might materially and adversely affect the performance by the Seller of its obligations under, or the validity or enforceability of, this Agreement or any other Related Document to which it is a party and (ii) no injunctions, writs, restraining orders or other orders in effect against the Seller that would adversely affect its ability to perform under this Agreement or any other Related Document to which it is a party;

(g)           Insolvency.  The Seller is solvent and will not become insolvent after giving effect to the transactions contemplated hereby.  At all times during this Agreement, the Seller shall possess sufficient net capital and liquid assets (or ability to access the same) to satisfy its obligations as they become due in the normal course of business, and will not be rendered insolvent by the sale or other transfer of any Contributed Assets;

(h)           Principal Place of Business and State of Incorporation.  As of the date hereof, the Seller’s principal place of business and chief executive office are each at 2320 Marinship Way, Suite 300, Sausalito, California 94965 and the Seller has maintained such addresses for the immediately preceding four months.  As of the date hereof, the Seller’s state of incorporation is the State of Delaware.

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(i)            Accounting and Tax Treatment.  The Seller will treat the transfer of the Contributed Assets to the Issuer pursuant to this Agreement as a capital contribution (in part) and sale (in part) of such Contributed Assets (which allocation between capital contribution and sale will be determined in accordance with Section 2.01 and Section 2.02 hereof) for financial reporting, accounting and all income tax purposes;

(j)            Approvals.  All approvals, authorizations, consents, orders or other actions of any Person required to be obtained by the Seller or, to the knowledge of the Seller, by any other party in connection with the execution and delivery of this Agreement or any other Related Document to which it is a party have been or will be taken or obtained on or prior to the date hereof,

(k)           Financial Statements.  The consolidated balance sheet of the Seller at December 31, 2001 and the consolidated statements of income, retained earnings and cash flows for the fiscal years ended on such dates, are accompanied by reports thereon containing opinions without qualification, except as therein noted, by the independent accountants, have been prepared in accordance with generally accepted accounting principles consistently applied, and present fairly the financial position of the Seller and its subsidiaries as of such dates and the results of their operations for such periods;

Since December 31, 2001, there has been no change in the business or condition (financial or otherwise) of the Seller except changes in the ordinary course of business, and those changes which were reported in the Seller’s public filings with the Securities and Exchange Commission, none of which individually or in the aggregate has been materially adverse.  Neither the Seller nor any of its subsidiaries (other than the Issuer) has any material liabilities or obligations other than those disclosed in the financial statements referred to in the preceding paragraph or for which adequate reserves are reflected in such financial statements.  The Issuer does not have any material liabilities or obligations other than under the Related Documents;

(l)            Governmental Consent.  With the exception of a Current Report on Form 8-K which the Seller shall promptly file with the SEC regarding the execution and delivery of this Agreement and the other Transaction Documents to which it is a party, no consent, approval or authorization of, or filing, registration or qualification with, any Governmental Authority is or will be necessary or required on the part of the Seller in connection with the execution and delivery of this Agreement or the transfer and conveyance of the Contributed Assets hereunder;

(m)          Investment Company.  The Seller is not an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended;

(n)           Valid Business Purpose.  The Seller has valid business reasons for selling, transferring and conveying the Contributed Assets to the Issuer;

(o)           Title to Contributed Assets.  Immediately prior to the transfer of any Contributed Asset to the Issuer pursuant to the terms of this Agreement, the Seller had good and marketable title to such Contributed Asset free and clear of all Liens except Permitted Encumbrances, and as of the applicable Transfer Date, the Seller shall convey to the Issuer good and marketable title to

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each such Contributed Asset, free and clear of all Liens, except Permitted Encumbrances and the Liens in favor of the Indenture Trustee;

(p)           Delivery of Required Financing Statements.  The Seller has filed on or prior to each Transfer Date all of the filings pursuant to Sections 2.03(a) or (b), as the case may be, and (c) hereof with respect to the Contributed Assets for such Transfer Date.

(q)           Casualty Loss.  No Contributed Engine shall have suffered a Casualty Loss on or prior to the related Transfer Date;

(r)            No Violation of Lease Agreements.  The transfer and conveyance to the Issuer of the Contributed Assets will not violate the terms or provisions of any Lease Agreement or any other agreement to which the Seller then is a party or by which it is bound;

(s)           Rights to Lease Agreements are Assignable.  The rights of the Seller with respect to each Lease Agreement transferred pursuant to this Agreement are assignable by the Seller without the consent of any Person other than consents which will have been obtained prior to the related Transfer Date;

(t)            All Necessary Action Taken.  Immediately after each of the transfers and conveyances to the Issuer as contemplated in this Agreement, (i) all necessary action will have been taken by the Seller to validly transfer and convey to the Issuer free and clear of all Liens except Permitted Encumbrances and, (A) all right, title and interest of the Seller in and to each Lease Agreement and the payments due and to become due thereunder to the extent related to a Contributed Engine and all scheduled lease payments to become due thereunder which related to a Contributed Engine and (B) all right, title and interest of the Seller in and to any Contributed Engines and Related Assets which are transferred hereunder and (ii) all necessary action will have been taken by the relevant parties to grant to the Indenture Trustee a perfected, first priority security interest in the Collateral (except, with respect to Contributed Engines leased to Lessees domiciled outside the United States, only to the extent reasonably available);

(u)           Origination and Collection Practices.  To the best of the Seller’s knowledge, the origination, acquisition and collection practices used by the Seller with respect to each Lease Agreement have been in all respects legal, proper, prudent and in accordance with the standards it uses for its own portfolio;

(v)           Reserved;

(w)          Owner Trust.  The Owner Trust that will hold such Engine is duly organized, validly existing and in compliance under the laws of the state of its formation, as indicated in the applicable Engine or Beneficial Interest Transfer Certificate, with all necessary power and authority to own its properties and to conduct its business as such properties are currently owned or contemplated to be owned and such business is currently or contemplated to be conducted, had at all relevant times, and now has, power, authority, and legal right to acquire and own the Engine and Lease owned by it, as described in the applicable Engine or Beneficial Interest Transfer Certificate and to perform its obligations under any Related Document to which it is a party, and has not at any time had any other legal name except as set forth in the applicable Engine or Beneficial Interest Transfer Certificate;

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(x)            Reserved;

(y)           Ordinary Course of Business.  All Lease Agreements related to Contributed Engines and Contributed Beneficial Interests were originated in the ordinary course of business of the Seller’s business;

(z)            No Adverse Selection Procedures:  Eligible Engines.  No adverse selection procedures have been used by the Seller in selecting any Contributed Engine (and related Lease Agreement) and each Contributed Engine and each Lease Agreement is an Eligible Engine and an Eligible Lease, respectively;

(aa)         Ordinary Course.  The transactions contemplated by this Agreement are being consummated by the Seller in good faith and in furtherance of the Seller’s ordinary business purposes and constitute a practical and reasonable course of action by the Seller designed to improve the financial position of the Seller, with no contemplation of insolvency and with no intent to hinder, delay or defraud any of its present or future creditors;

(bb)         To the best of the Seller’s knowledge, each Lease Agreement and all accompanying documents are complete and authentic and all signatures thereon are genuine;

(cc)         Each Lease Agreement arose from a bona fide transaction, complying with all applicable laws and regulations of Governmental Authorities, with persons having legal capacity to contract and was duly authorized, executed and delivered by the Seller;

(dd)         All amounts represented to be payable under each Lease Agreement are, in fact, payable in accordance with the provisions of each Lease Agreement;

(ee)         No Event of Default (as defined in the Lease Agreement) has occurred under any Lease Agreement;

(ff)           Each Contributed Engine conforms to the description thereof as set forth on the List of Engines and any applicable Engine or Beneficial Interest Transfer Certificate;

(gg)         The items in each Collateral File that are required to be delivered on the applicable Transfer Date have been delivered to the Custodian and each of such items delivered on the applicable Transfer Date complies with the terms herein and in the Indenture;

(hh)         Each Lease Agreement requires Lessee to pay, and indemnify, defend and hold Lessor and Lessor’s lender (which term includes the Noteholders and the Indenture Trustee) harmless on a net after tax basis from and against any and all taxes of whatever kind or nature, including costs or expenses incurred in connection therewith, which may be assessed against, chargeable to or collectible from any of Lessee, Lessor’s lender or lessor by any taxing authority, foreign, federal, state or local, and which are based upon, levied or assessed with respect to the lease of any Engine or the operation, possession or use of such Engine while under any Lease, except taxes based on the net income of Lessor; and

(ii)           Each Lease Agreement is non-cancelable by the Lessee during the term of such Lease Agreement unless such requirement is waived in writing by the Administrative Agent.

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Section 3.02.          Representations and Warranties of the Issuer.  The Issuer hereby makes the following representations and warranties, for the benefit of the Seller, the Indenture Trustee, the Noteholders and any Series Enhancer, if any, on which the Seller relies in transferring the Contributed Assets to the Issuer.  Such representations and warranties speak as of each Transfer Date with respect to the Contributed Assets transferred to the Issuer on such date, unless otherwise indicated, but shall survive each transfer and conveyance of the respective Contributed Assets to the Issuer and the pledge of such Contributed Assets to the Indenture Trustee until the Notes have been paid in full.

(a)           Organization and Good Standing.  The Issuer is a limited liability company duly organized and validly existing in compliance under the laws of Delaware, with full power and authority to own and operate its properties and to conduct its business as presently conducted and to enter into and perform its obligations under this Agreement and each other Related Document to which it is a party and the transactions contemplated hereby and thereby;

(b)           Due Qualification.  The Issuer is duly qualified to do business as a foreign limited liability company in good standing, and has obtained all necessary licenses and approvals in all jurisdictions in which the ownership or lease of property or the conduct of its business requires such qualification, except to the extent that the failure to be so qualified, licensed or approved would not, in the aggregate, materially and adversely affect the ability of (i) the Issuer to perform its obligations under and comply with the terms of this Agreement or any other Related Documents to which it is a party or (ii) the Indenture Trustee to enforce its rights under any Lease Agreement, this Agreement or any other Related Document;

(c)           Power and Authority.  The Issuer has the power and authority to execute and deliver this Agreement and to carry out its terms; and the execution, delivery and performance of this Agreement have been duly authorized by the Issuer by all necessary action; the Issuer will have the power and authority to acquire and will have acquired whatever right, title and interest in the Contributed Assets as was conveyed to it by the Seller; and the Issuer will have duly authorized, executed and delivered the Notes, this Agreement and the other Related Documents to which it is a party;

(d)           Binding Obligations.  This Agreement and each other Related Document to which the Issuer is a party, when duly executed and delivered by the other parties hereto or thereto, will constitute a legal, valid and binding obligation of the Issuer enforceable in accordance with its terms subject as to enforceability to applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors’ rights generally and to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law);

(e)           No Violation.  The consummation of the transactions contemplated by and the fulfillment of the terms of this Agreement will not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under, the charter documents or by-laws of the Issuer, or any term of any indenture to which the Issuer is a party or by which its assets may be bound;

(f)            No Proceedings or Injunctions.  There are (i) no proceedings or investigations to which the Issuer, or any Affiliate of the Issuer, is a party pending, or, to the knowledge of the

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Issuer, threatened, before any court, regulatory body, administrative agency or other tribunal or Governmental Authority (A) asserting the invalidity of the Notes, this Agreement or the other Related Documents to which Issuer is a party, (B) seeking to prevent the issuance of the Notes or the consummation of any of the transactions contemplated by this Agreement or the other Related Documents to which the Issuer is a party or (C) seeking any determination or ruling that would materially and adversely affect (1) the performance by the Issuer of its obligations under, or the validity or enforceability of, the Notes, this Agreement or the other Related Documents to which the Issuer is a party or (2) the ability of any Owner Trust, the Indenture Trustee or any Series Enhancer, if any, to enforce its rights under any Lease Agreement, this Agreement or any other Related Document and (ii) no injunctions, writs, restraining orders or other orders in effect against the Issuer that would adversely affect (1) its ability to perform under the Notes, this Agreement or the other Related Documents to which it is a party or (2) the ability of any Owner Trust, the Indenture Trustee or any Series Enhancer, if any, to enforce its rights under any Lease Agreement, this Agreement or any other Related Document;

(g)           Approvals.  All approvals, authorizations, consents, orders or other actions of any Person required to be obtained by the Issuer or, to the knowledge of the Issuer, by any other party in connection with the execution and delivery of this Agreement or any other Related Document to which it is a party have been or will be taken or obtained on or prior to the date hereof;

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

(i)            Principal Place of Business and State of Formation; Trade Names.  The Issuer has only one place of business and its chief executive office is located at the address set forth in the preamble hereto.  The Issuer’s state of formation is the State of Delaware.  The Issuer has not been known by any name other than “Willis Engine Funding LLC”;

(j)            Subsidiaries.  Except for WLFC Funding (Ireland) Limited, a corporation organized under the law of the Republic of Ireland, the Issuer has no Subsidiaries; and

(k)           Ordinary Course.  The transactions contemplated by this Agreement are being consummated by the Issuer in good faith and in furtherance of the Issuer’s ordinary business purposes and constitute a practical and reasonable course of action by the Issuer designed to improve the financial position of the Issuer, with no contemplation of insolvency and with no intent to hinder, delay or defraud any of its present or future creditors.

ARTICLE IV

COVENANTS OF THE SELLER AND THE ISSUER

Section 4.01.          Seller Covenants.  The Seller hereby covenants and agrees with the Issuer, the Noteholders and the Indenture Trustee as follows:

(a)           Merger or Consolidation of, or Assumption of the Obligations of, the Seller.  Notwithstanding anything in this Agreement to the contrary, any corporation (i) into which the Seller may be merged or consolidated, (ii) resulting from any merger, conversion or consolidation to which the Seller shall be party or (iii) succeeding to the business of the Seller

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substantially as a whole, will be the successor to the Seller under this Agreement, without the execution or filing of any document or any further act on the part of any of the parties to this Agreement; provided, however, that (x) immediately after giving effect to such transaction, no Event of Default shall result therefrom and no representation or warranty made pursuant to Section 3.01 shall have been breached, (y) the Seller shall have delivered to the Issuer, the Administrative Agent and each Rating Agency, if any, an Officer’s Certificate and an Opinion of Counsel each stating that such consolidation, merger or succession and such agreement of assumption comply with this Section 4.01 and that all conditions precedent, if any, provided for in this Agreement relating to such transaction have been complied with and (z) the Seller shall have delivered to the Issuer, the Administrative Agent and each Rating Agency an Opinion of Counsel either (1) stating that, in the opinion of such counsel, all UCC financing statements and amendments thereto have been executed and filed that are necessary fully to preserve and protect the interests of the Issuer, the Indenture Trustee and any Series Enhancer, if any, in the Contributed Assets, or (2) stating that, in the opinion of such counsel, no such action shall be necessary to preserve and protect such interests.

(b)           Limitation on Liability of the Seller and Others.  The Seller and any director, officer, employee or agent of the Seller may rely in good faith on any document of any kind, prima facie properly executed and submitted by any Person respecting any matters arising under this Agreement; provided, however, that any such limitation does not affect the obligation of the Seller to accept reconveyance of certain Contributed Engines and the Related Assets, or Beneficial Interests in Owner Trusts that own such Contributed Engines and the Related Assets and pay the consideration therefor pursuant to Section 2.02 hereof.  The Seller shall not be under any obligation to appear in, prosecute or defend any legal action that is not incidental to its obligations as the transferor of the Contributed Assets under this Agreement, any Engine or Beneficial Interest Transfer Certificate and that in its reasonable opinion may involve it in any expense or liability.

(c)           Preservation of Security Interest.  The Seller shall execute and file such UCC financing statements in such manner and in such places as may be required by law fully to preserve, maintain and protect the interest of the Issuer under this Agreement and the security interest of the Noteholders and the Indenture Trustee in the Contributed Assets.

(d)           Preservation of Name, etc.  The Seller will not change its name, identity or corporate structure in any manner unless (i) the Seller shall have given the Issuer, the Indenture Trustee, each Series Enhancer, if any, the Administrative Agent and the Noteholders at least 30 days’ prior written notice thereof and (ii) the Seller shall have filed any necessary UCC financing statements necessary to continue the effectiveness of any UCC financing statement referred to in paragraph (c) above.

(e)           Preservation of Office.  The Seller will give the Issuer, each Series Enhancer, if any, the Administrative Agent, the Indenture Trustee and the Noteholders at least 30 days’ prior written notice of any relocation of its chief executive office.

(f)            Books and Records.  The Seller will, at its own cost and expense, mark its books and records to the effect that each Contributed Engine and Related Asset has been transferred to the Issuer and subsequently pledged to the Indenture Trustee pursuant to the Indenture.

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(g)           Obligations with Respect to Engines and Beneficial Interests.  The Seller will do nothing to impair the rights of the Issuer, the Owner Trusts, the Noteholders or the Indenture Trustee in the Contributed Engines, Contributed Beneficial Interests and the Related Assets, as the case may be, other than as permitted by the Servicing Agreement.

(h)           Compliance with Law.  The Seller will comply, in all material respects, with all acts, rules, regulations, orders, decrees and directions of any Governmental Authority applicable to the Contributed Assets or any part thereof, provided, however, that the Seller may contest any act, rule, regulation, order, decree or direction in any reasonable manner which shall not materially and adversely affect the rights of the Issuer, the Noteholders or the Indenture Trustee in any of the Contributed Assets.

(i)            Conveyance of Contributed Assets; Security Interests.  Except for the transfers and conveyances hereunder and the security interest created pursuant to the Indenture, the Seller will not pledge, assign or transfer to any other Person, or grant, create, incur, assume or suffer to exist any Lien other than Permitted Encumbrances on, any Contributed Asset (or any interest therein) other than the rights of a lessee under a Lease Agreement and the Seller shall defend the right, title and interest of the Issuer and its successors and assigns in, to and under the Contributed Assets against all claims of third parties claiming through or under the Seller.

(j)            Notification of Breach.  The Seller will advise the Issuer, the Administrative Agent and the Indenture Trustee promptly, in reasonable detail, upon discovery of the occurrence of any breach by the Seller of any of its representations, warranties and covenants contained herein.

(k)           Further Assurances.  The Seller will make, execute or endorse, acknowledge and file or deliver to the Issuer, the Owner Trusts and each Series Enhancer, if any, from time to time such UCC financing statements (including any termination or continuation statements), schedules, confirmatory assignments, conveyances, transfer endorsements, powers of attorney, certificates, reports and other assurances or instruments and take such further steps relating to the Contributed Assets and other rights covered by this Agreement, as the Issuer, the Owner Trusts or each Series Enhancer, if any, may request and reasonably require.  The Seller shall take all steps necessary to perfect the Issuer’s and the Indenture Trustee’s interest in the Contributed Assets under any international perfection standards that may be adopted after the date of this Agreement to the extent practicable and without unreasonable cost.

(l)            Indemnification.  The Seller agrees to indemnify, defend and hold the Issuer and the Owner Trusts harmless from and against any and all loss, liability, damage, judgment, claim, deficiency or expense (including interest, penalties, reasonable attorneys’ fees and amounts paid in settlement) to which the Issuer or the Owner Trusts may become subject insofar as such loss, liability, damage, judgment, claim, deficiency or expense arises out of or is based upon a breach by the Seller of its covenants contained in Section 4.01, or any information certified in any schedule delivered by the Seller hereunder being untrue in any material respect as of the date of such certification.  The obligations of the Seller under this Section 4.01(l) shall be considered to have been relied upon by the Issuer, the Owner Trusts, the Noteholders, the Administrative Agent and the Indenture Trustee and shall survive the execution, delivery, and performance of this Agreement regardless of any investigation made by the Issuer or on its behalf.

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(m)          Notice of Liens.  The Seller shall notify the Issuer promptly after becoming aware of any Lien other than Permitted Encumbrances on the Contributed Assets or on any assets owned by any Owner Trust.

(n)           Transfer Taxes.  The Seller shall, immediately upon (i) receipt of notice from any applicable Governmental Authority that a tax or related fine is due or (ii) the imposition of any related Lien on any property of the Issuer, pay all taxes, related fines and related expenses (including attorney’s fees) incurred or required to be paid by the Seller or the Issuer in connection with or related to the conveyance of the Contributed Assets from the Seller to the Issuer and from the Issuer to the Owner Trusts, and acknowledges that the Issuer shall have no responsibility with respect thereto.

(o)           No Bankruptcy Petition Against the Issuer or the Owner Trusts.  The Seller will not, prior to the date that is one year and one day after the payment in full of all amounts owing pursuant to the Indenture, this Agreement and the Related Documents, institute against the Issuer or any Owner Trust, or join any other Person in instituting against the Issuer or any Owner Trust, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or similar proceedings under the laws of any applicable jurisdiction.  This subsection 4.01(o) shall survive the termination of this Agreement.

(p)           ERISA.  The Seller agrees to indemnify, defend and hold the Issuer and each Owner Trust harmless from and against any and all loss, liability, damage, judgment, claim, deficiency or expense (including interest, penalties, reasonable attorneys’ fees and amounts paid in settlement) to which the Issuer or any Owner Trust may become subject insofar as such loss, liability, damage, judgment, claim, deficiency or expense arises out of any Plan.

(q)           Substantive Consolidation.  The Seller will be operated in such a manner so that it would not be substantively consolidated with the Issuer or any Owner Trust, so that the separate existence of the Seller, on the one hand, and the Issuer and each Owner Trust, on the other hand, would not be disregarded in the event of a bankruptcy or insolvency of the Seller or the Issuer or any Owner Trust, and in such regard, among other things:

(i)            the Seller, on the one hand, will not be involved in the day-to-day management of the Issuer or any Owner Trust, on the other hand;

(ii)           the Seller, on the one hand, will maintain separate corporate records and books of account from the Issuer and each Owner Trust, on the other hand, and otherwise will observe corporate formalities and have a separate area from the Issuer for its business;

(iii)          the financial statements and books and records of the Seller will be prepared after the date of creation of the Issuer to reflect and will reflect the separate existence of the Issuer and each Owner Trust, provided, that the Issuer’s and the Owner Trust’s assets and liabilities may be included in a consolidated financial statement issued by an Affiliate of the Issuer; provided, however, that any such consolidated financial statement will make clear that the Issuer’s and the Owner Trust’s assets are not available to satisfy the obligations of such Affiliate;

(iv)          the Seller, on the one hand, will maintain its assets separately from the assets of the Issuer and each Owner Trust, on the other hand (including through the maintenance of a separate bank account), and the Seller’s assets, and records relating thereto, have not been, are not and will not be, commingled with those of the Issuer or any Owner Trust;

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(v)           all of the Seller’s business correspondence and other communications will be conducted in the Seller’s own name and on its own respective stationery;

(vi)          the Seller does not act as an agent for the Issuer or any Owner Trust, other than in its capacity as the Servicer, and in connection therewith, will present itself to the public as an agent for the Issuer and each Owner Trust and as a corporation separate from the Issuer and each Owner Trust;

(vii)         the Seller does not conduct any of the business of the Issuer or any Owner Trust in the Seller’s name;

(viii)        the Seller does not pay any liabilities of the Issuer or any Owner Trust out of the Seller’s funds or assets;

(ix)           the Seller maintains an arm’s-length relationship with the Issuer and each Owner Trust except with respect to the making of the Guaranty;

(x)            the Seller will not assume or guarantee or become obligated for the debts of the Issuer or any Owner Trust or hold out its credit as being available to satisfy the obligations of the Issuer or any Owner Trust except with respect to (A) obligations of the Seller under the Guaranty and (B) obligations of the Seller to Lessees arising by operation of law under Eligible Leases with respect to which the consent of such Lessees has not been obtained prior to the transfer of such Eligible Leases to Issuer by Seller pursuant to this Agreement;

(xi)           the Seller will not acquire obligations of the Issuer or any Owner Trust;

(xii)          the Seller will allocate fairly and reasonably overhead or other expenses that are properly shared with the Issuer, including without limitation, shared office space;

(xiii)         the Seller will identify and hold itself out as a separate and distinct entity from the Issuer and each Owner Trust;

(xiv)        the Seller will correct any known misunderstanding regarding its separate identity from the Issuer and each Owner Trust;

(xv)         the Seller will not identify the Issuer or any Owner Trust as a division or part of itself,

(xvi)        the Seller will not enter into, or be a party to, any transaction with the Issuer or any Owner Trust except in the ordinary course of its business and on terms which are intrinsically fair and are no less favorable to it than would be obtained in a comparable arm’s-length transaction with an unrelated third party, other than with respect to the making of the Guaranty; and

(xvii)       the Seller does not pay the salaries of the Issuer’s or any Owner Trust’s employees, if any.

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Section 4.02.          Issuer Covenants.

(a)           Non-Consolidation.  The Issuer will be operated in such a manner so that neither it nor any Owner Trust would be substantively consolidated with the Seller, so that the separate existence of the Issuer and each Owner Trust, on the one hand, and the Seller, on the other hand, would not be disregarded in the event of a bankruptcy or insolvency of the Issuer, any Owner Trust, or the Seller, and in such regard, among other things:

(i)            the Issuer will not be involved in the day-to-day management of the Seller;

(ii)           the Issuer (A) will, on its behalf and on behalf of each Owner Trust, maintain separate records and books of account from the Seller and otherwise will observe all formalities and have a separate area from the Seller for its business and (B) will cause to be maintained, on behalf of each Owner Trust, separate trust records and financial records which may be produced upon demand identifying the assets, liabilities, revenues and expenses of such Owner Trust separately from those of the Issuer and;

(iii)          the financial statements and books and records of the Issuer and the financial records of each Owner Trust, on the one hand, will reflect its separate existence from the Seller, on the other hand, provided, that the Issuer’s and the Owner Trust’s assets and liabilities may be included in a consolidated financial statement issued by an Affiliate of the Issuer; provided, however, that any such consolidated financial statement will make clear that the Issuer’s and the Owner Trust’s assets are not available to satisfy the obligations of such Affiliate;

(iv)          the Issuer will and will cause each Owner Trust to maintain its assets separately from the assets of the Seller and records relating thereto, have not been, are not and will not be commingled with those of the Seller’s assets;

(v)           all of the Issuer’s and each Owner Trust’s business correspondence and other communications will be conducted in its own name and on its own stationery;

(vi)          the Issuer will not and will not permit any Owner Trust to act as an agent of the Seller in any capacity and will present itself to the public as a corporation or Trust separate from the Seller;

(vii)         the Issuer will and will cause each Owner Trust to conduct its business solely in its own name;

(viii)        the Issuer will and will cause each Owner Trust to pay its own liabilities out of its own funds and assets;

(ix)           the Issuer will and will cause each Owner Trust to maintain an arm’s-length relationship with its Affiliates;

(x)            the Issuer will not and will not permit any Owner Trust to assume or guarantee or become obligated for the debts of any other entity or hold out its credit as being available to satisfy the obligation of any other entity, (in each case other than guarantees or other obligations of any Owner Trust in respect of obligations of the Issuer) and will not permit any

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other person to assume or guarantee or become obligated for its debts or hold out its credit as being available to satisfy its obligations, except with respect to (A) obligations of the Seller under the Guaranty and (B) obligations of the Seller to Lessees arising by operation of law under Eligible Leases with respect to which the consent of such Lessees has not been obtained prior to the transfer of such Eligible Leases to Issuer by Seller pursuant to this Agreement;

(xi)           the Issuer will not acquire obligations or securities of its stockholders;

(xii)          the Issuer will allocate fairly and reasonably overhead or other expenses that are properly shared with any other person or entity, including without limitation, shared office space, and use separate stationery, invoices and checks;

(xiii)         the Issuer will and will cause each Owner Trust to identify and hold itself out as a separate and distinct entity under its own name and not as a division or part of any other person or entity;

(xiv)        the Issuer will and will cause each Owner Trust to correct any known misunderstanding regarding its separate identity;

(xv)         the Issuer will not and will not permit any Owner Trust to make loans to any person or entity;

(xvi)        the Issuer will not identify its stockholders, or any Affiliates of any of them, as a division or part of itself;

(xvii)       the Issuer will not and will not permit any Owner Trust to enter into, or be a party to, any transaction with its stockholders or their Affiliates except in the ordinary course of its business and on terms which are intrinsically fair and are no less favorable to it than would be obtained in a comparable arm’s-length transaction with an unrelated third party; and

(xviii)      the Issuer will pay the salaries of its own employees, if any, from its own funds.

Section 4.03.          Transfer of Contributed Assets.  The Seller understands that the Issuer intends to assign the Contributed Assets and its rights under this Agreement to the Indenture Trustee under the Indenture, and hereby consents to the assignment of all or any portion of this Agreement by the Issuer to such Indenture Trustee.  The Seller agrees that upon such assignment the Indenture Trustee may exercise the rights of the Issuer hereunder and shall be entitled to all of the benefits of the Issuer hereunder.

ARTICLE V

CONDITIONS PRECEDENT

Section 5.01.          Conditions to the Issuer’s Obligations.  The obligations of the Issuer to acquire Contributed Assets on any Transfer Date shall be subject to the satisfaction of the following conditions (in addition to the procedures required by Section 2.02 (d)):

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(a)           All representations and warranties of the Seller contained in this Agreement shall be true and correct on the Transfer Date (including without limitation the Engine Representations and Warranties) with the same effect as though such representations and warranties had been made on such date;

(b)           All information concerning the Contributed Assets provided to the Issuer shall be true and correct in all material respects;

(c)           The Seller shall have performed all other obligations required to be performed by the provisions of this Agreement and the other Related Documents;

(d)           All corporate and legal proceedings and all instruments in connection with the transactions contemplated by this Agreement shall be satisfactory in form and substance to the Issuer, and the Issuer shall have received from the Seller copies of all documents (including without limitation records of corporate proceedings) relevant to the transactions herein contemplated as the Issuer may reasonably have requested; and

(e)           No Event of Default or Early Amortization Event shall have occurred and then be continuing or result from the acquisitions of such Contributed Assets.

Section 5.02.          Conditions to the Seller’s Obligations.  The obligations of the Seller to convey and contribute the Contributed Assets on the initial Transfer Date and on each subsequent Transfer Date shall be subject to the satisfaction of the following conditions (in addition to the procedures required by section 2.02(d)):

(a)           All representations and warranties of the Issuer contained in this Agreement shall be true and correct with the same effect as though such representations and warranties had been made on such date; and

(b)           All limited liability company and legal proceedings and all instruments in connection with the transactions contemplated by this Agreement shall be satisfactory in form and substance to the Seller, and the Seller shall have received from the Issuer copies of all documents (including without limitation records of limited liability company proceedings) relevant to the transactions herein contemplated as the Seller may reasonably have requested.

ARTICLE VI

TERMINATION

Section 6.01.          Termination.  The respective obligations and responsibilities of the Seller and the Issuer created by this Agreement shall not terminate prior to payment in full of all Outstanding Obligations.

Section 6.02.          Effect of Termination.  No termination or rejection or failure to assume the executory obligations of this Agreement in the bankruptcy of the Seller or the Issuer shall be deemed to impair or affect the obligation pertaining to any executed conveyance or executed obligations, including without limitation breaches of representations and warranties by the Seller or the Issuer occurring prior to the date of such termination.  Without limiting the foregoing,

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prior to termination, neither the failure of the parties to execute and to deliver an Engine or Beneficial Interest Transfer Certificate pursuant to Section 2.02, nor the failure of the Seller to pay in cash or kind the compensation therefor shall render such transfer or obligation executory, nor shall the continued duties of the parties pursuant to Article 4 or Section 7.06 of this Agreement render an executed conveyance executory.

ARTICLE VII

MISCELLANEOUS PROVISIONS

Section 7.01.          Amendment.  This Agreement may be amended from time to time by the Seller and the Issuer only with the prior written consent of the Indenture Trustee as directed by each Control Party of each Series and upon prior notice to each Rating Agency, if any.  The Issuer shall forward copies of any amendment to this Agreement to the Administrative Agent and the Rating Agencies, if any.

Section 7.02.          Governing Law.  This Agreement and any amendment hereof pursuant to Section 7.01 shall be construed in accordance with and governed by the substantive laws of New York (without regard to choice of law principles) applicable to agreements made and to be performed therein and the obligations, rights and remedies of the parties under this Agreement shall be determined in accordance with such laws.

Section 7.03.          Notices.  All demands, notices and communications under this Agreement shall be in writing personally delivered, or sent by facsimile (with subsequent telephone confirmation of receipt thereof) or sent by overnight courier service, at the following address:  (a) Seller, at its address at Willis Lease Finance Corporation, 2320 Marinship Way, Suite 300, Sausalito, California 94965; (b) Issuer, at its address at Willis Engine Funding LLC, 2320 Marinship Way, Suite 300, Sausalito, California 94965 and (c) the Indenture Trustee, the Noteholders, the Rating Agencies and the Series Enhancer, if any, and Administrative Agent at their respective addresses set forth in the related Supplement.  Notice shall be effective and deemed received (a) two days after being delivered to the courier service, if sent by courier, (b) upon receipt of confirmation of transmission, if sent by facsimile or (c) when delivered, if delivered by hand.  Either party may alter the address to which communications are to be sent by giving notice of such change of address in conformity with the provisions of this Section 7.03 for giving notice and by otherwise complying with any applicable terms of this Agreement.

Wherever notice or a report is required to be given or delivered to or from any party pursuant to this Agreement, a copy of such notice or report shall also be given or delivered to the Administrative Agent.

Section 7.04.          Severability of Provisions.  If any one or more of the covenants, agreements, provisions or terms of this Agreement shall be for any reason whatsoever held invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Agreement and shall in no way affect the validity or enforceability of the other covenants, agreements, provisions or terms of this Agreement.

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Section 7.05.          Assignment.  Notwithstanding anything to the contrary contained in this Agreement, this Agreement may not be assigned by the Seller except as provided in Section 4.01(a), without the prior written consent (which consent shall not be unreasonably withheld) of the Issuer and the Indenture Trustee at the direction of each Control Party of each Series and, except as provided in Section 4.03, this Agreement may not be assigned by the Issuer without the prior written consent (which consent shall not be unreasonably withheld) of each Control Party of each Series.  Whether or not expressly stated, all representations, warranties, covenants and agreements of the Seller (whether as the Seller or as Servicer) and the Issuer in this Agreement, or in any document delivered by any of them in connection with this Agreement, shall be for the benefit of, and shall be exercisable by, the Indenture Trustee, each Series Enhancer, if any, and the Noteholders.

Section 7.06.          Further Assurances.  Each of the Seller and the Issuer agrees to do such further acts and things and to execute and deliver such additional assignments, agreements, powers and instruments as are reasonably required to carry into effect the purposes of this Agreement or to better assure and confirm unto the Indenture Trustee, the Series Enhancers, if any, or the Noteholders their rights, powers and remedies hereunder.

Section 7.07.          No Waiver; Cumulative Remedies.  No failure to exercise and no delay in exercising, on the part of the Issuer or the Seller, any right, remedy, power or privilege hereunder, shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise hereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges herein provided are cumulative and not exhaustive of any rights, remedies, powers and privileges provided by law.

Section 7.08.          Counterparts.  This Agreement may be executed in two or more counterparts (and by different parties on separate counterparts), each of which shall be an original, but all of which shall constitute one and the same instrument.

Section 7.09.          Binding Effect.  This Agreement will inure to the benefit of and be binding upon the parties hereto and, upon the transfer contemplated by Section 4.03 hereof, the Indenture Trustee, the Noteholders and their respective successors and permitted assigns.

Section 7.10.          Merger and Integration.  Except as specifically stated otherwise herein, this Agreement sets forth the entire understanding of the parties relating to the subject matter hereof, and all prior understandings, written or oral, are superseded by this Agreement.  This Agreement may not be modified, amended, waived or supplemented except as provided herein.

Section 7.11.          Headings.  The headings herein are for purposes of reference only and shall not otherwise affect the meaning or interpretation of any provision hereof

Section 7.12.          Schedules and Exhibits.  The schedules and exhibits attached hereto and referred to herein shall constitute a part of this Agreement and are incorporated into this Agreement for all purposes.

Section 7.13.          General Interpretive Principles.  For purposes of this Agreement except as otherwise expressly provided or unless the context otherwise requires:

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(a)           the terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender;

(b)           accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles as in effect on the date hereof;

(c)           references herein to “Articles”, “Sections”, “Subsections”, “paragraphs” and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, paragraphs and other subdivisions of this Agreement;

(d)           a reference to a Subsection section without further reference to a Section is a reference to such Subsection section as contained in the same Section in which the reference appears, and this rule shall also apply to paragraphs and other subdivisions;

(e)           the words “herein”, “hereof”, “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular provision; and

(f)            the term “include” or “including” shall mean without limitation by reason of enumeration.

Section 7.14.          Third-Party Beneficiaries.  This Agreement will inure to the benefit of and be binding upon the parties hereto, the Indenture Trustee and the Noteholders, and their respective successors and permitted assigns.

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IN WITNESS WHEREOF, the Seller and the Issuer have caused this Contribution and Sale Agreement to be duly executed by their respective officers as of the day and year first above written.

WILLIS LEASE FINANCE CORPORATION
	By:	/s/ DONALD A. NUNEMAKER
		Name: Donald A. Nunemaker
		Title: Executive Vice President, Chief Operating Officer
WILLIS ENGINE FUNDING LLC
	By:	/s/ DONALD A. NUNEMAKER
		Name: Donald A. Nunemaker
		Title: Vice President

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SCHEDULE 1 to

Contribution And Sale Agreement

“Contribution Percentage” means                   percent (      %).*

*              This redacted material has been omitted pursuant to a request for confidential treatment, and the material has been filed separately with the Commission.

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EX-10.26

Exhibit 10.26

EXECUTION COPY

WILLIS ENGINE FUNDING LLC*

Issuer

and

THE BANK OF NEW YORK

Indenture Trustee

SERIES 2002-1 SUPPLEMENT

Dated as of September 12, 2002

to

INDENTURE

Dated as of September 12, 2002

SERIES 2002-1 NOTES

*              Portions of the material in this Exhibit have been redacted pursuant to a request for confidential treatment, and the redacted material has been filed separately with the Securities and Exchange Commission (the “Commission”).  An asterisk has been placed in the precise places in this Agreement where we have redacted information, and the asterisk is keyed to a legend which states that the material has been omitted pursuant to a request for confidential treatment.

TABLE OF CONTENTS

ARTICLE I	DEFINITIONS; CALCULATION GUIDELINES
Section 1.1		Definitions
Section 1.2		Calculation Guidelines
ARTICLE II	CREATION OF THE SERIES 2002-1 NOTES
Section 2.1		Designation: General Terms and Conditions
Section 2.2		Interest Payments on the Series 2002-1 Notes
Section 2.3		Principal Payments on the Series 2002-1 Notes
Section 2.4		Amounts and Terms of Series 2002-1 Noteholder Commitments
Section 2.5		Increased Cost; Capital Adequacy; Taxes
Section 2.6		Payments, Computations, Etc.
ARTICLE III	SERIES 2002-1 SERIES ACCOUNT AND ALLOCATION AND APPLICATION OF AMOUNTS THEREIN
Section 3.1		Series 2002-1 Series Account
Section 3.2		Distributions from Series 2002-1 Series Account on each Payment Date
Section 3.3		Allocation of Excess Cash Available for Distribution
Section 3.4		Series 2002-1 Restricted Cash Account
Section 3.5		Series 2002-1 Engine Reserve Account
Section 3.6		Series 2002-1 Security Deposit Account
Section 3.7		Securities Accounts
ARTICLE IV	ADDITIONAL COVENANTS
Section 4.1		Additional Series
Section 4.2		Control Party
Section 4.3		Inspections
Section 4.4		Reserved
Section 4.5		Interest Rate Hedge Agreements
Section 4.6		Insurance
Section 4.7		Lessee Acknowledgment
Section 4.8		Opinions of Foreign Local Counsel
Section 4.9		Filing of Leases with FAA
ARTICLE V	CONDITIONS OF EFFECTIVENESS AND FUTURE LENDING
Section 5.1		Effectiveness of Supplement
Section 5.2		Advances on Class A Notes
Section 5.3		Deliveries

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ARTICLE VI	REPRESENTATIONS AND WARRANTIES
Section 6.1		Existence
Section 6.2		Authorization
Section 6.3		No Conflict; Legal Compliance
Section 6.4		Validity and Binding Effect
Section 6.5		Financial Statements
Section 6.6		Executive Offices
Section 6.7		No Agreements or Contracts
Section 6.8		Consents and Approvals
Section 6.9		Margin Regulations
Section 6.10		Taxes
Section 6.11		Other Regulations
Section 6.12		Solvency and Separateness
Section 6.13		No Proceedings
Section 6.14		Recourse Against Certain Parties
Section 6.15		Survival of Representations and Warranties
Section 6.16		No Event of Default or Early Amortization Event
Section 6.17		Litigation and Contingent Liabilities
Section 6.18		Title; Liens
Section 6.19		Subsidiaries
Section 6.20		No Partnership
Section 6.21		Pension and Welfare Plans
Section 6.22		Ownership of Issuer
Section 6.23		Security Interest
Section 6.24		Eligible Lease Agreements; Eligible Engines
ARTICLE VII	EARLY AMORTIZATION EVENT
Section 7.1		Early Amortization Event
ARTICLE VIII	MISCELLANEOUS PROVISIONS
Section 8.1		Ratification of Indenture
Section 8.2		Counterparts
Section 8.3		Governing Law
EXHIBITS
EXHIBIT A		Form of Class A Note
EXHIBIT B		Form of Class B Note
EXHIBIT C		Eligible Engines, Depreciation Periods and Maximum Concentration Limits
EXHIBIT D-1		Lessee Acknowledgment (First Security Bank Form)
EXHIBIT D-2		Lessee Acknowledgment (Willis Form)
EXHIBIT E		Asset Base Certificate
EXHIBIT F		Withdrawal Notice

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EXHIBIT G	Funding Deliverables
EXHIBIT H-1	Form of Trust Agreement
EXHIBIT H-2	Form of Owner Trustee Guaranty
EXHIBIT H-3	Form of Owner Trustee Mortgage
EXHIBIT H-4	Form of Beneficial Interest Pledge Agreement
EXHIBIT J-1	Form of Portfolio Report
EXHIBIT J-2	Form of Principal Report
SCHEDULES
SCHEDULE 1	Certain Terms
SCHEDULE 2	Initial List of Engines and Lease Agreements

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SERIES 2002-1 SUPPLEMENT, dated as of September 12, 2002 (the “Supplement” or the “Series 2002-1 Supplement”), 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”).

Pursuant to the Indenture, dated as of September 12, 2002 (as amended and supplemented, the “Indenture”), between the Issuer and the Indenture Trustee, the Issuer may from time to time direct the Indenture Trustee to authenticate one or more new Series of Notes.  The Principal Terms of any new Series are to be set forth in a Supplement to the Indenture.

Pursuant to this Supplement, the Issuer and the Indenture Trustee wish to create the Series 2002-1 Notes and specify the Principal Terms thereof.

The parties hereto have agreed to enter into such transactions but only upon the terms and conditions hereinafter set forth and in reliance on the representations and warranties of the Issuer set forth herein.

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

ARTICLE I

DEFINITIONS; CALCULATION GUIDELINES

Section 1.1Definitions.

(a)Capitalized terms used in this Supplement but not defined herein shall have the meaning assigned to such terms in the Indenture.  Whenever used in this Supplement, the following words and phrases shall have the following meanings, and the definitions of such terms are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms.

“Administrative Agent Fee” means the fee payable by the Issuer to the Administrative Agent pursuant to Section 2.4(e) hereof.

“Africa/Middle East/Emerging Europe” has the meaning set forth in Schedule 1 attached hereto.

“Aggregate Note Principal Balance” means the sum of the Class A Note Principal Balance and the Class B Note Principal Balance.

“Aggregate Required Amortization Amount” means as of any Payment Date on or after the Conversion Date, if no Early Amortization Event has occurred or is continuing on such Payment Date, an amount equal to the excess, if any, of (1) the sum of (A) the product of (i) ninety-percent (90%) and (ii) all Engine Revenues actually received by, or on behalf of, the Issuer during the related Collection Period with respect to the Series 2002-1 Engines and (B) the product of (x) a fraction, expressed as a percentage, the numerator of which shall equal the

Aggregate Note Principal Balance (prior to giving effect to any payments of principal on such Payment Date) and the denominator of which shall equal the sum of the Net Book Values of all Series 2002-1 Engines (calculated as of the last day of the immediately preceding month) and (y) the greater of (i) the sum of the Net Book Values of all Series 2002-1 Engines sold during the related Collection Period (which Net Book Values will be determined as of the last day of the month immediately preceding such sale), and (ii) the aggregate Sales Proceeds of all Series 2002-1 Engines sold during the related Collection Period, over (2) the sum of the amounts paid pursuant to clauses (A) through (G) inclusive, (I) and (J) of Section 3.2(I).

“Alternate Base Rate” means, on any date, a fluctuating rate of interest per annum equal to the greater of:

(i)the rate of interest most recently announced by Barclays Bank PLC at its branch office in New York, New York as its prime or reference rate; and

(ii)the Federal Funds Rate plus 0.50%.

“Alternative Rate” shall mean, with respect to any Interest Accrual Period (or portion thereof), an interest rate per annum equal to the Eurodollar Rate (Reserve Adjusted); provided, however, that:

(i)if the Deal Agent shall have determined as of the applicable rate determination date that a Eurodollar Rate Disruption Event has occurred and is continuing, then the “Alternative Rate” for such Interest Accrual Period (or portion thereof) shall be an interest rate per annum equal to the Alternate Base Rate in effect from time to time during such Interest Accrual Period (or portion thereof) unless the Deal Agent and the Issuer agree in writing to a different rate;

(ii)if the Deal Agent shall have determined as of the applicable rate determination date that the Eurodollar Rate for any Interest Accrual Period (or portion thereof) does not accurately reflect the cost to the Holders of funding their respective investments in the Series 2002-1 Notes for such Interest Accrual Period (or portion thereof), then the “Alternative Rate” with respect to such Interest Accrual Period (or portion thereof) shall be an interest rate per annum equal to the Alternate Base Rate in effect from time to time during such Interest Accrual Period (or portion thereof) unless the Deal Agent and the Issuer agree in writing to a different rate;

(iii)if for any reason the Alternative Rate becomes applicable on notice to the Deal Agent of less than three Eurodollar Business Days, the “Alternative Rate” shall be the Alternate Base Rate in effect from time to time during the period prior to the satisfaction of such three Eurodollar Business Days’ notice requirement; and

(iv)notwithstanding anything to the contrary in clauses (i) through (iii) above, at all times following the occurrence of an Early Amortization Event or an Event of Default, the “Alternative Rate” for any Interest Accrual Period shall be a rate per annum equal to the Alternate Base Rate in effect from time to time during such Interest Accrual Period, unless the Deal Agent and the Issuer agree in writing to a different rate.

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“Applicable Percentage” has the meaning set forth in Schedule 1 attached hereto.

“Asset Base” means, 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 Series 2002-1 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 Series 2002-1, and (b) the amount on deposit in the related Restricted Cash Account for Series 2002-1 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 Series 2002-1 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, unless such Excess Concentration Amount has been waived by the Control Party for Series 2002-1.

“Breakage Costs” means any amount or amounts as shall compensate a Purchaser for any loss, cost or expense (in any event excluding lost profits) incurred by such Purchaser in connection with funding obtained by it with respect to a Loan (as reasonably determined by the Deal Agent in its sole discretion on behalf of the Purchaser) as a result of a prepayment by the Issuer of principal or Interest pursuant to the terms hereof.

“Class A Increased Costs” has the meaning set forth in the Class A Note Purchase Agreement.

“Class A Loan” means any Loan funded pursuant to the Class A Note Purchase Agreement.

“Class A Maximum Limit” means the lesser of (i) $180,000,000 and (ii) such lesser amount as may be specified by the Issuer in writing to the Deal Agent pursuant to Section 2.05 of the Class A Note Purchase Agreement in connection with a concurrent pro rata reduction of the Class B Maximum Limit pursuant to Section 2.05 of the Class B Note Purchase Agreement.

“Class A Note” means any one of the Class A Notes of Series 2002–1 issued pursuant to the terms of this Supplement, substantially in the form of Exhibit A to this Supplement.

“Class A Note Commitment” has the meaning set forth in Schedule 1 attached hereto.

“Class A Note Distributable Amortization Amount” means, for any Payment Date on or after the Conversion Date, the sum of (x) the Class A Note Required Amortization Amount for such Payment Date and (y) any Class A Note Distributable Amortization Amount remaining unpaid from prior Payment Dates.

“Class A Note Interest Arrearage” means, for any Payment Date, an amount equal to the excess, if any, of (a) the Class A Note Interest Payment for such Payment Date and any outstanding Class A Note Interest Arrearage from the immediately preceding Payment Date plus interest on any outstanding Class A Note Interest Arrearage, to the extent permitted by law, at

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the Overdue Rate over (b) the amount of Class A Note Interest Payment and Class A Note Interest Arrearage actually distributed to the Class A Note Purchaser on such Payment Date.

“Class A Note Interest Payment” means, as of any Payment Date, the amount of Interest accrued on the Class A Loans during the immediately preceding Interest Accrual Period.

“Class A Note Minimum Principal Payment Amount” means, for any Payment Date, the amount set forth in clause (A) or (B), as applicable:

(A)If no Early Amortization Event has occurred or is continuing on such Payment Date, an amount equal to the excess, if any, of (1) the Class A Note Principal Balance over (2) the Senior Asset Base; or

(B)If an Early Amortization Event has occurred or is continuing, all remaining amounts on deposit in the Series 2002-1 Series Account after payment of the amounts set forth in clauses (A) through (J), inclusive, of Section 3.2(II) of this Supplement, until the Class A Note Principal Balance is reduced to zero.

“Class A Note Principal Balance” means an amount equal to the excess of (x) the sum of (A) the outstanding principal balance of the Class A Notes on the Closing Date plus (B) the principal balance of all Class A Loans made subsequent to the Closing Date, minus (y) all amounts paid to the Class A Note Purchaser representing the sum of the following, to the extent actually received by the Class A Note Purchaser: (i) Class A Note Minimum Principal Payment Amounts, (ii) Class A Note Distributable Amortization Amounts, (iii) Prepayments of principal of the Class A Notes paid to the Class A Note Purchaser, and (iv) repayments of the Class A Note Principal Balance made pursuant to Section 2.4(c) hereof.

“Class A Note Purchase Agreement” means the Class A Note Purchase Agreement, dated as of September 12, 2002, among the Issuer, the Servicer, Sheffield and Barclays Bank PLC.

“Class A Note Purchaser” shall have the meaning set forth in the Class A Note Purchase Agreement.

“Class A Note Required Amortization Amount” means, for any Payment Date on or after the Conversion Date, an amount equal to the product of (x) the Class A Note Principal Balance as of such Payment Date (prior to giving effect to any payments of principal on such Payment Date) and (y) the Aggregate Required Amortization Amount for such Payment Date divided by (z) the Aggregate Note Principal Balance as of such Payment Date (prior to giving effect to any payments of principal on such Payment Date).

“Class B Increased Costs” has the meaning set forth in the Class B Note Purchase Agreement.

“Class B Loan” means any Loan funded pursuant to the Class B Note Purchase Agreement.

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“Class B Maximum Limit” means the lesser of (i) $20,000,000 and (ii) such lesser amount as may be specified by the Issuer in writing to the Deal Agent pursuant to Section 2.05 of the Class B Note Purchase Agreement in connection with a concurrent pro rata reduction of the Class A Maximum Limit pursuant to Section 2.05 of the Class A Note Purchase Agreement.

“Class B Note” means any one of the Class B Notes of Series 2002–1 issued pursuant to the terms of this Supplement, substantially in the form of Exhibit B to this Supplement.

“Class B Note Commitment” has the meaning set forth in Schedule 1 attached hereto.

“Class B Note Distributable Amortization Amount” means, for any Payment Date on or after the Conversion Date, the sum of (x) the Class B Note Required Amortization Amount for such Payment Date and (y) any Class B Note Distributable Amortization Amount remaining unpaid from prior Payment Dates.

“Class B Note Interest Arrearage” means, for any Payment Date, an amount equal to the excess, if any, of (a) the Class B Note Interest Payment for such Payment Date and any outstanding Class B Note Interest Arrearage from the immediately preceding Payment Date plus interest on any outstanding Class B Note Interest Arrearage, to the extent permitted by law, at the Overdue Rate over (b) the amount of Class B Note Interest Payment and Class B Note Interest Arrearage actually distributed to the Class B Note Purchasers on such Payment Date.

“Class B Note Interest Payment” means, as of any Payment Date, the amount of Interest accrued and unpaid on the Class B Loans during the immediately preceding Interest Accrual Period.

“Class B Note Minimum Principal Payment Amount” means, for any Payment Date, the amount set forth in clause (A) or (B), as applicable:

(A)If no Early Amortization Event has occurred or continuing on such Payment Date, an amount equal to the excess, if any, of (1) the Class B Note Principal Balance over (2) the Subordinate Asset Base; or

(B)If an Early Amortization Event has occurred or is continuing, all remaining amounts on deposit in the Series 2002-1 Series Account after payment of the amounts set forth in clauses (A) through (K), inclusive, of Section 3.2(II) of this Supplement, until the Class B Note Principal Balance is reduced to zero.

