UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
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Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
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For the fiscal year ended December 31, 2008 |
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Commission File Number: 001-15369
WILLIS LEASE FINANCE CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware |
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68-0070656 |
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(State or other jurisdiction of incorporation or organization) |
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(IRS Employer Identification No.) |
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773 San Marin Drive, Suite 2215, Novato, CA |
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94998 |
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(Address of principal executive offices) |
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(Zip Code) |
Registrant’s telephone number, including area code (415) 408-4700
Securities registered pursuant to
Section 12(b) of the Act:
None.
Securities registered pursuant to Section 12(g) of the Act:
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Name of each exchange on which registered |
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Common Stock |
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NASDAQ |
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Preferred Stock |
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Indicate by check mark if the Registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act.
Yes o No x
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes o No x
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 x No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendments to this Form 10-K. x
Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
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(Do not check if a smaller reporting company) |
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Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o No x
The aggregate market value of voting stock held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed second fiscal quarter (June 30, 2008) was approximately $61.8 million (based on a closing sale price of $10.68 per share as reported on the NASDAQ National Market).
The number of shares of the registrant’s Common Stock outstanding as of March 25, 2009 was 9,068,166.
The Company’s Proxy Statement for the 2009 Annual Meeting of Stockholders is incorporated by reference into Part III of this 10-K.
WILLIS LEASE
FINANCE CORPORATION
2008 FORM 10-K ANNUAL REPORT
2
INTRODUCTION
Willis Lease Finance Corporation with its subsidiaries is a leading lessor of commercial aircraft engines. Our strategy is to provide leasing services to a diversified group of customers worldwide. In particular, we provide this service to commercial aircraft operators and maintenance, repair and overhaul organizations (“MROs”).
Commercial aircraft operators need engines in addition to those installed in the aircraft that they operate. These spare engines are required for various reasons including requirements that engines be inspected and repaired at regular intervals based on equipment utilization. Furthermore, unscheduled events such as mechanical failure, FAA airworthiness directives or manufacturer-recommended actions for maintenance, repair and overhaul of engines result in the need for spare engines. Commercial aircraft operators and others in the industry generally estimate that the total number of spare engines needed is between 10 and 15% of the total number of installed engines. Today it is estimated that there are nearly 47,000 engines installed on commercial aircraft. Accordingly, we estimate that there are between 4,700 and 7,100 spare engines in the market, including both owned and leased spare engines.
Our engine portfolio consists of noise-compliant Stage III commercial jet engines manufactured by CFMI, General Electric, Pratt & Whitney, Rolls Royce and International Aero Engines. These engines generally may be used on one or more aircraft types and are the most widely used engines in the world, powering Airbus, Boeing, McDonnell Douglas, Bombardier and Embraer aircraft. Our portfolio is continually changing due to acquisitions and sales. As of December 31, 2008, we had a total lease portfolio consisting of 160 engines and related equipment, four aircraft and three spare parts packages with 64 lessees in 35 countries and an aggregate net book value of $829.7 million. We also act as a manager of engines for other parties for which we are paid management fees. As of December 31, 2008, we managed a total lease portfolio of 11 engines and related equipment for other parties. We also seek, from time to time, to act as leasing agent of engines for other parties.
We hold a fifty percent membership interest in a joint venture, WOLF A340, LLC, a Delaware limited liability company, (“WOLF”). On December 30, 2005, WOLF completed the purchase of two Airbus A340-313 aircraft from Boeing Aircraft Holding Company for a purchase price of $96.0 million. These aircraft are currently leased to Emirates with remaining lease terms of 54 and 56 months. Our investment in the joint venture is $9.0 million.
We are a Delaware corporation, incorporated in 1996. Our executive offices are located at 773 San Marin Drive, Suite 2215, Novato, California 94998. We transact business directly and through our subsidiaries unless otherwise indicated.
We maintain a website at www.willislease.com where our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports are available without charge, as soon as reasonably practicable following the time they are filed with or furnished to the SEC. You may read and copy any materials we file with the SEC at the SEC’s public reference room at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0300. The SEC also maintains an electronic Internet site that contains our reports, proxy and information statements, and other information at http://www.sec.gov.
We do not break our business into multiple segments. Instead, we consider our continuing operations to operate in one reportable segment.
THE WEST SECURITIZATION
Willis Engine Securitization Trust, or “WEST,” is a special-purpose, bankruptcy-remote, Delaware statutory trust that is wholly-owned by us and consolidated in our financial statements. We established WEST in 2005 to acquire and finance engines owned by another of our wholly-owned subsidiaries, WEST Engine Funding LLC (formerly Willis Engine Funding LLC). In August 2005 and again in March 2008, WEST issued and sold notes to finance its acquisition of engines. WEST’s obligations under these notes are serviced by revenues from the lease and disposition of its engines, and are secured by all its assets, including all its interests in its engines, its subsidiaries, restricted cash accounts, engine maintenance reserve accounts, all proceeds from the sale or disposition of engines, and all insurance proceeds. We have not guaranteed any obligations of WEST and none of our assets secure such obligations.
We are the servicer and administrative agent for WEST. Our annual fees for these services are 11.5% as servicer and 2.0% as administrative agent of the aggregate net rents actually received by WEST on its engines, and such fees are payable to us monthly. We are also paid a fee of 3.0% of the net proceeds from the sale of any engines. As WEST is consolidated in our financial statements these fees eliminate on consolidation. Proceeds from engine sales will be used, at WEST’s election, to reduce WEST’s debt or to acquire other engines.
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WEST gives us the flexibility to manage the portfolio to adapt to changes in aircraft fleets and customer demand over time, benefiting both us and the investors. The Asset-Backed Securitization provides a significant improvement to our capital structure by better matching debt maturity to asset life. It includes a warehouse facility to provide additional borrowing capacity, which offers new capital to fund growth and, more importantly, provides a structure for regular placement of additional term notes in the future as the warehouse matures.
OUR COMPETITIVE ADVANTAGES
We are uniquely positioned in the market and remain competitive, in part, due to the following advantages:
· We have an entrepreneurial culture and our size and independent ownership structure gives us a unique ability to move faster than our competition.
· Our independent ownership allows us to meet our customer needs without regard to any potentially conflicting affiliate demands to use their engines or services.
· We have significant technical expertise and experience.
· We have extensive industry contacts/relationships—worldwide.
· We have a trusted reputation for quality engines and engine records.
· We have a diverse portfolio by customer, geography and engine type.
· We have a diverse product offering (by engine type and types of leases).
MARKET OVERVIEW FOR SPARE ENGINES
Historically, commercial aircraft operators owned rather than leased their engines. As engines become more powerful and technically sophisticated, they also become more expensive to acquire and maintain. In part due to cash constraints on commercial aircraft operators and the costs associated with engine ownership, commercial aircraft operators have become more cost-conscious and now utilize operating leases for a portion of their engines and are therefore better able to manage their finances in this capital-intensive business. Engine leasing is a specialized business that has evolved into a discrete sector of the commercial aviation market. Participants in this sector need access to capital, as well as specialized technical knowledge, in order to compete successfully.
Growth in the spare engine leasing industry is dependent on two fundamental drivers:
· the number of commercial aircraft, and therefore engines, in the market; and
· the proportion of engines that are leased, rather than owned, by commercial aircraft operators.
We believe both drivers will increase over time.
Increased number of aircraft, and therefore engines, in the market
We believe that the number of commercial and cargo aircraft, and hence spare engines, will increase. Boeing estimates that there are roughly 19,000 aircraft as of 2007 and projects this will grow to approximately 36,000 aircraft by 2027. Aircraft equipment manufacturers have predicted such an increase in aircraft to address the rapid growth of both passenger and cargo traffic in the Asian markets, as well as demand for new aircraft in more mature markets.
Increased lease penetration rate
Spare engines provide support for installed engines in the event of routine or other engine maintenance or unscheduled removal. The number of spare engines needed to service any fleet is determined by many factors. These factors include:
· the number and type of aircraft in an aircraft operator’s fleet;
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· the geographic scope of such aircraft operator’s destinations;
· the time an engine is on-wing between removals;
· average shop visit time; and
· the number of spare engines an aircraft operator requires in order to ensure coverage for predicted and unscheduled removals.
We believe that commercial aircraft operators are increasingly considering their spare engines as significant capital assets, where operating leases may be more attractive than capital leases or ownership of spare engines. Some believe that currently as many as 25% to 30% of the spare engine market falls under the category of leased engines. Industry analysts have forecast that the percentage of leased engines is likely to increase over the next 15 years as engine leasing follows the growth of aircraft leasing. We believe this is due to the increasing cost of newer engines, the anticipated modernization of the worldwide aircraft fleet and the significant cost associated therewith, and the emergence of new niche-focused airlines which generally use leasing in order to obtain their capital assets.
ENGINE LEASING
As of December 31, 2008, all of our leases to air carriers, manufacturers and MROs are operating leases as opposed to finance leases. Although we have no current plans to enter into finance leases, we may decide to enter into finance leases in the future. Under operating leases, we retain the potential benefit and assume the risk of the residual value of the aircraft equipment, in contrast to capital or financing leases where the lessee has more of the potential benefits and risks of ownership. Operating leases allow commercial aircraft operators greater fleet and financial flexibility due to the relatively small initial capital outlay necessary to obtain use of the aircraft equipment, and the availability of short and long term leases to better meet their needs. Operating lease rates are generally higher than finance lease rates, in part because of the risks associated with the residual value.
We describe all of our current leases as triple-net operating leases. A triple-net operating lease requires the lessee to make the full lease payment and pay any other expenses associated with the use of the engines, such as maintenance, casualty and liability insurance, sales or use taxes and personal property taxes. The leases contain detailed provisions specifying the lessees’ responsibility for engine damage, maintenance standards and the required condition of the engine upon return at the end of the lease. During the term of the lease, we generally require the lessee to maintain the engine in accordance with an approved maintenance program designed to meet applicable regulatory requirements in the jurisdictions in which the lessee operates.
We lease our assets under both short and long term leases. Short term leases are generally for periods of less than one year. Under many of our leases the lessee pays use fees designed to cover expected future maintenance costs (often called maintenance reserves) which are reimbursable for certain maintenance expenditures. Under long term leases, at the end of the lease the accumulated use fees are retained by us to fund future maintenance not performed by the lessee as indicated by the remaining use fees. Under short-term leases and certain medium-term leases, we may undertake a portion of the maintenance and regulatory compliance risk. For these leases, the lessee has no claim to the maintenance reserves paid to us throughout the term of the lease. Use fees received are recognized in revenue as maintenance reserve revenue if they are not reimbursable to the lessee which is typically the case with short term leases. Use fees that are reimbursable under longer term leases are recorded as a maintenance reserve liability until they are reimbursed to the lessee or the lease terminates, at which time they are recognized in revenue as maintenance reserve revenue.
We try to mitigate risk where possible. For example, we make an analysis of the credit risk associated with the lessee before entering into any significant lease transaction. Our credit analysis generally consists of evaluating the prospective lessee’s financial standing by utilizing financial statements and trade and/or banking references. In certain circumstances, we may require our lessees to provide additional credit support such as a letter of credit or a guaranty from a bank or a third party or a security deposit. We also evaluate insurance and expropriation risk and evaluate and monitor the political and legal climate of the country in which a particular lessee is located in order to determine our ability to repossess our engines should the need arise. Despite these guidelines, we cannot give assurance that we will not experience collection problems or significant losses in the future. See “Risk Factors” below.
At the commencement of a lease, we may collect, in advance, a security deposit normally equal to at least one month’s lease payment. Under the terms of some of our leases, during the term of the lease, the lessees pay amounts to us based on usage of the engine, which are referred to as maintenance reserves or use fees, which are designed to cover the expected future maintenance costs. The security deposit is returned to the lessee after all lease return conditions have been met. For those leases in which the maintenance reserves are reimbursable to the lessee, maintenance reserves are collected and are reimbursed to the lessee when qualifying maintenance is performed. Under longer-term leases, to the extent that cumulative use fee billings are inadequate to fund expenditures
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required prior to return of the engine to us, the lessee is obligated to cover the shortfall. Recovery is therefore dependent upon the financial condition of the lessee.
During the lease period, our leases require that maintenance and inspection of the leased engines be performed at qualified maintenance facilities certified by the FAA or its foreign equivalent. In addition, when an engine comes off-lease, it undergoes inspection to verify compliance with lease return conditions. Our management believes that our attention to our lessees, and our emphasis on maintenance and inspection helps preserve residual values and generally helps us to recover our investment in our leased engines.
Upon termination of a lease, we will lease or sell the related engines. The demand for aftermarket engines for either sale or lease may be affected by a number of variables, including:
· general market conditions;
· regulatory changes (particularly those imposing environmental, maintenance and other requirements on the operation of engines);
· changes in demand for air travel;
· fuel costs;
· changes in the supply and cost of aircraft equipment; and
· technological developments.
In addition, the value of particular used engines varies greatly depending upon their condition, the maintenance services performed during the lease term and, as applicable, the number of hours or cycles remaining until the next major maintenance is required. If we are unable to lease or sell engines on favorable terms, our financial results and our ability to service debt may be adversely affected. See “Risk Factors” below.
The value of a particular model of engine is heavily dependent on the status of the types of aircraft on which it is installed. We believe values of engines tend to be stable so long as the host aircraft for the engines as well as the engines themselves are still being manufactured. Prices will also tend to remain stable and even rise after a host aircraft is no longer manufactured so long as there is sufficient demand for the host aircraft. However, the value of an engine begins to decline rapidly once the host aircraft begins to be retired from service and/or parted out in significant numbers. Values of engines also may decline because of manufacturing defects that may surface subsequently.
As of December 31, 2008, we had a total lease portfolio of 160 aircraft engines and related equipment, three spare parts packages, four aircraft and various parts and other engine-related equipment with a cost of $968.4 million in our lease portfolio. As of December 31, 2007, we had a total lease portfolio of 144 aircraft engines and related equipment, three spare parts packages, four aircraft, two helicopters and various parts and other engine-related equipment with a cost of $880.3 million in our lease portfolio.
As of December 31, 2008, minimum future rentals under non-cancelable operating leases of these engines, parts and aircraft assets were as follows:
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(in thousands) |
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2009 |
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$ |
64,252 |
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2010 |
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43,384 |
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2011 |
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30,404 |
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2012 |
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21,607 |
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2013 |
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12,777 |
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Thereafter |
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28,133 |
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$ |
200,557 |
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As of December 31, 2008, we had 64 lessees of commercial aircraft engines, aircraft, and other aircraft-related equipment in 35 countries. We do not believe we are dependent on a single customer or a few customers the loss of which would have a material adverse effect on our revenues.
6
AIRCRAFT LEASING
As of December 31, 2008, we owned four DeHaviland DHC-8-100 turboprop aircraft, all of which we lease to Hawaii Island Air (Island Air). The leases are expected to generate lease rent revenue of approximately $1.7 million in 2009 and $1.4 million in 2010. These aircraft have a net book value of $5.5 million.
Gavarnie Holding, LLC, a Delaware Limited Liability Company (“Gavarnie”) owned by Charles F. Willis, IV, purchased the stock of Island Air from Aloha AirGroup, Inc. (“Aloha”) on May 11, 2004. Charles F. Willis, IV is our President, CEO and Chairman of our Board of Directors and owns approximately 32% of our common stock as of December 31, 2008. In 2006, in response to a fare war commenced by a competitor, Island Air requested a reduction in lease rent payments. The Board of Directors subsequently approved 14 months of lease rent deferrals totaling $784,000. All deferrals were accounted for as a reduction in lease revenue in the applicable period. Because of the question regarding collectibility of amounts due under these leases, lease rent revenue for these leases have been recorded on a cash basis until such time as collectibility becomes reasonably assured. After taking into account the deferred amounts, Island Air remains current on all obligations except for $288,000 in overdue rent related to February and March 2009. Our leases with Island Air have been restructured and amended effective January 2009. The $784,000 in accumulated rent deferrals have been incorporated in the lease rents for two of the aircraft for the period January 2009 – April 2012. During the difficult period in Hawaii involving uneconomic fares being charged by a competitor, Island Air, in an effort to conserve cash, deferred maintenance on engines leased by the Company. Due to concern regarding Island Air’s ability to meet lease return conditions and after reviewing the current maintenance status and condition of the leased assets, the Company recorded a reduction in the carrying value of these assets of $0.8 million in the second quarter of 2008. Including this write down, the aircraft and engines on lease to Island Air have a net book value of $6.0 million at December 31, 2008.
Our aircraft leases are “triple-net” leases and the lessee is responsible for making the full lease payment and paying any other expenses associated with the use of the aircraft, such as maintenance, casualty and liability insurance, sales or use taxes and personal property taxes. In addition, the lessee is responsible for normal maintenance and repairs, engine and airframe overhauls, and compliance with return conditions of flight equipment on lease. Under the provisions of many leases, for certain engine and airframe overhauls, we reimburse the lessee for costs incurred up to but not exceeding maintenance reserves the lessee has paid to us. Maintenance reserves are designed to cover the expected maintenance costs. The lessee is also responsible for compliance with all applicable laws and regulations with respect to the aircraft. We require our lessees to comply with FAA requirements. We periodically inspect our leased aircraft. Generally, we require a deposit as security for the lessee’s performance of obligations under the lease and the condition of the aircraft upon return. In addition, the leases contain extensive provisions regarding our remedies and rights in the event of a default by the lessee and specific provisions regarding the condition of the aircraft upon return. The lessee is required to continue to make lease payments under all circumstances, including periods during which the aircraft is not in operation due to maintenance or grounding.
We hold a fifty percent membership interest in a joint venture, WOLF A340, LLC, a Delaware limited liability company, (“WOLF”). On December 30, 2005, WOLF completed the purchase of two Airbus A340-313 aircraft from Boeing Aircraft Holding Company for a purchase price of $96.0 million. These aircraft are currently on lease to Emirates until 2013. Our investment in the joint venture at December 31, 2008 is $9.0 million.
COMPETITION
The markets for our products and services are very competitive, and we face competition from a number of sources. These competitors include aircraft engine and aircraft parts manufacturers, aircraft and aircraft engine lessors, airline and aircraft service and repair companies and aircraft spare parts distributors. Many of our competitors have substantially greater resources than us. Those resources may include greater name recognition, larger product lines, complementary lines of business, greater financial, marketing, information systems and other resources. In addition, equipment manufacturers, aircraft maintenance providers, FAA certified repair facilities and other aviation aftermarket suppliers may vertically integrate into the markets that we serve, thereby significantly increasing industry competition. We can give no assurance that competitive pressures will not materially and adversely affect our business, financial condition or results of operations. See “Risk Factors”.
INSURANCE
In addition to requiring full indemnification under the terms of our leases, we require our lessees to carry the types of insurance customary in the air transportation industry, including comprehensive third party liability insurance and physical damage and casualty insurance. We require that we be named as an additional insured on liability insurance with ourselves and our lenders normally identified as the loss payee for damage to the equipment on policies carried by lessees. We monitor compliance with the insurance provisions of the leases. We also carry contingent physical damage and third party liability insurance as well as product liability insurance.
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GOVERNMENT REGULATION
Our customers are subject to a high degree of regulation in the jurisdictions in which they operate. For example, the FAA regulates the manufacture, repair and operation of all aircraft operated in the United States and equivalent regulatory agencies in other countries, such as the Joint Aviation Authority (“JAA”) in Europe, regulate aircraft operated in those countries. Such regulations also indirectly affect our business operations. All aircraft operated in the United States must be maintained under a continuous condition-monitoring program and must periodically undergo thorough inspection and maintenance. The inspection, maintenance and repair procedures for commercial aircraft are prescribed by regulatory authorities and can be performed only by certified repair facilities utilizing certified technicians. The FAA can suspend or revoke the authority of air carriers or their licensed personnel for failure to comply with regulations and ground aircraft if their airworthiness is in question.
While our leasing and reselling business is not regulated, the aircraft, engines and engine parts that we lease and sell to our customers must be accompanied by documentation that enables the customer to comply with applicable regulatory requirements. Furthermore, before parts may be installed in an aircraft, they must meet certain standards of condition established by the FAA and/or the equivalent regulatory agencies in other countries. Specific regulations vary from country to country, although regulatory requirements in other countries are generally satisfied by compliance with FAA requirements. Presently, whenever necessary, with respect to a particular engine or engine component, we utilize FAA and/or JAA certified repair stations to repair and certify engines and components to ensure marketability.
Effective January 1, 2000, federal regulations stipulate that all aircraft engines hold, or be capable of holding, a noise certificate issued under Chapter 3 of Volume 1, Part II of Annex 16 of the Chicago Convention, or have been shown to comply with Stage III noise levels set out in Section 36.5 of Appendix C of Part 36 of the FAA Regulations of the United States if the engines are to be used in the continental United States. Additionally, much of Europe has adopted similar regulations. As of December 31, 2008, all of the engines in our lease portfolio are Stage III engines and are generally suitable for use on one or more commonly used aircraft.
We believe that the aviation industry will be subject to continued regulatory activity. Additionally, increased oversight has and will continue to originate from the quality assurance departments of airline operators. We have been able to meet all such requirements to date, and believe that we will be able meet any additional requirements that may be imposed. We cannot give assurance, however, that new, more stringent government regulations will not be adopted in the future or that any such new regulations, if enacted, would not have a material adverse impact on us.
GEOGRAPHIC AREAS IN WHICH WE OPERATE
Approximately 81% of our engines, related aircraft parts, and equipment (all of which we sometimes refer to as “equipment”) by net book value are leased and operated internationally. All leases relating to this equipment are denominated and payable in U.S. dollars, which is customary in the industry. Future leases may provide for payments to be made in Euros or other foreign currencies. In 2008, we leased our equipment to lessees domiciled in nine geographic regions. We are subject to a number of risks related to our foreign operations. See “Risk Factors” below.
The following table displays the regional profile of our lease customer base for the years ended December 31, 2008, 2007 and 2006. Other than the United States in each of 2006-2008 and China in 2008, no single country accounted for more than 10% of our lease rent revenue for any of those periods. The tables include geographic information about our leased equipment grouped by the lessee’s domicile (which does not necessarily indicate the asset’s actual location):
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Year Ended December 31, 2008 |
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Year Ended December 31, 2007 |
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Year Ended December 31, 2006 |
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Lease Rent
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Percentage |
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Lease Rent
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Percentage |
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Lease Rent
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Percentage |
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(dollars in thousands) |
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United States |
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$ |
20,933 |
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20 |
% |
$ |
13,831 |
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16 |
% |
$ |
9,441 |
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14 |
% |
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Mexico |
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6,876 |
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7 |
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5,863 |
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7 |
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4,093 |
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6 |
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Canada |
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825 |
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1 |
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— |
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— |
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— |
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— |
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Australia/New Zealand |
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— |
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— |
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— |
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— |
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53 |
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— |
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Europe |
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31,692 |
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31 |
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28,863 |
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34 |
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25,910 |
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37 |
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South America |
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14,701 |
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14 |
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11,049 |
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13 |
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8,749 |
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13 |
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Asia |
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22,860 |
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22 |
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20,705 |
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24 |
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12,809 |
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18 |
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Africa |
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574 |
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1 |
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1,212 |
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1 |
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1,094 |
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2 |
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Middle East |
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3,960 |
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4 |
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4,561 |
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5 |
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7,081 |
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10 |
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Total |
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$ |
102,421 |
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100 |
% |
$ |
86,084 |
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100 |
% |
$ |
69,230 |
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100 |
% |
8
FINANCING/SOURCE OF FUNDS
We, directly or through WEST, typically acquire engines with a combination of equity capital and funds borrowed from financial institutions. In order to facilitate financing and leasing of engines, each engine is generally owned through a statutory or common law trust that is wholly-owned by us or our subsidiaries. We usually borrow 80% to 83% of an engine purchase price. Substantially all of our assets secure our related indebtedness. We typically acquire engines from airlines in a sale-lease back transaction, from engine manufacturers or from other lessors. From time to time, we selectively acquire engines prior to a firm commitment to lease or sell the engine, depending on the price of the engine, market demand with the expectation that we can lease or sell such engines.
EMPLOYEES
As of December 31, 2008, we had 55 full-time employees (excluding consultants), in sales and marketing, technical service and administration. None of our employees is covered by a collective bargaining agreement and we believe our employee relations are satisfactory.
The following risk factors and other information included in this Annual Report should be carefully considered. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations. If any of the following risks occur, our business, financial condition, operating results, and cash flows could be materially adversely affected.
RISKS RELATING TO OUR BUSINESS
We are affected by the risks faced by commercial aircraft operators and MROs because they are our customers.
Commercial aircraft operators are engaged in economically sensitive, highly cyclical and competitive businesses. We are a supplier to commercial aircraft operators and MROs. As a result, we are indirectly affected by all the risks facing commercial aircraft operators and MROs, which are beyond our control. Our results of operations depend, in part, on the financial strength of our customers and our customers’ ability to compete effectively in the marketplace and manage their risks. These risks include, among others:
· general economic conditions in the countries in which our customers operate, including changes in gross domestic product;
· demand for air travel and air cargo shipments;
· changes in interest rates and the availability and terms of credit available to commercial aircraft operators;
· concerns about security, terrorism, war, public health and political instability;
· environmental compliance and other regulatory costs;
· labor contracts, labor costs and stoppages at commercial aircraft operators;
· aircraft fuel prices and availability;
· technological developments;
· maintenance costs;
· airport access and air traffic control infrastructure constraints;
· insurance and other operating costs incurred by commercial aircraft operators and MROs;
· industry capacity, utilization and general market conditions
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· market prices for aviation equipment.
To the extent that our customers are negatively affected by these risk factors, we may experience:
· a decrease in demand for some engine types in our portfolio;
· greater credit risks from our customers, and a higher incidence of lessee defaults and repossessions;
· an inability to quickly lease engines and aircraft on commercially acceptable terms when these become available through our purchase commitments and regular lease terminations; and
· shorter lease terms, which may increase our expenses and reduce our utilization rates.
Our engine values and lease rates, which are dependent on the status of the types of aircraft on which engines are installed, and other factors, could decline.
The value of a particular model of engine depends heavily on of the types of aircraft on which it may be installed and the supply of available engines. We believe values of engines tend to be relatively stable so long as there is sufficient demand for the host aircraft. However, we believe the value of an engine begins to decline rapidly once the host aircraft begins to be retired from service and/or used for spare parts in significant numbers. Certain types of engines may be used in significant numbers by commercial aircraft operators that are currently experiencing financial difficulties. If such operators were to go into liquidation or similar proceedings, the resulting over-supply of engines from these operators could have an adverse effect on the demand for the affected engine types and the values of such engines.
Upon termination of a lease, we may be unable to enter into new leases or sell the engine on acceptable terms.
We own the engines that we lease to customers and bear the risk of not recovering our entire investment through leasing and selling the engines. Upon termination of a lease, we seek to enter a new lease or to sell the engine. We also selectively sell engines on an opportunistic basis. We cannot give assurance that we will be able to find, in a timely manner, a lessee for our engines coming off-lease. If we do find a lessee, we may not be able to obtain satisfactory lease rates and terms (including maintenance and redelivery conditions) or rates and terms comparable to our current leases, and we can give no assurance that the creditworthiness of any future lessee will be equal to or better than that of the existing lessees of our engines. Because the terms of engine leases may be less than 12 months, we may frequently need to remarket engines. We face the risk that we may not be able to keep the engines on lease consistently.
We may not be able to repossess an engine when the lessee defaults, and even if we are able to repossess the engine, we may have to expend significant funds in the repossession and leasing of the engine.
When a lessee defaults we typically seek to terminate the lease and repossess the engines. If a defaulting lessee contests the termination and repossession or is under court protection, enforcement of our rights under the lease may be difficult, expensive and time-consuming. We may not realize any practical benefits from our legal rights and we may need to obtain consents to export the engine. As a result, the relevant engine may be off-lease or not producing revenue for a prolonged period. In addition, we will incur direct costs associated with repossessing our engine. These costs may include legal and similar costs, the direct costs of transporting, storing and insuring the engine, and costs associated with necessary maintenance and recordkeeping to make the engine available for lease or sale. During this time, we will realize no revenue from the leased engine, and we will continue to be obligated to pay our debt financing for the engine. If an engine is installed on an airframe, the airframe may be owned by an aircraft lessor or other third party. Our ability to recover engines installed on airframes may depend on the cooperation of the airframe owner.
We are subject to the risks and costs of aircraft maintenance and obsolescence on the aircraft that we own.
We currently own four DeHaviland DHC-8-100 turboprop aircraft and interests through WOLF in two Airbus A340-313 aircraft. We may buy other aircraft or interests in aircraft in the future primarily to seek opportunities to realize value from the engines. Among other risks described in this Annual Report, the following risks apply when we lease or sell aircraft:
· we will be subject to the greater maintenance risks and risks of declines in value that apply to aircraft as opposed to engines, as well as the potentially greater risks of leasing or selling aircraft;
· intense competition among manufacturers, lessors, and sellers may, among other things, adversely affect the demand for, lease rates and residual values of our aircraft;
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· our aircraft lessees are aircraft operators engaged in economically sensitive, highly cyclical and competitive businesses and our results of operations from aircraft leasing depend, in part, on their financial strength (for more details, see the risk factor entitled “We are affected by the risks faced by commercial aircraft operators and MROs because they are our customers” above);
· our aircraft lessees may encounter significant financial difficulties, which could result in our agreeing to amend our leases with the customer to, among other things, defer or forgive rent payments or extend lease terms as an alternative to repossession;
· our aircraft lessees may file for bankruptcy which could result in us incurring greater losses with respect to aircraft than with respect to engines; and
· aircraft technology is constantly improving and, as a result, aircraft of a particular model and type tend to become obsolete and less in demand over time, when newer, more advanced and efficient aircraft become available.
We carry the risk of maintenance for our lease assets. Our maintenance reserves may be inadequate or lessees may default on their obligations to perform maintenance, which could increase our expenses.
Under most of our engine leases, the lessee makes monthly maintenance reserve payments to us based on the engine’s usage and management’s estimate of maintenance costs. A certain level of maintenance reserve payments on the WEST engines are held in related engine reserve restricted cash accounts. Generally the lessee under long term leases is responsible for all scheduled maintenance costs, even if they exceed the amounts of maintenance reserves paid. Approximately 40 of our leases comprising 21.9% of the net book value of our on-lease engines at December 31, 2008 do not provide for any monthly maintenance reserve payments to be made by lessees, and we can give no assurance that future leases of the engines will require maintenance reserves. In some cases, including engine repossessions, we may decide to pay for refurbishments or repairs if the accumulated use fees are inadequate.
We can give no assurance that our operating cash flows and available liquidity reserves, including the amounts held in the engine reserve restricted cash accounts, will be sufficient to fund necessary engine maintenance. Actual maintenance reserve payments by lessees and other cash that we receive may be significantly less than projected as a result of numerous factors, including defaults by lessees. Furthermore, we can provide no assurance that lessees will meet their obligations to make maintenance reserve payments or perform required scheduled maintenance or, to the extent that maintenance reserve payments are insufficient to cover the cost of refurbishments or repairs.
Continuing failures by lessees to meet their maintenance and recordkeeping obligations under our leases could adversely affect the value of our leased engines and our ability to lease the engines in a timely manner following termination of the lease.
The value and income producing potential of an engine depend heavily on it being maintained in accordance with an approved maintenance system and complying with all applicable governmental directives and manufacturer requirements. In addition, for an engine to be available for service, all records, logs, licenses and documentation relating to maintenance and operations of the engine must be maintained in accordance with governmental and manufacturer specifications.
Our leases make the lessees primarily responsible for maintaining the engines, keeping related records and complying with governmental directives and manufacturer requirements. Over time, certain lessees have experienced and may experience in the future, difficulties in meeting their maintenance and recordkeeping obligations as specified by the terms of our leases.