“Class B Note Principal Balance” means an amount equal to the excess of (x) the sum of (A) the outstanding principal balance of the Class B Notes on the Closing Date plus (B) the principal balance of all Class B Loans made subsequent to the Closing Date, minus (y) all amounts paid to the Class B Note Purchasers representing the sum of the following, to the extent actually received by the Class B Note Purchasers: (i) Class B Note Minimum Principal Payment Amounts, (ii) Class B Note Distributable Amortization Amounts, (iii) Prepayments of principal of the Class B Notes paid to the Class B Note Purchasers, (iv) repayments of the Class B Note Principal Balance made pursuant to Section 2.4(c) hereof, and (v) payments of principal of the Class B Notes made by the Seller pursuant to the Guaranty.

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“Class B Note Purchase Agreement” means the Class B Note Purchase Agreement, dated as of September 12, 2002, among the Issuer, the Servicer, Barclays Bank PLC and Fortis Bank.

“Class B Note Purchaser” shall have the meaning set forth in the Class B Note Purchase Agreement.

“Class B Note Required Amortization Amount” means, for any Payment Date on or after the Conversion Date, an amount equal to the product of (x) the Class B Note Principal Balance as of such Payment Date (prior to giving effect to any payments of principal on such Payment Date) and (y) the Aggregate Required Amortization Amount for such Payment Date divided by (z) the Aggregate Note Principal Balance as of such Payment Date (prior to giving effect to any payments of principal on such Payment Date).

“Closing” means the time at which each of the conditions precedent set forth in Section 5.2 of this Supplement (with respect to the initial Loan made hereunder) shall have been duly fulfilled or satisfied.

“Closing Date” means the date on which Closing occurs.

“Collateral Custodian” shall mean BNY Midwest Trust Company, an Illinois corporation, or any successor thereto satisfactory to the Deal Agent.

“Collateral Custodian’s Fees” has the meaning set forth in Schedule 4 to the Collateral Custody Agreement.

“Collateral Custody Agreement” shall mean a custodial agreement among the Collateral Custodian, the Issuer, the Servicer, the Indenture Trustee and the Deal Agent, as amended from time to time, relating to the transactions contemplated hereby.

“Commercial Paper Notes” shall mean short-term promissory notes issued or to be issued by Sheffield Receivables Corporation.

“Conversion Date” means the Payment Date occurring on September 11, 2003; provided, however, that such Conversion Date may be extended for a period of no longer than 364 days, if approved by all of the Holders of the Class A and Class B Notes.

“CP Rate” shall mean with respect to any Interest Accrual Period (or portion thereof), the per annum rate calculated to yield the “weighted average cost” (as defined below) for such Interest Accrual Period (or portion thereof) related to the issuance of Commercial Paper Notes; provided, however, that if any component of such rate is a discount rate, in calculating the “CP Rate” for such Interest Accrual Period (or portion thereof) the rate resulting from converting such discount rate to an interest-bearing equivalent rate per annum shall be used in calculating such component.  As used in this definition, “weighted average cost” for any Interest Accrual Period (or portion thereof) means the sum of (i) the actual interest accrued on outstanding Commercial Paper Notes during such Interest Accrual Period (or portion thereof), (ii) the commissions of placement agents and dealers in respect of such Commercial Paper Notes, and (iii) other borrowings by Sheffield, including to fund small or odd dollar amounts that are not

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easily accommodated in the commercial paper market; and provided, further, that at all times following the occurrence of an Early Amortization Event or an Event of Default, the “CP Rate” for any Interest Accrual Period (or portion thereof) shall be the Alternative Rate in effect from time to time.

“Deal Agent” means Barclays Bank PLC.

“Default Interest” is defined in Section 2.2(b) of this Supplement.

“Depreciation Percentage” has the meaning set forth in Schedule 1 attached hereto.

“Determination Date” means the first Business Day prior to any Payment Date.

“Developed Asia/Pacific Rim” has the meaning set forth in Schedule 1 attached hereto.

“Developed Europe” has the meaning set forth in Schedule 1 attached hereto.

“Dollars” and the sign “$” means lawful currency of the United States of America.

“Early Amortization Event” is defined in Section 7.1 of this Supplement.

“Effective Date” means the date on which each of the conditions precedent set forth in Section 5.1 of this Supplement shall have been duly fulfilled or satisfied.

“Eligible Engine” means any Engine that, individually or when considered with all Eligible Engines then owned (either directly or beneficially) by Issuer, as applicable, shall comply with each of the following requirements, unless any of such requirements (with the exception of requirement (7) is waived in writing by the Deal Agent:

(1)Eligible Lease.  Each Engine is subject to an Eligible Lease on the related Transfer Date; provided that an Engine shall not be required to be subject to an Eligible Lease on the related Transfer Date so long as, after giving effect to the transfer of all Engines which are transferred on any Transfer Date, the On-Lease Percentage of all Eligible Engines as of such Transfer Date shall not be less than the Target On-Lease Percentage;

(2)On-Lease Percentage.  The On-Lease Percentage of all Eligible Engines as of the related Transfer Date shall be greater than the Applicable Percentage;

(3)Engine Representations and Warranties.  Each Engine complies with the Engine Representations and Warranties on the related Transfer Date, including without limitation, that representation and warranty of the Seller set forth in Section 3.01(o) of the Contribution and Sale Agreement;

(4)Casualty Loss.  No Casualty Loss shall have been suffered by the related Engine;

(5)           Depreciation Policy.  The depreciation method utilized in calculating the Net Book Value of such Engine as of such Transfer Date is the Depreciation Policy;

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(6)Owner Trust.  (a) Such Engine shall be owned by and leased from an Owner Trustee on behalf of an Owner Trust created by the Issuer pursuant to a Trust Agreement substantially in the form attached hereto as Exhibit H-1, (b) such Owner Trustee shall have executed and delivered to the Collateral Custodian a facsimile copy of an Owner Trustee Guaranty substantially in the form attached hereto as Exhibit H-2 (the original counterpart of which shall be delivered to the Collateral Custodian within ten Business Days after such execution and delivery), (c) such Owner Trustee shall have executed and delivered to FAA Counsel, and to the Collateral Custodian a facsimile copy of, a Owner Trustee Mortgage substantially in the form attached hereto as Exhibit H-3 (the original counterpart of which shall be delivered to the Collateral Custodian within three (3) Business Days after the filing thereof with the FAA), and (d) the Issuer shall have executed and delivered to the Collateral Custodian a facsimile copy of a Beneficial Interest Pledge Agreement substantially in the form attached hereto as Exhibit H-4 (the original counterpart of which shall be delivered to the Collateral Custodian within ten Business Days after such execution and delivery); and

(7)Term Securitization.  Following the consummation of the Term Securitization, the Requisite Global Majority has approved such Engine.

“Eligible Lease” means each Lease Agreement that encumbers an Engine on any Transfer Date or any date thereafter that complies with all of the following requirements unless any of such requirements is waived in writing by the Deal Agent:

(1)Delinquencies.  No Scheduled Payment on such Lease Agreement is delinquent for more than 30 days as of the related Transfer Date;

(2)Valid Contract.  Each Lease Agreement is a legal, valid and binding full recourse payment obligation of the related Lessee, is enforceable in accordance with its terms (except as may be limited by applicable insolvency, bankruptcy, moratorium, reorganization, or other similar laws affecting enforceability of creditors’ rights generally and the availability of equitable remedies) and is in full force and effect and such Lease Agreement has not been satisfied, subordinated or rescinded;

(3)Hell-or-High Water Obligation.  The Lessee’s obligations under each Lease Agreement are non-cancelable and unconditional and not subject to any right of setoff, counterclaim, reduction or recoupment;

(4)Reserved;

(5)Net Lease.  Each Lease Agreement contains provisions requiring the related Lessee to pay all sales, use, excise, rental, property or similar taxes imposed on or with respect to the Engine and to assume all risk of loss or malfunction of the related Engine; each Lease Agreement requires the Lessee to maintain the Engine in good and workable order and as are necessary to maintain the Engine’s serviceability standards pursuant to FAA requirements or requirements of other appropriate Governmental Authorities;

(6)Legal Capacity.  The Lessee had the legal capacity to execute such Lease Agreement and the Issuer, the Seller or the Owner Trustee, as applicable, had the legal capacity to execute such Lease Agreement or the related acquisition documentation, as the case may be;

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(7)U.S. Dollars.  All payments under each Lease Agreement are required to be made in Dollars;

(8)No Consent.  No Lease Agreement requires the prior written consent of a Lessee or contains another restriction relating to the transfer or assignment of such Lease Agreement by the Seller, the Owner Trustee or the Issuer (except such consent as has been obtained or restrictions satisfied on or prior to the related Transfer Date);

(9)Scheduled Payments.  Each Lease Agreement provides for the payment of Scheduled Payments on a basis no less frequently than quarterly;

(10)Payment.  As of the Transfer Date, no Scheduled Payment under any Lease Agreement has been prepaid; (it being understood that scheduled rental payments to be paid in advance for each rent period in accordance with the terms of the Lease Agreement are not prepayments).

(11)Customary Practices.  The Lease Agreement was originated or acquired by the Seller or the Issuer, as the case may be, in the ordinary course of its business;

(12)Bankrupt Lessee.  On the Transfer Date, the related Engine is not subject to a Lease Agreement with a Lessee that is subject to an Insolvency Proceeding;

(13)Insurance.  The Lease Agreement requires the Lessee to provide liability insurance, all risk ground and flight hull and engine coverage for damage/loss of the Engine subject to such Lease, war risk, and where requested by the Issuer and the Administrative Agent and where available on a commercially reasonable basis, governmental confiscation and expropriation insurance coverage with acceptable deductibles, each of which shall name, as the case may be, the Indenture Trustee as first loss payee, and the Indenture Trustee, the Administrative Agent, the Deal Agent and the Noteholders under the Indenture, and their respective directors, officers, employees and agents as additional insureds;

(14)Geographic Operating Restrictions.  In the Lease Agreement the Lessee agrees not to operate the related Engine, and not to be based, in any jurisdiction excluded from the insurance coverage referred to in item (13) above and to comply with all applicable requirements of Governmental Authorities relating to the installation, operation and maintenance of such Engine; and

(15)Chattel Paper.  Any original counterpart of each Lease Agreement (other than the one held by the Lessee or filed with any relevant Governmental Authority) that constitutes “chattel paper” for purposes of the UCC as in effect in the jurisdiction whose law governs the Lease Agreement has been delivered to the Indenture Trustee.

“Emerging Asia” has the meaning set forth in Schedule 1 attached hereto.

“Emerging Latin/South America” has the meaning set forth in Schedule 1 attached hereto.

“Emerging Market” has the meaning set forth in Schedule 1 attached hereto.

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“Engine Transfer Certificate” has the meaning set forth in the Contribution and Sale Agreement.

“Engine Type Excess Concentration Amount” means at any date of determination, the dollar amount, if any, by which the sum of the Net Book Values of all Eligible Engines (relating to Loans hereunder) of the same engine type exceeds the applicable concentration limits set forth in Section 5.2(o) hereof.

“Eurocurrency Liabilities” shall have the meaning assigned to that term in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.

“Eurodollar Business Day” means any day that is not a Saturday or Sunday or other day on which banking institutions in London, England, are authorized or obligated by law, executive order or government decree to remain closed or on which the London interbank market generally is closed to transactions in Dollars.

“Eurodollar Office” shall mean such office or offices through which the Deal Agent determines the Eurodollar Rate.  A Eurodollar Office of the Deal Agent may be, at the option of the Deal Agent, either a domestic or foreign office.

“Eurodollar Rate” shall mean, with respect to any Interest Accrual Period (or portion thereof), a per annum rate of interest equal to the rate shown on page 3750 of the Bridge Telerate screen or any successor page as the composite offered rate for London interbank deposits for a period approximating such Interest Accrual Period (or portion thereof), as shown under the heading “USD” as of 11:00 A.M. (London time) on the second Business Day before (and for value on) the first day of such Interest Accrual Period (or portion thereof).  In the event no such rate appears, the Eurodollar Rate shall be, with respect to any Interest Accrual Period, the per annum rate of interest at which Dollar deposits in immediately available funds are offered to the Eurodollar Office of the Deal Agent by prime banks in the interbank eurodollar market at or about 10:00 a.m., London time, on the second Eurodollar Business Day before (and for value on) the first day of such Interest Accrual Period (or portion thereof) and in an amount of not less than $1,000,000 for such Interest Accrual Period (or portion thereof).

“Eurodollar Rate (Reserve Adjusted)” shall mean, with respect to any Interest Accrual Period (or portion thereof), the per annum rate of interest (rounded upward, if necessary, to the nearest whole multiple of 1/100th of one percent per annum) determined by dividing (a) the Eurodollar Rate for such Interest Accrual Period (or portion thereof) by (b) one minus the Eurodollar Reserve Percentage (expressed as a decimal) applicable during such Interest Accrual Period (or portion thereof).

“Eurodollar Rate Disruption Event” shall mean any of the following:  (a) a determination by Deal Agent that it would be contrary to law or to the directive of any central bank or other Governmental Authority to obtain Dollars in the London interbank market to fund or maintain an investment in the Series 2002-1 Notes for an Interest Accrual Period (or portion thereof) or (b) a determination by Deal Agent that by reason of circumstances affecting the London interbank market generally Dollars cannot be obtained in such market to fund an investment in the Series 2002-1 Notes for an Interest Accrual Period (or portion thereof).

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“Eurodollar Reserve Percentage” shall mean, with respect to any Interest Accrual Period (or portion thereof), the reserve percentage (rounded upwards, if necessary, to the nearest 1/100th of one percent per annum) applicable during such Interest Accrual Period (or portion thereof) (or, if more than one such percentage shall be so applicable during such Interest Accrual Period, the daily average of such percentages for those days in such Interest Accrual Period (or portion thereof) during which any such percentages shall be in effect) under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for banks or other financial institutions subject to such regulations with respect to liabilities or assets consisting of or including Eurocurrency Liabilities having a term equal to such Interest Accrual Period (or portion thereof).

“Evidence of Filing” has the meaning set forth in the Contribution and Sale Agreement.

“Excess Concentration Amount” means, at any date of determination, an amount equal to the highest of the Engine Type Excess Concentration Amount, the Single Lessee Excess Concentration Amount, the Three Lessee Excess Concentration Amount, the Geographic Region Excess Concentration Amount and the Wide Body Aircraft Excess Concentration Amount.

“Existing and Possible Loans” means Loans outstanding hereunder and Loans proposed to be made on any Transfer Date.

“FAA Counsel” shall mean McAfee & Taft or such other reputable counsel with offices in Oklahoma City, OK as Issuer and Servicer may from time to time select.

“Federal Funds Rate” means for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the federal funds rates and confirmed in Federal Reserve Board Statistical Release H.15(519) or any successor or substitute publication selected by Barclays Bank PLC (or, if such day is not a Business Day, for the next preceding Business Day), or, if for any reason, such rate is not available on any day, the rate determined, in the sole opinion of Barclays Bank PLC, to be the rate at which federal funds are being offered for sale in the national federal funds market at 9:00 a.m. (New York City time).

“Federal Reserve Board” means the Board of Governors of the Federal Reserve System or any successor thereto.

“Final Payment Date” means, with respect to Series 2002-1 Notes, the date which is the fourth anniversary of the Conversion Date, or if such date is not a Business Day, the Business Day immediately succeeding such date.

“Geographic Region Excess Concentration Amount” means at any date of determination, the dollar amount, if any, by which the sum of the Net Book Values of all Eligible Engines (relating to Loans hereunder) subject to a Lease Agreement with Lessees having corporate headquarters located in the geographic areas set forth in Section 5.2(r) hereof exceeds the applicable concentration limits set forth in Section 5.2(r) hereof.

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“Guarantor” means Willis Lease Finance Corporation and its successors and permitted assigns.

“Guaranty” means the Guaranty dated as of September 12, 2002 made by the Guarantor in favor of the Class B Note Purchasers, as the same is amended, restated, supplemented and modified from time to time.

“Increased Costs” shall have the meaning set forth in the applicable Note Purchase Agreement.

“Indenture Compliance Certificate” means the certificate of the Issuer given pursuant to Section 5.2(c) hereof.

“Interest” means for each Interest Accrual Period and for each Loan outstanding, the sum of the products (for each such day during such Interest Accrual Period) of

(S + IR) x P x 1/360

where:

S	=	the Spread applicable to such Loan on such day; and
IR	=	the Interest Rate applicable to such Loan on such day; and
P	=	the principal balance of such Loan on such day.

provided, however, that (i) no provision of this Supplement shall require the payment or permit the collection of Interest in excess of the maximum permitted by applicable law and (ii) Interest shall not be considered paid by any distribution if such distribution is rescinded or must otherwise be returned for any reason.

“Interest Accrual Period” means for any Payment Date, the period beginning with and including the day next following the end of the preceding Interest Accrual Period and ending on and including the 15th day of the following month; except that, in the case of the first Interest Accrual Period, the period beginning with and including the Effective Date and ending on and including the 15th day of the month next following the month in which the Effective Date occurs.  If such period is associated with Alternative Rate fundings the Interest Accrual Period shall be at the Deal Agent’s discretion; provided, however, that such period shall end on no later than either the 15th day of the following month or the 15th day of the second succeeding month.  When switching from Alternative Rate to CP Rate or Alternate Base Rate funding, the first such Interest Accrual Period shall be at the Deal Agent’s discretion.

“Interest Rate” means for any Loan on any day:

(A)so long as an Event of Default shall not have occurred and be contining on such day:

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(i)with respect to a Class A Note, a rate equal to the Sheffield Cost of Funds on such day, or

(ii)with respect to a Class B Note, a rate equal to the Alternative Rate on such day; or

(B)if an Event of Default has occurred and is continuing on such day, the applicable Overdue Rate.

“Issuer Fee Letter” means the Fee Letter, dated as of September 12, 2002 between the Issuer and the Deal Agent.

“Lease Agreement” means any lease agreement entered into from time to time by the Issuer or any Owner Trust, either directly or pursuant to an assignment, pursuant to which the Issuer or any Owner Trust leases one or more Engines, which lease agreement is identified on Schedule 2 hereto, and any additions, substitutions and replacements therefore made in accordance with the Series 2002-1 Transaction Documents and reflected in an amendment to such Schedule 2.

“Loan” means an extension of credit made by a Purchaser pursuant to Section 2.4 hereof.

“Minimum Servicing Fee Percentage” has the meaning set forth in Schedule 1 attached hereto.

“Note” means, with respect to Series 2002-1, any Class A Note or Class B Note.

“Note Commitment” means either the Class A Note Commitment or the Class B Note Commitment, as applicable.

“Note Purchase Agreement” means either the Class A Note Purchase Agreement or the Class B Note Purchase Agreement, as applicable.

“Noteholder(s)” means, at any time of determination for the Series 2002-1 Notes, any person in whose name a Note is registered in the Note Register.

“On-Lease Percentage” means, a fraction, expressed as a percentage, the numerator of which is equal to the Net Book Value of all Eligible Engines (relating to Loans hereunder) subject to a Lease Agreement and the denominator of which is equal to the sum of the Net Book Values of all Engines (relating to Loans hereunder).

“Overdue Rate” means on any day, the sum of:

(A)(i)with respect to a Class A Note, a rate equal to the Sheffield Cost of Funds on such day, or

(ii)with respect to a Class B Note, a rate equal to the Alternative Rate on such day; and

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(B)2.00% per annum.

“Owner Trust” means, with respect to an Engine, an owner trust that is established pursuant to a trust agreement substantially in the form attached hereto as Exhibit H-1 solely to hold such Engine and related Lease Agreement in connection with the Indenture.

“Owner Trust Documents” means with respect to an Owner Trust, an executed Trust Agreement substantially in the form attached hereto as Exhibit H-1, an executed Owner Trustee Guaranty substantially in the form attached hereto as Exhibit H-2, an executed Owner Trustee Mortgage substantially in the form attached hereto as Exhibit H-3, and an executed Beneficial Interest Pledge Agreement substantially in the form attached hereto as Exhibit H-4.

“Payment Date” means, with respect to the Series 2002-1 Notes, the twentieth day of each month, or, if such day is not a Business Day, the immediately following Business Day; provided, however, that the initial Payment Date shall be the twentieth day of the second month immediately succeeding the Closing Date, or if such day is not a Business Day, the immediately following Business Day.

“Portfolio Report” shall have the meaning set forth in Section 4.4(a) hereof.

“Prepayment” means any mandatory or optional prepayment of principal of Notes including, without limitation, any Prepayment pursuant to Section 702 of the Indenture.

“Principal Report” shall have the meaning set forth in Section 4.4(b) hereof.

“Principal Report Date” means, with respect to any Payment Date, the third Business Day prior to such Payment Date.

“Purchaser” shall mean the Class A Note Purchaser or a Class B Note Purchaser, as applicable.

“Quarterly Utilization Rate” means, as of the last day of any calendar month, the weighted average of the On-Lease Percentages for such calendar month and the two calendar months immediately preceding such calendar month.

“Record Date” means the third Business Day prior to any Payment Date.

“Renewal Fee” has the meaning set forth in the Issuer Fee Letter.

“Securities Accounts” means the Series 2002-1 Series Account, the Series 2002-1 Restricted Cash Account, the Series 2002-1 Engine Reserve Account and the Series 2002-1 Security Deposit Account.

“Securities Intermediary” means 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.

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“Senior Asset Base” means, as of any Payment Date, an amount equal to (1) the sum of (a) the product of (i) 90%, (ii) the Applicable Percentage and (iii) 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 Series 2002-1 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 Series 2002-1, and (b) the amount on deposit in the related Restricted Cash Account for Series 2002-1 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 Series 2002-1 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.

“Senior Step-Up Program Fee” shall have the meaning assigned to such term in the Issuer Fee Letter.

“Series Collateral” shall have the meaning set forth in Section 2.1(e) hereof.

“Series 2002-1” shall mean the Series of Notes the terms of which are specified in this Supplement.

“Series 2002-1 Engines” shall mean the Engines identified on Schedule 2 hereto, and any additions, substitutions and replacements therefore made in accordance with the Series 2002-1 Transaction Documents and reflected in an amendment to such Schedule 2.

“Series 2002-1 Engine Reserve Account” means the subaccount established by the Issuer with the Indenture Trustee into which Maintenance Reserve Payments are deposited pursuant to Section 308 of the Indenture and Section 3.05 hereof.

“Series 2002-1 Note Principal Balance” means as of any date of determination, the sum of the Class A Note Principal Balance and the Class B Note Principal Balance.

“Series 2002-1 Noteholder” shall mean the Person in whose name a Series 2002-1 Note is registered in the Note Register.

“Series 2002-1 Notes” means the Class A and Class B Notes, and shall include any and all replacements, extensions, substitutions or renewals of such notes.

“Series 2002-1 Restricted Cash Account” means the subaccount (designated as such) of the account established pursuant to Section 307 of the Indenture.

“Series 2002-1 Restricted Cash Amount” means the amount required to be deposited or maintained in the Series 2002-1 Restricted Cash Account, which on the date on which the initial Loan is made and on any Payment Date thereafter shall be equal to the product of (x) two percent (2%) and (y) the Series 2002-1 Note Principal Balance on such date on which the initial Loan is made or on such Payment Date, as the case may be (after giving effect to all Loans made on such date on which the initial Loan is made or on such Payment Date and all Class A Note Minimum

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Principal Payment Amounts and Class B Note Minimum Principal Payment Amounts actually paid on such date on which the initial Loan is made or on such Payment Date).

“Series 2002-1 Security Deposit Account” means the subaccount established by the Issuer with the Indenture Trustee into which Security Deposits are deposited pursuant to Section 309 of the Indenture and Section 3.6 hereof.

“Series 2002-1 Series Account” means the account established by the Issuer with the Indenture Trustee into which funds are deposited from the Trust Account pursuant to Section 303 of the Indenture.

“Series 2002-1 Transaction Documents” means any and all of the Indenture, this Supplement, the Series 2002-1 Notes, the Servicing Agreement, the Contribution and Sale Agreement, the Class A Note Purchase Agreement, the Class B Note Purchase Agreement, the Administration Agreement, each Beneficial Interest Pledge Agreement, each Owner Trustee Guaranty, each Owner Trustee Mortgage, each Trust Agreement and any and all other agreements, documents and instruments executed and delivered by or on behalf or in support of the Issuer with respect to the issuance and sale of the Series 2002-1 Notes, as any of the foregoing may from time to time be amended, modified, supplemented or renewed.

“Servicer Advance” means all extraordinary out of pocket payments payable pursuant to Section 3.04 of the Servicing Agreement and made by the Servicer which have been authorized by the Deal Agent.

“Servicer Report” means, with respect to Series 2002-1, the monthly report prepared by the Servicer in the form set forth in Exhibit A to the Servicing Agreement.

“Servicing Fee” has the meaning set forth in Schedule 1 attached hereto.

“Sheffield” means Sheffield Receivables Corporation or any successor thereto.

“Sheffield Cost of Funds” means for any Loan on any day, (a) to the extent that the Class A Note Purchaser funds such Loan either directly or indirectly through the issuance of Commercial Paper Notes, a rate equal to the CP Rate for such Interest Accrual Period (or any applicable portion thereof) and (b) to the extent that the Class A Note Purchaser funds such Loan other than by issuing Commercial Paper Notes, a rate equal to the Alternative Rate for such day or such other rate as the Deal Agent and the Issuer shall agree to in writing.

“Single Lessee Excess Concentration Amount” means at any date of determination, the dollar amount, if any, by which the aggregate of the sum of the Net Book Values of all Eligible Engines (relating to Loans hereunder) that are subject to a Lease Agreement with any single Lessee (including Affiliates thereof) exceeds the applicable concentration limits set forth in Section 5.2(p) hereof.

“Single Lessee Percentage” has the meaning set forth in Schedule 1 attached hereto.

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“Spread” with respect to any Loan shall mean the Program Fee Rate (as defined in the Issuer Fee Letter) applicable to such Loan, or following the consummation of the Term Securitization, such other rate as agreed to by the Issuer and the Purchasers in writing.

“Subordinate Asset Base” means the excess of the Asset Base over the Class A Note Principal Balance.

“Subordinate Step-Up Program Fee” shall have the meaning assigned to such term in the Issuer Fee Letter.

“Subsequent Lease Transaction” shall mean a Lease Agreement for any Engine which is entered into after the Transfer Date for such Engine.

“Target EBIT Ratio” has the meaning set forth in Schedule 1 attached hereto.

“Target On-Lease Percentage” has the meaning set forth in Schedule 1 attached hereto.

“Target One Year Lease Expiry Concentration Percentage” has the meaning set forth in Schedule 1 attached hereto.

“Target Two Year Lease Expiry Concentration Percentage” has the meaning set forth in Schedule 1 attached hereto.

“Taxes” means any present or future taxes, levies, imposes, duties, charges, assessment or fees of any nature (including interest, penalties and additions thereto) that are imposed by any government or other taxing authority.

“Term Securitization” means a transaction whereby a special-purpose entity that is an Affiliate of Willis Lease Finance Corporation other than the Issuer issues notes, certificates, preferred shares or beneficial interests secured by aircraft engines, lease agreements and other related assets that include all or a portion of the Contributed Assets or Beneficial Interests related thereto.

“Three Lessee Excess Concentration Amount” means at any date of determination, the dollar amount, if any, by which the sum of the Net Book Values of all Eligible Engines (relating to Loans hereunder) that are subject to a Lease Agreement with the three (3) largest Lessees with respect to aggregate Net Book Values (including Affiliates thereof) exceeds the applicable concentration limits set forth in Section 5.2(q) hereof.

“Three Lessee Percentage” has the meaning set forth in Schedule 1 attached hereto.

“Utilization Rate” means, as of any date of determination, the percentage equivalent of a fraction, the numerator of which is the aggregate Net Book Value of the Series 2002-1 Engines subject to Lease Agreements as of such date and the denominator of which is the Aggregate Net Book Value of the Series 2002-1 Engines.

“Warehouse Structuring Fee” shall have the meaning assigned to such term in the Issuer Fee Letter.

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“Weighted Average Lease Rate Percentage” has the meaning set forth in Schedule 1 attached hereto.

“Wide Body Aircraft Excess Concentration Amount” means, at any date of determination, the dollar amount, if any, by which the sum of the Net Book Values of all Eligible Engines (relating to Loans hereunder) designed to power Wide Body Aircraft exceeds the applicable concentration limits set forth in Section 5.2(s) hereof.

“Wide Body Aircraft Percentage” has the meaning set forth in Schedule 1 attached hereto.

Section 1.2Calculation Guidelines.

For purposes of calculating the Class A Note Interest Payment, the Class A Note Principal Balance shall at all times be equal to the sum of all Class A Loans then outstanding.  For purposes of calculating the Class B Note Interest Payment, the Class B Note Principal Balance shall at all times be equal to the sum of all Class B Loans then outstanding.

ARTICLE II

CREATION OF THE SERIES 2002-1 NOTES

Section 2.1Designation: General Terms and Conditions.

(a)There is hereby created a Series of Notes to be issued in two Classes pursuant to the Indenture and this Supplement to be known respectively as the “Willis Engine Funding LLC Secured Notes, Series 2002-1, Class A and Class B”.  The Series 2002-1 Notes shall not be rated by any Rating Agency.

(b)The Payment Date with respect to the Series 2002-1 Notes shall be the twentieth day of each month, or, if such day is not a Business Day, the immediately following Business Day.

(c)The Class A Notes and the Class B Notes shall be issued in definitive form substantially in the forms of Exhibit A and Exhibit B hereto.

(d)Payments of principal and interest on the Series 2002-1 Notes shall be payable solely from funds on deposit in the Series 2002-1 Series Account or from other funds as set forth in this Series 2002-1 Supplement at the times and in the amounts set forth in Article III of this Supplement.

(e)In furtherance of, and in addition to the property identified in, the Granting Clause set forth in the Indenture, as it relates to this Supplement, the Issuer hereby grants to the Indenture Trustee, for the benefit of the Series 2002-1 Noteholders, a security interest in all of Issuer’s right, title and interest in and to (i) each of the Series 2002-1 Engines, (ii) the Lease Agreements that encumber the Series 2002-1 Engines on the Closing Date or on any date thereafter, (iii) the Series 2002-1 Series Account, the Series 2002-1 Engine Reserve Account, the Series 2002-1 Security Deposit Account and the Series 2002-1 Restricted Cash Account and all

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amounts and Eligible Investments from time to time on deposit therein, (iv) each Beneficial Interest in an Owner Trust that owns a Series 2002-1 Engine, and (v) all income, payments and proceeds of the foregoing (all such property identified in this Section 2.1(e), collectively, the “Series Collateral”).  Such Series Collateral (except as set forth in Section 401(d) of the Indenture with respect to Excess Cash Available for Distribution) shall not be available to pay any other Aggregate Outstanding Obligations until all Outstanding Obligations under this Supplement have been paid in full.

(f)In the event that any term or provision contained herein shall conflict with or be inconsistent with any term or provision contained in the Indenture, the terms and provisions of this Supplement shall govern.

Section 2.2            Interest Payments on the Series 2002-1 Notes.

(a)Interest on Series 2002-1 Notes.  Each Loan shall bear interest on the outstanding principal amount thereof from the date when made, continued or converted until paid in full at a rate per annum equal to the sum of the applicable Spread and the applicable Interest Rate.  Such interest shall be payable on each Payment Date from amounts on deposit in the Series 2002-1 Series Account in accordance with Section 302 of the Indenture and Section 3.2 of this Supplement.

(b)Default Interest.  If an Event of Default has occurred and is continuing on any given day, the Issuer shall pay interest (“Default Interest”) at a rate per annum equal to the Overdue Rate, for the period during which such amounts shall remain unpaid.  Such interest shall be payable (i) on each Payment Date from amounts on deposit in the Series 2002-1 Series Account in accordance with Section 3.2 of this Supplement and (ii) as further provided Article VIII of the Indenture.

(c)Determination of Interest.  The Administrative Agent shall determine the Interest on any Class of Notes as provided herein and pursuant to Section 2.06 of the applicable Note Purchase Agreement.

Section 2.3Principal Payments on the Series 2002-1 Notes.

Principal of the Series 2002-1 Notes shall be payable on each Payment Date from amounts on deposit in the Series 2002-1 Series Account (and on the Final Payment Date, from amounts on deposit in the Series 2002-1 Restricted Cash Account) in accordance with Section 3.2 of this Supplement.  The unpaid principal amount of the Series 2002-1 Notes shall be due and payable in full on the Final Payment Date, together with all unpaid interest, fees, expenses, costs and other amounts payable by the Issuer pursuant to the terms of the Indenture and this Supplement.

Section 2.4Amounts and Terms of Series 2002-1 Noteholder Commitments; Fees Payable by Issuer.

(a)           Subject to the terms and conditions of this Supplement and the Class A Note Purchase Agreement and the Class B Note Purchase Agreement, the Class A Note Commitment

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and the Class B Note Commitment, respectively, shall be available to the Issuer on and after the Closing Date until the Conversion Date.

(b)Prior to the Conversion Date, the Class A Notes and Class B Notes shall be revolving notes with maximum aggregate principal amounts equal to their respective Note Commitments, then in effect; provided, however, that at no time shall the Class A Note Principal Balance exceed the Senior Asset Base for this Series 2002-1 nor shall the Class B Note Principal Balance exceed the Subordinate Asset Base for this Series 2002-1.  The Deal Agent shall maintain a record of all Loans and repayments made on the Class A Notes and the Class B Notes and absent manifest error such records shall be conclusive.  On any date requested by the Issuer, after the Issuer shall have satisfied all applicable conditions precedent set forth in Article V hereof and in the Class A Note Purchase Agreement and the Class B Note Purchase Agreement, each Purchaser shall, at the Issuer’s request for a Loan as specified in a notice given to the Deal Agent in accordance with the terms of the applicable Note Purchase Agreement, make payment thereof (in proportion to its respective commitment) in accordance with the terms of the applicable Note Purchase Agreement in an amount specified in such notice, and in accordance with the written direction of the Issuer by wire transfer in same day funds provided, that each request for an advance of principal of the applicable Note shall, subject to the applicable Note Commitment then in effect, be in minimum and multiple aggregate amounts as set forth in Section 2.04(b) of the applicable Note Purchase Agreement.  The Issuer shall pay interest on the Class A Notes and the Class B Notes at the rates and in the manner set forth in Section 2.2 hereof.  The unpaid principal amount of the Notes and all unpaid interest accrued thereon, together with any unpaid Senior Step-Up Program Fee, Subordinate Step-Up Program Fee, Renewal Fee and all other fees, expenses, costs and other sums chargeable to the Issuer incurred in connection therewith, shall be due and payable on the Final Payment Date.

Each request for a Loan shall constitute a reaffirmation by the Issuer that (1) no Event of Default or Early Amortization Event has occurred and is continuing and (2) the representations and warranties contained in the Series 2002-1 Transaction Documents are true, correct and complete in all material respects to the same extent as though made on and as of the date of the request, except to the extent such representations and warranties specifically relate to an earlier date, in which event they shall be true, correct and complete in all material respects as of such earlier date.

Notwithstanding any other provision of this Section 2.4(b), following the consummation of the Term Securitization, the Purchasers shall not be obligated to fund Loans under this Series 2002-1 Supplement and the Note Purchase Agreements until the Issuer and the Purchasers have agreed in writing regarding the Spreads for such Loans.

(c)The Issuer may, on any Payment Date, repay all or any portion of the Class A Note Principal Balance and Class B Note Principal Balance provided that the Issuer gives written notice of such prepayment to the Deal Agent that number of days before such Payment Date as may be mutually agreed by the Issuer and the Deal Agent and in accordance with the terms of this Supplement and complies with all other applicable requirements of the applicable Note Purchase Agreements, by making a wire transfer to the Deal Agent; provided, however that the Issuer may not make such repayment from funds in the Series 2002-1 Restricted Cash Account unless the Issuer is repaying all of the Class A Note Principal Balance and all of the Class B

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Note Principal Balance.  Such repayment shall be accompanied by instructions to apply such cash to the reduction of principal and accrued Interest through the date of such payment.  If the Issuer does not notify each Purchaser and the Deal Agent of any such principal reduction at least 30 days prior to such principal reduction, the Issuer shall pay all costs related to the reduction of outstanding principal, including Breakage Costs and all costs associated with the outstanding Commercial Paper Notes related to such principal reduction.  The Issuer understands (i) that Commercial Paper Notes issued in connection with such principal may not be prepaid, (ii) that the amount of cash proceeds received by each Purchaser may not match the amount of maturing Commercial Paper Notes on the desired repayment date and (iii) that each Purchaser shall use its reasonable best efforts to minimize any such Breakage Costs.

(d)The Issuer may terminate or reduce the Class A Maximum Limit and the Class B Maximum Limit pursuant to Section 2.05 of the Class A Note Purchase Agreement and Class B Note Purchase Agreement, respectively.

(e)The Issuer shall pay on each quarterly Payment Date, beginning with the third Payment Date, an Administrative Agent Fee to the Administrative Agent as set forth in Schedule 1.

(f)The Issuer shall pay on the Closing Date a Warehouse Structuring Fee to the Deal Agent and any other fees and expenses of the Deal Agent, each as set forth in the Issuer Fee Letter.

(g)The Issuer shall pay on any applicable Payment Date the Renewal Fee to the Deal Agent as set forth in the Issuer Fee Letter.

(h)The Issuer shall pay on any Payment Date on or after the Conversion Date the Senior Step-Up Program Fee and the Subordinate Step-Up Program Fee to the Class A Noteholders and the Class B Noteholders, respectively, as set forth in the Issuer Fee Letter.

Section 2.5Increased Cost; Capital Adequacy; Taxes.

The provisions set forth in Sections 2.08, 2.09 and 2.10 of each of the Class A Note Purchase Agreement and Class B Note Purchase Agreement are incorporated herein.

Section 2.6Payments, Computations, Etc.

(a)Unless otherwise expressly provided herein, all amounts to be deposited by the Issuer or the Servicer hereunder shall be 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.  Unless otherwise expressly provided herein, all amounts to be paid to the Deal Agent or to any Noteholder, as applicable, shall be paid in accordance with the terms hereof on the day when due in lawful money of the United States in immediately available funds to a dollar denominated account maintained by the Deal Agent or any Noteholder in accordance with wire instructions given to the Indenture Trustee by the Deal Agent or Noteholder.  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.

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(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 Loan requested by the Issuer and approved by a Purchaser and the Deal Agent pursuant to Section 2.04(b) of the applicable Note Purchase Agreement 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 such Purchaser against any reasonable loss, cost or expense incurred by such Purchaser, including, without limitation, any loss (including loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Purchaser to fund or maintain such Loan, as the case may be, during such Interest Accrual Period.

ARTICLE III

SERIES 2002-1 SERIES ACCOUNT AND ALLOCATION AND APPLICATION OF AMOUNTS THEREIN

Section 3.1Series 2002-1 Series Account.

The Issuer shall establish on the Effective Date and maintain, so long as any Series 2002-1 Note is Outstanding, an Eligible Account with the Indenture Trustee which shall be designated as the Series 2002-1 Series Account, which account is hereby pledged to the Indenture Trustee for the benefit of the Series 2002-1 Noteholders pursuant to the Indenture and this Supplement.  All deposits of funds by or for the benefit of the Series 2002-1 Noteholders from the Trust Account and the Series 2002-1 Restricted Cash Account shall be accumulated in, and withdrawn from, the Series 2002-1 Series Account in accordance with the provisions of the Indenture and this Supplement.

Section 3.2Distributions from Series 2002-1 Series Account on each Payment Date.

On each Payment Date, the Indenture Trustee shall, in accordance with the Servicer Report, distribute funds then on deposit in the Series 2002-1 Series Account and any other funds available for application to the Series 2002-1 Notes to the following Persons and in the following order of priority:

IIf an Early Amortization Event shall not then be continuing:

(A)By wire transfer of immediately available funds, to the Indenture Trustee, all Indenture Trustee’s Fees, to the Collateral Custodian, all Collateral Custodian’s Fees, to any Owner Trustee of an Owner Trust that owns a Series 2002-1 Engine, any fees and expenses incurred in performing its duties under the applicable Trust Agreement, in each case then due and payable for Series 2002-1 to the extent not paid by the Servicer;

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(B)(i)if the Indenture Trustee has received the Servicer Report for the related Collection Period, to the Servicer by wire transfer of immediately available funds, an amount equal to the sum of any (x) Servicing Fee Arrearage and (y) Servicing Fee then due and payable and (ii) to the Servicer by wire transfer of immediately available funds, an amount equal to any outstanding Servicer Advance;

(C)To the Administrative Agent, any fees and expenses then payable to the Administrative Agent approved by the Requisite Global Majority pursuant to Section 405(b) of the Indenture;

(D)To each Interest Rate Hedge Provider, any payments owing under the related Interest Rate Hedge Agreement other than termination payments;

(E)To each Holder of a Class A Note on the immediately preceding Record Date an amount equal to such Holder’s pro rata portion of first, any Class A Note Interest Arrearage, and second, the Class A Note Interest Payment for such Payment Date;

(F)To each Holder of a Class B Note on the immediately preceding Record Date, an amount equal to its pro rata portion of first, any Class B Note Interest Arrearage, and second, the Class B Note Interest Payment for such Payment Date;

(G)To the Series 2002-1 Restricted Cash Account, an amount sufficient so that the total amount on deposit therein is equal to the Series 2002-1 Restricted Cash Amount for such Payment Date;

(H)(i) To the Deal Agent, an amount equal to the Renewal Fee, if applicable and (ii) to the Administrative Agent an amount equal to the sum of (x) the Administrative Agent Fee then due and payable and (y) any unpaid Administrative Agent Fee from all prior Payment Dates;

(I)On a pari passu basis, (i) to each Holder of a Class A Note on the immediately preceding Record Date, an amount equal to its pro rata portion of the Class A Note Minimum Principal Payment Amount and (ii) to each Interest Rate Hedge Provider any termination payments owing under the related Interest Rate Hedge Agreement;

(J)To each Holder of a Class B Note on the immediately preceding Record Date, an amount equal to its pro rata portion of the Class B Note Minimum Principal Payment Amount;

(K)For any Payment Date on or after the Conversion Date, to each Holder of a Class A Note on the immediately preceding Record Date, an amount equal to its pro rata portion of the sum of (x) the Senior Step-Up Program Fee then due and payable and (y) any unpaid Senior Step-Up Program Fee from all prior Payment Dates, if any;

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(L)For any Payment Date on or after the Conversion Date, to each Holder of a Class B Note on the immediately preceding Record Date, an amount equal to its pro rata portion of the sum of (x) the Subordinate Step-Up Program Fee then due and payable and (y) any unpaid Subordinate Step-Up Program Fee from all prior Payment Dates, if any;

(M)For any Payment Date on or after the Conversion Date, to each Holder of a Class A Note on the immediately preceding Record Date, an amount equal to its pro rata portion of the Class A Note Distributable Amortization Amount;

(N)For any Payment Date on or after the Conversion Date, to each Holder of a Class B Note on the immediately preceding Record Date, an amount equal to its pro rata portion of the Class B Note Distributable Amortization Amount;

(O)To each Holder of a Class A Note on the immediately preceding Record Date, pro rata, an amount equal to any Class A Increased Costs and amounts due pursuant to Sections 2.5 and 2.6 hereof, if any, then due and payable with respect to such Class A Note and any other costs, expenses, taxes and indemnities payable by the Issuer pursuant to the Class A Note Purchase Agreement;

(P)To each Holder of a Class B Note on the immediately preceding Record Date, pro rata, an amount equal to any Class B Increased Costs and amounts due pursuant to Sections 2.5 and 2.6 hereof, if any, then due and payable with respect to such Class B Note and any other costs, expenses, taxes and indemnities payable by the Issuer pursuant to the Class B Note Purchase Agreement;

(Q)To the Indenture Trustee for distribution pursuant to Section 401(d) of the Indenture, as Excess Cash Available for Distribution, to the extent that any Deficient Series is Outstanding on such Payment Date; and

(R)To the Issuer by wire transfer of immediately available funds, any remaining amount on deposit in the Series 2002-1 Series Account on such Payment Date.

Notwithstanding the foregoing, the amounts set forth in clause (R) shall be payable only at such times as no Deficient Series then exists.

IIIf an Early Amortization Event shall then be continuing:

(A)By wire transfer of immediately available funds, to the Indenture Trustee, all Indenture Trustee’s Fees, to the Collateral Custodian, all Collateral Custodian’s Fees, to any Owner Trustee of an Owner Trust that owns a Series 2002-1 Engine, any fees and expenses incurred in performing its duties under the applicable Trust Agreement, in each case then due and payable for Series 2002-1 to the extent not paid by the Servicer;

(B)(i)If the Indenture Trustee has received the Servicer Report for the related Collection Period, to the Servicer by wire transfer of immediately available funds, an amount equal to the sum of any (x) Servicer Fee Arrearage and (y) Servicer Fee

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then due and payable and (ii) to the Servicer by wire transfer of immediately available funds, an amount equal to any outstanding Servicer Advance;

(C)To the Administrative Agent, any fees and expenses then payable to the Administrative Agent approved by the Requisite Global Majority pursuant to Section 405(b) of the Indenture;

(D)To an Interest Rate Hedge Provider, any payments owing under the related Interest Rate Hedge Agreement other than termination payments;

(E)To each Holder of a Class A Note on the immediately preceding Record Date an amount equal to such Holder’s pro rata portion of first, any Class A Note Interest Arrearage, and second, the Class A Note Interest Payment for such Payment Date;

(F)To each Holder of a Class B Note on the immediately preceding Record Date, an amount equal to its pro rata portion of first, any Class B Note Interest Arrearage, and second, the Class B Note Interest Payment for such Payment Date;

(G)To the Series 2002-1 Restricted Cash Account, an amount sufficient so that the total amount on deposit therein is equal to the Series 2002-1 Restricted Cash Amount for such Payment Date;

(H)(i) To the Deal Agent, an amount equal to the Renewal Fee, if applicable and (ii) to the Administrative Agent an amount equal to the sum of (x) the Administrative Agent Fee then due and payable and (y) any unpaid Administrative Agent Fee from all prior Payment Dates;

(I)For any Payment Date on or after the Conversion Date, to each Holder of a Class A Note on the immediately preceding Record Date, an amount equal to its pro rata portion of the sum of (x) the Senior Step-Up Program Fee then due and payable and (y) any unpaid Senior Step-Up Program Fee from all prior Payment Dates, if any;

(J)For any Payment Date on or after the Conversion Date, to each Holder of a Class B Note on the immediately preceding Record Date, an amount equal to its pro rata portion of the sum of (x) the Subordinate Step-Up Program Fee then due and payable and (y) any unpaid Subordinate Step-Up Program Fee from all prior Payment Dates, if any;

(K)On a pari passu basis, (i) to each Holder of a Class A Note on the immediately preceding Record Date, an amount equal to its pro rata portion of the Class A Note Minimum Principal Payment Amount and (ii) to each Interest Rate Hedge Provider any termination payments owing under the related Interest Rate Hedge Agreement;

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(L)To each Holder of a Class B Note on the immediately preceding Record Date, an amount equal to its pro rata portion of the Class B Note Minimum Principal Payment Amount;

(M)To each Holder of a Class A Note on the immediately preceding Record Date, pro rata, an amount equal to any Class A Increased Costs and amounts due pursuant to Sections 2.5 and 2.6 hereof, if any, then due and payable with respect to such Class A Note and any other costs, expenses, taxes and indemnities payable by the Issuer pursuant to the Class A Note Purchase Agreement;

(N)To each Holder of a Class B Note on the immediately preceding Record Date, pro rata, an amount equal to any Class B Increased Costs and amounts due pursuant to Sections 2.5 and 2.6 hereof, if any, then due and payable with respect to such Class B Note and any other costs, expenses, taxes and indemnities payable by the Issuer pursuant to the Class B Note Purchase Agreement;

(O)To the Indenture Trustee for distribution pursuant to Section 401(d) of the Indenture, as Excess Cash Available for Distribution, to the extent that any Deficient Series is Outstanding on such Payment Date; and

(P)To the Issuer by wire transfer of immediately available funds, any remaining amount on deposit in the Series 2002-1 Series Account on such Payment Date.

Any amounts payable to a Noteholder shall be made by wire transfer of immediately available funds to the account that such Noteholder has designated to the Indenture Trustee in writing on or prior to the Business Day immediately preceding the Payment Date.

Section 3.3Allocation of Excess Cash Available for Distribution.

On each Payment Date, the Indenture Trustee shall distribute any Excess Cash Available for Distribution deposited into the Series 2002-1 Series Account in accordance with Section 401 of the Indenture in payment of the amounts and in the order of priority set forth in Section 3.2(I) or (II) hereof; as the case may be.

Section 3.4Series 2002-1 Restricted Cash Account.

(a)The Issuer shall establish on the Effective Date and maintain so long as any Series 2002-1 Note is Outstanding an Eligible Account with the Indenture Trustee which shall be designated as the Series 2002-1 Restricted Cash Account, which account is hereby pledged to the Indenture Trustee pursuant to the Indenture and this Supplement.  On the date on which the initial Loan is made, the Issuer will deposit the Series 2002-1 Restricted Cash Amount in the Series 2002-1 Restricted Cash Account from the proceeds of issuance of the Series 2002-1 Notes and thereafter amounts shall be deposited in the Series 2002-1 Restricted Cash Account in accordance with Section 3.2 of this Supplement.  Any and all moneys remitted by the Indenture Trustee to the Series 2002-1 Restricted Cash Account shall be invested in Eligible Investments in accordance with the Indenture and shall be distributed in accordance with this Section 3.4.

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(b)The Indenture Trustee shall as promptly as practicable, in accordance with written instructions from the Deal Agent delivered to the Indenture Trustee prior to each Payment Date, make a draw on the Series 2002-1 Restricted Cash Account in an amount equal to the extent by which amounts on deposit in the Series 2002-1 Series Account will be insufficient to pay those amounts payable pursuant to Section 3.2(I)(E) and (F) or Section 3.2(II)(E) and (F), as the case may be, on such Payment Date (after giving effect to any distributions to be made on such Payment Date prior to the payment of such amounts) and the amount of any such draw shall be deposited in the Series 2002-1 Series Account.

(c)On each Payment Date, the Indenture Trustee shall, in accordance with the Servicer Report or pursuant to written instructions from the Deal Agent, deposit in the Series 2002-1 Series Account the excess, if any, of (A) amounts then on deposit in the Restricted Cash Account (after giving effect to any withdrawals therefrom on such Payment Date) over (B) the Series 2002-1 Restricted Cash Amount.  On the Final Payment Date, any remaining funds in the Series 2002-1 Restricted Cash Account shall be deposited in the Series 2002-1 Series Account and distributed in accordance with Section 3.2 of this Supplement.

Section 3.5Series 2002-1 Engine Reserve Account.

(a)The Issuer shall establish on the Effective Date and maintain an Eligible Account with the Indenture Trustee which shall be designated as the Series 2002-1 Engine Reserve Account, which account is hereby pledged to the Indenture Trustee pursuant to the Indenture and this Supplement.  The Issuer, or Servicer on its behalf; shall cause the Lessees to remit the Maintenance Reserve Payments to the Trust Account, and the Servicer, pursuant to the Servicing Agreement, shall, by not later than each Determination Date, specifically identify those Maintenance Reserve Payments to a particular Eligible Engine and instruct the Indenture Trustee to allocate all Maintenance Reserve Payments on deposit in the Trust Account which relate to any Engine pledged as collateral for the Series 2002-1 Notes, to the Series 2002-1 Engine Reserve Account.

(b)The Issuer shall maintain (or shall cause the Servicer to maintain) records that will identify amounts on deposit in the Series 2002-1 Engine Reserve Account to a specific Eligible Engine.  The Servicer shall be entitled to withdraw funds from the Series 2002-1 Engine Reserve Account for the payment of maintenance expenses with respect to the related Eligible Engine, at the times and subject to the further conditions set forth in the Servicing Agreement; provided, however, that the Servicer may not make any such withdrawal in an amount greater than $1,000,000 unless the Deal Agent determines (or is deemed to determine) that the use of proceeds of such withdrawal complies with the Maintenance Reserve Withdrawal Conditions (as defined below).

The Servicer shall give the Indenture Trustee and the Deal Agent prior written notice of any such requested withdrawal in excess of $1,000,000, accompanied by supporting documentation showing compliance with the Maintenance Reserve Withdrawal Conditions.  Such request shall be accompanied by a notice in the form of Exhibit F to this Supplement, duly completed (a “Withdrawal Notice”).  The Indenture Trustee shall, upon receipt of such notice of a requested withdrawal and supporting documentation, transmit copies thereof by telecopy to the Deal Agent.  If such notice and documentation are received by the Indenture Trustee prior to

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2:00 p.m. (New York time) on any Business Day, the Indenture Trustee will telecopy the same to the Deal Agent at (212) 412-3266 on the same Business Day.  In all other cases the Indenture Trustee will telecopy such notice and documentation to the Deal Agent at such telecopy number on the next Business Day following the Indenture Trustee’s receipt thereof.  If the Deal Agent determines that such supporting documentation does not show that such drawing complies with the Maintenance Reserve Withdrawal Conditions or that it has received insufficient supporting documentation to show such compliance, it will so indicate by signing the applicable Withdrawal Notice in the space provided, and sending such signed Withdrawal Notice to the Indenture Trustee and the Servicer no later than 5:00 p.m. (New York time) on the second Business Day after the day on which the Deal Agent received such telecopy from the Indenture Trustee.  Such notice by the Deal Agent, if given, will be sent to the Indenture Trustee by telecopy at (212) 815-2493.  If the Indenture Trustee does not receive such notice by 5:00 p.m. (New York time) on such second Business Day at such telecopy number, the Deal Agent will be deemed to have determined that such withdrawal complies with the Maintenance Reserve Withdrawal Conditions.  If the Indenture Trustee timely receives such Withdrawal Notice signed by the Deal Agent, it will not permit the applicable withdrawal from the Series 2002-1 Engine Reserve Account.  If the Indenture Trustee does not timely receive such Withdrawal Notice signed by the Deal Agent, it will permit the applicable withdrawal.

The “Maintenance Reserve Withdrawal Conditions” applicable to any Withdrawal Notice are that

(i)the amount requested to be withdrawn must be no greater than the aggregate amount of the invoices for work done on the applicable Eligible Engine, copies of which are delivered as part of the supporting documentation for such Withdrawal Notice, and

(ii)the amount requested to be withdrawn must be no greater than the aggregate amount of all Maintenance Reserve Payments on deposit in the Series  2002-1 Engine Reserve Account which were shown as being allocated to the applicable Eligible Engine in the most recently delivered Servicer Report.

Notwithstanding the foregoing, so long as a Servicer Default is then in effect, the Servicer shall not be entitled to make any such withdrawal (irrespective of the amount thereof) except upon presentation of supporting documentation reasonably determined by the Deal Agent to comply with the Maintenance Reserve Withdrawal Conditions and the terms of the applicable Lease Agreement (which shall evidence its determination by written instrument delivered to the Indenture Trustee).

Section 3.6Series 2002-1 Security Deposit Account.

(a)The Issuer shall establish on the Effective Date and maintain an Eligible Account with the Indenture Trustee which shall be designated as the Series 2002-1 Security Deposit Account, which account is hereby pledged to the Indenture Trustee pursuant to the Indenture and this Supplement.  The Issuer, or Servicer on its behalf, shall cause the Lessees to remit the Security Deposits to the Trust Account, and the Servicer, pursuant to the Servicing Agreement, shall, by not later than each Determination Date, specifically identify those Security Deposits to

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a particular Eligible Engine and instruct the Indenture Trustee to allocate all Security Deposits on deposit in the Trust Account which relate to any Engine pledged as collateral for the Series 2002-1 Notes, to the Series 2002-1 Security Deposit Account.

(b)The Issuer shall maintain (or shall cause the Servicer to maintain) records that will identify amounts on deposit in the Series 2002-1 Security Deposit Account to a specific Eligible Engine.  The Servicer shall be entitled to withdraw funds from the Series 2002-1 Security Deposit Account for the refund to the Lessee of the Security Deposit 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 Deal Agent to comply with the terms of the applicable Lease Agreement (which shall evidence its determination by written instrument delivered to the Indenture Trustee).

(c)The Servicer shall be entitled to withdraw any funds eligible for withdrawal pursuant to Section 3.6(b) from the Series 2002-1 Security Deposit Account and transfer them to the Series 2002-1 Collection Account to be applied (i) in respect of a final Scheduled Payment due and owing by the related Lessee with respect to the related Eligible Engine or (ii) otherwise upon a payment default by the related Lessee pursuant to the applicable Lease, 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 Deal 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 3.7Securities Accounts.

(a)Notwithstanding any other provision of this Supplement or the Indenture, 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 the UCC) 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 3.7(a) will give the Indenture Trustee “control” over the Securities Accounts (as the term “control” is defined under the UCC), without prejudice to any other provision of the UCC that also would be deemed to give the Indenture Trustee such control.

ARTICLE IV

ADDITIONAL COVENANTS

In addition to the covenants set forth in Article VI of the Indenture, the Issuer hereby makes the following additional covenants for the benefit of the Series 2002-1 Noteholders:

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Section 4.1Additional Series.

For so long as any Series 2002-1 Note is Outstanding, the Issuer shall not issue any additional Series of Notes on or after the Effective Date without (a) the prior written consent of the Control Party for this Series 2002-1, (b) confirmation in writing that the Outstanding obligations of each Series of Notes (calculated after giving effect to such proposed issues) shall not exceed the Asset Base for such Series of Notes as evidenced by the related Asset Base Certificate most recently received by the Indenture Trustee (but not earlier than the preceding Payment Date) and (c) confirmation in writing that no Early Amortization Event or Event of Default has occurred and is then continuing, and as a result of the issuance of such new Series no Early Amortization Event or Event of Default will exist.

Section 4.2Reserved.

Section 4.3Inspections.

The Issuer agrees that any Person designated in writing by the Deal Agent may consult with the proper officials of the Issuer (including, without limitation, officials of any Affiliate of the Issuer in charge of servicing the Lease Agreements) at such times during normal business hours and as often as the Deal Agent may reasonably request regarding the information required to be furnished pursuant to the Servicing Agreement or regarding the performance of its respective covenants and agreements contained in any of this Supplement or any of the Related Documents to which it is a party.

Section 4.4Portfolio Report; Principal Report.

(a)The Issuer shall (or shall cause the Servicer to) on each Determination Date prepare and deliver to the Indenture Trustee, each Series Enhancer (if applicable), each Rating Agency (if applicable) and the Administrative Agent a monthly report substantially in the form attached hereto as Exhibit J-1 (the “Portfolio Report”) detailing the status of each Lease including but not limited to engine utilization, engine lease rates, engine purchases and dispositions, current Lessees, any repossessions under any Lease and any delinquencies under any Lease.

(b)The Issuer shall (or shall cause the Servicer to) on each Principal Report Date prepare and deliver to the Administrative Agent a monthly report substantially in the form attached hereto as Exhibit J-2 (the “Principal Report”) for the related Payment Date listing the Class A Note Principal Balance and the Class B Note Principal Balance that will be outstanding on such Payment Date after all distributions of principal on such Payment Date.

Section 4.5Interest Rate Hedge Agreements.

(a)The Issuer shall enter into Interest Rate Hedge Agreements in order to protect the Issuer, to the extent commercially practicable, from fluctuations in interest rates which would increase the interest payments of the Issuer on Notes issued under this Supplement; provided that Interest Rate Hedge Agreements shall be maintained in at least the amount specified in Schedule 1 and in form and substance acceptable to the Deal Agent and be with an Interest Rate Hedge Provider acceptable to the Deal Agent; provided, however, that following any Servicer Default

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the Deal Agent shall have the right, in its sole discretion but after consultation with the initial Servicer if the initial Servicer is still an operating entity, to direct the Indenture Trustee to enter into Interest Rate Hedge Agreements on the Issuer’s or the Indenture Trustee’s behalf on or prior to the effective date of each such Interest Rate Hedge Agreement which is not solely a cap agreement, the Interest Rate Hedge Providers thereunder shall agree, for the period of one year after all Indebtedness under this Supplement shall have been paid in full, not to commence any case, proceeding or other action under any existing or future Insolvency Law seeking to have an order for relief entered with respect to the Issuer.  In addition, long term senior unsecured indebtedness of the related Interest Rate Hedge Provider shall be rated not less than “A” by Standard & Poor’s and “A2” by Moody’s.

(b)Each Interest Rate Hedge Agreement shall provide that all payments made pursuant thereto shall be paid directly to the Series 2002-1 Series Account or shall be assigned to the Issuer with directions from the Issuer to deposit such payments in the Series 2002-1 Series Account, and all payments received from an Interest Rate Hedge Provider shall be deposited by the Issuer or the Indenture Trustee directly into the Series 2002-1 Series Account.

Section 4.6Insurance.

Within 45 days of the Closing Date or the Transfer Date related to the transfer of any additional Engine and related Lease Agreement, in the case of any Engine and related Lease Agreement received from an Affiliate of the Issuer, and on or before such Closing Date or Transfer Date, in the case of all other Engines and related Lease Agreements, and on the date of the applicable Subsequent Lease Transaction, the Issuer shall deliver to the Collateral Custodian certificates evidencing the applicable Lessee’s insurance coverage (in addition to any insurance coverage required under the Servicing Agreement), which shall be satisfactory to the Deal Agent, and shall name the Indenture Trustee on behalf of the Series 2002-1 Noteholders as contract party or additional loss payee, as the case may be, in the case of casualty insurance, and as additional insured in the case of liability insurance.

Section 4.7Lessee Acknowledgment.

Within 90 days of the Closing Date or the Transfer Date with respect to any Engine, the Lessee under the Lease Agreement relating to such Engine, if any, shall have executed and delivered to the Deal Agent a written agreement, substantially in the form attached hereto as Exhibit D.

Section 4.8Opinions of Foreign Local Counsel.

Within 120 days of the Closing Date or the Transfer Date related to each Engine and related Lease Agreement, as the case may be, the Issuer shall cause the delivery to the Series 2002-1 Noteholders of such Opinions of Counsel as may be requested by the Deal Agent, other than counsel employed by the Issuer, the Seller or the Servicer for purposes other than solely with respect to the issuance of such opinions, in form and substance satisfactory to the Series 2002-1 Noteholders, as to the perfection and priority (to the extent applicable in such jurisdiction) of the Indenture Trustee’s security interest in each Engine and related Lease

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Agreement, which are subject to the applicable laws of any jurisdiction other than the United States.

Section 4.9Filing of Leases with FAA.

The Issuer will cause each Lease to be duly filed with the FAA, together with any Lease assignment which may be necessary to perfect the Indenture Trustee’s security interest in such Lease, no later than the Transfer Date of the applicable Engine and, in the case of any Lease executed and delivered after such Transfer Date, no later than the date of such execution and delivery, and will deliver, or will cause to be delivered, evidence of such filing together with any “chattel paper” original of such Lease to the Collateral Custodian within three Business Days of such filing.

ARTICLE V

CONDITIONS OF EFFECTIVENESS AND FUTURE LENDING

Section 5.1Effectiveness of Supplement.

The effectiveness of this Supplement is subject to the condition precedent that the Indenture Trustee shall have received all of the following, each duly executed and dated as of the Effective Date, in form and substance satisfactory to all of the initial Series 2002-1 Noteholders and each (except for the Series 2002-1 Notes, of which only the originals shall be signed) in sufficient number of signed counterparts to provide one for each Series 2002-1 Noteholder:

(a)Series 2002-1 Notes:  Separate Series 2002-1 Notes executed by the Issuer, and duly authenticated by the Indenture Trustee, in favor of each Series 2002-1 Noteholder in the stated principal amount of such Series 2002-1 Notes that such Series 2002-1 Noteholder has agreed to purchase.

(b)Certificate(s) of Secretary or Assistant Secretary.  Separate certificates executed by the corporate secretary or assistant secretary of each of Willis Lease Finance Corporation (in its capacities as the Seller, the Servicer and the Guarantor) and the Issuer, dated the Effective Date, certifying (i) that the respective company has the authority to execute and deliver, and perform its respective obligations under each of the Series 2002-1 Transaction Documents to which it is a party, and (ii) that attached are true, correct and complete copies of the Certificate of Incorporation, by-laws, board resolutions and incumbency certificates (in the case of Willis Lease Finance Corporation) or Certificate of Formation, Limited Liability Company Agreement and incumbency certificates (in the case of the Issuer) in form and substance satisfactory to all of the initial Series 2002-1 Noteholders, as to such matters as they shall require.

(c)Security Documents.  The Indenture and this Supplement, in form and substance satisfactory to all of the initial Series 2002-1 Noteholders, shall have been executed and delivered by Issuer, and all other parties thereto, together with other documents reasonably requested by Series 2002-1 Noteholders.

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(d)Opinions of Counsel.  Opinions of Counsel to the Issuer, the Seller, the Guarantor, the Servicer and the Indenture Trustee, in form and in substance satisfactory to the initial Series 2002-1 Noteholders as to such matters as it shall require.

(e)Series 2002-1 Transaction Documents.  Each of the Servicing Agreement, the Contribution and Sale Agreement, the Administration Agreement, the Indenture, the Class A Note Purchase Agreement, the Class B Note Purchase Agreement, this Supplement and the Issuer Fee Letter shall have been duly executed and delivered.

(f)Good Standing Certificates.  Good Standing Certificates in the state(s) of formation and location for each of the Seller (as Seller and Servicer), the Guarantor and the Issuer.

(g)Establishment of Accounts.  Each of the Trust Account, the Series 2002-1 Series Account, the Restricted Cash Account, the Series 2002-1 Restricted Cash Account, the Engine Reserve Account, the Series 2002-1 Engine Reserve Account, the Security Deposit Account and the Series 2002-1 Security Deposit Account shall have been established with the Indenture Trustee as evidenced by a certificate of an authorized officer of the Indenture Trustee.

(h)Guaranty.  The Guarantor shall have duly executed and delivered the Guaranty.

(i)Legal Fees.  The Issuer shall have paid to Sidley Austin Brown & Wood llp its fees and expenses as counsel for the Deal Agent and the Purchasers.

Purchase of the Series 2002-1 Notes by the Series 2002-1 Noteholders shall be conclusive evidence, upon which the Indenture Trustee may rely that the Series 2002-1 Noteholders have determined that the conditions precedent to the effectiveness of the Series 2002-1 Supplement set forth in (a) through (i) above, have been complied with to their satisfaction.

Section 5.2Advances on Notes.

The obligation of a Purchaser to make any Loans pursuant to the applicable Note Commitment under this Supplement and the applicable Note Purchase Agreement is subject to the following further conditions precedent; provided, however, that the Deal Agent may waive in writing those conditions set forth in subdivisions (o), (r), (s), (v) and (w) of this Section 5.2:

(a)Default.  Before and after giving effect to such advance, no Event of Default shall have occurred and be continuing.

(b)Early Amortization Event.  Before and after giving effect to such advance, no Early Amortization Event shall have occurred and be continuing, unless each of the Requisite Global Majority and Holders representing one hundred percent (100%) of the Aggregate Note Principal Balance have approved such advance.

(c)Certification.  Issuer shall have delivered to the Collateral Custodian, Deal Agent and Sheffield a compliance certificate, signed by an officer of Issuer, as to the matters set out in Article V and in Article VI of this Supplement.

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(d)Asset Base Certificate.  Issuer shall have delivered to the Collateral Custodian, Deal Agent and Sheffield a duly completed and executed Asset Base Certificate, as of each Determination Date and one (1) day preceding an Incremental Funding (as defined in applicable Note Purchase Agreement), that states that (i) the Class A Note Principal Balance (after giving effect to such proposed advance of principal of the Class A Note, if applicable) will not exceed the Senior Asset Base for Series 2002-1 and (ii) the Class B Note Principal Balance (after giving effect to such proposed advance of principal of the Notes, if applicable) will not exceed the Subordinate Asset Base for Series 2002-1 and complies with the requirements therefor set forth in the Indenture and this Supplement.

(e)Conversion Date.  The Conversion Date shall not have occurred.

(f)Security Documents.  All UCC financing statements and documents of similar import in other jurisdictions, including the documents required to be filed pursuant to the Contribution and Sale Agreement, and other documents reasonably requested by Series 2002-1 Noteholders shall have been filed with the applicable Governmental Authorities, and all Evidence of Filing delivered by the Seller to the Issuer on such Transfer Date pursuant to Section 2.03(c) of the Contribution and Sale Agreement shall have been delivered to the Deal Agent and the Collateral Custodian.

(g)Certificate as to Engines.  A certificate from the Servicer certifying that it is managing all of the Contributed Engines in accordance with the Servicing Agreement shall have been delivered to the Collateral Custodian.

(h)Opinions of Counsel.  The Collateral Custodian shall have received Opinions of Counsel to the Issuer, other than counsel employed by the Issuer, the Seller or the Servicer, as to the filing with the FAA of the Indenture Trustee’s security interest in the Collateral, and the perfection and priority of such security interest with respect to FAA matters in form and substance satisfactory to the Series 2002-1 Noteholders.

(i)Perfected Security Interest.  The Collateral Custodian and the Deal Agent shall have received evidence satisfactory to the Deal Agent that the Indenture Trustee has (or upon funding, will have) a perfected, first priority security interest in each Engine and related Lease Agreements that will be the subject of such Loan; provided, however, that if the applicable laws of any jurisdiction in which an Engine is required to be registered does not provide for a means to obtain such a perfected, first priority security interest, then the Issuer shall provide additional assurances satisfactory to the Purchasers.

(j)Appraisal.  The Collateral Custodian and the Deal Agent shall have received an Appraisal in form, scope and for a value satisfactory to the Deal Agent with respect to each Engine that will be the subject of such Loan.

(k)Chattel Paper.  Any original counterpart of each Lease Agreement (other than the one held by the Lessee or filed with any relevant Governmental Authority) that will be the subject of a Loan that constitutes “chattel paper” for purposes of the UCC as in effect in the jurisdiction whose law governs the Lease Agreement has been delivered in escrow to the Issuer’s FAA Counsel on or prior to the effectiveness of such Lease Agreement, and shall have been filed

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with the FAA on or before the date of such Loan, provided, however, that FAA Counsel shall deliver such “chattel paper” original counterpart to the Collateral Custodian within three (3) Business Days after such filing.

(l)Remittance to Trust Account.  The Lessee under each Lease Agreement that will be the subject of a Loan shall have been directed to remit to the Trust Account all Scheduled Payments and other amounts owing pursuant to such Lease Agreement.

(m)Lessee Acknowledgment.  The Lessee under the Lease Agreement relating to an Engine, if any, shall have received a written agreement for Lessee’s signature, substantially in the form attached hereto as Exhibit D.

(n)Reserved.

(o)Maximum Concentration by Engine Types.  Each Engine shall have been manufactured by one of the manufacturers set forth under the column titled “Manufacturer” on Exhibit C hereto and shall be one of the engine types set forth opposite the name of such manufacturer under the column titled “Engine Type” on Exhibit C hereto.  After giving effect to the transfer of Engines on any Transfer Date, the sum of the Net Book Values of all Eligible Engines (relating to Existing and Possible Loans) of the same engine type shall not exceed an amount equal to the product of (i) the percentage set forth opposite such engine type in the column entitled “Maximum Concentration” on Exhibit C hereto and (ii) the Aggregate Net Book Value (relating to Existing and Possible Loans) on such Transfer Date.

(p)Maximum Concentration for Single Lessee.  After giving effect to the transfer of Engines and the related Lease Agreements on any Transfer Date, the sum of the Net Book Values of all Eligible Engines (relating to Existing and Possible Loans) that are or would be subject to a Lease Agreement with a single Lessee (including Affiliates thereof) shall not exceed an amount equal to the product of (i) the Single Lessee Percentage and (ii) the Aggregate Net Book Value (relating to Existing and Possible Loans).

(q)Maximum Concentration for any Three Lessees.  After giving effect to the transfer of Engines and the related Lease Agreements on any Transfer Date, the sum of the Net Book Values of all Eligible Engines (relating to Existing and Possible Loans) that are or would be subject to a Lease Agreement with the three (3) largest Lessees with respect to aggregate Net Book Values (including Affiliates thereof) shall not exceed an amount equal to the product of (i) the Three Lessee Percentage and (ii) the Aggregate Net Book Value (relating to Existing and Possible Loans).

(r)Maximum Concentration by Geographic Region.  After giving effect to the transfer of Engines and the related Lease Agreements on any Transfer Date, the sum of the Net Book Values of all Engines (relating to Existing and Possible Loans) that are or would be subject to a Lease Agreement with Lessees having corporate headquarters located in the geographic regions set forth in Schedule 1 shall not exceed an amount equal to the product of (i) the percentage set forth opposite such geographic region under the column entitled “Maximum Geographic Percentage” in the Geographic Concentration Table in Schedule 1 and (ii) the Aggregate Net Book Value (relating to Existing and Possible Loans).

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(s)Concentration of Engines for Wide Body Aircraft.  After giving effect to the transfer of all Engines which are transferred on any Transfer Date, the sum of the Net Book Values of all Eligible Engines designed to power Wide Body Aircraft shall not exceed an amount equal to the product (A) the Wide Body Aircraft Percentage and (B) the Aggregate Net Book Value.

(t)On-Lease Percentage.  After giving effect to the transfer of Engines on any Transfer Date, the On-Lease Percentage of all Eligible Engines (relating to Existing and Possible Loans) as of such Transfer Date shall not be less than the Applicable Percentage.

(u)Weighted Average Lease Rate Factor.  After giving effect to the transfer of Engines on any Transfer Date, the Weighted Average Lease Rate Factor for all Eligible Engines (relating to Existing and Possible Loans) shall not be less than the Weighted Average Lease Rate Percentage.

(v)One Year Lease Expiry Concentration Percentage.  After giving effect to the transfer of Engines on any Transfer Date, the One Year Lease Expiry Concentration Percentage for Eligible Engines (relating to Existing and Possible Loans) on such Transfer Date shall not exceed the Target One Year Lease Expiry Concentration Percentage.

(w)Two Year Lease Expiry Concentration Percentage.  After giving effect to the transfer of Engines on any Transfer Date, the Two Year Lease Expiry Concentration Percentage for Eligible Engines (relating to Existing and Possible Loans) on such Transfer Date shall not exceed the Target Two Year Lease Expiry Concentration Percentage.

(x)Reserved.

(y)Reserved.

(z)Cargo-only Carriers.  After giving effect to the transfer of Engines on any Transfer Date, the percentage of Engines leased to cargo-only carriers shall not exceed 15% of all Eligible Engines.

(aa)Owner Trustee Documents.  With respect to each Engine owned by an Owner Trustee, the Collateral Custodian shall have received from such Owner Trustee within three (3) Business Days of the transfer of such Engine to such Owner Trustee (i) a copy of the resolutions of the Board of Directors of the Owner Trustee, in its individual capacity, certified by the Secretary or an Assistant Secretary of the Owner Trustee, duly authorizing the execution, delivery and performance by the Owner Trustee of each of the Related Documents to which the Owner Trustee is or will be a party; (ii) an incumbency certificate of Owner Trustee, as to the persons authorized to execute and deliver the Related Documents to which it is or will be a party and the signatures of such person or persons; and (iii) a legal opinion of counsel to the Owner Trustee with respect to the due authorization, execution and delivery by the Owner Trustee of the Related Documents to which it is or will be a party.

(bb)Collateral Custody Agreement.  The Issuer, the Servicer, the Indenture Trustee and the Deal Agent shall have entered into a Collateral Custody Agreement in form and substance satisfactory to the Deal Agent with the Collateral Custodian and, on or before the date

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of the applicable Loan, the Collateral Custodian shall have confirmed to the Deal Agent in writing that the Collateral Custodian has received the documents required by Schedule I (attached hereto as Exhibit G) of such Collateral Custody Agreement to be delivered on or before the date of such applicable Loan.

Section 5.3Deliveries.  The Issuer will timely file and deliver each document which is required to be filed or delivered hereunder or under any Related Document, or the filing or delivery of which is listed as a condition to the making of any Loan in Section 5.2 but which is permitted to be filed or delivered after the date of such Loan, strictly within the time period set forth herein for such filing or delivery.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

To induce the Series 2002-1 Noteholders to purchase the Series 2002-1 Notes hereunder, the Issuer hereby represents and warrants to the Series 2002-1 Noteholders as of the Effective Date, the Closing Date and each date on which a Loan is made (to the extent applicable to the Issuer generally and to the assets added to the Collateral on such date on which a Loan is made, unless otherwise specified) that:

Section 6.1Existence.

Issuer is a limited liability company duly organized, validly existing and in compliance under the laws of the State of Delaware.  Issuer is in good standing and is duly qualified to do business in each jurisdiction where the failure to do so would have a material adverse effect upon the Issuer.

Section 6.2Authorization.

Issuer has the power and is duly authorized to execute and deliver this Supplement and the other Series 2002-1 Transaction Documents to which it is a party, Issuer is and will continue to be duly authorized to borrow monies hereunder, and Issuer is and will continue to be authorized to perform its obligations under this Supplement and under the other Series 2002-1 Transaction Documents.  The execution, delivery and performance by Issuer of this Supplement and the other Series 2002-1 Transaction Documents to which it is a party and the borrowings hereunder do not and will not require any consent or approval of any Governmental Authority, stockholder or any other Person which has not already been obtained.

Section 6.3No Conflict; Legal Compliance.

The execution, delivery and performance of this Supplement and each of the other Series 2002-1 Transaction Documents and the execution, delivery and payment of the Series 2002-1 Notes will not: (a) contravene any provision of Issuer’s charter documents or bylaws or other organizational documents; (b) contravene, conflict with or violate any applicable law or regulation, or any order, writ, judgment, injunction, decree, determination or award of any Governmental Authority; or (c) materially violate or result in the breach of; or constitute a default under any indenture or other loan or credit agreement, or other agreement or instrument

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to which Issuer is a party or by which Issuer, or its property and assets may be bound or affected.  Issuer is not in material violation or breach of or default under any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award or any contract, agreement, lease, license, indenture or other instrument to which it is a party.

Section 6.4Validity and Binding Effect.

This Supplement is, and each Series 2002-1 Transaction Document to which Issuer is a party, when duly executed and delivered, will be, legal, valid and binding obligations of Issuer, enforceable against Issuer in accordance with their respective terms, except as enforceability may be limited by bankruptcy, insolvency or other similar laws of general application affecting the enforcement of creditors’ rights or by general principles of equity limiting the availability of equitable remedies.

Section 6.5Financial Statements.

Since December 30, 2001, there has been no Material Adverse Change in the financial condition of the Seller or the Servicer.

Section 6.6Executive Offices.

The current location of Issuer’s chief executive office and principal place of business is located at 2320 Marinship Way, Suite 200, Sausalito, California 94965.  The Issuer does not have trade names or doing business names.

Section 6.7No Agreements or Contracts.

The Issuer has not transacted any business on or prior to the Effective Date.  The Issuer is not now and has not been a party to any contract or agreement (whether written or oral), other than the Series 2002-1 Transaction Documents and contracts or agreements incidental thereto, including contracts or agreement for the sale of any Contributed Assets or any Beneficial Interests, provided that such sale is permitted by the Indenture.  Notwithstanding the foregoing sentence, the Issuer may enter into any agreement(s) for 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 of the Indenture.

Section 6.8Consents and Approvals.

No approval, authorization or consent of any trustee or holder of any Indebtedness or obligation of Issuer or of any other Person under any material agreement, contract, lease or license or similar document or instrument to which Issuer is a party or by which Issuer is bound, is required to be obtained by Issuer in order to make or consummate the transactions contemplated under the Series 2002-1 Transaction Documents.  All consents and approvals of, filings and registrations with, and other actions in respect of, all Governmental Authorities required to be obtained by Issuer in order to make or consummate the transactions contemplated under the Series 2002-1 Transaction Documents have been, or prior to the time when required will have been, obtained, given, filed or taken and are or will be in full force and effect.

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Section 6.9Margin Regulations.

Issuer does not own any “margin security”, as that term is defined in Regulations G and U of the Federal Reserve Board, and the proceeds of the Series 2002-1 Notes issued under this Supplement will be used only for the purposes contemplated hereunder.  None of such proceeds will be used, directly or indirectly, for the purpose of purchasing or carrying any margin security, for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase or carry any margin security or for any other purpose which might cause any of the loans under this Supplement to be considered a “purpose credit” within the meaning of Regulations T, U and X.  Issuer will not take or permit any agent acting on its behalf to take any action which might cause this Supplement or any document or instrument delivered pursuant hereto to violate any regulation of the Federal Reserve Board.

Section 6.10Taxes.

All federal, state, local and foreign tax returns, reports and statements required to be filed by Issuer have been filed with the appropriate Governmental Authorities, and all Taxes and other impositions shown thereon to be due and payable by Issuer have been paid prior to the date on which any fine, penalty, interest or late charge may be added thereto for nonpayment thereof, or any such fine, penalty, interest, late charge or loss has been paid, or Issuer is contesting its liability therefore in good faith and has fully reserved all such amounts according to GAAP in the financial statements provided to the Noteholders pursuant to Section 626 of the Indenture.  Issuer has paid when due and payable all material charges upon the books of Issuer and no Government Authority has asserted any Lien against Issuer with respect to unpaid Taxes.  Proper and accurate amounts have been withheld by Issuer and its Subsidiaries from its employees for all periods in full and complete compliance with the tax, social security and unemployment withholding provisions of applicable federal, state, local and foreign law and such withholdings have been timely paid to the respective Governmental Authorities.

Section 6.11Other Regulations.

Issuer is not: (a) a “public utility company” or a “holding company,” or an “affiliate” or a “Subsidiary company” of a “holding company,” or an “affiliate” of such a “Subsidiary company,” as such terms are defined in the Public Utility Holding Company Act of 1935, as amended, or (b) an “investment company,” or an “affiliated person” of; or a “promoter” or “principal underwriter” for, an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended.  The issuance of the Notes hereunder and the application of the proceeds and repayment thereof by Issuer and the performance of the transactions contemplated by this Supplement and the other Series 2002-1 Transaction Documents will not violate any provision of the Investment Company Act of 1940, as amended, or the Public Utility Holding Company Act of 1935, as amended, or any rule, regulation or order issued by the Securities and Exchange Commission thereunder.

Section 6.12Solvency and Separateness.

The Issuer represents, warrants and covenants to take the following actions to maintain its existence separate and apart from any other Person:

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(i)maintain books of account in accordance with GAAP and maintain its accounts, books and records separate from any other person or entity;

(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 arms-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 the Issuer’s 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 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 arms-length transaction with an unrelated third party;

(xvi)pay the salaries of its own employees, if any, from its own funds;

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(xvii)maintain capital that is adequate for the business and undertakings of the Issuer;

(xviii)have one director who shall not have been, at the time of his or her appointment or at any time in the preceding five (5) years: (a) a direct or indirect legal or beneficial stockholder of the Issuer or any of its affiliates; (b) a creditor, supplier, employee, officer, director, manager or contractor of the Issuer or any of its affiliates; (c) a person who controls the Issuer or any of its affiliates; or (d) a member of the immediate family of a person defined in (a), (b) or (c) immediately above;

(xix)is not insolvent under the Insolvency Law and will not be rendered insolvent by the transactions contemplated by the Series 2002-1 Transaction Documents and after giving effect to such transactions, the Issuer will not be left with an unreasonably small amount of capital with which to engage in its business nor will the Issuer have intended to incur, or believed that it has incurred, debts beyond its ability to pay such debts as they mature.  The Issuer does not contemplate the commencement of insolvency, bankruptcy, liquidation or consolidation proceedings or the appointment of a receiver, liquidator, trustee or similar person in respect of the Issuer or any of its assets.

Section 6.13No Proceedings.

Each of the Issuer and the Indenture Trustee hereby agrees that it will not institute against, or join any other Person in instituting against Sheffield any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceedings under the laws of the United States or any other state of the United States, so long as any Commercial Paper Notes shall be outstanding and there shall not have elapsed one year and one day since the last day on which any such Commercial Paper Notes shall have been outstanding.

Section 6.14Recourse Against Certain Parties.

(a)No recourse under or with respect to any obligation, covenant or agreement (including, without limitation, the payment of any fees or any other obligations) of any of the Issuer, the Servicer, Sheffield, any Purchaser or the Deal Agent as contained in the Series 2002-1 Transaction Documents or any other agreement, instrument or document entered into by it pursuant hereto or in connection herewith shall be had against any administrator of such party or any incorporator, affiliate, stockholder, officer, employee or director of such party or of any such administrator, as such, by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute or otherwise; it being expressly agreed and understood that the agreements of such party contained in the Series 2002-1 Transaction Documents and all of the other agreements, instruments and documents entered into by it pursuant hereto or in connection herewith are, in each case, solely the corporate obligations of such party, provided that in the case of Sheffield, such liabilities shall be paid only after the repayment in full of all Commercial Paper Notes and all other liabilities contemplated in the program documents with respect to Sheffield, and that no personal liability whatsoever shall attach to or be incurred by any administrator of such party or any incorporator, stockholder, affiliate, officer, employee or director of such party or of any such administrator, as such, or any of them, under or by reason of any of the obligations, covenants or agreements of such Purchaser contained in the Series 2002-1

41

Transaction Documents or in any other such instrument, document or agreement, or which are implied therefrom, and that any and all personal liability of every such administrator of such party and each incorporator, stockholder, affiliate, officer, employee or director of such party or of any such administrator, or any of them, for breaches by such party of any such obligations, covenants or agreements, which liability may arise either at common law or in equity, by statute or constitution, or otherwise, is hereby expressly waived as a condition of; and in consideration for, the execution of the Series 2002-1 Transaction Documents.

(b)Notwithstanding anything contained in this Agreement or any other Series 2002-1 Transaction Document, Sheffield shall have no obligation to pay any amount required to be paid by it hereunder or in excess of any amount available to Sheffield after paying or making provision for the payment of its Commercial Paper Notes.  All payment obligations of Sheffield hereunder are contingent upon the availability of funds in excess of the amounts necessary to pay Commercial Paper Notes; and each of the Issuer, the Deal Agent and the Servicer agrees that they shall not have a claim under Section 101(5) of the United States Bankruptcy Code if and to the extent that any such payment obligation exceeds the amount available to Sheffield to pay such amounts after paying or making provision for the payment of its Commercial Paper Notes.

(c)The provisions of this Section 6.14 shall survive the termination of this Agreement.

Section 6.15Survival of Representations and Warranties.

So long as any of the Notes shall be Outstanding and until payment and performance in full of the Outstanding Obligations, the representations and warranties contained herein shall have a continuing effect as having been true when made.

Section 6.16No Event of Default or Early Amortization Event.

No Event of Default or Early Amortization Event has occurred and is continuing.

Section 6.17Litigation and Contingent Liabilities.

No claims, litigation, arbitration proceedings or governmental proceedings by any Governmental Authority are pending or threatened against or are affecting Issuer or any of its Subsidiaries the results of which might interfere with the consummation of any of the transactions contemplated by this Supplement or any document issued or delivered in connection herewith.

Section 6.18Title; Liens.

The Issuer has good, legal and marketable title to its assets including the Collateral, and none of such assets is subject to any Lien, except for the Lien created pursuant to the Indenture.  The Issuer has not assigned, conveyed, pledged or otherwise transferred to any other Person any of its right, title or interest in the Collateral.

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Section 6.19Subsidiaries.

At all times on or prior to the Effective Date, the Issuer has had no subsidiaries other than WLFC Funding (Ireland) Limited, a corporation organized under the law of the Republic of Ireland.

Section 6.20No Partnership.

The Issuer is not a partner or joint venturer in any partnership or joint venture.

Section 6.21Pension and Welfare Plans.

No accumulated funding deficiency (as defined in Section 412 of the Code or Section 302 of ERISA) or reportable event (within the meaning of Section 4043 of ERISA), has occurred with respect to any Plan.  The present value of all benefit liabilities under all Plans subject to Title IV of ERISA, as defined in Section 4001(a)(16) of ERISA, exceeds the fair market value of all assets of Plans subject to Title IV of ERISA (determined as of the most recent valuation date for such Plan on the basis of assumptions prescribed by the Pension Benefit Guaranty Corporation for the purpose of Section 4044 of ERISA), by no more than $1.9 million.  Neither Issuer nor any ERISA Affiliate is subject to any present or potential withdrawal liability pursuant to Title IV of ERISA and no multiemployer plan (within the meaning of Section 4001 (a)(3) of ERISA) to which the Issuer or any ERISA Affiliate has an obligation to contribute or any liability, is or is likely to be disqualified for tax purposes, in reorganization within the meaning of Section 4241 of ERISA or Section 418 of the Code) or is insolvent (as defined in Section 4245 of ERISA).  No liability (other than liability to make periodic contributions to fund benefits) with respect to any Plan of Issuer, or Plan subject to Title IV of ERISA of any ERISA Affiliate, has been, or is expected to be, incurred by Issuer or an ERISA Affiliate, either directly or indirectly.  All Plans of Issuer are in material compliance with ERISA and the Code.  No lien under Section 412 of the Code or 302(f) of ERISA or requirement to provide security under the Code or ERISA has been or is reasonably expected by Issuer to be imposed on its assets.  The Issuer does not have any obligation under any collective bargaining agreement.  As of the Effective Date, the Issuer is not an employee benefit plan within the meaning of ERISA or a “plan” within the meaning of Section 4975 of the Code and assets of the Issuer do not constitute “plan assets” within the meaning of Section 2510.3-101 of the regulations of the Department of Labor.

Section 6.22Ownership of Issuer.

On the Effective Date, all of the issued and outstanding common shares of the Issuer are owned by Willis Lease Finance Corporation.

Section 6.23Security Interest.

The security interest in the Collateral created pursuant to the Indenture and this Supplement has been validly created, and no other action is required to be taken by any person in order for the full benefit of the security interest created thereby to vest in the Indenture Trustee in order to insure the first priority perfected security interest of the Indenture Trustee (for the benefit of the Series 2002-1 Noteholders) in the Collateral.  Each Lease Agreement is “chattel paper” (under the UCC, if the UCC is in effect in the jurisdiction whose law governs the Lease

43

Agreement).  All executed counterparts of each Lease Agreement (other than the one held by the related Lessee or filed with any relevant Governmental Authority) that constitutes “chattel paper” are in the possession of the Custodian.

Section 6.24Eligible Lease Agreements; Eligible Engines.

Each of the Lease Agreements is an Eligible Lease and each Engine is an Eligible Engine.

ARTICLE VII

EARLY AMORTIZATION EVENT

Section 7.1Early Amortization Event.

With respect to the Series 2002-1 Notes, as of any date of determination, the existence of any one of the following events or conditions shall constitute an Early Amortization Event:

(i)An “event of default” under any Related Document (including an Event of Default) shall have occurred and then be continuing;

(ii)A Servicer Default shall have occurred and then be continuing;

(iii)The Aggregate Note Principal Balance of any Series exceeds the Asset Base for such Series on any Payment Date (after giving effect to any payments of principal on such Payment Date) and such excess continues for a period of 10 consecutive days without being cured;

(iv)The EBIT Ratio of Issuer shall be less than the Target EBIT Ratio;

(v)Prior to the date on which the Term Securitization is consummated, the Asset Base shall be less than or equal to $60,000,000, or, as of the close of business on the date on which the Term Securitization is consummated, either the Asset Base or the total Outstanding Obligations for Series 2002-1 shall be greater than $0;

(vi)The occurrence of any other Early Amortization Event as specified in the Indenture;

(vii)Outstanding Obligations exceed 90% of the aggregate Appraised Values of each Eligible Engine and such excess continues for a period of 10 consecutive days without being cured;

(viii)The Quarterly Utilization Rate is less than 75%.

(ix)The failure to pay in full on any Payment Date (a) interest accrued on the Notes, (b) the Class A Minimum Principal Payment Amount and the Class B Minimum Principal Payment Amount and, (c) after the Conversion Date, the Class A

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Note Distributable Amortization Amount and the Class B Note Distributable Amortization Amount.

ARTICLE VIII

MISCELLANEOUS PROVISIONS

Section 8.1Ratification of Indenture.

As supplemented by this Supplement, the Indenture is in all respects ratified and confirmed and the Indenture as so supplemented by this Supplement shall be read, taken and construed as one and the same instrument.

Section 8.2Counterparts.

This Supplement may be executed in two or more counterparts, and by different parties on separate counterparts, each of which shall be an original, but all of which shall constitute one and the same Instrument.

Section 8.3Governing Law.

THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF TILE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICTS OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF TILE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this Supplement 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

J-2-1

SCHEDULE 1

Section 1:Definitions

“Africa/Middle East/Emerging Europe” means the following countries: Czech Republic, Hungary, Poland, Bahrain, Israel, Jordan, Morocco, Qatar, Slovakia, South Africa and Turkey.

“Applicable Percentage” means                        percent (     %).*

“Class A Note Commitment” means an amount equal to the lesser of (i) the Class A Maximum Limit and (ii) the Senior Asset Base.

“Class B Note Commitment” means an amount equal to the lesser of (i) the Class B Maximum Limit and (ii) the Subordinate Asset Base.

“Depreciation Percentage” means                        percent (     %).*

“Developed Asia/Pacific Rim” means the following countries: Australia, Egypt, Fiji, Hong Kong, Japan, New Zealand, Saudi Arabia, Singapore and Taiwan.

“Developed Europe” means the following countries: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Malta, Norway, Portugal, Spain, Sweden, Switzerland, The Netherlands and the United Kingdom.

“Emerging Asia” means the following countries: China, India, Indonesia, Korea, Malaysia, Papua New Guinea, Philippines, Sri Lanka and Thailand.

“Emerging Latin/South America” means the following countries: Argentina, Aruba, Bolivia, Brazil, British West Indies, Costa Rica, Chile, Columbia, Jamaica, Mexico and Peru.

“Emerging Market” means Emerging Latin/South America, Emerging Asia and Emerging Africa/Middle East/Europe.

“Minimum Servicing Fee Percentage” means       % per annum.*

“Servicing Fee” means for any Payment Date an amount equal to the product of (x)                percent (     %) and (y) the aggregate amount of Engine Revenues with respect to the Series 2002–1 Engines during the immediately preceding Collection Period; provided however, that if an Early Amortization Event has occurred and is continuing such fee shall mean for any Payment Date an amount equal to the product of (x)              percent (     %) and (y) the aggregate amount of Engine Revenues with respect to the Series 2002-1 Engines during the immediately preceding Collection Period.*

*              This redacted material has been omitted pursuant to a request for confidential treatment, and the material has been filed separately with the Commission.

S1-1

“Single Lessee Percentage” means                        percent (     %); provided, however, that with respect to any lessee which is located in an Emerging Market, the Single Lessee Percentage shall mean              percent (       %).*

“Target EBIT Ratio” means 1.20:1.0.

“Target On-Lease Percentage” means                        percent (     %).*

“Target One Year Lease Expiry Concentration Percentage” means                        percent (     %).*

“Target Two Year Lease Expiry Concentration Percentage” means                        percent (     %).*

“Three Lessee Percentage” means                        percent (     %).*

“Weighted Average Lease Rate Percentage” means one percent (1.0%).

“Wide Body Aircraft Percentage” means                        percent (     %).*

Section 2:Certain Additional Terms.

Administrative Agent Fee.  The Issuer shall pay on each quarterly Payment Date, beginning with the third Payment Date, an Administrative Agent Fee to the Administrative Agent an amount equal to the product of (x)       %, (y) one-fourth and (2) the Aggregate Note Principal Balance.  Such Administrative Agent Fee shall be payable on each quarterly Payment Date from amounts then on deposit in the Series 2002-1 Series Account in accordance with Section 3.02 of the Supplement.*

Interest Rate Hedge Agreements.  Beginning on September 12, 2002, the Issuer at all times shall have Interest Rate Hedge Agreements in effect, each of which has an aggregate notional amount of not less than 50% of the Outstanding Obligations of the, Series 2002-1 Notes.

*              This redacted material has been omitted pursuant to a request for confidential treatment, and the material has been filed separately with the Commission.

S1-2

Section 3: Geographic Concentration Table.

“Section 3: Geographic Concentration Table”

Geographic Region	Maximum Geographic Percentage
Africa/Middle East/Emerging Europe		%*
Emerging Asia		%*
China(1)		%*
Developed Asia/Pacific Rim		%*
Developed Europe		%*
North America		%*
Emerging Latin/South America		%*
Total Emerging Markets		%*

(1) People’s Republic of China, excluding Hong Kong.

*              This redacted material has been omitted pursuant to a request for confidential treatment, and the material has been filed separately with the Commission.

S1-3

SCHEDULE 2

to Series 2002-1 Supplement

“Initial List of Engine and Lease Agreements”

(consisting of 23 pages)

Engines

One (1) General Electric model CF6-80C2D1F aircraft engine bearing manufacturer’s serial number 704638

One (1) Pratt & Whitney model PW2037 aircraft engine bearing manufacturer’s serial number 716430

One (1) Pratt & Whitney model JT8D-219 aircraft engine bearing manufacturer’s serial number 728173

One (1) General Electric CF6-50C2 aircraft engine bearing manufacturer’s serial number 455805

One (1) Pratt & Whitney JT8D-219 aircraft engine bearing manufacturer’s serial number 716779

One (1) Pratt & Whitney JT8D-217C/219 aircraft engine bearing manufacturer’s serial number 718210

One (1) CFM International CFM56-3B2 aircraft engine bearing manufacturer’s serial number 725183

One (1) CFM International CFM56-3C1 aircraft engine bearing manufacturer’s serial number 725522

One (1) CFM International CFM56-5A aircraft engine bearing manufacturer’s serial number 733141

One (1) CFM International model CFM56-5A3 aircraft engine bearing manufacturer’s serial number 733186

One (1) CFM International CFM56-5C aircraft engine bearing manufacturer’s serial number 741551

One (1) CFM International CFM56-5B4/P aircraft engine bearing manufacturer’s serial number 779194

One (1) CFM International CFM56-5B1/B2 aircraft engine bearing manufacturer’s serial number 779484

One (1) CFM International CFM56-5B3-P aircraft engine bearing manufacturer’s serial number 779542

One (1) CFM International CFM56-7 aircraft engine bearing manufacturer’s serial number 874243

One (1) General Electric CF6-50C2 aircraft engine bearing manufacturer’s serial number 528113

S1-4

One (1) Pratt & Whitney JT8D-219 aircraft engine bearing manufacturer’s serial number 718035

One (1) Pratt & Whitney JT8D-219 aircraft engine bearing manufacturer’s serial number 718064

One (1) Pratt & Whitney JT8D-217C/219 aircraft engine bearing manufacturer’s serial number 718262

One (1) CFM International CFM56-3B2 aircraft engine bearing manufacturer’s serial number 721877

One (1) Pratt & Whitney PW2037 aircraft engine bearing manufacturer’s serial number 727057

One (1) Pratt & Whitney PW4062-3 aircraft engine bearing manufacturer’s serial number 727340

One (1) Pratt & Whitney PW4062-3 aircraft engine bearing manufacturer’s serial number 727393

One (1) Pratt & Whitney JT8D-219 aircraft engine bearing manufacturer’s serial number 728154

One (1) CFM International model CFM 56-5A3 aircraft engine bearing manufacturer’s serial number 731570

One (1) CFM International CFM56-5A3 aircraft engine bearing manufacturer’s serial number 731813

One (1) CFM International CFM56-5A3 aircraft engine bearing manufacturer’s serial number 733163

One (1) CFM International CFM56-5A3 aircraft engine bearing manufacturer’s serial number 733172

One (1) Pratt & Whitney PW4168A aircraft engine bearing manufacturer’s serial number 733438

One (1) Pratt & Whitney PW4168A aircraft engine bearing manufacturer’s serial number 733471

One (1) CFM International CFM56-5C3F aircraft engine bearing manufacturer’s serial number 740342

One (1) CFM International CFM56-5C3F aircraft engine bearing manufacturer’s serial number 741414

One (1) CFM International CFM56-3C1 aircraft engine bearing manufacturer’s serial number 858327

One (1) CFM International CFM56-3C1 aircraft engine bearing manufacturer’s serial number 858788

One (1) CFM International CFM56-3B2 aircraft engine bearing manufacturer’s serial number 858789

5

One (1) CFM International CFM56-3C1 aircraft engine bearing manufacturer’s serial number 858839

One (1) Pratt & Whitney PW4090 aircraft engine bearing manufacturer’s serial number 222108

One (1) Pratt & Whitney PW4060-3 aircraft engine bearing manufacturer’s serial number 724721

One (1) CFM International model CFM56-5A3 aircraft engine bearing manufacturer’s serial number 733175

One (1) IAE model V2528-D5 aircraft engine bearing manufacturer’s serial number V20001

One (1) IAE model V2528-D5  aircraft engine bearing manufacturer’s serial number V20267

One (1) CFM International model CFM56-5B aircraft engine bearing manufacturer’s serial number 575283

Leases

Engine 725183

Aircraft Engine Lease Agreement dated as of June 30, 1999 (the “TAP Lease”) between Willis Lease Finance Corporation (“Willis”) as lessor, and Transportes Aereos Portugueses, S.A., as lessee, with the following attached thereto: (i) General Terms Engine Lease Agreement dated as of June 30, 1999, and (ii) Engine Transfer Certificate dated as of June 30, 1999 between Willis, as seller, and WLFC Funding Corporation, as issuer, which TAP Lease and attachments were recorded by the FAA on July 6, 1999 and assigned Conveyance No. YY025858, as amended by Letter Amendment dated as of June 29, 2001, which was recorded by the FAA on September 25, 2001 and assigned Conveyance No. FF32960, as amended by Letter Amendment dated as of September 28, 2001, which was recorded by the FAA on October 11, 2001 and assigned Conveyance No. ZZ025584, as further amended by Letter Amendment dated as of December 29, 2001, which was recorded by the FAA on May 1, 2002 and assigned Conveyance No. I070020.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following document, which was filed for recording with the Federal Aviation Administration on this date, but has not yet been recorded, a true and correct copy of which is attached hereto: Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignment, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

6

Engine 718210

Aircraft Engine Lease Agreement dated as of October 30, 1997 between Terandon Leasing Corporation (“Terandon”), as lessor, and SPANAIR, as lessee, with General Terms Engine Lease Agreement dated as of October 30, 1997 attached thereto, which was recorded by the FAA on December 15, 1995, and assigned Conveyance No.II010037, as assigned and assumed by Assignment and Assumption Agreement and Bill of Sale dated as of December 19, 1997 between Terandon, as assignor, and Willis Lease Finance Corporation (“Willis”), as assignee, which was recorded by the FAA on January 27, 1998 and assigned Conveyance No. EE015339, as assigned and assumed under that certain Engine Transfer Certificate dated as of December 19, 1997 between Willis, as seller, and WLFC Funding Corporation, as issuer, which was recorded by the FAA on January 27, 1998 and assigned Conveyance No. EE015340.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following document, which was filed for recording with the Federal Aviation Administration on this date, but has not yet been recorded, a true and correct copy of which is attached hereto: Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignment, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

Engine 874243

Aircraft Engine Lease Agreement dated as of April 29, 1998 (the “Shanghai Lease”) between Willis Lease Finance Corporation (“Willis”) as lessor, and Shanghai Airlines, as lessee, with the following attached thereto: (i) General Terms Engine Lease Agreement dated as of April 29, 1998, and (ii) Engine Transfer Certificate dated as of April 29, 1998 between Willis, as seller, and WLFC Funding Corporation, as issuer, which Shanghai Lease and attachments were recorded by the FAA on June 11, 1998 and assigned Conveyance No. MM015772 (the Engine Transfer Certificate was recorded separately by the FAA on June 11, 1998 and assigned Conveyance No. MM015773).