Our ability to determine the condition of the engines and whether the lessees are properly maintaining our engines is generally limited to the lessees’ reporting of monthly usage and any maintenance performed, confirmed by periodic inspections performed by us and third-parties. A lessee’s failure to meet its maintenance or recordkeeping obligations under a lease could result in:
· a grounding of the related engine;
· a repossession which would likely cause us to incur additional and potentially substantial expenditures in restoring the engine to an acceptable maintenance condition, which may or not be capitalizable for accounting purposes;
· a need to incur additional costs and devote resources to recreate the records prior to the sale or lease of the engine;
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· loss of lease revenue while we perform refurbishments or repairs and recreate records; and
· a lower lease rate and/or shorter lease term under a new lease entered into by us following repossession of the engine.
Any of these events may adversely affect the value of the engine, unless and until remedied, and reduce our revenues and increase our expenses. If an engine is damaged during a lease and we are unable to recover from the lessee or insurance, we may incur a loss.
Our operating results vary and comparisons to results for preceding periods may not be meaningful.
Due to a number of factors, including the risks described in this ITEM 1A, our operating results may fluctuate. These fluctuations may also be caused by:
· the timing and number of purchases and sales of engines;
· the timing and amount of maintenance reserve revenues recorded resulting from the termination of long term leases, for which significant amount of maintenance reserves may have accumulated;
· the termination or announced termination of production of particular aircraft and engine types;
· the retirement or announced retirement of particular aircraft models by aircraft operators;
· the operating history of any particular engine or engine model;
· the length of our operating leases; and
· the timing of necessary overhauls of engines.
These risks may reduce our engine utilization rates, lease margins, maintenance reserve revenues, proceeds from engine sales, and result in higher legal, technical, maintenance, storage and insurance costs related to repossession and costs of engines being off-lease. As a result of the foregoing and other factors, the availability of engines for lease or sale periodically experiences cycles of oversupply and undersupply of given engine models. The incidence of an oversupply of engines may produce substantial decreases in engine lease rates, the appraised and resale value of engines and increase the time and costs incurred to lease or sell engines.
We anticipate that fluctuations from period to period will continue in the future. As a result, we believe that comparisons to results for preceding periods may not be meaningful and that results of prior periods should not be relied upon as an indication of our future performance.
Our customers face intense competition and some carriers are in troubled financial condition.
The commercial aviation industry deteriorated sharply in 2001 and 2002 as a result of many factors, including the September 11, 2001 terrorist attacks and the related slowdown in economic activity. Since that time, airline traffic has substantially recovered. However, in 2008, the airline industry recovery was negatively impacted by the spike in fuel prices and the deepening worldwide recession, partly caused by the recent turmoil in the credit and financial markets. We cannot give assurance that delinquencies and defaults on our leases will not increase during cyclical downturns in the economy and commercial aviation industry.
Certain lessees may be significantly delinquent in their rental payments and may default on their lease obligations. As of December 31, 2008, we had an aggregate of approximately $2.5 million in lease rent and $1.5 million in maintenance reserve payments more than 30 days past due. Our inability to collect receivables or to repossess engines or other leased equipment in the event of a default by a lessee could have a material adverse effect on us.
Various airlines have filed for bankruptcy, and a number of such airlines have ceased operations. Carriers often announce aircraft disposal plans which could affect the market for spare aircraft engines and the values of spare engines if they are removed from the aircraft and separately placed in the market. We also lease aircraft and engines to Hawaii Island Air, Inc. (“Island Air”), which operates exclusively in Hawaii, a challenging airline market in which two carriers entered bankruptcy in 2003 and 2004, and currently in the throes of a fare war. In 2006, in response to a fare war commenced by a competitor, Island Air requested a reduction in lease rent payments. The Board of Directors subsequently approved 14 months of lease rent deferrals totaling $784,000. All deferrals were accounted for as a reduction in lease revenue in the applicable period. Because of the question regarding collectibility of amounts due under these leases, lease rent revenue for these leases have been recorded on a cash basis until such time as collectibility becomes reasonably assured. After taking into account the deferred amounts, Island Air remains current on all obligations except for $288,000 in overdue rent related February and March 2009. Our leases with Island Air are currently being restructured and amended effective January
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2009. The $784,000 in accumulated rent deferrals have been incorporated in the lease rents for two of the aircraft for the period January 2009 – April 2012. During the difficult period in Hawaii involving uneconomic fares being charged by a competitor, Island Air, in an effort to conserve cash, deferred maintenance on engines leased by the Company. Due to concern regarding Island Air’s ability to meet lease return conditions and after reviewing the current maintenance status and condition of the leased assets, the Company recorded a reduction in the carrying value of these assets of $0.8 million in the second quarter of 2008. Including this write down, the aircraft and engines on lease to Island Air have a net book value of $6.0 million at December 31, 2008.
We and our customers operate in a highly regulated industry and changes in laws or regulations may adversely affect our ability to lease or sell our engines.
Licenses and consents
We and our customers operate in a highly regulated industry. A number of our leases require specific governmental or regulatory licenses, consents or approvals. These include consents for certain payments under the leases and for the export, import or re-export of our engines. Consents needed in connection with future leasing or sale of our engines may not be received timely or have economically feasible terms. Any of these events could adversely affect our ability to lease or sell engines.
The U.S. Department of Commerce, or the “Commerce Department,” regulates exports. We are subject to the Commerce Department’s and the U.S. Department of State’s regulations with respect to the lease and sale of engines and aircraft to foreign entities and the export of related parts. These Departments may, in some cases, require us to obtain export licenses for engines exported to foreign countries. The U.S. Department of Homeland Security, through the U.S. Customs and Border Protection, enforces regulations related to the import of engines and aircraft into the United States for maintenance or lease and imports of parts for installation on our engines and aircraft.
We are prohibited from doing business with persons designated by the U.S. Department of the Treasury’s Office of Foreign Assets Control, or “OFAC,” on its “Specially Designated Nationals List,” and must monitor our operations and existing and potential lessees for compliance with OFAC’s rules.
Civil aviation regulation
Users of engines are subject to general civil aviation authorities, including the FAA and Joint Aviation Authorities in Europe, who regulate the maintenance of engines and issue airworthiness directives. Airworthiness directives typically set forth special maintenance actions or modifications to certain engine types or series of specific engines that must be implemented for the engine to remain in service. Also, airworthiness directives may require the lessee to make more frequent inspections of an engine or particular engine parts. Each lessee of an engine generally is responsible for complying with all airworthiness directives. However, if the engine is off lease, we may be forced to bear the cost of compliance with such airworthiness directives, and if the engine is leased, subject to the terms of the lease, if any, we may be forced to share the cost of compliance.
Environmental regulation
Governmental regulations of noise and emissions levels may be applicable where the related airframe is registered, and where the aircraft is operated. For example, jurisdictions throughout the world have adopted noise regulations which require all aircraft to comply with Stage III noise requirements. In addition to the current Stage III compliance requirements, the United States and the International Civil Aviation Organization, or “ICAO,” have adopted a new, more stringent set of “Stage IV” standards for noise levels which will apply to engines manufactured or certified beginning in 2006. At this time, the United States regulations would not require any phase-out of aircraft that qualify only for Stage III compliance, but the European Union has established a framework for the imposition of operating limitations on non-Stage IV aircraft. These regulations could limit the economic life of our engines or reduce their value, could limit our ability to lease or sell the non-compliant engines or, if engine modifications are permitted, require us to make significant additional investments in the engines to make them compliant.
The United States and other jurisdictions are beginning to impose more stringent limits on the emission of nitrogen oxide, carbon monoxide and carbon dioxide emissions from engines, consistent with ICAO standards. These limits generally apply only to engines manufactured after 1999. Concerns over global warming could result in more stringent limitations on the operation of older, non-compliant engines.
Any change to current tax laws or accounting principles making operating lease financing less attractive could adversely affect our business, financial condition and results of operations.
Our lessees enjoy favorable accounting and tax treatment by using operating leases. Changes in tax laws or accounting principles that make operating leases less attractive to our lessees could have a material adverse affect on demand for our leases and on our business.
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Allegations that our aircraft, engines or parts caused bodily injury or property damage expose us to liability claims.
We are exposed to potential liability claims if the use of our aircraft, engines or parts is alleged to have caused bodily injury or property damage. Our leases require our lessees to indemnify us against these claims and to carry insurance customary in the air transportation industry, including liability, property damage and hull all risks insurance on our engines and on our aircraft at agreed upon levels. We can give no assurance that one or more catastrophic events will not exceed insurance coverage limits or that lessees’ insurance will cover all claims that may be asserted against us. Any insurance coverage deficiency or default by lessees under their indemnification or insurance obligations may reduce our recovery of losses upon an event of loss.
We may not be adequately covered by insurance.
While we maintain contingent insurance covering losses not covered by our lessees’ insurance, such coverage may not be available in circumstances where the lessee’s insurance coverage is insufficient. In addition, if a lessee is not obligated to maintain sufficient insurance, we may incur the costs of additional insurance coverage during the related lease. We are required under certain of our debt facilities to obtain political risk insurance for leases to lessees in specified jurisdictions. We can give no assurance that such insurance will be available at commercially reasonable rates, if at all.
Currently, the U.S. government is still offering war risk insurance to U.S.-certificated airlines; however, most foreign governments have ceased this practice, forcing non-U.S. airlines back into the commercial insurance market for this coverage. It is unknown how long the U.S. government will continue to offer war risk insurance and whether U.S.-certificated airlines could obtain war risk insurance in the commercial markets on acceptable terms and conditions.
We and our lenders generally are named as an additional insured on liability insurance policies carried by our lessees and are usually the loss payees for damage to the engines. We have not experienced any significant aviation-related claims or any product liability claims related to our engines or spare parts that were not insured. However, an uninsured or partially insured claim, or a claim for which third-party indemnification is not available, could have a material adverse effect upon us. A loss of an aircraft where we lease the airframe, an engine or spare parts could result in significant monetary claims.
RISKS RELATING TO OUR CAPITAL STRUCTURE
Our inability to obtain sufficient capital would constrain our ability to grow our portfolio and to increase our revenues.
Our business is capital intensive and highly leveraged. Accordingly, our ability to successfully execute our business strategy and maintain our operations depends on the availability and cost of debt and equity capital. Additionally, our ability to borrow against our portfolio of engines is dependent, in part, on the appraised value of our engines. If the appraised value of our engines declines, we may be required to reduce the principal outstanding under certain of our debt facilities. Availability under such debt facilities may also be reduced, at least temporarily, as a result of such reduced appraisals.
The recent, well publicized, worldwide disruptions in the credit and financial markets increase the risk of adverse effects on our customers and our capital providers (lenders and derivative counter-parties) and therefore on us. The disruptions may also adversely affect our ability to raise additional capital to continue our recent growth trend. Although we have adequate debt commitments from our lenders, assuming they are willing and able to meet their contractual obligation to lend to us, the market disruptions may adversely affect our ability to raise additional equity capital to fund future growth, requiring us to rely on internally generated funds. This would lower our rate of capital investment.
We can give no assurance that the capital we need will be available to us on favorable terms, or at all. Our inability to obtain sufficient capital, or to renew or expand our credit facilities could result in increased funding costs and would limit our ability to:
· meet the terms and maturities of our existing and future debt facilities;
· add new equipment to our portfolio;
· fund our working capital needs and maintain adequate liquidity; and
· finance other growth initiatives.
Our financing facilities impose restrictions on our operations.
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We have, and expect to continue to have, various credit and financing arrangements with third parties. These financing arrangements are secured by all or substantially all of our assets. Our existing credit and financing arrangements require us to meet certain financial condition and performance tests. Our revolving credit facility prohibits our declaring or paying dividends on shares of any class or series of our capital stock if an event of default under such facilities has or will occur and remains uncured. The agreements governing our debt, including the issuance of notes by WEST, also include restrictive financial covenants. A breach of those and other covenants could, unless waived or amended by our creditors, result in a cross-default to other indebtedness and an acceleration of all or substantially all of our debt. We have obtained such amendments and waivers to our financing agreements in the past, but we cannot provide any assurance that we will receive such amendments or waivers in the future if we request them. If our outstanding debt is accelerated at any time, we likely would have little or no cash or other assets available after payment of our debts, which could cause the value or market price of our outstanding equity securities to decline significantly and we would have few, if any, assets available for distributions to our equity holders in liquidation.
We are exposed to interest rate risk on our engine leases, which could have a negative impact on our margins.
We are affected by fluctuations in interest rates. Our lease rates are generally fixed, but nearly all our debt bears variable rate interest based on one-month LIBOR, so changes in interest rates directly affect our lease margins. We seek to reduce our interest rate volatility and uncertainty through hedging with interest rate derivative contracts with respect to a portion of our debt. Our lease margins, as well as our earnings and cash flows may be adversely affected by increases in interest rates, to the extent we do not have hedges or other derivatives in place or if our hedges or other derivatives do not mitigate our interest rate exposure from an economic standpoint. We would be adversely affected by increasing interest rates. As reported by British Bankers’ Association, the one-month LIBOR has decreased from approximately 4.60% on December 31, 2007 to approximately 0.44% on December 31, 2008.
We have risks in managing our portfolio of engines to meet customer needs.
The relatively long life cycles of aircraft and jet engines can be shortened by world events, government regulation or customer preferences. We seek to manage these risks by trying to anticipate demand for particular engine types, maintaining a portfolio mix of engines that we believe is diversified and that will have long-term value and will be sought by lessees in the global market for jet engines, and by selling engines that we expect will experience obsolescence or declining usefulness in the foreseeable future. The WEST securitization facility limits our sale of certain engines in that facility during any 12 month period to 10% of the “average aggregate adjusted borrowing value” of the engines during any 12 month period, which may inhibit engine sales that we otherwise believe should be pursued. We can give no assurance that we can successfully manage our engine portfolio to reduce these risks.
Our inability to maintain sufficient liquidity could limit our operational flexibility and also impact our ability to make payments on our obligations as they come due.
In addition to being capital intensive and highly leveraged, our business also requires that we maintain sufficient liquidity to enable us to contribute the non-financed portion of engine purchases as well as to service our payment obligations to our creditors as they become due despite the fact that the timing and amounts of payments under our leases do not match the timing under our debt service obligations. Our restricted cash is unavailable for general corporate purposes. Accordingly, our ability to successfully execute our business strategy and maintain our operations depends on our ability to continue to maintain sufficient liquidity, cash and available credit under our credit facilities. Our liquidity could be adversely impacted if we are subjected to one or more of the following: a significant decline in lease revenues, a material increase in interest expense that is not matched by a corresponding increase in lease rates, a significant increase in operating expenses, or a reduction in our available credit under our credit facilities. If we do not maintain sufficient liquidity, our ability to meet our payment obligations to creditors or to borrow additional funds could become impaired as could our ability to make dividend payments or other distributions to our equity holders. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”
NUMEROUS FACTORS MAY AFFECT THE TRADING PRICE OF OUR COMMON STOCK AND OUR PREFERRED STOCK
The trading price of our common stock and our Series A Preferred Stock may fluctuate due to many factors, including:
· risks relating to our business described in this Annual Report;
· sales of our securities by a few stockholders or even a single significant stockholder;
· general economic conditions;
· changes in accounting mandated under GAAP;
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· quarterly variations in our operating results;
· our financial condition, performance and prospects;
· changes in financial estimates by us;
· level, direction and volatility of interest rates and expectations of changes in rates;
· market for securities similar to our common stock and our Series A Preferred Stock; and
· changes in our capital structure, including additional issuances by us of debt or equity securities.
In addition, the U.S. stock markets have experienced price and volume volatility that has affected many companies’ stock prices, often for reasons unrelated to the operating performance of those companies.
RISKS RELATING TO OUR FOREIGN OPERATIONS
A substantial portion of our lease revenue comes from foreign customers, subjecting us to divergent regulatory requirements.
For the year ended December 31, 2008, 80% of our lease revenue was generated by leases to foreign customers. Such international leases present risks to us because certain foreign laws, regulations and judicial procedures may not be as protective of lessor rights as those which apply in the United States. We are also subject to risks of foreign laws that affect the timing and access to courts and may limit our remedies when collecting lease payments and recovering assets. None of our leased engines have been expropriated; however, we can give no assurance that political instability abroad and changes in the policies of foreign nations will not present expropriation risks in the future that are not covered by insurance.
Our leases require payments in U.S. dollars but many of our customers operate in other currencies; if foreign currencies devalue against the U.S. dollar, our lessees may be unable to make their payments to us.
All of our current leases require that payments be made in U.S. dollars. If the currency that our lessees typically use in operating their businesses devalues against the U.S. dollar, the lessees could encounter difficulties in making payments in U.S. dollars. Furthermore, many foreign countries have currency and exchange laws regulating international payments that may impede or prevent payments from being paid to us in U.S. dollars. Future leases may provide for payments to be made in Euros or other foreign currencies. Any change in the currency exchange rate that reduces the amount of U.S. dollars obtained by us upon conversion of future lease payments denominated in Euros or other foreign currencies, may, if not appropriately hedged by us, have a material adverse effect on us and increase the volatility of our earnings. If payments on our leases are made in foreign currency, our risks and hedging costs will increase.
We operate globally and are affected by our customers’ local and regional economic and other risks.
We believe that our customers’ growth and financial condition are driven by economic growth in their service areas. The largest portion of our lease revenues come from Europe. European airline operations are among the most heavily regulated in the world. At the same time, new low-cost carriers have exerted substantial competitive and financial pressure on major European airlines. Low-cost carriers are having similar effects in North America and elsewhere.
Our operations may also be affected by political or economic instability in the areas where we have customers.
We may not be able to enforce our rights as a creditor if a lessee files for bankruptcy outside of the United States.
When a debtor seeks protection under the United States Bankruptcy Code, creditors are automatically stayed from enforcing their rights. In the case of United States-certificated airlines, Section 1110 of the Bankruptcy Code provides certain relief to lessors of aircraft equipment. Section 1110 has been the subject of significant litigation and we can give no assurance that Section 1110 will protect our investment in an aircraft or engines 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.
Liens on our engines could exceed the value of the engines, which could negatively affect our ability to repossess, lease or sell a particular engine.
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Liens that secure the payment of repairers’ charges or other liens may, depending on the jurisdiction, attach to the engines. Engines also may be installed on airframes to which liens unrelated to the engines have attached. These liens may secure substantial sums that may, in certain jurisdictions or for limited types of liens, exceed the value of the particular engine to which the liens have attached. In some jurisdictions, a lien may give the holder the right to detain or, in limited cases, sell or cause the forfeiture of the engine. Such liens may have priority over our interest as well as our creditors’ interest in the engines, either because they have such priority under applicable local law or because our creditors’ security interests are not filed in jurisdictions outside the United States. These liens and lien holders could impair our ability to repossess and lease or sell the engines. We cannot give assurance that our lessees will comply with their obligations to discharge third party liens on our engines. If they do not, we may, in the future, find it necessary to pay the claims secured by such liens to repossess the engines.
In certain countries, an engine affixed to an aircraft may become an accession to the aircraft and we may not be able to exercise our ownership rights over the engine.
In some jurisdictions, an engine affixed to an aircraft may become an accession to the aircraft, so that the ownership rights of the owner of the aircraft supersede the ownership rights of the owner of the engine. If an aircraft is security for the owner’s obligations to a third-party, the security interest in the aircraft may supersede our rights as owner of the engine. This legal principle could limit our ability to repossess an engine in the event of a lease default while the aircraft with the engine installed remains in such a jurisdiction. We may suffer a loss if we are not able to repossess engines leased to lessees in these jurisdictions.
RISKS RELATED TO OUR SMALL SIZE AND CORPORATE STRUCTURE
Intense competition in our industry, particularly with major companies with substantially greater financial, personnel, marketing and other resources, could cause our revenues and business to suffer.
The engine leasing industry is highly competitive and global. Our primary competitors include GE Engine Leasing, Shannon Engine Support, Pratt &Whitney, Rolls-Royce Partners Finance and Engine Lease Finance.
Our primary competitors generally have significantly greater financial, personnel and other resources, and a physical presence in more locations, than we do. In addition, competing engine lessors may have lower costs of capital and may provide financial or technical services or other inducements to customers, including the ability to sell or lease aircraft or provide other forms of financing that we do not provide. We cannot give assurance that we will be able to compete effectively or that competitive pressures will not adversely affect us.
There is no organized market for the spare engines we purchase. Typically, we purchase engines from commercial aircraft operators, engine manufacturers, MROs and other suppliers. We rely on our representatives, advertisements and reputation to generate opportunities to purchase and sell engines. The market for purchasing engine portfolios is highly competitive, generally involving an auction bidding process. We can give no assurance that engines will continue to be available to us on acceptable terms and in the types and quantities we seek consistent with the diversification requirements of our debt facilities and our portfolio diversification goals.
Substantially all of our assets are pledged to our creditors.
Substantially all of our assets are pledged to secure our obligations to creditors. Our revolving credit banks have a lien on all of our assets, including our equity in WEST. Due to WEST’s bankruptcy remote structure, that equity is subject to the prior payments of WEST’s debt and other obligations. Therefore, our rights and the rights of our creditors to participate in any distribution of the assets of WEST upon its liquidation, reorganization, dissolution or winding up will be subject to the prior claims of WEST’s creditors. Similarly, the rights of our shareholders are subject to satisfaction of the claims of our lenders and other creditors.
We may be unable to manage the expansion of our operations.
We can give no assurance that we will be able to manage effectively the potential expansion of our operations, or that if we are successful expanding our operations that our systems, procedures or controls will be adequate to support our operations, in which event our business, financial condition, results and cash flows could be adversely affected.
Any acquisition or expansion involves various risks, which may include some or all of the following:
· incurring or assuming additional debt;
· diversion of management’s time and attention from ongoing business operations;
· future charges to earnings related to the possible impairment of goodwill and the write down of other intangible assets;
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· risks of unknown or contingent liabilities;
· difficulties in the assimilation of operations, services, products and personnel;
· unanticipated costs and delays;
· risk that the acquired business does not perform consistently with our growth and profitability expectations;
· risk that growth will strain our infrastructure, staff, internal controls and management, which may require additional personnel, time and expenditures; and
· potential loss of key employees and customers.
Any of the above factors could have a material adverse effect on us.
Compliance with the regulatory requirements imposed on us as a public company results in significant costs that will likely have an adverse effect on our results.
As a public company, we are subject to various regulatory requirements including, but not limited to, compliance with the Sarbanes-Oxley Act of 2002. Compliance with these regulations results in significant additional costs to us both directly, through increased audit and consulting fees, and indirectly, through the time required by our small staff to address the regulations. We complied with Section 404a of the Sarbanes-Oxley Act as of December 31, 2007, completing our assessment of internal controls over financial reporting. We must comply with Section 404b of the Sarbanes-Oxley Act for the fiscal year ending December 31, 2009 when our auditors will audit internal controls for the first time. Such compliance requires us to incur considerable costs on audit and consulting fees and require significant management time that will adversely affect our results of operations and cash flows.
We are effectively controlled by one principal stockholder, who has the power to contest the outcome of most matters submitted to the stockholders for approval and to affect our stock prices adversely if he were to sell substantial amounts of his common stock.
As of December 31, 2008, our principal stockholder, Chairman of the Board of Directors and Chief Executive Officer, Mr. Charles F. Willis, IV, beneficially owned or had the ability to direct the voting of 2,940,064 shares of our common stock, representing approximately 32% of the outstanding shares of our common stock. As a result, Mr. Willis effectively controls us and has the power to contest the outcome of substantially all matters submitted to our stockholders for approval, including the election of the board of directors. In addition, future sales by Mr. Willis of substantial amounts of our common stock, or the potential for such sales, could adversely affect the prevailing market price of our common stock and possibly other classes or series of our stock such as our Series A Preferred Stock.
Our business might suffer if we were to lose the services of certain key employees.
Our business operations depend upon our key employees, including our executive officers. Loss of any of these employees, particularly our Chief Executive Officer, could have a material adverse effect on our business as our key employees have knowledge of our industry and customers and would be difficult to replace. We maintain key man life insurance of $5.0 million on Mr. Willis, but such amount is unlikely to adequately compensate us for the loss of his services.
We are the servicer and administrative agent for the WEST facility and our cash flows would be materially and adversely affected if we were removed from these positions.
We are the servicer and administrative agent with respect to engines in the WEST facility. We receive annual fees of 11.5% as servicer and 2.0% as administrative agent of the aggregate net rents actually received by WEST on its engines. We may be removed as servicer and administrative agent by the affirmative vote of a requisite number of holders of WEST facility notes upon the occurrence of certain specified events. If we are removed, our expenses would increase since our consolidated subsidiary, WEST, would have to hire an outside provider to replace the servicer and administrative agent functions, and we would be materially and adversely affected. Consequently, our business, financial condition, results of operations and cash flows would be adversely affected.
Provisions in Delaware law and our charter and bylaws might prevent or delay a change of control.
Certain provisions of law, our amended certificate of incorporation, bylaws and amended rights agreement could make the following more difficult: (1) an acquisition of us by means of a tender offer, a proxy contest or otherwise, and (2) the removal of incumbent officers and directors.
Our board of directors has authorized the issuance of shares of Series I Preferred Stock pursuant to our amended rights agreement, by and between us and American Stock Transfer and Trust Company, as rights agent. The rights agreement could make it
18
more difficult to proceed with and tend to discourage a merger, tender offer or proxy contest. Our amended certificate of incorporation also provides that stockholder action can be taken only at an annual or special meeting of stockholders and may not be taken by written consent and, in certain circumstances relating to acquisitions or other changes in control, requires an 80% supermajority vote of all outstanding shares of our common stock. Our bylaws also limit the ability of stockholders to raise matters at a meeting of stockholders without giving advance notice.
Our principal offices are located at 773 San Marin Drive, Suite 2215, Novato, California, 94998. We occupy space in Novato under a lease that covers approximately 18,375 square feet of office space and expires February 28, 2015. The lease rental commitment is approximately $0.5 million for 2009. Equipment leasing, financing, sales and general administrative activities are conducted from the Novato location. We also sub-lease approximately 6,500 square feet of office and warehouse space for our operations at San Diego, California. This lease expires October 31, 2010, and the remaining lease commitment is approximately $306,000. We also lease office space in Shanghai, China. The lease expires December 31, 2009 and the remaining lease commitment is approximately $65,000.
We are not a party to any material legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of stockholders during the fourth quarter of the fiscal year 2008.
19
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The following information relates to our Common Stock, which is listed on the NASDAQ National Market under the symbol WLFC. As of March 23, 2009 there were approximately 1,326 stockholders of our Common Stock.
The high and low closing sales price of the Common Stock for each quarter of 2008 and 2007, as reported by NASDAQ, are set forth below:
|
|
|
2008 |
|
2007 |
|
||||||||
|
|
|
High |
|
Low |
|
High |
|
Low |
|
||||
|
First Quarter |
|
$ |
14.11 |
|
$ |
11.96 |
|
$ |
10.60 |
|
$ |
10.09 |
|
|
Second Quarter |
|
13.59 |
|
10.00 |
|
11.92 |
|
10.20 |
|
||||
|
Third Quarter |
|
12.88 |
|
8.85 |
|
14.84 |
|
11.19 |
|
||||
|
Fourth Quarter |
|
13.37 |
|
8.13 |
|
16.40 |
|
11.18 |
|
||||
During the years ended December 31, 2008 and 2007 we did not pay cash dividends to our common stockholders. We have not made any dividend payments to our common stockholders since our inception as all available cash has been utilized for the business. We have no intention of paying dividends on our common stock in the foreseeable future. In addition, certain of our debt facilities contain negative covenants which prohibit us from paying any dividends or making distributions of any kind with respect to our common stock.
The following table outlines our Equity Compensation Plan Information.
|
Plan Category |
|
Number of securities to be
|
|
Weighted-
|
|
Number of securities
|
|
|
|
|
|
(a) |
|
(b) |
|
(c) |
|
|
|
1996 Stock Option/Stock Issuance Plan* |
|
1,204,407 |
|
$ |
7.01 |
|
— |
|
|
2007 Stock Incentive Plan |
|
— |
|
n/a |
|
1,203,181 |
|
|
|
Total |
|
1,204,407 |
|
$ |
7.01 |
|
1,203,181 |
|
* Plan expired
20
ITEM 6. SELECTED FINANCIAL DATA
The following table summarizes our selected consolidated financial data and operating information. The selected consolidated financial and operating data should be read in conjunction with the Consolidated Financial Statements and notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Form 10-K.
|
|
|
Years Ended December 31, |
|
|||||||||||||
|
|
|
2008 |
|
2007 |
|
2006 |
|
2005 |
|
2004
|
|
|||||
|
|
|
(dollars in thousands, except per share data) |
|
|||||||||||||
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Lease rent revenue |
|
$ |
102,421 |
|
$ |
86,084 |
|
$ |
69,230 |
|
$ |
63,119 |
|
$ |
58,177 |
|
|
Maintenance reserve revenue |
|
33,716 |
|
28,169 |
|
32,744 |
|
15,983 |
|
13,045 |
|
|||||
|
Gain (Loss) on sale of leased equipment |
|
12,333 |
|
6,876 |
|
3,781 |
|
(1,844 |
) |
360 |
|
|||||
|
Other income |
|
3,823 |
|
768 |
|
300 |
|
366 |
|
677 |
|
|||||
|
Total revenue |
|
$ |
152,293 |
|
$ |
121,897 |
|
$ |
106,055 |
|
$ |
77,624 |
|
$ |
72,259 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Net income |
|
$ |
26,601 |
|
$ |
17,664 |
|
$ |
17,886 |
|
$ |
3,641 |
|
$ |
3,328 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Net income attributable to common shareholders |
|
$ |
23,473 |
|
$ |
14,536 |
|
$ |
14,941 |
|
$ |
3,641 |
|
$ |
3,328 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Basic earnings per common share |
|
$ |
2.85 |
|
$ |
1.79 |
|
$ |
1.63 |
|
$ |
0.40 |
|
$ |
0.37 |
|
|
Diluted earnings per common share |
|
$ |
2.68 |
|
$ |
1.66 |
|
$ |
1.56 |
|
$ |
0.38 |
|
$ |
0.36 |
|
|
Balance Sheet Data: |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Total assets |
|
$ |
983,309 |
|
$ |
868,590 |
|
$ |
730,019 |
|
$ |
646,452 |
|
$ |
574,020 |
|
|
Debt (includes capital lease obligation) |
|
$ |
641,125 |
|
$ |
567,108 |
|
$ |
465,249 |
|
$ |
407,551 |
|
$ |
369,840 |
|
|
Shareholders’ equity |
|
$ |
192,207 |
|
$ |
174,652 |
|
$ |
164,002 |
|
$ |
127,761 |
|
$ |
123,293 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Lease Portfolio: |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Engines at end of the period |
|
160 |
|
144 |
|
131 |
|
124 |
|
115 |
|
|||||
|
Spare parts packages at the end of the period |
|
3 |
|
3 |
|
3 |
|
3 |
|
3 |
|
|||||
|
Aircraft and Helicopters at the end of the period |
|
4 |
|
6 |
|
4 |
|
5 |
|
5 |
|
|||||
21
|
ITEM 7. |
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
OVERVIEW
Forward-Looking Statements. This Annual Report on Form 10-K includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including statements regarding prospects or future results of operations or financial position, made in this Annual Report on Form 10-K are forward-looking. We use words such as anticipates, believes, expects, future, intends, and similar expressions to identify forward-looking statements. Forward-looking statements reflect management’s current expectations and are inherently uncertain. Actual results could differ materially for a variety of reasons, including, among others, the effects on the airline industry and the global economy of events such as terrorist activity, changes in oil prices and other disruptions to the world markets; trends in the airline industry, including growth rates of markets and other economic factors; risks associated with owning and leasing jet engines and aircraft; our ability to successfully negotiate equipment purchases, sales and leases, to collect outstanding amounts due and to control costs and expenses; changes in interest rates and availability of capital, our ability to continue to meet the changing customer demands; regulatory changes affecting airline operations, aircraft maintenance, accounting standards and taxes; the market value of engines and other assets in our portfolio. These risks and uncertainties, as well as other risks and uncertainties that could cause our actual results to differ significantly from management’s expectations, are described in greater detail in Item 1A. of Part I, “Risk Factors,” which, along with the previous discussion, describes some, but not all, of the factors that could cause actual results to differ significantly from management’s expectations.
General . Our core business is acquiring and leasing pursuant to operating leases, commercial aircraft engines and related aircraft equipment, and the selective sale of such engines, all of which we sometimes refer to as “equipment.” We have no current plans to enter into finance leases although we may do so in the future. As of December 31, 2008, we had 64 lessees in 35 countries. Our portfolio is continually changing due to acquisitions and sales. As of December 31, 2008, our total lease portfolio consisted of 160 engines and related equipment, four aircraft and three spare engine parts packages with an aggregate net book value of $829.7 million. As of December 31, 2008, we also managed 11 engines and related equipment on behalf of other parties. On December 30, 2005, we entered into a joint venture with Oasis International Leasing (USA), Inc., called WOLF. WOLF completed the purchase of two Airbus A340-313 aircraft from Boeing Aircraft Holding Company for a purchase price of $96.0 million. We actively manage our portfolio and structure our leases to maximize the residual values of our leased assets. Our leasing business focuses on popular Stage III commercial jet engines manufactured by CFMI, General Electric, Pratt & Whitney, Rolls Royce and International Aero Engines. These engines are the most widely used engines in the world, powering Airbus, Boeing, McDonnell Douglas, Bombardier and Embraer aircraft.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The preparation of our consolidated financial statements requires us 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, we evaluate our estimates, including those related to residual values, estimated asset lives, impairments and bad debts. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances 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.
We believe the following critical accounting policies, grouped by our activities, affect our more significant judgments and estimates used in the preparation of our consolidated financial statements:
Leasing Related Activities . Revenue from leasing of aircraft 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, we do not recognize revenue until received. We also estimate and charge to income a provision for bad debts based on our experience in the business and with each specific customer and the level of past due accounts. The financial condition of our customers may deteriorate and result in actual losses exceeding the estimated allowances. In addition, any deterioration in the financial condition of our customers may adversely affect future lease revenues. As of December 31, 2008, all of our leases are accounted for as operating leases. Under an operating lease, we retain title to the leased equipment, thereby retaining the potential benefit and assuming the risk of the residual value of the leased equipment.
We generally depreciate engines on a straight-line basis over 15 years to a 55% residual value. Spare parts packages are generally depreciated on a straight-line basis over 15 years to a 25% residual value. Aircraft are generally depreciated on a straight-line basis over 13-20 years to a 15%-17% residual value. For equipment which is unlikely to be repaired at the end of its current expected life, and is likely to be disassembled upon lease termination, we depreciate the equipment over its estimated life to a residual value based on an estimate of the wholesale value of the parts after disassembly. Currently, 23 engines having a net book value of $44.2 million are depreciated using this policy. If useful lives or residual values are lower than those estimated by us, upon sale of the equipment, a loss may be realized. It is our policy to review estimates regularly to more accurately expense the cost of equipment over
22
the useful life of the engines. Beginning April 1, 2008 and again on July 1, 2008, we changed the depreciation estimate related to certain older engine types in our portfolio. This change in depreciation estimate resulted in a $3.8 million increase in depreciation during 2008 and on an annual basis will result in an increase in depreciation expense of $6.8 million per year assuming no change in our portfolio. The net effect of these changes in depreciation estimates is a reduction in 2008 net income of $2.4 million or $0.28 in diluted earnings per share over what net income would have otherwise been had these changes in depreciation estimates not been made.
Sales Related Activities . For equipment sold out of our lease portfolio, we recognize the gain or loss associated with the sale as revenue. Gain consists of sales proceeds less the net book value of the equipment sold and any costs directly associated with the sale.
Asset Valuation. Statement of Financial Accounting Standards (SFAS) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, requires that long-lived assets and certain identifiable intangibles to be held and used by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, and long-lived assets and certain identifiable intangibles to be disposed of generally be reported at the lower of carrying amount or fair value less cost to sell. Impairment is identified by comparison of undiscounted forecasted cash flows, including estimated sales proceeds, over the life of the asset with the asset’s book value. If the forecasted undiscounted cash flows are less than the book value, we write the asset down to its fair value. We determine fair value by reference to independent appraisals, quoted market prices (e.g., an offer to purchase) and other factors.
Accounting for Maintenance Expenditures and Maintenance Reserves. Use fees received are recognized in revenue as maintenance reserve revenue if they are not reimbursable to the lessee. Use fees that are reimbursable are recorded as a maintenance reserve liability until they are reimbursed to the lessee or the lease terminates, at which time they are recognized in revenue as maintenance reserve revenue. Our expenditures for maintenance are expensed as incurred. Expenditures that meet the criteria for capitalization are recorded as an addition to equipment recorded on the balance sheet.
YEAR ENDED DECEMBER 31, 2008 COMPARED TO THE YEAR ENDED DECEMBER 31, 2007
Revenue is summarized as follows:
|
|
|
Year ended December 31, |
|
||||||||
|
|
|
2008 |
|
2007 |
|
||||||
|
|
|
Amount |
|
% |
|
Amount |
|
% |
|
||
|
|
|
(dollars in thousands) |
|
||||||||
|
Lease rent revenue |
|
$ |
102,421 |
|
67.3 |
% |
$ |
86,084 |
|
70.6 |
% |
|
Maintenance reserve revenue |
|
33,716 |
|
22.1 |
|
28,169 |
|
23.1 |
|
||
|
Gain on sale of leased equipment |
|
12,333 |
|
8.1 |
|
6,876 |
|
5.7 |
|
||
|
Other income |
|
3,823 |
|
2.5 |
|
768 |
|
0.6 |
|
||
|
Total |
|
$ |
152,293 |
|
100.0 |
% |
$ |
121,897 |
|
100.0 |
% |
Lease Rent Revenue . Our lease rent revenue for the year ended December 31, 2008, increased 19.0% to $102.4 million from $86.1 million for the comparable period in 2007. This increase primarily reflects a growth in the size of the lease asset portfolio which translated into a higher amount of equipment on lease. The aggregate of net book value of leased equipment at December 31, 2008 and 2007, was $829.7 million and $744.8 million, respectively, an increase of 11.4%. The ten engine sale to an investor group in September 2008 resulted in a reduction in portfolio net book value of $52 million, with the Company also recognizing nine months of lease rent revenue in 2008. At December 31, 2008, and 2007, respectively, approximately 92% and 91% of equipment by net book value was on-lease. The average utilization for the year ended December 31, 2008 was 93%, the same as a year ago. During the year ended December 31, 2008, 43 engines were added to our lease portfolio at a total cost of $229.1 million (including capitalized costs). During the year ended December 31, 2007, 22 engines and 2 helicopters were added to our lease portfolio at a total cost of $201.1 million (including capitalized costs).
Maintenance Reserve Revenue . Our maintenance reserve revenue for the year ended December 31, 2008, increased 19.7% to $33.7 million from $28.2 million for the comparable period in 2007. This increase was primarily due to the larger lease asset portfolio and an increased amount of equipment on-lease during 2008.
Gain on Sale of Leased Equipment . During the year ended December 31, 2008, we sold 13 engines, 2 helicopters and various engine-related equipment from the lease portfolio for a net gain of $12.3 million. In the quarter ended September 30, 2008, the Company sold a portfolio of ten engines having a net book value of $52 million to an investor group for $63 million, contributing $11 million to gain on sale for the year ended 2008. During the year ended December 31, 2007, we sold 5 engines and various engine-related equipment from the lease portfolio for a net gain of $6.9 million.
23
Other Income. Our other income consists primarily of management fee income and lease administration fees, and increased $3.1 million from the prior year. The increase was due to the settlement of a claim in the first quarter of 2008 for $1.0 million to resolve a litigation arising from a lessee default as well as the recording of a gain of $2.2 million related to an insurance casualty loss in the fourth quarter.
Depreciation Expense . Depreciation expense increased $6.3 million or 20.2% to $37.4 million for the year ended December 31, 2008, from the comparable period in 2007 due to increased lease portfolio value and changes in estimates of residual values on certain older engine types. Beginning April 1, 2008 and again on July 1, 2008, we changed the depreciation estimate related to certain older engine types in our portfolio. It is our policy to review estimates regularly to reflect the cost of equipment over the useful life of these engines. This change in depreciation estimate resulted in a $3.8 million increase in depreciation in 2008. The net effect of these changes in depreciation estimates is a reduction in 2008 net income of $2.4 million or $0.28 in diluted earnings per share over what net income would have otherwise been had these changes in depreciation estimates not been made.
Write-down of Equipment. Write-down of equipment to their estimated fair values totaled $6.1 million for the year ended December 31, 2008, an increase of $2.3 million from the $3.8 million recorded in the comparable period in 2007. Write-downs on held for use equipment totaled $2.5 million for the year ended December 31, 2008, due to the adjustment of carrying values for certain impaired engines and aircraft within the portfolio to reflect estimated market values. There was an additional write-down of $3.6 million for the year ended December 31, 2008 due to a management decision to consign six engines for part out and sale. Write-downs on held for use equipment to their estimated fair values totaled $1.7 million for the year ended December 31, 2007, due to the adjustment of carrying values for certain impaired engines within the portfolio to reflect estimated market values. There was an additional write-down of $2.1 million for the year ended December 31, 2007 due to a management decision to consign four engines for part out and sale.
General and Administrative Expenses . General and administrative expenses increased 33.2% to $30.8 million for the year ended December 31, 2008, from the comparable period in 2007 due mainly to increases in employment related costs ($1.3 million), engine thrust rental fees, maintenance and freight ($1.3 million), stock-based compensation ($1.1 million), servicing fees for regional engine portfolio ($1.0 million), corporate travel and entertainment ($0.9 million), accounting and legal services ($0.8 million) and employee severance costs ($0.7 million).
Net Finance Costs . Net finance costs include interest expense, interest income and net (gain)/loss on debt extinguishment. Interest expense increased 1.8% to $38.6 million for the year ended December 31, 2008, from the comparable period in 2007, due to an increase in average debt outstanding, which was partially offset by decreased interest rates. Interest income for the year ended December 31, 2008, decreased to $1.9 million from $3.8 million for the year ended December 31, 2007, due to a decrease in deposit balances and decreased interest rates. Virtually of our debt is tied to one-month US dollar LIBOR which decreased from 4.60% at December 31, 2007 to 0.44% at December 31, 2008.
We recorded $2.7 million as a loss upon extinguishment of debt in 2007 due to the change in ownership of our WEST Series 2005-B1 Floating Rate Notes and a portion of the existing WEST Series 2005-A1 Floating Rate Notes. As part of the second issuance of WEST, the existing WEST Series 2005-B1 Floating Rate Notes were purchased by our investment banker in 2007 and then re-sold to a different investor. Also, as a result of this process, $33.1 million of existing WEST Series 2005-A1 Floating Rate Notes were sold by an investor to a different investor. As a result of these transactions, we wrote off approximately $1.5 million and $0.8 million of unamortized WEST Series 2005-B1 Floating Rate Note debt issuance costs and WEST Series 2005-A1 Floating Rate Note debt issuance costs, respectively. The change in ownership of the WEST Series 2005-A1 Floating Rate Notes also resulted in the write off of $0.4 million in unamortized WEST Series 2005-A1 Floating Rate Note purchase discount in 2007.
Income Taxes . Income taxes for the year ended December 31, 2008, increased to $15.4 million from $10.1 million for the comparable period in 2007 reflecting increased pre-tax income. The overall effective tax rate for the year ended December 31, 2008, was 36.7% compared to 36.4% for the prior year. Our tax rate is subject to change based on changes in the mix of assets leased to domestic and foreign lessees, the proportions of revenue generated within and outside of California and numerous other factors, including changes in tax law.
24
YEAR ENDED DECEMBER 31, 2007 COMPARED TO THE YEAR ENDED DECEMBER 31, 2006
Revenue is summarized as follows:
|
|
|
Year ended December 31, |
|
||||||||
|
|
|
2007 |
|
2006 |
|
||||||
|
|
|
Amount |
|
% |
|
Amount |
|
% |
|
||
|
|
|
(dollars in thousands) |
|
||||||||
|
Lease rent revenue |
|
$ |
86,084 |
|
70.6 |
% |
$ |
69,230 |
|
65.3 |
% |
|
Maintenance reserve revenue |
|
28,169 |
|
23.1 |
|
32,744 |
|
30.9 |
|
||
|
Gain on sale of leased equipment |
|
6,876 |
|
5.7 |
|
3,781 |
|
3.5 |
|
||
|
Other income |
|
768 |
|
0.6 |
|
300 |
|
0.3 |
|
||
|
Total |
|
$ |
121,897 |
|
100.0 |
% |
$ |
106,055 |
|
100.0 |
% |
Lease Rent Revenue . Our lease rent revenue for the year ended December 31, 2007, increased 24.3% to $86.1 million from $69.2 million for the comparable period in 2006. This increase primarily reflects a growth in the size of the lease asset portfolio which translated into a higher amount of equipment on lease. The aggregate of net book value of leased equipment at December 31, 2007 and 2006, was $744.8 million and $604.1 million, respectively, an increase of 23.3%. Lease rent revenues also increased due to stronger utilization of lease assets in 2007 compared to a year ago. At December 31, 2007, and 2006, respectively, approximately 91% and 90% of equipment by net book value was on-lease. The average utilization for the year ended December 31, 2007, was 93% compared to 90% in the prior year. During the year ended December 31, 2007, 22 engines and 2 helicopters were added to our lease portfolio at a total cost of $201.1 million (including capitalized costs). During the year ended December 31, 2006, 18 engines were added to our lease portfolio at a total cost of $142.5 million (including capitalized costs).
Maintenance Reserve Revenue . Our maintenance reserve revenue for the year ended December 31, 2007, decreased 14.0% to $28.2 million from $32.7 million for the comparable period in 2006. This decrease was primarily due to the recording of $14.1 million in maintenance reserve revenue in 2006 related to nine long term leases terminated with a single customer in that year. This decrease was partially offset by the larger lease asset portfolio and an increased amount of equipment on-lease during 2007.
Gain on Sale of Leased Equipment . During the year ended December 31, 2007, we sold 5 engines and various engine-related equipment from the lease portfolio for a net gain of $6.9 million. During the year ended December 31, 2006, we sold 11 engines and various engine-related equipment from the lease portfolio for a net gain of $3.8 million.
Other Income. Our other income consists primarily of management fee income and lease administration fees, and increased $0.5 million due to an increase in the number of engines on lease.
Depreciation Expense . Depreciation expense increased $4.9 million or 18.6% to $31.1 million for the year ended December 31, 2007, from the comparable period in 2006 due to increased lease portfolio value and changes in estimates of residual values on certain older engine types. Beginning April 1, 2007, we changed the depreciation estimate related to certain older engine types in our portfolio. It is our policy to review estimates regularly to reflect more accurately the cost of equipment over the useful life of these engines. This change in depreciation estimate resulted in a $3.3 million increase in depreciation in 2007. The net effect of this change in depreciation estimate is a reduction in 2007 net income of $2.1 million or $0.24 in diluted earnings per share over what net income would have otherwise been had this change in depreciation estimate not been made.
Write-down of Equipment. Write-down of equipment to their estimated fair values totaled $3.8 million for the year ended December 31, 2007, an increase of $0.4 million from the $3.4 million recorded in the comparable period in 2006. Write-downs on held for use equipment totaled $1.7 million for the year ended December 31, 2007, due to the adjustment of carrying values for certain impaired engines within the portfolio to reflect estimated market values. There was an additional write-down of $2.1 million for the year ended December 31, 2007 due to a management decision to consign four engines for part out and sale. Write-downs on held for use equipment to their estimated fair values totaled $2.8 million for the year ended December 31, 2006, due to the adjustment of carrying values for certain impaired engines within the portfolio to reflect estimated market values. There was an additional write-down of $0.6 million for the year ended December 31, 2006 due to a management decision to dispose of, rather than repair, two engines.
General and Administrative Expenses . General and administrative expenses increased 7.4% to $23.1 million for the year ended December 31, 2007, from the comparable period in 2006 due mainly to increases in employment related costs ($1.8 million), administration and insurance expense ($0.3 million), consulting fees ($0.1 million), technical services, engine maintenance and freight ($0.1 million) and offset by reductions in travel and entertainment ($0.4 million), and accounting and legal services ($0.6 million).
Net Finance Costs . Net finance costs include interest expense, interest income, net (gain)/loss on debt extinguishment and realized and unrealized (gains) and losses on derivative instruments. Interest expense increased 20.0% to $37.9 million for the year ended December 31, 2007, from the comparable period in 2006, due to increases in interest rates and average debt outstanding. Interest income for the year ended December 31, 2007, increased to $3.8 million from $3.1 million for the year ended December 31,
25
2006, due to an increase in deposit balances and increased interest rates. Virtually all of our debt is tied to one-month US dollar LIBOR which decreased from 5.32% at December 31, 2006 to 4.60% at December 31, 2007. Despite this year over year reduction at December 31, the yearly average one-month LIBOR rate for 2007 increased to 5.28% from 5.09% in 2006 due to increases in the rate throughout 2006 and the first three quarters of 2007, before falling in the fourth quarter. Realized and unrealized gains on derivative instruments decreased net finance costs by $0.2 million for the year ended December 31, 2006 and had no impact on finance costs for the year ended December 31, 2007.
We recorded $2.7 million as a loss upon extinguishment of debt in 2007 due to the change in ownership of our WEST Series 2005-B1 Floating Rate Notes and a portion of the existing WEST Series 2005-A1 Floating Rate Notes. The WEST Series 2005-B1 Floating Rate Notes were purchased by our investment banker in 2007 and then re-sold to a different investor. Also, as a result of the second issuance of WEST in 2007, $33.1 million of existing WEST Series 2005-A1 Floating Rate Notes were sold by an investor to a different investor. As a result of these transactions, we wrote off approximately $1.5 million and $0.8 million of unamortized WEST Series 2005-B1 Floating Rate Note debt issuance costs and WEST Series 2005-A1 Floating Rate Note debt issuance costs, respectively. The change in ownership of the WEST Series 2005-A1 Floating Rate Notes also resulted in the write off of $0.4 million in unamortized WEST Series 2005-A1 Floating Rate Note purchase discount in 2007.
Income Taxes . Income taxes for the year ended December 31, 2007, increased to $10.1 million from $9.1 million for the comparable period in 2006 reflecting increased pre-tax income and a higher effective tax rate. The overall effective tax rate for the year ended December 31, 2007, was 36.4% compared to 34.0% for the prior year due to the decrease in the amount of benefit obtained under the Extraterritorial Income Exclusion as a percentage of pre-tax income in 2007 compared to 2006. Our tax rate is subject to change based on changes in the mix of assets leased to domestic and foreign lessees, the proportions of revenue generated within and outside of California and numerous other factors, including changes in tax law.
RECENT ACCOUNTING PRONOUNCEMENTS
In September 2006, the Financial Accounting Standards Board (FASB) issued Financial Accounting Standards Statement No. 157, Fair Value Measurements (“SFAS 157”). SFAS 157 establishes a framework for measuring fair value under GAAP and expands disclosures about fair value measurements. In February 2008, the FASB issued FASB Staff Position No. SFAS 157-2, “Effective Date of FASB Statement No. 157”, which provides a one year deferral of the effective date of SFAS 157 for non-financial assets and non-financial liabilities, except those that are recognized or disclosed in the financial statements at fair value at least annually. Effective January 1, 2008, we adopted the provisions of SFAS 157 with respect to our financial assets and liabilities. We have applied SFAS 157 to our recording of derivative instruments at fair value as either an asset or liability, and have deferred adoption for non-recurring fair value measurements, principally impairment of equipment.
In December 2007, the FASB issued SFAS No. 141R, “Business Combinations,” which modifies the accounting for business acquisitions. SFAS No. 141R requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction and establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed in a business combination. Certain provisions of this standard will, among other things, impact the determination of acquisition-date fair value of consideration paid in a business combination (including contingent consideration); exclude transaction costs from acquisition accounting; and change accounting practices for acquired contingencies, acquisition-related restructuring costs, in-process research and development, indemnification assets, and tax benefits. SFAS No. 141R is effective for financial statements issued for fiscal years beginning after December 15, 2008. The Company presently does not expect the adoption of SFAS No. 141R to have an effect on its financial statements.
In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51,” which establishes new standards governing the accounting for and reporting of noncontrolling interests in a subsidiary and for the deconsolidation of a subsidiary. SFAS No. 160 is effective for financial statements issued for the fiscal year beginning on or after December 15, 2008, and interim periods within those fiscal years. The Company presently does not expect the adoption of SFAS No. 160 to have an effect on its financial statements.
In March 2008, the FASB issued Statement No. 161, “Disclosures about Derivatives Instruments and Hedging Activities”(“SFAS 161”), an amendment of FASB Statement No. 133, “Accounting for Derivative Instruments and Hedging Activities”(“SFAS 133”). SFAS 161 changes the disclosure requirements for derivative instruments and hedging activities. Entities are required to provide enhanced disclosures stating how and why an entity uses derivative instruments; how derivative instruments and related hedged items are accounted for under SFAS 133 and its related interpretations; and how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. SFAS 161 requires that objectives for using derivative instruments be disclosed in terms of underlying risk and accounting designation. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. SFAS
26
161 also encourages but does not require comparative disclosures for earlier periods at initial adoptions. We are currently evaluating the impact that the adoption of SFAS 161 will have on our financial statements.
In May 2008, the FASB issued Statement of Financial Accounting Standards No. 162, “The Hierarchy of Generally Accepted Accounting Principles” (“SFAS 162”). SFAS 162 is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board Auditing amendments to AU Section, 411 The Meaning of “Present Fairly in Conformity with Generally Accepted Accounting Principles”. The statement is intended to improve financial reporting by identifying a consistent hierarchy for selecting accounting principles to be used in preparing financial statements that are presented in conformity with U.S. generally accepted accounting principles (GAAP). The Company presently does not expect the adoption of SFAS No. 162 to have an effect on its financial statements.
LIQUIDITY AND CAPITAL RESOURCES
Historically, we have financed our growth through borrowings secured by our equipment lease portfolio. Cash of approximately $394.7 million, $191.6 million and $171.9 million, in the years ended December 31, 2008, 2007 and 2006, respectively, was derived from this activity. In these same time periods $321.3 million, $90.5 million and $114.6 million, respectively, was used to pay down related debt. Cash flow from operating activities generated $51.6 million, $54.9 million and $56.8 million in the years ended December 31, 2008, 2007 and 2006, respectively
On February 7, 2006, we completed our public offering of 3,475,000 shares of our 9.0% Series A Cumulative Redeemable Preferred Stock with a liquidation preference of $10 per share, or approximately $34.8 million in total. After underwriting commissions and expenses of issuance, we received net proceeds of approximately $31.9 million. The preferred stock accrues cash dividends from the date of issuance at a rate of 9.0% per annum, or approximately $260,625 per month. The first dividend payment date was March 15, 2006. The payment of dividends, including with respect to the Series A Preferred Stock, is at the discretion of our board of directors. The Series A Preferred Stock is traded on the NASDAQ National Market.
Our primary use of funds is for the purchase of equipment for lease. Purchases of equipment (including capitalized costs) totaled $233.7 million, $201.7 million and $166.5 million for the years ended December 31, 2008, 2007 and 2006, respectively.
On December 12, 2006 we repurchased 1.3 million shares of our own common stock, or 14% of the shares outstanding, at $9.00 per share for a total cost of $11.7 million from FlightTechnics LLC in a private transaction. The repurchased shares were cancelled. As a result of this transaction the total number of common shares outstanding was approximately 8.0 million.
Cash flows from operations are driven significantly by payments made under our lease agreements, which comprise lease revenue and maintenance reserves, and are offset by interest expense. Note that cash received from reserves arrangements for some of our engines on lease are restricted per our debt arrangements. The lease revenue stream, in the short-term, is at fixed rates while virtually all of our debt is at variable rates. If interest rates increase, it is unlikely we could increase lease rates in the short term and this would cause a reduction in our earnings and operating cash flows. Revenue and maintenance reserves are also affected by the amount of equipment off lease. Approximately 92%, by book value, of our assets were on-lease at December 31, 2008 compared to approximately 91% at December 31, 2007. The average utilization rate for the year ended December 31, 2008 was 93%, the same as a year ago. If there is any increase in off-lease rates or deterioration in lease rates that are not offset by reductions in interest rates, there will be a negative impact on earnings and cash flows from operations.
At December 31, 2008, notes payable consists of loans totaling $641.1 million (net of discounts of $3.9 million) payable over periods of 18 months to approximately 15 years with interest rates varying between approximately 1.6% and 8.0% (excluding the effect of our interest rate derivative instruments).
The significant facilities are described below.
At December 31, 2008, we had a $289.0 million revolving credit facility to finance the acquisition of aircraft engines for lease as well as for general working capital purposes. As of December 31, 2008, $101.3 million was available under this facility. The revolving facility ends in June 2009 with a final maturity in June 2010. The interest rate on this facility at December 31, 2008 was one-month LIBOR plus 1.75%. Under the revolver facility, all subsidiaries except WEST Engine Funding LLC jointly and severally guarantee payment and performance of the terms of the loan agreement. The maximum guarantee is $289.0 million plus any accrued and unpaid interest, fees or reimbursements but is limited at any given time to the sum of the principal outstanding plus accrued interest and fees. The guarantee would be triggered by a default under the agreement.
On August 9, 2005, we closed the Asset-Backed Securitization through a newly created, bankruptcy remote, Delaware Statutory Trust, Willis Engine Securitization Trust (“WEST”). WEST issued and sold $228.3 million of term notes and approximately $113.6 million of 2005 Series warehouse notes. The 2005 Series warehouse notes were increased by $57.8 million to $171.4 million
27
on April 16, 2007 and were then converted to term notes of WEST on March 28, 2008 with the sale of $212.4 million of Series 2008-A1 notes and $20.3 million of Series 2008-B1 notes. At the closing, WEST agreed to acquire 11 engines from us directly. As a result of the transfer of engines from us to WEST, we no longer have access to these engines and they are managed to repay the note holders of WEST and for us as the equity holder of WEST. These transactions did not change the book value of the engines in the consolidated financial statements. We used these funds net of a $2.9 million discount on the Series 2008-A1 notes to pay off the balance remaining of the Series 2005-A2 and B2 notes of $164.1 million, pay off $62.0 million of our indebtedness related to the transfer of 11 engines from us to WEST, pay transaction expenses of approximately $3.2 million and received cash of approximately $0.5 million for general corporate purposes. Interest on the Series 2008-A1 and B1 notes is one-month LIBOR plus a margin of 1.50% and 3.50%, respectively. The Series 2008-A1 term notes expected maturity is March 2021 and the Series 2008-B1 term notes expected maturity is March 2023.
From March 28, 2008 to June 30, 2008, our investment banker, acting as our agent to sell the notes, was the holder of $20.3 million of the Series 2008-B1 notes. On June 30, 2008, we secured a $20.0 million senior term loan and used the loan proceeds to re-purchase the Series 2008-B1 from our investment banker. The Series 2008-B1 notes were pledged as collateral for the $20.0 million senior term loan. The loan is for a term of two years with maturity on July 1, 2010 and is structured as a bullet loan with no amortization with all amounts due at maturity. The interest rate for the term loan is one-month LIBOR plus 3.50%. Our investment banker will continue to market the Series 2008-B1 notes and in the event the Series 2008-B1 notes are placed with an investor within the next two years, the term loan will be repaid with the proceeds from the sale of the Series 2008-B1 notes.
WEST’s ability to make distributions and pay dividends to us is subject to the prior payments of its debt and other obligations and WEST’s maintenance of adequate reserves and capital. Under WEST, cash is collected in a restricted account, which is used to service the debt and any remaining amounts, after debt service and defined expenses, are distributed to us. Additionally, maintenance reserve payments and lease security deposits are accumulated in restricted accounts and are not available for general use. Cash from maintenance reserve payments are held in the restricted cash account and are subject to a minimum balance established annually based on an engine portfolio maintenance reserve study provided by a third party. Any excess maintenance reserve amounts remain within the restricted cash accounts and are utilized for the purchase of new engines.
On December 13, 2007, we closed on a new $200.0 million warehouse facility within WEST, consisting of $175.0 million of Series 200 7-A2 Floating Rate Notes and $25.0 million of Series 2007-B2 Floating Rate Notes. At December 31, 2008, $140.4 million was available under these warehouse notes. The 2007 series warehouse notes allow for borrowings during a three-year term, after which it is expected that they will be converted to term notes of WEST. Interest on the Series 2007-A2 notes and the Series 2007-B2 notes is one-month LIBOR plus a margin of 1.25% and 2.75%, respectively. The facility has a committed amount of $200.0 million. The Series 2007-A2 notes mature approximately December 2020 and the Series 2007-B2 notes mature approximately December 2022.
At December 31, 2008, $369.4 million of WEST term notes and $59.6 million of WEST warehouse notes were outstanding. The term notes are divided into $147.4 million Series 2005-A1 notes, $200.1 million Series 2008-A1 notes and $21.8 million Series 2005-B1 notes. The warehouse notes are divided into $52.0 million Series A2 notes and $7.6 million Series B2 notes. The assets of WEST, WEST Engine Funding and any associated Owner Trust are not available to satisfy our obligations or any of our affiliates. WEST is consolidated for financial statement presentation purposes. At December 31, 2008, interest on the Series 2005-A1 notes and Series 2007-A2 notes is one-month LIBOR plus a margin of 1.25%. At December 31, 2008, interest on the Series 2008-A1 notes is one-month LIBOR plus a margin of 1.50%. At December 31, 2008, interest on the Series 2005-B1 notes is one-month LIBOR plus a margin of 3.00% and a supplemental margin of 3.00%, for a total margin of 6.00%. At December 31, 2008, interest on the Series 2007-B2 notes is one-month LIBOR plus a margin of 2.75%.
WEST entered into a Senior Liquidity Facility on December 13, 2007 which expires on the final maturity date of the Series 2008-A1 term notes in March 2021. The facility is provided by our investment bank and the maximum facility size is 4% of the outstanding Series 2007-A2 Notes and Series 2008-A1 Notes This facility replaced the requirement to maintain 4% cash reserves for the 2007-A2 Notes and the Series 2008-A1 Notes. The facility may be drawn on any Payment Date should the cash flow at WEST be insufficient to pay interest on the Series 2007-A2 Notes, Series 2008-A1 Notes and any required hedge payments. A commitment fee is payable on the facility. The establishment of this facility resulted in the release of $7.1 million of cash held previously in the Senior Restricted Cash Account in December, 2007.
On December 21, 2007, we closed on a new credit facility with Export Development Canada (EDC) for a ten year term totaling $13.9 million, in support of the December 21, 2007 purchase of two new Bell 412 EP helicopters that were manufactured in Montreal, Canada. Interest is payable on the floating rate note based on three-month LIBOR plus a margin of 0.83%. Following the sale of the two Bell 412 EP helicopters on May 8, 2008, we repaid the EDC credit facility totaling $13.6 million, which represented the remaining principal amount owing at that time.
At December 31, 2008, we had warehouse and revolving credit facilities totaling approximately $489.0 million compared to $660.4 million at December 31, 2007. At December 31, 2008, and December 31, 2007, respectively, approximately $241.7 million and $300.0 million was available under these combined facilities. The decrease in availability in 2008 was due to the drawdown of funds from the facilities to support engine purchases.
28
At December 31, 2008 and 2007, one-month LIBOR was 0.44% and 4.60%, respectively.