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following document, which was filed for recording with the Federal Aviation Administration on this date, but has not yet been recorded, a true and correct copy of which is attached hereto: Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignment, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

7

Engine 455805

Aircraft Engine Lease Agreement dated as of May 14, 1998 (the “MTU Lease”), between AAR Aircraft & Engine Group, Inc. (“AAR”), as lessor, and MTU Maintenance GmbH (“MTU”) as lessee, with the following attached thereto: (i) Engine Delivery Receipt dated May 27, 1998, (ii) General Terms Engine Lease Agreement dated as of March 8, 1996, (iii) Novation Agreement dated as of May 21, 1998 among AAR, as assignor/seller, Kellstrom Commercial Aircraft, Inc. (“Kellstrom”), as assignee/buyer, and MTU, as lessee, (iv) Assignment and Assumption of Lease and Purchase and Sale of Engine Agreement dated as of March 25, 1999 between Kellstrom, as assignor, and Willis Lease Finance Corporation (“Willis”), as assignee, and (v) Engine Transfer Certificate dated April 6, 1999 between Willis, as assignor, and WLFC Funding Corporation, as assignee, which MTU Lease and attachments were recorded by the FAA on May 11, 1999 and assigned Conveyance No. II014063.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following document, which was filed for recording with the Federal Aviation Administration on this date, but has not yet been recorded, a true and correct copy of which is attached hereto: Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignment, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

Engine 779194

Aircraft Engine Lease Agreement dated as of June 19, 1998 between Willis Lease Finance Corporation (“Willis”), as lessor, and Air Jamaica Limited, as lessee, with General Terms Engine Lease Agreement dated as of June 19, 1998, attached thereto, which was recorded by the FAA on August 5, 1998, and assigned Conveyance No. KK22899, as amended by Letter Amendment dated January 25, 1999, which was recorded by the FAA on September 9, 1999, and assigned Conveyance No. MM018466, as assigned and assumed under that certain Engine Transfer Certificate dated as of August 27, 1999 between Willis, as seller, and WLFC Funding Corporation, as issuer, which was recorded by the FAA on August 31, 1999 and assigned Conveyance No. II015208.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following document, which was filed for recording with the Federal Aviation Administration on this date, but has not yet been recorded, a true and correct copy of which is attached hereto: Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignment, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

8

Engine 779484

Aircraft Engine Lease Agreement dated as of December 22, 1998 between Willis Lease Finance Corporation (“Willis”), as lessor, and Flying Colours Airlines Limited (now JMC Airlines Ltd.), as lessee, with General Terms Engine Lease Agreement dated as of December 21, 1998 attached thereto, which was recorded by the FAA on January 4, 1999 and assigned Conveyance No. ZZ018400, as assigned and assumed by Engine Transfer Certificate dated as of January 15, 1999 between Willis, as seller, and WLFC Funding Corporation, as issuer, which was recorded by the FAA on May 10, 1999 and assigned Conveyance No. II014049.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following document, which was filed for recording with the Federal Aviation Administration on this date, but has not yet been recorded, a true and correct copy of which is attached hereto: Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignment, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

Engine 733141

Engine Lease Agreement dated as of August 21, 1998 (shown in the FAA records as dated August 31, 1998) between Willis Lease Finance Corporation (“Willis”), as lessor, and Compagnie Nationale Air France, now Société Air France, as lessee, which was recorded by the FAA on September 1, 1998 and assigned Conveyance No. T058245, as assigned and assumed by that certain Engine Transfer Certificate dated as of September 4, 1998 between Willis, as seller, and WLFC Funding Corporation, as issuer, which was recorded by the FAA on November 5, 1998, and assigned Conveyance No. SS010988, as amended by Amendment No. 1 dated August 18, 2000, which was recorded by the FAA on October 25, 2000 and assigned Conveyance No. T064666, and as further amended by Amendment No. 2 dated March 1, 2002, which was recorded by the FAA on May 20, 2002 and assigned Conveyance No. M000687.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following document, which was filed for recording with the Federal Aviation Administration on this date, but has not yet been recorded, a true and correct copy of which is attached hereto: Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignment, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

9

Engine 725522

Aircraft Engine Lease Agreement dated as of September 9, 1997 between Willis Lease Finance Corporation (“Willis”), as lessor, and Jet Airways (India) Ltd., as lessee, with General Terms Engine Lease Agreement dated as of July 1, 1997 attached thereto, which was recorded by the FAA on December 5, 1997 and assigned Conveyance No. Z02548, as assigned and assumed by Engine Transfer Certificate dated as of December 19, 1997 between Willis, as seller, and WLFC Funding Corporation, as issuer, which was recorded by the FAA on January 27, 1998 and assigned Conveyance No. EE015340.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following document, which was filed for recording with the Federal Aviation Administration on this date, but has not yet been recorded, a true and correct copy of which is attached hereto: Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignment, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

Engine 779542

Aircraft Engine Lease Agreement dated as of July 29, 1998 between Willis Lease Finance Corporation (“Willis”), as lessor, and Air 2000 Limited, as lessee, with General Terms Engine Lease Agreement dated as of December 9, 1996 attached thereto, which was recorded by the FAA on August 21, 1998 and assigned Conveyance No. PP010544, as amended by Letter Amendment dated April 16, 1999, with Novation Agreement dated April 16, 1999 among Willis, as assignor, WLFC Funding Corporation, as assignee, and Air 2000 Limited attached, which was recorded by the FAA on May 18, 1999 and assigned Conveyance No. K21295, as amended by Lease Amendment dated September 17, 1999, which was recorded by the FAA on November 10, 1999 and assigned Conveyance No. JJ31856, and as further amended by Lease Amendment dated March 30, 2000, which was recorded by the FAA on May 2, 2000 and assigned Conveyance No. SS014493.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following document, which was filed for recording with the Federal Aviation Administration on this date, but has not yet been recorded, a true and correct copy of which is attached hereto: Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignment, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

10

Engine 716779

Aircraft Engine Lease Agreement dated as of October 17, 2001 between WLFC Funding Corporation, as lessor, and Vanguard Airlines, as lessee, with General Terms Engine Lease Agreement dated as of October 17, 2001 attached thereto, which was recorded by the FAA on November 5, 2001 and assigned Conveyance No. XX019451.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following document, which was filed for recording with the Federal Aviation Administration on this date, but has not yet been recorded, a true and correct copy of which is attached hereto: Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignment, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

Engine 741551

Aircraft Engine Lease Agreement dated as of May 14, 1998 (the “Virgin Lease”) between Willis Lease Finance Corporation (“Willis”) as lessor, and Virgin Atlantic Airways Ltd., as lessee, with the following attached thereto: (i) General Terms Engine Lease Agreement dated as of May 14, 1998, and (ii) Engine Transfer Certificate dated as of May 14, 1998 between Willis, as seller, and WLFC Funding Corporation, as issuer, which Virgin Lease and attachments were recorded by the FAA on June 16, 1998 and assigned Conveyance No. EE016577 (the Engine Transfer Certificate was recorded separately by the FAA on June 16, 1998 and assigned Conveyance No. EE016578).

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following document, which was filed for recording with the Federal Aviation Administration on this date, but has not yet been recorded, a true and correct copy of which is attached hereto: Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignment, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

Engine 222108

Aircraft Engine Lease Agreement dated as of December 1, 2000 between Willis Lease Finance Corporation (“Willis”), as lessor, and WLFC (Ireland) Limited (“WLFCI”), as lessee, with General Terms Engine Lease Agreement dated as of November 29, 2000 attached thereto, which was recorded by the FAA on January 26, 2001 and assigned Conveyance No. TT014464, as assigned by Assignment and Bill of Sale dated as of May 31, 2001 between Willis, as assignor, and Wells Fargo Bank Northwest, National Association, as owner trustee, as

11

assignee, which was recorded by the FAA on June 13, 2001 and assigned Conveyance No. JJ37092, as assigned and assumed by Deed of Novation dated June 6, 2002 among WLFCI, as assignor, WLFC Funding (Ireland) Limited, as assignee, and the owner trustee, which was recorded by the FAA on June 18, 2002 and assigned Conveyance No. NN023493.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following documents, which were filed for recording with the Federal Aviation Administration on this date, but have not yet been recorded, true and correct copies of which are attached hereto: (i) First Transfer Master Assignment and Assumption Agreement and Bill of Sale [WLFC] dated this date, between Wells Fargo Bank Northwest, National Association, not individual but solely as owner trustee, as assignor, and WLFC Funding Corporation, as assignee, and (ii) Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignments, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

Engine 718035

Engine Lease Agreement dated January 7, 1992 (the “Avianca Lease”) between GPA Group plc (“GPA”), as lessor, and Aerovias Nacionales de Colombia S.A. Avianca (“Avianca”), as lessee, with the following attached thereto: (i) Engine Lease Assignment, Assumption and Amendment Agreement dated September 30, 1997 between GPA as assignor, T-10 Inc. as assignee, and Avianca as lessee, and (ii) Second Engine Lease Assignment, Assumption and Amendment Agreement dated August 2, 2001 among T-10 Inc. as assignor, Wells Fargo Bank Northwest, National Association, as owner trustee, as assignee, and Avianca as lessee; which Avianca Lease and attachments were recorded by the FAA on January 25, 2002 and assigned Conveyance No. W000315.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following documents, which were filed for recording with the Federal Aviation Administration on this date, but have not yet been recorded, true and correct copies of which are attached hereto: (i) First Transfer Master Assignment and Assumption Agreement and Bill of Sale [WLFC] dated this date, between Wells Fargo Bank Northwest, National Association, not individual but solely as owner trustee, as assignor, and WLFC Funding Corporation, as assignee, and (ii) Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignments, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

12

Engine 718064

Engine Lease Agreement dated January 7, 1992 (the “Avianca Lease”) between GPA Group plc (“GPA”), as lessor, and Aerovias Nacionales de Colombia S.A. Avianca (“Avianca”), as lessee, with the following attached thereto: (i) Engine Lease Assignment, Assumption and Amendment Agreement dated September 30, 1997 between GPA as assignor, T-10 Inc. as assignee, and Avianca as lessee, and (ii) Second Engine Lease Assignment, Assumption and Amendment Agreement dated August 2, 2001 among T-10 Inc. as assignor, Wells Fargo Bank Northwest, National Association, as owner trustee, as assignee, and Avianca as lessee; which Avianca Lease and attachments were recorded by the FAA on January 25, 2002 and assigned Conveyance No. W000317.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following documents, which were filed for recording with the Federal Aviation Administration on this date, but have not yet been recorded, true and correct copies of which are attached hereto: (i) First Transfer Master Assignment and Assumption Agreement and Bill of Sale [WLFC] dated this date, between Wells Fargo Bank Northwest, National Association, not individual but solely as owner trustee, as assignor, and WLFC Funding Corporation, as assignee, and (ii) Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignments, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

Engine 858327

Aircraft Engine Lease Agreement dated as of August 1, 2002 between Wells Fargo Bank Northwest, National Association, as owner trustee, as lessor, and Frontier Airlines, Inc., as lessee, with General Terms Engine Lease Agreement dated as of August 1, 2002 attached thereto, which was recorded by the FAA on August 28, 2002 and assigned Conveyance No. XX021974.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following documents, which were filed for recording with the Federal Aviation Administration on this date, but have not yet been recorded, true and correct copies of which are attached hereto: (i) First Transfer Master Assignment and Assumption Agreement and Bill of Sale [WLFC] dated this date, between Wells Fargo Bank Northwest, National Association, not individual but solely as owner trustee, as assignor, and WLFC Funding Corporation, as assignee, and (ii) Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignments, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

13

Engine 740342

Aircraft Engine Lease Agreement dated as of May 3, 2001 between Wells Fargo Bank Northwest, National Association, formerly First Security Bank, National Association, as owner trustee, as lessor, and Gulf Air Company G.S.C., as lessee, with General Terms Engine Lease Agreement dated March 28, 2001 attached thereto, which was recorded by the FAA on May  7, 2001 and assigned Conveyance No. Q67587.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following documents, which were filed for recording with the Federal Aviation Administration on this date, but have not yet been recorded, true and correct copies of which are attached hereto: (i) First Transfer Master Assignment and Assumption Agreement and Bill of Sale [WLFC] dated this date, between Wells Fargo Bank Northwest, National Association, not individual but solely as owner trustee, as assignor, and WLFC Funding Corporation, as assignee, and (ii) Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignments, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

Engine 741414

Aircraft Engine Lease Agreement dated as of May 3, 2001 between Wells Fargo Bank Northwest, National Association, formerly First Security Bank, National Association, as owner trustee, as lessor, and Gulf Air Company G.S.C., as lessee, with General Terms Engine Lease Agreement dated March 28, 2001 attached thereto, which was recorded by the FAA on May  7, 2001 and assigned Conveyance No. Q67589.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following documents, which were filed for recording with the Federal Aviation Administration on this date, but have not yet been recorded, true and correct copies of which are attached hereto: (i) First Transfer Master Assignment and Assumption Agreement and Bill of Sale [WLFC] dated this date, between Wells Fargo Bank Northwest, National Association, not individual but solely as owner trustee, as assignor, and WLFC Funding Corporation, as assignee, and (ii) Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignments, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

Engine 721877

Aircraft Engine Lease Agreement dated as of May 21, 2002 between Wells Fargo Bank Northwest, National Association, as owner trustee, as lessor, and Hainan Airlines, as

14

lessee, with General Terms Engine Lease Agreement dated May 21, 2002 attached thereto, which was recorded by the FAA on May 31, 2002 and assigned Conveyance No. K034326.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following documents, which were filed for recording with the Federal Aviation Administration on this date, but have not yet been recorded, true and correct copies of which are attached hereto: (i) First Transfer Master Assignment and Assumption Agreement and Bill of Sale [WLFC] dated this date, between Wells Fargo Bank Northwest, National Association, not individual but solely as owner trustee, as assignor, and WLFC Funding Corporation, as assignee, and (ii) Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignments, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

Engine 858839

Aircraft Engine Lease Agreement dated as of May 21, 2002 between Wells Fargo Bank Northwest, National Association, as owner trustee, as lessor, and Hainan Airlines, as lessee, with General Terms Engine Lease Agreement dated May 21, 2002 attached thereto, which was recorded by the FAA on May 31, 2002 and assigned Conveyance No. K034324.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following documents, which were filed for recording with the Federal Aviation Administration on this date, but have not yet been recorded, true and correct copies of which are attached hereto: (i) First Transfer Master Assignment and Assumption Agreement and Bill of Sale [WLFC] dated this date, between Wells Fargo Bank Northwest, National Association, not individual but solely as owner trustee, as assignor, and WLFC Funding Corporation, as assignee, and (ii) Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignments, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

Engine 727393

Aircraft Engine Lease Agreement dated as of April 13, 2002 between Wells Fargo Bank Northwest, National Association, as owner trustee, as lessor, and Hawaiian Airlines, Inc., as lessee, with General Terms Engine Lease Agreement dated as of April 13, 2002 attached thereto, which was recorded by the FAA on April 17, 2002 and assigned Conveyance No. S118700.

15

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following documents, which were filed for recording with the Federal Aviation Administration on this date, but have not yet been recorded, true and correct copies of which are attached hereto: (i) First Transfer Master Assignment and Assumption Agreement and Bill of Sale [WLFC] dated this date, between Wells Fargo Bank Northwest, National Association, not individual but solely as owner trustee, as assignor, and WLFC Funding Corporation, as assignee, and (ii) Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignments, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

Engine 731813

Aircraft Engine Lease Agreement dated as of December 19, 2001 between Wells Fargo Bank Northwest, National Association, as owner trustee, as lessor, and International Lease Finance Corporation, as lessee, with General Terms Engine Lease Agreement dated as of December 18, 2001 attached thereto, which was recorded by the FAA on December 21, 2001 and assigned Conveyance No. K032713, as amended by Letter Amendment dated April 19, 2002, which was recorded by the FAA on May 20, 2002 and assigned Conveyance No. II0025289, as amended by Letter Amendment dated as of July 15, 2002, which was recorded by the FAA on August 2, 2002 and assigned Conveyance No. ZZ027761.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following documents, which were filed for recording with the Federal Aviation Administration on this date, but have not yet been recorded, true and correct copies of which are attached hereto: (i) First Transfer Master Assignment and Assumption Agreement and Bill of Sale [WLFC] dated this date, between Wells Fargo Bank Northwest, National Association, not individual but solely as owner trustee, as assignor, and WLFC Funding Corporation, as assignee, and (ii) Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignments, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

Engine 727340

Aircraft Engine Lease Agreement dated as of November 7, 2001 between Wells Fargo Bank Northwest, National Association, as owner trustee, as lessor, and Lan Chile S.A., as lessee, with General Terms Engine Lease Agreement dated November 7, 2001 attached thereto, which was recorded by the FAA on December 5, 2001 and assigned Conveyance No. UU032267.

16

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following documents, which were filed for recording with the Federal Aviation Administration on this date, but have not yet been recorded, true and correct copies of which are attached hereto: (i) First Transfer Master Assignment and Assumption Agreement and Bill of Sale [WLFC] dated this date, between Wells Fargo Bank Northwest, National Association, not individual but solely as owner trustee, as assignor, and WLFC Funding Corporation, as assignee, and (ii) Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignments, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

Engine 528113

Aircraft Engine Lease Agreement dated as of January 21, 2000 between Willis Lease Finance Corporation (“Willis”), as lessor, and MNG Havayollari Ve Tasimacilik Anonim Sirketi, as lessee, with General Terms Engine Lease Agreement dated as of January 21, 2000 attached thereto, which was recorded by the FAA on February 25, 2000 and assigned Conveyance No. QQ020822, as assigned by Assignment and Bill of Sale dated as of March 24, 2000 between Willis, as assignor, and First Security Bank, National Association, now Wells Fargo Bank Northwest, National Association, as owner trustee, as assignee, which was recorded by the FAA on June 27, 2000 and assigned Conveyance No. XX015520, as amended by Letter Amendment dated May 2, 2000, which was recorded by the FAA on May 23, 2000 and assigned Conveyance No. K25712, as amended by Letter Amendment dated July 22, 2000, which was recorded by the FAA on August 3, 2000 and assigned Conveyance No. C39536, and as further amended by Letter Amendment dated December 20, 2001, which was recorded by the FAA on December 31, 2001 and assigned Conveyance No. BB036299.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following documents, which were filed for recording with the Federal Aviation Administration on this date, but have not yet been recorded, true and correct copies of which are attached hereto: (i) First Transfer Master Assignment and Assumption Agreement and Bill of Sale [WLFC] dated this date, between Wells Fargo Bank Northwest, National Association, not individual but solely as owner trustee, as assignor, and WLFC Funding Corporation, as assignee, and (ii) Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignments, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

17

Engine 858788

Aircraft Engine Lease Agreement dated as of March 16, 1998 (the “Rio-Sul Lease”) between Willis Lease Finance Corporation (“Willis”), as lessor, and Rio-Sul Servicos Aereos Regionais S.A., as lessee, with the following attached thereto: (i) General Terms Engine Lease Agreement dated as of February 27, 1998, and (ii) Engine Transfer Certificate dated as of March 16, 1998, between Willis, as seller, and WLFC Funding Corporation, as issuer, which Rio-Sul Lease and attachments were recorded by the FAA on March 31, 1998 and assigned Conveyance No. H93122, as assigned by Assignment and Bill of Sale dated as of June 12, 2002 between WLFC Funding Corporation, as assignor, and Wells Fargo Bank Northwest, National Association, as owner trustee, as assignee, which was recorded by the FAA on July 23, 2002 and assigned Conveyance No. W000961.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following documents, which were filed for recording with the Federal Aviation Administration on this date, but have not yet been recorded, true and correct copies of which are attached hereto: (i) First Transfer Master Assignment and Assumption Agreement and Bill of Sale [WLFC] dated this date, between Wells Fargo Bank Northwest, National Association, not individual but solely as owner trustee, as assignor, and WLFC Funding Corporation, as assignee, and (ii) Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignments, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

Engine 858789

Aircraft Engine Lease Agreement dated as of March 16, 1998 (the “Rio-Sul Lease”) between Willis Lease Finance Corporation (“Willis”), as lessor, and Rio-Sul Servicos Aereos Regionais S.A. (“Rio-Sul”), as lessee, with the following attached thereto: (i) General Terms Engine Lease Agreement dated as of February 27, 1998, and (ii) Engine Transfer Certificate dated as of March 16, 1998 between Willis, as seller, and WLFC Funding Corporation, as issuer, which Rio-Sul Lease and attachments were recorded by the FAA on March 31, 1998 and assigned Conveyance No. H93123, as assigned and assumed by Assignment and Bill of Sale dated as of June 12, 2002 between WLFC Funding Corporation, as assignor, and Wells Fargo Bank Northwest, National Association, as owner trustee, as assignee, which was recorded by the FAA on July 23, 2002 and assigned Conveyance No. W000964.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following documents, which were filed for recording with the Federal Aviation Administration on this date, but have not yet been recorded, true and correct copies of which are attached hereto: (i) First Transfer Master Assignment and Assumption Agreement and Bill of Sale [WLFC] dated this date, between Wells Fargo Bank Northwest, National Association, not individual but solely as owner trustee, as assignor, and WLFC Funding Corporation, as assignee, and (ii) Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding

18

Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignments, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

Engine 727057

Aircraft Engine Lease Agreement dated as of June 18, 1998 between Willis Lease Finance Corporation (“Willis”), as lessor, and Shanghai Airlines, as lessee, with General Terms Engine Lease Agreement dated as of April 29, 1998 attached thereto, which was recorded by the FAA on August 5, 1998 and assigned Conveyance No. KK22897, as assigned by Assignment and Bill of Sale dated as of May 22, 2001 between Willis, as assignor, and Wells Fargo Bank Northwest, National Association, as owner trustee, as assignee, with Joinder and Amendment Agreement dated May 22, 2000 attached thereto, which was recorded by the FAA on June 14, 2001 and assigned Conveyance No. KK028508.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following documents, which were filed for recording with the Federal Aviation Administration on this date, but have not yet been recorded, true and correct copies of which are attached hereto: (i) First Transfer Master Assignment and Assumption Agreement and Bill of Sale [WLFC] dated this date, between Wells Fargo Bank Northwest, National Association, not individual but solely as owner trustee, as assignor, and WLFC Funding Corporation, as assignee, and (ii) Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignments, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

Engine 733163

Aircraft Engine Lease Agreement dated as of March 22, 2002 between Wells Fargo Bank Northwest, National Association, as owner trustee, as lessor, and Snecma Services S.A., as lessee, with General Terms Engine Lease Agreement dated March 22, 2002 attached thereto, which was recorded by the FAA on April 9, 2002 and assigned Conveyance No. JJ40857.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following documents, which were filed for recording with the Federal Aviation Administration on this date, but have not yet been recorded, true and correct copies of which are attached hereto: (i) First Transfer Master Assignment and Assumption Agreement and Bill of Sale [WLFC] dated this date, between Wells Fargo Bank Northwest, National Association, not individual but solely as owner trustee, as assignor, and WLFC Funding Corporation, as assignee, and (ii) Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine

19

and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignments, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

Engine 728154

Aircraft Engine Lease Agreement dated as of March 7, 2001 between First Security Bank, National Association, now Wells Fargo Bank Northwest, National Association, as owner trustee, as lessor, and Spanair S.A., as lessee, with General Terms Engine Lease Agreement dated March 7, 2001 attached thereto, which was recorded by the FAA on March 22, 2001 and assigned Conveyance No. H101539.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following documents, which were filed for recording with the Federal Aviation Administration on this date, but have not yet been recorded, true and correct copies of which are attached hereto: (i) First Transfer Master Assignment and Assumption Agreement and Bill of Sale [WLFC] dated this date, between Wells Fargo Bank Northwest, National Association, not individual but solely as owner trustee, as assignor, and WLFC Funding Corporation, as assignee, and (ii) Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignments, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

Engine 733438

Aircraft Engine Lease Agreement dated as of November 29, 2000 between First Security Bank, National Association, now Wells Fargo Bank Northwest, National Association, as owner trustee, as lessor, and SR Technics AG, as lessee, with General Terms Engine Lease Agreement dated November 29, 2000 attached thereto, which was recorded by the FAA on February 1, 2001 and assigned Conveyance No. HK020200.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following documents, which were filed for recording with the Federal Aviation Administration on this date, but have not yet been recorded, true and correct copies of which are attached hereto: (i) First Transfer Master Assignment and Assumption Agreement and Bill of Sale [WLFC] dated this date, between Wells Fargo Bank Northwest, National Association, not individual but solely as owner trustee, as assignor, and WLFC Funding Corporation, as assignee, and (ii) Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by

20

virtue of the foregoing assignments, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

Engine 733471

Aircraft Engine Lease Agreement dated as of November 29, 2000 between First Security Bank, National Association, now Wells Fargo Bank Northwest, National Association, as owner trustee, as lessor, and SR Technics AG, as lessee, with General Terms Engine Lease Agreement dated November 29, 2000 attached thereto, which was recorded by the FAA on May 7, 2001 and assigned Conveyance No. H101988.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following documents, which were filed for recording with the Federal Aviation Administration on this date, but have not yet been recorded, true and correct copies of which are attached hereto: (i) First Transfer Master Assignment and Assumption Agreement and Bill of Sale [WLFC] dated this date, between Wells Fargo Bank Northwest, National Association, not individual but solely as owner trustee, as assignor, and WLFC Funding Corporation, as assignee, and (ii) Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignments, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

Engine 733172

Aircraft Engine Lease Agreement dated as of September 2, 2002 between Wells Fargo Bank Northwest, National Association, as owner trustee, as lessor, and Gulf Aircraft Maintenance Company, as lessee, with General Terms Engine Lease Agreement dated as of August 12, 2002 attached thereto, which was recorded by the FAA on September 6, 2002 and assigned Conveyance No. J001573.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following documents, which were filed for recording with the Federal Aviation Administration on this date, but have not yet been recorded, true and correct copies of which are attached hereto: (i) First Transfer Master Assignment and Assumption Agreement and Bill of Sale [WLFC] dated this date, between Wells Fargo Bank Northwest, National Association, not individual but solely as owner trustee, as assignor, and WLFC Funding Corporation, as assignee, and (ii) Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignments, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

21

Engine 718262

Aircraft Engine Lease Agreement dated as of July 23, 2002 between Wells Fargo Bank Northwest, National Association, as owner trustee, as lessor, and Vanguard Airlines, as lessee, with General Terms Engine Lease Agreement dated July 23, 2002 attached thereto, which was recorded by the FAA on August 9, 2002 and assigned Conveyance No. CC016158.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following documents, which were filed for recording with the Federal Aviation Administration on this date, but have not yet been recorded, true and correct copies of which are attached hereto: (i) First Transfer Master Assignment and Assumption Agreement and Bill of Sale [WLFC] dated this date, between Wells Fargo Bank Northwest, National Association, not individual but solely as owner trustee, as assignor, and WLFC Funding Corporation, as assignee, and (ii) Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignments, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

Engine 724721

Aircraft Engine Lease Agreement dated as of November 29, 2000 between Willis Lease Finance Corporation (“Willis”), as lessor, and WLFC (Ireland) Limited (“WLFCI”), as lessee, with General Terms Engine Lease Agreement dated as of November 29, 2000 attached thereto, which was recorded by the FAA on January 5, 2001 and assigned Conveyance No. YY030445, as assigned by Assignment and Bill of Sale dated as of May 31, 2001 between Willis, as assignor, and Wells Fargo Bank Northwest, National Association, as owner trustee, as assignee, which was recorded by the FAA on June 14, 2001 and assigned Conveyance No. JJ37144, as assigned by Deed of Novation dated June 6, 2002 among WLFCI, as assignor, WLFC Funding (Ireland) Limited, as assignee, and the owner trustee, which was recorded by the FAA on June 27, 2002 and assigned Conveyance No. TT016885.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following documents, which were filed for recording with the Federal Aviation Administration on this date, but have not yet been recorded, true and correct copies of which are attached hereto: (i) First Transfer Master Assignment and Assumption Agreement and Bill of Sale [WLFC] dated this date, between Wells Fargo Bank Northwest, National Association, not individual but solely as owner trustee, as assignor, and WLFC Funding Corporation, as assignee, and (ii) Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignments, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

22

Engine 733186

Aircraft Engine Lease Agreement dated as of March 9, 2001 (the “SNECMA Lease”) between WLFC Funding Corporation, as lessor, and SNECMA Services S.A. (“SNECMA”), as lessee, with the following attached thereto:  (i) General Terms Engine Lease Agreement dated September 11, 1999 between Willis Lease Finance Corporation (“Willis”), as lessor, and SNECMA, as lessee, (ii) Assignment dated as of March 9, 2001 between Willis, as assignor, and WLFC Funding Corporation, as assignee, which SNECMA Lease and attachments were recorded by the FAA on April 20, 2001 and assigned Conveyance No. L73991, as amended by Letter Amendment dated January 7, 2002 between WLFC Funding Corporation, as lessor, and SNECMA, as lessee, which was recorded by the FAA on February 2, 2002 and assigned Conveyance No. T068730.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following document, which was filed for recording with the Federal Aviation Administration on this date, but has not yet been recorded, a true and correct copy of which is attached hereto: Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignment, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

Engine 731570

Aircraft Engine Lease Agreement dated as of August 26, 2002 between Wells Fargo Bank Northwest, National Association, as owner trustee, as lessor, and Gulf Aircraft Maintenance Company, as lessee, with General Terms Engine Lease Agreement dated August 12, 2002 attached thereto, which was recorded by the FAA on August 28, 2002 and assigned Conveyance No. XX021984.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following documents, which were filed for recording with the Federal Aviation Administration on this date, but have not yet been recorded, true and correct copies of which are attached hereto: (i) First Transfer Master Assignment and Assumption Agreement and Bill of Sale [WLFC] dated this date, between Wells Fargo Bank Northwest, National Association, not individual but solely as owner trustee, as assignor, and WLFC Funding Corporation, as assignee, and (ii) Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignments, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

23

Engine 716430

Aircraft Engine Lease Agreement dated July 19, 2001 (the “TWA Lease”) between Kellstrom Industries, Inc., as lessor, and TWA Airlines LLC (“TWA”), as lessee, with the following attached thereto:  (i) Engine Lease General Terms Agreement dated as of June 28, 2001, and (ii) Assignment and Assumption of Lease and Purchase and Sale of Engine Agreement dated as of July 31, 2001 among Kellstrom Industries, Inc., as assignor, Willis Lease Finance Corporation, as beneficiary, and Wells Fargo Bank Northwest, National Association, as owner trustee, as assignee, which TWA Lease and attachments were recorded by the FAA on October 1, 2001 and assigned Conveyance No. L75041.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following documents, which were filed for recording with the Federal Aviation Administration on this date, but have not yet been recorded, true and correct copies of which are attached hereto: (i) First Transfer Master Assignment and Assumption Agreement and Bill of Sale [Willis] dated this date, between Wells Fargo Bank Northwest, National Association, not individual but solely as owner trustee, as assignor, and Willis Lease Finance Corporation, as assignee, and (ii) Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation, as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignments, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

Engine 733175

Aircraft Engine Lease Agreement dated as of December 1, 2000 between Willis Lease Finance Corporation, as lessor, and WLFC (Ireland) Limited, as lessee, with General Terms Engine Lease Agreement dated as of November 29, 2000 attached thereto, which was recorded by the FAA on February 26, 2001 and assigned Conveyance No. I067517, as amended by Letter Amendment dated May 23, 2001 which was recorded by the FAA on July 5, 2001 and assigned Conveyance No. HK021663, as assigned and assumed by Assignment and Bill of Sale dated as of December 21, 2001 between Willis Lease Finance Corporation, as assignor, and Wells Fargo Bank Northwest, National Association, as owner trustee, as assignee, which was recorded by the FAA on January 28, 2002 and assigned Conveyance No. FF33661, and as further assigned and assumed by Deed of Novation dated June 6, 2002 among WLFC (Ireland) Limited as assignor, WLFC Funding (Ireland) Limited as assignee, and Wells Fargo Bank Northwest, National Association, as lessor, which was recorded by the FAA on June 18, 2002 and assigned Conveyance No. NN023496.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following documents, which were filed for recording with the Federal Aviation Administration on this date, but have not yet been recorded, true and correct copies of which are attached hereto: (i) First Transfer Master Assignment and Assumption Agreement and Bill of Sale [WLFC] dated this date, between Wells Fargo Bank Northwest,

24

National Association, not individual but solely as owner trustee, as assignor, and WLFC Funding Corporation, as assignee, and (ii) Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation (as successor by merger to WLFC Funding Corporation), as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignments, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

Engine 704638

Aircraft Engine Lease Agreement dated as of March 16, 1998 between Willis Lease Finance Corporation, as lessor, and “VARIG”, S.A. (Viacao Aerea Rio-Grandense), as lessee, with General Terms Engine Lease Agreement dated as of February 27, 1998 attached thereto, which was recorded by the FAA on June 30, 1998 and assigned Conveyance No. H94205, as assigned and assumed by Assignment and Bill of Sale dated as of December 4, 2001 between Willis Lease Finance Corporation, as assignor, and Wells Fargo Bank Northwest, National Association, as owner trustee, as assignee, which was recorded by the FAA on January 11, 2002 and assigned Conveyance No. I069446.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following documents, which were filed for recording with the Federal Aviation Administration on this date, but have not yet been recorded, true and correct copies of which are attached hereto: (i) First Transfer Master Assignment and Assumption Agreement and Bill of Sale [Willis] dated this date, between Wells Fargo Bank Northwest, National Association, not individual but solely as owner trustee, as assignor, and WLFC Funding Corporation, as assignee, and (ii) Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation, as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignments, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

Engine 728173

Aircraft Engine Lease Agreement dated as of November 16, 2001 between Wells Fargo Bank Northwest, National Association, as owner trustee, as lessor, and Spirit Airlines, Inc., as lessee, with General Terms Engine Lease Agreement dated November 4, 2001 attached thereto, which was recorded by the FAA on December 4, 2001 and assigned Conveyance No. SS017842.

The foregoing engine lease, as assigned, assumed and/or amended, has been assigned and assumed pursuant to the following documents, which were filed for recording with the Federal Aviation Administration on this date, but have not yet been recorded, true and correct copies of which are attached hereto: (i) First Transfer Master Assignment and Assumption Agreement and Bill of Sale [Willis] dated this date, between Wells Fargo Bank Northwest,

25

National Association, not individual but solely as owner trustee, as assignor, and WLFC Funding Corporation, as assignee, and (ii) Contribution and Sale Agreement dated as of September 12, 2002 between Willis Lease Finance Corporation, as seller/assignor, and Willis Engine Funding LLC, as issuer/assignee, with Engine and Beneficial Interest Transfer Certificate dated this date between Willis Lease Finance Corporation, as assignor, and Willis Engine Funding LLC, as assignee, attached thereto (by virtue of the foregoing assignments, Willis Engine Funding LLC is the current lessor under the above-described engine lease).

Engine 20001

None

Engine 20267

None

Engine 575283

None

26

EX-10.27

Exhibit 10.27

GUARANTY

This GUARANTY (this “Guaranty”) dated as of September 12, 2002 is made by WILLIS LEASE FINANCE CORPORATION, a Delaware corporation (together with its successors and assigns, the “Guarantor”), in favor of BARCLAYS BANK PLC, a public limited company organized under the law of England and Wales, in its capacity as Deal Agent (as defined below) and as a Class B Purchaser (as defined below), and FORTIS BANK (NEDERLAND) N.V., organized under the laws of the Netherlands, in its capacity as a Class B Purchaser (as defined below).

RECITALS

WHEREAS, Willis Engine Funding LLC (“Issuer”), the Guarantor, Sheffield Receivables Corporation (the “Class A Purchaser”) and Barclays Bank PLC, as deal agent (the “Deal Agent”), have entered into that certain Class A Note Purchase Agreement dated as of September 12, 2002 (the “Class A Note Purchase Agreement”), pursuant to which the Class A Purchaser agreed to purchase up to $180,000,000 aggregate principal amount of notes entitled Willis Engine Funding LLC Secured Notes, Series 2002-1 Class A (the “Class A Notes”) issued pursuant to the Indenture, dated as of September 12, 2002 (the “Trust Indenture”), and the Series 2002-1 Supplement, dated as of September 12, 2002 (the “2002-1 Supplement” and, together with the Trust Indenture, the “Indenture”), between Issuer and The Bank of New York (“Indenture Trustee”);

WHEREAS, the Issuer, the Guarantor, Barclays Bank PLC (together with its successors and assigns, in such capacity, a “Class B Purchaser”), Fortis Bank (Nederland) N.V. (together with its successors and assigns, a “Class B Purchaser” and together with Barclays Bank PLC in its capacity as a Class B Purchaser, the “Class B Purchasers”) and the Deal Agent have entered into that certain Class B Note Purchase Agreement dated as of September 12, 2002 (the “Class B Note Purchase Agreement”), pursuant to which the Class B Purchasers agreed to purchase up to $20,000,000 aggregate principal amount of notes entitled Willis Engine Funding LLC Secured Notes, Series 2002-1 Class B (the “Class B Notes”) issued pursuant to the Indenture;

WHEREAS, it is a condition of the effectiveness of the Class B Note Purchase Agreement that the Guarantor execute and deliver this Guaranty; and

WHEREAS, Guarantor is the owner of all of the capital stock of Issuer and will obtain substantial direct and indirect benefit from the purchase of the Class A Notes and the Class B Notes by the Class A Purchaser and the Class B Purchasers, respectively;

NOW, THEREFORE, in consideration of the foregoing recitals and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, and intending to be legally bound, the parties hereto do hereby agree as follows:

AGREEMENT

Section 1.              Definitions.  Capitalized terms used herein shall have the following meanings:

1

Guaranty Amount:  As of any date of determination, an amount equal to the excess of (A) the lesser of (i) the Class B Note Principal Balance as of such date and (ii) 10% of the Outstanding Obligations as of such date over (B) the Guaranty Deduction Amount as of such date.

Guaranty Deduction Amount:  As of any date of determination, an amount equal to the sum of (a) any amounts prior to or as of such date paid by Guarantor pursuant to the Indemnification Agreement and (b) any amounts prior to or as of such date paid by Guarantor to lessees, sublessees or other Persons pursuant to the Guarantor’s obligations as surety with respect to the obligations of Issuer or any Owner Trustee pursuant to any Lease.

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.

Indemnification Agreement:  The Indemnification Agreement dated as of September 12, 2002 between the Guarantor and the Indenture Trustee.

All other capitalized terms not otherwise defined herein have the meanings set forth in the Indenture.

Section 2.              Acknowledgment; Guaranty.  Guarantor hereby unconditionally, absolutely and irrevocably guarantees to the Class B Purchasers, up to an amount not exceeding the Guaranty Amount (items (i) through (iii) collectively, the “Guaranteed Indebtedness”): (i) the full and prompt payment of the principal balance of the Class B Notes and the indebtedness represented thereby as and when due or at such earlier date as may result from the acceleration thereof as a result of the occurrence of an Early Amortization Event or an Event of Default under the terms of the Indenture; (ii) the full and prompt payment of the interest on the outstanding principal balance of the Class B Notes as and when due or at such earlier date as may result from the acceleration thereof following an Early Amortization Event or an Event of Default under the terms of the Indenture; and (iii) the full and prompt payment of an amount equal to each and all of the payments and other sums, when and as the same shall become due, required to be paid by the Issuer to the Class B Noteholders under the terms of the Indenture.

Section 3.              Guaranty Unconditional.  The obligations of Guarantor hereunder are irrevocable, absolute and unconditional, irrespective of the value, genuineness, regularity, validity or enforceability of the Guaranteed Indebtedness or any other circumstances which might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor.  No setoff, abatement, recoupment, counterclaim, reduction or diminution of an obligation, or any

2

defense of any kind or nature (other than performance by Guarantor of its obligations hereunder or the payment in full of the Guaranteed Indebtedness), which Guarantor has or may have with respect to a claim under this Guaranty, shall be available hereunder to Guarantor against the Class B Purchasers.

Section 4.              Payments.  All payments to be made by Guarantor to or for the benefit of the Class B Purchasers hereunder shall be made, in accordance with the written direction of each of the Class B Purchasers, by wire transfer in lawful money of the United States of America, in immediately available funds, and shall be accompanied by a notice from Guarantor stating that such payments are made under this Guaranty.

Section 5.              Representations, Warranties and Covenants.  Guarantor hereby represents and warrants to the Class B Purchasers that:

(a)           The Guarantor is a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation, has full corporate power to own its assets and to engage in the activities in which it is now engaged and is duly qualified and in good standing under the laws of each jurisdiction where the conduct of its activities requires such qualification, if the failure to so qualify would have a material adverse effect on the condition (financial or otherwise) of the Guarantor;

(b)           The Guarantor has full power, authority and legal right to execute, deliver and perform this Guaranty and has taken all necessary action to authorize the execution, delivery and performance by it of this Guaranty.  No consent, license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any Governmental Authority is required for the execution, delivery and performance by the Guarantor of this Guaranty which has not been obtained, made, given or accomplished. This Guaranty has been duly executed and delivered by a duly authorized representative of the Guarantor, and this Guaranty constitutes the valid, legal and binding obligations of the Guarantor, enforceable against the Guarantor in accordance with its respective terms, except as such enforcement may be limited by (A) bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and (B) general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law);

(c)           The execution, delivery and performance by the Guarantor of this Guaranty will not violate any provision of any law or regulation applicable to the Guarantor, or of any order, judgment, award or decree of any court, arbitrator or Governmental Authority applicable to the Guarantor or the organizational documents of the Guarantor or any mortgage, indenture, lease, contract or other agreement, instrument or undertaking to which the Guarantor is a party or by which the Guarantor or any of its assets may be bound, and will not result in, or require, the creation or imposition of any lien on any of its property, assets or revenues pursuant to the provisions of any such mortgage, indenture, lease, contract or other agreements, instrument or undertaking;

(d)           No litigation, investigation or administrative proceeding of or before any court, arbitrator or governmental authority is pending or, to the Guarantor’s knowledge, threatened against the Guarantor which if decided adversely to the Guarantor, would materially affect the

3

condition (financial or otherwise), business or operations of the Guarantor, or the ability of the Guarantor to perform its obligations under this Guaranty;

(e)           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, delivery and performance of this Guaranty by the Guarantor, have been taken or obtained on or prior to the Effective Date;

(f)            The financial statements of Guarantor dated as of December 31, 2001 (audited), a copy of which have been furnished to the Deal Agent, fairly present the financial position and results of operations for Guarantor for the dates and periods purported to be covered thereby, all in accordance with GAAP, and there has been no Material Adverse Change in the financial position or operations of Guarantor since the date of such financial statements; and

(g)           Guarantor is not insolvent as of the Effective Date and the incurrence of Guarantor’s obligations under this Guaranty will not cause Guarantor: (i) to become insolvent; (ii) to be left with unreasonably small capital for any business or transaction in which Guarantor is presently engaged or plans to be engaged; or (iii) to be unable to pay its debts as such debts mature.

Section 6.              Consents.  Guarantor hereby consents that any or all of the following actions may be taken or things done without notice to Guarantor and without affecting the liability of Guarantor under this Guaranty:

A.            The time for Issuer’s performance of or compliance with any of the terms of the Guaranteed Indebtedness may be accelerated (upon an Event of Default), or extended or such performance or compliance may be waived by the Deal Agent (including, without limitation, the renewal, extension, acceleration (upon an Event of Default) or other change in the time of payment, or other terms of, the Guaranteed Indebtedness, such as an increase or decrease in the rate of interest thereon); and

B.            The terms of any of the Guaranteed Indebtedness or any term or condition in the Indenture may be amended as provided for therein by the Issuer and Deal Agent, as the case may be, for the purpose of adding any provisions thereto or changing in any manner the rights or obligations of Issuer and/or Deal Agent thereunder.

Section 7.              Due Diligence.  Guarantor acknowledges that it has, independently of and without reliance on the Deal Agent, made its own credit analysis of Issuer and performed its own legal review of this Guaranty, the Indenture, the Contribution and Sale Agreement, the Class A Note Purchase Agreement, the Class B Note Purchase Agreement and the Related Documents and all related documents and filings, and Guarantor is not relying on the Deal Agent with respect to any of the aforesaid items. Guarantor has established adequate means of obtaining from Issuer on a continuing basis financial and other information pertaining to Issuer’s financial condition. Guarantor agrees to keep adequately informed from such means of any facts, events or circumstances which might in any way affect Guarantor’s risks hereunder, and Guarantor further agrees that the Deal Agent shall have no obligation to disclose to Guarantor information or

4

material with respect to Issuer acquired in the course of the Deal Agent’s relationship with Issuer.

Section 8.              Tolling of Statute of Limitations.  Guarantor agrees that any payment or performance of any of the terms of the Guaranteed Indebtedness or other acts which tolls any statute of limitations applicable to the Guaranteed Indebtedness shall also toll the statute of limitations applicable to Guarantor’s liability under this Guaranty.

Section 9.              Waiver.  Guarantor hereby expressly waives diligence, presentment, demand for payment, protest, benefit of any statute of limitations affecting Issuer’s liability under the Class B Notes or the Indenture or the enforcement of this Guaranty, discharge due to any disability of Issuer, any defenses of Issuer to its obligations under the Class B Notes or the Indenture not arising under the express terms of the Class B Notes or the Indenture or from a material breach thereof by Deal Agent or a Class B Purchaser which under the law has the effect of discharging Issuer from the Guaranteed Indebtedness as to which this Guaranty is sought to be enforced, the benefit of any act or omission by the Deal Agent or a Class B Purchaser that directly or indirectly results in or aids the discharge of Issuer from any of the Guaranteed Indebtedness by operation of law or otherwise, all notices whatsoever, including, without limitation, notice of acceptance of this Guaranty and the incurring of the Guaranteed Indebtedness, and any requirement that the Deal Agent or a Class B Purchaser exhaust any right, power or remedy or proceed against Issuer, the Collateral or any other guarantor of, or any other Person liable for, any of the Guaranteed Indebtedness, or any portion thereof. Guarantor specifically agrees that it will not be necessary or required, and Guarantor shall not be entitled to require, that Deal Agent or a Class B Purchaser file suit or proceed to assert or obtain a claim for personal judgment against Issuer for the Guaranteed Indebtedness, or to make any effort at collection or enforcement of the Guaranteed Indebtedness from Issuer or file suit or proceed to obtain or assert a claim for personal judgment against Guarantor or any other guarantor or other party liable for the Guaranteed Indebtedness or make any effort at collection of the Guaranteed Indebtedness from any such party or exercise or assert any other right or remedy to which the Deal Agent or a Class B Purchaser is or may be entitled in connection with the Guaranteed Indebtedness or guaranty relating thereto or assert or file any claim against the assets of Issuer, before or as a condition of enforcing the liability of Guarantor under this Guaranty.

Section 10.            Certain Rights.  In pursuing their rights under this Guaranty, the Class B Purchasers need not join Guarantor in any suit against Issuer or join Issuer in any suit against Guarantor.

Section 11.            Continuing Guaranty.  This Guaranty shall be a continuing guaranty and any other guarantors of all or a portion of the Guaranteed Indebtedness may be released without affecting the liability of Guarantor hereunder.

Section 12.            Indemnity.  In addition to and without limiting or impairing in any manner whatsoever Guarantor’s other obligations under this Guaranty or any other document executed and delivered by Guarantor to the Deal Agent or the Class B Purchasers, Guarantor agrees to indemnify the Deal Agent and the Class B Purchasers from and against any and all costs, expenses, losses and liabilities relating to claims by any third parties growing out of or

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resulting from transactions contemplated by this Guaranty (including, without limitation, enforcement of this Guaranty).

Section 13.            Notice.  The Deal Agent shall provide Guarantor with a copy of any notice of default to Issuer as provided under the Indenture; provided, however, the failure of Deal Agent to provide such notice to Guarantor will not exonerate Guarantor of any Guaranteed Indebtedness. All notices and communications under this Agreement shall be in writing personally delivered, or sent by facsimile (with subsequent telephone confirmation of receipt thereof) or sent by overnight courier service at the following addresses: Guarantor, at its address at Willis Lease Finance Corporation, 2320 Marinship Way, Suite 300, Sausalito, CA 94965; and Deal Agent, at its address at 200 Park Avenue, New York, New York 10166, Attention: Asset Securitization Group or, as to each party, at such other address as shall be designated by such party in a written notice to the other party complying as to delivery with the terms of this Section 13. 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. All such notices and communications shall, when hand delivered be effective upon delivery, when sent by courier be effective on the next succeeding Business Day.

Section 14.            Reinstatement.  Notwithstanding any provision in the Indenture or the Class B Notes to the contrary, the liability of Guarantor hereunder shall be reinstated and revived and the rights of the Class B Purchasers shall continue if and to the extent that for any reason any payment by or on behalf of Issuer is rescinded or must be otherwise restored by the Class B Purchasers, whether as a result of any proceedings in bankruptcy or reorganization or otherwise, all as though such amount had not been paid.  The determination as to whether any such payment must be rescinded or restored shall be made by the Class B Purchasers in their sole discretion; provided, however, that if the Class B Purchasers choose to contest any such matter at the request of Guarantor, Guarantor agrees to indemnify and hold harmless the Class B Purchasers from all costs and expenses (including, without limitation, attorneys’ fees) related to such request.

Section 15.            No Waiver, Amendments, Etc.  No failure on the part of the Class B Purchasers to exercise, no delay in exercising and no course of dealing with respect to, 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.  This Guaranty may not be amended or modified except by written agreement between the Guarantor and the Class B Purchasers and no consent or waiver hereunder shall be valid unless in writing and executed in accordance with the provisions of this Guaranty.

Section 16.            Compromise and Settlement.  No compromise, settlement, release, renewal, extension, indulgence, change in, waiver or modification of any of the terms of the Guaranteed Indebtedness or the release of Guarantor or discharge of Issuer or Guarantor from the performance of any of the terms of the Guaranteed Indebtedness shall release or discharge Guarantor from this Guaranty.

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Section 17.            Insolvency.  The voluntary or involuntary liquidation, dissolution, sale or other disposition of all or substantially all the assets and liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, or other proceeding affecting Issuer or Guarantor or the disaffirmance of the Class A Notes, the Class B Notes or the Indenture, or Guarantor’s obligations hereunder in any such proceeding shall not release or discharge Guarantor from this Guaranty.

Section 18.            Expenses.  In addition to its guaranty hereunder of the Guaranteed Indebtedness, Guarantor hereby agrees to pay all costs and expenses, including, without limitation, attorneys’ fees, paid or incurred by the Class B Purchasers in collection or enforcing any or all of the Guaranty Amount or in connection with the enforcement of this Guaranty and in which the Class B Purchasers are the prevailing party.

Section 19.            Entire Agreement.  This Guaranty and all documents mentioned or contemplated herein constitute and contain the entire agreement of the parties and supersede any and all prior and contemporaneous agreements, negotiations, correspondence, understandings and communications between the parties, whether written or oral, respecting the subject matter hereof.

Section 20.            Severability.  If any provision of this Guaranty is held to be unenforceable for any reason, it shall be adjusted, if possible, rather than voided in order to achieve the intent of the parties to the extent possible. In any event, all other provisions of this Guaranty shall be deemed valid and enforceable to the full extent possible.

Section 21.            Subordination of Indebtedness.  Any Indebtedness or other obligation of Issuer now or hereafter held by or owing to Guarantor is hereby subordinated in time and right of payment to all obligations of Issuer to the Class B Purchasers; and such Indebtedness of Issuer to Guarantor is assigned to the Class B Purchasers, as collateral security for this Guaranty and the Guaranteed Indebtedness, and if the Class B Purchasers so request, shall be collected, enforced and received by Guarantor in trust for the Class B Purchasers, and be paid over to the Class B Purchasers, on account of the Outstanding Obligations of Issuer to the Class B Purchasers, but without reducing or affecting in any manner the liability of Guarantor under the other provisions of this Guaranty. Any notes now or hereafter evidencing such Indebtedness of Issuer to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to the Class B Purchasers.  Guarantor will, and the Deal Agent is hereby authorized, in the name of Guarantor from time to time, to execute and file financing statements and continuation statements and execute such other documents and take such other action as Deal Agent deems necessary or appropriate to perfect, preserve and enforce its rights hereunder.  Notwithstanding the foregoing, the right of the Servicer to receive the Servicing Fee and receive reimbursement of Servicer Advances is not subordinated except as may be provided in Section 3.2 of the Series 2002-1 Supplement.

Section 22.            No Petition.  Guarantor hereby covenants 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 under any Series was Outstanding.

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Section 23.            Assignment; Governing Law.  This Guaranty shall be binding upon and inure to the benefit of Guarantor and the Class B Purchasers and each of their respective successors and assigns, except that Guarantor shall not have the right to assign its rights hereunder or any interest herein unless authorized by a writing executed by the Class B Purchasers. The Guarantor hereby consents (a) to the Class B Purchasers enforcing their rights and remedies hereunder and/or any other Owner or (b) to the assignment of all of the Class B Purchasers rights and remedies hereunder to any subsequent Noteholder or to the trustee under the Indenture. This Guaranty shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to the conflicts of laws principles of such jurisdiction.

Section 24.            Consent to Jurisdiction.  Guarantor hereby irrevocably consents to the non-exclusive personal jurisdiction o f the state and federal courts located in New York County, New York, solely for purposes of any action, claim or other proceeding arising out of any dispute in connection with this Guaranty, any rights or obligations hereunder or thereunder or the performance of such rights and obligations.  Guarantor hereby irrevocably consents to the service of a summons and complaint and other process in any action, claim or proceeding brought by the Class B Purchasers in connection with this Guaranty, any rights or obligations hereunder or thereunder or the performance of such rights and obligations, on behalf of itself or its property, in the manner specified in Section 13 above.  Nothing in this Section 24 shall affect the right of the Class B Purchasers to serve legal process in any other manner permitted by applicable law or affect the right of the Class B Purchasers to bring any action or proceeding against Guarantor or its properties in the courts of any other jurisdictions.

Section 25.            Termination of Guaranty.  This Guaranty shall terminate upon payment in full of the Class B Notes and fulfillment of all other Guaranteed Indebtedness in full; provided, however, this Section shall not affect the obligations of Guarantor pursuant to Section 14 of this Guaranty.

Section 26.            Waiver of Jury Trial.  THE GUARANTOR AND THE CLASS B PURCHASERS HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS GUARANTY, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.

Section 27.            Waiver of Specific Rights. GUARANTOR HEREBY IRREVOCABLY WAIVES AND RELEASES ANY AND ALL RIGHTS IT MAY HAVE AT ANY TIME (WHETHER ARISING DIRECTLY OR INDIRECTLY, BY OPERATION OF LAW, CONTRACT OR OTHERWISE) TO REQUIRE THE MARSHALING OF ANY ASSETS OF ISSUER, WHICH RIGHT OF MARSHALING MIGHT OTHERWISE ARISE FROM ANY SUCH PAYMENTS MADE OR OBLIGATIONS PERFORMED.

Section 28.            Subordination of Specific Rights.  Guarantor hereby agrees that for so long as the Guaranteed Indebtedness is outstanding, it shall not take any action to enforce any claim, right or remedy which Guarantor may have against Issuer that arises hereunder, including without limitation any claim, remedy or right of subrogation, reimbursement, exoneration, or

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indemnification. Guarantor further agrees that any claim, right or remedy which Guarantor may have against Issuer that arises hereunder, including without limitation any claim, remedy or right of subrogation, reimbursement, exoneration, orindemnification, shall be subordinated to the prior payment of the Guaranteed Indebtedness.

Section 29.            Transfer.  In the event of any transfer of any Class B Note, all rights of the transferor of such Class B Note under this Guaranty in respect of such Class B Note shall, once the transferee of such Class B Note has become the registered Holder of such Class B Note, shall be assigned to, and shall be enforceable by, such transferee.

Section 30.            General Interpretive Principles.  For purposes of this Guaranty except as otherwise expressly provided or unless the context otherwise requires:

A.            the terms defined in this Guaranty have the meanings assigned to them in this Guaranty and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender;

B.            accounting terms not otherwise defined herein have the meanings assigned to them in accordance with Generally Accepted Accounting Principles as in effect on the date hereof;

C.            references herein to “Sections”, “Subsections”, “paragraphs”, and other subdivisions without reference to a document are to designated Sections, Subsections, paragraphs and other subdivisions of this Guaranty;

D.            a reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to paragraphs and other subdivisions;

E.             the words “herein”, “hereof’, “hereunder” and other words of similar import refer to this Guaranty as a whole and not to any particular provision; and

F.             the term “include” or “including” shall mean without limitation by reason of enumeration.

[The Remainder of this Page is Intentionally left Blank]

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IN WITNESS WHEREOF, Guarantor has executed and delivered this Guaranty as of the date first written above.

WILLIS LEASE FINANCE CORPORATION
as Guarantor
By:	/s/ DONALD A. NUNEMAKER
	Name: Donald A. Nunemaker
	Title: Executive Vice President,
		Chief Operating Officer

ACCEPTED AND AGREED TO:
BARCLAYS BANK PLC
as Deal Agent and as a a Class B Purchaser
By:		/s/ PIERRE DULEYRIE
	Name: Pierre Duleyrie
	Title: Director
FORTIS BANK (NEDERLAND) N.V.
as a Class B Purchaser
By:
			Name:
			Title:

S-1

EX-10.28

Exhibit 10.28

EXECUTION COPY

ADMINISTRATION AGREEMENT*

among

WILLIS ENGINE FUNDING LLC,

as Issuer,

WILLIS LEASE FINANCE CORPORATION,

as Servicer

BARCLAYS BANK PLC,

as Administrative Agent

and

THE BANK OF NEW YORK,

as Indenture Trustee

Dated as of September 12, 2002

^*               Portions of the material in this Exhibit have been redacted pursuant to a request for confidential treatment, and the redacted material has been filed separately with the Securities and Exchange Commission (the “Commission”).  An asterisk has been placed in the precise places in this Agreement where we have redacted information, and the asterisk is keyed to a legend which states that the material has been omitted pursuant to a request for confidential treatment.

EXECUTION COPY

This ADMINISTRATION AGREEMENT, dated as of September 12, 2002 (the ”Agreement”), among WILLIS ENGINE FUNDING LLC, a Delaware limited liability company (the ”Issuer”), WILLIS LEASE FINANCE CORPORATION, a Delaware corporation (the “Servicer”), BARCLAYS BANK PLC (the ”Administrative Agent”) 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:

WHEREAS, the Issuer is issuing its Series 2002-1 Notes (the ”Series 2002–1 Notes”) pursuant to the Series 2002-1 Supplement, dated as of September 12, 2002 (the ”Series 2002-1 Supplement”) to the Indenture, dated as of September 12, 2002 (the ”Indenture”), each between the Issuer and The Bank of New York, as trustee (the ”Indenture Trustee”);

WHEREAS, pursuant to the Indenture and the other Related Documents, the Administrative Agent is required to perform certain duties referred to therein; and

WHEREAS, the Administrative Agent has the capacity to provide the services required thereby and is willing to perform such services on the terms set forth herein;

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and other, good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows:

SECTION 1.           Definitions.  Capitalized terms used and not otherwise defined herein shall have the meanings assigned to such terms in the Series 2002-1 Supplement or, if not defined therein, as defined in the Indenture.

SECTION 2.           Appointment and Authority of Administrative Agent.  Subject to the terms and conditions set forth herein, the Indenture Trustee, on behalf of the Noteholders, hereby appoints the Administrative Agent to perform all of the activities set forth in Section 3 hereof.  By executing this Agreement, the Administrative Agent hereby accepts such appointment.

SECTION 3.           Duties of the Administrative Agent.  Subject to the limitations set forth in this Agreement, the duties of the Administrative Agent shall be limited to the following:

(a)           Facilitation of Transfer to Replacement Servicer.  Upon receipt of a copy of a notice that a Servicer Termination Notice has been issued pursuant to Section 405(b) of the Indenture, the Administrative Agent shall use reasonable efforts to locate a qualified replacement Servicer to fulfill the duties of the then current Servicer in accordance with, and subject to the terms and conditions set forth in, Section 405(b) of the Indenture.  The Administrative Agent agrees to perform the duties set forth in Section 405(b) of the Indenture.

(b)           Facilitation of Transfer to Successor Indenture Trustee.  Upon receipt of a copy of the notice given by the Indenture Trustee pursuant to Section 907 of the

Indenture, the Administrative Agent shall use reasonable efforts to locate a qualified successor trustee to fulfill the duties of the then current Indenture Trustee.

(c)           Reserved.

(d)           The Administrative Agent shall take all action required of it under the Indenture or the Series 2002-1 Supplement.  All such obligations of the Administrative Agent set forth therein are incorporated herein by reference and failure to take any such action shall constitute a breach of this Agreement.

SECTION 4.           Standard. of Care; Conformity with Applicable Law; Liability of Administrative Agent.  (a)  The Administrative Agent will perform its duties hereunder in accordance with the same standard of care exercised by the Administrative Agent in the conduct of similar affairs for its own account.

(b)           The Administrative Agent will not, in performing its obligations hereunder, take any action that would be in violation of any law, rule or regulation that may be applicable to the Administrative Agent, its property or the services to be performed hereunder.

(c)           The Administrative Agent shall not (a) be liable for any action taken or omitted to be taken by it under or in connection with this Agreement (except for its own gross negligence or willful misconduct), or (b) be responsible in any manner for any recital, statement, representation or warranty made by the Issuer, Indenture Trustee or Servicer, or any officer thereof, contained in this Agreement or in any other Related Document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or in any other Related Document, or for the value of any Collateral or the validity, effectiveness, genuineness, enforceability or sufficiency of any Related Document, or for any failure of the Issuer, Indenture Trustee or Servicer or any other party to any Related Document to perform its obligations thereunder except to the extent set forth therein.  The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, telegram, facsimile or other document reasonably believed by it to be genuine and correct and to have been signed or sent by the proper Person or Persons, and upon advice and statements of legal counsel, independent accountants and other experts selected by the Administrative Agent.

SECTION 5.           Records.  The Administrative Agent shall maintain appropriate books of account and records relating to services performed hereunder, which books of account and records shall upon prior written notice to the Administrative Agent be accessible for inspection at the offices of the Administrative Agent by the Issuer, the Servicer and the Indenture Trustee, and the agents of any of them, at such inspecting party’s expense during the Administrative Agent’s normal business hours.

SECTION 6.           Indemnification.  (a)             The Administrative Agent hereby agrees to indemnify and hold harmless the Indenture Trustee, each Noteholder and their respective directors, officers and shareholders (each an “Indemnified Party”) from and against any and all damages, losses, liabilities, costs and expenses incurred by an Indemnified Party resulting from

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the gross negligence or willful misconduct of the Administrative Agent in performing (or failing to perform) its obligations under this Agreement.  An Indemnified Party shall immediately notify the Administrative Agent of any damages, losses, liabilities, costs or expenses which an Indemnified Party has determined has given or would give rise to a right of indemnification hereunder and the Administrative Agent shall have the exclusive right to compromise or defend any such liability or claim at its own expense, which decision shall be binding and conclusive upon an Indemnified Party.  Failure to give such notice shall not relieve the Administrative Agent of its obligations hereunder; provided, however, that the Administrative Agent shall not be liable or otherwise be held responsible for any damages, losses, liabilities, costs or expenses resulting from the failure to give such notice.  The Administrative Agent hereby agrees to indemnify and hold harmless the Issuer from and against any and all damages, losses, liabilities, costs and expenses incurred by the Issuer resulting from the gross negligence or willful misconduct of the Administrative Agent in performing its obligations under Section 2.2(c) of the Series 2002-1 Supplement.

(b)           The Issuer and the Servicer shall jointly and severally indemnify and hold harmless the Administrative Agent from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses and disbursements of any kind whatsoever which may at any time (including at any time following the repayment of any Outstanding Obligations and the termination or resignation of the related Administrative Agent) be imposed on, incurred by or asserted against the Administrative Agent in any way relating to or arising out of this Agreement or any document contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by the Administrative Agent under or in connection with any of the foregoing; provided, however, that neither the Issuer nor the Servicer shall be liable for the payment to the Administrative Agent of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting solely from the Administrative Agent’s gross negligence or willful misconduct.

SECTION 7.           Compensation.  As compensation for the performance of the Administrative Agent’s obligations under this Agreement, the Issuer agrees to pay quarterly in arrears, beginning with the third Payment Date, to the Administrative Agent a fee at the rate of      %* per annum of the sum of the Aggregate Note Principal Balance of all Series then Outstanding on the related quarterly Payment Date; notwithstanding payment of such fee by the Servicer, each of the parties hereto acknowledge that the Administrative Agent is the agent of the Noteholders.  If the Servicer fails to pay such fee, the Issuer shall pay such unpaid amounts from amounts on deposit in the Series 2002-1 Series Account in accordance with the provisions of Section 3.2 of the Series 2002-1 Supplement.  In addition, the Administrative Agent shall also be entitled to be reimbursed in accordance with Section 3.2 of the Series 2002-1 Supplement for its expenses incurred in taking any actions required pursuant to Section 405(b) of the Indenture.

SECTION 8.           Independence of the Administrative Agent.  For all purposes of this Agreement, the Administrative Agent shall be an agent of the Noteholders and shall not be subject to the supervision of the Issuer, Servicer or Indenture Trustee with respect to the manner

^*               This redacted material has been omitted pursuant to a request for confidential treatment, and the material has been filed separately with the Commission.

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in which it accomplishes the performance of its obligations hereunder; provided, however, that the Administrative Agent shall act in accordance with directions from the Requisite Global Majority when required by the Indenture or the Related Documents.

SECTION 9.           No Joint Venture.  Nothing contained in this Agreement (i) shall constitute the Administrative Agent, the Issuer, the Servicer and the Indenture Trustee as members of any partnership, joint venture, association, syndicate, unincorporated business or other separate entity, (ii) shall be construed to impose any liability as such on any of them or (iii) shall be deemed to confer on any of them any express, implied or apparent authority to incur any obligation or liability on behalf of the others.

SECTION 10.         Other Activities of the Administrative Agent.  Nothing herein shall prevent the Administrative Agent or its Affiliates from engaging in other businesses or, in its sole discretion, from acting in a similar capacity as an administrator for any other Person even though such Person may engage in business activities similar to those of the Issuer and/or the Servicer.

SECTION 11.         Term of Agreement; Resignation and Removal of Administrative Agent.  (a)  This Agreement shall continue in force until all of the Outstanding Obligations under the Indenture are paid in full, upon which event this Agreement shall automatically terminate.

(b)           The Administrative Agent may resign its duties hereunder by providing each of the Issuer, the Servicer and the Indenture Trustee with at least 60 days’ prior written notice.

(c)           The Indenture Trustee, acting at the written direction of the Requisite Global Majority, or of the Issuer, may remove the Administrative Agent immediately upon written notice of termination to the Administrative Agent (with a copy to each of the Issuer and the Servicer) if any of the following events shall occur:

(i)            the Administrative Agent shall default in any material respect the performance of any of its duties under this Agreement which failure continues unremedied for a period of fifteen (15) days after the receipt by the Administrative Agent of written notice thereof specifying with reasonable detail the default;

(ii)           a court having jurisdiction in the premises shall enter a decree or order for relief, and such decree or order shall not have been vacated within 60 days, in respect of the Administrative Agent in any involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect or appoint a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for the Administrative Agent or any substantial part of its property or order the winding-up or liquidation of its affairs; or

(iii)          the Administrative Agent shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, shall consent to the entry of an order for relief in an involuntary case under any such law, or shall consent to the appointment of a receiver, liquidator, assignee, trustee, custodian, sequestrator or similar official for the Administrative Agent or any substantial part of its property, shall consent to the taking of possession by any such official of any substantial part of its property, shall make

4

any general assignment for the benefit of creditors or shall fail generally to pay its debts as they become due.

(d)           No resignation or removal of the Administrative Agent pursuant to this Section 11 shall be effective until (i) a successor Administrative Agent shall have been appointed by the Requisite Global Majority (which successor shall also be reasonably acceptable to the Issuer) and (ii) such successor Administrative Agent shall have agreed in writing to be bound by the terms of this Agreement in the same manner as the Administrative Agent is bound hereunder or as otherwise approved by the Requisite Global Majority.  A copy of any such appointment and the agreement executed by such successor Administrative Agent shall be promptly sent to each of the Issuer, the Servicer and the Indenture Trustee.

SECTION 12.         Action upon Termination; Resignation or Removal.  Promptly upon the effective date of termination of this Agreement pursuant to Section 11(a) of this Agreement or the resignation or removal of the Administrative Agent pursuant to Section 11(b) or (c) of this Agreement, respectively, the Administrative Agent shall be entitled to be paid all fees and reimbursable expenses accruing to it to the date of such termination, resignation or removal.  In the event of the resignation or removal of the Administrative Agent pursuant to Section 11(b) or (c) of this Agreement, respectively, the Administrative Agent shall cooperate with the Indenture Trustee and take all reasonable steps requested to assist the Requisite Global Majority and the Indenture Trustee in making an orderly transfer of the duties of the Administrative Agent.

SECTION 13.         Notices.  Any notice, report or other communication given hereunder shall be in writing and addressed as follows:

(a)           If to the Issuer, to:

Willis Engine Funding LLC

2320 Marinship Way

Sausalito, California 94965

Attention:  Counsel

Fax:  (415) 331-0607

with a copy to:

the Servicer and

Gibson, Dunn & Crutcher LLP

333 South Grand Avenue

Los Angeles, CA 90071

Attention:  Brian D. Kilb

Telephone:            (213) 229-7236

Fax:(213) 229-7520

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(b)           If to the Administrative Agent, to:

Barclays Bank PLC

200 Park Avenue

New York, New York 10166

Attn:  Asset Securitization Group

(c)           If to the Indenture Trustee, to:

The Bank of New York

101 Barclay Street

8th Floor West

Asset Backed Securities Unit

New York, New York 10286

Fax:  (212) 815-2493

(d)           If to the Servicer, to:

Willis Lease Finance Corporation

2320 Marinship Way, Suite 300

Sausalito, California 94965

Attention:  Counsel

Fax:  415/331-0607

with a copy to:

Gibson, Dunn & Crutcher LLP

333 South Grand Avenue

Los Angeles, CA 90071

Attention:  Brian D. Kilb

Telephone:            (213) 229-7236

Fax:(213) 229-7520

(e)           If to any Noteholder, at the address set forth in the Note Register, or to such other address as any party shall have provided to the other parties in writing.  Any notice required to be in writing hereunder shall be deemed given if such notice is mailed by certified mail, postage prepaid, or hand-delivered (or, in the case of the Issuer or the Servicer, by internationally recognized courier service) to the address of such party as provided above.

SECTION 14.         Amendments.  This Agreement may be amended from time to time by the parties hereto, provided that any amendment must be accompanied by the written consent of the Requisite Global Majority.  Prior to the execution of any amendment to this Agreement, the Issuer will provide notice of any such amendment to each Rating Agency, if any.

SECTION 15.         Successors and Assigns.  This Agreement may not be assigned by the Administrative Agent except to an Affiliate unless (i) such assignment is previously consented to in writing by the Indenture Trustee (acting at the direction of the Control Party of

6

each Series), (ii) such assignee is reasonably acceptable to the Issuer, and (iii) each Rating Agency, if any, shall have received prior notice of each such assignment.

SECTION 16.         GOVERNING LAW.  THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.

SECTION 17.         Consent to Jurisdiction.  Any legal suit, action or proceeding against any of the parties hereto arising out of or relating to this Agreement, or any transaction contemplated hereby, may be instituted in any federal or state court in New York County, State of New York, and each of the parties hereto 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 Agreement, each of the Issuer and the Servicer hereby irrevocably submits to the non-exclusive jurisdiction of any such court in any such suit, action or proceeding.  Each of the Issuer and the Servicer hereby irrevocably appoints and designates CT Corporation Systems, 1633 Broadway, New York, New York 10019, its true and lawful attorney-in-fact and duly authorized agent for the limited purpose of accepting service of legal process and the Issuer agrees that service of process upon such party shall constitute personal service of such process on such Person.  Each of the Issuer and the Servicer shall maintain the designation and appointment of such authorized agent until all amounts payable under this Agreement shall have been paid in full.  If such agent shall cease to so act, each of the Issuer and the Servicer shall immediately designate and appoint another such agent satisfactory to the Administrative Agent and shall promptly deliver to the Administrative Agent evidence in writing of such other agent’s acceptance of such appointment.

SECTION 18.         Headings.  The section headings hereof have been inserted for convenience of reference only and shall not be construed to affect the meaning, construction or effect of this Agreement.

SECTION 19.         Counterparts.  This Agreement may be executed in counterparts, each of which when so executed shall together constitute but one and the same agreement.

SECTION 20.         Severability.  Any provision of this Agreement that is prohibited or unenforceable under any applicable law, rule or regulation or that would result in the imposition of any fine or adverse regulatory or other consequence in any jurisdiction shall be ineffective to the extent thereof without invalidating the remaining provisions hereof and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

SECTION 21.         Agreement Not to File Petition in Bankruptcy.  The Administrative Agent hereby agrees that it shall not institute against, or join any other person in instituting against, the Issuer any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding, or other proceeding under any insolvency, bankruptcy or similar law of any

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jurisdiction, for one year and a day after the last date on which any Note of any Series was Outstanding.

SECTION 22.         Binding Effect Third-Party Beneficiaries.  This Agreement will inure to the benefit of and be binding upon the parties hereto.

SECTION 23.         Merger and Integration.  Except as specifically stated otherwise herein, this Agreement sets forth the entire understanding of the parties relating to the subject matter hereof, and all prior understandings, written or oral, are superseded by this Agreement.  This Agreement may not be modified, amended, waived or supplemented except as provided herein.

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EXECUTION COPY

IN WITNESS WHEREOF, the parties have caused this Administration Agreement to be duly executed and delivered as of the day and year first above written.

WILLIS ENGINE FUNDING LLC, as Issuer
By:	/s/ MONICA J. BURKE
		Name: Monica J. Burke
		Title: Chief Financial Officer
BARCLAYS BANK PLC, as Administrative Agent
By:	/s/ PIERRE DULEYRIE
				Name: Pierre Duleyrie
				Title: Director
WILLIS LEASE FINANCE CORPORATION, as Servicer
By:	/s/ DONALD A. NUNEMAKER
		Name: Donald A. Nunemaker
		Title: Executive Vice President,
					Chief Operating Officer
THE BANK OF NEW YORK, not in its individual capacity but solely as Indenture Trustee
By:	/s/ SCOTT J. TEPPER
			Name: Scott J. Tepper
			Title: Assistant Vice President

EX-10.29

Exhibit 10.29

EXECUTION COPY

CLASS A NOTE PURCHASE AGREEMENT

among

WILLIS ENGINE FUNDING LLC,

as Issuer

WILLIS LEASE FINANCE CORPORATION,

as Servicer

SHEFFIELD RECEIVABLES CORPORATION,

as Class A Note Purchaser

and

BARCLAYS BANK PLC,

as Purchaser’s Agent

dated as of September 12, 2002

TABLE OF CONTENTS

i

ii

SCHEDULES
SCHEDULE 1	Address for Delivery of Payments
SCHEDULE 2	Conditions Precedent to Initial Purchase
EXHIBITS
EXHIBIT A	Form of Loan Report

iii

CLASS A NOTE PURCHASE AGREEMENT (“Class A Note Purchase Agreement”) dated as of September 12, 2002, among WILLIS ENGINE FUNDING LLC (the “Issuer”), WILLIS LEASE FINANCE CORPORATION (the “Servicer”), SHEFFIELD RECEIVABLES CORPORATION (the “Class A Note Purchaser”) and BARCLAYS BANK PLC (the “Purchaser’s Agent”).

The parties hereto agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01.  Certain Defined Terms.  Capitalized terms used herein without definition shall have the meanings set forth in 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 Purchaser’s Agent, each Owner, each Liquidity Provider, each Person providing credit support for the Class A Note Purchaser’s Commercial Paper Notes, 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 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 A Note Purchaser” means Sheffield Receivables Corporation.

“Class A Notes” means $165,343,500 initial principal amount of the Issuer’s Class A Notes dated September 12, 2002.

“Class B Notes” means $18,371,500 initial principal amount of the Issuer’s Class B Notes dated September 12, 2002.

“Class B Note Purchase Agreement” means the Class B Note Purchase Agreement, dated as of September 12, 2002, among the Issuer, the Servicer, Barclays Bank PLC and Fortis Bank (Nederland) N.V.

“Class B Note Purchasers” has the meaning specified in the Class B Note Purchase Agreement.

“Collection Date” means the date following the Termination Date on which the aggregate outstanding Class A Note Principal Balance has been reduced to zero, the Class A Note Purchaser has received all Interest and other amounts due to the Class A Note Purchaser in connection with this Agreement and the Purchaser’s Agent has received all amounts due to it in connection with this Agreement.

“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 A Note Purchaser 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 a Class A Note Purchaser 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 Purchaser’s Agent of a written request by the Issuer to obtain a Loan, such notice to be in the form of Exhibit A hereto and to conform to requirements of Section 3.02 hereof.

“Governmental Actions” means any and all consents, approvals, permits, orders, authorizations, waivers, exceptions, variances, exemptions or licenses of, or registrations, declarations or filings with, any Governmental Authority required under any Governmental Rules.

“Governmental 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.

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“Governmental Rules” means any and all laws, statutes, codes, rules, regulations, ordinances, orders, writs, decrees and injunctions, of any Governmental Authority and any and all legally binding conditions, standards, prohibitions, requirements and judgments of any Governmental Authority.

“Increased Costs” has the meaning specified in Section 2.08 hereof.

“Incremental Funding” means any Funding that increases the aggregate outstanding Class A 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.

“Liquidity Agreement” means the Revolving Asset Purchase Agreement dated as of September 12, 2002, among the Class A Note Purchaser, the Purchaser’s Agent and the additional Sheffield Purchasers, if any, named therein, as the same may be amended, supplemented or otherwise modified from time to time.

“Liquidity Providers” means the banks at any time party to the Liquidity Agreement.

“Loan Request” means any request by the Issuer pursuant to Section 2.04(b) and in the form of Exhibit A.

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“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 the Class A Note Purchaser and each other Person (including a participant to the extent of its undivided interest) that has purchased, or has entered into a commitment to purchase, the Class A Note, or an interest therein, from the Class A Note Purchaser whether pursuant to a Liquidity Agreement or otherwise.

“Purchase” means the initial purchase by the Class A Note Purchaser of the Class A Note from the Issuer.

“Purchaser” means the Class A Note Purchaser.

“Purchaser’s Agent” means Barclays Bank PLC.

“Requirement of Law” means, as to any Person, any law (statutory or common), treaty, rule or regulation or determination of an arbitrator or of a Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

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

“Securities Act” means the Securities Act of 1933, as amended.

“Servicer” means Willis Lease Finance Corporation.

“Sheffield Owners” means the Class A Note Purchaser and the Sheffield Purchasers.

“Sheffield Purchasers” means each of the purchasers from time to time party to the Liquidity Agreement.

“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.

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“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 A 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 A Note Purchase Agreement shall refer to this Class A Note Purchase Agreement as a whole and not to any particular provision of this Class A Note Purchase Agreement; and Section, subsection, Schedule and Exhibit references contained in this Class A Note Purchase Agreement are references to Sections, subsections, Schedules and Exhibits in or to this Class A Note Purchase Agreement unless otherwise specified.

ARTICLE II

PURCHASE AND SALE

SECTION 2.01.  Sale and Delivery of the Class A 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 Purchaser’s Agent on behalf of the Class A Note Purchaser on the Closing Date,the Class A Note with a maximum principal amount of $180,000,000, which Class A Note shall be duly executed by the Issuer, duly authenticated by the Indenture Trustee and registered in the name of the Purchaser’s Agent on behalf of the Class A Note Purchaser.  The actual outstanding principal balance of the Class A Note will be increased and decreased from time to time in accordance with the terms hereof and of the Indenture Supplement.  The Class A Note will be delivered to the Purchaser’s Agent against payment of the amount of the Loan related to the initial Funding made pursuant to Section 2.04.

SECTION 2.02.  Acceptance and Custody of Series 2002-1 Class A Note.  On the Closing Date, the Purchaser’s Agent shall take delivery of the Class A Note and maintain custody thereof on behalf of the Class A Note Purchaser.

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 A Note Purchaser.  The Purchaser’s Agent may act on behalf of and for the benefit of the Class A Note Purchaser in this regard.  The Class A Note Purchaser shall fund Loans from time to time during the period from the date hereof to but not including the Termination Date; provided, however, that no Loan shall be funded under this Agreement unless on the applicable Funding Date a Loan is funded under the Class B Note

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Purchase Agreement in an amount that is one-ninth (1/9) the amount of the Loan funded under this Agreement.  Under no circumstances shall the Class A Note Purchaser fund any Loan if after giving effect to such Funding or Incremental Funding, the aggregate Class A Note Principal Balance outstanding hereunder would (i) exceed the Class A Note Commitment or (ii) exceed the product of (y) nine (9) and (z) the aggregate Class B Note Principal Balance outstanding under the Class B 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 Purchaser’s Agent, make written request for the Class A Note Purchaser to extend the Commitment Termination Date for an additional period of 364 days.  The Purchaser’s Agent will give prompt notice to the Class A Note Purchaser and the Class B Note Purchasers of its receipt of such request for extension of the Commitment Termination Date.  The Class A Note Purchaser shall make a determination, in its sole discretion and after a full credit review, not more than 30 days and not less than 15 days prior to the then applicable Commitment Termination Date as to whether or not it will agree to extend the Commitment Termination Date; provided, however, that the failure of the Class A Note Purchaser 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 A Note Purchaser 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 B Note Purchase Agreement be extended to the same date.

SECTION 2.04.  The Initial Funding and Incremental Fundings.

(a)           The Class A 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 A Note Purchaser of a Loan Request delivered by the Issuer to the Purchaser’s Agent at least two Business Days prior to such proposed Funding Date and each such notice shall specify (i) the aggregate amount of such initial Funding or Incremental Funding which amount must satisfy the applicable minimum requirement set forth in the following sentence and (ii) the date of such Funding or Incremental Funding.  The Issuer shall deliver no more than two such notices in any calendar month, and each amount specified in any such notice must satisfy the following minimum requirements, as applicable, as a condition to the related Funding:  (i) the initial Funding shall be in an amount equal to $4,500,000 or an integral multiple of $9,000 in excess thereof; (ii) each Incremental Funding hereunder shall be in an amount equal to $900,000 or an integral multiple of $9,000 in excess thereof; provided, however, that if such Incremental Funding is to be made hereunder at a time when there are no outstanding Commercial Paper Notes issued in respect of a Funding of $4,500,000 or an integral multiple of $9,000 in excess thereof, then such Incremental Funding shall be in an amount equal to $4,500,000 or an integral multiple of $9,000 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 A Note Purchaser.  On the date

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of such Funding or Incremental Funding, as the case may be, the Class A Note Purchaser shall, upon satisfaction of the applicable conditions set forth in Article III, make available to the Issuer by wire transfer in immediately available funds, at such bank or other location reasonably designated by Issuer in its Loan Request given pursuant to this Section 2.04(b), an amount equal to the amount of such Loan related to such initial Funding or Incremental Funding, as the case may be.  Notwithstanding any other provision of this Section 2.04(b), following the consummation of the Term Securitization, the Class A Note Purchaser shall not be obligated to fund a Loan under this Agreement and the Series 2002-1 Supplement until the Issuer and the Class A Note Purchaser have agreed in writing regarding the Spread for such Loan.

SECTION 2.05.  Reduction of the Class A Maximum Limit.  The Issuer may, upon at least five Business Days’ notice to the Purchaser’s Agent, terminate in whole or reduce in part the portion of the Class A Maximum Limit that exceeds the sum of the aggregate Class A Note Principal Balance and interest accrued and to accrue thereon through the date of payment; provided, however, that each partial reduction of the Class A Maximum Limit shall be in an aggregate amount equal to $900,000 or an integral multiple thereof; and provided further, however, that each partial reduction of the Class A Maximum Limit shall be accompanied by a partial reduction of the Class B Maximum Limit under the Class B Note Purchase Agreement in an amount equal to one-ninth (1/9) 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 Purchaser’s Agent shall determine the Interest (including unpaid Interest, if any, due and payable on a prior Payment Date) on the Class A 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 an account maintained by the Purchaser’s Agent as shown on Schedule 1 hereto, or such other account designated from time to time by the Purchaser’s Agent.  The Issuer shall, to the extent permitted by law, pay to the Class A Note Purchaser Default Interest at the Overdue Rate as provided in the Indenture; provided, however, that such interest rate shall not at any time exceed the maximum rate permitted by applicable law.  All computations of interest and other fees hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first but excluding the last day) elapsed.

(b)           Whenever any payment hereunder shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of Interest or any fee payable hereunder, as the case may be.

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(c)           If any Funding or Incremental Funding requested by the Issuer and approved by the Class A Note Purchaser pursuant to Section 2.04, is not, for any reason whatsoever related to a default or nonperformance by the Issuer, made or effectuated, as the case may be, on the date specified therefor, the Issuer shall indemnify the Class A Note Purchaser against any reasonable loss, cost or expense incurred by the Class A Note Purchaser, including, without limitation, any loss (excluding loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by the Class A Note Purchaser to fund or maintain such Funding or Incremental Funding, as the case may be, during such Interest Accrual Period.

SECTION 2.08.  Increased Costs.  If due to the introduction of or any change (including, without limitation, any change by way of imposition or increase of reserve requirements) in or in the Interpretation of any law or regulation or the imposition of any guideline or request from any central bank or other Governmental Authority after the date hereof reflecting such change, there shall be an increase in the cost to an Affected Person of making or maintaining any investment in the Class A Note or any interest therein or of agreeing to purchase or invest in the Class A Note or any interest therein, as the case may be (other than by reason of any Interpretation of or introduction of or change in laws or regulations relating to Taxes or Excluded Taxes), such Affected Person shall promptly submit to the Issuer, the Servicer and, if such Person is not the Purchaser’s Agent, the Purchaser’s Agent, a certificate setting forth in reasonable detail, the calculation of such increased costs incurred by such Affected Person.  In determining such amount, such Affected Person may use any reasonable 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 A Increased Costs for the Interest Accrual Period immediately succeeding the date on which such certificate was delivered (or if such certificate was delivered during the last Interest Accrual Period, for such last Interest Accrual Period) and to the extent remaining outstanding, each Interest Accrual Period thereafter until paid in full.  The Purchaser’s Agent, out of amounts received by it in respect of Class A 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 A 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 A Note Purchaser’s agreement to make or maintain an investment in the Class A Note or any interest therein and other similar agreements or facilities, or (ii) the existence of any agreement by Affected Persons to make or maintain an investment in the Class A Note or any interest therein or to fund any such investment and any other commitments of the same type, such Affected Person shall promptly submit to the Issuer, the Servicer and, if such Person is not the Purchaser’s Agent, the Purchaser’s Agent, a certificate

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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 A Increased Costs for the Interest Accrual Period immediately succeeding the date on which such certificate was delivered (or if such certificate was delivered during the last Interest Accrual Period, for such last Interest Accrual Period), and to the extent remaining outstanding, each Accrual Period thereafter until paid in full.  The Purchaser’s Agent, out of amounts received by it in respect of Class A 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 A Increased Costs is less than the aggregate amount payable to all such Affected Persons pursuant to Sections 2.08, 2.09 and 2.10 hereof, the resulting shortfall shall be allocated among such Affected Persons on a pro rata basis (determined by the amount owed to each).

SECTION 2.10.  Taxes.  (a) Any and all payments and deposits required to be made under this Agreement, the Class A Note or the Indenture by the Issuer or the Indenture Trustee to or for the benefit of an Owner shall be made, to the extent allowed by law, free and clear of and without deduction for any and all present or future taxes, levies, imposts, 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 A Note or any interest therein hereunder is acquired, accounted for or booked as a result of the sale, transfer or assignment by any Owner of its interest hereunder, other than any such taxes, levies, imposts, duties, charges or fees imposed as a result of any such change or adoption occurring after any such Class A Note or interest therein is acquired, accounted for or booked; (iv) taxes measured by income, gross receipts, assets or capital of any Owner by the taxing authority of the

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jurisdiction where such Owner is organized, incorporated, managed, controlled or is considered to be doing business or in which it maintains an office, branch or agency (other than Taxes imposed on the gross amount of any payments made to under this Agreement without regard to such place of origination or incorporation, such management or control, the conduct of such business or the maintenance of such office, branch or agency); (v) any Taxes imposed on such Owner as a result of payments not related to this Agreement; and (vi) any withholding tax with respect to any Owner (all such exclusions being hereinafter called “Excluded Taxes” and all other taxes, levies, imposts, duties, charges or fees being hereinafter called “Taxes”).  To the extent that any Owner actually realizes a tax benefit on its income tax returns (whether by reason of a deduction, credit or otherwise) (a “Tax Benefit”) for a given year that is attributable to the payment by the Issuer or the Indenture Trustee of any such Taxes on behalf of such Owner, such Owner shall reimburse the Issuer for the amount of such Tax Benefit, it being understood that the taking of any action to realize any Tax Benefit shall be within the sole discretion of such Owner; provided, however, that for purposes of reimbursing the Issuer, such Owner shall calculate the amount of the Tax Benefit realized that is attributable to the Issuer’s or the Indenture Trustee’s payment of such Taxes on behalf of such Owner as if such Owner realized or received such Tax Benefit pro rata with all othe 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 A Note 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 A Note in connection with a United States trade or business for so long as it is an Owner.

(c)           Any Section 2.10(a) Amounts payable to an Owner hereunder shall be included in the Class A Increased Costs (i) for the Interest Accrual Period in respect of which the payment subject to withholding is made and (ii) to the extent remaining outstanding, each Interest Accrual Period thereafter until paid in full.  The Purchaser’s Agent, out of amounts received by it in respect of Class A 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 A 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).

(d)           If, in connection with an agreement or other document providing liquidity support, credit enhancement or other similar support to any Owner in connection with this Agreement or the funding or maintenance of its interest in the Class A Note or any interest therein hereunder, such Owner is required to compensate a bank or other financial institution in respect of Taxes under circumstances similar to those described in this Section 2.10, then the amounts payable to such Owner hereunder shall be increased to the extent necessary to yield to such Owner (after payment of all Taxes to such bank or other financial institutions) the amount stated to be payable to such Owner hereunder.

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ARTICLE III

CONDITIONS PRECEDENT TO OBLIGATION OF THE PURCHASER

SECTION 3.01.  Conditions Precedent to Initial Purchase.  The initial Purchase hereunder is subject to the condition precedent that the Purchaser’s Agent shall have received on or before the date of such purchase the items listed in Schedule 2, each (unless otherwise indicated) dated such date, in form and substance satisfactory to the Purchaser’s Agent and the Class A Note Purchaser.

SECTION 3.02.  Conditions Precedent to All Fundings.  Each Funding (including the initial Funding) by the Class A Note Purchaser and each Incremental Funding (each, a “Transaction”) shall be subject to the further conditions precedent that (a) with respect to any Funding (including the initial Funding) or Incremental Funding, the Servicer shall have delivered to the Purchaser’s Agent, on or prior to the date of such Funding or Incremental Funding in form and substance satisfactory to the Purchaser’s Agent, a Loan Request substantially in the form of Exhibit A, and containing such additional information as may be reasonably requested by the Purchaser’s Agent; (b) on the date of such Transaction the following statements shall be true and the Issuer shall be deemed to have certified that:

(i)            The representations and warranties contained in Sections 4.01 and 4.02 are true and correct on and as of such day as though made on and as of such date;

(ii)           No event has occurred and is continuing, or would result from such Transaction which constitutes an Early Amortization Event;

(iii)          On and as of such day, after giving effect to such Transaction, the outstanding Class A Note Principal Balance does not exceed the Class A Note Commitment and the outstanding Aggregate Note Principal Balance does not exceed the the sum of the Class A Note Commitment and the Class B 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 A Note Purchaser in accordance with the provisions hereof;

(vi)          McAfee & Taft shall have delivered to the Purchaser’s Agent its written opinion, dated the applicable Transfer Date, which shall state that it may be relied upon by subsequent Class A Noteholders, in form and substance satisfactory to the Purchaser’s Agent and the Class A Note Purchaser, with respect to FAA and recordation matters; and

(vii)         on the date of such Transaction, the Purchaser’s Agent shall have received such other approvals, opinions or documents as the Purchaser’s Agent may reasonably require.

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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 a Class A Noteholder pursuant to the Supplement, unless otherwise indicated) and warrants to, and agrees with, the Class A Note Purchaser that:

(i)            The Issuer is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware, with its chief executive office located at 2320 Marinship Way, Suite 300, Sausalito, California 94965, and has the power to own its assets and to engage in the activities in which it is presently engaged and is duly qualified and in good standing under the laws of each jurisdiction where its ownership of property or the conduct of its activities requires such qualification, if the failure to so qualify would have a material adverse effect on the financial condition of the Issuer or on the enforceability of the Class A Note or the ability of the Issuer to perform its obligations under this Agreement and the other Related Documents to which it is a party.  One hundred percent of the beneficial ownership of the Issuer is owned by Willis Lease Finance Corporation (“WLFC”).  The Issuer has no subsidiaries other than WLFC Funding (Ireland) Limited;

(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 A Note and the Class B Notes, have been duly executed and delivered by the Issuer, and each of the Class A Note and the Class B Notes, when issued in accordance with the terms hereof and of the Indenture and the Supplement, will have been duly executed and delivered;

(iii)          Each of the Issuer Documents (other than the Class A Note), assuming due authorization, execution and delivery by the other parties thereto, constitutes, and each of the Class A Note and the Class B Notes, when issued and authenticated in accordance with the terms of the Indenture, will constitute, a legal, valid and binding obligation of the Issuer, enforceable against the Issuer in accordance with its terms, except that such enforcement may be limited by (A) bankruptcy, insolvency, reorganization, moratorium or other similar laws (whether statutory, regulatory or decisional) now or hereafter in effect relating to creditors’ rights generally and (B) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law);

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(iv)          The consummation of the transactions contemplated by the Issuer Documents and the fulfillment of the terms therein will not conflict with or result in any breach of any of the terms and provisions of or constitute (with or without notice, lapse of time or both) a default under the certificate of formation or limited liability company agreement of the Issuer, or any indenture, agreement, mortgage, deed of trust, commitment letter or funding arrangement with any lending institution or investment bank or other instrument to which the Issuer is a party or by which it is bound, or result in the creation or imposition of any lien, claim or encumbrance upon any of its properties pursuant to the terms of such indenture, agreement, mortgage, deed of trust, commitment letter or funding arrangement with any lending institution or investment bank or other such instrument, other than as created pursuant to the Indenture and the Supplement, or violate any law or, any order, rule or regulation applicable to the Issuer of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Issuer or any of its properties and there are no legal or governmental proceedings pending or, to the best knowledge of the Issuer, threatened or contemplated that would result in a material modification or revocation thereof;

(v)           There are no litigation, proceedings or investigations to which the Issuer, or any Affiliate of the Issuer, is a party pending, or, to the knowledge of Issuer, threatened, before any court, regulatory body, administrative agency or other tribunal or governmental instrumentality (A) asserting the invalidity of the Class A Note or and the Class B Notes or the other Issuer Documents, (B) seeking to prevent the issuance of the Class A Note or the consummation of any of the transactions contemplated by the other Issuer Documents, or (C) seeking any determination or ruling that would materially and adversely affect the performance by the Issuer of its obligations under, or the validity or enforceability of; the Class A Note or and the Class B Notes or the other Issuer Documents;

(vi)          All approvals, authorizations, consents, orders or other actions of any person, corporation or other organization, or of any court, governmental agency or body or official, required in connection with the execution and delivery of the Issuer Documents by the Issuer and with the valid and proper authorization, issuance and sale of the Class A Note and the Class B Notes pursuant to this Agreement, have been or will be taken or obtained on or prior to the Effective Date;

(vii)         No written materials delivered to the Class A Note Purchaser by or on behalf of the Issuer in connection with the sale of 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 the Issuer or any Affiliate of the Issuer or, to the knowledge of the Issuer, any Lease Agreement, Lessee or Engine which the Issuer has not disclosed to the Purchaser’s Agent in writing which materially adversely affects or, so far as the Issuer can now reasonably foresee, will materially adversely affect the ability of the Issuer to perform the transactions contemplated hereby and by the other Related Documents;

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(viii)        The List of Engines to be created as of the Closing Date and each supplement thereto will be available to the Purchaser’s Agent by the Issuer and will be complete as of the date thereof and will include an accurate (in all material respects) description of the Engines;

(ix)           The representations and warranties made by the Issuer in the Issuer Documents are true and correct in all material respects and the Class A 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 A Note and the Class B Notes, have been paid;

(xi)           To the extent the Exchange Act may be deemed to apply to the Class A Note and the Class B Notes and the Loans, none of the transactions contemplated in the Issuer Documents (including, without limitation thereof; the use of the proceeds from the sale of the Class A Note) will violate or result in a violation of Section 7 of the Exchange Act, or any regulations issued pursuant thereto;

(xii)          Concurrently with the execution and delivery of this Agreement, the Issuer is executing no other note purchase agreement with respect to the Class A Note;

(xiii)         The Issuer is not an “investment company” within the meaning of the Investment Company Act of 1940, as amended;

(xiv)        For so long as the Series 2002-1 Class A and Class B Notes are the only Notes outstanding under the Indenture, each of the Indenture and the Supplement need 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 A Note and the Class B Notes;

(xvi)        To the extent that the Securities Act may be deemed to apply to the Class A Note and the Class B Notes and the Loans, neither the Issuer nor any affiliate (as defined in Rule 501(b) of Regulation D under the Securities Act (“Regulation D”)) of the Issuer has directly, or through any agent, including, without limitation, the Purchaser’s Agent, (i) sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of; any security (as defined in the Securities Act) which is or will be integrated with the sale of the Class A Note and the Class B Notes in a manner that would render the issuance and sale of the Class A Note or the Class B Notes a violation of the Securities Act or require the registration of the Class A Note or the Class B Notes under the Securities Act or (ii) engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offering of the Class A Note and the Class B Notes;

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(xvii)       To the extent that the Securities Act may be deemed to apply to the Class A Note and the Class B Notes and the Loans, it is not necessary in connection with the offer, sale and delivery of the Class A Note in the manner contemplated by this Agreement or the Class B Notes in the manner contemplated by the Class B Note Purchase Agreement to register the Class A Note or the Class B Notes under the Securities Act assuming that the Class A 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 A Note and the Class B Notes, as such payments become due and payable, in accordance with the Indenture;

(xx)          The Issuer agrees that it will not directly or indirectly, sell or offer to sell the Class A Note or the Class B Notes or similar security in a manner that would render the issuance and sale of the Class A Note or the Class B Notes pursuant to this Agreement a violation of Section 5 of the Securities Act.

SECTION 4.02.  Representations and Warranties and Agreements of WLFC.  WLFC hereby represents (as of the Effective Date and as of each date on which a Loan is made by a Class A Noteholder pursuant to the Indenture Supplement, unless otherwise indicated) and warrants to, and agrees with, the Class A Note Purchaser that:

(i)            The representations and warranties made by WLFC in this Class A Note Purchase Agreement, the Class B 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 A Note Purchaser shall be entitled to rely on such representations and warranties;

(ii)           No written materials delivered to the Class A Note Purchaser by or on behalf of WLFC in connection with the sale of the Class A Note or 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 WLFC or any Affiliate of WLFC or, to the knowledge of WLFC, any Lease Agreement, Lessee or Engine which WLFC had not disclosed to the Purchaser’s Agent in writing which materially affects adversely or, so far as WLFC can now reasonably foresee, will materially affect adversely the ability of WLFC to perform the transactions contemplated hereby and by the Base Indenture, the Indenture Supplement, the Servicing Agreement, the Class A Note and the Class B Notes;

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(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 A Note and the Class B Notes and the Loans, none of the transactions contemplated herein or in the Class B Note Purchase Agreement (including, without limitation thereof; the use of the proceeds from the sale of the Class A Note and the Class B Notes) will violate or result in a violation of Section 7 of the Exchange Act or any regulations issued pursuant thereto including, without limitation, Regulations T, U and X of the Federal Reserve Board, 12 C.F.R., Chapter II.  WLFC will not use any distribution from the Issuer of proceeds received by the Issuer from the sale of the Class A Note and the Class B Notes to purchase or carry, directly or indirectly, margin stock;

(v)           No event has occurred and is continuing that constitutes, or with the passage of time or the giving of notice or both would constitute a Servicer Event of Default or an Early Amortization Event under, and as defined in, the Servicing Agreement or the Indenture, respectively.  WLFC is not in violation in any material respect of any term of any agreement, charter instrument, bylaw or other instrument to which it is a party or by which it is or may be bound;

(vi)          The aggregate amount of Scheduled Payments payable by the Lessees under the Lease Agreements during each Collection Period is sufficient to cover the monthly Servicing Fee, and pay the principal and interest on the Class A Note and the Class B Notes, as such payments become due and payable, in accordance with the Indenture; and

(vii)         To the extent that the Securities Act may be deemed to apply to the Class A Note and the Class B Notes and the Loans, neither WLFC nor any affiliate (as defined in Rule 501(b) of Regulation D) of WLFC has directly, or through any agent, including, without limitation, the Purchaser’s Agent, (i) sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of; any security (as defined in the Securities Act) which is or will be integrated with the sale of the Class A Note and the Class B Notes in a manner that would render the issuance and sale of the Class A Note or the Class B Notes a violation of the Securities Act or require the registration of the Class A Note or the Class B Notes under the Securities Act or (ii) engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offering of the Class A Note and the Class B Notes.  It is not necessary in connection with the offer, sale and delivery of the Class A Note and the Class B Notes to register the Class A Note or the Class B Notes under the Securities Act.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

The Class A Note Purchaser hereby makes the following representations and warranties to the Issuer as of the Closing Date:

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SECTION 5.01.  Organization.  The Class A Note Purchaser has been duly organized and is validly existing and in good standing as a corporation under the laws of its jurisdiction of incorporation, with power and authority to own its properties and to transact the business in which it is now engaged, and the Class A Note Purchaser is duly qualified to do business and is in good standing in each State of the United States where the nature of its business requires it to be so qualified.

SECTION 5.02.  Authority, etc.  The Class A Note Purchaser has all requisite power and authority to enter into and perform its obligations under this Class A Note Purchase Agreement and to consummate the transactions contemplated hereby.  The execution and delivery by the Class A Note Purchaser of this Class A Note Purchase Agreement and the consummation by the Class A Note Purchaser of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action on the part of the Class A Note Purchaser.  This Class A Note Purchase Agreement has been duly and validly executed and delivered by the Class A Note Purchaser and constitutes a legal, valid and binding obligation of the Class A Note Purchaser, enforceable against the Class A Note Purchaser in accordance with its terms, subject as to enforcement to bankruptcy, reorganization, insolvency, moratorium and other similar laws of general applicability relating to or affecting creditors’ rights and to general principles of equity.  Neither the execution and delivery by the Class A Note Purchaser of this Class A Note Purchase Agreement nor the consummation by the Class A Note Purchaser of any of the transactions contemplated hereby, nor the fulfillment by the Class A 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 the Class A Note Purchaser or any Governmental Rule applicable to the Class A Note Purchaser or (ii) any term or provision of any indenture or other agreement or instrument, to which the Class A Note Purchaser is a party or by which the Class A Note Purchaser or any portion of its properties are bound.  No Governmental Action which has not been obtained is required by or with respect to the Class A Note Purchaser in connection with the execution and delivery of this Class A Note Purchase Agreement by the Class A Note Purchaser or the consummation by the Class A Note Purchaser of the transactions contemplated hereby or thereby.

SECTION 5.03.  Securities Act.

(a)           The Class A Notes purchased by the Purchaser’s Agent on behalf of the Class A Note Purchaser pursuant to this Class A Note Purchase Agreement will be acquired for investment only and not with a view to any public distribution thereof, and the Class A Note Purchaser will not offer to sell or otherwise dispose of its Class A 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 A Note Purchaser acknowledges that it has no right to require the Issuer to register the Class A Notes under the Securities Act or any other securities law. The Class A Note Purchaser agrees that the Class A Notes may not be reoffered, resold, pledged or otherwise transferred except in compliance with the Securities Act and to a person that the Class A 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 A

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Note Purchaser nor any of its 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 A Notes.

(b)           The Class A Note Purchaser is aware of the following:  (i) there are significant restrictions on and conditions to the transferability of the Class A Notes (and the Class A Notes will bear legends referring to such restrictions) and there is no market for the Class A Notes and no market is expected to develop for the Class A Notes, and accordingly, it may not be possible for the Class A Note Purchaser to liquidate the Class A Note Purchaser’s investment in the Class A 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 A Notes; (iii) there are numerous risks and uncertainties involved in the Class A Note Purchaser’s acquisition of the Class A Notes and the Class A Note Purchaser has been advised of and understands such risks and uncertainties; and (iv) any projections or predictions that may have been made available to the Class A Note Purchaser are based on estimates, assumptions, and forecasts which may prove to be incorrect; and no assurance is given that actual results will correspond with the results contemplated by the various projections.

(c)           The Class A Note Purchaser has knowledge and experience in financial and business matters, is capable of evaluating the merits and risks of an investment in the Class A Notes and has carefully considered the suitability of an investment in such Notes and has determined that the Class A Notes are a suitable investment.  The Class A Note Purchaser has received and carefully read the Transaction Documents and the Class A Note Purchaser confirms that all documents, records and books pertaining to the Class A Notes, the Issuer and its assets and the other parties to the Transaction Documents which are relevant to the Class A Note Purchaser’s investment decision have been made available to the Class A Note Purchaser.  The Class A Note Purchaser is capable of bearing the risks and burdens of its investment in the Class A Notes and is aware that an early redemption of the Class A Notes may occur and that no premium will be paid upon any early redemption.

SECTION 5.04.  Investment Company Act.

(a)           Neither the Class A Note Purchaser nor the Purchaser’s Agent is required to register as an “investment company” nor is the Class A Note Purchaser or the Purchaser’s Agent controlled by an “investment company” within the meaning of the Investment Company Act.

(b)           The Class A Note Purchaser and the Purchaser’s Agent acknowledge that the Issuer has not registered as an investment company under the Investment Company Act.  In connection with the exclusion of the Issuer from classification as an investment company under the Investment Company Act, the Class A Note Purchaser represents that it constitutes no more than seven “beneficial owners” of the Class A Notes for purposes of Section 3(c)(1) of the Investment Company Act.  The Class A Note Purchaser further represents that:  (i) it is investing no more than 40% of its assets in the Class A Notes; (ii) it was not formed for the purpose of investing in the Class A Notes; (iii) (a) the shareholders, partners or other holders of equity or beneficial interests in the Class A Note Purchaser are not able to decide individually whether to acquire the Class A 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

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much will be invested in investments on their behalf; (iv) it is acquiring the Class A Notes in a principal amount of not less than the minimum denominations set forth in the Indenture; and (v) it is acquiring the Class A Notes for investment and not for sale in connection with any distribution thereof.  The Class A Note Purchaser further understands and agrees that it will not permitted to transfer any or all of the Class A 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 A Notes for the benefit of any person or account and it will be the sole beneficial owner of the Class A 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 A Notes.

SECTION 5.05.  Pledge to Liquidity Providers.  The Issuer recognizes the obligations of the Class A Note Purchaser under the terms of the Liquidity Agreement and hereby consents to the transfer of the Class A Notes to the Liquidity Providers when required and in accordance with the terms of the Liquidity Agreement; provided that each of the Liquidity Providers shall be a QIB, each Liquidity Provider shall be only one beneficial owner of the Class A Notes for purposes of the Investment Company Act and that the total number of Liquidity Providers shall not at any time exceed 10, and each Liquidity Provider shall have delivered to the Issuer and the Indenture Trustee on or before the later of the date hereof and the date on which it first becomes a Liquidity Provider, an investment letter making representations and warranties substantially identical to those set forth in the form of Exhibit B to the Indenture.  If at any time the number of Liquidity Providers shall exceed one, the Purchaser’s Agent shall notify the Issuer and the Indenture Trustee of the additional Liquidity Providers and that each such  Liquidity Provider represents only one beneficial owner for the purposes of the Investment Company Act.  Transfers of the Class A Notes under the terms of the Liquidity Agreement shall be subject to the terms of this Section 5.05, but shall not otherwise be subject to the transfer restrictions set forth in the Indenture.

ARTICLE VI

COVENANTS OF THE ISSUER

SECTION 6.01.  Rating of Class A Note Purchaser’s Commercial Paper Notes.  To the extent that any rating provided with respect to the Class A Note Purchaser’s Commercial Paper Notes by any rating agency is conditional upon the furnishing of documents or the taking of any other action by the Issuer, the Issuer shall take all reasonable actions to furnish such documents and take any such other action.

SECTION 6.02.  Information from the Issuer.  So long as the Class A Note Purchaser shall own the Class A Notes, the Issuer will furnish to the Class A Note Purchaser and the Purchaser’s Agent:

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(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 the Class A Note Purchaser or Purchaser’s Agent may from time to time reasonably request without unreasonable expense to the Issuer;

(c)           such publicly available information, documents, records or reports respecting the Issuer or the condition or operations, financial or otherwise of the Issuer as the Class A Note Purchaser or Purchaser’s Agent may from time to time reasonably request;

(d)           as soon as possible and in any event within five Business Days after the occurrence thereof, notice of (i) the occurrence of any Event of Default, (ii) the occurrence of any Early Amortization Event, (iii) any fact, condition or event which, with the giving of notice or the passage of time or both, would become an Event of Default, (iv) any fact, condition or event which, with the giving of notice or the passage of time or both, would become a 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 A 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 A Note Purchaser or the Purchaser’s Agent, or its agents or representatives to:

(a)           examine all books, records and documents (including computer tapes and disks) in the possession or under the control of the Issuer relating to the Collateral, and

(b)           visit the offices and property of the Issuer for the purpose of examining the materials described in clause (a) above.