Approximately $34.2 million of our debt is repayable during 2009. Such repayments consist of scheduled installments due under term loans. The table below summarizes our contractual commitments at December 31, 2008.
|
|
|
|
|
Payment due by period |
|
|||||||||||
|
|
|
Total |
|
Less than 1
|
|
1-3 Years |
|
3-5 Years |
|
More than 5
|
|
|||||
|
Long-term debt obligations |
|
$ |
645,012 |
|
$ |
34,216 |
|
$ |
286,931 |
|
$ |
80,384 |
|
$ |
243,481 |
|
|
Interest payments under long — term debt obligations |
|
60,861 |
|
13,867 |
|
18,167 |
|
12,017 |
|
16,810 |
|
|||||
|
Operating lease obligations |
|
3,526 |
|
704 |
|
1,130 |
|
1,051 |
|
641 |
|
|||||
|
Purchase obligations |
|
141,783 |
|
141,783 |
|
— |
|
— |
|
— |
|
|||||
|
Total |
|
$ |
851,182 |
|
$ |
190,570 |
|
$ |
306,228 |
|
$ |
93,452 |
|
$ |
260,932 |
|
Approximately $636.7 million of the above debt is subject to our 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, under these facilities, we can typically borrow 80% to 83% of an engine purchase and between 50% and 85% of an aircraft or spare parts purchase. Therefore we must have other available funds for the balance of the purchase price of any new equipment to be purchased or we will not be permitted to draw on these facilities. The facilities are also cross-defaulted. If we do not comply with the covenants or eligibility requirements, we 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. We were in compliance with all covenants at December 31, 2008.
We have estimated the interest payments due under long-term debt by applying the interest rates applicable at December 31, 2008 to the remaining debt, adjusted for the estimated debt repayments identified in the table above. Actual interest payments made will vary due to changes in the rates for one-month LIBOR. The interest estimate excludes the effect of any derivative instruments in place at the balance sheet date.
We have paid deposits to secure the purchase during 2009 of 12 engines and 3 helicopters for a gross purchase price of $141.8 million, for delivery from March to December 2009. As at December 31, 2008, non-refundable deposits paid related to this purchase commitment were $13.2 million. In October, 2006, we entered into an agreement with CFM International (“CFM”) to purchase up to $540.0 million of new spare aircraft engines. The agreement specifies that, subject to availability, we may purchase up to a total of 45 CFM56-7B and CFM56-5B spare engines over the next five years, with options to acquire up to an additional 30 engines. Our 2009 purchase orders have been accepted by CFM and are included in our commitments to purchase.
The lease of our office premises in Sausalito expired on December 31, 2007 and we moved to new offices in Novato, California on March 1, 2008. We have entered into a new lease effective November 1, 2007 for the new offices in Novato, California that covers approximately 18,375 square feet of office space. The total remaining rent commitment is approximately $3.2 million and expires February 28, 2015. The sub-lease of our premises in San Diego expires in October 2010. Our Shanghai, China office lease expires in December 2009.
We believe our equity base, internally generated funds and existing debt facilities are sufficient to maintain our level of operations through 2009. A decline in the level of internally generated funds, such as could result if the amount of equipment off-lease increases or there is a decrease in availability under our existing debt facilities, would impair our ability to sustain our level of operations. We are discussing additions to our capital base with our commercial and investment banks. If we are not able to access additional capital, our ability to continue to grow our asset base consistent with historical trends will be impaired and our future growth limited to that which can be funded from internally generated capital.
Management of Interest Rate Exposure
At December 31, 2008, all but $1.5 million of our borrowings were on a variable rate basis at various interest rates tied to one-month LIBOR. Our equipment leases are generally structured at fixed rental rates for specified terms. Increases in interest rates could narrow or result in a negative spread, between the rental revenue we realize under our leases and the interest rate that we pay under our borrowings. We have entered into interest rate derivative instruments to mitigate our exposure to interest rate risk and not to speculate or trade in these derivative products. We currently have interest rate swap agreements which have notional outstanding
29
amounts of $383.0 million, with remaining terms of between one and 72 months and fixed rates of between 2.10% and 5.05%. The fair value of the swaps at December 31, 2008 and 2007 was negative $20.5 million and negative $7.7 million, respectively, representing a net liability for us.
SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” requires companies to record derivative instruments at fair value as either an asset or liability. We use derivative instruments (primarily interest rate swaps) to manage the risk of interest rate fluctuation. While substantially all our derivative transactions are entered into for the purposes described above, hedge accounting is only applied where specific criteria have been met and it is practicable to do so. In order to apply hedge accounting, the transaction must be designated as a hedge and the hedge relationship must be highly effective. The hedging instrument’s effectiveness is assessed utilizing regression analysis at the inception of the hedge and on at least a quarterly basis throughout its life. All of the transactions that we have designated as hedges are accounted for as cash flow hedges. The effective portion of the gain or loss on a derivative instrument designated as a cash flow hedge is reported as a component of other comprehensive income and is reclassified into earnings in the period during which the transaction being hedged affects earnings. The ineffective portion of these hedges flows through earnings in the current period. The hedge accounting for these derivative instrument arrangements increased interest expense by $5.2 million in 2008 and reduced interest expense by $2.0 million in 2007. This incremental cost in 2008 and incremental benefit in 2007 for the swaps effective for hedge accounting was included in interest expense for the respective periods.
We will be exposed to risk in the event of non-performance of the interest rate hedge counter-parties. We anticipate that we may hedge additional amounts of our floating rate debt during the next year.
Related Party and Similar Transactions
Gavarnie Holding, LLC, a Delaware Limited Liability Company (“Gavarnie”) owned by Charles F. Willis, IV, purchased the stock of Aloha Island Air, Inc., a Delaware Corporation, (“Island Air”) from Aloha AirGroup, Inc. (“Aloha”) on May 11, 2004. Charles F. Willis, IV is the President, CEO and Chairman of our Board of Directors and owns approximately 32% of our common stock as of December 31, 2008. Island Air leases four DeHaviland DHC-8-100 aircraft and two spare engines from us, which are expected to generate lease rent revenue of approximately $1.9 million in 2009 and $1.6 million in 2010. In 2006, in response to a fare war commenced by a competitor, Island Air requested a reduction in lease rent payments. The Board of Directors subsequently approved 14 months of lease rent deferrals totaling $784,000. All deferrals were accounted for as a reduction in lease revenue in the applicable period. Because of the question regarding collectibility of amounts due under these leases, lease rent revenue for these leases have been recorded on a cash basis until such time as collectibility becomes reasonably assured. After taking into account the deferred amounts, Island Air remains current on all obligations except for $288,000 in overdue rent related to February and March 2009. Our leases with Island Air are currently being restructured and amended effective January 2009. The $784,000 in accumulated rent deferrals have been incorporated in the lease rents for two of the aircraft for the period January 2009 – April 2012. During the difficult period in Hawaii involving uneconomic fares being charged by a competitor, Island Air, in an effort to conserve cash, deferred maintenance on engines leased by the Company. Due to concern regarding Island Air’s ability to meet lease return conditions and after reviewing the current maintenance status and condition of the leased assets, the Company recorded a reduction in the carrying value of these assets of $0.8 million in the second quarter of 2008. Including this write down, the aircraft and engines on lease to Island Air have a net book value of $6.0 million at December 31, 2008.
We entered into a Consignment Agreement dated May 26, 2006, with J.T. Power LLC (“J.T. Power”), an entity whose majority shareholder, Austin Willis, is the son of our President and Chief Executive Officer, and directly and indirectly, a shareholder of ours as well as a Director of the Company. During the six months ended December 31, 2006, sales of consigned parts were $0.1 million. During the year ended December 31, 2007, sales of consigned parts were $0.1 million. The book value for the parts consigned to J.T. Power as of December 31, 2007 was $0. On January 22, 2008, we entered into a Consignment Agreement with J.T. Power in which they are responsible to market and sell parts from the teardown of three engines with a book value of $4.2 million. During the year ended December 31, 2008, sales of consigned parts were $2.6 million. On November 17, 2008, we entered into a Consignment Agreement with J.T. Power in which they are responsible to market and sell parts from the teardown of one engine with a book value of $1.0 million. On July 27, 2006, we entered into an Aircraft Engine Agency Agreement with J.T. Power, in which we will on a non-exclusive basis, provide engine lease opportunities with respect to available spare engines at J.T. Power. J.T. Power will pay us a fee based on a percentage of the rent collected by J.T. Power for the duration of the lease including renewals thereof. Revenue of $32,400 was earned during the period from inception of the agreement to December 31, 2006. In 2007, we earned revenue of $84,000 and paid $21,000 in commission under this program. In 2008, we earned revenue of $33,500 and paid $0 in commission under this program.
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ITEM 7A. |
Our primary market risk exposure is that of interest rate risk. A change in LIBOR rates would affect our cost of borrowing. Increases in interest rates, which may cause us to raise the implicit rates charged to our customers, could result in a reduction in demand for our leases. Alternatively, we may price our leases based on market rates so as to keep the fleet on-lease and suffer a decrease in our operating margin due to interest costs that we are unable to pass on to our customers. All but $1.5 million of our
30
outstanding debt is variable rate debt. We estimate that for every one percent increase or decrease in our variable rate debt (net of derivative instruments), annual interest expense would increase or decrease $2.6 million (in 2007, $2.7 million per annum).
We hedge a portion of our borrowings, effectively fixing the rate of these borrowings. This hedging activity helps protect us against reduced margins on longer term fixed rate leases. Based on the implied forward rates for one-month LIBOR, we expect interest expense will be increased by approximately $12.1 million for the year ending December 31, 2009, as a result of our hedges. Such hedging activities may limit our ability to participate in the benefits of any decrease in interest rates, but may also protect us from increases in interest rates. Furthermore, since lease rates tend to vary with interest rate levels, it is possible that we can adjust lease rates for the effect of change in interest rates at the termination of leases. Other financial assets and liabilities are at fixed rates.
We are also exposed to currency devaluation risk. During 2008, 2007, and 2006, respectively, 80%, 84%, and 86% of our total lease rent revenues came from non-United States domiciled lessees. All of our leases require payment in US dollars. If these lessees’ currency devalues against the US dollar, the lessees could potentially encounter difficulty in making their lease payments.
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ITEM 8. |
The information required by this item is submitted as a separate section of this report beginning on page 36.
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ITEM 9. |
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
None.
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ITEM 9A. |
(a) Evaluation of disclosure controls and procedures. Based on management’s evaluation (with the participation of our Chief Executive Officer (CEO) and Chief Financial Officer (CFO)), as of the end of the period covered by this report, our CEO and CFO have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)), are effective to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Inherent Limitations on Controls
Management, including the CEO and CFO, does not expect that our disclosure controls and procedures will prevent or detect all error and fraud. Any control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.
Management’s Report on Internal Control over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Our internal control system was designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with generally accepted accounted principles.
Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2008. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework . Based on this assessment our management believes that, as of December 31, 2008, our internal control over financial reporting is effective under those criteria. This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to provide only management’s report in this annual report.
(b) Changes in internal control over financial reporting. There has been no change in our internal control over financial reporting during our fourth fiscal quarter ended December 31, 2008 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
31
|
ITEM 9B. |
None.
|
ITEM 10. |
We have adopted a Standards of Ethical Conduct Policy (“Code of Ethics”) that applies to all employees and directors including our Chief Executive Officer, Chief Operating Officer, and Chief Financial Officer. The Code of Ethics is filed in Exhibit 14.1 and is also available on our website at www.willislease.com.
The remainder of the information required by this item is incorporated by reference to our Proxy Statement.
|
ITEM 11. |
The information required by this item is incorporated by reference to our Proxy Statement.
|
ITEM 12. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
The information required by this item is incorporated by reference to our Proxy Statement. The information in Item 5 of this report regarding our Equity Compensation Plans is incorporated herein by reference.
|
ITEM 13. |
The information required by this item is incorporated by reference to our Proxy Statement.
|
ITEM 14. |
We were billed the following amounts by our principal accountant:
|
|
|
2008 |
|
2007 |
|
||
|
Audit fees |
|
$ |
573,612 |
|
$ |
750,262 |
|
|
Audit-related fees |
|
31,300 |
|
30,000 |
|
||
|
Tax fees |
|
— |
|
— |
|
||
|
All other fees |
|
— |
|
— |
|
||
|
|
|
$ |
604,912 |
|
$ |
780,262 |
|
Amounts billed under Audit-related fees for 2008 are for professional services rendered in issuing a comfort letter in connection with the WEST 2008 offering memorandum associated with the 2008 series WEST term notes. Amounts billed under Audit-related fees for 2007 are for professional services rendered in issuing a comfort letter in connection with the WEST 2007 offering memorandum associated with the 2007 series WEST warehouse notes.
The remaining information required by this item is incorporated by reference to our Proxy Statement.
|
ITEM 15. |
(a) (1) Financial
Statements
The response to this portion of Item 15 is submitted as a separate section of
this report beginning on page 36.
(a) (2) Financial Statement Schedules
Schedule I, Parent Company Financial Statements, and Schedule II, Valuation Accounts, are submitted as a separate section of this report starting on page 62.
32
All other financial statement schedules have been omitted as the required information is not pertinent to the Registrant or is not material or because the required information is included in the Financial Statements and Notes thereto.
(a) (3), (b) and (c): Exhibits: The response to this portion of Item 15 is submitted below.
EXHIBITS
|
Exhibit
|
|
Description |
|
3.1 |
|
Certificate of Incorporation, dated March 12, 1998, as amended by the Certificate of Amendment of Certificate of Incorporation, dated May 6, 1998. |
|
3.2 |
|
Bylaws, dated April 18, 2001 as amended by (1) Amendment to Bylaws, dated November 13, 2001, and (2) Amendment to Bylaws, dated December 16, 2008. |
|
4.1 |
|
Specimen of Series A Cumulative Redeemable Preferred Stock Certificate (incorporated by reference to Exhibit 4.1 to Form S-1 Registration Statement Amendment No. 2 filed on January 27, 2006). |
|
4.2 |
|
Form of Certificate of Designations of the Registrant with respect to the Series A Cumulative Reedemable Preferred Stock (incorporated by reference to Exhibit 4.2 to Form S-1 Registration Statement Amendment No. 2 filed on January 27, 2006). |
|
4.3 |
|
Form of Amendment No. 1 to Certificate of Designations of the Registrant with respect to the Series A Cumulative Redeemable Preferred Stock. |
|
4.4 |
|
Rights Agreement dated as of September 24, 1999, by and between Willis Lease Finance Corporation and American Stock Transfer and Trust Company, as Rights Agent (incorporated by reference to Exhibit 4.1 to Form 8-K filed on October 4, 1999). |
|
4.5 |
|
Second Amendment to Rights Agreement dated as of December 15, 2005, by and between Willis Lease Finance Corporation and American Stock Transfer and Trust Company, as Rights Agent. |
|
4.6 |
|
Third Amendment to Rights Agreement dated as of September 30, 2008, by and between Willis Lease Finance Corporation and American Stock Transfer and Trust Company, as Rights Agent. |
|
4.7 |
|
Form of Certificate of Designations of the Registrant with respect to the Series I Junior Participating Preferred Stock (formerly known as “Series A Junior Participating Preferred Stock”). |
|
4.8 |
|
Form of Amendment No. 1 to Certificate of Designations of the Registrant with respect to Series I Junior Participating Preferred Stock. |
|
10.1 |
|
Form of Indemnification Agreement entered into between the Registrant 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 |
|
1996 Stock Option/Stock Issuance Plan, as amended and restated as of March 1, 2003 (incorporated by reference to Exhibit 99.1 to Form S-8 filed on September 26, 2003). |
|
10.3 |
|
2007 Stock Incentive Plan (incorporated by reference to the Registrant’s Proxy Statement for 2007 Annual Meeting of Stockholders filed on April 30, 2007). |
|
10.4 |
|
Amended and Restated Employment Agreement between the Registrant and Charles F. Willis IV dated as of December 1, 2008 (incorporated by reference to Exhibit 10.1 to Form 8-K filed on December 22, 2008). |
|
10.5 |
|
Employment Agreement between the Registrant and Donald A. Nunemaker dated November 21, 2000 (incorporated by reference to Exhibit 10.3 to Form 10-K for the year ended December 31, 2000). |
|
10.6 |
|
Employment Agreement between the Registrant and Thomas C. Nord dated September 19, 2005 (incorporated by reference to Exhibit 10.1 to Form 8-K filed on September 23, 2005). |
|
10.7 |
|
Employment Agreement between the Registrant and Bradley S. Forsyth February 20, 2007 (incorporated by reference to Exhibit 10.2 to Form 8-K filed on February 21, 2007). |
|
10.8 |
|
Loan and Aircraft Security Agreement dated October 29, 2004 between Fleet Capital Corporation and Willis Lease Finance Corporation (incorporated by reference to Exhibit 10.42 to Form 10-K filed on March 31, 2005). |
|
10.9 |
|
Amendment No. 1 to Loan and Aircraft Security Agreement dated as of December 9, 2004 between Fleet Capital Corporation and Willis Lease Finance Corporation (incorporated by reference to Exhibit 10.44 to Form 10-K filed on March 31, 2005). |
|
10.10 |
|
Amendment No. 2 to Loan and Aircraft Security Agreement dated as of February 14, 2007 between Fleet Capital Corporation and Willis Lease Finance Corporation. |
|
10.11 |
|
Amendment No. 3 to Loan and Aircraft Security Agreement dated as of August 28, 2008 between Fleet Capital Corporation and Willis Lease Finance Corporation. |
|
10.12 |
|
Series 2005-A1 Note Purchase Agreement, dated as of July 28, 2005, among the Registrant, Willis Engine Securitization Trust, UBS Securities LLC and UBS Limited (incorporated by reference to Exhibit 10.35 to Form 10-Q filed on November 29, 2005). |
|
10.13 |
|
Series 2005-B1 Note Purchase Agreement, dated as of August 9, 2005, among the Registrant, Willis Engine Securitization Trust, Fortis Capital and HSH Nordbank AG (incorporated by reference to Exhibit 10.36 to Form 10-Q filed on November 29, 2005). |
|
10.14 |
|
Series 2007-A2 Note Purchase and Loan Agreement dated as of December 13, 2007, among Willis Engine Securitization Trust, Willis Lease Finance Corporation and the initial Series 2007-A2 Holders (incorporated by reference to Exhibit 10.59 to Form 10-K filed on March 31, 2008). |
|
10.15 |
|
Series 2007-B2 Note Purchase and Loan Agreement dated as of December 13, 2007 among Willis Engine Securitization |
33
|
|
|
Trust, Willis Lease Finance Corporation and the initial Series 2007-B2 Holders (incorporated by reference to Exhibit 10.60 on Form 10-K filed on March 31, 2008). |
|
10.16 |
|
Series 2008-A1 Note Purchase and Loan Agreement dated as of March 25, 2008, among Willis Engine Securitization Trust, Willis Lease Finance Corporation and the initial Series 2008-A1 Holders. |
|
10.17 |
|
Series 2008-B1 Note Purchase and Loan Agreement dated as of March 25, 2008, among Willis Engine Securitization Trust, Willis Lease Finance Corporation and the initial Series 2008-B1 Holders. |
|
10.18* |
|
Amended and Restated Indenture, dated December 13, 2007, by and between Willis Engine Securitization Trust and Deutsche Bank Trust Company Americas. |
|
10.19 |
|
Series A1 Indenture Supplement, dated August 9, 2005, by and between Willis Engine Securitization Trust and Deutsche Bank Trust Company Americas (incorporated by reference to Exhibit 10.40 to Form 10-Q filed on November 29, 2005). |
|
10.20 |
|
Series B1 Indenture Supplement, dated August 9, 2005, by and between Willis Engine Securitization Trust and Deutsche Bank Trust Company Americas (incorporated by reference to Exhibit 10.41 to Form 10-Q filed on November 29, 2005). |
|
10.21 |
|
Series 2007-A2 Supplement, dated as of December 13, 2007, by and between Willis Engine Securitization Trust and Deutsche Bank Trust Company Americas. |
|
10.22 |
|
Series 2007-B2 Supplement, dated as of December 13, 2007, by and between Willis Engine Securitization Trust and Deutsche Bank Trust Company Americas. |
|
10.23 |
|
Series 2008-A1 Supplement, dated as of March 28, 2008, by and between Willis Engine Securitization Trust and Deutsche Bank Trust Company Americas. |
|
10.24 |
|
Series 2008-B1 Supplement, dated as of March 28, 2008, by and between Willis Engine Securitization Trust and Deutsche Bank Trust Company Americas. |
|
10.25 |
|
General Supplement 2008-1 dated as of March 28, 2008. |
|
10.26 |
|
General Supplement 2009-1 dated as of March 20, 2009. |
|
10.27 |
|
Servicing Agreement, dated as of August 9, 2005, among the Registrant, Willis Engine Securitization Trust, WEST Engine Funding and 59 engine owning trusts named therein (incorporated by reference to Exhibit 10.44 of our report in Form 10-Q filed on November 29, 2005). |
|
10.28 |
|
Administrative Agency Agreement, dated as of August 9, 2005, among the Registrant, Willis Engine Securitization Trust, WEST Engine Funding and 59 engine owning trusts named therein (incorporated by reference to Exhibit 10.45 of our report in Form 10-Q filed on November 29, 2005). |
|
10.29 |
|
Limited Liability Company Agreement of WOLF A340 LLC, dated as of December 8, 2005, between Oasis International Leasing (USA), Inc. and the Registrant (incorporated by reference to Exhibit 10.49 on Form S-1 Registration Statement Amendment No. 1 filed on January 9, 2006). |
|
10.30* |
|
Second Amended and Restated Credit Agreement, dated as of June 30, 2006 among Willis Lease Finance Corporation, and Certain Banking Institutions named therein with National City Bank and Fortis Bank (Nederland) N.V. (incorporated by reference to Exhibit 10.52 of our report in Form 10-Q filed on August 14, 2006). |
|
10.31 |
|
First Amendment to Second Amended and Restated Credit Agreement, dated as of December 13, 2006. |
|
10.32 |
|
Second Amendment to Second Amended and Restated Credit Agreement, dated as of June 7, 2007 among Willis Lease Finance Corporation, National City Bank and Certain Banking Institutions (incorporated by reference to Exhibit 10.58 of our report on Form 10-K filed on March 31, 2008). |
|
11.1 |
|
Statement re Computation of Per Share Earnings |
|
12.1 |
|
Statements re Computation of Ratios |
|
14.1 |
|
Code of Ethics (incorporated by reference to our report on Form 10-K filed on March 31, 2006). |
|
21.1 |
|
Subsidiaries of the Registrant |
|
23.1 |
|
Consent and Report of KPMG LLP |
|
31.1 |
|
Certification of Charles F. Willis, IV, pursuant to Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
31.2 |
|
Certification of Bradley S. Forsyth, pursuant to Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
32 |
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
* Portions of these exhibits have been omitted pursuant to a request for confidential treatment and the redacted material has been filed separately with the Commission.
(d) Financial Statements
Financial Statements are submitted as a separate section of this report beginning on page 36.
34
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.
|
Dated: |
March 30, 2009 |
|
|
|
Willis Lease Finance Corporation |
|
|
|
|
|
|
|
By: |
/s/ CHARLES F. WILLIS, IV |
|
|
|
Charles F. Willis, IV |
|
|
|
Chairman of the Board, President, and |
|
|
|
Chief Executive Officer |
|
Dated: |
|
Title |
|
Signature |
|
|
|
|
|
|
|
Date: March 30, 2009 |
|
Chief Executive Officer and Director |
|
/s/ CHARLES F. WILLIS, IV |
|
|
|
(Principal Executive Officer) |
|
Charles F. Willis, IV |
|
|
|
|
|
|
|
Date: March 30, 2009 |
|
Chief Financial Officer |
|
/s/ BRADLEY S. FORSYTH |
|
|
|
and Senior Vice President
|
|
Bradley S. Forsyth |
|
|
|
|
|
|
|
Date: March 30, 2009 |
|
Director |
|
/s/ ROBERT T. MORRIS |
|
|
|
|
|
Robert T. Morris |
|
|
|
|
|
|
|
Date: March 30, 2009 |
|
Director |
|
/s/ HANS JORG HUNZIKER |
|
|
|
|
|
Hans Jorg Hunziker |
|
|
|
|
|
|
|
Date: March 30, 2009 |
|
Director |
|
/s/ W. WILLIAM COON, JR. |
|
|
|
|
|
W. William Coon, Jr. |
|
|
|
|
|
|
|
Date: March 30, 2009 |
|
Director |
|
/s/ AUSTIN C. WILLIS |
|
|
|
|
|
Austin C. Willis |
|
|
|
|
|
|
|
Date: March 30, 2009 |
|
Director |
|
/s/ GERARD LAVIEC |
|
|
|
|
|
Gerard Laviec |
35
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
|
37 |
|
|
|
|
|
Consolidated Balance Sheets as of December 31, 2008 and December 31, 2007 |
38 |
|
|
|
|
39 |
|
|
|
|
|
40 |
|
|
|
|
|
41 |
|
|
|
|
|
42 |
36
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors
Willis Lease Finance Corporation:
We have audited the accompanying consolidated balance sheets of Willis Lease Finance Corporation and subsidiaries (the “Company”) as of December 31, 2008 and 2007, and the related consolidated statements of income, shareholders’ equity and comprehensive income, and cash flows for each of the years in the three-year period ended December 31, 2008. In connection with our audits of the consolidated financial statements, we also have audited financial statement schedules I and II. These consolidated financial statements and financial statement schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedules based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Willis Lease Finance Corporation and subsidiaries as of December 31, 2008 and 2007, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2008, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.
|
/s/ KPMG LLP |
|
|
San Francisco, California |
|
|
March 30, 2009 |
|
37
WILLIS LEASE FINANCE CORPORATION
AND SUBSIDIARIES
(In thousands, except share data)
|
|
|
December 31, |
|
December 31, |
|
||
|
|
|
2008 |
|
2007 |
|
||
|
ASSETS |
|
|
|
|
|
||
|
Cash and cash equivalents |
|
$ |
8,618 |
|
$ |
7,234 |
|
|
Restricted cash |
|
69,194 |
|
64,960 |
|
||
|
Equipment held for operating lease, less accumulated depreciation of $138,607 and $135,517 at December 31, 2008 and 2007, respectively |
|
829,739 |
|
744,827 |
|
||
|
Equipment held for sale |
|
21,191 |
|
5,006 |
|
||
|
Operating lease related receivable, net of allowances of $339 and $62 at December 31, 2008 and 2007, respectively |
|
8,607 |
|
5,550 |
|
||
|
Investments |
|
10,434 |
|
10,327 |
|
||
|
Assets under derivative instruments |
|
276 |
|
12 |
|
||
|
Property, equipment & furnishings, less accumulated depreciation of $2,651 and $2,463 at December 31, 2008 and 2007, respectively |
|
7,751 |
|
6,771 |
|
||
|
Equipment purchase deposits |
|
13,530 |
|
12,180 |
|
||
|
Other assets |
|
13,969 |
|
11,723 |
|
||
|
Total assets |
|
$ |
983,309 |
|
$ |
868,590 |
|
|
|
|
|
|
|
|
||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
||
|
Liabilities: |
|
|
|
|
|
||
|
Accounts payable and accrued expenses |
|
$ |
12,732 |
|
$ |
11,825 |
|
|
Liabilities under derivative instruments |
|
20,810 |
|
7,709 |
|
||
|
Deferred income taxes |
|
56,118 |
|
46,632 |
|
||
|
Notes payable, net of discount of $3,887 and $1,594 at December 31, 2008 and 2007, respectively |
|
641,125 |
|
567,108 |
|
||
|
Maintenance reserves |
|
49,158 |
|
49,481 |
|
||
|
Security deposits |
|
5,179 |
|
5,890 |
|
||
|
Unearned lease revenue |
|
5,980 |
|
5,293 |
|
||
|
Total liabilities |
|
791,102 |
|
693,938 |
|
||
|
|
|
|
|
|
|
||
|
Shareholders’ equity: |
|
|
|
|
|
||
|
Preferred stock ($0.01 par value, 5,000,000 shares authorized; 3,475,000 shares issued and outstanding at December 31, 2008 and 2007, respectively) |
|
31,915 |
|
31,915 |
|
||
|
Common stock ($0.01 par value, 20,000,000 shares authorized; 9,077,905 and 8,433,224 shares issued and outstanding at December 31, 2008 and 2007, respectively) |
|
91 |
|
84 |
|
||
|
Paid-in capital in excess of par |
|
57,939 |
|
55,712 |
|
||
|
Retained Earnings |
|
117,163 |
|
93,690 |
|
||
|
Accumulated other comprehensive loss, net of income tax benefit of $8,569 and $3,883 at December 31, 2008 and 2007, respectively |
|
(14,901 |
) |
(6,749 |
) |
||
|
Total shareholders’ equity |
|
192,207 |
|
174,652 |
|
||
|
Total liabilities and shareholders’ equity |
|
$ |
983,309 |
|
$ |
868,590 |
|
See accompanying notes to the consolidated financial statements.
38
WILLIS LEASE FINANCE CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands, except per share data)
|
|
|
Years Ended December 31, |
|
|||||||
|
|
|
2008 |
|
2007 |
|
2006 |
|
|||
|
REVENUE |
|
|
|
|
|
|
|
|||
|
Lease rent revenue |
|
$ |
102,421 |
|
$ |
86,084 |
|
$ |
69,230 |
|
|
Maintenance reserve revenue |
|
33,716 |
|
28,169 |
|
32,744 |
|
|||
|
Gain on sale of leased equipment |
|
12,333 |
|
6,876 |
|
3,781 |
|
|||
|
Other income |
|
3,823 |
|
768 |
|
300 |
|
|||
|
Total revenue |
|
152,293 |
|
121,897 |
|
106,055 |
|
|||
|
|
|
|
|
|
|
|
|
|||
|
EXPENSES |
|
|
|
|
|
|
|
|||
|
Depreciation expense |
|
37,438 |
|
31,136 |
|
26,255 |
|
|||
|
Write-down of equipment |
|
6,142 |
|
3,822 |
|
3,389 |
|
|||
|
General and administrative |
|
30,758 |
|
23,094 |
|
21,539 |
|
|||
|
Net finance costs: |
|
|
|
|
|
|
|
|||
|
Interest expense |
|
38,640 |
|
37,940 |
|
31,610 |
|
|||
|
Interest income |
|
(1,887 |
) |
(3,795 |
) |
(3,082 |
) |
|||
|
Net loss on extinguishment of debt |
|
— |
|
2,667 |
|
— |
|
|||
|
Realized and unrealized gains on derivative instruments |
|
— |
|
— |
|
(153 |
) |
|||
|
Total net finance costs |
|
36,753 |
|
36,812 |
|
28,375 |
|
|||
|
Total expenses |
|
111,091 |
|
94,864 |
|
79,558 |
|
|||
|
|
|
|
|
|
|
|
|
|||
|
Earnings from operations |
|
41,202 |
|
27,033 |
|
26,497 |
|
|||
|
|
|
|
|
|
|
|
|
|||
|
Earnings from joint venture |
|
797 |
|
700 |
|
466 |
|
|||
|
|
|
|
|
|
|
|
|
|||
|
Income before income taxes |
|
41,999 |
|
27,733 |
|
26,963 |
|
|||
|
Income tax expense |
|
(15,398 |
) |
(10,069 |
) |
(9,077 |
) |
|||
|
Net income |
|
$ |
26,601 |
|
$ |
17,664 |
|
$ |
17,886 |
|
|
|
|
|
|
|
|
|
|
|||
|
Preferred stock dividends paid and declared-Series A |
|
3,128 |
|
3,128 |
|
2,945 |
|
|||
|
|
|
|
|
|
|
|
|
|||
|
Net income attributable to common shareholders |
|
$ |
23,473 |
|
$ |
14,536 |
|
$ |
14,941 |
|
|
|
|
|
|
|
|
|
|
|||
|
Basic earnings per common share: |
|
$ |
2.85 |
|
$ |
1.79 |
|
$ |
1.63 |
|
|
|
|
|
|
|
|
|
|
|||
|
Diluted earnings per common share: |
|
$ |
2.68 |
|
$ |
1.66 |
|
$ |
1.56 |
|
|
|
|
|
|
|
|
|
|
|||
|
Average common shares outstanding |
|
8,242 |
|
8,115 |
|
9,169 |
|
|||
|
Diluted average common shares outstanding |
|
8,760 |
|
8,742 |
|
9,606 |
|
|||
See accompanying notes to the consolidated financial statements.