Except as provided in Section 10.05 hereof, any information obtained by the Class A Note Purchaser or the Purchaser’s Agent pursuant to this Section 6.03 shall be held in confidence by the Class A Note Purchaser or Purchaser’s Agent unless such information (i) has become available to the public, (ii) is required or requested by any Governmental Authority or in any court proceeding, or (iii) is required by any Governmental Rule to be disclosed or otherwise made available and, in the case of (ii) and (iii) such disclosure shall be only to the extent required.

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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 A Note and the Class B Notes in a manner that would require the registration under the Securities Act of the sale to the Class A Note Purchaser and the Class B Note Purchasers of the Class A Note and the Class B Notes, respectively.

ARTICLE VII

MUTUAL COVENANTS AND AGREEMENTS

SECTION 7.01.  Legal Conditions to Closing.  The Class A Note Purchaser, the Purchaser’s Agent, the Issuer, and the Servicer will take all reasonable actions necessary to comply promptly with all legal requirements which may be imposed on any of them with respect to the Closing (including satisfaction of the conditions contained in this Class A Note Purchase Agreement), and will promptly cooperate with and furnish information to one another in connection with any such legal requirements.  The Class A Note Purchaser, the Purchaser’s Agent, the Issuer, and the Servicer will take all reasonable action necessary to obtain (and will cooperate with one another in obtaining) any consent, authorization, permit, license, franchise, order or approval of, or any exemption by, any Governmental Authority or any other Person, required to be obtained or made by it in connection with any of the transactions contemplated by this Class A 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 A 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 A Note Purchase Agreement, the Class A Note Purchaser, the Purchaser’s Agent, the Issuer and the Servicer will do, execute and perform all such other acts, deeds and documents as the other party may from time to time reasonably require in order to carry out the intent of this Class A Note Purchase Agreement.

ARTICLE VIII

INDEMNIFICATION

SECTION 8.01.  Indemnification by the Issuer.  The Issuer agrees to indemnify and hold harmless the Class A Note Purchaser and the Purchaser’s Agent, the Sheffield Purchasers (including any Persons who are participants with any such Sheffield Purchasers) and any other Owners and any of their respective officers, directors, employees, agents,

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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 A 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 A Note Purchase Agreement in respect of, arising out of, or involving a claim made by any Person against the Indemnified Party (a “Third Party Claim”), such Indemnified Party must notify the Issuer in writing of the Third Party Claim within five Business Days of receipt of a summons, complaint or other notice of the commencement of litigation and within ten Business Days after receipt by such Indemnified Party of any other written notice of the Third Party Claim.  Thereafter, the Indemnified Party shall deliver to the Issuer, within a reasonable time after the Indemnified Party’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnified Party relating to the Third Party Claim.

SECTION 8.03.  Defense of Claims.  If a Third Party Claim is made against an Indemnified Party, (a) the Issuer will be entitled to participate in the defense thereof and, (b) if it so chooses, to assume the defense thereof with counsel selected by the Issuer, provided that in connection with such assumption (i) such counsel is not reasonably objected to by the Indemnified Party and (ii) the Issuer first admits in writing its liability to indemnify the Indemnified Party with respect to all elements of such claim in full.  Should the Issuer so elect to assume the defense of a Third Party Claim, none of the Issuer will be liable to the Indemnified Party for any legal expenses subsequently incurred by the Indemnified Party in connection with the defense thereof.  If the Issuer elects to assume the defense of a Third Party Claim, the Indemnified Party will (i) cooperate in all reasonable respects with the Issuer in connection with such defense and (ii) not admit any liability with respect to, or settle, compromise or discharge, such Third Party Claim without the Issuer’s prior written consent.  If the Issuer shall assume the defense of any Third Party Claim, the Indemnified Party shall be entitled to participate in (but not control) such defense with its own counsel at its own expense.  If the Issuer does not assume the defense of any such Third Party Claim, the Indemnified Party may defend the same in such manner as it may deem appropriate, including settling such claim or litigation after giving notice to the Issuer of such terms and, the Issuer will promptly reimburse the Indemnified Party upon written request.

ARTICLE IX

THE PURCHASER’S AGENT

SECTION 9.01.  Authorization and Action.  Each Sheffield Owner hereby accepts the appointment of Barclays Bank PLC, as Purchaser’s Agent hereunder, and authorizes the Purchaser’s Agent to take such action as agent on its behalf and to exercise such powers as are

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delegated to the Purchaser’s Agent by the terms hereof, together with such powers as are reasonably incidental thereto.  The Purchaser’s Agent reserves the right, in its sole discretion, to take any actions, exercise any rights or remedies under this Class A Note Purchase Agreement and any related agreements and documents.  Except for actions which the Purchaser’s Agent is expressly required to take pursuant to this Class A Note Purchase Agreement or the Revolving Asset Purchase Agreement the Purchaser’s Agent shall not be required to take any action which exposes the Purchaser’s Agent to personal liability or which is contrary to applicable law unless the Purchaser’s Agent shall receive further assurances to its satisfaction from the Sheffield Owners of the indemnification obligations under Section 9.04 hereof against any and all liability and expense which may be incurred in taking or continuing to take such action.  The Purchaser’s Agent agrees to give to each Sheffield 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 A Note Purchase Agreement or the Indenture.  Subject to Section 9.06 hereof, the appointment and authority of the Purchaser’s Agent hereunder shall terminate upon the payment to (a) each Sheffield Owner of all amounts owing to such Owner hereunder and (b) the Purchaser’s Agent of all amounts due hereunder.

SECTION 9.02.  Purchaser’s Agent’s Reliance, Etc.  Neither the Purchaser’s Agent nor any of its directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them as Purchaser’s Agent under or in connection with this Class A Note Purchase Agreement or any related agreement or document, except for its or their own gross negligence or willful misconduct.  Without limiting the foregoing, the Purchaser’s Agent:  (i) may consult with legal counsel, independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (ii) makes no warranty or representation to any Sheffield Owner and shall not be responsible to any Sheffield Owner for any statements, warranties or representations made by the Issuer, the Servicer or the Indenture Trustee in connection with this Class A 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 A 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 Sheffield Owner for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Class A 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 A Note Purchase Agreement by acting upon any notice (including notice by telephone), consent, certificate or other instrument or writing (which may be by telex) believed by it in good faith to be genuine and signed or sent by the proper party or parties.

SECTION 9.03.  Purchaser’s Agent and Affiliate.  Barclays Bank PLC and its Affiliates may generally engage in any kind of business with the Issuer or the Servicer, any of their respective Affiliates and any Person who may do business with or own securities of the Issuer or the Servicer or any of its Affiliates, all as if Barclays Bank PLC were not the Purchaser’s Agent and without any duty to account therefor to the Sheffield Owners.

SECTION 9.04.  Indemnification.  Each Sheffield Owner severally agrees to indemnify the Purchaser’s Agent (to the extent not reimbursed by the Issuer or the Servicer),

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from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, or reasonable out-of-pocket expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Purchaser’s Agent in any way relating to or arising out of this Class A Note Purchase Agreement or any action taken or omitted by the Purchaser’s Agent under this Class A Note Purchase Agreement; provided, that (i) a Sheffield Owner shall not be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting or arising from the Purchaser’s Agent’s gross negligence or willful misconduct and (ii) a Sheffield 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 A Note Purchaser and the majority of the Sheffield Purchasers (based on purchase commitments under the Revolving Asset Purchase Agreement).  Without limitation of the generality of the foregoing, each Sheffield Owner agrees to reimburse the Purchaser’s Agent, promptly upon demand, for any reasonable out-of-pocket expenses (including reasonable counsel fees) incurred by the Purchaser’s Agent in connection with the administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Class A Note Purchase Agreement; provided, that no Sheffield Owner shall be responsible for the costs and expenses of the Purchaser’s Agent in defending itself against any claim alleging the gross negligence or willful misconduct of the Purchaser’s Agent to the extent such gross negligence or willful misconduct is determined by a court of competent jurisdiction in a final and non-appealable decision.

SECTION 9.05.  Purchase Decision.  Each Sheffield Owner acknowledges that it has, independently and without reliance upon the Purchaser’s Agent, any other Sheffield 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 A Note Purchase Agreement and to purchase an interest in the Class A Notes.  Each Sheffield Owner also acknowledges that it will, independently and without reliance upon the Purchaser’s Agent, any other Sheffield 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 A Note Purchase Agreement or any related agreement, instrument or other document.

SECTION 9.06.  Successor Purchaser’s Agent.  (a) The Purchaser’s Agent may resign at any time by giving sixty days’ written notice thereof to the Sheffield Owners, the Issuer, the Servicer and the Indenture Trustee.  Upon any such resignation, a majority of the Sheffield Owners shall have the right to appoint a successor Purchaser’s Agent approved by the Issuer (which approval will not be unreasonably withheld or delayed).  If no successor Purchaser’s Agent shall have been so appointed by a majority of the Sheffield Owners and shall have accepted such appointment, within sixty days after the retiring Purchaser’s Agent’s giving of notice or resignation, then the retiring Purchaser’s Agent may, on behalf of the Sheffield Owners appoint a successor Purchaser’s Agent.  If such successor Purchaser’s Agent is not an Affiliate of Barclays Bank PLC, such successor Purchaser’s Agent shall be subject to the Issuer’s prior written consent.  Upon the acceptance of any appointment as Purchaser’s Agent hereunder by a successor Purchaser’s Agent, such successor Purchaser’s Agent shall thereupon succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Purchaser’s Agent, and the retiring Purchaser’s Agent shall be discharged from its duties and obligations

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under this Class A Note Purchase Agreement.  After any retiring Purchaser’s Agent’s resignation or removal hereunder as Purchaser’s Agent, the provisions of this Article IX shall inure to its benefit as to any actions taken or omitted to be taken by it while it was an Purchaser’s Agent under this Class A Note Purchase Agreement.

ARTICLE X

MISCELLANEOUS

SECTION 10.01.  Amendments.  No amendment or waiver of any provision of this Class A Note Purchase Agreement shall in any event be effective unless (i) the same shall be in writing and signed by all of the parties hereto and (ii) each rating agency then rating the Commercial Paper Notes shall have confirmed that such amendment will not result in a reduction or withdrawal of its then effective rating of the Commercial Paper Notes, 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 A Note Purchaser:

Sheffield Receivables Corporation

c/o Barclays Bank PLC

222 Broadway

New York, New York 10038

Attention:  Asset Securitization Group

Telephone No.  (212) 412-3266

Telecopier No.  (212) 412-6846

If to the Issuer:

Willis Engine Funding LLC

2320 Marinship Way

Suite 300

Sausalito, California 94965

Telephone No.  (415) 331-5281

Telecopier No.  (415) 331-5167

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If to Purchaser’s Agent:

Barclays Bank PLC

222 Broadway

New York, New York 10038

Attention:  Asset Securitization Group

Telephone No.  (212) 412-3266

Telecopier 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 A Note Purchase Agreement shall be binding upon and inure to the benefit of the Issuer, the Purchaser’s Agent and the Class A Note Purchaser and their respective successors and assigns (including any subsequent holders of the Class A 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 A Note Purchaser.  The Issuer acknowledges that the Class A Note Purchaser may at any time assign any and all of its rights hereunder to the Sheffield Owners.  This Class A 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 A Notes shall have been paid in full.

SECTION 10.05.  Provision of Documents and Information.  The Issuer acknowledges and agrees that the Class A Note Purchaser and the Purchaser’s Agent are permitted to provide to the Sheffield Purchasers, the placement agents for the Class A Note Purchaser’s Commercial Paper Notes, the rating agencies of the Class A Note Purchaser’s Commercial Paper Notes and other liquidity and credit providers under the Class A Note Purchaser’s Commercial Paper Note program, opinions, certificates, documents and other information relating to the Issuer, the Indenture Trustee and the Servicer and the Collateral delivered to the Class A Note Purchaser or Purchaser’s Agent pursuant to this Class A Note Purchase Agreement.  In addition, the Issuer, the Indenture Trustee and the Servicer agree that any successors or assignees of the Class A Note Purchaser will be entitled to receive the same opinions, certificates, documents and other information from the Issuer, the Indenture Trustee, the Servicer and their respective agents and representatives as the Class A Note Purchaser or Purchaser’s Agent under this Class A Note Purchase Agreement.  The Purchaser’s Agent agrees not to provide any of the foregoing materials or information to any of the Sheffield Purchasers, the other liquidity and credit providers under the Class A Note Purchaser’s Commercial Paper Program or the dealers or placement agents of the Class A Note Purchaser’s Commercial Paper Notes unless such party has agreed to hold such materials or information in confidence in accordance with the standard set forth in Section 6.03 hereof.

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SECTION 10.06.  GOVERNING LAW; JURISDICTION.  THIS CLASS A 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 A NOTE PURCHASE AGREEMENT HEREBY AGREES TO THE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND ANY APPELLATE COURT HAVING JURISDICTION TO REVIEW THE JUDGMENTS THEREOF.  EACH OF THE PARTIES HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY OF THE AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.

SECTION 10.07.  No Proceedings.

(a)           The Issuer agrees that so long as any of the Class A Note Purchaser’s Commercial Paper 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 A Note Purchaser’s Commercial Paper Notes shall have been outstanding, it shall not file, or join in the filing of, a petition against the Class A Note Purchaser under the Federal Bankruptcy Code, or join in the commencement of any bankruptcy, reorganization, arrangement, insolvency, liquidation or other similar proceeding against the Class A Note Purchaser.

(b)           Each of the Class A Note Purchaser and the Purchaser’s Agent agrees that so long as any of the Class A 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 A 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 A 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 A Note Purchaser or any Sheffield Purchaser under this Class A Note Purchase Agreement, or any other agreement, instrument, document or certificate executed and delivered by or issued by the Class A Note Purchaser or any such Sheffield Purchaser or any officer thereof are solely the corporate obligations of the Class A Note Purchaser or any such Sheffield Purchaser.  No recourse shall be had for payment of any fee or other obligation or claim arising out of or relating to this Class A Note Purchase Agreement or any other agreement, instrument, document or certificate executed and delivered or issued by the Class A Note Purchaser or any Sheffield Purchaser or any officer thereof in connection therewith, against any stockholder, employee, officer, director or incorporator of the Class A Note Purchaser or any such Sheffield Purchaser.

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SECTION 10.10.  Limited Recourse.  The obligations of the Issuer under this Class A Note Purchase Agreement shall be payable only out of the Collateral and the Class A Note Purchaser shall not look to any property or assets of the Issuer, other than to the Collateral remaining after all obligations of the Issuer under the Indenture are satisfied. To the extent that the proceeds of the Collateral after application in accordance with the provisions of the Indenture are insufficient to satisfy the obligations of the Issuer under the Indenture and under this Agreement, the Issuer shall have no further obligation in respect hereof and any remaining outstanding obligation shall be extinguished.

SECTION 10.11.  Survival.  All representations, warranties, guaranties and indemnifications (including the payment obligations in Section 9.04 hereof) contained in this Class A 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 A 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 A Note Purchase Agreement.

SECTION 10.13.  Appointment of Agent for Service of Process.  The Issuer hereby appoints CT Corporation Systems having an address at 1633 Broadway, New York, New York 10019 as its agent for service of process in the State of New York.

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IN WITNESS WHEREOF, the parties have caused this Class A 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
SHEFFIELD RECEIVABLES CORPORATION,
as Class A Note Purchaser
By:  Barclays Bank PLC, as Attorney in Fact
By:	/s/ JANETTE LIEU
		Name: Janette Lieu
		Title: Associate Director
BARCLAYS BANK PLC,
as Purchaser’s Agent
By:	/s/ PIERRE DULEYRIE
		Name:  Pierre Duleyrie
		Title: Director

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SCHEDULE 1

Account to which cash payments shall be made:

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

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SCHEDULE 2

Conditions of the Class A Note Purchaser’s Obligation.  The Class A Note Purchaser’s obligation to make the initial Loan shall be subject to the accuracy in all material respects of the representations and warranties of the Issuer and WLFC in each of the Series 2002-1 Transaction Documents, to the performance in all material respects by WLFC and the Issuer of their respective obligations thereunder, to the satisfaction of all of the conditions precedent set forth in Sections 5.1 and 5.2 of the Indenture Supplement and to the following additional conditions:

(a)           All of the respective representations and warranties of the Issuer under the Issuer Documents and of WLFC under the WLFC Documents shall be true and correct in all material respects as of the date made, and no event shall have occurred which, with notice or the passage of time, would constitute an Event of Default under the Indenture or an Early Amortization Event under the Indenture and each of such Issuer Documents and WLFC Documents shall have been duly authorized, executed and delivered and shall be in full force and effect;

(b)           Cooley Godward LLP shall have delivered to the Purchaser’s Agent its written opinion, dated the Closing Date, which shall state that it may be relied upon by subsequent Class A Noteholders, in form and substance satisfactory to the Purchaser’s Agent and the Class A Note Purchaser, with respect to the Deal Documents;

(c)           Ray Quinney & Nebeker shall have delivered to the Purchaser’s Agent its written opinion, dated the initial Transfer Date, which shall state that it may be relied upon by subsequent Class A Noteholders, in form and substance satisfactory to the Purchaser’s Agent and the Class A Note Purchaser, 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 Purchaser’s Agent its written opinions, dated the Closing Date, in form and substance satisfactory to the Purchaser’s Agent and the Class A Note Purchaser;

(e)           Gibson, Dunn & Crutcher LLP, counsel for WLFC and the Issuer, shall have delivered to the Purchaser’s Agent its written opinions, dated the Closing Date, in form and substance satisfactory to the Purchaser’s Agent and the Class A Note Purchaser;

(f)            Emmet, Marvin & Martin, counsel to the Indenture Trustee, shall have furnished to the Purchaser’s Agent and to the Issuer its written opinion, dated the Closing Date, in form and substance satisfactory to the Purchaser’s Agent and the Class A Note Purchaser;

(g)           The Issuer shall have furnished to the Purchaser’s 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 A Note Purchaser (other than projections and other estimates) did not contain any untrue statement of a material fact, and any estimates or projections so supplied to the Class A 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 Purchaser’s 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 A Note Purchaser (other than projections and other estimates) did not contain any untrue statement of a material fact in light of the circumstances under which they were made, and any estimates or projections so supplied to the Class A Note Purchaser 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 A Note Purchaser’s reasonable opinion would make it illegal for the Issuer to issue and sell the

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Class A Note 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 Senior Asset Base as of the Closing Date shall be not less than the Outstanding Obligations in respect of the Class A Note;

(n)           The Issuer, WLFC, the Class A Note Purchaser and the Indenture Trustee shall each have received a fully executed counterpart original and any required conformed copies of all Related Documents delivered at or prior to the Closing Date;

(o)           All corporate, trust and other proceedings in connection with the sale of the Class A Note and the transactions contemplated hereby and all documents and certificates incident thereto shall be satisfactory in form and substance to the Class A Note Purchaser and its counsel, and the Class A Note Purchaser shall have received such other documents and certificates incident to such transaction as the Class A Note Purchaser or such counsel shall reasonably request;

(p)           WLFC shall have furnished to the Class A Note Purchaser or to the Purchaser’s 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 A Note Purchaser and the Purchaser’s 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 A Note Purchaser and the Purchaser’s 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 A Note Purchaser or the Purchaser’s Agent shall have received the following, in each case in form and substance satisfactory to them and their special counsel:

(i)            a copy of resolutions of the Board of Directors of the Issuer, certified by the Secretary or an Assistant Secretary of the Issuer as of the Effective Date, duly authorizing the issuance, sale and delivery of the Class A Note by the Issuer and the execution, delivery and performance by the Issuer of the Issuer Documents and any other Related Documents to which it is a party and any other documents executed by or on behalf of the Issuer in connection with the transactions contemplated hereby; and an incumbency certificate of the Issuer as to the person or persons executing and delivering each such document;

(ii)           a copy of resolutions of the Board of Directors of WLFC, certified by the Secretary or an Assistant Secretary of WLFC as of the Effective Date, duly authorizing the execution, delivery and performance by WLFC of the WLFC Documents

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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 A Note Purchaser may reasonably request in order to establish the corporate existence and good standing of each thereof; the proper taking of all appropriate corporate proceedings in connection with the transactions contemplated hereby and the compliance with the conditions set forth herein; and

(r)            The Class A Note Purchaser 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 A Note Purchaser’s special counsel, advisable in connection with the transactions contemplated herein shall have been delivered to the Class A Note Purchaser.

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EX-10.30

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

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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

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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

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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.

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“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.

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“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

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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

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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;

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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;

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(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

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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;

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(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;

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(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;

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(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

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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

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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.

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(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.

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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

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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.

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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.

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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

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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,

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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

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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

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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.

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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.

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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

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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

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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

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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.

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EX-10.31

Exhibit 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

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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

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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

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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

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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.

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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.

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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,

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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.

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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, 8^th Floor West, Asset Backed Finance Unit, New York, New York 10286.

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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.

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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;

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(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

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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.

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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,

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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

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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.

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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.

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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.

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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.

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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.

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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

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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.

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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.

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(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.

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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

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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.

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(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

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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

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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

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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

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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

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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).

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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.

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(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)

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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

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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

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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

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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.

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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

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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

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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

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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

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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;

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(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

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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.

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(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);

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(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.

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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

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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

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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

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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.

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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

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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.

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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

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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

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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

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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.

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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.

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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

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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.

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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.

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(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.

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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.

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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

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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;

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(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

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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.

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(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.

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(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.

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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

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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.

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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

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EX-10.32

Exhibit 10.32

EXECUTION COPY

CUSTODIAL AGREEMENT

This Custodial Agreement, dated as of September 12, 2002 (this “Custodial Agreement”), is entered into by and among BNY MIDWEST TRUST COMPANY, an Illinois corporation (the “Custodian”), WILLIS ENGINE FUNDING LLC, a Delaware limited liability company (the “Issuer”), WILLIS LEASE FINANCE CORPORATION, a Delaware corporation, as Servicer (the “Servicer”), THE BANK OF NEW YORK, as Indenture Trustee (the “Indenture Trustee”) and BARCLAYS BANK PLC , as Deal Agent (the “Deal Agent”) for the Noteholders.

RECITALS

WHEREAS, Issuer, Servicer, the Purchasers, Deal Agent and Indenture Trustee have entered into various agreements relating to the issuance by the Issuer of the Series 2002-1 Notes pursuant to that certain Indenture dated as of September 12, as supplemented by the Series 2002-1 Supplement dated as of September 12, 2002 (the “Supplement”) (as supplemented by the Supplement, the “Indenture”), including without limitation the Servicing Agreement dated as of September 12, 2002 (the “Servicing Agreement”), the Contribution and Sale Agreement dated as of September 12, 2002 (the “Contribution Agreement”), and other documents and instruments ancillary thereto (the Indenture, Supplement, Servicing Agreement, Contribution Agreement and such other documents and instruments ancillary thereto, each as further amended, restated, modified or supplemented from time to time, the “Securitization Facility Agreements”);

WHEREAS, pursuant to the terms of the Securitization Facility Agreements and other documents executed in connection therewith, Issuer is obligated to deliver possession of each Deliverable, Deliverable Package, the Collateral Files and the collateral therein and Possessory Collateral (each as defined below), to Indenture Trustee and to perfect the security interest of Indenture Trustee for the benefit of the Noteholders;

WHEREAS, Issuer and Indenture Trustee have requested Custodian to serve as the bailee of Indenture Trustee with regard to the Collateral Files and the collateral therein and Possessory Collateral during the term of the Securitization Facility Agreements and to provide for perfection of the security interest of Indenture Trustee according to the terms and conditions of this Custodial Agreement;

WHEREAS, Custodian has agreed to serve as Custodian for Indenture Trustee with regard to each Collateral File and the collateral therein and Possessory Collateral;

WHEREAS, Custodian is a financial institution regulated by the Comptroller of the Currency;

NOW, THEREFORE, in consideration of their mutual agreements, the parties agree as follows:

I.Definitions.  Capitalized terms used in this Custodial Agreement are used as defined in this Section I and are to be construed as including the plural as well as the singular forms of such terms.  Additional definitions may be found throughout this Custodial Agreement.  Capitalized terms used, but not defined in this Custodial Agreement, are used as defined in the Securitization Facility Agreements.

As used in this Custodial Agreement, the following terms will have the following meanings:

“Alternative Delivery” shall mean any delivery to a Lessee of an Engine or execution by a Lessee of any Lease that is not a Funding or a Remarketing.

“Alternative Delivery Deliverable” shall mean any item listed on Schedule 3 hereto and related to the applicable Engine.

“Alternative Delivery Package” shall mean an Alternative Delivery Package delivered to Custodian and containing any Alternative Delivery Deliverable required to be delivered to Custodian.

“Business Day” shall mean any day on which banks are not authorized or required to close in New York City, New York, Chicago, Illinois or San Francisco, California.

“Collateral File” shall mean, with respect to any Funding, Remarketing or Alternative Delivery, all of the Deliverables listed on the applicable Collateral Schedule, and any and all other documents held by Custodian related to such Funding, Remarketing, or Alternative Delivery.

“Collateral Schedule” shall mean a schedule related to the applicable Engine containing the Deliverables set forth in Schedule 1, Schedule 2 or Schedule 3 hereto, as applicable.

“Deliverable” shall mean any item listed on any Collateral Schedule.

“Deliverable Package” shall mean any Funding Package, Remarketing Package, Alternative Delivery Package or package containing a Subsequent Deliverable, as the case may be.

“Funding” shall mean any financing of an Engine to be owned by the Issuer or an Owner Trust the Beneficial Interest in which will be owned by the Issuer.

“Funding Deliverable” shall mean any item listed on Schedule 1 hereto and related to the applicable Engine.

“Funding Package” shall mean a Funding Package delivered to Custodian and containing any Funding Deliverable required to be delivered to Custodian.

“Obligations” shall mean all obligations and liabilities of Issuer to Indenture Trustee under the Securitization Facility Agreements and all documents executed in

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connection with the Securitization Facility Agreements, as each may be amended, restated or otherwise modified from time to time, including without limitation any promissory notes executed in connection therewith, as such notes may be amended, restated or otherwise modified from time to time.

“Possessory Collateral” shall mean any instruments or security documents a security interest in which must be perfected by control (as such term is defined in the applicable UCC) and which serves as collateral for or evidences any Funding, Remarketing, or Alternative Delivery.

“Remarketing” shall mean any Subsequent Lease Transaction.

“Remarketing Deliverable” shall mean any item listed in Schedule 2 hereto and related to the applicable Engine.

“Remarketing Package” shall mean a Remarketing Package delivered to Custodian and containing any Remarketing Deliverable required to be delivered to Custodian.

II.Deliveries.

A.            Deliveries related to any Funding.

1.             In connection with each Funding, Issuer will deliver or will cause to be delivered to Custodian a Collateral File relating to such Funding, containing the deliverables identified in the Funding Deliverable Schedule (the “Funding Deliverable Schedule”) attached hereto as Schedule 1, each to be delivered within the applicable time period as set forth on such schedule opposite the related Funding Deliverable under the column titled “Due Date”.

2.             On or prior to 4:30 p.m. (New York time) on the Business Day prior to each Funding, Servicer will execute and deliver or cause to be delivered to Custodian, together with the related initial Funding Package, a certificate from a duly authorized officer of the Servicer, certifying that (A) it has delivered to the Custodian the Funding Deliverables numbered 1 and 2 on Schedule 1 hereto, (B) any Funding Deliverable not contained in the initial Funding Package will be delivered within the applicable time period set forth on Schedule 1 hereto and (C) each Funding Deliverable delivered or to be delivered relates or will relate to the applicable Engine (such Engine to be clearly identified in such certificate by the Engine’s manufacturer’s serial number) and is in form and substance required under the Securitization Facility Agreements.

B.Deliveries related to any Remarketing.

1.             In connection with each Remarketing, Issuer will deliver or will cause to be delivered to Custodian a Collateral File relating to such Remarketing, containing the deliverables identified in the Remarketing Deliverable Schedule (the “Remarketing Deliverable Schedule”) attached hereto as Schedule 2, each to be delivered

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within the applicable time period as set forth on such schedule opposite the related Remarketing Deliverable under the column titled “Due Date”.

2.             On or prior to 4:30 p.m. (New York time) on the Business Day prior to the date of each Remarketing, Servicer will execute and deliver or cause to be delivered to Custodian, together with the related initial Remarketing Package, a report from a duly designated representative of the Servicer, stating that (A) it has delivered to the Custodian the Remarketing Deliverable numbered 1 on Schedule 2 hereto, (B) any Remarketing Deliverable not contained in the initial Remarketing Package will be delivered within the applicable time period set forth on Schedule 2 hereto and (C) each Remarketing Deliverable delivered or to be delivered relates or will relate to the applicable Engine (such Engine to be clearly identified in such certificate by the Engine’s manufacturer’s serial number) and is in form and substance required under the Securitization Facility Agreements.

C.Deliveries related to any Alternative Delivery.

1.             In connection with each Alternative Delivery, Issuer will deliver or will cause to be delivered to Custodian a Collateral File relating to such Alternative Delivery, containing the deliverables identified in the Alternative Delivery Deliverable Schedule attached hereto as Schedule 3 or in such other schedule approved by the Deal Agent and delivered by Issuer to Custodian one (1) Business Day prior to the related Alternative Delivery (the “Alternative Delivery Deliverable Schedule”), each to be delivered within the applicable time period as set forth on such schedule opposite the related Alternative Delivery Deliverable under the column titled “Due Date”.

2.             On or prior to 4:30 p.m. (New York time) on the Business Day prior to each Alternative Delivery, Servicer will execute and deliver or cause to be delivered to Custodian, together with the related initial Alternative Delivery Package, a report from a duly designated representative of the Servicer, stating that (A) it has delivered to the Custodian the Alternative Delivery Deliverables required to be delivered on or prior to the applicable Alternative Delivery as listed on Schedule 3 hereto, (B) any Alternative Delivery Deliverable not contained in the initial Alternative Delivery Package will be delivered within the applicable time period set forth on Schedule 3 hereto and (C) each Alternative Delivery Deliverable delivered or to be delivered relates or will relate to the applicable Engine (such Engine to be clearly identified on such certificate by the Engine’s manufacturer’s serial number) and is in form and substance required under the Securitization Facility Agreements.

D.Subsequent Deliverables.  Subsequent to the date of the receipt of any Deliverable Package, Issuer will deliver (or will cause to be delivered) to Custodian subsequent documents, certificates or instruments (each a “Subsequent Deliverable”) necessary to complete the related Collateral File, together with a report (with copies of such report to the Deal Agent and Indenture Trustee) from a duly designated representative of the Servicer, stating that (A) the Subsequent Deliverable is being delivered within the applicable time period set forth on the applicable Collateral Schedule and (B) the Subsequent Deliverable relates to the applicable Engine (such Engine to be

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clearly identified on such certificate by the Engine’s manufacturer’s serial number) and is in form and substance required under the Securitization Facility Agreements.

E.Receipt Obligations Concerning All Deliverables.

1.             Upon receipt of a Deliverable Package, Custodian shall inventory all documents in such Deliverable Package together with any and all other documents related to the applicable Engine, and, subject to paragraph 3 below, immediately notify in writing Indenture Trustee, Issuer, Servicer and Deal Agent if (A) any Deliverable listed in the certificate of Servicer related to such Deliverable Package is not contained in the applicable Deliverable Package, (B) there are any discrepancies between the Deliverables listed in the certificate of Servicer and the documents contained in the related Deliverable Package or (C) Custodian, in its sole discretion, has any doubts relating to any of the contents of the Deliverable Package.

2.             Indenture Trustee authorizes Issuer to deliver, or cause to be delivered, full and complete possession of each Deliverable to Custodian, and each Deliverable delivered or to be delivered together with all other items required, but not delivered to Custodian, shall serve as security for the payment of the Obligations and shall be subject to a perfected, first priority lien pursuant to the terms of the Securitization Facility Agreements.

3.             If on any day the Custodian receives more than five (5) Deliverable Packages, Custodian shall inventory all documents in each Delivery Package together with any and all other documents related to each of the applicable Engines, and, within five (5) Business Days, notify in writing Indenture Trustee, Issuer, Servicer and Deal Agent if (A) any Deliverable listed in any certificate of Servicer related to any of such Deliverable Packages is not contained in the applicable Deliverable Package, (B) there are any discrepancies between the Deliverables listed in any certificate of Servicer and the documents contained in the related Deliverable Package or (C) Custodian, in its sole discretion, has any doubts relating to any of the contents of any Deliverable Package.

4.             On the fourth (4th) Business Day, the 46^th day, the 91^st day and the 121^st day, after the Custodian’s receipt of any initial Deliverable Package, Custodian shall use its best efforts to deliver to Servicer, Indenture Trustee, Issuer and Deal Agent on such date (but in no event later than one (1) Business Day thereafter) a certificate (the “Certification”) in the form attached hereto as Exhibit A to the effect that, except as listed in such Certification (each, an “Excepted Item”), Custodian has a complete Collateral File with respect to the related Engine; provided, that after a Certification has been delivered indicating that the Custodian has in its actual possession the complete Collateral File with respect to the related Engine, no further Certification as to such Collateral File shall be required.  It is expressly understood and agreed by the parties hereto that the Custodian shall not be liable to any party hereto for incorrectly listing any Excepted Item in a Certification, so long as such listing is based on the Custodian’s good faith and reasonable belief that such Excepted Item is not in its actual possession on the date of such Certification.

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III.Custody of Collateral Files and Possessory Collateral.

1.             Custodian agrees to hold each Deliverable, each Deliverable Package, each Collateral File and the collateral contained therein and Possessory Collateral in trust for the benefit of and on behalf of Indenture Trustee as perfected, first priority lien holder, and as its agent in accordance with the provisions of this Custodial Agreement.  Custodian shall, during the term of this Custodial Agreement, segregate and maintain continuous actual custody, possession and control of each Deliverable, each Deliverable Package, each Collateral File and the collateral contained therein and Possessory Collateral deposited with it for and on behalf of Indenture Trustee as perfected, first priority lien holder.  Upon written notice from the Indenture Trustee (at the direction of the Deal Agent), Custodian shall release any Deliverable, any Deliverable Package, any Collateral File and the collateral contained therein and Possessory Collateral to Indenture Trustee, or its designee, as required in this Custodial Agreement.  The possession of any Deliverable, any Deliverable Package, any Collateral File and the collateral contained therein and Possessory Collateral by Custodian and any rights therein of Issuer are subject to all terms and provisions of this Custodial Agreement, the perfected, first priority security interest of Indenture Trustee and the rights and obligations of Indenture Trustee under this Custodial Agreement.

2.             Custodian shall, at its own expense, maintain at all times during the existence of this Custodial Agreement and keep in full force and effect, (1) fidelity insurance, (2) theft of documents insurance and (3) forgery insurance subject to deductibles, each in amounts customary and standard in the industry and with insurance companies reasonably acceptable to Indenture Trustee.  Upon written request, Indenture Trustee shall be entitled to receive a certificate from the respective insurer that such insurance is in full force and effect.

IV.Duty of Custodian.  Except as otherwise provided herein, Custodian shall maintain custody of each Deliverable, each Deliverable Package, each Collateral File and the collateral contained therein and Possessory Collateral until Indenture Trustee, in writing, requests delivery of any portion or all of any Deliverable, Deliverable Package, Collateral File and the collateral contained therein and Possessory Collateral to Indenture Trustee or its designee.  Custodian agrees that, except as otherwise required herein or otherwise required by law, it will not release any portion or all of any Deliverable, any Deliverable Package, any Collateral File and the collateral contained therein or any Possessory Collateral to any person or entity, whatsoever, without the prior written consent of Indenture Trustee.  Custodian agrees that it will look solely to Issuer for payment of its services as Custodian under this Custodial Agreement and Issuer hereby agrees and acknowledges that it shall be solely responsible for the same and shall promptly pay the same.

V.Delivery and Location.  Each Deliverable, each Deliverable Package, each Collateral File and the collateral contained therein and Possessory Collateral shall be delivered to Custodian at and shall be maintained by Custodian in a segregated and divided space in secure and fireproof facilities, at Custodian’s place of business at 2 North LaSalle Street, Lower Level, Chicago, Illinois 60602, provided, however, that with

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the prior written consent of Indenture Trustee, each of the Deliverables, Deliverable Packages, the Collateral Files and the collateral contained therein and Possessory Collateral in Custodian’s actual possession may be transferred to a similarly segregated and divided space in a secure and fireproof facility at a location notified to Indenture Trustee and Deal Agent in writing.

VI.Inspections.  Upon no less than two (2) Business Days’ prior written notice to Custodian, Indenture Trustee, Deal Agent, Issuer, Servicer or any of their respective agents, accountants, attorneys and auditors will be permitted during normal business hours to examine Custodian’s documents, records and other papers in possession of or under the control of Custodian relating to any Deliverable, any Deliverable Package, any Collateral File and the collateral contained therein and any Possessory Collateral.

VII.Continuation of Custody.  Until such time as Indenture Trustee notifies Custodian in writing that the Obligations have been satisfied, Custodian’s custody of each Deliverable, each Deliverable Package, each Collateral File and the collateral contained therein and Possessory Collateral shall continue, and neither Issuer nor Servicer shall have the right to retake or request delivery to a third party of any Deliverable, any Deliverable Package, any Collateral File and the collateral contained therein or any Possessory Collateral or any of the documents therein or related thereto.  Subject to Section VIII hereof, upon the written request of Indenture Trustee, Custodian shall release any portion or all of any Deliverable, any Deliverable Package, any Collateral File and the collateral contained therein or any Possessory Collateral to Indenture Trustee or any third party designated by Indenture Trustee.  After the Obligations of Issuer to Indenture Trustee have been fully paid and satisfied, Indenture Trustee shall give written notice to Custodian and Custodian shall return any Deliverable, any Deliverable Package, any Collateral File and the collateral contained therein or any Possessory Collateral to Issuer or its designee.

VIII.Release for Servicing or Foreclosure.  From time to time as appropriate for servicing or foreclosure of any Deliverable, any Deliverable Package, any Collateral File and the collateral contained therein or Possessory Collateral, Custodian  shall, upon written request from Servicer in the form of Exhibit B attached hereto, and with the prior written consent of Indenture Trustee, deliver to Servicer such Deliverable or Deliverables as requested by Servicer and consented to in writing by Indenture Trustee for, including, but not limited to, the prosecution of any foreclosure or collection proceeding or for Remarketing.  Upon the receipt of the released Deliverable or Deliverables, Servicer shall execute a trust receipt, in the form of Exhibit C attached hereto (a “Trust Receipt”), indicating the purpose of the release of the Deliverable or Deliverables and acknowledging the continuing application of the security interest of Indenture Trustee in the Deliverables, Deliverable Packages, the Collateral Files and the collateral contained therein and Possessory Collateral and any proceeds thereof.

IX.Release of Collateral File upon Instruction.  Upon written notice from Indenture Trustee for the release of a Collateral File (or any portion thereof), Custodian

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shall, within two (2) Business Days following receipt of such notice, release such Collateral File (or portion thereof) to Issuer or its designee.

X.Reports.  In addition to Certifications required pursuant to the terms of this Custodial Agreement, Custodian shall provide the Issuer, Servicer, Indenture Trustee and Deal Agent, within five (5) Business Days following the end of each calendar month, a monthly written report as of the last day of such calendar month, which report shall set forth each Engine in the portfolio and with respect to each Engine (A) each Deliverable related to such Engine not in Custodian’s actual possession as of the date of such report and (B) each Deliverable related to such Engine released for including, but not limited to, the purpose of servicing and foreclosure.

XI.Removal of Custodian.  Indenture Trustee, with or without cause, shall (at the direction of the Deal Agent) and upon at least sixty (60) days’ prior written notice to Custodian (with a copy to Issuer and Deal Agent), remove and discharge Custodian from the performance of its duties under this Custodial Agreement.  Having given such notice of removal, Indenture Trustee promptly shall appoint a successor custodian to act on behalf of Indenture Trustee and Issuer, as their respective rights appear herein.  Such successor custodian shall accept such appointment by executing and delivering a written instrument similar in form and substance to this Custodial Agreement and satisfactory to both of Issuer and Deal Agent, which such instrument shall be acknowledged by Indenture Trustee and Servicer.  So long as no Event of Default (as defined in the Securitization Facility Agreements) shall have occurred and be continuing, Issuer shall have the right to consent to the appointment of a successor custodian pursuant to this Section XI, which consent shall not be unreasonably withheld.  In the event of any such removal, Custodian shall promptly transfer to the successor custodian, as directed by Indenture Trustee, and at the expense of Issuer, all of the Deliverables, any Deliverable Package, any Collateral File and the collateral contained therein and Possessory Collateral then in, or in the case of Subsequent Deliverables thereafter coming into, Custodian’s actual possession.  In the event of any such removal, Issuer shall promptly pay Custodian its outstanding fees and expenses, if any, incurred in connection with this Custodial Agreement.  In the event of any appointment of a successor custodian, Issuer shall be responsible for the fees and expenses of the Custodian and the successor custodian.

XII.Termination of Custodian.  Custodian may resign or terminate its obligations under this Custodial Agreement upon at least sixty (60) days’ prior written notice to Issuer, Deal Agent and Indenture Trustee.  In the event of such termination or resignation, Indenture Trustee shall appoint a successor custodian, such appointment to occur in no event later than 60 days after Indenture Trustee’s receipt of Custodian’s notice of resignation or termination.  Such successor custodian shall accept such appointment by executing and delivering a written instrument similar in form and substance to this Custodial Agreement and satisfactory to Deal Agent, which such instrument shall be acknowledged by Issuer, Indenture Trustee and Servicer.  Upon such acceptance, Custodian shall promptly transfer to the successor custodian, as directed by Indenture Trustee and at the expense of Issuer, all of the Deliverables, any Deliverable Package, any Collateral Files and the collateral contained therein and Possessory

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Collateral then in, or in the case of Subsequent Deliverables thereafter coming into, Custodian’s actual possession.  The termination or resignation of Custodian pursuant to this Section XII shall not become effective until a successor custodian has accepted its appointment pursuant to this Section XII, and the Custodian’s obligations hereunder shall survive until the successor custodian has confirmed in writing to the Indenture Trustee, Deal Agent, Servicer, Issuer and Custodian that each Deliverable in Custodian’s actual possession on the date of its notice of termination or resignation, as the case may be, is in the successor custodian’s actual possession (provided that the acceptance thereof, shall have occurred within 120 days following the appointment of the successor custodian).  The payment of such successor custodian’s fees and expenses shall be solely the responsibility of Issuer.

XIII.Representations, Warranties and Covenants of Custodian.  With respect to each Certification, Custodian hereby represents and warrants to, and covenants with Indenture Trustee that as of the date such Certification is provided:

(a)           Custodian is duly organized, validly existing and in good standing under the laws of the United States;

(b)           Custodian has the full power and authority to hold each Deliverable, Deliverable Package, Collateral File and the collateral contained therein and Possessory Collateral (whether acting alone or through an agent) and to execute, deliver and perform, and to enter into and consummate all transactions contemplated by this Custodial Agreement, has duly authorized the execution, delivery and performance of this Custodial Agreement, has duly executed and delivered this Custodial Agreement and this Custodial Agreement constitutes a legal, valid and binding obligation of Custodian, enforceable against it in accordance with its terms, except as enforcement of such terms may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally and by the availability of equitable remedies; and

(c)           Custodian is a separate and independent entity from Issuer and Servicer, does not own a controlling interest in Issuer or Servicer either directly or through affiliates and no director or officer of Custodian is also a director or officer of Issuer or Servicer.

XIV.Notices.  All demands, notices and communications hereunder, except as otherwise provided herein, shall be in writing and shall be effective upon receipt to:

(a)           in the case of Custodian:

BNY Midwest Trust Company

2 North LaSalle Street

Lower Level

Chicago, Illinois 60602

Attention:  Ms. Diane Moser

Fax No.:  (312) 827-8588

Telephone No.:  (312) 827-8680

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(b)           in the case of Issuer:

Willis Engine Funding LLC

2320 Marinship Way, Suite 300

Sausalito, California 94965

Attention:  Counsel

Fax No.:  (415) 331-5167

Telephone No.:  (415) 331-5281

(c)           in the case of Servicer:

Willis Lease Finance Corporation

2320 Marinship Way, Suite 300

Sausalito, California 94965

Attention:  Counsel

Fax No.:  (415) 331-5167

Telephone No.:  (415) 331-5281

(d)           in the case of Deal Agent:

Barclays Bank PLC

200 Park Avenue

New York, New York 10166

Fax No.:  (212) 412-6846

Telephone No.:  (212) 412-2932

(e)           in the case of Indenture Trustee:

The Bank of New York

101 Barclay Street

8^th Floor West

New York, New York 10286

Attention:  Asset Backed Securities Unit

Fax No.:  (212) 815-2493

Telephone No.:  (212) 815-8332

XV.Facsimile Notices.  All parties to this Custodial Agreement agree that where any written consent or notice is required of any party that a facsimile transmission signed on behalf of such party will be sufficient to serve as such written consent or notice.  Custodian may act upon any instrument or other writing believed by it in good faith to be genuine and signed or presented by the proper person.  Each party to this Custodial Agreement shall provide Custodian with the names of persons authorized, subject to change by subsequent notice received in writing by Custodian, to receive the Collateral Files, to sign consents and notices or otherwise act on behalf of those respective parties.  Each party shall additionally provide sample signatures for such authorized persons.

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XVI.Governing Law and Jurisdiction; Waiver of Jury Trial.  This Custodial Agreement shall be construed in accordance with the laws of the State of New York governing agreements made and to be performed therein, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws.  The parties hereto agree to submit to personal jurisdiction in the State of New York in any action or proceeding arising out of this Custodial Agreement.  The parties hereto each hereby waive the right to trial by jury in any proceeding in connection with or arising out of this Custodial Agreement.

XVII.Prior Agreements.  This Custodial Agreement supersedes all prior and contemporaneous agreements and understandings, written or oral, relating to the subject matter hereof.  The provisions of this Custodial Agreement may not be amended, modified, waived, discharged or terminated orally, but rather only by an instrument in writing signed by the parties hereto.

XVIII.Charges and Expenses.  Issuer will pay all fees of Custodian in connection with the performance of its duties hereunder in accordance with the fee schedule attached hereto as Schedule 4 (the “Custodial Fee Schedule”) and also the reasonable legal fees, costs and expenses incurred by Custodian in connection herewith; provided, however, that (i) Custodian shall in no event acquire and hereby agrees not to assert any lien upon any Deliverable, any Deliverable Package, Collateral File, any collateral contained therein or Possessory Collateral deposited under this Custodial Agreement and (ii) in the event Issuer fails to pay the fees and expenses of Custodian as set forth herein, Custodian shall have no obligation to take actions or incur costs in connection with this Custodial Agreement unless Servicer, Issuer or another Person has made adequate provision for payment of Custodian’s fees and expenses.

XIX.No Adverse Interests.  Custodian covenants and warrants to Indenture Trustee and Issuer that:  (i) as of the date hereof, and as of each Certification, Custodian does not and shall not hold any adverse interest, by way of security or otherwise, in any Deliverable, any Deliverable Package, Collateral File, any collateral contained therein or Possessory Collateral; and (ii) the execution of this Custodial Agreement and the creation of the custodial relationship hereunder does not create any interest, by way of security or otherwise of Custodian in or to any Deliverable, any Deliverable Package, Collateral File and any collateral contained therein or Possessory Collateral, other than Custodian’s rights as custodian hereunder.

XX.Assignment; Time.  Custodian shall not delegate, assign or sub-contract any of its rights or obligations under this Custodial Agreement.  Issuer may not assign its rights or obligations under this Custodial Agreement.  Indenture Trustee may assign its rights and obligations under this Custodial Agreement.  Time is of the essence with respect to all dates, terms and conditions of this Custodial Agreement.  All references to time herein shall be deemed to refer to New York City time unless otherwise provided.

XXI.Termination of Obligations of Custodian.  Subject to Section XII, Custodian’s obligations under this Custodial Agreement shall cease upon the earliest to occur of the following:  (a) delivery or surrender of all of the Deliverables, Deliverable

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Packages, Collateral Files and the collateral contained therein and Possessory Collateral in Custodian’s actual possession to Indenture Trustee; (b) delivery or surrender of all of the Deliverables, Deliverable Packages, Collateral Files and the collateral contained therein and Possessory Collateral in Custodian’s actual possession to any third–party custodian designated in writing by Indenture Trustee (at the direction of Deal Agent); and (c) following the receipt by Custodian of written notice from Indenture Trustee of the payment in full and satisfaction of the Issuer’s Obligations to Indenture Trustee under the Securitization Facility Agreements, receipt by Servicer of each Collateral File (or portion thereof).

XXII.Custodian.  (a)  In the absence of bad faith on the part of Custodian, Custodian may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any request, instructions, certificate, opinion or other document furnished to Custodian, reasonably believed by Custodian to be genuine and to have been signed or presented by the proper party or parties and conforming to the requirements of this Custodial Agreement; but in the case of any request, instruction, document or certificate which by any provision hereof is specifically required to be furnished to the Custodian, the Custodian shall be under a duty to examine the same to determine whether or not it conforms to the requirements of this Custodial Agreement.

(b)           Custodian shall not be liable for any error in judgment made in good faith by any officer or officers of Custodian, unless it shall be conclusively determined by a court of competent jurisdiction that Custodian was grossly negligent in ascertaining the pertinent facts.

(c)           None of the provisions of this Custodial Agreement shall require Custodian to expend or risk its own funds or otherwise to incur any liability, financial or otherwise, in the performance of any 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 indemnity satisfactory to it against such risk or liability is not assumed to it.

(d)           Whenever, in the administration of the provisions of this Custodial Agreement, Custodian shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action to be taken hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of gross negligence, willful misconduct or bad faith on the part of Custodian, be deemed to be conclusively proved and established by a certificate signed by one of Indenture Trustee’s or the Issuer’s officers, as the case may be, and delivered to Custodian and such certificate, in the absence of gross negligence, willful misconduct or bad faith on the part of Custodian, shall be full warrant to Custodian for any action taken, suffered or omitted by it under the provisions of this Custodial Agreement upon the faith thereof.

(e)           Custodian may consult with counsel and the advice or any opinion of counsel shall be full and complete authorization and protection in respect of any action taken or omitted by it hereunder in good faith and in accordance with such advice or opinion of counsel.

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(f)            Except as expressly stated in this Custodial Agreement, Custodian 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, entitlement order, approval or other paper or document.

(g)           Custodian may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, custodians or nominees appointed by it with due care, and shall not be responsible for any willful misconduct or gross negligence on the part of any agent, attorney, custodian or nominee so appointed.

XXIII.Indemnification  (a)  Servicer agrees to indemnify and hold Custodian and its directors, officers, agents and employees harmless against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever, including reasonable attorney’s fees and expenses, that may be imposed on, incurred by, or asserted against it or them in any way relating to or arising out of this Custodial Agreement or any action taken or not taken by it or them hereunder unless such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements (other than special, indirect, punitive or consequential damages, which shall in no event be paid by Custodian) were imposed on, incurred by or asserted against Custodian relating to or arising out of gross negligence, bad faith or willful misconduct on the part of Custodian or any of its directors, officers, agents and employees.  The foregoing indemnification shall survive any resignation or removal of Custodian or the termination or assignment of this Custodial Agreement.

(b)           Neither Custodian nor any of its officers, directors, employees or agents shall be liable for any action taken or omitted under this Custodial Agreement or in connection herewith except to the extent caused by such person’s gross negligence, willful misconduct or bad faith, as determined by the final judgment of a court of competent jurisdiction, no longer subject to appeal or review.

XXIV.No Adverse Interest of Custodian.  By execution of this Custodial Agreement, Custodian warrants that it currently does not hold and during the existence of this Custodial Agreement shall not hold, any adverse interest, by way of security or otherwise, in any Deliverable, Deliverable Package, Collateral File and the collateral contained therein or Possessory Collateral.

XXV.Counterparts.  This Custodial Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original, and all of which taken together shall constitute but one and the same instrument.

XXVI.Force Majeure.  No party hereto shall be liable for failure to perform, in whole or in material part (including, without limitation, the failure to deliver any Deliverable in a timely manner as required by this Custodial Agreement), its obligations under this Custodial Agreement if such failure is caused by any event or condition not

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existing as of the date of this Custodial Agreement and not reasonably within the control of the affected party, including, but without limitation, by fire, flood, typhoon, earthquake, explosion, strikes, labor troubles or other industrial disturbances, unavoidable accidents, war (declared or undeclared), acts of terrorism, sabotage, embargoes, blockage, acts of governmental authorities, riots, insurrections, or any other cause beyond the control of the parties hereto; provided that the affected party promptly notifies each of the other parties hereto of the occurrence of the event of force majeure and takes all reasonable steps necessary to the performance of its obligations so interfered with, as soon as practicable.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

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The parties to this Custodial Agreement have caused it to be executed by their duly authorized officers as of the date first written above.

CUSTODIAN	BNY MIDWEST TRUST COMPANY
	By:	/s/	DIANE MOSER
			Name: Diane Moser
			Title: Vice President
ISSUER	WILLIS ENGINE FUNDING LLC
	By:	/s/	MONICA J. BURKE
			Name: Monica J. Burke
			Title: Chief Financial Officer
SERVICER	WILLIS LEASE FINANCE CORPORATION
	By:	/s/	DONALD A. NUNEMAKER
			Name: Donald A. Nunemaker
			Title: Executive Vice President, Chief Operating Officer
DEAL AGENT	BARCLAYS BANK PLC
	By:	/s/	PIERRE DULEYRIE
			Name: Pierre Duleyrie
			Title: Director
INDENTURE TRUSTEE	THE BANK OF NEW YORK
	By:	/s/	SCOTT J. TEPPER
			Name: Scott J. Tepper
			Title: Assistant Vice President

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SCHEDULE 1

Funding Deliverables

ITEM		RECIPIENTS	DUE DATE
1.	Owner Trustee Guaranty executed by Owner Trustee	Custodian	At least 2 Business Days prior to the applicable Funding
2.	Beneficial Interest Pledge Agreement, executed by the Issuer	Custodian	At least 2 Business Days prior to the applicable Funding
3.	Asset Base Certificate	Custodian, Deal Agent, Sheffield	At least 1 day prior to the applicable Funding
4.	Notice of Request for a Loan	Custodian, Deal Agent, Sheffield	On or prior to the applicable Funding
5.	Servicer Certificate	Deal Agent and Custodian	On or prior to the applicable Funding
6.	Compliance Certificate	Custodian, Deal Agent, Sheffield	On or prior to the applicable Funding
7.	Appraisals	Custodian, Deal Agent	On or prior to the applicable Funding
8.	Certified Board resolutions of the Owner Trustee	Custodian	On or prior to the third Business Day following the applicable Funding
9.	Incumbency certificate of the Owner Trustee	Custodian	On or prior to the third Business Day following the applicable Funding
10.	Legal opinion as to execution of Loan Documents by the Owner Trustee	Custodian	On or prior to the third Business Day following the applicable Funding
11.	Engine and Beneficial Interest Transfer Certificate	Custodian	On or prior to the applicable Funding
12.	Supplement to List of Engines	Custodian	On or prior to the third Business Day following the applicable Funding
13.	Any “chattel paper” original of each Lease Agreement	Custodian	To be provided to FAA Counsel, acting as agent for the Indenture Trustee, on or prior to any transfer.  FAA Counsel agrees to provide to Custodian within 3 Business days of the applicable Funding
14.	Owner Trustee Mortgage executed by Owner Trustee	Custodian	To be provided to FAA Counsel on or prior to any transfer.  FAA Counsel agrees to provide to Custodian within 3 Business days of the applicable Funding
15.	Opinion of FAA Counsel as to filing perfection and priority with respect to the FAA of Indenture Trustee’s security interest in the Collateral	Custodian	Within 3 Business Days after the applicable Funding
16.	Certificates of insurance coverage or such other evidence of insurance coverage acceptable to the Deal Agent	Custodian	On or prior to the applicable Funding
17.	Consent and Agreement	Custodian	Within 90 days of the applicable Funding
18.	Evidence of filing Engine or Beneficial Interest registration with requisite Governmental Authority	Custodian	Promptly upon receipt
19.	File-stamped copies of UCC-1 financing statements naming WLFC as Debtor/Seller; the Issuer as Secured Party/Purchaser; and BNY as Assignee of Secured Party	Custodian	Promptly upon receipt
20.	File-stamped copies of UCC-1 financing statements naming the Issuer as Debtor and BNY as Secured Party	Custodian	Promptly upon receipt
21.	Filed-stamped copies of FAA recordations of the Contribution and Sale Agreement, Indenture, Series 2002-1 Supplement and each Lease Agreement for each Engine and Contributed Beneficial Interest	Custodian	Promptly upon receipt
22.	File-stamped copies of Security filings, if any, required by the Governmental Authority of the country of any foreign Lessee’s chief executive office	Custodian	Promptly upon receipt
23.	File-stamped copies of UCC-1 financing statements covering any Lease Agreements being transferred and naming the lease originator as Debtor; the Issuer as Secured Party and BNY as Assignee of Secured Party	Custodian	Promptly upon receipt
24.	File-stamped copies of UCC termination statements covering the security interest of any other Person with respect to Contributed Assets or Beneficial Interests in assets being transferred.	Custodian	Promptly upon receipt
25.	File-stamped copies of UCC-1 financing statements naming the Owner Trustee as debtor and the Indenture Trustee as secured party.	Custodian	Promptly upon receipt

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SCHEDULE 2

Remarketing Deliverables

ITEM		RECIPIENTS	DUE DATE
1.	Certificates of insurance coverage or such other evidence of insurance coverage acceptable to the Deal Agent	Custodian	On or prior to the date of applicable Remarketing
2.	Servicer Certificate	Deal Agent and Custodian	On or prior to the third Business Day following the applicable Remarketing
3.	Supplement to List of Engines	Custodian	On or prior to the third Business Day following the applicable Remarketing
4.	Any “chattel paper” original of each Lease Agreement	Custodian	To be provided to FAA Counsel, acting as agent for the Indenture Trustee, on or prior to any transfer.  FAA Counsel agrees to provide to Custodian within 3 Business days of the applicable Remarketing
5.	Opinion of FAA Counsel as to filing perfection and priority with respect to the FAA of Indenture Trustee’s security interest in the Collateral	Custodian	Within three Business Days after the applicable Remarketing
6.	Consent and Agreement	Custodian	Within 90 days of the applicable Remarketing
7.	Evidence of filing Engine or Beneficial Interest registration with requisite Governmental Authority	Custodian	Promptly upon receipt
8.	File-stamped copies of UCC-1 financing statements naming WLFC as Debtor/Seller; the Issuer as Secured Party/Purchaser; and BNY as Assignee of Secured Party	Custodian	Promptly upon receipt
9.	File-stamped copies of UCC-1 financing statements naming the Issuer as Debtor and BNY as Secured Party	Custodian	Promptly upon receipt
10.	File-stamped copies of FAA recordations of the Contribution and Sale Agreement, Indenture, Series 2002-1 Supplement and each Lease Agreement for each Engine and Contributed Beneficial Interest	Custodian	Promptly upon receipt
11.	File-stamped copies of Security filings, if any, required by the Governmental Authority of the country and of any foreign Lessee’s chief executive office	Custodian	Promptly upon receipt
12.	File-stamped copies of UCC-1 financing statements covering any Lease Agreements being transferred and naming the lease originator as Debtor; the Issuer as Secured Party and BNY as Assignee of Secured Party	Custodian	Promptly upon receipt
13.	File-stamped copies of UCC termination statements covering the security interest of any other Person with respect to Contributed Assets or Beneficial Interests in assets being transferred	Custodian	Promptly upon receipt
14.	File-stamped copies of UCC-1 financing statements naming the Owner Trustee as debtor and the Indenture Trustee as secured party.	Custodian	Promptly upon receipt

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SCHEDULE 3

Alternative Delivery Deliverables

ITEM		RECIPIENTS	DUE DATE
1.	Certificates of insurance coverage or such other evidence of insurance coverage acceptable to the Deal Agent	Custodian	On or prior to the date of applicable Alternative Delivery
2.	Servicer Certificate	Deal Agent and Custodian	On or prior to the date of applicable Alternative Delivery
3.	Supplement to List of Engines	Custodian	On or prior to the third Business Day following the applicable Alternative Delivery
4.	Any “chattel paper” original of each Lease Agreement	Custodian	To be provided to FAA Counsel, acting as agent for the Indenture Trustee, on or prior to any transfer.  FAA Counsel agrees to provide to Custodian within 3 Business days of the applicable Alternative Delivery
5.	Opinion of FAA Counsel as to filing perfection and priority with respect to the FAA of Indenture Trustee’s security interest in the Collateral	Custodian	Within three Business Days after the applicable Alternative Delivery
6.	Consent and Agreement	Custodian	Within 90 days of the applicable Remarketing
7.	Opinions of Foreign Local Counsel as to perfection, if necessary (only for foreign Lessees not set up with an Owner Trust structure)	Custodian	Within 120 days of the applicable Alternative Delivery
8.	Evidence of filing Engine or Beneficial Interest registration with requisite Governmental Authority	Custodian	Promptly upon receipt
9.	File-stamped copies of UCC-1 financing statements naming WLFC as Debtor/Seller; the Issuer as Secured Party/Purchaser; and BNY as Assignee of Secured Party	Custodian	Promptly upon receipt
10.	File-stamped copies of UCC-1 financing statements naming the Issuer as Debtor and BNY as Secured Party	Custodian	Promptly upon receipt
11.	File-stamped copies of FAA recordations of the Contribution and Sale Agreement, Indenture, Series 1997-1 Supplement and each Lease Agreement for each Engine and Contributed Beneficial Interest	Custodian	Promptly upon receipt
12.	File-stamped copies of Security filings, if any, required by the Governmental Authority of the country and of any foreign Lessee’s chief executive office	Custodian	Promptly upon receipt
13.	File-stamped copies of UCC-1 financing statements covering any Lease Agreements being transferred and naming the lease originator as Debtor; the Issuer as Secured Party and BNY as Assignee of Secured Party	Custodian	Promptly upon receipt
14.	File-stamped copies of UCC termination statements covering the security interest of any other Person with respect to Contributed Assets or Beneficial Interests in assets being transferred	Custodian	Promptly upon receipt
15.	File-stamped copies of UCC-1 financing statements naming the Owner Trustee as debtor and the Indenture Trustee as secured party.	Custodian	Promptly upon receipt

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SCHEDULE 4

Custodial Fee Schedule

Proposal for

Willis Engine Funding, LLC

Custodian Services

September 4, 2002

Acceptance Fee: $2,500 upfront

•  Review of the agreement and all supporting documents

•  Initial establishment of the account (s)

Annual Administration Fee: $5,000 per year

This fee is payable in advance and subsequently, on each anniversary date. Fees include the following services:

•  Final Review Certification/Reinstatement

•  File/document Releases

•  Safekeeping of files

•  Trailing Documentation  

Miscellaneous Fees: 

Photocopying of Documents: $0.20 per page

Out-of Pocket Expenses 

Fees quoted do not include any out-of-pocket expenses including, but not limited to travel, facsimile, overnight courier, and messenger costs. These expenses will be billed, at out cost, when incurred. In the event the transaction terminates before closing, all out-of-pocket expenses incurred, including our counsel fees, if applicable will be billed to the account.

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External Counsel Fees

Fees quoted do not include external counsel fees. A bill for counsel fees incurred up to closing will be presented for payment on the closing date.

Miscellaneous Services

The charges for performing services not contemplated at the time of the execution of the documents not specifically covered elsewhere in the schedule will be determined by appraisal in amounts commensurate with the service.  

Terms of Proposal

BNY Midwest Trust Company’s final acceptance of this appointment is subject to the full review and approval of all related documentation and financials and our conflict investigation. This offer shall be deemed terminated if we do not enter into a written agreement within three months from the date of transmittal. Fees will be subject for review, if volumes increase beyond initial activity.

Willis Engine Funding, LLC
	Name
	Signature
	Date

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EX-10.33

Exhibit 10.33

EXECUTION COPY

WILLIS LEASE FINANCE CORPORATION

AND

WILLIS ENGINE FUNDING LLC

SERVICING AGREEMENT

Dated as of September 12, 2002

ALL RIGHT, TITLE AND INTEREST IN AND TO THIS AGREEMENT ON THE PART OF WILLIS ENGINE FUNDING LLC HAS BEEN ASSIGNED TO AND IS SUBJECT TO A SECURITY INTEREST IN FAVOR OF THE BANK OF NEW YORK, AS INDENTURE TRUSTEE, UNDER AN INDENTURE DATED AS OF SEPTEMBER 12, 2002 FOR THE BENEFIT OF THE PERSONS REFERRED TO THEREIN.

SERVICING AGREEMENT

This Servicing Agreement, dated as of September 12, 2002 (the“Agreement”) is entered into by and between Willis Lease Finance Corporation (the “Servicer”)and Willis Engine Funding LLC (the“Issuer”).

RECITALS

A.            Pursuant to the Contribution and Sale Agreement (the “Contribution and Sale Agreement”), dated as of September 12, 2002 between the Servicer and the Issuer, the Servicer as the Seller will sell from time-to-time to the Issuer certain Eligible Engines, Lease Agreements and other Contributed Assets.

B.            Pursuant to the Series 2002-1 Supplement (the “Series 2002-1 Supplement”), dated as of September 12, 2002, between the Issuer and The Bank of New York, as Indenture Trustee (the “Indenture Trustee”),to the Indenture (the “Indenture”), dated as of September 12, 2002, between the Issuer and the Indenture Trustee, the Class A Note Purchase Agreement and the Class B Note Purchase Agreement, the Issuer is selling to the purchasers therein described its Series 2002-1 Class A Notes (the “2002-1 A Notes”) in a maximum original principal amount of $180,000,000 and its Series 2002-1 Class B Notes (the “2002-1 B Notes” and, together with the 2002-1 A Notes, the “Notes”) in a maximum original principal amount of $20,000,000.

C.            From time-to-time, the Issuer and the Indenture Trustee may enter into additional supplements to the Indenture (each such supplement, together with the Series 2002-1 Supplement, each a “Supplement”) providing for the issuance of additional Series.

D.            In consideration for the Servicing Fee provided in the applicable Supplement, the Servicer agrees to undertake certain obligations set forth herein.

ARTICLE I

DEFINITIONS

Section 1.01  Definitions.

Except as otherwise specified, capitalized terms used herein shall have the meanings set forth in the Series 2002-1 Supplement, the Indenture and the Contribution and Sale Agreement, and the definitions of such terms are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neutral gender of such terms.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE SERVICER

The Servicer hereby represents and warrants to the Issuer as of the Effective Date (unless otherwise indicated herein) that:

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Section 2.01  Corporate Organization and Authority.

The Servicer:

(a)           is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation;

(b)           has all requisite power and authority and all necessary licenses and permits to own and operate its properties and to carry on its business as now conducted (except where the failure to have such licenses and permits could not individually or in the aggregate (i) have a material adverse effect on the business or financial condition of the Servicer; or (ii) impair the enforceability of any of its obligations under this Agreement and the transactions contemplated hereby);

(c)           is duly qualified and is authorized to do business and is in good standing as a foreign corporation in each jurisdiction where the character of its properties or the nature of its activities makes such qualification necessary (except where the failure to be so qualified or in good standing would not individually or in the aggregate (i) have a material adverse effect on the business or financial condition of the Servicer; or (ii) impair the enforceability of any of the obligations under this Agreement and the transactions contemplated hereby); and

(d)           has duly authorized, executed and delivered this Agreement and all other documents delivered in connection herewith, and this Agreement is the legal, valid and binding obligation of the Servicer enforceable against the Servicer in accordance with the terms hereof except as enforcement of such terms may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting the rights of creditors generally and by equitable principles (regardless of whether such enforcement is in a proceeding in equity or at law).

Section 2.02  Pending Litigation.

There are no actions, suits, proceedings, investigations or injunctive or other orders pending, or, to the knowledge (after due inquiry) of the Servicer, threatened, against or affecting the Servicer or any subsidiary in or before any court, governmental authority or agency or arbitration board or tribunal which, individually or in the aggregate, involve the possibility of materially and adversely affecting the properties, business, or financial condition of the Servicer and its subsidiaries, or the ability of the Servicer to perform its obligations under this Agreement.  The Servicer is not in default with respect to any order of any court, governmental authority or agency or arbitration board or tribunal.

Section 2.03  No Material Event.

No event has occurred which materially adversely affects the Servicer’s operations, including, but not limited to, its ability to perform its obligations hereunder.

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Section 2.04  Transactions Legal and Authorized.

This Agreement:

(a)           has been duly authorized by all necessary corporate action on the part of the Servicer, and does not and will not require any stockholder approval, or approval or consent of any trustee or holders of any indebtedness or obligations of the Servicer, except as has been obtained;

(b)           is within the corporate powers of the Servicer; and

(c)           is legal and will not conflict with, result in any material breach in any of the provisions of, constitute a default under, or result in the creation of any lien upon any property of the Servicer under the provisions of, any agreement, charter instrument, by-law or other instrument to which the Servicer is or will be a party or by which it or its property may be bound or result in the violation of any law, regulation, rule, order or judgment applicable to the Servicer or its properties, or any order to which the Servicer or its properties is subject, or of any government or governmental agency or authority.

Section 2.05  Governmental Consent.

No consent, approval or authorization of, or filing registration or qualification with, any governmental authority is or will be necessary or required on the part of the Servicer in connection with the execution, delivery and performance of this Agreement.

Section 2.06  Compliance with Law.

The Servicer:

(a)           is not in violation of any laws, ordinances, governmental rules or regulations or court orders to which it is subject;

(b)           has not failed to obtain any licenses, permits, franchises or other governmental authorizations necessary to the ownership of its property or to the conduct of its business, the absence of which would materially and adversely affect the properties, business or condition of the Servicer and its subsidiaries or the ability of the Servicer to perform its obligations under this Agreement; and

(c)           is not in violation in any respect of any material term of any agreement, charter instrument, by-law or other instrument to which it is a party or by which it may be bound, which violation might, individually or in the aggregate, materially adversely affect the business or condition of the Servicer and its subsidiaries.

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ARTICLE III

ADMINISTRATION AND SERVICING OF COLLATERAL

Section 3.01  Responsibilities of Servicer; Appointment of Servicer.

(a)           General Responsibilities.    The Servicer, with respect to all Lease Agreements, Contributed Engines and any other Collateral, as an independent contractor acting solely as an agent for the Issuer, shall:

(i)            manage, service, administer, collect and enforce the rights of the Issuer or each Owner Trust, as the case may be, under the Lease Agreements, the Contributed Engines and any insurance policies required by the Lease Agreements to be maintained or otherwise maintained with respect to the Contributed Engines (the “Insurance Policies”),

(ii)           enforce the Indenture Trustee’s security interest in the Lease Agreements, the Contributed Engines or any other Collateral,

(iii)          hold, sell and re-lease the Contributed Engines upon the expiration or other termination of the related Lease Agreement,

(iv)          hold, sell and the re-lease the Contributed Engines transferred to the Issuer not subject to Lease Agreements,

(v)           maintain (or cause to be maintained) all Insurance Policies, in full force and effect,

(vi)          maintain (or cause to be maintained) and re-condition the Contributed Engines,

(vii)         collect and post all payments made on account of Lease Agreements and respond to all inquiries of obligors under Lease Agreements (“Lessees”),

(viii)        investigate delinquencies, account for collections and furnish monthly and annual statements to the Indenture Trustee with respect to distributions,

(ix)           provide to the Noteholders appropriate federal income tax information,

(x)            collect and remit any sales, use, property and other taxes due with respect to the Contributed Engines to the appropriate taxing authorities,

(xi)           take all commercially reasonable efforts to maintain the perfected security interest of the Indenture Trustee in the Lease Agreements, the Contributed Engines and the other items of Collateral,

(xii)          subject to the limitations set forth in this Agreement, have full power and authority to carry out the obligations imposed upon it by this Agreement in any manner that it may deem necessary or desirable, including the delegation of such responsibilities to a

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subservicer chosen with due care; provided, however, that no such delegation shall relieve the Servicer of liability hereunder,

(xiii)         at all times act in accordance with the provisions of each Lease Agreement, and observe and comply with all requirements of law applicable to it,

(xiv)        at all times hold itself out to the public and to the parties with whom it deals as acting as an agent of the Issuer,

(xv)         except as permitted by the terms of any Lease Agreement, not take any action which would result in the interference with the Lessee’s right to quiet enjoyment of the Contributed Engines subject to the Lease Agreement during the term thereof, and

(xvi)        maintain its customary practices regarding internal credit rating and underwriting standards.

Without limiting the generality of the foregoing, the Servicer, as agent for the Issuer, shall, and is hereby irrevocably authorized and empowered by the Issuer (subject to the standard of care set forth in Section 3.02 and to the representations and covenants set forth in Section 5.12)to, execute and deliver on behalf of the Issuer all instruments of satisfaction or cancellation, or of partial or full release or discharge, and all other comparable instruments, with respect to the Lease Agreements and the other Collateral as shall be permitted under the terms of this Agreement and, in addition, to evidence that any item is not included in the Collateral.

(b)           Specific Responsibilities.    The Servicer (whether acting alone or through a subservicer), acting as an agent of the Issuer, shall perform the duties imposed upon it by Section 3.01(a)(i) in the following manner:

(i)            Enforcement Actions Against the User.  The Servicer shall sue to enforce or collect upon the Lease Agreements if the Servicer believes that such enforcement or collection suits are reasonably likely to increase the amount ultimately collected on the Lease Agreements and the Issuer has delivered to the Servicer its prior written consent to such action.  Upon the commencement of such a legal proceeding, the Issuer shall, at the request of the Servicer, assign such Lease Agreement to the Servicer for purposes of collection only.  In any such proceeding, the Servicer shall have the right, with the prior written consent of the Issuer, to (1) settle any such proceeding, (2) compromise any claims brought by a Lessee against the Servicer and (3) give a general release in connection with any proceeding by or against the Lessee arising out of or in connection with a Lease Agreement.  The Servicer shall be entitled to receive prompt reimbursement for extraordinary out-of-pocket expenses payable pursuant to Section 3.04 and incurred in connection with the enforcement and collection of a Lease Agreement to the extent provided from funds on deposit in the Trust Account from time-to-time; provided, however, that the Servicer shall incur such out-of-pocket expenses only if the Servicer, in its commercially reasonable judgment, believes that the incurrence of such expense is reasonably likely to increase the net amount ultimately collected on such Lease Agreement after giving effect to such out-of-pocket expenses;

(ii)           Enforcement of Recourse Against Third Parties.  Except as hereinafter provided, and in each case with the prior written consent of the Issuer, the Servicer shall exercise

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any rights of recourse against third parties that exist with respect to any Lease Agreement in accordance with standards it applies in servicing aircraft engine lease agreements held for its own account.  In any such proceeding, the Servicer, as agent of the Issuer, shall have the right, with the prior written consent of the Issuer, to (x) settle any such proceeding, (y) compromise any claims brought by a Lessee against the Servicer or the Issuer and (z) give a general release in connection with any proceeding by or against the Lessee arising out of or in connection with a Lease Agreement.  In exercising such recourse rights, the Servicer is authorized on the Issuer’s and the Indenture Trustee’s behalf to reassign the Lease Agreement to the Person against whom recourse exists to the extent necessary, and on the terms set forth, in the document creating such recourse rights.  Except as hereinafter provided, the Servicer will not reduce or diminish such recourse rights, unless (i) the Lease Agreement is in default, or the Servicer reasonably believes that a default is imminent, (ii) the Issuer delivers its prior written consent and (iii) the Servicer believes, in its good faith judgment, that such reduction or diminution in recourse rights is reasonably likely to maximize the net amount ultimately collected on such Lease Agreement after giving effect to reimbursement of any extraordinary out-of-pocket expenses payable pursuant to Section 3.04 and incurred by the Servicer in connection with the reduction or diminution of such recourse rights;

(iii)          Voluntary Prepayments  by Lessees.  The Servicer may grant to the Lessee under any Lease Agreement any rebate, refund or adjustment that the Servicer, in its commercially reasonable judgment, believes is required because of a prepayment of a Lease Agreement; provided, however, that the Servicer will not permit any rescission or cancellation of any Lease Agreement, nor will it take any action with respect to any Lease Agreement which is reasonably likely to materially impair the rights of the Noteholders, the Indenture Trustee or the Issuer in the Lease Agreement or the related Contributed Engine or the proceeds thereof without the prior written consent of the Issuer and the Indenture Trustee.  The Servicer shall direct the Lessee to remit any such prepayment amount directly to the Trust Account.  For purposes of this subparagraph (iii), a voluntary prepayment is any prepayment by a Lessee not required pursuant to the terms of the related Lease Agreement;

(iv)          Waiver and Modifications to Lease Agreement.  The Servicer, as agent of the Issuer, may, in each case with the prior written consent of the Issuer and subject to the limitations set forth in this subparagraph (iv), waive, modify or vary any term of any Lease Agreement or consent to the postponement of strict compliance with any such terms if, in the Servicer’s commercially reasonable judgment, such waiver, modification, variation or postponement is reasonably likely to maximize the net amount which will be ultimately realized from such Lease Agreement or the value of the related Contributed Engine after giving effect to the reimbursement of any extraordinary out-of-pocket expenses payable pursuant to Section 3.04 and incurred by the Servicer in connection therewith.  With respect to the foregoing, the following conditions and limitations shall apply with respect to any waivers, modifications, variations or postponements granted pursuant to this subparagraph (iv):

(A)          the Servicer shall not forgive any payment under a Lease Agreement unless (1) (x) the Lease Agreement is in default, or the Servicer believes that such default is imminent, and (y) the Servicer believes, in its commercially reasonable judgment, that the forgiveness of the payments is reasonably likely to maximize the net amount ultimately collected on such Lease Agreement after giving effect to the reimbursement of any extraordinary

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out-of-pocket expenses payable pursuant to Section 3.04 and incurred by the Servicer in connection therewith or (2) only under the circumstances required by the Contribution and Sale Agreement, the Servicer either (x) repurchases such Lease Agreement by depositing an amount equal to the Warranty Purchase Amount of such Lease Agreement in the Trust Account or (y) provides a substitute qualifying Lease Agreement for such Lease Agreement prior to the effective date of any such forgiveness; and

(B)           the Servicer shall not enter into any agreement which would have the effect of releasing the Lessee from its obligations pursuant to a Lease Agreement or of releasing the security interest in the related Contributed Engines except (a) to the extent provided in the Lease Agreement or (b) in connection with a prepayment contemplated in Section 3.01 (b)(iii) hereof;

(v)           Acceleration of Lease Agreement After Lease Agreement Default.  Notwithstanding any provision to the contrary contained in this Agreement, the Servicer may with the prior written consent of the Issuer exercise any right under a Lease Agreement to accelerate the unpaid payments due or to become due under a Lease Agreement; provided, however, that the Servicer shall not accelerate any Scheduled Payment unless permitted to do so by the terms of the related Lease Agreement and under applicable law;

(vi)          Reserved.

(vii)         Remarketing.  In the event that the Servicer as an agent of the Issuer reclaims possession of Contributed Engines from a Lessee in the enforcement of or upon termination of any Lease Agreement, the Servicer shall sell, re-condition and/or re-lease each such Contributed Engine consistent with the standard of care set forth in Section 3.02.  The foregoing is subject to the provision that the Servicer shall not expend funds in connection with any repair or re-conditioning or towards the repossession of such Contributed Engines unless such repair and/or repossession is reasonably likely to increase the amount realized from such Contributed Engines by an amount greater than the amount of such expenses.  On an Engine by Engine basis, the Servicer shall be entitled to withdraw and apply funds from the Engine Reserve Account for the purpose of any permitted repair or reconditioning of such Engine hereunder (provided that the Lease Agreement relating to such Engine permits the lessor thereunder to retain maintenance reserves under such Lease Agreement upon termination of such Lease Agreement);

(viii)        Collection of Payments.  The Servicer shall direct all Lessees to remit payments to the Trust Account; and

(ix)           Billing of Lease Agreement Payments.  As of the initial Transfer Date, the Servicer shall implement a system for mailing periodic invoices, which may be in electronic form, for Lease Agreement payments directly to the Lessees.

Notwithstanding any other provision of this Agreement to the contrary, the Servicer shall at all times observe the servicing standard set forth in Section 3.02 hereto.

(c)           Credit Policies.  The Servicer shall follow such credit policies with respect to the leasing of the Contributed Engines not subject to a Lease Agreement in accordance with the

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standard of care set forth in Section 3.02 and, subject to such credit policies, the Servicer may in its sole discretion as agent for the Issuer determine and approve the creditworthiness of any lessee (though the Servicer makes no representation or warranty to the Issuer, the Indenture Trustee or the Noteholders as to the solvency or financial stability of any lessee).

(d)           Prosecution of Claims.  The Servicer as an agent of the Issuer may institute and prosecute claims against the manufacturers of, sellers of, or Persons having repaired such Contributed Engines as the Servicer may consider advisable for breach of warranty or representation, any defect in condition, design, operation, fitness or repair, or any other nonconformity with the terms of manufacture, sale or repair, as applicable.

(e)           Maintenance and Repair.  The Servicer as agent for the Issuer shall maintain and repair (or cause to be maintained and repaired) each Contributed Engine in accordance with the standard of care set forth in Section 3.02 and, in the case of Contributed Engines subject to a Lease Agreement, in accordance with the terms of the related Lease Agreement.  On an Engine by Engine basis, the Servicer shall be entitled to withdraw and apply funds from the Engine Reserve Account for the purpose of any permitted repair or reconditioning of such Engine hereunder.

(f)            Capital Improvements.  The Servicer as agent for the Issuer shall make (or cause to be made) any capital improvements to any Contributed Engine that are necessary to conform with applicable governmental, manufacturer or industry standards and may make (or cause to be made) any capital improvements to any Contributed Engine that are otherwise desirable in the Servicer’s reasonable opinion.

(g)           Lost or Destroyed Engines.  If any Contributed Engine suffers a Casualty Loss (as defined in the Indenture), the Servicer, as agent for the Issuer, shall remit to the Trust Account the Casualty Proceeds, if any, therefrom.

(h)           Maintenance of Insurance.  The Servicer, as agent for the Issuer, shall maintain or cause to be maintained contingent liability insurance in an amount representing coverage of at least $500,000,000 and otherwise with coverage and with terms and conditions consistent with industry practices.

(i)            The Issuer hereby appoints Willis Lease Finance Corporation as the initial Servicer under this Agreement.  The term of such appointment shall commence on the Effective Date and shall terminate on the date on which the Servicer or the Issuer receives a notice of termination pursuant to Section 7.02 hereof.

Section 3.02  Standard of Care.

In entering into, managing, administering, servicing, enforcing and making collections on the Lease Agreements, the Contributed Engines and the other items of Collateral as agent for the Issuer pursuant to this Agreement, the Servicer will employ such servicing procedures as are prudent and customary in the industry for lease agreements or aircraft engines of a type similar to the Contributed Engines and in any event employ not less than that degree of skill and care that the Servicer exercises with respect to any similar aircraft engines or lease agreements owned by it.  The Servicer shall maintain all state and federal licenses and franchises necessary for it to

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perform its servicing responsibilities hereunder, shall not materially impair the rights of the Issuer, the Indenture Trustee or the Noteholders in any Lease Agreement, the related Contributed Engines or payments therefrom, except as expressly permitted herein, and shall comply in all material respects with all applicable federal and state laws and regulations.

Section 3.03  Maintenance of Rights in Collateral.

The Servicer shall record documents with the FAA and shall file the UCC financing statements and other documents or instruments set forth in Section 2.03 of the Contribution and Sale Agreement within the time frames set forth therein and thereafter will file such additional UCC financing statements and continuation statements and assignments and other documents or instruments so that the security interest in favor of the Indenture Trustee in the Collateral will be perfected by such filings with the appropriate UCC filing offices and other Governmental Authorities.

Section 3.04  Costs of Servicing; Servicing Fee.

Except with respect to funds withdrawn and applied by the Servicer pursuant to Sections 6.03 and 6.04 hereof, all costs of administering and servicing the Collateral in the manner required by this Agreement shall be borne by the Servicer.  As compensation to the Servicer for its servicing of the Collateral, the Servicer will be entitled to receive the Servicing Fee as set forth in the related Supplements from amounts on deposit in the Trust Account.  Such Servicing Fee shall be paid at the times and in the priority set forth in the Supplements.  The Servicer shall also be entitled to receive reimbursement of extraordinary out-of-pocket expenses incurred by the Servicer in connection with its activities hereunder which have been authorized by the Administrative Agent.

Section 3.05  Servicer Report.

On or prior to each Determination Date, provided however, no later than 1:00 P.M. (New York City time), the Servicer shall deliver a written Servicer Report, substantially in the form of Exhibit A hereto, to the Indenture Trustee and the Rating Agency, if any.

Section 3.06  Reserved.

Section 3.07  Other Information.

The Servicer shall, at the Indenture Trustee’s reasonable written request, furnish to the Indenture Trustee from time-to-time such information and make such calculations as may be relevant to the performance of the Indenture Trustee’s duties as set forth in the Indenture.

Section 3.08  Issuer to Cooperate.

(a)           Upon the Issuer’s written consent to any enforcement of any remedies or rights provided by the Lease Agreements on its behalf by the Servicer, the Issuer shall thereafter upon written request of the Servicer execute and deliver to the Servicer any court pleadings, requests for trustee’s sale or other documents necessary with respect to any such enforcement.  Together with such documents or pleadings, the Servicer shall deliver to the Issuer a certificate of a

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servicing officer requesting that such pleadings or documents be executed by the Issuer and certifying as to the reason such documents or pleadings are required.

(b)           The Issuer shall furnish the Servicer with any powers of attorney and other documents necessary or appropriate to enable the Servicer to carry out its duties and to exercise its authority hereunder.

(c)           If in any action or legal proceeding it is held that the Servicer may not enforce a Lease Agreement on the ground that the Servicer is not a real party in interest or a holder entitled to enforce the Lease Agreement, then the Indenture Trustee and the Issuer shall, at the Servicer’s request and expense, take such steps as the Servicer deems reasonably necessary and shall have been set forth in writing to the Indenture Trustee or the Issuer, as appropriate, to enforce the Lease Agreement, including bringing suit in the name of the Issuer, the Indenture Trustee, or on behalf of the Noteholders, as appropriate.

Section 3.09  Gross Revenues.

As of any date of determination, at least 66.67% of the Servicer’s gross revenues shall be derived from the ownership, leasing or trading of, and management for third parties of, aircraft engines, other power producing engines, air frames and related equipment.

Section 3.10  Remarketing of Engines; Designation of Re-Leasing.

(a)           The Servicer as agent for the Issuer shall use reasonable efforts to sell or re-lease any Contributed Engine upon the expiration or early termination of a Lease Agreement relating to a Contributed Engine (unless the Lessee shall have exercised the purchase option under such Lease Agreement and made payment therefor) on the best terms then available.  Any such sale or re-lease of Contributed Engines shall be conducted in accordance with the standards set forth in Section 3.02.  In the event that the Servicer receives more than one offer for the sale or re-lease of a Contributed Engine, the Servicer will be required to select the sale or re-lease proposal which, in its reasonable judgment, is most likely to maximize the total future proceeds.

(b)           Any re-lease of a Contributed Engine shall be designated by the Servicer as such.  Upon such designation, the Servicer shall amend the List of Lease Agreements and, if necessary, all applicable UCC financing statements and other filings, as appropriate and shall record the Lease Agreement related to such Engine with the FAA and any other applicable Governmental Authorities.

Section 3.11  Assignment of Lease Agreements.

Except as set forth in a Lease Agreement, the Servicer shall not, without the prior written consent of the Issuer and the consent of a Global Requisite Majority of Noteholders, enter into any agreement which permits a Lessee to assign its obligations under such Lease Agreement.

Section 3.12  Interest Rate Hedge Agreements.

The Servicer on behalf of the Issuer may enter into Interest Rate Hedge Agreements on such terms as the Issuer may approve.  The Servicer will not enter into any Interest Rate Hedge

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Agreement under which the Issuer assumes liability without the consent of a Global Requisite Majority, other than any Interest Rate Hedge Agreement in effect on the Transfer Date, which consent shall not be unreasonably withheld.

Section 3.13  Evidence of Insurance.

The Servicer will provide confirmation of the renewal of the insurance required by Section 3.01(a)(i) and (v) and Section 3.01(h) hereof annually and will forward copies of all certificates evidencing cancellation, nonrenewal, expiration, replacement or renewal to the Indenture Trustee, promptly after receipt.

Section 3.14  Servicer Advances.

All extraordinary out-of-pocket payments payable pursuant to Section 3.04 and made by the Servicer hereunder which have been authorized by the Administrative Agent shall constitute a “Servicer Advance”and be reimbursable to the Servicer from funds on deposit in the Trust Account prior to any distributions pursuant to the Supplements.

Section 3.15  Lessee Acknowledgements.

On each Transfer Date, the Servicer as agent for the Issuer shall send to each Lessee under each Lease Agreement that will be the subject of a Loan a written certificate in substantially the form as may be required in the relevant Lease Supplement or such other form as may be agreed by the Administration Agent.

ARTICLE IV

INDEMNIFICATION

Section 4.01  Indemnification.

The Servicer agrees to indemnify and hold harmless the Issuer, the Administrative Agent, the Indenture Trustee, the Noteholders and their respective directors, officers, employees and agents (each, an “Indemnified Party”)against any and all liabilities, claims, losses, damages, penalties, costs and expenses (including costs of defense and legal fees and expenses) which may be incurred or suffered by such Indemnified Party (except to the extent caused by gross negligence or willful misconduct on the part of the Indemnified Party) in connection with any action provided for in this Agreement, including those provided in Sections 3.08 and 5.06 hereof, and otherwise arising out of, or based upon, a breach by the Servicer of its obligations under this Agreement or any other Related Document or any information certified in any schedule, Servicer Report or other document delivered by the Servicer being untrue in any material respect as of the date of such certification; provided that the foregoing indemnity shall in no way be deemed to impose on the Servicer any obligation to make any payment with respect to principal or interest on the Notes or to reimburse the Issuer for any payments on account of the Notes.  The obligations of the Servicer under this Section shall survive the termination of this Agreement, the resignation or removal of the Indenture Trustee (to the degree that such claim arose prior to the date of such resignation or removal), and the termination of the Servicer pursuant to the terms hereof.

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ARTICLE V

COVENANTS OF THE SERVICER

Section 5.01  Existence of the Servicer.

On and after the Effective Date, and subject to the next succeeding paragraph, the Servicer will keep in full force and effect its existence, rights and franchise as a corporation under the laws of its jurisdiction of incorporation and will preserve its qualification to do business as a foreign corporation in each jurisdiction to the extent necessary to protect the validity and enforceability of the Collateral or to permit performance of the Servicer’s obligations under this Agreement where the absence of such qualification would materially and adversely affect the properties, business or condition of the Servicer and its subsidiaries or the ability of the Servicer to perform its obligations under this Agreement.

On and after the Effective Date, the Servicer shall not merge or consolidate with another Person unless (i) the surviving entity, if not the Servicer, shall execute and deliver to the Issuer and the Indenture Trustee, in form and substance satisfactory to each of them, (x) an instrument expressly assuming all of the obligations of the Servicer hereunder, and (y) an opinion of counsel to the effect that such entity has effectively assumed the obligations of the Servicer hereunder, that all conditions precedent provided for in this Agreement relating to such transaction have been complied with, that in the opinion of such counsel, all financing statements and continuation statements and amendments thereto have been executed and filed that are necessary fully to preserve and protect the interest of the Issuer and the Indenture Trustee in the Collateral, and reciting the details of such filings, or stating that no such action shall be necessary to preserve and protect such interest, (ii) the Guarantor shall acknowledge to the Indenture Trustee in writing that the Guaranty remains in full force and effect, (iii) immediately after giving effect to such transaction, no Servicer Event of Default, and no event which, after notice or lapse of time, or both, would become a Servicer Event of Default shall have occurred and be continuing, (iv) the surviving entity shall have a minimum net worth of not less than the amount which the Servicer was required to maintain immediately prior to such transfer pursuant to Section 7.01(ix), (v) the Servicer shall deliver to the Indenture Trustee a letter from the Rating Agency, if any, to the effect that such consolidation, merger or succession will not result in a downgrading of the rating of any Notes, if such a rating existed immediately prior to such consolidation, merger or succession and (vi) at least 66.67% of the surviving entity’s gross revenues must be derived from the ownership, leasing and trading of, and management for third parties of, aircraft engines, other power producing engines, airframes and related equipment.

Section 5.02  Limitation on Liability of the Servicer and Others.

(a)           Neither the Servicer nor any of the directors, officers, employees or agents of the Servicer shall incur any liability to the Issuer, the Indenture Trustee or the Noteholders, for any reasonable action taken or not taken in good faith pursuant to the terms of this Agreement with respect to any portion of the Collateral; provided, however, that this provision shall not protect the Servicer or any such Person against any breach of representations or warranties made by it herein or in any certificate delivered in conjunction with the purchase of the Notes or for any liability that would otherwise be imposed by reason of willful misfeasance or gross negligence in

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the performance of its duties hereunder or by reason of reckless disregard of obligations and duties hereunder.

(b)           Except as provided in this Agreement, the Servicer shall not be under any obligation to appear in, prosecute, or defend any legal action that shall not be incidental to its duties to service the Collateral in accordance with this Agreement, and that in its opinion may involve it in any extraordinary expense or liability; provided, however, that the Servicer may undertake, at its expense, any reasonable action that it may deem necessary or desirable in respect of this Agreement and the rights and duties of the parties to this Agreement and the interests of the Noteholders under this Agreement.

(c)           Subject to Section 5.02(a), the Servicer and any director or officer or employee or agent of the Servicer may rely in good faith on the advice of counsel, outside accounting firm or other agent selected by it with due care or on any document of any kind, prima facie properly executed and submitted by any Person respecting any matters arising hereunder.

Section 5.03  Servicer Not to Resign or be Removed.

On and after the Effective Date, the Servicer shall not resign from the servicing obligations and duties hereby imposed on it except in connection with an assignment permitted by Section 8.02 or upon determination that such obligations or duties hereunder are no longer permissible under applicable law.  Any such determination permitting the resignation of the Servicer shall be evidenced by an Opinion of Counsel, in form and substance satisfactory to the Control Party, to such effect delivered to the Indenture Trustee.

Except as provided in Sections 7.02 and 8.02, the Servicer shall not be removed or be replaced as Servicer with respect to the Collateral or any portion thereof.

No resignation or removal of the Servicer shall in any event become effective until the successor Servicer shall have assumed the Servicer’s servicing responsibilities and obligations in accordance with Section 7.03.

Section 5.04  Financial and Business Information.

On and after the initial Transfer Date, the Servicer shall deliver to the Issuer, the Indenture Trustee and each Noteholder:

(a)           promptly upon their becoming available, but in no event later than 120 days, in the case of the Forms 10-K, and 60 days, in the case of the Forms 10-Q after the end of the period covered by such Form, one copy of each annual report to shareholders, reports on Forms 8-K, 10-K, and 10-Q, proxy statement, registration statement, prospectus and notices filed with or delivered to any securities exchange, the Securities and Exchange Commission or any successor agencies, in each case relating to the Servicer or the Notes;

(b)           immediately upon any officer of the Servicer becoming aware of the existence of any condition or event which constitutes (or with the passage of time and/or the giving of notice would constitute) a Servicer Event of Default, a written notice describing its nature and period of existence and what action the Servicer is taking or proposes to take with respect thereto;

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(c)           written notice of the following, promptly upon the Servicer’s becoming aware of such events or conditions:

(i)            any proposed or pending investigation of it by any Governmental Authority or agency, or

(ii)           any court or administrative proceeding which individually or in the aggregate involves a likelihood of material and adverse effect upon the properties, business, profits or condition (financial or otherwise) of the Servicer, a written notice specifying the nature of such investigation or proceeding and what action the Servicer is taking or proposes to take with respect thereto and evaluating its merits;

(d)           immediately upon becoming aware of the existence of any condition that would constitute a Servicer Event of Default with respect to any item of the Collateral, a written notice describing its nature and period of existence and what action the Servicer is taking or proposes to take with respect thereto; and

(e)           upon written request, the Servicer shall furnish to the Issuer, the Indenture Trustee and the Administrative Agent, within five (5) Business Days of receipt of such request: a list of all Contributed Engines and related Lease Agreements held as part of the Collateral as of the end of the most recent Collection Period and with reasonable promptness, any other data and information which may be reasonably requested from time-to-time.

Section 5.05  Officer’s Certificates.

With each set of documents delivered pursuant to Section 5.04(a) the Servicer will deliver an Officer’s Certificate substantially in the form of Exhibit B hereto stating (i) that the officer signing such Officer’s Certificate has reviewed the relevant terms of this Agreement and has made, or caused to be made under such officer’s supervision, a review of the activities of the Servicer during the period covered by the statements then being furnished, (ii) that the review has not disclosed the existence of any Servicer Event of Default or, if a Servicer Event of Default exists, describing its nature and what action the Servicer has taken and is taking with respect thereto, and (iii) that on the basis of such review the officer signing such certificate is of the opinion that during such period the Servicer has serviced the Collateral in compliance with the procedures hereof except as described in such certificate.

Section 5.06  Inspection.

On and after the initial Transfer Date, the Servicer shall make available to the Issuer, the Indenture Trustee, the Noteholders or their respective duly authorized representatives, attorneys or auditors the accounts, records and computer systems maintained by the Servicer with respect to the Collateral at such times during normal operating hours as the Indenture Trustee shall reasonably request which do not unreasonably interfere with the Servicer’s normal operations or customer or employee relations.  Nothing in this Section 5.06 shall affect the obligation of the Servicer to observe any applicable law or contract prohibiting disclosure of information, and the failure of the Servicer to provide access to information as a result of such obligation shall not constitute a breach of this Section 5.06.  All reasonable out-of-pocket expenses incurred during the exercise of any rights by any Person under this Section 5.06 during the continuance of a

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Servicer Event of Default (or any condition or event which with the giving of notice or the lapse of time or both would become a Servicer Event of Default) shall be paid by the Servicer.

Section 5.07  Servicer Records.

On or before the initial Transfer Date, the Servicer will indicate in its records that it is servicing and administering the Collateral in its capacity as Servicer hereunder, at the request and for the benefit of the Issuer and subject to the provisions of the Indenture.

Section 5.08  No Bankruptcy Petition Against the Issuer.

The Servicer covenants and agrees it will not, prior to the date that is one year and one day after the payment in full of the Notes and all other amounts owing pursuant to the Indenture, institute against, or join any other Person in instituting against, the Issuer, any bankruptcy, reorganization, receivership, arrangement, insolvency or liquidation proceedings or other similar proceedings under any federal or state bankruptcy or similar law.  This Section 5.08 shall survive the termination of this Agreement.

Section 5.09  Compliance with Lease Agreements.

The Servicer will comply with, and shall cause each of its Affiliates to comply with, all of their respective covenants and agreements contained in each of the Lease Agreements to which it is a party or by which it is bound.

Section 5.10  Annual Independent Public Accountants’ Servicing Report.

On or before April 30 of each year, beginning April 30, 2003, the Servicer at its expense shall cause a firm of independent public accountants to furnish a statement to the Indenture Trustee to the effect that such firm has examined certain documents and records relating to the servicing of the Collateral and the reporting requirements with respect thereto with respect to the prior calendar year and that, on the basis of such examination, the allocation of payments has been made in compliance with this Agreement, except for (i) such exceptions as such firm shall believe to be immaterial and (ii) such other exceptions as shall be set forth in such statement.

Section 5.11  Liens.

The Servicer agrees not to create, incur, assume or grant, or suffer to exist, directly or indirectly, any lien, security interest, pledge or hypothecation of any kind on or concerning the Collateral, including the Lease Agreements and Contributed Engines, title thereto or any interest therein or in this Agreement to any Person other than the Indenture Trustee, except for Permitted Encumbrances.  The Servicer will promptly take or cause to be taken such actions as may be necessary to discharge any such lien in accordance with the standards set forth in Section 3.02.

Section 5.12  Non-Consolidation with Issuer.

The Servicer represents, warrants and covenants to take the following actions to maintain its existence separate and apart from any other Person:

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(a)           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 that the Issuer’s assets are not available to satisfy the obligations of such affiliate;

(b)           not commingle its funds or assets with those of any other entity;

(c)           hold its assets in its own name;

(d)           conduct its business solely in its own name;

(e)           pay its own liabilities out of its own funds and assets;

(f)            observe all corporate formalities;

(g)           maintain an arm’s-length relationship with its affiliates;

(h)           not assume or guarantee or become obligated for the debts of the Issuer or any Owner Trust or hold out its credit as being available to satisfy the obligations of the Issuer or any Owner Trust except with respect to (i) obligations in connection with the Guaranty in connection with its capacity as the Seller and (ii) obligations in connection with 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 the Issuer in connection with its capacity as the Seller;

(i)            allocate fairly and reasonably overhead or other expenses that are properly shared with the Issuer, including without limitation, shared office space, and use separate stationery, invoices and checks from the Issuer;

(j)            identify and hold itself out as separate and distinct from the Issuer and will not hold the Issuer out as a division or part of itself;

(k)           correct any known misunderstanding regarding the Issuer’s separate identity from it;

(l)            not enter into, or be a party to, any transaction with the Issuer or its 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 arms-length transaction with an unrelated third party; and

(m)          not pay the salaries of the Issuer’s employees, if any.

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ARTICLE VI

PAYMENTS RELATING TO THE COLLATERAL

Section 6.01  Direction to Lessees.

On or prior to each Transfer Date, the Servicer, as agent for the Issuer, shall 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 with respect to such Lease Agreements made on or after such Transfer Date, including, without limitation, all Scheduled Payments, Maintenance Reserve Payments and Security Deposits 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 6.02  Trust Account.

(a)           Promptly upon receipt thereof (but in no event later than two (2) Business Days after receipt), the Servicer, as agent for the Issuer, shall deposit into the Trust Account those amounts that have been remitted to the Servicer that the Servicer ascertains to be Scheduled Payments, prepayments and other payments, including but not limited to, 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 Servicer shall not be deposited in the Trust Account but shall be paid directly to the person entitled to such indemnification or insurance payment; provided, further, that the Servicer shall not be obligated to remit all, or any portion of, the foregoing amount from which the Servicer shall be entitled hereunder to reimburse itself for Servicer Advances.

(b)           Promptly upon receipt thereof (but in no event later than two (2) Business Days after receipt), the Servicer shall deposit into the Trust Account the aggregate Warranty Purchase Amount due and payable by the Seller pursuant to the Contribution and Sale Agreement.

(c)           Notwithstanding the foregoing, the Servicer shall not be obligated to deposit the amounts set forth in Sections 6.02(a) or (b) in respect of Lease Agreements and the related Contributed Engines for which the Warranty Purchase Amount or prepayment has been deposited previously and may deduct from amounts otherwise payable by it to the Trust Account, or request in writing the Indenture Trustee to deduct from the Trust Account and pay to the Servicer, an amount equal to amounts previously deposited by the Servicer or a subservicer into the Trust Account but which are later determined by the Servicer to have resulted from mistaken deposits.

(d)           By not later than each Determination Date, the Servicer, as agent for the Issuer, 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

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and Security 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 of 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.

(e)           The Servicer shall maintain accurate records of the source of each payment received by it or deposited into the Trust Account in order to allocate such payment to the Series to which it relates, if more than one Series is outstanding.

Section 6.03  Engine Reserve Account.

The Servicer shall maintain records that will identify amounts on deposit in the Engine Reserve Account subaccount to a specific Eligible Engine.  The Servicer, as agent for the Issuer, shall be entitled to withdraw and apply funds from the Engine Reserve Account for the payment of maintenance expenses with respect to the related Eligible Engine or otherwise in accordance with the terms of the applicable Lease Agreement with respect to the related Eligible Engine; provided, however, that so long as a Servicer Default is then in effect, the Issuer shall not be entitled to instruct the Servicer 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 such determination by written instrument delivered to the Indenture Trustee).

Section 6.04  Security Deposit Account.

The Servicer shall maintain records that will identify amounts on deposit in the Security Deposit Account subaccount to a specific Eligible Engine.  The Servicer, as agent for the Issuer, shall be entitled to withdraw and apply funds from the Security Deposit Account in accordance with the terms of the applicable Lease Agreement with respect to the related Eligible Engine; provided, however, that so long as a Servicer Default is then in effect, the Issuer shall not be entitled to instruct the Servicer 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 such determination by written instrument delivered to the Indenture Trustee).

Section 6.05  Investment of Monies Held in the Trust Account, Series Account, Engine Reserve Account, Restricted Cash Account and the Security Deposit Account.

The Servicer shall direct the Indenture Trustee to invest the amounts on deposit in the Trust Account, the Series Account, the Engine Reserve Account, the Restricted Cash Account and the Security Deposit Account as provided in Section 304 of the Indenture.  Investment Earnings on Eligible Investments in the Series Account shall be available for distribution on each Payment Date in accordance with the provisions of the related Supplement.  Investment Earnings on Eligible Investments in the Restricted Cash Account, the Engine Reserve Account and the

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Security Deposit Account shall be retained in such Account and shall be distributed in accordance with the provisions of the Indenture and the related Supplements.

ARTICLE VII

SERVICER EVENTS OF DEFAULT; TERMINATION

Section 7.01  Servicer Events of Default.