39
WILLIS LEASE FINANCE CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Shareholders’ Equity and Comprehensive Income
Years Ended December 31, 2008, 2007 and 2006
(In thousands)
|
|
|
Preferred
|
|
Issued and
|
|
Common
|
|
Paid-in
|
|
Accumulated Other
|
|
Retained
|
|
Total
|
|
|||||||
|
Balances at December 31, 2005 |
|
— |
|
9,152 |
|
$ |
92 |
|
$ |
63,618 |
|
$ |
(161 |
) |
$ |
64,213 |
|
$ |
127,762 |
|
||
|
Net income |
|
— |
|
— |
|
— |
|
— |
|
— |
|
17,886 |
|
17,886 |
|
|||||||
|
Unrealized loss from derivative instruments, net of tax benefit of $465 |
|
— |
|
— |
|
— |
|
— |
|
(806 |
) |
— |
|
(806 |
) |
|||||||
|
Total comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
17,080 |
|
|||||||
|
Issuance of 3,475 shares of Series A preferred stock, net of expenses |
|
31,915 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
31,915 |
|
|||||||
|
Preferred stock dividends paid and declared |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(2,945 |
) |
(2,945 |
) |
|||||||
|
Shares repurchased |
|
— |
|
(1,300 |
) |
(13 |
) |
(11,687 |
) |
— |
|
— |
|
(11,700 |
) |
|||||||
|
Shares issued under stock compensation plans |
|
— |
|
158 |
|
1 |
|
963 |
|
— |
|
— |
|
964 |
|
|||||||
|
Stock-based compensation expenses |
|
— |
|
— |
|
— |
|
685 |
|
— |
|
— |
|
685 |
|
|||||||
|
Tax benefit on disqualified dispositions of shares |
|
— |
|
— |
|
— |
|
241 |
|
— |
|
— |
|
241 |
|
|||||||
|
Balances at December 31, 2006 |
|
$ |
31,915 |
|
8,010 |
|
$ |
80 |
|
$ |
53,820 |
|
$ |
(967 |
) |
$ |
79,154 |
|
$ |
164,002 |
|
|
|
Net income |
|
— |
|
— |
|
— |
|
— |
|
— |
|
17,664 |
|
17,664 |
|
|||||||
|
Unrealized loss from derivative instruments, net of tax benefit of $3,334 |
|
— |
|
— |
|
— |
|
— |
|
(5,782 |
) |
— |
|
(5,782 |
) |
|||||||
|
Total comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
11,882 |
|
|||||||
|
Preferred stock dividends paid |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(3,128 |
) |
(3,128 |
) |
|||||||
|
Shares issued under stock compensation plans |
|
— |
|
423 |
|
4 |
|
1,115 |
|
— |
|
— |
|
1,119 |
|
|||||||
|
Stock-based compensation expenses |
|
— |
|
— |
|
— |
|
599 |
|
— |
|
— |
|
599 |
|
|||||||
|
Tax benefit on disqualified dispositions of shares |
|
— |
|
— |
|
— |
|
178 |
|
— |
|
— |
|
178 |
|
|||||||
|
Balances at December 31, 2007 |
|
$ |
31,915 |
|
8,433 |
|
$ |
84 |
|
$ |
55,712 |
|
$ |
(6,749 |
) |
$ |
93,690 |
|
$ |
174,652 |
|
|
|
Net income |
|
— |
|
— |
|
— |
|
— |
|
— |
|
26,601 |
|
26,601 |
|
|||||||
|
Unrealized loss from derivative instruments, net of tax benefit of $4,698 |
|
— |
|
— |
|
— |
|
— |
|
(8,152 |
) |
— |
|
(8,152 |
) |
|||||||
|
Total comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
18,449 |
|
|||||||
|
Preferred stock dividends paid |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(3,128 |
) |
(3,128 |
) |
|||||||
|
Shares issued under stock compensation plans |
|
— |
|
645 |
|
7 |
|
626 |
|
— |
|
— |
|
633 |
|
|||||||
|
Stock-based compensation expenses |
|
— |
|
— |
|
— |
|
1,693 |
|
— |
|
— |
|
1,693 |
|
|||||||
|
Tax on disqualified dispositions of shares |
|
— |
|
— |
|
— |
|
(92 |
) |
— |
|
— |
|
(92 |
) |
|||||||
|
Balances at December 31, 2008 |
|
$ |
31,915 |
|
9,078 |
|
$ |
91 |
|
$ |
57,939 |
|
$ |
(14,901 |
) |
$ |
117,163 |
|
$ |
192,207 |
|
|
See accompanying notes to the consolidated financial statements.
40
WILLIS LEASE FINANCE CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In thousands)
|
|
|
Years ended December 31, |
|
|||||||
|
|
|
2008 |
|
2007 |
|
2006 |
|
|||
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|||
|
Net income |
|
$ |
26,601 |
|
$ |
17,664 |
|
$ |
17,886 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|||
|
Depreciation expense |
|
37,438 |
|
31,136 |
|
26,255 |
|
|||
|
Write-down of equipment |
|
6,142 |
|
3,822 |
|
3,389 |
|
|||
|
Stock-based compensation expenses |
|
1,693 |
|
599 |
|
685 |
|
|||
|
Amortization of deferred costs |
|
4,831 |
|
3,912 |
|
3,746 |
|
|||
|
Amortization of loan discount |
|
595 |
|
385 |
|
423 |
|
|||
|
Allowances and provisions |
|
278 |
|
(17 |
) |
(385 |
) |
|||
|
Changes in the fair value of derivative instruments |
|
— |
|
— |
|
(169 |
) |
|||
|
Gain on sale of leased equipment |
|
(12,333 |
) |
(6,876 |
) |
(3,781 |
) |
|||
|
Gain on insurance settlement |
|
(2,211 |
) |
— |
|
— |
|
|||
|
Loss on disposition of property, plant & equipment |
|
— |
|
33 |
|
— |
|
|||
|
Income from joint venture |
|
(797 |
) |
(700 |
) |
(466 |
) |
|||
|
Net loss on extinguishment of debt |
|
— |
|
2,667 |
|
— |
|
|||
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|||
|
Receivables |
|
(3,335 |
) |
(531 |
) |
(105 |
) |
|||
|
Other assets |
|
(3,421 |
) |
(1,734 |
) |
1,871 |
|
|||
|
Accounts payable and accrued expenses |
|
611 |
|
(5,883 |
) |
7,323 |
|
|||
|
Deferred income taxes |
|
14,172 |
|
9,491 |
|
8,777 |
|
|||
|
Restricted cash |
|
(18,349 |
) |
(14,207 |
) |
2,598 |
|
|||
|
Maintenance reserves |
|
(323 |
) |
12,736 |
|
(11,297 |
) |
|||
|
Security deposits |
|
(711 |
) |
1,041 |
|
885 |
|
|||
|
Unearned lease revenue |
|
687 |
|
1,333 |
|
(832 |
) |
|||
|
Net cash provided by operating activities |
|
51,568 |
|
54,871 |
|
56,803 |
|
|||
|
|
|
|
|
|
|
|
|
|||
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|||
|
Proceeds from sale of equipment held for operating lease (net of selling expenses) |
|
99,493 |
|
36,471 |
|
42,695 |
|
|||
|
Restricted cash for investing activities |
|
14,116 |
|
(184 |
) |
(14,100 |
) |
|||
|
Proceeds from insurance settlement |
|
3,500 |
|
— |
|
— |
|
|||
|
Proceeds from principal payment of notes receivable |
|
— |
|
12 |
|
149 |
|
|||
|
Distributions from joint venture |
|
690 |
|
975 |
|
211 |
|
|||
|
Purchase of equipment held for operating lease |
|
(233,748 |
) |
(201,702 |
) |
(166,504 |
) |
|||
|
Purchase of property, equipment and furnishings |
|
(1,593 |
) |
(44 |
) |
(113 |
) |
|||
|
Net cash used in investing activities |
|
(117,542 |
) |
(164,472 |
) |
(137,662 |
) |
|||
|
|
|
|
|
|
|
|
|
|||
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|||
|
Proceeds from issuance of notes payable |
|
394,682 |
|
191,552 |
|
171,907 |
|
|||
|
Proceeds from issuance of preferred stock |
|
— |
|
— |
|
31,915 |
|
|||
|
Debt issuance cost |
|
(3,477 |
) |
(4,972 |
) |
(842 |
) |
|||
|
Distribution to preferred stockholders |
|
(3,128 |
) |
(3,128 |
) |
(2,945 |
) |
|||
|
Proceeds from issuance of common stock |
|
633 |
|
1,119 |
|
964 |
|
|||
|
Excess tax benefit (cost) from stock-based compensation |
|
(92 |
) |
178 |
|
241 |
|
|||
|
Decrease in restricted cash |
|
— |
|
22,190 |
|
— |
|
|||
|
Repurchase of common stock |
|
— |
|
— |
|
(11,700 |
) |
|||
|
Principal payments on notes payable |
|
(321,260 |
) |
(90,491 |
) |
(114,640 |
) |
|||
|
Net cash provided by financing activities |
|
67,358 |
|
116,448 |
|
74,900 |
|
|||
|
Increase (decrease) in cash and cash equivalents |
|
1,384 |
|
6,847 |
|
(5,959 |
) |
|||
|
Cash and cash equivalents at beginning of period |
|
7,234 |
|
387 |
|
6,346 |
|
|||
|
|
|
|
|
|
|
|
|
|||
|
Cash and cash equivalents at end of period |
|
$ |
8,618 |
|
$ |
7,234 |
|
$ |
387 |
|
|
Supplemental disclosures of cash flow information: |
|
|
|
|
|
|
|
|||
|
Net cash paid for: |
|
|
|
|
|
|
|
|||
|
Interest |
|
$ |
30,994 |
|
$ |
35,311 |
|
$ |
30,744 |
|
|
Income Taxes |
|
$ |
2,269 |
|
$ |
15 |
|
$ |
12 |
|
Supplemental disclosures of non-cash investing activities:
During the years ended December 31, 2008, 2007 and 2006, a liability of $587, $2,184 and $0, respectively, was incurred but not paid in connection with our purchase of aircraft and engines.
See accompanying notes to the consolidated financial statements.
41
WILLIS LEASE FINANCE CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(1) Organization and Summary of Significant Accounting Policies
(a) Organization
Willis Lease Finance Corporation (“Willis” or the “Company”) is a provider of aviation services whose primary focus is on providing operating leases of commercial aircraft engines and other aircraft-related equipment to air carriers, manufacturers and overhaul/repair facilities worldwide. Willis also engages in the selective purchase and resale of commercial aircraft engines.
WLFC (Ireland) Limited is a wholly-owned subsidiary of Willis and was formed in 1998 to facilitate certain of Willis’ international leasing activities.
During 2005, Willis Engine Securitization Trust (“WEST”) was established for the purpose of financing aircraft engines. WEST purchased Willis Engine Funding LLC (“WEF”), a wholly owned subsidiary of Willis. WEF was renamed WEST Engine Funding LLC. WEF is a Delaware limited liability company and was established in 2002 for the purpose of financing aircraft engines and is a special-purpose bankruptcy-remote entity. WEST Engine Funding (Ireland) Limited is a wholly-owned subsidiary of WEST and was established in 2005 to facilitate certain international leasing activities.
Management considers the continuing operations of our company to operate in one reportable segment.
(b) Principles of Consolidation
The consolidated financial statements include the accounts of Willis, WEST, WEF, WEST Engine Funding (Ireland) Limited and WLFC (Ireland) Limited (together, the “Company”). All intercompany balances and transactions have been eliminated in consolidation.
(c) Revenue Recognition
Revenue from leasing of aircraft equipment is recognized as operating lease revenue straight-line over the terms of the applicable lease agreements. Revenue is not recognized when cash collection is not reasonably assured.
We regularly sell equipment from our lease portfolio. This equipment may or may not be subject to a lease at the time of sale. The gain or loss on such sales is recognized as revenue and consists of proceeds associated with the sale less the net book value of the asset sold and any direct costs associated with the sale. To the extent that deposits associated with the engine are not included in the sale we include any such amount in our calculation of gain or loss.
In the year ended December 31, 2008, the Company sold a portfolio of ten engines to an investor group for $63 million. After the date of sale, the Company retains responsibility to manage the engines sold to the investor group. Because the arrangement has multiple deliverables, the Company evaluated the arrangement under Emerging Issues Task Force Issue No. 00-21, Revenue Arrangements with Multiple Deliverables (EITF 00-21) which addresses accounting for multiple element arrangements. The Company has determined that the two deliverables under the arrangements, the sale of the engines and the management services, are separate units of accounting. Therefore, revenue is recognized in accordance with SAB 104 for each unit.
One requirement of EITF 00-21 for the two deliverables to be accounted for as separate units of accounting is that management can determine the fair value of the undelivered item (the management services), when the first item (the sale of engines) is delivered. Assessing fair value evidence requires judgment. In determining fair value, the Company has reviewed information from management agreements entered into by other parties on a standalone basis, compared it to the management agreement entered into during the quarter and determined that the fees charged on a standalone basis were comparable to the fees charged when the Company entered into the management agreement concurrent with the sale of the portfolio of engines. Accordingly it was able to determine that the fees charged for its management services were comparable to those charged by other asset managers for the same service. As such, the Company has concluded that evidence exists to support its assessment of the fair value of the management services.
Based on the conclusion that the sale of engines and the management services can be accounted for separately, the Company recognized a $11.1 million gain on sale of the ten engine portfolio in the year ended December 31, 2008. The gain recorded was the difference between the sales price and the net book value of the engines sold.
The Company recognizes revenue from management fees under equipment management agreements as earned on a monthly basis. Management fees are based upon a percentage of net lease rents of the investor group’s engine portfolio calculated on an accrual basis.
42
Under the terms of some of our leases, the lessees pay use fees (also known as maintenance reserves) to us based on usage of the leased asset, which are designed to cover expected future maintenance costs. Some of these amounts are reimbursable to the lessee if they make specifically defined maintenance expenditures. Use fees received are recognized in revenue as maintenance reserve revenue if they are not reimbursable to the lessee. Use fees that are reimbursable are recorded as a maintenance reserve liability until they are reimbursed to the lessee or the lease terminates, at which time they are recognized in revenue as maintenance reserve revenue.
Certain lessees may be significantly delinquent in their rental payments and may default on their lease obligations. As of December 31, 2008, we had an aggregate of approximately $2.5 million in lease rent and $1.5 million in maintenance reserve payments more than 30 days past due. Our inability to collect receivables or to repossess engines or other leased equipment in the event of a default by a lessee could have a material adverse effect on us.
(d) Equipment Held for Operating Lease
Aircraft assets held for operating lease are stated at cost, less accumulated depreciation. Certain costs incurred in connection with the acquisition of aircraft assets are capitalized as part of the cost of such assets. Major overhauls paid for by us, which improve functionality or extend original useful life, are capitalized and depreciated over the estimated remaining useful life of the equipment. The cost of overhauls of aircraft assets under long term leases, for which the lessee is responsible for maintenance during the period of the lease, are paid for by the lessee or from reimbursable maintenance reserves paid to the Company in accordance with the lease, and are not capitalized.
Based on specific aspects of the equipment, we generally depreciate engines on a straight-line basis over a 15-year period from the acquisition date to a 55% residual value. We believe that this methodology accurately reflects our typical holding period for the assets and, that the residual value assumption reasonably approximates the selling price of the assets 15 years from date of acquisition.
For engines or aircraft that are unlikely to be repaired at the end of the current expected useful lives, we depreciate the engines or aircraft over their estimated lives to a residual value based on an estimate of the wholesale value of the parts after disassembly.
The spare parts packages owned by us are depreciated on a straight-line basis over an estimated useful life of 15 years to a 25% residual value. The aircraft owned by us are depreciated on a straight-line basis over an estimated useful life of 13 to 20 years to a 15% to 17% residual value.
Statement of Financial Accounting Standards No. 144 (SFAS), “Accounting for the Impairment or Disposal of Long-Lived Assets,” requires that long-lived assets and certain identifiable intangibles to be held and used by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, and long-lived assets and certain identifiable intangibles to be disposed of generally be reported at the lower of carrying amount or fair value less cost to sell. Impairment is identified by comparison of undiscounted forecast cash flows, including estimated sales proceeds, over the life of the asset with the assets’ book value. If the forecast undiscounted cash flows are less than the book value the asset is written down to its fair value. Fair value is determined by reference to independent appraisals, quoted market prices (e.g. an offer to purchase) and other factors considered relevant by Management. We conduct a formal annual review of the carrying value of long-lived assets and also evaluate assets during the year if we note a triggering event indicating an impairment is possible. Such reviews resulted in impairment charges for engines and aircraft of $6.1 million, $3.8 million and $3.4 million (disclosed separately as “Write-down of equipment” in the Consolidated Statements of Income) in 2008, 2007 and 2006, respectively.
(e) Debt Issuance Costs and Related Fees
To the extent that we are required to pay fees in order to secure debt, such fees are capitalized and amortized over the life of the related loan using the interest method.
(f) Maintenance and Repair Costs
Maintenance and repair costs under our leases are generally the responsibility of the lessees. Under many of our leases, lessees pay periodic use fees (often called maintenance reserves) to us based on the usage of the asset. Under the terms of some of our leases, the lessees pay amounts to us based on usage, which are designed to cover the expected maintenance cost. Some of these amounts are reimbursable to the lessee if they make specifically defined maintenance expenditures.
Use fees received are recognized in maintenance reserve revenue if they are not reimbursable to the lessee. Use fees that are reimbursable are included in maintenance reserve liability until they are reimbursed to the lessee or the lease terminates, at which time they are recognized in maintenance reserve revenue. Our expenditures for maintenance are expensed as incurred. Expenditures that meet the criteria for capitalization are recorded as an addition to equipment recorded on the balance sheet. Major overhauls paid for by us, which improve functionality or extend original useful life, are capitalized and depreciated over the estimated remaining useful life of the equipment.
43
(g) Interest Rate Hedging
We have entered into various derivative instruments to mitigate our exposure on our variable rate borrowings. The derivative instruments are fixed-rate interest swaps, where SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended, requires companies to record derivative instruments at fair value as either an asset or liability.
While substantially all our derivative transactions are entered into for the purposes described above, hedge accounting is only applied where specific criteria have been met and it is practicable to do so. In order to apply hedge accounting, the transaction must be designated as a hedge and it must be highly effective. The hedging instrument’s effectiveness is assessed utilizing regression analysis at the inception of the hedge and on at least a quarterly basis throughout its life. All of the transactions that we have designated as hedges are cash flow hedges. The effective portion of the change in fair value on a derivative instrument designated as a cash flow hedge is reported as a component of other comprehensive income and is reclassified into earnings in the period during which the transaction being hedged affects earnings. The ineffective portion of the hedges are recorded in earnings in the current period.
(h) Income Taxes
We use the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred income taxes are recognized for the tax consequences of “temporary differences” by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The effect on deferred taxes of a change in the tax rates is recognized in income in the period that includes the enactment date.
FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109” (FIN 48) clarified the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS No. 109, “Accounting for Income Taxes”. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This Interpretation also provides guidance on de-recognition, classification, interest and penalties, accounting in interim period, disclosure, and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006 and we adopted this interpretation effective January 1, 2007. We did not carry any specified tax reserves as of December 31, 2006 and December 31, 2007. Since adoption, we have evaluated income tax uncertainty risk areas and exposures and have reserved $176,000 as of December 31, 2008.
The Company files income tax returns in various states and countries which may have different statutes of limitations. The Company records penalties and accrued interest related to uncertain tax positions in income tax expense. Such adjustments have historically been minimal and immaterial to our financial results.
(i) Property, Equipment and Furnishings
Property, equipment and furnishings are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the related assets, which range from three to seven years. Leasehold improvements are recorded at cost and depreciated by the straight-line method over the shorter of the lease term or useful life of the leasehold.
(j) Cash and Cash Equivalents
We consider highly liquid investments readily convertible into known amounts of cash, with original maturities of 90 days or less, as cash equivalents.
(k) Restricted Cash
We have certain bank accounts that are subject to restrictions in connection with our WEST borrowings. Under WEST, cash is collected in a restricted account, which is used to service the debt and any remaining amounts, after debt service and defined expenses, are distributed to us. Additionally, maintenance reserve payments and lease security deposits are accumulated in restricted accounts and are not available for general use.
Cash from maintenance reserve payments are held in the restricted cash account and are subject to a minimum balance established annually based on an engine portfolio maintenance reserve study provided by a third party. This structure was incorporated into the Indenture in December 2007, which resulted in the redeployment of cash that is now available to fund future engine purchases. Any excess maintenance reserve amounts remain within the restricted cash accounts and are utilized for the purchase of new engines. Engines purchased with these funds are not included as part of the borrowing capacity for WEST. Maintenance reserve accounts are only available to meet the costs of specified engine maintenance or repair provisions and can be reimbursed to the lessee. In the event an engine is sold, accumulated maintenance reserves remaining after the sale may be used for new engine purchases.
44
Security deposits are held until the end of the lease, at which time provided return conditions have been met, the deposit will be returned to the lessee. To the extent return conditions are not met, these deposits may be retained by us. Further, WEST deposits cash in the Senior Restricted Cash Account in an amount equal to 4% of the sum of the outstanding principal balance of the Series 2005-A1 Notes and in the Junior Restricted Cash Account in an amount equal to 3% of the sum of the outstanding principal balances of all Series of Series B Notes. A Senior Liquidity Facility was established in December, 2007 which replaced the need to maintain cash reserves for the Series 2005-A2 Notes and the Series 2008-A1 Notes.
(l) 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.
The preparation of consolidated financial statements requires us 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, we evaluate our estimates, including those related to residual values, estimated asset lives, impairments and bad debts. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances 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.
Management believes that the accounting policies on revenue recognition, maintenance reserves and expenditures, useful life of equipment, asset residual values, asset impairment and allowance for doubtful accounts are critical to the results of operations.
If the useful lives or residual values are lower than those estimated by us, upon sale of the asset a loss may be realized. 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 impairment write-downs may occur.
(m) Per share information
Basic earnings per common share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. The computation of fully diluted earnings per share is similar to the computation of basic earnings per share, except for the inclusion of all potentially dilutive common shares. The reconciliation between basic common shares and fully diluted common shares is presented below:
|
|
|
2008 |
|
2007 |
|
2006 |
|
|
|
|
(in thousands) |
|
||||
|
Shares: |
|
|
|
|
|
|
|
|
Weighted-average number of common shares outstanding |
|
8,242 |
|
8,115 |
|
9,169 |
|
|
Potentially dilutive common shares |
|
518 |
|
627 |
|
437 |
|
|
Total shares |
|
8,760 |
|
8,742 |
|
9,606 |
|
|
Potential common stock excluded as anti-dilutive in period |
|
111 |
|
227 |
|
636 |
|
(n) Investments
We have one investment in a joint venture where we own 50% of the equity of the venture and we have significant influence. We account for this investment using the equity method of accounting. The investment is recorded at the amount invested plus or minus our 50% share of net income or loss less any distributions or return of capital received from the entity.
We also have an investment in a non-marketable security where management does not have significant influence and is recorded at cost. Management evaluates the investment for impairment quarterly. No adjustment to the carrying value was required during the periods presented.
45
(o) Stock Based Compensation
We recognize compensation expense in the financial statements for share-based awards based on the grant-date fair value of those awards. Additionally, stock-based compensation expense includes an estimate for pre-vesting forfeitures and is recognized over the requisite service periods of the awards on a straight-line basis, which is generally commensurate with the vesting term.
Our 2007 Stock Incentive Plan (the 2007 Plan) was adopted on May 24, 2007. Under this 2007 Plan, a total of 2,000,000 shares are authorized for stock based compensation in the form of either restricted stock or stock options. Two types of restricted stock were granted in 2007: 239,952 shares vesting over 4 years and 15,452 shares vesting on the first anniversary date from date of issuance. Three types of restricted stock were granted in 2008: 243,964 shares vesting over 4 years, 313,045 shares vesting over 5 years and 17,476 shares vesting on the first anniversary date from date of issuance. 33,043 shares of restricted stock awards granted in 2007 and 2008 were cancelled during 2008 and the shares will revert to the share reserve and be available for issuance at a later date, in accordance with the Plan. Our accounting policy is to recognize the expense of such awards on a straight-line basis over the vesting period. The fair value of the restricted stock awards equaled the stock price at the date of grants.
Approximately $1.7 million in stock compensation expense was recorded in 2008, of which $1.6 million was related to restricted stock grants in 2007 and 2008. Approximately $0.6 million in stock compensation expense was recorded in 2007, of which $0.3 million was related to restricted stock grants. The stock compensation expense related to the 2007 and 2008 restricted stock awards that will be recognized in future periods total $6.9 million. The Plan terminates on May 24, 2017.
(p) Initial Direct Costs associated with Leases
We account for the initial direct costs, including sales commission and legal fees, incurred in obtaining a new lease by deferring and amortizing those costs over the term of the lease. The amortization of these costs is recorded under General and Administrative expenses in the Consolidated Statements of Income. The amounts amortized were $2.0 million, $1.4 million and $1.0 million for the years ended December 31, 2008, 2007 and 2006, respectively.
(q) Fair Value Measurements:
In September 2006, the Financial Accounting Standards Board (FASB) issued Financial Accounting Standards Statement No. 157, Fair Value Measurements (“SFAS 157”). SFAS 157 establishes a framework for measuring fair value under GAAP and expands disclosures about fair value measurements. In February 2008, the FASB issued FASB Staff Position No. SFAS 157-2, “Effective Date of FASB Statement No. 157”, which provides a one year deferral of the effective date of SFAS 157 for non-financial assets and non-financial liabilities, except those that are recognized or disclosed in the financial statements at fair value at least annually. Effective January 1, 2008, we adopted the provisions of SFAS 157 with respect to our financial assets and liabilities. We have applied SFAS 157 to our recording of derivative instruments at fair value as either an asset or liability, and have deferred adoption for non-recurring fair value measurements, principally impairment of equipment.
Fair value is defined under SFAS 157 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under SFAS 157 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:
Level 1 - Quoted prices in active markets for identical assets or liabilities.
Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
We measure the fair value of our notional interest rate swaps of $383.0 million based on Level 3 inputs as defined by SFAS 157. The company estimates the fair value of derivative instruments using a discounted cash flow technique. Fair value may depend on the credit rating and risk of the counterparties to the derivative contracts. In 2008, $5.2 million was realized through the income statement as an increase in interest expense. In 2007, $2.0 million was realized through the income statement as a reduction in interest expense.
46
The following table shows the fair value activity for the year.
|
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) |
|
Derivatives (in
|
|
|
|
Beginning balance, January 1, 2008 |
|
$ |
(7,697 |
) |
|
Total gains or losses (realized/unrealized) |
|
|
|
|
|
Included in earnings |
|
(5,197 |
) |
|
|
Included in other comprehensive income |
|
(12,837 |
) |
|
|
Purchases, issuances and settlements |
|
5,197 |
|
|
|
Ending balance, December 31, 2008 |
|
$ |
(20,534 |
) |
In February 2007, the FASB issued Financial Accounting Standards (FAS) Statement No. 159, The Fair Value Option for Financial Assets and Financial Liabilities – Including an amendment of FASB Statement No. 115 (“SFAS 159”). Under this pronouncement, companies may elect to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reporting earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. However, SFAS 159 specifically includes financial assets and financial liabilities recognized under leases (as defined in FAS No. 13, Accounting for Leases), as among those items not eligible for the fair value measurement option except contingent obligations for cancelled leases and guarantees of third-party lease obligations. Effective January 1, 2008, we adopted SFAS 159 and did not elect fair value measurement for any financial instruments or other items.
(r) Recent Accounting Pronouncement s
In September 2006, the Financial Accounting Standards Board (FASB) issued Financial Accounting Standards Statement No. 157, Fair Value Measurements (“SFAS 157”). SFAS 157 establishes a framework for measuring fair value under GAAP and expands disclosures about fair value measurements. In February 2008, the FASB issued FASB Staff Position No. SFAS 157-2, “Effective Date of FASB Statement No. 157”, which provides a one year deferral of the effective date of SFAS 157 for non-financial assets and non-financial liabilities, except those that are recognized or disclosed in the financial statements at fair value at least annually. Effective January 1, 2008, we adopted the provisions of SFAS 157 with respect to our financial assets and liabilities. We have applied SFAS 157 to our recording of derivative instruments at fair value as either an asset or liability, and have deferred adoption for non-recurring fair value measurements, principally impairment of equipment.
In December 2007, the FASB issued SFAS No. 141R, “Business Combinations,” which modifies the accounting for business acquisitions. SFAS No. 141R requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction and establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed in a business combination. Certain provisions of this standard will, among other things, impact the determination of acquisition-date fair value of consideration paid in a business combination (including contingent consideration); exclude transaction costs from acquisition accounting; and change accounting practices for acquired contingencies, acquisition-related restructuring costs, in-process research and development, indemnification assets, and tax benefits. SFAS No. 141R is effective for financial statements issued for fiscal years beginning after December 15, 2008. While we have not yet evaluated this statement for the impact, if any, that SFAS 141R will have on our consolidated financial statements, we will be required to expense costs related to any acquisitions after December 31, 2008.
In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51,” which establishes new standards governing the accounting for and reporting of noncontrolling interests in a subsidiary and for the deconsolidation of a subsidiary. SFAS No. 160 is effective for financial statements issued for the fiscal year beginning on or after December 15, 2008, and interim periods within those fiscal years. The Company presently does not expect the adoption of SFAS No. 160 to have an effect on its financial statements.
In March 2008, the FASB issued Statement No. 161, “Disclosures about Derivatives Instruments and Hedging Activities”(“SFAS 161”), an amendment of FASB Statement No. 133, “Accounting for Derivative Instruments and Hedging Activities”(“SFAS 133”). SFAS 161 changes the disclosure requirements for derivative instruments and hedging activities. Entities are required to provide enhanced disclosures stating how and why an entity uses derivative instruments; how derivative instruments and related hedged items are accounted for under SFAS 133 and its related interpretations; and how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. SFAS 161 requires that objectives for using derivative instruments be disclosed in terms of underlying risk and accounting designation. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. SFAS 161 also encourages but does not require comparative disclosures for earlier periods at initial adoptions. The Company presently does not expect the adoption of SFAS 161 to have an effect on its financial statements.
47
In May 2008, the FASB issued Statement of Financial Accounting Standards No. 162, “The Hierarchy of Generally Accepted Accounting Principles” (“SFAS 162”). SFAS 162 is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board Auditing amendments to AU Section, 411 The Meaning of “Present Fairly in Conformity with Generally Accepted Accounting Principles”. The statement is intended to improve financial reporting by identifying a consistent hierarchy for selecting accounting principles to be used in preparing financial statements that are presented in conformity with U.S. generally accepted accounting principles (GAAP). The Company presently does not expect the adoption of SFAS No. 162 to have an effect on its financial statements.
(2) Equipment Held for Lease
At December 31, 2008, we had 160 aircraft engines and related equipment with a cost of $944.5 million, three spare parts packages with a cost of $5.1 million and four aircraft with a cost of $18.8 million, in our operating lease portfolio. At December 31, 2007, we had 144 aircraft engines and related equipment with a cost of $839.4 million, three spare parts packages with a cost of $5.1 million, four aircraft with a cost of $19.4 million and two helicopters with a cost of $16.4 million, in our operating lease portfolio.
A majority of our aircraft equipment is leased and operated internationally. All leases relating to this equipment are denominated and payable in U.S. dollars.
We lease our aircraft equipment to lessees domiciled in nine geographic regions. The tables below set forth geographic information about our leased aircraft equipment grouped by domicile of the lessee (which is not necessarily indicative of the asset’s actual location):
|
|
|
Years ended December 31, |
|
|||||||
|
Lease rent revenue |
|
2008 |
|
2007 |
|
2006 |
|
|||
|
|
|
(in thousands) |
|
|||||||
|
Region |
|
|
|
|
|
|
|
|||
|
United States |
|
$ |
20,933 |
|
$ |
13,831 |
|
$ |
9,441 |
|
|
Mexico |
|
6,876 |
|
5,863 |
|
4,093 |
|
|||
|
Canada |
|
825 |
|
— |
|
— |
|
|||
|
Australia/New Zealand |
|
— |
|
— |
|
53 |
|
|||
|
Europe |
|
31,692 |
|
28,863 |
|
25,910 |
|
|||
|
South America |
|
14,701 |
|
11,049 |
|
8,749 |
|
|||
|
Asia |
|
22,860 |
|
20,705 |
|
12,809 |
|
|||
|
Africa |
|
574 |
|
1,212 |
|
1,094 |
|
|||
|
Middle East |
|
3,960 |
|
4,561 |
|
7,081 |
|
|||
|
Totals |
|
$ |
102,421 |
|
$ |
86,084 |
|
$ |
69,230 |
|
|
|
|
Years ended December 31, |
|
|||||||
|
Lease rent revenue less applicable depreciation, and interest: |
|
2008 |
|
2007 |
|
2006 |
|
|||
|
|
|
(in thousands) |
|
|||||||
|
Region: |
|
|
|
|
|
|
|
|||
|
United States |
|
$ |
9,271 |
|
$ |
3,741 |
|
$ |
2,606 |
|
|
Mexico |
|
2,195 |
|
1,042 |
|
649 |
|
|||
|
Canada |
|
420 |
|
— |
|
— |
|
|||
|
Australia/New Zealand |
|
— |
|
— |
|
53 |
|
|||
|
Europe |
|
12,555 |
|
7,904 |
|
7,579 |
|
|||
|
South America |
|
4,750 |
|
1,207 |
|
2,008 |
|
|||
|
Asia |
|
10,085 |
|
7,236 |
|
3,348 |
|
|||
|
Africa |
|
302 |
|
547 |
|
486 |
|
|||
|
Middle East |
|
1,571 |
|
1,090 |
|
2,391 |
|
|||
|
Off-lease and other |
|
(4,363 |
) |
(4,013 |
) |
(5,732 |
) |
|||
|
Totals |
|
$ |
36,786 |
|
$ |
18,754 |
|
$ |
13,388 |
|
48
|
Net book value of equipment held for operating lease: |
|
2008 |
|
2007 |
|
2006 |
|
|||
|
|
|
(in thousands) |
|
|||||||
|
Region |
|
|
|
|
|
|
|
|||
|
United States |
|
$ |
144,696 |
|
$ |
100,641 |
|
$ |
67,747 |
|
|
Mexico |
|
38,920 |
|
50,771 |
|
49,513 |
|
|||
|
Canada |
|
9,713 |
|
— |
|
— |
|
|||
|
Europe |
|
225,055 |
|
255,706 |
|
187,400 |
|
|||
|
South America |
|
134,430 |
|
84,367 |
|
55,448 |
|
|||
|
Asia |
|
161,605 |
|
146,318 |
|
134,970 |
|
|||
|
Africa |
|
— |
|
4,494 |
|
10,093 |
|
|||
|
Middle East |
|
46,023 |
|
34,461 |
|
35,720 |
|
|||
|
Off-lease and other |
|
69,297 |
|
68,069 |
|
63,210 |
|
|||
|
Totals |
|
$ |
829,739 |
|
$ |
744,827 |
|
$ |
604,101 |
|
As of December 31, 2008 and 2007, the lease status of the equipment held for operating lease was as follows:
|
Lease Term |
|
December 31, 2008
|
|
|
|
|
|
(in thousands) |
|
|
|
Off-lease and other |
|
$ |
69,297 |
|
|
Month-to-month leases |
|
129,540 |
|
|
|
Leases expiring 2009 |
|
242,812 |
|
|
|
Leases expiring 2010 |
|
106,456 |
|
|
|
Leases expiring 2011 |
|
65,798 |
|
|
|
Leases expiring 2012 |
|
70,325 |
|
|
|
Leases expiring 2013 |
|
61,860 |
|
|
|
Leases expiring thereafter |
|
83,651 |
|
|
|
|
|
$ |
829,739 |
|
|
Lease Term |
|
December 31, 2007
|
|
|
|
|
|
(in thousands) |
|
|
|
Off-lease and other |
|
$ |
68,069 |
|
|
Month-to-month leases |
|
70,240 |
|
|
|
Leases expiring 2008 |
|
252,686 |
|
|
|
Leases expiring 2009 |
|
64,501 |
|
|
|
Leases expiring 2010 |
|
101,741 |
|
|
|
Leases expiring 2011 |
|
70,350 |
|
|
|
Leases expiring 2012 |
|
55,460 |
|
|
|
Leases expiring thereafter |
|
61,780 |
|
|
|
|
|
$ |
744,827 |
|
As of December 31, 2008, minimum future payments under non-cancelable leases were as follows:
|
Year |
|
(in thousands) |
|
|
|
2009 |
|
$ |
64,252 |
|
|
2010 |
|
43,384 |
|
|
|
2011 |
|
30,404 |
|
|
|
2012 |
|
21,607 |
|
|
|
2013 |
|
12,777 |
|
|
|
Thereafter |
|
28,133 |
|
|
|
|
|
$ |
200,557 |
|
49
(3) Investments
In July 1999, we entered into an agreement to participate in a joint venture formed as a limited company — Sichuan Snecma Aero-engine Maintenance Co. Ltd. (“Sichuan Snecma”) for the purpose of providing airlines in the Asia Pacific area with modern maintenance, leased engines and spare parts. Sichuan Snecma focuses on providing maintenance services for CFM56 series engines and is located in Chengdu, China. Our investment of $1.48 million (2007, $1.48 million) represents a 4.6% interest in the joint venture.
We hold a fifty percent membership interest in a joint venture, WOLF A340, LLC, a Delaware limited liability company, (“WOLF”). On December 30, 2005, WOLF completed the purchase of two Airbus A340-313 aircraft from Boeing Aircraft Holding Company for a purchase price of $96.0 million. The purchase was funded by four term notes with one financial institution totaling $76.8 million, with interest payable at LIBOR plus 1.0% to 2.5% and maturing in 2013. These aircraft are currently on lease to Emirates until 2013. Our investment in the joint venture is $9.0 million and $8.8 million as of December 31, 2008 and December 31, 2007, respectively.
|
Year Ending December 31, 2008 and 2007 (in thousands) |
|
|
|
|
|
|
|
|
|
|
|
Investment in WOLF A340, LLC as of December 31, 2006 |
|
$ |
9,122 |
|
|
|
|
|
|
|
|
Investment |
|
— |
|
|
|
Earnings from joint venture |
|
700 |
|
|
|
Distribution |
|
(975 |
) |
|
|
Investment in WOLF A340, LLC as of December 31, 2007 |
|
$ |
8,847 |
|
|
|
|
|
|
|
|
Investment |
|
— |
|
|
|
Earnings from joint venture |
|
797 |
|
|
|
Distribution |
|
(690 |
) |
|
|
Investment in WOLF A340, LLC as of December 31, 2008 |
|
$ |
8,954 |
|
50
(4) Notes Payable
Notes payable consisted of the following:
|
|
|
As of December 31, |
|
||||
|
|
|
2008 |
|
2007 |
|
||
|
|
|
(in thousands) |
|
||||
|
Credit facility at a floating rate of interest of LIBOR plus 1.75%, secured by engines. The facility has a committed amount of $289.0 million, which revolves until June 2009 and matures in June 2010. |
|
$ |
187,668 |
|
$ |
197,500 |
|
|
|
|
|
|
|
|
||
|
WEST Series 2005-A1 term notes payable of $147.4 million (2007, $162.8 million) payable at a floating rate of interest based on LIBOR plus 1.25% and $21.8 million (2007, $23.7 million) Series B1 term notes payable at LIBOR plus 6.00%, secured by engines. |
|
169,272 |
|
186,542 |
|
||
|
|
|
|
|
|
|
||
|
WEST Series 2008-A1 term notes payable of $200.1 million (2007, $0 million) payable at a floating rate of interest based on LIBOR plus 1.50%, secured by engines. |
|
200,132 |
|
— |
|
||
|
|
|
|
|
|
|
||
|
WEST Series 2005-A2 warehouse notes payable of $0 million (2007, $143.0 million) payable at a floating rate of interest based on LIBOR plus 1.25% and $0 million (2007, $20.0 million) Series 2005-B2 warehouse notes payable at LIBOR plus 2.75%, secured by engines. |
|
— |
|
162,955 |
|
||
|
|
|
|
|
|
|
||
|
WEST Series 2007-A2 warehouse notes payable of $52.0 million (2007, $0 million) payable at a floating rate of interest based on LIBOR plus 1.25% and $7.6 million (2007, $0 million) Series 2007-B2 warehouse notes payable at LIBOR plus 2.75%, secured by engines. |
|
59,617 |
|
— |
|
||
|
|
|
|
|
|
|
||
|
Note payable at a floating rate of LIBOR plus 3.50% maturing in July 2010. Secured by Series 2008-B1 notes ($20.3 million). |
|
20,000 |
|
— |
|
||
|
|
|
|
|
|
|
||
|
Note payable at a fixed interest rate of 8.00%, unsecured, maturing in December 2013. |
|
1,500 |
|
— |
|
||
|
|
|
|
|
|
|
||
|
Notes payable at a fixed interest rate of 6.95% secured by aircraft, matured in March 2008 and September 2008. |
|
— |
|
1,621 |
|
||
|
|
|
|
|
|
|
||
|
Note payable at a floating rate of LIBOR plus 0.83%, repaid in May, 2008. |
|
— |
|
13,907 |
|
||
|
|
|
|
|
|
|
||
|
Note payable at a floating rate of LIBOR plus 1.20%, maturing in October 2011. Secured by an aircraft. |
|
5,894 |
|
6,177 |
|
||
|
|
|
|
|
|
|
||
|
Note payable at a floating rate of LIBOR plus 1.50%, maturing in October 2011. Secured by an aircraft. |
|
929 |
|
— |
|
||
|
|
|
|
|
|
|
||
|
Total notes payable before discount |
|
$ |
645,012 |
|
$ |
568,702 |
|
|
|
|
|
|
|
|
||
|
WEST Series 2005-A1 term notes discount, $3,000 at issuance, and WEST Series 2008-A1 term notes discount, $2,888 at issuance, net of amortization |
|
(3,887 |
) |
(1,594 |
) |
||
|
|
|
|
|
|
|
||
|
Total notes payable |
|
$ |
641,125 |
|
$ |
567,108 |
|
51
At December 31, 2008, one-month LIBOR was 0.44%. At December 31, 2007, the one-month LIBOR rate was 4.60%.
Principal outstanding at December 31, 2008, is repayable as follows:
|
Year |
|
(in thousands) |
|
|
|
2009 |
|
$ |
34,216 |
|
|
2010 (includes $187.7 million outstanding on revolving credit facility) |
|
241,906 |
|
|
|
2011 |
|
45,025 |
|
|
|
2012 |
|
39,442 |
|
|
|
2013 |
|
40,942 |
|
|
|
Thereafter |
|
243,481 |
|
|
|
|
|
$ |
645,012 |
|
Certain of the debt instruments above also have covenant requirements such as minimum tangible net worth, maximum balance sheet leverage and various interest coverage ratios. The Company also has certain negative financial covenants such as liens, advances, change in business, sales of assets, dividends and stock repurchase. These covenants are tested quarterly and the company was in full compliance with all covenant requirements at December 31, 2008.
At December 31, 2008, we had a $289.0 million revolving credit facility to finance the acquisition of aircraft engines for lease as well as for general working capital purposes. As of December 31, 2008, $101.3 million was available under this facility. The revolving facility ends in June 2009 with the final amount borrowed at June 2009 due in June 2010. The interest rate on this facility at December 31, 2008 was one-month LIBOR plus 1.75%. Under the revolver facility, all subsidiaries except WEST Engine Funding LLC jointly and severally guarantee payment and performance of the terms of the loan agreement.
On August 9, 2005, we closed the Asset-Backed Securitization through a newly created, bankruptcy remote, Delaware Statutory Trust, Willis Engine Securitization Trust (“WEST”). WEST issued and sold $228.3 million of term notes and approximately $113.6 million of 2005 Series warehouse notes. The 2005 Series warehouse notes were increased by $57.8 million to $171.4 million on April 16, 2007 and were then converted to term notes of WEST on March 28, 2008 with the sale of $212.4 million of Series 2008-A1 notes and $20.3 million of Series 2008-B1 notes. At the closing, WEST agreed to acquire 11 engines from us directly. As a result of the transfer of engines from us to WEST, we no longer have access to these engines and they are managed to repay the note holders of WEST and for us as the equity holder of WEST. These transactions did not change the book value of the engines in the consolidated financial statements. We used these funds net of a $2.9 million discount on the Series 2008-A1 notes to pay off the balance remaining of the Series 2005-A2 and B2 notes of $164.1 million, pay off $62.0 million of our indebtedness related to the transfer of 11 engines from us to WEST, pay transaction expenses of approximately $3.2 million and received cash of approximately $0.5 million for general corporate purposes. Interest on the Series 2008-A1 and B1 notes is one-month LIBOR plus a margin of 1.50% and 3.50%, respectively. The Series 2008-A1 term notes expected maturity is March 2021 and the Series 2008-B1 term notes expected maturity is March 2023.
From March 28, 2008 to June 30, 2008, our investment banker, acting as our agent to sell the notes, was the holder of $20.3 million of the Series 2008-B1 notes. On June 30, 2008, we secured a $20.0 million senior term loan and used the loan proceeds to re-purchase the Series 2008-B1 from our investment banker. The Series 2008-B1 notes were pledged as collateral for the $20.0 million senior term loan. The loan is for a term of two years with maturity on July 1, 2010 and is structured as a bullet loan with no amortization with all amounts due at maturity. The interest rate for the term loan is one month LIBOR plus 3.50%. Our investment banker will continue to market the Series 2008-B1 notes and in the event the Series 2008-B1 notes are placed with an investor within the next two years, the term loan will be repaid with the proceeds from the sale of the Series 2008-B1 notes.
WEST’s ability to make distributions and pay dividends to us is subject to the prior payments of its debt and other obligations and WEST’s maintenance of adequate reserves and capital. Under WEST, cash is collected in a restricted account, which is used to service the debt and any remaining amounts, after debt service and defined expenses, are distributed to us. Additionally, maintenance reserve payments and lease security deposits are accumulated in restricted accounts and are not available for general use. Cash from maintenance reserve payments are held in the restricted cash account and are subject to a minimum balance established annually based on an engine portfolio maintenance reserve study provided by a third party. Any excess maintenance reserve amounts remain within the restricted cash accounts and are utilized for the purchase of new engines.
On December 13, 2007, we closed on a new $200.0 million warehouse facility within WEST, consisting of $175.0 million of Series 2007-A2 Floating Rate Notes and $25.0 million of Series 2007-B2 Floating Rate Notes. At December 31, 2008, $140.4 million was available under these warehouse notes. The 2007 series warehouse notes allow for borrowings during a three-year term, after
52
which it is expected that they will be converted to term notes of WEST. Interest on the Series 2007-A2 notes and the Series 2007-B2 notes is one-month LIBOR plus a margin of 1.25% and 2.75%, respectively. The facility has a committed amount of $200.0 million. The Series 2007-A2 notes mature approximately December 2020 and the Series 2007-B2 notes mature approximately December 2022.
At December 31, 2008, $369.4 million of WEST term notes and $59.6 million of WEST warehouse notes were outstanding. The term notes are divided into $147.4 million Series 2005-A1 notes, $200.1 million Series 2008-A1 notes and $21.8 million Series 2005-B1 notes. The warehouse notes are divided into $52.0 million Series A2 notes and $7.6 million Series B2 notes. The assets of WEST, WEST Engine Funding and any associated Owner Trust are not available to satisfy our obligations or any of our affiliates. WEST is consolidated for financial statement presentation purposes. At December 31, 2008, interest on the Series 2005-A1 notes and Series 2007-A2 notes is one-month LIBOR plus a margin of 1.25%. At December 31, 2008, interest on the Series 2008-A1 notes is one-month LIBOR plus a margin of 1.50%. At December 31, 2008, interest on the Series 2005-B1 notes is one-month LIBOR plus a margin of 3.00% and a supplemental margin of 3.00%, for a total margin of 6.00%. At December 31, 2008, interest on the Series 2007-B2 notes is one-month LIBOR plus a margin of 2.75%.
WEST entered into a Senior Liquidity Facility on December 13, 2007 which expires on the final maturity date of the Series 2008-A1 term notes in March 2021. The facility is provided by our investment bank and the maximum facility size is 4% of the outstanding Series 2007-A2 Notes and Series 2008-A1 Notes This facility replaced the requirement to maintain 4% cash reserves for the 2007-A2 Notes and the Series 2008-A1 Notes. The facility may be drawn on any Payment Date should the cash flow at WEST be insufficient to pay interest on the Series 2007-A2 Notes, Series 2008-A1 Notes and any required hedge payments. A commitment fee is payable on the facility. The establishment of this facility resulted in the release of $7.1 million of cash held previously in the Senior Restricted Cash Account in December, 2007.
On December 21, 2007, we closed on a new credit facility with Export Development Canada (EDC) for a ten year term totaling $13.9 million, in support of the December 21, 2007 purchase of two new Bell 412 EP helicopters that were manufactured in Montreal, Canada. Interest is payable on the floating rate note based on three-month LIBOR plus a margin of 0.83%. Following the sale of the two Bell 412 EP helicopters on May 8, 2008, we repaid the EDC credit facility totaling $13.6 million, which represented the remaining principal amount owing at that time.
At December 31, 2008, we had warehouse and revolving credit facilities totaling approximately $489.0 million compared to $660.4 million at December 31, 2007. At December 31, 2008, and December 31, 2007, respectively, approximately $241.7 million and $300.0 million was available under these combined facilities.
The Company and its subsidiaries are required to comply with various financial covenants such as minimum tangible net worth, maximum balance sheet leverage and various interest coverage ratios. The Company also has certain negative financial covenants such as liens, advances, change in business, sales of assets, dividends and stock repurchase. These covenants are tested quarterly and the company was in full compliance with all covenant requirements at December 31, 2008.
(5) Derivative Instruments
We hold a number of interest rate derivative instruments to mitigate our exposure to changes in interest rates, in particular LIBOR, as all but $1.5 million of our borrowings are at variable rates. At December 31, 2008, we were a party to interest rate swap agreements with notional outstanding amounts of $383.0 million, remaining terms of between one and 72 months and fixed rates of between 2.10% and 5.05%. At December 31, 2007, we were a party to interest rate swap agreements with notional outstanding amounts of $294.0 million, remaining terms of between one and 50 months and fixed rates of between 3.45% and 5.05%. The fair value of the swaps at December 31, 2008 and 2007 was negative $20.5 million and negative $7.7 million, respectively, representing a net liability for us. These amounts represent the estimated amount we would be required to pay if we terminated the swaps.
Valuation of the derivative instruments requires certain assumptions for underlying variables and the use of different assumptions would result in a different valuation. Management believes it has applied assumptions consistently during the period and has not changed our method of valuation during the period.
We apply hedge accounting and account for the change in fair value of our cash flow hedges through other comprehensive income to all derivative instruments, except for three hedges with notional outstanding amounts totaling $45.0 million that were entered into, but which did not qualify for hedge accounting in accordance with SFAS No. 133 during the quarter ended March 31, 2006 during which period we recorded $153,000 of unrealized gain from derivative instruments in the consolidated statement of income for 2006. There were no disqualifications in 2007 and 2008.
Based on the implied forward rate for LIBOR at December 31, 2008, we anticipate that interest expense will be increased by approximately $12.1 million for the year ending December 31, 2009 due to the interest-rate derivative contracts in place.
53
(6) Income Taxes
The components of income tax expense for the years ended December 31, 2008, 2007 and 2006, included in the accompanying consolidated statements of income were as follows:
|
|
|
Federal |
|
State |
|
Total |
|
|||
|
|
|
(in thousands) |
|
|||||||
|
|
|
|
|
|
|
|
|
|||
|
December 31, 2008 |
|
|
|
|
|
|
|
|||
|
Current |
|
$ |
264 |
|
$ |
831 |
|
$ |
1,095 |
|
|
Deferred |
|
13,347 |
|
825 |
|
14,172 |
|
|||
|
Charges in lieu of tax |
|
118 |
|
13 |
|
131 |
|
|||
|
Total 2008 |
|
$ |
13,729 |
|
$ |
1,669 |
|
$ |
15,398 |
|
|
|
|
|
|
|
|
|
|
|||
|
December 31, 2007 |
|
|
|
|
|
|
|
|||
|
Current |
|
$ |
378 |
|
$ |
33 |
|
$ |
411 |
|
|
Deferred |
|
8,095 |
|
1,369 |
|
9,464 |
|
|||
|
Charges in lieu of tax |
|
218 |
|
(24 |
) |
194 |
|
|||
|
Total 2007 |
|
$ |
8,691 |
|
$ |
1,378 |
|
$ |
10,069 |
|
|
|
|
|
|
|
|
|
|
|||
|
December 31, 2006 |
|
|
|
|
|
|
|
|||
|
Current |
|
$ |
45 |
|
$ |
9 |
|
$ |
54 |
|
|
Deferred |
|
7,801 |
|
996 |
|
8,797 |
|
|||
|
Charges in lieu of tax |
|
226 |
|
— |
|
226 |
|
|||
|
Total 2006 |
|
$ |
8,072 |
|
$ |
1,005 |
|
$ |
9,077 |
|
The following is a reconciliation of the federal income tax expense at the statutory rate of 34% to the effective income tax expense:
|
|
|
Years ended December 31, |
|
||||||||||
|
|
|
2008 |
|
2007 |
|
2006 |
|
||||||
|
|
|
(in thousands and % of pre-tax income) |
|
||||||||||
|
|
|
$ |
|
% |
|
$ |
|
% |
|
$ |
|
% |
|
|
Statutory federal income tax expense |
|
14,280 |
|
34.0 |
|
9,429 |
|
34.0 |
|
9,168 |
|
34.0 |
|
|
State taxes, net of federal benefit |
|
1,004 |
|
2.4 |
|
909 |
|
3.3 |
|
801 |
|
3.0 |
|
|
Extraterritorial income exclusion |
|
(169 |
) |
(0.4 |
) |
(150 |
) |
(0.5 |
) |
(1,167 |
) |
(4.0 |
) |
|
Prior year adjustments |
|
27 |
|
0.1 |
|
(170 |
) |
(0.6 |
) |
53 |
|
— |
|
|
Permanent differences and other |
|
256 |
|
0.6 |
|
51 |
|
0.2 |
|
222 |
|
1.0 |
|
|
Effective income tax expense |
|
15,398 |
|
36.7 |
|
10,069 |
|
36.4 |
|
9,077 |
|
34.0 |
|
In 2008, 2007, and 2006, we determined that a number of assets and their associated leases qualify for exclusion from federal taxable income under the Extraterritorial Income Exclusion rules, resulting in a reduction in the federal effective tax rate.
54
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are presented below:
|
|
|
As of December 31, |
|
||||
|
|
|
2008 |
|
2007 |
|
||
|
|
|
(in thousands) |
|
||||
|
Deferred tax assets: |
|
|
|
|
|
||
|
Charitable contribution |
|
$ |
6 |
|
$ |
80 |
|
|
Unearned lease revenue |
|
2,188 |
|
1,985 |
|
||
|
State taxes |
|
2,387 |
|
2,098 |
|
||
|
Reserves and allowances |
|
1,205 |
|
693 |
|
||
|
Other accrual |
|
2,057 |
|
2,360 |
|
||
|
Alternative minimum tax credit |
|
1,007 |
|
743 |
|
||
|
Net operating loss carry forward |
|
30,384 |
|
34,708 |
|
||
|
Total deferred tax assets |
|
39,234 |
|
42,667 |
|
||
|
|
|
|
|
|
|
||
|
Deferred tax liabilities: |
|
|
|
|
|
||
|
Depreciation and impairment on aircraft engines and equipment |
|
(78,963 |
) |
(62,657 |
) |
||
|
Section 481 Adjustment-Maintenance Reserve |
|
(20,658 |
) |
(28,524 |
) |
||
|
Deferred tax (liability)/asset related to unrealized (gain)/loss on derivative instruments |
|
(— |
) |
(34 |
) |
||
|
Other deferred tax liabilities |
|
(4,300 |
) |
(1,967 |
) |
||
|
Net deferred tax liabilities |
|
(103,921 |
) |
(93,182 |
) |
||
|
|
|
|
|
|
|
||
|
Other comprehensive income, deferred tax asset |
|
8,569 |
|
3,883 |
|
||
|
|
|
|
|
|
|
||
|
Net deferred tax liabilities |
|
$ |
(56,118 |
) |
$ |
(46,632 |
) |
As of December 31, 2008, we had net operating loss carry forwards of approximately $85.6 million for federal tax purposes and $14.6 million for state tax purposes. The federal net operating loss carry forwards will expire at various times from 2019 to 2026 and the state net operating loss carry forwards will expire at various times from 2014 to 2018. As of December 31, 2008, we also had alternative minimum tax credits of approximately $0.9 million for federal income tax purposes which have no expiration date and which should be available to offset future alternative minimum tax liabilities. Management believes that no valuation allowance is required on deferred tax assets, as it is more likely than not that all amounts are recoverable through future taxable income.
(7) Fair Value of Financial Instruments
The carrying amount reported in the consolidated balance sheets for cash and cash equivalents, restricted cash, operating lease related receivable and accounts payable approximates fair value because of the immediate or short-term maturity of these financial instruments.
The carrying amount of the Company’s outstanding balance on its Notes Payable as of December 31, 2008 was estimated to have a fair value of approximately $585.4 million based on the fair value of estimated future payments calculated using the prevailing interest rates.
(8) Risk Management — Risk Concentrations and Interest Rate Risk
Risk Concentrations
Financial instruments which potentially subject us to concentrations of credit risk consist principally of cash deposits, lease receivables and interest rate swaps.
55
We place our cash deposits with financial institutions and other creditworthy institutions such as money market funds and limit the amount of credit exposure to any one party. We opt for security of principal as opposed to yield. In late 2008, we moved substantial deposits to US treasury securities to avoid risk of loss. Concentrations of credit risk with respect to lease receivables are limited due to the large number of customers comprising our customer base, and their dispersion across different geographic areas. Some lessees are required to make payments for maintenance reserves at the end of the lease however, risk is considered limited due to the relatively few lessees which have this provision in the lease. We enter into interest rate swap agreements with three counterparties that are investment grade financial institutions.
Interest Rate Risk Management
To mitigate exposure to interest rate changes, we have entered into interest rate swap agreements. As of December 31, 2008, such swap agreements had notional outstanding amounts of $383.0 million, average remaining terms of between one and 72 months and fixed rates of between 2.10% and 5.05%. In 2008, $5.2 million was realized through the income statement as an increase in interest expense. In 2007 and 2006, $2.0 million and $2.3 million was realized through the income statement as a reduction in interest expense, respectively.
(9) Commitments, Contingencies, Guarantees and Indemnities
Our principal offices are located in Novato, California. We occupy space in Novato under a lease that expires February 28, 2015. The remaining lease rental commitment is approximately $3.2 million. Equipment leasing, financing, sales and general administrative activities are conducted from the Novato location. We also sub-lease office and warehouse space for our operations at San Diego, California. This lease expires October 31, 2010, and the remaining lease commitment is approximately $306,000. We also lease office space in Shanghai, China. The lease expires December 31, 2009 and the remaining lease commitment is approximately $65,000.
We have paid deposits to secure the purchase during 2009 of 12 engines and 3 helicopters for a gross purchase price of $141.8 million, for delivery from March to December 2009. As at December 31, 2008, non-refundable deposits paid related to this purchase commitment were $13.2 million. In October, 2006, we entered into an agreement with CFM International (“CFM”) to purchase up to $540.0 million of new spare aircraft engines. The agreement specifies that, subject to availability, we may purchase up to a total of 45 CFM56-7B and CFM56-5B spare engines over the next five years, with options to acquire up to an additional 30 engines. Our 2009 purchase orders have been accepted by CFM and are included in our commitments to purchase.
(10) Shareholders’ Equity
(a) Preferred Stock
On February 7, 2006 we completed a public offering of 3,475,000 shares of our 9.0% Series A Cumulative Redeemable Preferred Stock with a liquidation preference of $10 per share, or approximately $34.8 million in total. After underwriting commissions and expenses of issuance, we received net proceeds of approximately $31.9 million. The preferred stock accrues cash dividends from the date of issuance at a rate of 9.0% per annum, or approximately $260,625 per month. The first dividend payment was paid March 15, 2006. The payment of dividends is at the discretion of our board of directors. The Series A Preferred Stock is traded on the NASDAQ National Market under the symbol WLFCP.
Holders of the Series A Preferred Stock will generally have no voting rights, but may elect two directors if we fail to pay dividends for an aggregate of 18 or more months (consecutive or nonconsecutive) and also may vote in certain other limited circumstances. The Series A Preferred Stock has no stated maturity date and is not convertible into any of our property or other securities. On or after February 11, 2011 we may, at our option, redeem the shares. Accordingly, the Series A Preferred Stock will remain outstanding indefinitely, unless we decide to redeem them, or they are otherwise cancelled or exchanged.
(b) Common Stock Repurchase
On December 12, 2006 we repurchased 1.3 million shares of our own common stock, or 14% of the shares outstanding, at $9.00 per share for a total cost of $11.7 million from FlightTechnics LLC in a private transaction. The repurchased shares were cancelled. As a result of this transaction the total number of common shares outstanding was approximately 8.0 million as of December 31, 2006.
56
(11) Stock-Based Compensation Plans
The components of stock compensation expense for the years ended December 31, 2008, 2007 and 2006, included in the accompanying consolidated statements of income were as follows:
|
|
|
2008 |
|
2007 |
|
2006 |
|
|||
|
|
|
(in thousands) |
|
|||||||
|
2007 Stock Incentive Plan |
|
$ |
1,570 |
|
$ |
322 |
|
$ |
— |
|
|
1996 Stock Option/Stock Issuance Plan |
|
74 |
|
248 |
|
656 |
|
|||
|
Employee Stock Purchase Plan |
|
49 |
|
29 |
|
29 |
|
|||
|
Total Stock Compensation Expense |
|
$ |
1,693 |
|
$ |
599 |
|
$ |
685 |
|
The significant stock compensation plans are described below.
2007 Stock Incentive Plan: Our 2007 Stock Incentive Plan (the 2007 Plan) was adopted on May 24, 2007. Under this 2007 Plan, a total of 2,000,000 shares are authorized for stock based compensation in the form of either restricted stock or stock options. Two types of restricted stock were granted in 2007: 239,952 shares vesting over 4 years and 15,452 shares vesting on the first anniversary date from date of issuance. Three types of restricted stock were granted in 2008: 243,964 shares vesting over 4 years, 313,045 shares vesting over 5 years and 17,476 shares vesting on the first anniversary date from date of issuance. 33,043 shares of restricted stock awards granted in 2007 and 2008 were cancelled during 2008 and the shares will revert to the share reserve and be available for issuance at a later date, in accordance with the Plan. Our accounting policy is to recognize the associated expense of such awards on a straight-line basis over the vesting period. The fair value of the restricted stock awards equaled the stock price at the date of grants. The stock compensation expense related to the 2007 and 2008 restricted stock awards that will be recognized over the average remaining vesting period of 3.5 years totals $6.9 million. At December 31, 2008, the intrinsic value of unvested restricted stock awards is $6.7 million. The Plan terminates on May 24, 2017.