The following events and conditions shall constitute “Servicer Events of Default”upon their occurrence at any time on or after the initial Transfer Date:

(i)            failure on the part of the Servicer to remit to the Indenture Trustee any amount required to be remitted under this Agreement within the time period required under this Agreement; provided, however that the failure of the Indenture Trustee to accept any remittance from the Servicer shall not constitute a Servicer Event of Default;

(ii)           failure on the part of the Servicer to deliver to the appropriate party any financial statement or management report required to be delivered under this Agreement within fifteen (15)Business Days of when required to be delivered under this Agreement;

(iii)          (A) failure on the part of the Servicer to deliver a Servicer Report within five (5) Business Days of the date required pursuant to Section 3.05 hereof or (B) the Servicer delivers a Servicer Report which is materially incorrect and the Servicer fails to correct such inaccuracy for a period of five (5) Business Days after the earlier of (x) the Servicer becoming aware of such inaccuracy or (y) the giving of written notice of such inaccuracy (I) to the Servicer by the Indenture Trustee or (II) to the Servicer and the Indenture Trustee by a Global Requisite Majority of Noteholders;

(iv)          failure on the part of the Servicer duly to observe or perform in any material respect any other of its respective covenants or agreements in this Agreement which failure continues unremedied for a period of thirty (30) days after the earlier of (x) any officer of the Servicer becoming aware of such failure or (y) the giving of written notice of such failure (I) to the Servicer by the Indenture Trustee or (II) to the Servicer and the Indenture Trustee by a Global Requisite Majority of Noteholders;

(v)           if any representation or warranty of the Servicer made in this Agreement or in any certificate or other writing delivered pursuant hereto or any other Related Documents is incorrect in any material respect as of the time when the same shall have been made;

(vi)          the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Servicer in an involuntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization, or other similar law or (B) a decree or order adjudging the Servicer bankrupt or insolvent, or approving as properly filed a petition seeking reorganization of the Servicer, or arrangement or adjustment of the Servicer’s assets, of or in respect of the Servicer under any applicable federal or state law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator, or other similar official of the Servicer or of any substantial part of its property, or ordering the winding-up or liquidation of the

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affairs of the Servicer, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of ninety (90) consecutive days;

(vii)         the commencement by the Servicer of a voluntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization, or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by the Servicer to the entry of a decree or order for relief in respect of the Servicer in an involuntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization, or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against the Servicer, or the filing by the Servicer of a petition or answer or consent seeking reorganization or relief under any applicable federal or state law, or the consent by the Servicer to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator, or similar official of the Servicer or of any substantial part of its property, or the making by the Servicer of an assignment for the benefit of creditors, or the failure by the Servicer to pay its debts generally as they become due, or the taking of corporate action by the Servicer in furtherance of any such action;

(viii)        any assignment by the Servicer, or any attempt by the Servicer to assign its duties or rights hereunder, except as specifically permitted hereunder;

(ix)           Tangible Net Worth of the Willis Companies shall at any time be less than the sum of: (i)  $75,000,000; plus (ii) if positive, 75% of the cumulative Net Income of the Willis Companies for each fiscal quarter earned from and after December 31, 2000 (without any deduction for net losses for any fiscal quarter); plus (iii) 75% of the net proceeds received by Servicer from the issuance of common stock or preferred stock of Servicer after January 1, 2001;

(for purposes of this clause (ix), the following terms shall have the following meanings:

“Intangible Assets” shall mean all assets which would be classified as intangible assets under GAPP consistently applied, including without limitation, goodwill (whether representing the excess of cost over book value of assets acquired or otherwise), patents, trademarks, trade names, copyrights, franchises, and deferred charges (including, without limitation, unamortized debt discount and expense, organization costs, and research and development costs).  For purposes of this definition, prepayments of taxes, license fees and other expenses shall not be deemed Intangible Assets.

“Net Income” shall mean net income of the Willis Companies after taxes, determined in accordance with GAAP.

“Net Worth” shall mean, at any particular time, all amounts in conformity with GAAP, that would be included as stockholder’s equity on a consolidated balance sheet of the Willis Companies excluding other comprehensive income or loss resulting from the implementation of SFAS 133.

“Subsidiary” shall mean a corporation or other entity the shares of stock or other equity interests of which having ordinary voting power (other than stock or other equity interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation are at the time owned, or the management of

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which is otherwise controlled, directly or indirectly through one or more intermediaries or both, by the Servicer.

“Tangible Net Worth” shall mean Net Worth minus Intangible Assets.

“Willis Companies” shall mean the Servicer and its consolidated Subsidiaries.

(x)            failure on the part of the Servicer to maintain a total debt-to-equity ratio of less than or equal to 5.0 to 1.0;

(xi)           failure on the part of the Servicer to maintain an EBIT Ratio equal to at least 1.20 to 1.0 on a rolling four (4) quarter basis;

(xii)          occurrence of an “Event of Default” (as defined in the related agreements) under any debt obligations of the Servicer (other than debt obligations which are nonrecourse to the credit of the Servicer) in an amount greater than $5,000,000;

(xiii)         the Servicer is consolidated with, merged with, or sells its properties and assets substantially as an entity to another entity, unless the Servicer is the surviving entity;

(xiv)        Reserved;

(xv)         Charles F. Willis, IV ceases to be either an officer or director of the Servicer; provided, however, that a Servicer Event of Default shall not have occurred if in the event of the death or disability of Charles F. Willis, IV, the Servicer notifies the Administrative Agent and takes the appropriate action as specified by the Administrative Agent, but in no event later than 90 days after such death or disability; or

(xvi)        the Servicer shall fail to own one hundred percent of the beneficial ownership of the Issuer.

Prior to the declaration of a Servicer Event of Default, as provided in Section 7.01 above, a Global Requisite Majority of Noteholders may waive in writing any past Servicer Event of Default.  Upon any such written waiver, any such Servicer Event of Default shall be deemed to have been cured.  No such waiver shall extend to any subsequent or other Servicer Event of Default or impair any right consequent to it.

Section 7.02  Termination.

If a Servicer Event of Default, except for a Servicer Event of Default as described in Section 7.0 l(xvi), shall have occurred and be continuing, the Indenture Trustee shall, following the request of a Global Requisite Majority of Noteholders, give written notice to the Servicer and the Issuer of the termination of all of the rights and obligations of the Servicer under this Agreement.  On the receipt by the Servicer of such written notice and the acceptance by a successor Servicer (the “Successor Servicer”) of its appointment, all rights and obligations of the Servicer under this Agreement, including without limitation the Servicer’s right hereunder to receive Servicing Fees accruing subsequent to such termination date, shall cease and the same shall pass to and be vested in, and assumed by, the Successor Servicer pursuant to and under this

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Agreement.  The Successor Servicer is hereby authorized and empowered to execute and deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, any and all other instruments or things necessary or appropriate to effect the purposes of such notice of termination.

Notwithstanding any other provision of this Agreement, the provisions of this Agreement are terminable by the Issuer, with or without cause and without regard to whether a Servicer Event of Default has occurred, upon thirty (30) day’s prior written notice to the Servicer; provided, however,that any such termination shall require the prior written consent of the Indenture Trustee.

Section 7.03  Appointment of Successor.

(a)           After the date on which the Servicer has received a notice of termination pursuant to Section 7.02, the Indenture Trustee shall, at the direction of a Global Requisite Majority of Noteholders, appoint a Successor Servicer designated by such Global Requisite Majority of Noteholders.

(b)           Pending appointment of a Successor Servicer hereunder, the Indenture Trustee shall prepare the Servicer Report in accordance with Section 3.05 hereof.  So long as the Indenture Trustee actually prepares such Servicer Report, the Indenture Trustee shall be entitled to receive as additional compensation the Servicing Fee set forth in Section 3.04 hereof.  Nothing contained in this Section 7.03(b) shall be construed to require the Indenture Trustee to perform any other obligation of the Servicer set forth in this Agreement.

Section 7.04  Servicer to Cooperate.

The Servicer hereby agrees to cooperate with the Successor Servicer appointed in accordance with Section 7.02 or Section 7.03 hereof, as applicable, in effecting the termination and transfer of the responsibilities and rights of the Servicer hereunder to the Successor Servicer, including, without limitation, the execution and delivery of assignments of UCC financing statements, and the transfer to the Successor Servicer for administration by it of all cash amounts then held by the Servicer or thereafter received with respect to the Collateral.  The Servicer hereby agrees to transfer to any Successor Servicer its electronic records and all other records, correspondence and documents relating to the Collateral in the manner and at such times as the Successor Servicer shall reasonably request.  The Servicer hereby designates the Successor Servicer its agent and attorney-in-fact to execute transfers of UCC financing statements and any other filings or instruments which may be necessary or advisable to effect such transfer of the Servicer’s responsibilities and rights hereunder.

Section 7.05  Remedies Not Exclusive.

Nothing in the preceding provisions of this Article VII shall be interpreted as limiting or restricting the rights or remedies which the Issuer, any Owner Trust, the Indenture Trustee, the Noteholders, the Indemnified Parties or any other Person would otherwise have at law or in equity against the Servicer on account of the breach or violation of any provision of this Agreement, including without limitation the right to recover full and complete damages on account thereof to the extent not inconsistent with Section 5.02 hereof.

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ARTICLE VIII

ASSIGNMENT

Section 8.01  Assignment to Indenture Trustee.

It is understood that this Agreement and all rights of the Issuer hereunder will be assigned by the Issuer to the Indenture Trustee, for the benefit of the Indenture Trustee and the Noteholders, and may be subsequently assigned by the Indenture Trustee to any successor Indenture Trustee.  The Servicer hereby expressly agrees to each such assignment and agrees that all of its duties, obligations, representations and warranties hereunder shall be for the benefit of, and may be enforced by, the Indenture Trustee, and, if provided in the Indenture, by the Noteholders.

Section 8.02  Assignment by Servicer.

None of the rights or obligations of the Servicer hereunder may be assigned without the prior written consent of the Issuer and the Indenture Trustee (acting upon the instructions of a Global Requisite Majority of Noteholders; providedthat nothing herein shall preclude the Servicer from performing its duties hereunder through the use of agents to the extent that such use is consistent with the Servicer’s business practices in dealing with similar assets held for its own account; and provided, further, that the use of an agent shall not relieve the Servicer from any of its obligations hereunder.

ARTICLE IX

MISCELLANEOUS PROVISIONS

Section 9.01  Amendment.

(a)           This Agreement may be amended from time-to-time by the Servicer and the Issuer, but without the consent of any of the Noteholders, to cure any ambiguity, to correct or supplement any provision herein that may be inconsistent with any other provisions herein, or to add or amend any other provisions with respect to matters or questions arising under this Agreement; provided, however, that such action shall not, as evidenced by an Opinion of Counsel, adversely affect in any material respect the interests of the Noteholders, the Indenture Trustee, the Administrative Agent or any other Indemnified Party.

(b)           This Agreement may also be amended from time-to-time by written amendment duly executed by the parties hereto with the consent of a Global Requisite Majority of Noteholders; provided, however, that such amendment may not, without the consent of all of the Noteholders (i) reduce in any manner the amount of, or accelerate or delay the timing of, collections of payments on the Collateral or distributions that are required to be made for the benefit of the Noteholders, (ii) reduce the aforesaid percentage of Noteholders which are required to consent to any such amendment or take any other action hereunder, or (iii) modify this Section 9.01.  The Servicer shall deliver copies of any amendment to this Agreement to the Indenture Trustee.

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Section 9.02  Waivers.

No failure of delay on the part of the Issuer or any Owner Trust inexercising any power, right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or remedy preclude any other or further exercise thereof or the exercise of any other power, right or remedy.

Section 9.03  Notices.

All communications and notices pursuant hereto to any party shall be in writing or by telegraph or telecopy and addressed or delivered to it at its address (or in case of telecopy, at its telecopy number at such address) as follows or at such other address as may be designated by it by notice to the other party and, if mailed or sent by telegraph, shall be deemed given when mailed, communicated to the telegraph office or telecopy:

(a)           in the case of the Servicer:

Willis Lease Finance Corporation
2320 Marinship Way, Suite 300
Sausalito, California 94965
Telecopy:  (415) 331-0607
Attention:  Counsel

(b)           in the case of the Issuer:

Willis Engine Funding LLC
2320 Marinship Way
Sausalito, California 94965
Telecopy:  (415) 331-0607
Attention: Chief Financial Officer

with a copy to:

Gibson, Dunn & Crutcher LLP
333 South Grand Avenue
Los Angeles, California 90071
Attention: Brian D. Kilb

Section 9.04  Costs and Expenses.

The Servicer will pay all expenses incident to the performance of its obligations under this Agreement and the Servicer agrees to pay all reasonable out-of-pocket costs and expenses of the Issuer and each Owner Trust,including fees and expenses of counsel, in connection with the enforcement of any obligation of the Servicer hereunder.

Section 9.05  Third Party Beneficiaries.

The Indenture Trustee, the Noteholders, the Administrative Agent and each Indemnified Party and each Owner Trust areexpress third party beneficiaries to this Agreement.

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Section 9.06  Survival of Representations.

The respective agreements, representations, warranties and other statements by the Issuer and the Servicer set forth in or made pursuant to this Agreement shall remain in full force and effect and will survive the Closing Date.

Section 9.07  Headings and Cross-References.

The various headings in this Agreement are included for convenience only and shall not affect the meaning or interpretation of any provision of this Agreement.  References in this Agreement to Section names or numbers are to such Sections of this Agreement.

Section 9.08  Governing Law.

This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to the conflicts of law principles thereof.

Section 9.09  Consent to Jurisdiction.

Each of the parties hereto irrevocably submits to the non-exclusive jurisdiction of any state or Federal court sitting in New York County over any suit, action or proceeding arising out of or relating to this Agreement.  Each of the parties hereto irrevocably waives, to the fullest extent permitted by law, any objection which it may have to the laying of the venue of any such suit, action or proceeding brought in such a court and any claim that any such suit, action or proceeding brought in such a court has been brought in an inconvenient forum.  Each of the parties hereto agrees that the final judgment in any such suit, action or proceeding brought in such a court shall be conclusive and binding upon each of the parties hereto and may be enforced by the courts of New York (or any other courts to the jurisdiction of which it is subject) by a suit upon such judgment, provided that service of process is effected upon it as permitted by law; provided, however, that each of the parties hereto does not waive, and the foregoing provisions of this sentence shall not constitute or be deemed to constitute a waiver of, (i) any right to appeal any such judgment, to seek any stay or otherwise to seek reconsideration or review of any such judgment or (ii) any stay of execution or levy pending an appeal from, or a suit, action or proceeding for reconsideration or review of, any such judgment.

Section 9.10  Counterparts.

This Agreement may be executed in two or more counterparts and by different parties on separate counterparts, each of which shall be an original, but all of which together shall constitute one and the same instrument.

Section 9.11  General Interpretive Principles.

For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:

(a)           accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles as in effect on the date hereof,

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(b)           references herein to “Articles”, “Sections”, “Subsections”, “paragraphs”, and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, paragraphs and other subdivisions of this Agreement;

(c)           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;

(d)           the words “herein”, “hereof”, “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular provision; and

the term “include” or “including” shall mean without limitation by reason of enumeration.

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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed by their respective officers thereunto duly authorized as of the date first above written.

WILLIS LEASE FINANCE CORPORATION
By:	/s/ DONALD A. NUNEMAKER
	Name: Donald A. Nunemaker
	Title: Executive Vice President, Chief Operating Officer
WILLIS ENGINE FUNDING LLC
By:	/s/ MONICA J. BURKE
	Name: Monica J. Burke
	Title: Chief Financial Officer

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EX-10.34

Exhibit 10.34

INDEPENDENT CONTRACTOR AGREEMENT

THIS INDEPENDENT CONTRACTOR AGREEMENT (the “Agreement”) is entered into on this 13^th day of September, 2002 by and between Hans Jörg Hunziker (or a company which is majority-owned by Mr. Hunziker) (“Contractor”) whose address is Luxweg 13, 8155 Niederhasle, Switzerland, and Willis Lease Finance Corporation (“WLFC”) whose address is 2320 Marinship Way, Suite 300, Sausalito, CA  94965 USA.  Contractor and WLFC are sometimes referred to in this Agreement as the “Party” or collectively as the “Parties.”

R E C I T A L S

A.            Contractor is knowledgeable in the aircraft and engine leasing area and holds contacts in this regard in Europe and elsewhere throughout the world.

B.            WLFC desires to retain the services of Contractor, and Contractor desires to perform services for WLFC, upon the terms and conditions hereinafter set forth.

A G R E E M E N T

The Parties agree as follows:

1.             Services.  During the term of this Agreement, and subject to the terms and conditions hereinafter set forth, Contractor shall perform services within his area of expertise for WLFC, including, but not necessarily limited to, helping WLFC raise debt/equity in Europe, representing WLFC at SR Technics, assisting in the identification and solicitation of potential strategic partners, and performing consulting services consisting of assisting in the sale, acquisition, or lease of aircraft engines, and at WLFC’s option, aircraft, in Europe, or other activities as Willis may reasonably request.  Contractor agrees to work on this engagement and to keep Willis regularly informed of the progress of his work by written monthly status reports.   Such services shall be performed from time to time as requested by the WLFC CEO and/or COO or their designees.

2.             Term and Termination.

(a)           Term.  The term of this Agreement shall commence effective as of 15 September, 2002 and shall continue through 14 September, 2003 subject to termination at will, with or without cause, by either party upon six (6) month’s advance written notice.

(b)           This Agreement shall terminate upon the occurrence of any of the following events:

                                (i)The dissolution or liquidation of WLFC;

                                (ii)           The death or total disability of Contractor.  Total disability is any disability which prevents Contractor from performing services hereunder for a period of fifteen (15) consecutive days, or twenty (20) nonconsecutive days;

                                (iii)          A breach by Contractor of any of Contractor’s covenants under this Agreement which Contractor fails to cure within ten (10) days after written notice of default;

                                (iv)The mutual written agreement of the Parties to this Agreement; or

                                (v)           Six (6) months after prior written notice by either Party to the other Party.

(c)           Upon termination of this Agreement for any reason whatsoever, (i) WLFC shall pay to Contractor all amounts accrued under paragraph 3 hereof up to the date of termination; (ii) Contractor shall deliver to WLFC any and all completed and uncompleted tasks which Contractor may have been performing at the time of the termination as well as all WLFC data and information, in written, recorded or physical form concerning the subject of this Agreement and entrusted to or developed by Contractor during this Agreement; and (iii) the terms and provisions of this Agreement shall have no further force or effect.

(d)           The Parties reserve the right to amend this Agreement at any time upon three (3) days prior written notice to the other Party.  All amendments must be in writing and executed by both Parties prior to the amendment taking effect.

3.             Payment.

(a)           In consideration of the services performed by Contractor hereunder, and upon completion of services performed on terms satisfactory to WLFC, Contractor shall be entitled to the compensation as set forth in the form of Exhibit A attached hereto. Contractor shall be paid in arrears based upon receipt of his monthly invoice (to be paid within 30 days), without deductions or withholdings.

(b)           Contractor shall be reimbursed within fifteen (15) days of invoice for all reasonable out-of-pocket expenses incurred solely in connection with his performance of services under this Agreement, including office rental, travel expenses, presentation preparation costs, telephone, facsimile and other communication expenses and other out-of-pocket expenses.  All other costs and expenses incurred in connection with the performance of Contractor’s obligations hereunder, including without limitation, costs and expenses associated with employees or agents of Contractor, insurance, licenses, taxes, accounting and bookkeeping costs, and legal representation, shall be for the account of, and paid by, Contractor.

Contractor will travel coach class within the E.U. and purchase the most reasonable flights available.  Overseas travel will be in business class, if available.

Contractor will submit itemized bills to WLFC monthly following the end of each calendar month, together with invoices, receipts and other evidence of all expenses included in each such bill.  All trips which are expected to cost in excess of US$2,500.00 must be approved in advance by WLFC.

4.             Relationship of the Parties.

(a)           The Parties intend that the relationship between them created by this Agreement is that of employer and independent contractor.  Neither Contractor nor any agent, employee, or servant of Contractor shall be or shall be deemed to be an agent, employee, or servant of WLFC.  The manner and means of performing services under this Agreement shall be under the sole control of Contractor.  None of the benefits provided by WLFC to its employees (including, but not limited to, compensation, insurance, vacation pay, sick leave, pension, profit sharing, health insurance and workers’ compensation insurance) shall be available to Contractor or any agent, employee or servant of Contractor.  Contractor shall be solely and entirely responsible for his acts and for the acts of his agents, employees, servants, and subcontractors during the performance of services under this Agreement, and Contractor specifically acknowledges he is covered under his own workers’ compensation and will not be covered under the workers’ compensation of WLFC.

(b)           During the term of this Agreement, including any extensions or renewals thereof, Contractor shall perform all of the duties required of him under the terms of this Agreement.

(c)           Contractor does not have the authority to bind WLFC to any contract, nor does Contractor have the authority to enter into contracts on behalf of WLFC.  Each Party agrees not to represent in any way the existence of (i) any authority to bind the other Party, or (ii) any relationship between the Parties hereto other than the independent contractor arrangement specified herein.

5.             Compliance with Laws and Regulations.  In the performance of services hereunder, Contractor agrees to act in full compliance with any and all applicable laws, rules and regulations adopted or promulgated by any governmental agency or regulatory body, including state, federal and provincial.  Contractor assumes full responsibility for the payment of any and all contributions, payroll taxes or assessments, state or federal or provincial, imposed with respect to Contractor and/or any employees of Contractor engaged in the performance of services hereunder. Contractor assumes and agrees to pay any and all gross receipts, compensating, use, transaction, sales, or other taxes or assessments of whatever nature or kind levied or assessed as a consequence of services performed or compensation paid under this Agreement.

6.             Indemnification.  Contractor shall indemnify, hold harmless, protect, and defend WLFC from and against any and all damages, losses, liabilities, obligations, or deficiencies resulting from, arising out of, or connected with, (i) the nonfulfillment of any obligation on the part of Contractor to be observed or performed under this Agreement, (ii) any and all claims made against WLFC by any third party, or third parties, at any time after the execution and delivery of this Agreement, arising out of, or connected with, any gross negligent act, or gross negligent omission, or willful misconduct of Contractor, or (iii) any demands, assessments, judgments, costs, reasonable attorneys’ fees, or other expenses arising out of, or connected with, any action, suit, proceeding or claim incident to any of the foregoing.

7.             Arbitration.  Any and all claims arising out of or related to the performance of services under this Agreement, any provision or aspect of this Agreement, or any alleged breach thereof, including any dispute as to any amount owed under this Agreement, shall be settled by arbitration in San Francisco, California in accordance with the rules then prevailing of the American Arbitration Association for Commercial Disputes; provided, however, that (i) in the event of any conflict between this and any other provision of this Agreement and such rules, the provisions of this Agreement shall prevail, and (ii) any claim must be presented for arbitration within six (6) months of the date upon which the aggrieved Party became aware of, or should have become aware of, the alleged claim.  Failure to assert a claim within six (6) months shall forever bar assertion of the claim.  The results of any arbitration shall be final and binding upon the Parties and judgment thereon may be entered in any California court.

8.             Tax Effects.  Both Parties hereto intend all payments, when made hereunder, to be fully deductible by WLFC and income to Contractor. Contractor agrees to report all payments made hereunder in full compliance with the tax legislation in Switzerland. Contractor shall be issued an IRS Form 1099 at year-end for all such income, if required.

9.             Authority.  Contractor represents and warrants that he has the right to enter into and perform this Agreement and that any consent or approval of any third party required for Contractor to do so has been obtained.

10.Confidentiality.

(a)           Contractor acknowledges that in the course of performance under this Agreement he will receive, develop and have access to the valuable, proprietary and trade secret information of WLFC and that the unauthorized disclosure of WLFC’s proprietary and trade secret information would irreparably damage WLFC.  Accordingly, Contractor agrees that all proprietary and trade secret information received or developed by Contractor as a consequence of this Agreement shall be maintained in confidence and will not be used, published or disclosed by Contractor without the prior written consent of WLFC.

(b)           The financial terms of this Agreement are also to be considered Confidential Information, subject to required reporting to authorities according to applicable local legislation.

(c)           Except in any proceeding to enforce provisions of this Agreement, Contractor, its employees, officers, directors and agents shall not publicize or disclose to any third party any of the terms or conditions of this Agreement without the prior written consent of WLFC, subject to required reporting to authorities according to applicable local legislation.

(d)           If either Party, or any one of its employees, officers, directors or agents is served with a subpoena or other process requiring production or disclosure of this Agreement or any of its terms or conditions, then the person or entity receiving such a subpoena or other process, before complying with such subpoena or other process, shall immediately notify the other of the same and permit the other a reasonable period of time (taking into account the terms of the subpoena or other process) to intervene and to contest such production.

(e)           The obligations of confidentiality discussed in this Agreement shall survive the termination of this Agreement.

11.           Copyright.  Unless otherwise specified, all work performed by Contractor under this Agreement, and all materials, products and deliverables prepared by Contractor for WLFC shall be the property of WLFC and all title and interest therein shall vest in WLFC and shall be deemed to be a “work for hire” made in the course of the services rendered hereunder.  To the extent that title to any such works may not by operation of law vest in WLFC, all rights, title and interest therein are hereby irrevocably assigned to WLFC.

12.           Inventions.  Any inventions which arise from the performance of Contractor’s services, and which are conceived or made in whole or in part by Contractor during the term of this Agreement, shall belong to WLFC, provided such inventions grow out of Contractor’s work with WLFC or are related in any manner to the business (commercial or experimental) of WLFC.  Contractor agrees to aid and cooperate with WLFC in obtaining and enforcing valid patents on such inventions and agrees to do all acts and execute all documents reasonably necessary to obtain and enforce such patents at WLFC’s request and expense.

13.           Conflicts of Interest.  During the term of this Agreement, Contractor shall be under no restriction with regard to entering into consulting arrangements with other persons or organizations, except that Contractor shall not engage in any activities which might be in conflict with WLFC’s interest, for example, working for a competitor of WLFC.  Contractor agrees to present any questions or concerns about the implementation of this provision to WLFC and the parties agree to reach a mutually satisfactory resolution of the issue.

14.           Miscellaneous.

(a)           No Waiver.  No waiver of any breach or of any one or more of the conditions or covenants in this Agreement by any Party hereto shall be deemed to imply or constitute a further waiver of any other like breach or condition or covenant.

(b)           Entire Agreement.  This Agreement sets forth the sole entire agreement and understanding between the Parties hereto as to the subject matter hereof, and merges with and supersedes all prior discussions, agreements and understandings of every and any nature between them with respect to such sub­ject matter.

(c)           Binding Effect.  All terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the Parties hereto and their successors and permitted assigns.

(d)           Assignment.  This Agreement can neither be assigned nor can the performance of any duties be delegated by the Contractor without the specific written authorization of WLFC.

(e)           Headings; Severability.  The headings in the sections of this Agreement are inserted for convenience only and shall not be considered or referred to in resolving any questions of interpretation.  The provisions of this Agreement are severable, and if any one or more provisions may be deter­mined to be judicially unenforceable, in whole or in part, the remaining provisions, and any partially unenforceable provisions, to the extent enforceable, shall nevertheless be binding and enforceable upon the Parties hereto.

(f)            Notices.  All notices, requests, demands, and other communications hereunder shall be in writing and shall be effective upon receipt.  All notices shall be given or served personally or sent by facsimile or first class mail, postage prepaid, addressed as follows:

If to WLFC:	Willis Lease Finance Corporation Attn: Legal Department 2320 Marinship Way, Suite 300 Sausalito, CA  94965 U.S.A. Tel.:  415-331-5281 Fax.: 415-331-5167
If to Contractor:	Hans Jörg Hunziker Luxweg 13 8155 Niederhasli/ZH Zurich, Switzerland Tel:  _+41 1 850 66 69_________________ Email: hunziker@hotmail.com

or to such other address which the Party receiving the notice has notified the Party giving the notice in the manner aforesaid.

(g)           Trading in Willis Lease Stock  Contractor acknowledges that while working under this Agreement and for 60 (sixty) days thereafter, Contractor shall act in compliance with the insider trading rules that apply to any trades in the publicly traded stock of Willis Lease Finance Corporation.

(h)           Force Majeure.  Neither Party shall be liable for delay or failure in the performance in whole or in part of this Agreement if such failure is caused by acts of God or public enemy, fire, flood, hurricanes, strikes or other labor disputes, riots, insurrection, war, governmental orders or actions, delays occasioned by suppliers or subcontractors or any cause beyond the control of either Party.

(i)Governing Law.  This Agreement shall be con­strued and interpreted according to the laws of the State of California.

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement effective as of the date first written above.

WILLIS LEASE FINANCE CORPORATION

/s/ Donald A. Nunemaker

Executive Vice President

Chief Operating Officer

/s/ Hans Jörg Hunziker

Independent Contractor

Exhibit A

to Independent Contractor Agreement

1.For business purposes, Contractor may use the title “Chairman, European Advisory Board”, or such other title as may be agreed to between the Parties.

2.Monthly payments for services performed shall be equal to $19,583.33, which would equate to $235,000.00 on an annual basis.

3.Monthly allowance for automobile expenses shall be equal to $1,250.00.

4.Contractor shall be eligible to receive an annual performance bonus (“Bonus”) in an amount not to exceed $117,500.00 Bonus, if awarded, to be paid proportionally as per June 30 and December 31, the first time as per December 31, 2002 per rata. Bonus shall be based upon specific performance criteria to be agreed between Contractor and WLFC.

5.Contractor shall be required to perform services for 46 out of 52 weeks during the original term of the Agreement.

EX-10.35

Exhibit 10.35

AMENDMENT NO. 1 TO CREDIT AGREEMENT

                This AMENDMENT NO. 1 TO CREDIT AGREEMENT (the “Amendment”) is dated as of November 12, 2002 between Willis Lease Finance Corporation, a Delaware corporation (“Borrower”) and ABB New Finance AB, as lender (the “Lender”).

W I T N E S S E T H

                WHEREAS, Borrower entered into a Credit Agreement dated as of September 21, 2001 (the “Credit Agreement”) with ABB Credit Finans AB (publ) (“Old ABB”);

WHEREAS, on November 5, 2002 Old ABB assigned its entire interest in and to the Loans (as defined in the Credit Agreement) and every Loan Document (as defined in the Credit Agreement) to Lender, and Lender agreed to accept the assignment and to be bound by each and every provision thereof;

                WHEREAS, Borrower  has requested that Lender amend the definition of “EBIT” so as to add back to Net Income the amount deducted for the non-cash write-off of $781,000 in previously paid legal and bank fees related to the former WLFC Funding Corporation loan from Wachovia Bank, N.A. (the “Write-Off”) and make certain other changes to the Credit Agreement and the other Loan Documents, and Lender is willing to do so.

                NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows:

                SECTION 1.  Definitions.  Capitalized terms not defined herein shall have the meanings assigned to those terms in the Credit Agreement.

                SECTION 2.  Amendment to Definitions of “EBIT” and “Interest Coverage Ratio.”

(a)           The definition of “EBIT” contained in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

                ““EBIT” shall mean the sum of (i) Net Income less any extraordinary gain or loss included in the calculation thereof, plus (ii) amounts deducted for interest expense and income taxes, plus (iii) to the extent not included in clause (ii), amortization or write-off of capitalized financing or debt issuance costs; capitalized financing or debt issuance costs include without limitation amounts deducted for the non-cash write-off of $781,000 in previously paid legal and bank fees related to the former WLFC Funding Corporation loan from Wachovia Bank, N.A.”

                                (b)           The definition of “Interest Coverage Ratio” contained in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

                ““Interest Coverage Ratio” shall mean the ratio of EBIT of the Willis Companies plus rent expenses of the Willis Companies to interest expense (excluding, to the extent otherwise included therein, amortization or write-off of capitalized financing or debt issuance costs;

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capitalized financing or debt issuance costs include without limitation amounts deducted for the non-cash write-off of $781,000 in previously paid legal and bank fees related to the former WLFC Funding Corporation loan from Wachovia Bank, N.A.) of the Willis Companies plus rent expenses of the Willis Companies.”

                SECTION 3.         Other Amendments.  In addition to the amendments contained in Section 2 above, the Credit Agreement and the other Loan Documents are hereby amended in the following respects:

                                (a)           All references in the Credit Agreement and the other Loan Documents to “WLFC Funding Corporation” are hereby deleted and replaced by “Willis Engine Funding LLC, a Delaware limited liability company”; and all references in the Credit Agreement and the other Loan Documents to the “WLFC Funding Facility” are hereby deleted and replaced by “Willis Engine Funding Facility.”

                                (b)           The definition of “Contribution Agreement” contained in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

                ““Contribution Agreement” shall have the meaning ascribed thereto in the definition of “Willis Engine Funding Facility,” as amended, waived, restated and supplemented from time to time.”

                                (c)           The definition of “Debt” contained in Section 1.1 of the Credit Agreement is hereby amended by adding the following language to the end of clause (v) thereof:

                “, except for guaranties of the obligations of Owner Trustees as lessor under Leases entered into in the ordinary course of business”

                                (d)           The following new definition of “Willis Engine Funding Facility” is hereby added to Section 1.1 of the Credit Agreement in alphabetical order:

““Willis Engine Funding Facility” shall mean the transactions contemplated by (i) that certain Indenture dated as of September 12, 2002 (the “Indenture”) between Willis Engine Funding LLC, a Delaware limited liability company (“WEF”) and The Bank of New York, as indenture trustee (the “Indenture Trustee”), as supplemented by that certain Series 2002-1 Supplement dated as of September 12, 2002 (the “Supplement”) between WEF and the Indenture Trustee, (ii) that certain Class A Note Purchase Agreement dated as of September 12, 2002 (the “Class A Note Purchase Agreement”) by and among Borrower, WEF, Sheffield Receivables Corporation (“Sheffield”) (“Class A Purchaser,” together with Class B Purchasers (as defined below), each individually a “Purchaser” and collectively, the “Purchasers”), and Barclays Bank PLC (“Barclays”), as agent on behalf of the Class A Purchasers, (iii) that certain Class B Note Purchase Agreement dated as of September 12, 2002 (the “Class B Note Purchase Agreement”; together with the Class A Note Purchase Agreement, the “Note Purchase Agreement”) by and among Borrower, WEF, Fortis Bank [Nederland] N.V. (“Fortis”) (a “Class B Purchaser”), and Barclays, as a Class B Purchaser and as agent on behalf of the Class B Purchasers, (iv) that certain Contribution and Sale Agreement dated as of September 12, 2002 (the “Contribution Agreement”) by and between Borrower and WEF, (v) that certain Administration Agreement

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dated as of September 12, 2002 (the “Administration Agreement”) by and among WEF, as issuer, Borrower, as servicer, Barclays, as administrative agent, and the Indenture Trustee, (vi) that certain Guaranty dated as of September 12, 2002 (the “Willis Engine Funding Guaranty”) by Borrower in favor of Barclays, as deal agent and as a Class B Purchaser, and Fortis as a Class B Purchaser, (vii) that certain Reimbursement Agreement dated as of September 12, 2002 (the “Reimbursement Agreement”) by and between Borrower and WEF, (viii) that certain letter regarding indemnification obligations dated September 12, 2002 (the “Indemnification Letter”) by Borrower in favor of Indenture Trustee, (ix) that certain Custodial Agreement dated as of September 12, 2002 (the “Custodial Agreement”) by and among Borrower, BNY Midwest Trust Company, as custodian, WEF, Indenture Trustee, and Barclays, as deal agent on behalf of the Purchasers, (x) that certain Servicing Agreement dated as of September 12, 2002 (the “Servicing Agreement”) by and between Borrower and WEF, (xi) that certain Agreement and Limited Waiver dated as of September 12, 2002 (the “Agreement and Limited Waiver”) by and among WEF, Barclays, as deal agent and a Class B Purchaser, Sheffield, as a Class A Purchaser, and Fortis, as a Class B Note Purchaser;  (xii) that certain First Transfer Master Assignment and Assumption Agreement and Bill of Sale dated as of September 16, 2002 (the “First Transfer Master Agreement”) by and between Borrower and Wells Fargo Bank Northwest, National Association, not in its individual capacity, but solely in its capacity as owner trustee under the trust agreements listed in Exhibit A thereto, (xiii) that certain Engine or Beneficial Interest Transfer Certificate dated as of September 16, 2002 (the “Engine Transfer Certificate”) by and between Borrower and WEF, and (xiv) certain other documents and agreements ancillary thereto; in each of cases (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiii), and (xiv) as amended, waived, restated and supplemented from time to time.”

                SECTION 4.  Full Force and Effect; Entire Agreement.  Except to the extent expressly provided in this Amendment, the terms and conditions of the Credit Agreement and each of the other Loan Documents shall remain unchanged and in full force and effect.  This Amendment constitutes the final agreement of the parties hereto with respect to the matters set forth herein and supersedes any prior agreement or understanding, written or oral, with respect to the matters contained herein.

                SECTION 5.  Effective Date of Amendment.  This Amendment shall be deemed effective retroactively to September 16, 2002.  From and after such date, any and all references to the “Credit Agreement” and the other Loan Documents shall be deemed to refer to the Credit Agreement and the other Loan Documents as amended hereby.

                SECTION 6.  Governing Law; Severability; Construction of Amendment.  This Amendment and all rights and obligations of the parties hereunder shall be governed by and be construed and enforced in accordance with the laws of the State of New York without regard to New York or federal principles of conflict of laws.  To the extent permitted by applicable law, the parties hereby waive any provision of law which renders any provision hereof prohibited or unenforceable in any respect.  Otherwise, any provision of this Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability, without invalidating any of the remaining provisions hereof, and any such prohibition or unenforceability in any one or more jurisdictions shall not invalidate or render unenforceable such provisions in other jurisdictions.  The parties’ failure at

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any time to require strict performance of any of the provisions of this Amendment shall not waive or diminish any right thereafter to demand strict compliance therewith or with any other provision of this Amendment.

                SECTION 7.  Counterparts.  This Amendment may be signed in any number of counterparts, and by different parties in separate counterparts, with the same effect as if the signatures to each such counterpart were upon a single instrument.  All counterparts shall be deemed an original of this Amendment.

                SECTION 8.  Headings.  All section headings contained herein are for convenience of reference only and are not intended to define or limit the scope of any provision of this Amendment.

                SECTION 9.  Representations and Warranties.  Borrower hereby represents and warrants to Lender that (i) this Amendment has been duly authorized, executed and delivered by it and (ii) this Amendment constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.

                SECTION 10.  Facsimile Signatures. The parties agree that this Amendment will be considered executed and delivered when the signature of a party is delivered to the other party by facsimile transmission.  Such facsimile signature shall be treated in all respects as having the same effect as an original signature.

[Remainder of page intentionally blank]

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IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed and delivered by their proper and duly authorized officers as of the date and year first written above.

WILLIS LEASE FINANCE CORPORATION
By:	/s/ MONICA J. BURKE
Name:	Monica J. Burke
Title:	Executive Vice President and Chief Financial Officer
ABB NEW FINANCE AB
By:	/s/ ANDERS LIDEFELT, ULF LUNDSTROM
Name:	Anders Lidefelt, Ulf Lundstrom
Title:

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EX-10.36

Exhibit 10.36

AMENDMENT NO. 2 TO CREDIT AGREEMENT ^*

                This AMENDMENT NO. 2 TO CREDIT AGREEMENT (the “Amendment”) is dated as of November 13, 2002 among Willis Lease Finance Corporation, a Delaware corporation (“Borrower”), the banking institutions signatories hereto (the “Banks”), National City Bank, as administrative agent for the Banks (the “Administrative Agent”), Fortis Bank [Nederland] N.V., as security agent (the “Security Agent”), and Fortis Bank [Nederland] N.V., as structuring agent (the “Structuring Agent”).

W I T N E S S E T H

                WHEREAS, the Borrower, the Banks, the Administrative Agent, the Security Agent, and the Structuring Agent are parties to that certain Credit Agreement dated as of May 1, 2001, as amended by Amendment No. 1 to Credit Agreement dated as of July 5, 2001 (the “Credit Agreement”);

                WHEREAS, the Borrower  has requested that Banks and Agents amend the definition of “EBIT” so as to add back to Net Income the amount deducted for the non-cash write-off of $781,000 in previously paid legal and bank fees related to the former WLFC Funding Corporation loan from Wachovia Bank, N.A. (the “Write-Off”) and make certain other changes to the Credit Agreement and the other Loan Documents, and the Banks and the Agents are willing to do so;

                NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows:

                SECTION 1.  Definitions.  Capitalized terms not defined herein shall have the meanings assigned to those terms in the Credit Agreement.

                SECTION 2.  Amendment to Definitions of “EBIT” and “Interest Coverage Ratio.”

(a)           The definition of “EBIT” contained in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

                ““EBIT” shall mean the sum of (i) Net Income less any extraordinary gain or loss included in the calculation thereof, plus (ii) amounts deducted for interest expense and income taxes, plus (iii) to the extent not included in clause (ii), amounts deducted for the non-cash write-off of $781,000 in previously paid legal and bank fees related to the former WLFC Funding Corporation loan from Wachovia Bank, N.A.”

                *              Portions of the material in this Exhibit have been redacted pursuant to a request for confidential treatment, and the redacted material has been filed separately with the Securities and Exchange Commission (the “Commission”).  An asterisk has been placed in the precise places in this Agreement where we have redacted information, and the asterisk is keyed to a legend which states that the material has been omitted pursuant to a request for confidential treatment.

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                                (b)           The definition of “Interest Coverage Ratio” contained in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

                ““Interest Coverage Ratio” shall mean the ratio of EBIT of the Willis Companies plus rent expenses of the Willis Companies to interest expense (excluding, to the extent otherwise included therein, amounts deducted for the non-cash write-off of $781,000 in previously paid legal and bank fees related to the former WLFC Funding Corporation loan from Wachovia Bank, N.A.) of the Willis Companies plus rent expenses of the Willis Companies.”

                SECTION 3.         Other Amendments.  In addition to the amendments contained in Section 2 above, the Credit Agreement and the other Loan Documents are hereby amended in the following respects:

                                (a)           All references in the Credit Agreement and the other Loan Documents to the “Funding Corp. Guaranty” are hereby deleted and replaced by “Willis Engine Funding Guaranty”; all references in the Credit Agreement and the other Loan Documents to “WLFC Funding Corporation” are hereby deleted and replaced by “Willis Engine Funding LLC, a Delaware limited liability company”; and all references in the Credit Agreement and the other Loan Documents to the “WLFC Funding Facility” are hereby deleted and replaced by “Willis Engine Funding Facility.”

                                (b)           The definition of “Consent and Intercreditor Agreement” contained in Section 1.1 of the Credit Agreement is hereby deleted.  All references in the Credit Agreement and the other Loan Documents to the “Consent and Intercreditor Agreement” are hereby deleted.

                                (c)           The definition of “Debt” contained in Section 1.1 of the Credit Agreement is hereby amended by adding the following language to the end of clause (v) thereof:

                “, except for guaranties of the obligations of Owner Trustees as lessor under Leases entered into in the ordinary course of business, where the Owner Trustee is acting as trustee under a Trust Agreement having the Borrower as the sole beneficiary”

                                (d)           The definition of “WLFC Funding Facility” contained in Section 1.1 of the Credit Agreement is hereby deleted.  A new definition of “Willis Engine Funding Facility” is hereby added to Section 1.1 of the Credit Agreement in alphabetical order to read as follows:

                ““Willis Engine Funding Facility” shall mean the transactions contemplated by (i) that certain Indenture dated as of September 12, 2002 (the “Indenture”) between Willis Engine Funding LLC, a Delaware limited liability company (“WEF”) and The Bank of New York, as indenture trustee (the “Indenture Trustee”), as supplemented by that certain Series 2002-1 Supplement dated as of September 12, 2002 (the “Supplement”) between WEF and the Indenture Trustee, (ii) that certain Class A Note Purchase Agreement dated as of September 12, 2002 (the “Class A Note Purchase Agreement”) by and among Borrower, WEF, Sheffield Receivables Corporation (“Sheffield”) (“Class A Purchaser,” together with Class B Purchasers (as defined below), each individually a “Purchaser” and collectively, the “Purchasers”), and Barclays Bank PLC (“Barclays”), as agent on behalf of the Class A Purchasers, (iii) that certain Class B Note

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Purchase Agreement dated as of September 12, 2002 (the “Class B Note Purchase Agreement”; together with the Class A Note Purchase Agreement, the “Note Purchase Agreement”) by and among Borrower, WEF, Fortis (a “Class B Purchaser”), and Barclays, as a Class B Purchaser and as agent on behalf of the Class B Purchasers, (iv) that certain Contribution and Sale Agreement dated as of September 12, 2002 (the “Contribution Agreement”) by and between Borrower and WEF, (v) that certain Administration Agreement dated as of September 12, 2002 (the “Administration Agreement”) by and among WEF, as issuer, Borrower, as servicer, Barclays, as administrative agent, and the Indenture Trustee, (vi) that certain Guaranty dated as of September 12, 2002 (the “Willis Engine Funding Guaranty”) by Borrower in favor of Barclays, as deal agent and as a Class B Purchaser, and Fortis as a Class B Purchaser, (vii) that certain Reimbursement Agreement dated as of September 12, 2002 (the “Reimbursement Agreement”) by and between Borrower and WEF, (viii) that certain letter regarding indemnification obligations dated September 12, 2002 (the “Indemnification Letter”) by Borrower in favor of Indenture Trustee, (ix) that certain Custodial Agreement dated as of September 12, 2002 (the “Custodial Agreement”) by and among Borrower, BNY Midwest Trust Company, as custodian, WEF, Indenture Trustee, and Barclays, as deal agent on behalf of the Purchasers, (x) that certain Servicing Agreement dated as of September 12, 2002 (the “Servicing Agreement”) by and between Borrower and WEF, (xi) that certain Agreement and Limited Waiver dated as of September 12, 2002 (the “Agreement and Limited Waiver”) by and among WEF, Barclays, as deal agent and a Class B Purchaser, Sheffield, as a Class A Purchaser, and Fortis, as a Class B Note Purchaser;  (xii) that certain First Transfer Master Assignment and Assumption Agreement and Bill of Sale dated as of September 16, 2002 (the “First Transfer Master Agreement”) by and between Borrower and Wells Fargo Bank Northwest, National Association, not in its individual capacity, but solely in its capacity as owner trustee under the trust agreements listed in Exhibit A thereto, (xiii) that certain Engine or Beneficial Interest Transfer Certificate dated as of September 16, 2002 (the “Engine Transfer Certificate”) by and between Borrower and WEF, and (xiv) certain other documents and agreements ancillary thereto; in each of cases (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiii), and (xiv) as amended, waived, restated and supplemented from time to time.”

                                (e)           The first sentence of Section 6.3 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

                “Guarantee or otherwise in any way become or be responsible for indebtedness or obligations (including working capital maintenance, take-or-pay contracts) of any unconsolidated Person, contingently or otherwise, except for guaranties of the obligations of Owner Trustees as lessor under Leases entered into in the ordinary course of business, where the Owner Trustee is acting as trustee under a Trust Agreement having the Borrower as the sole beneficiary.”

                SECTION 4.  Amended Disclosure Schedule (Schedule 1) and Schedule 2.  The Disclosure Schedule (Schedule 1) to the Credit Agreement is hereby deleted in its entirety and replaced with the Disclosure Schedule (Schedule 1) attached to this Amendment.  Schedule 2 to the Credit Agreement is hereby deleted in its entirety and replaced with Schedule 2 attached to this Amendment.

                SECTION 5.  Amendment Fee.  The Borrower agrees, on the date of this Amendment, to pay to the Administrative Agent for the account of each Bank signatory to this Amendment an

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amendment fee equal to    basis points of such Bank’s Revolving Loan Commitment on the date of this Amendment.  The Administrative Agent shall promptly distribute to such Banks their respective portions of the amendment fee.  Any Bank that is not a signatory to this Amendment on the date of this Amendment will not be entitled to an amendment fee.*

                SECTION 6.  Full Force and Effect; Entire Agreement.  Except to the extent expressly provided in this Amendment, the terms and conditions of the Credit Agreement and each of the other Loan Documents shall remain unchanged and in full force and effect.  This Amendment constitutes the final agreement of the parties hereto with respect to the matters set forth herein and supersedes any prior agreement or understanding, written or oral, with respect to the matters contained herein.

                SECTION 7.  Effective Date of Amendment.  This Amendment shall be deemed effective retroactively to September 16, 2002.  From and after such date, any and all references to the “Credit Agreement” and the other Loan Documents shall be deemed to refer to the Credit Agreement and the other Loan Documents as amended hereby.

                SECTION 8.  Governing Law; Severability; Construction of Amendment.  This Amendment and all rights and obligations of the parties hereunder shall be governed by and be construed and enforced in accordance with the laws of the State of California without regard to California or federal principles of conflict of laws.  To the extent permitted by applicable law, the parties hereby waive any provision of law which renders any provision hereof prohibited or unenforceable in any respect.  Otherwise, any provision of this Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability, without invalidating any of the remaining provisions hereof, and any such prohibition or unenforceability in any one or more jurisdictions shall not invalidate or render unenforceable such provisions in other jurisdictions.  The parties’ failure at any time to require strict performance of any of the provisions of this Amendment shall not waive or diminish any right thereafter to demand strict compliance therewith or with any other provision of this Amendment.

                SECTION 9.  Counterparts.  This Amendment may be signed in any number of counterparts, and by different parties in separate counterparts, with the same effect as if the signatures to each such counterpart were upon a single instrument.  All counterparts shall be deemed an original of this Amendment.

                SECTION 10.  Headings.  All section headings contained herein are for convenience of reference only and are not intended to define or limit the scope of any provision of this Amendment.

                SECTION 11.  Representations and Warranties.  Borrower hereby represents and warrants to each of the other parties hereto that (i) this Amendment has been duly authorized, executed and delivered by it and (ii) this Amendment constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.

                *              This redacted material has been omitted pursuant to a request for confidential treatment, and the material has been filed separately with the Commission.

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                SECTION 12.  Facsimile Signatures. The parties agree that this Amendment will be considered executed and delivered when the signature of a party is delivered to the Administrative Agent by facsimile transmission.  Such facsimile signature shall be treated in all respects as having the same effect as an original signature.

IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed and delivered by their proper and duly authorized officers as of the date and year first written above.

WILLIS LEASE FINANCE CORPORATION
By:	/s/ MONICA J. BURKE
Name:	Monica J. Burke
Title:	Executive Vice President and Chief Financial Officer
NATIONAL CITY BANK
By:	/s/ CHRISTOS KYTZIDIS
Name:	Christos Kytzidis
Title:	Vice President
NATIONAL CITY BANK, as Administrative Agent
By:	/s/ CHRISTOS KYTZIDIS
Name:	Christos Kytzidis
Title:	Vice President
FORTIS BANK [NEDERLAND] N.V.
By:	/s/ M.P.A. ZONDAG; B.M. KOOL
Name:	M.P.A. Zondag; B.M. Kool
Title:
FORTIS BANK [NEDERLAND] N.V., as Security Agent
By:	/s/ M.P.A. ZONDAG; B.M. KOOL
Name:	M.P.A. Zondag; B.M. Kool
Title:
FORTIS BANK [NEDERLAND] N.V., as Structuring Agent
By:	/s/ M.P.A. ZONDAG; B.M. KOOL
Name:	M.P.A. Zondag; B.M. Kool
Title:

5

WACHOVIA BANK, NATIONAL ASSOCIATION, f/k/a First Union National Bank
By:
Name:
Title:
CITY NATIONAL BANK
By:	/s/ NANCI BRUSATI DIAS
Name:	Nanci Brusati Dias
Title:	Vice President
CITIBANK, N.A., as successor to European American Bank
By:
Name:
Title:
CALIFORNIA BANK & TRUST
By:	/s/ J. MICHAEL SULLIVAN
Name:	J. Michael Sullivan
Title:	Vice President
BANCO POPULAR NORTH AMERICA
By:
Name:
Title:
CAPITAL BANK PLC
By:
Name:
Title:

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EX-11.1

WILLIS LEASE FINANCE CORPORATION
AND SUBSIDIARIES

Exhibit 11.1

Computation of Earnings Per Share

	Three Months Ended September 30,				Nine Months Ended September 30,
	2002		2001		2002		2001
	(In thousands, except per share data)
Net income
Basic
Earnings:
Income from continuing operations	$	33	$	1,755	$	1,576	$	7,223
Discontinued operations	—		45		—		(740		)
Net earnings	$	33	$	1,800	$	1,576	$	6,483
Shares:
Average common shares outstanding	8,832		8,812		8,830		8,752
Basic earnings per common share
Income from continuing operations	$	0.00	$	0.20	$	0.18	$	0.83
Discontinued operations	—		—		—		(0.09		)
Net earnings	$	0.00	$	0.20	$	0.18	$	0.74
Assuming Full Dilution
Earnings:
Income from continuing operations	$	33	$	1,755	$	1,576	$	7,223
Discontinued operations	—		45		—		(740		)
Net earnings	$	33	$	1,800	$	1,576	$	6,483
Shares:
Average common shares outstanding	8,832		8,812		8,830		8,752
Potentially dilutive common shares outstanding	9		142		18		163
Diluted average common shares outstanding	8,841		8,954		8,848		8,915
Earnings per common share assuming full dilution
Income from continuing operations	$	0.00	$	0.20	$	0.18	$	0.81
Discontinued operations	—		—		—		(0.08		)
Net earnings	$	0.00	$	0.20	$	0.18	$	0.73
Supplemental information:
The difference between average common shares outstanding to calculate basic and assuming full dilution is due to options outstanding under the 1996 Stock Options/Stock Issuance Plan and warrants issued in conjunction with the initial public offering.

EX-99.1

Exhibit 99.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Each of the undersigned hereby certifies, in his or her capacity as an officer of Willis Lease Finance Corporation (the “Company”), for purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his or her knowledge:

•the Quarterly Report of the Company on Form 10-Q for the period ended September 30, 2002 fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

•the information contained in such report fairly presents, in all material respects, the financial condition and results of operation of the Company.

Dated:  November  14, 2002

/s/ Charles F. Willis IV

President and Chief Executive Officer

/s/ Monica J. Burke

Chief Financial Officer and Executive Vice President