A summary of activity under the 2007 Plan for the years ended December 31, 2008, 2007 and 2006 is as follows:
|
|
|
Weighted |
|
||||||
|
|
|
Average Grant |
|
||||||
|
|
|
Number |
|
Date Fair |
|
Aggregate |
|
||
|
|
|
Outstanding |
|
Value |
|
Value |
|
||
|
Balance as of December 31, 2006 |
|
— |
|
— |
|
— |
|
||
|
Shares granted |
|
255,404 |
|
$ |
15.07 |
|
$ |
3,849,555 |
|
|
Shares cancelled |
|
— |
|
— |
|
— |
|
||
|
Shares vested |
|
— |
|
— |
|
— |
|
||
|
Balance as of December 31, 2007 |
|
255,404 |
|
$ |
15.07 |
|
$ |
3,849,555 |
|
|
Shares granted |
|
574,458 |
|
$ |
10.00 |
|
$ |
5,745,935 |
|
|
Shares cancelled |
|
(33,043 |
) |
$ |
13.29 |
|
$ |
(439,195 |
) |
|
Shares vested |
|
(75,443 |
) |
$ |
14.51 |
|
$ |
(1,094,434 |
) |
|
Balance as of December 31, 2008 |
|
721,376 |
|
$ |
11.18 |
|
$ |
8,061,861 |
|
Employee Stock Purchase Plan: Under our Employee Stock Purchase Plan (ESPP), as amended and restated effective August 1, 2004, 175,000 shares of common stock have been reserved for issuance. The Purchase Plan was effective in September 1996. Eligible employees may designate not more than 10% of their cash compensation to be deducted each pay period for the purchase of common stock under the Purchase Plan. Participants may purchase not more than 1,000 shares or $25,000 of common stock in any one calendar year. Each January 31 and July 31 shares of common stock are purchased with the employees’ payroll deductions from the immediately preceding six months at a price per share of 85% of the lesser of the market price of the common stock on the purchase date or the market price of the common stock on the date of entry into an offering period. In 2008 and 2007, 14,045 and 10,769 shares of common stock, respectively, were issued under the Purchase Plan. We issue new shares through our transfer agent upon employee stock purchase. The weighted average per share fair value of the employee’s purchase rights under the Purchase Plan for the rights granted was $2.77, $3.05 and $2.87 for 2008, 2007 and 2006, respectively.
1996 Stock Option/Stock Issuance Plan: We granted stock options under our 1996 Stock Option/Stock Issuance Plan (the 1996 Plan), as amended and restated as of March 1, 2003, until the plan terminated in June 2006. Under this Plan, a total of 3,025,000 shares were authorized for grant. These options have a contractual term of ten years and vest at a rate of 25% annually commencing on the first anniversary of the date of grant. For shares outstanding with graded vesting, our accounting policy is to value the options as one award and recognize the associated expense on a straight-line basis over the vesting period. In 2008, 106,876 options were exercised with a total intrinsic value at exercise date of approximately $794,000. We issue new shares through our transfer agent upon stock option exercise.
57
A summary of the activity under the 1996 Plan for the years ended December 31, 2008, 2007 and 2006 is as follows:
|
|
|
Options Outstanding |
|
|||||
|
|
|
Options
|
|
Options |
|
Weighted Average
|
|
|
|
Balance as of December 31, 2006 |
|
— |
|
1,682,122 |
|
$ |
7.32 |
|
|
Options exercised |
|
— |
|
(158,878 |
) |
$ |
5.97 |
|
|
Options canceled |
|
— |
|
(159,933 |
) |
$ |
10.43 |
|
|
Balance as of December 31, 2007 |
|
— |
|
1,363,311 |
|
$ |
7.12 |
|
|
Options exercised |
|
— |
|
(106,876 |
) |
$ |
4.90 |
|
|
Options canceled |
|
— |
|
(52,028 |
) |
$ |
14.00 |
|
|
Balance as of December 31, 2008 |
|
— |
|
1,204,407 |
|
$ |
7.01 |
|
The following is a summary of stock option activity under the 1996 Plan in 2008:
|
|
|
Shares |
|
Weighted Average
|
|
Weighted Average
|
|
Aggregate Intrinsic
|
|
||
|
Outstanding at January 1, 2008 |
|
1,363,311 |
|
$ |
7.12 |
|
— |
|
— |
|
|
|
Granted |
|
— |
|
— |
|
— |
|
— |
|
||
|
Exercised |
|
(106,876 |
) |
4.90 |
|
— |
|
— |
|
||
|
Forfeited |
|
— |
|
— |
|
— |
|
— |
|
||
|
Expirations |
|
(52,028 |
) |
14.00 |
|
— |
|
— |
|
||
|
Outstanding at December 31, 2008 |
|
1,204,407 |
|
$ |
7.01 |
|
3.30 |
|
$ |
3,270,437 |
|
|
Vested and expected to vest at December 31, 2008 |
|
1,203,497 |
|
$ |
7.01 |
|
3.29 |
|
$ |
3,270,350 |
|
|
Exercisable at December 31, 2008 |
|
1,162,907 |
|
$ |
6.92 |
|
3.17 |
|
$ |
3,266,842 |
|
A summary of the outstanding, exercisable options and their weighted average exercise prices is as follows:
|
|
|
Options |
|
Weighted Average
|
|
|
|
At December 31, 2006 |
|
1,397,166 |
|
$ |
7.17 |
|
|
At December 31, 2007 |
|
1,285,561 |
|
$ |
6.97 |
|
|
At December 31, 2008 |
|
1,162,907 |
|
$ |
6.92 |
|
The following table summarizes information concerning outstanding and exercisable options at December 31, 2008:
|
|
|
Options Outstanding |
|
Options Exercisable |
|
||||||||
|
Exercise Prices |
|
Number
|
|
Weighted Average
|
|
Weighted Average
|
|
Number
|
|
Weighted
|
|
||
|
From $3.69 to $4.50 |
|
14,931 |
|
2.06 |
|
$ |
4.35 |
|
14,931 |
|
$ |
4.35 |
|
|
From $4.68 to $4.68 |
|
133,459 |
|
3.35 |
|
4.68 |
|
133,459 |
|
4.68 |
|
||
|
From $4.92 to $4.92 |
|
7,775 |
|
4.41 |
|
4.92 |
|
7,775 |
|
4.92 |
|
||
|
From $5.01 to $5.01 |
|
214,954 |
|
4.17 |
|
5.01 |
|
214,954 |
|
5.01 |
|
||
|
From $5.07 to $5.07 |
|
30,000 |
|
4.60 |
|
5.07 |
|
30,000 |
|
5.07 |
|
||
|
From $5.40 to $5.40 |
|
242,850 |
|
2.78 |
|
5.40 |
|
242,850 |
|
5.40 |
|
||
|
From $5.50 to $5.50 |
|
141,296 |
|
1.78 |
|
5.50 |
|
141,296 |
|
5.50 |
|
||
|
From $6.50 to $8.70 |
|
22,842 |
|
5.39 |
|
8.06 |
|
20,342 |
|
7.98 |
|
||
|
From $9.20 to $9.20 |
|
124,000 |
|
6.59 |
|
9.20 |
|
93,000 |
|
9.20 |
|
||
|
From $10.00 to $15.56 |
|
272,300 |
|
2.05 |
|
11.30 |
|
264,300 |
|
11.31 |
|
||
|
From $3.69 to $15.56 |
|
1,204,407 |
|
3.30 |
|
$ |
7.01 |
|
1,162,907 |
|
$ |
6.92 |
|
58
(12) Employee 401(k) Plan
We adopted The Willis 401(k) Plan (the “401(k) Plan”) effective as of January 1997. The 401(k) Plan provides for deferred compensation as described in Section 401(k) of the Internal Revenue Code. The 401(k) Plan is a contributory plan available to all our full-time and part-time employees in the United States. In 2008, employees who participated in the 401(k) Plan could elect to defer and contribute to the 401(k) Plan up to 20% of pretax salary or wages up to $15,500 (or $20,500 for employees at least 50 years of age). We match employee contributions up to 50% of 8% of the employee’s salary which totaled $238,000 in 2008, $208,000 in 2007 and $206,000 in 2006.
59
(13) Quarterly Consolidated Financial Information (Unaudited)
The following is a summary of the unaudited quarterly results of operations for the years ended December 31, 2008, 2007 and 2006 (in thousands, except per share data).
|
Fiscal 2008 |
|
1st Quarter |
|
2nd Quarter |
|
3rd Quarter |
|
4th Quarter |
|
Full Year |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Total revenue |
|
$ |
32,243 |
|
$ |
37,240 |
|
$ |
45,894 |
|
$ |
36,916 |
|
$ |
152,293 |
|
|
Net income |
|
5,105 |
|
6,422 |
|
10,725 |
|
4,349 |
|
26,601 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Net income attributable to common shareholders |
|
4,323 |
|
5,640 |
|
9,943 |
|
3,567 |
|
23,473 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Basic earnings per common share |
|
0.53 |
|
0.69 |
|
1.20 |
|
0.43 |
|
2.85 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Diluted earnings per common share |
|
0.49 |
|
0.64 |
|
1.14 |
|
0.41 |
|
2.68 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Average common shares outstanding |
|
8,190 |
|
8,225 |
|
8,253 |
|
8,300 |
|
8,242 |
|
|||||
|
Diluted average common shares outstanding |
|
8,785 |
|
8,735 |
|
8,757 |
|
8,787 |
|
8,760 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Fiscal 2007 |
|
1st Quarter |
|
2nd Quarter |
|
3rd Quarter |
|
4th Quarter |
|
Full Year |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Total revenue |
|
$ |
27,116 |
|
$ |
30,967 |
|
$ |
29,814 |
|
$ |
34,000 |
|
$ |
121,897 |
|
|
Net income |
|
4,405 |
|
4,394 |
|
3,751 |
|
5,114 |
|
17,664 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Net income attributable to common shareholders |
|
3,623 |
|
3,612 |
|
2,969 |
|
4,332 |
|
14,536 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Basic earnings per common share |
|
0.45 |
|
0.44 |
|
0.36 |
|
0.54 |
|
1.79 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Diluted earnings per common share |
|
0.42 |
|
0.42 |
|
0.34 |
|
0.48 |
|
1.66 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Average common shares outstanding |
|
8,014 |
|
8,118 |
|
8,174 |
|
8,176 |
|
8,115 |
|
|||||
|
Diluted average common shares outstanding |
|
8,541 |
|
8,636 |
|
8,769 |
|
9,007 |
|
8,742 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Fiscal 2006 |
|
1st Quarter |
|
2nd Quarter |
|
3rd Quarter |
|
4th Quarter |
|
Full Year |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Total revenue |
|
$ |
33,846 |
|
$ |
20,927 |
|
$ |
29,608 |
|
$ |
21,674 |
|
$ |
106,055 |
|
|
Net income (loss) |
|
10,531 |
|
1,599 |
|
6,774 |
|
(1,018 |
) |
17,886 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Net income (loss) attributable to common shareholders |
|
10,063 |
|
817 |
|
5,992 |
|
(1,931 |
) |
14,941 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Basic earnings (loss) per common share |
|
1.10 |
|
0.09 |
|
0.65 |
|
(0.21 |
) |
1.63 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Diluted earnings (loss) per common share |
|
1.05 |
|
0.08 |
|
0.62 |
|
(0.19 |
) |
1.56 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Average common shares outstanding |
|
9,154 |
|
9,223 |
|
9,279 |
|
9,019 |
|
9,169 |
|
|||||
|
Diluted average common shares outstanding |
|
9,622 |
|
9,697 |
|
9,693 |
|
9,499 |
|
9,606 |
|
|||||
60
(14) Related Party and Similar Transactions
Gavarnie Holding, LLC, a Delaware Limited Liability Company (“Gavarnie”) owned by Charles F. Willis, IV, purchased the stock of Island Air from Aloha AirGroup, Inc. (“Aloha”) on May 11, 2004. Charles F. Willis, IV is the President, CEO and Chairman of our Board of Directors and owns approximately 32% of our common stock as of December 31, 2008. Island Air leases four DeHaviland DHC-8-100 aircraft and two engines from us, which are expected to generate lease rent revenue of approximately $1.9 million in 2009 and $1.6 million in 2010. In 2006, in response to a fare war commenced by a competitor, Island Air requested a reduction in lease rent payments. The Board of Directors subsequently approved 14 months of lease rent deferrals totaling $784,000. All deferrals were accounted for as a reduction in lease revenue in the applicable period. Because of the question regarding collectibility of amounts due under these leases, lease rent revenue for these leases have been recorded on a cash basis until such time as collectibility becomes reasonably assured. After taking into account the deferred amounts, Island Air remains current on all obligations except for $288,000 in overdue rent related to February and March 2009. Our leases with Island Air are currently being restructured and amended effective January 2009. The $784,000 in accumulated rent deferrals have been incorporated in the lease rents for two of the aircraft for the period January 2009 — April 2012. During the difficult period in Hawaii involving uneconomic fares being charged by a competitor, Island Air, in an effort to conserve cash, deferred maintenance on engines leased by the Company. Due to concern regarding Island Air’s ability to meet lease return conditions and after reviewing the current maintenance status and condition of the leased assets, the Company recorded a reduction in the carrying value of these assets of $0.8 million in the second quarter of 2008. Including this write down, the aircraft and engines on lease to Island Air have a net book value of $6.0 million at December 31, 2008.
We entered into a Consignment Agreement dated May 26, 2006, with J.T. Power LLC (“J.T. Power”), an entity whose majority shareholder, Austin Willis, is the son of our President and Chief Executive Officer, and directly and indirectly, a shareholder of ours as well as a Director of the Company. During the six months ended December 31, 2006, sales of consigned parts were $0.1 million. During the year ended December 31, 2007, sales of consigned parts were $0.1 million. The book value for the parts consigned to J.T. Power as of December 31, 2007 was $0. On January 22, 2008, we entered into a Consignment Agreement with J.T. Power in which they are responsible to market and sell parts from the teardown of three engines with a book value of $4.2 million. During the year ended December 31, 2008, sales of consigned parts were $2.6 million. On November 17, 2008, we entered into a Consignment Agreement with J.T. Power in which they are responsible to market and sell parts from the teardown of one engine with a book value of $1.0 million. On July 27, 2006, we entered into an Aircraft Engine Agency Agreement with J.T. Power, in which we will on a non-exclusive basis, provide engine lease opportunities with respect to available spare engines at J.T. Power. J.T. Power will pay us a fee based on a percentage of the rent collected by J.T. Power for the duration of the lease including renewals thereof. Revenue of $32,400 was earned during the period from inception of the agreement to December 31, 2006. In 2007, we earned revenue of $84,000 and paid $21,000 in commission under this program. In 2008, we earned revenue of $33,500 and paid $0 in commission under this program.
61
WILLIS LEASE FINANCE CORPORATION
AND SUBSIDIARIES
SCHEDULE I - CONDENSED BALANCE SHEET
Parent Company Information
December 31, 2008 and 2007
(In thousands, except share data)
|
|
|
December 31, |
|
December 31, |
|
||
|
|
|
2008 |
|
2007 |
|
||
|
ASSETS |
|
|
|
|
|
||
|
Cash and cash equivalents |
|
$ |
8,491 |
|
$ |
7,103 |
|
|
Equipment held for operating lease, less accumulated depreciation |
|
257,889 |
|
311,055 |
|
||
|
Equipment held for sale |
|
10,744 |
|
5,006 |
|
||
|
Operating lease related receivable, net of allowances |
|
3,207 |
|
2,647 |
|
||
|
Investments |
|
10,434 |
|
10,327 |
|
||
|
Investment in subsidiary |
|
103,588 |
|
69,211 |
|
||
|
Due from affiliate, net |
|
4,559 |
|
720 |
|
||
|
Assets under derivative instruments |
|
276 |
|
— |
|
||
|
Property, equipment & furnishings, less accumulated depreciation |
|
7,751 |
|
6,771 |
|
||
|
Deferred income taxes |
|
— |
|
1,390 |
|
||
|
Equipment purchase deposits |
|
13,530 |
|
12,180 |
|
||
|
Other assets |
|
4,762 |
|
4,415 |
|
||
|
Total assets |
|
$ |
425,231 |
|
$ |
430,825 |
|
|
|
|
|
|
|
|
||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
||
|
Liabilities: |
|
|
|
|
|
||
|
Accounts payable and accrued expenses |
|
$ |
6,829 |
|
$ |
7,484 |
|
|
Liabilities under derivative instruments |
|
6,190 |
|
2,766 |
|
||
|
Deferred income taxes |
|
2,665 |
|
— |
|
||
|
Notes payable, net of discount |
|
196,723 |
|
219,204 |
|
||
|
Maintenance reserves |
|
16,835 |
|
22,154 |
|
||
|
Security deposits |
|
1,578 |
|
2,114 |
|
||
|
Unearned lease revenue |
|
2,204 |
|
2,451 |
|
||
|
Total liabilities |
|
233,024 |
|
256,173 |
|
||
|
|
|
|
|
|
|
||
|
Shareholders’ equity: |
|
|
|
|
|
||
|
Preferred stock ($0.01 par value, 5,000,000 shares authorized; 3,475,000 shares issued and outstanding at December 31, 2008 and 2007, respectively) |
|
31,915 |
|
31,915 |
|
||
|
Common stock ($0.01 par value, 20,000,000 shares authorized; 9,077,905 and 8,433,224 shares issued and outstanding at December 31, 2008 and 2007, respectively) |
|
91 |
|
84 |
|
||
|
Paid-in capital in excess of par |
|
57,939 |
|
55,712 |
|
||
|
Retained Earnings |
|
117,163 |
|
93,690 |
|
||
|
Accumulated other comprehensive loss, net of income tax benefit |
|
(14,901 |
) |
(6,749 |
) |
||
|
Total shareholders’ equity |
|
192,207 |
|
174,652 |
|
||
|
Total liabilities and shareholders’ equity |
|
$ |
425,231 |
|
$ |
430,825 |
|
62
WILLIS LEASE FINANCE CORPORATION
AND SUBSIDIARIES
SCHEDULE I - CONDENSED STATEMENT OF INCOME
Parent Company Information
Years Ended December 31, 2008, 2007 and 2006
(In thousands)
|
|
|
2008 |
|
2007 |
|
2006 |
|
|||
|
REVENUE |
|
|
|
|
|
|
|
|||
|
Lease rent revenue |
|
$ |
34,221 |
|
$ |
34,902 |
|
$ |
28,448 |
|
|
Maintenance reserve revenue |
|
8,716 |
|
8,962 |
|
11,043 |
|
|||
|
Gain on sale of leased equipment |
|
5,587 |
|
5,670 |
|
1,853 |
|
|||
|
Other income |
|
11,649 |
|
8,541 |
|
6,072 |
|
|||
|
Total revenue |
|
60,173 |
|
58,075 |
|
47,416 |
|
|||
|
|
|
|
|
|
|
|
|
|||
|
EXPENSES |
|
|
|
|
|
|
|
|||
|
Depreciation expense |
|
15,533 |
|
15,570 |
|
12,578 |
|
|||
|
Write-down of equipment |
|
2,694 |
|
2,807 |
|
2,176 |
|
|||
|
General and administrative |
|
27,133 |
|
21,260 |
|
18,872 |
|
|||
|
Net finance costs: |
|
|
|
|
|
|
|
|||
|
Interest expense |
|
11,944 |
|
13,539 |
|
11,012 |
|
|||
|
Interest income |
|
(117 |
) |
(121 |
) |
(120 |
) |
|||
|
Realized and unrealized gains on derivative instruments |
|
— |
|
— |
|
(88 |
) |
|||
|
Total net finance costs |
|
11,827 |
|
13,418 |
|
10,804 |
|
|||
|
Total expenses |
|
57,187 |
|
53,055 |
|
44,430 |
|
|||
|
|
|
|
|
|
|
|
|
|||
|
Earnings from operations |
|
2,986 |
|
5,020 |
|
2,986 |
|
|||
|
|
|
|
|
|
|
|
|
|||
|
Earnings from joint venture |
|
797 |
|
700 |
|
466 |
|
|||
|
|
|
|
|
|
|
|
|
|||
|
Income before income taxes |
|
3,783 |
|
5,720 |
|
3,452 |
|
|||
|
Income tax expense |
|
(1,555 |
) |
(2,070 |
) |
(995 |
) |
|||
|
|
|
|
|
|
|
|
|
|||
|
Earnings from investment in affiliate |
|
24,373 |
|
14,014 |
|
15,429 |
|
|||
|
|
|
|
|
|
|
|
|
|||
|
Net income |
|
$ |
26,601 |
|
$ |
17,664 |
|
$ |
17,886 |
|
|
|
|
|
|
|
|
|
|
|||
|
Preferred stock dividends paid and declared-Series A |
|
3,128 |
|
3,128 |
|
2,945 |
|
|||
|
|
|
|
|
|
|
|
|
|||
|
Net income attributable to common shareholders |
|
$ |
23,473 |
|
$ |
14,536 |
|
$ |
14,941 |
|
63
WILLIS LEASE FINANCE CORPORATION
AND SUBSIDIARIES
SCHEDULE I - CONDENSED STATEMENT OF CASH FLOWS
Parent Company Information
Years Ended December 31, 2008, 2007 and 2006
(In thousands)
|
|
|
2008 |
|
2007 |
|
2006 |
|
|||
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|||
|
Net income |
|
$ |
26,601 |
|
$ |
17,664 |
|
$ |
17,886 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|||
|
Equity in income of subsidiary |
|
(24,373 |
) |
(14,014 |
) |
(15,429 |
) |
|||
|
Depreciation expense |
|
15,533 |
|
15,570 |
|
12,578 |
|
|||
|
Write-down of equipment |
|
2,694 |
|
2,807 |
|
2,176 |
|
|||
|
Stock-based compensation expenses |
|
1,693 |
|
599 |
|
685 |
|
|||
|
Amortization of deferred costs |
|
2,260 |
|
2,254 |
|
2,442 |
|
|||
|
Allowances and provisions |
|
23 |
|
5 |
|
(439 |
) |
|||
|
Changes in the fair value of derivative instruments |
|
— |
|
— |
|
(174 |
) |
|||
|
Gain on sale of leased equipment |
|
(5,587 |
) |
(5,670 |
) |
(1,853 |
) |
|||
|
Loss on disposition of property, plant & equipment |
|
— |
|
33 |
|
— |
|
|||
|
Income from joint venture |
|
(797 |
) |
(700 |
) |
(466 |
) |
|||
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|||
|
Receivables |
|
(582 |
) |
(777 |
) |
639 |
|
|||
|
Other assets |
|
(1,880 |
) |
(1,566 |
) |
2,301 |
|
|||
|
Accounts payable and accrued expenses |
|
3,313 |
|
(2,732 |
) |
179 |
|
|||
|
Due to/from subsidiary |
|
(905 |
) |
948 |
|
(861 |
) |
|||
|
Deferred income taxes |
|
329 |
|
1,501 |
|
871 |
|
|||
|
Maintenance reserves |
|
(5,318 |
) |
5,892 |
|
832 |
|
|||
|
Security deposits |
|
(536 |
) |
429 |
|
426 |
|
|||
|
Unearned lease revenue |
|
(247 |
) |
246 |
|
(325 |
) |
|||
|
Net cash provided by operating activities |
|
12,221 |
|
22,489 |
|
21,468 |
|
|||
|
|
|
|
|
|
|
|
|
|||
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|||
|
Increase in investment in subsidary, net |
|
(24,356 |
) |
(20,439 |
) |
— |
|
|||
|
Distribtuion received from subsidiary, net |
|
45,006 |
|
29,052 |
|
— |
|
|||
|
Proceeds from sale of equipment held for operating lease (net of selling expenses) |
|
53,947 |
|
30,721 |
|
23,294 |
|
|||
|
Proceeds from principal payment of notes receivable |
|
— |
|
12 |
|
149 |
|
|||
|
Distributions from joint venture |
|
690 |
|
975 |
|
211 |
|
|||
|
Purchase of equipment held for operating lease |
|
(58,909 |
) |
(102,252 |
) |
(82,953 |
) |
|||
|
Purchase of property, equipment and furnishings |
|
(1,593 |
) |
(44 |
) |
(113 |
) |
|||
|
Net cash provided by (used in) investing activities |
|
14,785 |
|
(61,975 |
) |
(59,412 |
) |
|||
|
|
|
|
|
|
|
|
|
|||
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|||
|
Proceeds from issuance of notes payable |
|
104,178 |
|
91,406 |
|
112,293 |
|
|||
|
Proceeds from issuance of preferred stock |
|
— |
|
— |
|
31,915 |
|
|||
|
Debt issuance cost |
|
(548 |
) |
(797 |
) |
(842 |
) |
|||
|
Distribution to preferred stockholders |
|
(3,128 |
) |
(3,128 |
) |
(2,945 |
) |
|||
|
Proceeds from issuance of common stock |
|
633 |
|
1,119 |
|
964 |
|
|||
|
Excess tax benefit (cost) from stock-based compensation |
|
(92 |
) |
178 |
|
241 |
|
|||
|
Repurchase of common stock |
|
— |
|
— |
|
(11,700 |
) |
|||
|
Principal payments on notes payable |
|
(126,661 |
) |
(42,461 |
) |
(97,371 |
) |
|||
|
Net cash provided by (used in) financing activities |
|
(25,618 |
) |
46,317 |
|
32,555 |
|
|||
|
Increase (decrease) in cash and cash equivalents |
|
1,388 |
|
6,831 |
|
(5,389 |
) |
|||
|
Cash and cash equivalents at beginning of period |
|
7,103 |
|
272 |
|
5,661 |
|
|||
|
|
|
|
|
|
|
|
|
|||
|
Cash and cash equivalents at end of period |
|
$ |
8,491 |
|
$ |
7,103 |
|
$ |
272 |
|
|
Supplemental disclosures of cash flow information: |
|
|
|
|
|
|
|
|||
|
Net cash paid for: |
|
|
|
|
|
|
|
|||
|
Interest |
|
$ |
7,164 |
|
$ |
9,712 |
|
$ |
11,038 |
|
|
Income Taxes |
|
$ |
2,256 |
|
$ |
15 |
|
$ |
12 |
|
|
|
|
|
|
|
|
|
|
|||
|
Supplemental disclosures of non-cash investing activities: |
|
|
|
|
|
|
|
|||
|
During the year ended December 31, 2008, there was a non-cash transfer of equipment to the WEST subsidiary of $38.7 million. |
|
|
|
|
|
|
|
|||
64
Schedule II
Valuation Accounts
Willis Lease
Finance Corporation
Valuation Accounts
(in thousands)
|
|
|
Balance at
|
|
Additions
|
|
Recoveries |
|
Deductions |
|
Balance at
|
|
|||
|
December 31, 2006 |
|
|
|
|
|
|
|
|
|
|
|
|||
|
Accounts receivable, allowance for doubtful accounts |
|
$ |
462 |
|
— |
|
— |
|
$ |
(376 |
) |
$ |
86 |
|
|
December 31, 2007 |
|
|
|
|
|
|
|
|
|
|
|
|||
|
Accounts receivable, allowance for doubtful accounts |
|
86 |
|
— |
|
— |
|
(24 |
) |
62 |
|
|||
|
December 31, 2008 |
|
|
|
|
|
|
|
|
|
|
|
|||
|
Accounts receivable, allowance for doubtful accounts |
|
62 |
|
277 |
|
— |
|
— |
|
339 |
|
|||
65
Exhibit 3.1
CERTIFICATE OF INCORPORATION
OF
WILLIS LEASE FINANCE CORPORATION
The name of this corporation is WILLIS LEASE FINANCE CORPORATION.
The address of the registered office of the corporation in the State of Delaware is 9 East Loockerman Street, City of Dover, County of Kent, and the name of its registered agent at that address is National Registered Agents, Inc.
The purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.
(a) The corporation shall be authorized to issue two classes of shares of stock to be designated, respectively, “Preferred Stock” and “Common Stock”; the total number of shares which the corporation shall have authority to issue is Twenty-Five Million (25,000,000); the total number of shares of Preferred Stock shall be Five Million (5,000,000) and each such share shall have a par value of one cent ($0.01); and the total number of shares of Common Stock shall be Twenty Million (20,000,000) and each such share shall have a par value of one cent ($0.01).
(b) The shares of Preferred Stock may be issued from time to time in one or more series. The board of directors is hereby vested with authority to fix by resolution or resolutions the designations and the powers, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof, including without limitation the dividend rate, conversion or exchange rights, redemption price and liquidation preference, of any series of shares of Preferred Stock, and to fix the number of shares constituting any such series, and to increase or decrease the number of shares of any such series (but not below the number of shares thereof then outstanding). In case the number of shares of any such series shall be so
decreased, the shares constituting such decrease shall resume the status which they had prior to the adoption of the resolution or resolutions originally fixing the number of shares of such series.
The name and mailing address of the incorporator of the corporation is: Jeanne Carnahan , c/o National Corporate Research, LTD, 9 East Loockerman Street, Dover, Delaware 19901.
Elections of directors need not be by written ballot unless the bylaws of the corporation shall so provide.
(a) The number of directors which shall constitute the whole board of directors of the corporation shall be specified in the bylaws of the corporation.
(b) Effective on the filing of the Certificate of Incorporation of the corporation (“Incorporation Date”), the board shall be divided into three classes: Class I, Class II and Class III. Such classes shall be as nearly equal in number of directors as possible. Directors in Class I shall serve for a term ending at the first annual meeting held after the Incorporation Date, directors in Class II shall serve for a term ending at the second annual meeting held after the Incorporation Date, and directors in Class III shall serve for a term ending at the third annual meeting held after the Incorporation Date. Thereafter, each director shall serve for a term ending at the third annual stockholders meeting following the annual meeting at which such director was elected. The foregoing notwithstanding, each director shall serve until his successor shall have been duly elected and qualified, unless he shall resign, die, become disqualified or disabled, or shall otherwise be removed.
(c) At each annual election held after the Incorporation Date, the directors chosen to succeed those whose terms then expire shall be identified as being of the same class as the directors they succeed, unless, by reason of any intervening changes in the authorized number of directors, the board of directors shall designate one or more directorships whose term then expires as directorships of another class in order more nearly to achieve equality in the number of directors among the classes. When the board of directors fills a vacancy resulting from the resignation, death, disqualification or removal of a director, the director chosen to fill that vacancy shall be of the same class as the director he succeeds, unless, by reason of any previous changes in the authorized number of directors, the board of directors shall designate the vacant directorship as a directorship of another class in order more nearly to achieve equality in the number of directors among the classes.
(d) Notwithstanding the rule that the three classes shall be as nearly equal in number of directors as possible, in the event of any change in the authorized number of directors each director then continuing to serve as such will nevertheless continue as a director of the class of which he is a member, until the expiration of his current term or his earlier resignation, death, disqualification or removal. If any newly created directorship or vacancy on the board of directors, consistent with the rule that the three classes shall be as nearly equal in number of directors as possible, may be allocated to one or two or more classes, the board of directors shall allocate it to that of the available class whose term of office is due to expire at the earliest date following such allocation.
(e) During any period when the holders of Preferred Stock or any one or more series thereof, voting as a class, shall be entitled to elect a specified number of directors by reason of dividend arrearages or other contingencies giving them the right to do so, then and during such time as such right continues (1) the then otherwise authorized number of directors shall be increased by such specified number of directors, and the holders of the Preferred Stock or such series thereof, voting as a class, shall be entitled to elect the additional directors as provided for pursuant to the provisions of such Preferred Stock or series; (2) each such additional director shall not be a member of Class I, Class II or Class III, but shall serve until the next annual meeting or until his successor shall be elected and shall qualify, or until his right to hold such office terminates pursuant to the provisions of such Preferred Stock or series, whichever is earlier; and (3) whenever the holders of such Preferred Stock or series thereof are divested of such rights to elect a specified number of directors, voting as a class, pursuant to the provisions of such Preferred Stock or series, the terms of office of all directors elected by the holders of such Preferred Stock or series, voting as a class pursuant to such provisions, or elected to fill any vacancies resulting from the resignation, death, disqualification or removal of directors so elected by the holders of such Preferred Stock or series, shall forthwith terminate and the authorized number of directors shall be reduced accordingly.
(f) Subject to the rights of the holders of any series of Preferred Stock then outstanding, any director, or the entire board of directors, may be removed from office at any time, but only (1) for cause, and (2) by the affirmative vote of the holders of a majority of the Voting Stock. For purposes of this Certificate of Incorporation, “Voting Stock” means all outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors of the Corporation, and each reference to a percentage or portion of shares of Voting Stock shall refer to such percentage or portion of the votes entitled to be cast by such shares.
To the fullest extent permitted by the Delaware General Corporation Law as the same exists or may hereafter be amended, a director of the corporation shall not be liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. If the Delaware General Corporation Law is amended after the date of the filing of this Certificate of Incorporation to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the corporation shall be eliminated
or limited to the fullest extent permitted by the Delaware General Corporation Law, as so amended from time to time. No repeal or modification of this Article VIII by the stockholders shall adversely affect any right or protection of a director of the corporation existing by virtue of this Article VIII at the time of such repeal or modification.
In furtherance and not in limitation of the powers conferred by statute, the board of directors is expressly authorized to make, repeal, alter, amend and rescind any or all of the bylaws of the corporation.
Bylaws may not be made, repealed, altered, amended or rescinded by the stockholders of the corporation except by the vote of the holders of not less than eighty percent (80%) of the outstanding Voting Stock of the corporation, considered for purposes of this Article IX as one class.
The corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred on stockholders herein are granted subject to this reservation. Notwithstanding the foregoing, the provisions set forth in this Article X and in Articles IV, VII, IX, XI, XII and XIII may not be repealed, amended or otherwise modified, directly or indirectly, in any respect; provided, however, that any of the foregoing Articles may be repealed or amended in any respect if such repeal or amendment is approved by such vote as may be required under applicable law and in addition thereto by the affirmative vote of the holders, voting together as a single class, of not less than eighty percent (80%) of the outstanding Voting Stock of the corporation.
Special meetings of the stockholders of the corporation for any purpose or purposes may be called at any time by the board of directors or by the Chairman of the Board or by the President of the corporation, but such special meetings may not be called by any other person or persons; provided, however, that if and to the extent that any special meeting of the stockholders may be called by any other person or persons specified in any provisions of any certificate filed under Section 151(g) of the Delaware General Corporation Law (or its successor statute as in effect from time to time hereunder), then such special meeting may also be called by the person or persons, in the manner, at the times and for the purposes so specified.
Subject to the rights of holders of any series of Preferred Stock relating to the ability of such holders of such Preferred Stock to take action by a consent or consents in writing, no action shall be taken by the stockholders except at an annual or special meeting of stockholders. No action shall be taken by stockholders by written consent.
(a) Vote Required For Certain Business Combinations . In addition to any affirmative vote required by law or by any other provision of this Certificate of Incorporation, and in addition to any voting rights granted or to be held by holders of Preferred Stock, the affirmative vote of the holders of not less than eighty percent (80%) of the outstanding Voting Stock of the Corporation, considered for purposes of this Article XIII as one class, shall be required for the approval or authorization of any “business combination” (as hereinafter defined) with any “other entity” (as hereinafter defined) if, as of the record date for the determination of stockholders entitled to notice thereof and to vote thereon, such other entity is, directly or indirectly, the “beneficial owner” of more than 5% of the outstanding shares of the Common Stock of the Corporation.
(b) Exceptions .
(i) Section (a) of this Article XIII shall not be applicable to any particular business combination, and such business combination shall require only such affirmative vote as may be required by law, by any voting rights granted to or held by holders of Preferred Stock and by any other provision of this Certificate of Incorporation, if the proposed business combination shall have been approved by a majority of the “continuing directors” (as hereinafter defined).
(ii) Section (a) of this Article XIII shall not be applicable to any particular business combination in which shareholders of the Corporation, in one or more transactions, are to receive cash, property, securities or other consideration in exchange for their shares of capital stock of the Corporation, and such business combination shall require only such affirmative vote as may be required by law, by any voting rights granted to or held by holders of Preferred Stock and by any other provision of this Certificate of Incorporation, if the following condition is met: the cash plus the fair market value of the property, securities or other consideration to be received per share by holders of the Common Stock of the Corporation in the business combination is not less than the highest per share price (including (i) brokerage commissions, (ii) soliciting dealers’ fees, (iii) dealer-manager compensation, and (iv) other expenses, including, but not limited to, costs of newspaper advertisements, printing expenses and attorneys’ fees) paid by such other entity in acquiring any of its holdings of the Corporation’s Common Stock (1) within the period of eighteen (18) months immediately prior to and including
the date of the most recent public announcement of the proposal of the business combination or (2) in the transaction or series of transactions in which it acquired more than 5% of the outstanding shares of the Common Stock of the Corporation.
(iii) Section (a) of this Article XIII shall not be applicable to any particular business combination, and such business combination shall require only such affirmative vote as may be required by law, by any voting rights granted to or held by holders of Preferred Stock and by any other provision of this Certificate of Incorporation, if the proposed business combination is solely between the Corporation and another corporation, 30% or more of the voting stock of which is owned by the Corporation.
(c) Definitions . For purposes of this Article XIII:
(1) The term “business combination” shall mean: (i) any merger or consolidation of the Corporation or of any subsidiary of the Corporation with or into any other entity; (ii) the sale, exchange or lease of all or any substantial part of the assets of the Corporation to any other entity; or (iii) any sale or lease to the Corporation or any subsidiary thereof in exchange for securities of the Corporation of any assets of any other entity or securities issued by such other entity, for which the approval of stockholders of the Corporation is required by law or by any agreement between the Corporation and any national securities exchange.
(2) The term “other entity” shall mean and include (i) any individual, corporation, partnership or other person; (ii) any other party which is an “affiliate” or “associate” (as those terms are defined in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934) of any entity described in clause (i); (iii) any other party with which any entity described in clause (i) or any of its affiliates or associates have any agreement, arrangement or understanding, directly or indirectly, for the purpose of acquiring, holding, voting or disposing of shares of the Corporation; and (iv) the predecessors, successors or assigns of any entities described in clauses (i), (ii) or (iii) in any transaction or series of transactions not involving a public offering of the shares of the Corporation within the meaning of the Securities Act of 1933; provided, however, that the term “other entity” shall not include any individual, corporation, partnership or other person, entity or group which “beneficially owned” on March 1, 1998, five percent (5%) or more of the outstanding common stock of Willis Lease Finance Corporation, a California corporation.
(3) The term “continuing director” shall mean a director who (i) is unaffiliated with and is not the other entity and (ii) was a member of the Board of Directors prior to the time that the other entity involved in the proposed business combination acquired in excess of 5% of the outstanding shares of Common Stock of the Corporation.
(4) The term “beneficial ownership” shall include, without limitation, any shares of stock of the Corporation which any other entity has the right to acquire pursuant to any agreement, or upon exercise of conversion rights, warrants or options, or otherwise.
(5) For the purposes of subparagraph (b)(ii) of this Article XIII, the term “other consideration” shall include Common Stock of the Corporation retained by its
existing public stockholders in the event of a business combination with such other entity in which the Corporation is the surviving corporation.
(d) Determination of Compliance . A majority of the continuing directors shall have the power and duty to determine, for purposes of this Article XIII and on the basis of information known to them:
(1) Whether the proposal business combination is within the scope of this Article XIII;
(2) Whether the other entity owns beneficially more than 5% of the outstanding shares of Common Stock of the Corporation;
(3) The per share value proposed to be paid to the holders of Common Stock of the Corporation in the business combination, within the meaning of paragraph (b)(ii) of this Article XIII; and
(4) The highest price per share paid by the other entity, within the meaning of subparagraph (b)(ii) of this Article XIII.
Such determination(s), if made in good faith, shall be binding upon all parties.
(e) Fiduciary Duty . Nothing contained in this Article XIII shall be construed to relieve the other entity from any fiduciary obligation imposed by statute or case law.
Whenever a compromise or arrangement is proposed between this corporation and its creditors or any class of them and/or between this corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for this corporation under the provisions of Section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this corporation under the provisions of Section 279 of Title 8 of the Delaware Code order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this corporation, as the case may be, and also on this corporation.
THE UNDERSIGNED, being the incorporator hereinbefore named, for the purpose of forming a corporation to do business both within and without the State of Delaware, and in accordance with the General Corporation Law of the State of Delaware, has executed this Certificate as of March 12, 1998.
|
|
/s/ Jeanne Carnahan |
|
|
Jeanne Carnahan, Incorporator |
Exhibit 3.2
BYLAWS
OF
WILLIS LEASE FINANCE CORPORATION
(a Delaware corporation)
Dated as of April 18, 2001
Amended as of November 13, 2001
Further Amended as of December 16, 2008
TABLE OF CONTENTS
|
|
|
Page |
|
|
|
|
|
ARTICLE I. Offices |
|
|
|
|
|
|
|
SECTION 1.01. |
Registered Office |
1 |
|
SECTION 1.02. |
Other Offices |
1 |
|
ARTICLE II. Meetings of Stockholders |
|
|
|
|
|
|
|
SECTION 2.01. |
Annual Meetings |
1 |
|
SECTION 2.02. |
Special Meetings |
1 |
|
SECTION 2.03. |
Place of Meetings |
1 |
|
SECTION 2.04. |
Notice of Meetings |
1 |
|
SECTION 2.05. |
Quorum |
2 |
|
SECTION 2.07. |
Voting |
2 |
|
SECTION 2.08. |
Fixing Date for Determination of Stockholders of Record |
3 |
|
SECTION 2.09. |
List of Stockholders Entitled to Vote |
3 |
|
SECTION 2.10. |
Judges |
3 |
|
SECTION 2.11. |
Notice of Stockholder Business and Nominations |
4 |
|
|
|
|
|
ARTICLE III. Board of Directors |
|
|
|
|
|
|
|
SECTION 3.01. |
General Powers |
6 |
|
SECTION 3.02. |
Number and Term of Office |
6 |
|
SECTION 3.03. |
Election of Directors |
6 |
|
SECTION 3.04. |
Resignations |
6 |
|
SECTION 3.05. |
Removal |
6 |
|
SECTION 3.06. |
Vacancies |
6 |
|
SECTION 3.07. |
Place of Meeting, Etc. |
6 |
|
SECTION 3.08. |
Regular Meetings |
6 |
|
SECTION 3.09. |
Special Meetings |
7 |
|
SECTION 3.10. |
Quorum and Manner of Acting |
7 |
|
SECTION 3.11. |
Organization |
7 |
|
SECTION 3.12. |
Action by Consent |
7 |
|
SECTION 3.13. |
Compensation |
7 |
|
SECTION 3.14. |
Committees |
8 |
|
SECTION 3.15. |
Qualification Requirement for Directors |
8 |
|
|
|
|
|
ARTICLE IV. Officers |
|
|
|
|
|
|
|
SECTION 4.01. |
Number |
8 |
|
SECTION 4.02. |
Election, Term of Office and Qualifications |
9 |
|
SECTION 4.03. |
Assistants, Agents and Employees, Etc. |
9 |
|
SECTION 4.04. |
Removal |
9 |
|
SECTION 4.05. |
Resignations |
9 |
|
SECTION 4.06. |
Vacancies |
9 |
|
SECTION 4.07. |
Inability to Act |
9 |
|
SECTION 4.08. |
The Chairman of the Board |
9 |
|
SECTION 4.09. |
The President |
9 |
|
SECTION 4.10. |
The Chief Financial Officer |
9 |
|
SECTION 4.11. |
The Vice Presidents |
10 |
i
|
SECTION 4.12. |
The Corporate Secretary |
10 |
|
SECTION 4.13. |
Compensation |
10 |
|
|
|
|
|
ARTICLE V. Contracts, Checks, Drafts, Bank Accounts, Etc. |
|
|
|
|
|
|
|
SECTION 5.01. |
Execution of Contracts |
10 |
|
SECTION 5.02. |
Checks, Drafts, Etc. |
10 |
|
SECTION 5.03. |
Deposits |
10 |
|
SECTION 5.04. |
General and Special Bank Accounts |
11 |
|
|
|
|
|
ARTICLE VI. Shares and Their Transfer |
|
|
|
|
|
|
|
SECTION 6.01. |
Certificates for Stock |
11 |
|
SECTION 6.02. |
Transfers of Stock |
11 |
|
SECTION 6.03. |
Regulations |
11 |
|
SECTION 6.04. |
Lost, Stolen, Destroyed, and Mutilated Certificates |
12 |
|
|
|
|
|
ARTICLE VII. Indemnification |
|
|
|
|
|
|
|
SECTION 7.01. |
Indemnification |
12 |
|
SECTION 7.02. |
Expenses |
12 |
|
SECTION 7.03. |
Other Rights and Remedies |
12 |
|
SECTION 7.04. |
Insurance |
13 |
|
SECTION 7.05. |
Constituent Corporations |
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ARTICLE VIII. Miscellaneous |
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SECTION 8.01. |
Fiscal Year |
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SECTION 8.02. |
Waiver of Notices |
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SECTION 8.03. |
Seal |
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SECTION 8.04. |
Interested Directors; Quorum |
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SECTION 8.05. |
Amendments |
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SECTION 8.06. |
Representation of Shares in Other Corporations |
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SECTION 8.07. |
Severability |
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SECTION 8.08. |
Pronouns |
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ii
BYLAWS
OF
WILLIS LEASE FINANCE CORPORATION
(a Delaware corporation)
ARTICLE I.
Offices
SECTION 1.01 Registered Office . The registered office of Willis Lease Finance Corporation (hereinafter called the Corporation) in the State of Delaware shall be at 9 East Loockerman Street, City of Dover, County of Kent, and the name of the registered agent in charge thereof shall be National Registered Agents, Inc.
SECTION 1.02 Other Offices . The Corporation may also have an office or offices at such other place or places, either within or without the State of Delaware, as the Board of Directors (hereinafter called the Board) may from time to time determine or as the business of the Corporation may require.
SECTION 2.01 Annual Meetings . Annual meetings of the stockholders of the Corporation for the purpose of electing directors to succeed those whose terms expire and for the transaction of such other proper business as may properly come before such meetings may be held at such time, date and place as the Board shall determine by resolution.
SECTION 2.02 Special Meetings . Special meetings of the stockholders for the transaction of any proper business, unless otherwise prescribed by statute, may be called only in accordance with Article XI of the Corporation’s Certificate of Incorporation as it may be amended from time to time (the “Certificate of Incorporation”).
SECTION 2.03 Place of Meetings . All meetings of the stockholders shall be held at such places, within or without the State of Delaware, as may from time to time be designated by the person or persons calling the respective meeting and specified in the respective notices or waivers of notice thereof. In the absence of any such designation, stockholders’ meetings shall be held at the principal executive office of the Corporation.
SECTION 2.04 Notice of Meetings . Except as otherwise required by law, notice of each meeting of the stockholders, whether annual or special, shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder of record entitled to vote at such meeting by delivering a typewritten or printed notice thereof to him personally, or by depositing such notice in the United States mail, in a postage prepaid envelope, directed to him at his post office address furnished by him to the Corporate Secretary of the Corporation for such purpose or, if he shall not have furnished to the Corporate Secretary his address for such purpose, then at his post office address last known to the Corporate
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Secretary, or by transmitting a notice thereof to him at such address by telegraph, cable, or wireless. Except as otherwise expressly required by law, no publication of any notice of a meeting of the stockholders shall be required. Every notice of a meeting of the stockholders shall state the place, date and hour of the meeting, and, in the case of a special meeting, shall also state the purpose or purposes for which the meeting is called. Notice of any meeting of stockholders shall not be required to be given to any stockholder who shall have waived such notice and such notice shall be deemed waived by any stockholder who shall attend such meeting in person or by proxy, except a stockholder who shall attend such meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Except as otherwise expressly required by law, notice of any adjourned meeting of the stockholders need not be given if the time and place thereof are announced at the meeting at which the adjournment is taken.
SECTION 2.05 Quorum . Except where otherwise provided by law, the holders of record of a majority of the shares of stock of the Corporation entitled to be voted thereat, present in person or by proxy, shall constitute a quorum for the transaction of business at any meeting of the stockholders of the Corporation or any adjournment thereof. For purposes of the foregoing, two or more classes or series of stock shall be considered a single class if the holders thereof are entitled to vote together as a single class at the meeting. In the absence of a quorum at any meeting or any adjournment thereof, a majority of the shares of stock of the Corporation present in person or by proxy and entitled to vote thereat or, in the absence therefrom of all the stockholders, any officer entitled to preside at, or to act as secretary of, such meeting may adjourn such meeting from time to time. At any such adjourned meeting at which a quorum is present any business may be transacted which might have been transacted at the meeting as originally called.
SECTION 2.06 Voting .
(a) Each stockholder shall, at each meeting of the stockholders, be entitled to vote in person or by proxy for each share or fractional share of the stock of the Corporation held by him which has voting power upon the matter in question.
(b) Any such voting rights may be exercised by the stockholder entitled thereto in person or by his proxy appointed by an instrument in writing or by any other secure means permitted by law, including telephonic and electronic transmission, subscribed by such stockholder or by his attorney thereunto authorized and delivered to the secretary of the meeting; provided, however, that no proxy shall be voted or acted upon after eleven months from its date unless said proxy shall provide for a longer period. The attendance at any meeting of a stockholder who may theretofore have given a proxy shall not have the effect of revoking the same unless he shall in writing so notify the secretary of the meeting prior to the voting of the proxy. At any meeting of the stockholders, all matters, except as otherwise provided in the Certificate of Incorporation or in these Bylaws, shall be decided by the vote of a majority in voting interest of the stockholders present in person or by proxy and entitled to vote thereat and thereon, a quorum being present. The vote at any meeting of the stockholders on any question need not be by ballot, unless the holders of a majority of the outstanding shares of all classes of stock entitled to vote thereon present in person or by proxy shall so determine. On a vote by ballot, each ballot shall be signed by the stockholder voting, or by his proxy, if there be such proxy, and it shall state the number of shares voted.
(c) Shares of its own stock belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors in such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes. Persons holding stock of the Corporation in a fiduciary capacity shall be entitled to vote such stock. Persons whose stock is pledged shall be entitled to
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vote, unless in the transfer by the pledgor on the books of the Corporation he shall have expressly empowered the pledgee to vote thereon, in which case only the pledgee, or his proxy, may represent such stock and vote thereon. Stock having voting power standing of record in the names of two or more persons, whether fiduciaries, members of a partnership, joint tenants in common, tenants by entirety or otherwise, or with respect to which two or more persons have the same fiduciary relationship, shall be voted in accordance with the provisions of the General Corporation Law of the State of Delaware.
SECTION 2.07 Fixing Date for Determination of Stockholders of Record . In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any other change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix, in advance, a record date, which shall not be more than 60 nor less than 10 days before the date of such meeting, nor more than 60 days prior to any other action. If no record date is fixed: (1) the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day before the day on which notice is given, or, if notice is waived, at the close of business on the day before the day on which the meeting is held; and (2) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto. A determination of stockholders entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of such meeting; provided, however, that the Board may fix a new record date for the adjourned meeting. When a record date is so fixed, only shareholders of record at the close of business on that date are entitled to notice of and to vote at the meeting or to receive the dividend, distribution, or allotment of rights, or to exercise the rights, as the case may be, notwithstanding any transfer of any shares on the books of the Corporation after the record date. The Board may close the books of the Corporation against transfers of shares during the whole or any part of a period of not more than sixty (60) days prior to the date of a shareholders’ meeting, the date when the right to any dividend, distribution, or allotment of rights vests, or the effective date of any change, conversion or exchange of shares.
SECTION 2.08 List of Stockholders Entitled to Vote . The Corporate Secretary of the Corporation shall prepare and make, or cause to be prepared and made, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.
SECTION 2.09 Judges . If at any meeting of the stockholders a vote by written ballot shall be taken on any question, the chairman of such meeting may appoint a judge or judges to act with respect to such vote. Each judge so appointed shall first subscribe an oath faithfully to execute the duties of a judge at such meeting with strict impartiality and according to the best of his ability. Such judges shall decide upon the qualification of the voters and shall report the number of shares represented at the meeting and entitled to vote on such question, shall conduct and accept the votes, and, when the voting is completed, shall ascertain and report the number of shares voted respectively for and against the question. Reports of judges shall be in writing and subscribed and delivered by them to the Corporate Secretary of the Corporation. The judges need not be stockholders of the Corporation, and any officer of the Corporation may
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be a judge on any question other than a vote for or against a proposal in which he shall have a material interest.
SECTION 2.10 Notice of Stockholder Business and Nominations .
(A) Annual Meetings of Stockholders .
(1) Nominations of persons for election to the Board and the proposal of business to be considered by the stockholders may be made at an annual meeting of the stockholders (a) pursuant to the Corporation’s notice of meeting, (b) by or at the direction of the Board or (c) by any stockholder of the Corporation who was a stockholder of record at the time of giving of notice provided for in this Bylaw, who is entitled to vote at the meeting and who complies with the notice procedures set forth in this Bylaw.
(2) For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (c) of paragraph (A)(1) of this Bylaw, the stockholder must have given timely notice thereof in writing, in conformance with the requirements of this Bylaw, to the Corporate Secretary of the Corporation and such other business must otherwise be a proper matter for stockholder action. To be timely, a stockholder’s notice shall be delivered to the Corporate Secretary at the principal executive offices of the Corporation not later than the close of business on the 90th day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so delivered not later than the close of business on the 90th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made by the Corporation. In no event shall the public announcement of an adjournment of an annual meeting commence a new time period for the giving of a stockholder’s notice as described above. Such stockholder’s notice shall set forth (a) as to each person whom the stockholder proposes to nominate for election or re-election as a director (i) the name, age, business address and residence address of such person, (ii) the principal occupation or employment of such person, (iii) the class and number of shares of the Corporation which are beneficially owned by such person, (iv) a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nominations are to be made by the stockholder, and (v) any other information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934 (the “1934 Act”) (including without limitation such person’s written consent to being named in the proxy statement, if any, as a nominee and to serving as a director if elected); and (b) as to any other business that the stockholder proposes to bring before the meeting (i) a brief description of the business desired to be brought before the meeting, (ii) the reasons for conducting such business at the meeting, (iii) any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made and (iv) any other information which is required to be disclosed in solicitations of proxies on behalf of any such business, and specifically, any such information called for by Items 4 and 5 of Regulation 14A under the 1934 Act regarding such other business, the proponent of such other business and any associates or persons who would be deemed “participants” under Regulation 14A were the proponent soliciting proxies on behalf of such other business. All such notices shall include (i) a representation that the person sending the notice is a shareholder of record and will remain such through the record date for the meeting, (ii) the name and address, as they appear on the Corporation’s books, of such shareholder, (iii) the class and number of the Corporation’s shares which are owned beneficially and of record by such shareholder, and (iv) a representation that such shareholder intends to appear in person or by proxy at such meeting to make the nomination or move the consideration of other business set forth in the notice.
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(3) Notwithstanding anything in the second sentence of paragraph (A)(2) of this Bylaw to the contrary, in the event that the number of directors to the Board is increased and there is no public announcement by the Corporation naming all of the nominees for director or specifying the size of the increased Board at least 70 days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by this Bylaw shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Corporate Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such public announcement is first made by the Corporation.
(B) Special Meetings of Stockholders . Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of persons for election to the Board may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (a) by or at the direction of the Board or (b) provided that the Board has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who is a stockholder of record at the time of giving of notice provided for in this Bylaw, who shall be entitled to vote at the meeting and who complies with the notice procedures set forth in this Bylaw. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board, any such stockholder may nominate a person or persons (as the case may be), for election to such position(s) as specified in the Corporation’s notice of meeting, if the stockholder’s notice required by paragraph (A)(2) of this Bylaw shall be delivered to the Corporate Secretary at the principal executive offices of the Corporation not later than the close of business on the 90th day prior to such special meeting or the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board to be elected at such meeting. In no event shall the public announcement of an adjournment of a special meeting commence a new time period for the giving of a stockholder’s notice as described above.
(C) General .
(1) Only such persons who are nominated in accordance with the procedures set forth in this Bylaw shall be eligible to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Bylaw. Except as otherwise provided by law, the Certificate of Incorporation or these Bylaws, the chairman of the meeting shall, if the facts warrant, determine and declare at the meeting that business or a nomination is not properly before the meeting and, if he should so determine, the defective business shall not be transacted and the defective nomination shall be disregarded.
(2) For purposes of this Bylaw, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this Bylaw, a stockholder shall also comply with all the applicable requirements of the 1934 Act and the rules and regulations thereunder with respect to the matters set forth in this Bylaw. Nothing in this Bylaw shall be deemed to affect any rights (i) of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the 1934 Act of (ii) of the holders of any series of Preferred Stock to elect directors under specified circumstances.
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SECTION 3.01 General Powers . The property, business and affairs of the Corporation shall be managed by the Board.
SECTION 3.02 Number and Term of Office . The authorized number of directors shall be six (6), and such number shall not be changed except by a Bylaw amending this section duly adopted by the Board or duly adopted by the stockholders pursuant to the terms of Article IX of the Certificate of Incorporation. Directors need not be stockholders. Each of the directors of the Corporation shall hold office until his successor shall have been duly elected and shall qualify or until he shall resign, die, become disqualified or disabled or shall otherwise be removed in the manner hereinafter provided.
SECTION 3.03 Election of Directors . The directors shall be elected annually by the stockholders of the Corporation and the persons receiving the greatest number of votes, up to the number of directors to be elected, shall be the directors. The election of directors is subject to any provisions contained in the Certificate of Incorporation relating thereto, including any provisions for a classified Board.
SECTION 3.04 Resignations . Any director of the Corporation may resign at any time by giving written notice to the Board, the Chairman of the Board, the President or the Corporate Secretary of the Corporation. Any such resignation shall take effect at the time specified therein, or, if the time is not specified, it shall take effect immediately upon its receipt; and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
SECTION 3.05 Removal . Any director or the entire Board may be removed, with cause, by the holders of a majority of the shares then entitled to vote at an election of directors.
SECTION 3.06 Vacancies . Except as otherwise provided in the Certificate of Incorporation and except for a vacancy created by the removal of a director, any vacancy in the Board, whether because of death, resignation, disqualification, an increase in the number of directors, or otherwise, may be filled by vote of the majority of the remaining directors, although less than a quorum. Vacancies created by the removal of a director may be filled only by the affirmative vote of the holders of a majority of the outstanding stock then entitled to vote at an election of directors. Each director so chosen to fill a vacancy shall hold office until his successor shall have been elected and shall qualify or until he shall resign, die, become disqualified or disabled or shall otherwise be removed in the manner herein provided.
SECTION 3.07 Place of Meeting, Etc . The Board may hold any of its meetings at such place or places within or without the State of Delaware as the Board may from time to time by resolution designate or as shall be designated by the person or persons calling the meeting or in the notice or a waiver of notice of any such meeting. Directors may participate in any regular or special meeting of the Board by means of conference telephone or similar communications equipment pursuant to which all persons participating in the meeting of the Board can hear each other, and such participation shall constitute presence in person at such meeting.
SECTION 3.08 Regular Meetings . A regular annual meeting of the Board shall be held without any further notice immediately after, and at the same place as, the annual
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meeting of shareholders. The Board may provide for other regular meetings from time to time by resolution. If any day fixed for a regular meeting shall be a legal holiday at the place where the meeting is to be held, then the meeting shall be held at the same hour and place on the next succeeding business day that is not a legal holiday. Except as provided by law, notice of regular meetings need not be given.
SECTION 3.09 Special Meetings . Special meetings of the Board shall be held whenever called by the Chairman of the Board, the President, any Vice President, the Corporate Secretary or any two (2) directors. Except as otherwise provided by law or by these Bylaws, notice of the time and place of each such special meeting shall be mailed to each director, addressed to him at his residence or usual place of business, at least five (5) days before the day on which the meeting is to be held, or shall be sent to him at such place by telegraph, cable, facsimile or email or be delivered personally not less than forty-eight (48) hours before the time at which the meeting is to be held. Except where otherwise required by law or by these Bylaws, notice of the purpose of a special meeting need not be given. Notice of any meeting of the Board shall not be required to be given to any director who signs a waiver of notice, whether before or after the meeting, or who attends the meeting, without protesting prior thereto or at its commencement, the lack of notice to such director.
SECTION 3.10 Quorum and Manner of Acting . Except as otherwise provided in these Bylaws, the presence of a majority of the authorized number of directors shall be required to constitute a quorum for the transaction of business at any meeting of the Board, and all matters shall be decided at any such meeting, a quorum being present, by the affirmative votes of a majority of the directors present. In the absence of a quorum, a majority of directors present at any meeting may adjourn the same from time to time until a quorum shall be present. If a meeting is adjourned for more than twenty-four (24) hours, notice of any adjournment to another time or place shall be given prior to the time of the reconvened meeting to the directors who were not present at the time of adjournment. The directors shall act only as a Board, and the individual directors shall have no power as such. A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for such meeting.
SECTION 3.11 Organization . Meetings of the Board shall be presided over by the Chairman of the Board, or in his absence by the President, or in his absence by the Chief Administrative Officer, or in his absence by the Chief Financial Officer, or in his absence by a Vice President, or in their absence by a chairman chosen at the meeting. The Corporate Secretary shall act as secretary of the meeting, but in his absence the chairman of the meeting may appoint any person to act as secretary of the meeting.
SECTION 3.12 Action by Consent . Any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting if a written consent thereto is signed by all members of the Board or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board or committee. Such action by written consent shall have the same force and effect as a unanimous vote of such directors.
SECTION 3.13 Compensation . The directors shall receive only such compensation for their services as directors as may be allowed by resolution of the Board. The Board may also provide that the Corporation shall reimburse each such director for any expense incurred by him on account of his attendance at any meetings of the Board or Committees of the Board. Neither the payment of such compensation nor the reimbursement of such expenses shall be construed to preclude any director from serving the Corporation or its subsidiaries in any other capacity and receiving compensation therefor.
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SECTION 3.14 Committees . The Board may, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of one (1) or more of the directors of the Corporation and to serve at the pleasure of the Board. Any such committee, to the extent provided in the resolution of the Board and except as otherwise limited by law, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have power or authority in reference to amending the Certificate of Incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the Corporation’s property and assets, recommending to the stockholders a dissolution of the Corporation or a revocation of dissolution, removing or indemnifying directors or amending these Bylaws; and, unless the resolution expressly so provides, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of the stock. Any such committee shall keep written minutes of its meetings and report the same to the Board at the next regular meeting of the Board. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member.
SECTION 3.15. Qualification Requirement for Directors . No person shall be qualified to be elected to, or appointed to fill a vacancy on, the Board during the pendency of a Business Combination transaction (as defined in Article XIII of the Certificate of InCorporation) if such person is, or (in the case of a person described in clause (i), (ii) or (iii) below) was within the two years preceding the date of such election or appointment: (i) an officer, director, employee or affiliate (as such term is defined in Rule 12b-2 of the General Rules and Regulations under the 1934 Act) of a party to such transaction (an “Interested Party”) or of any affiliate of an Interested Party; (ii) an agent subject to the direction of an Interested Party; (iii) a consultant or advisor to an Interested Party; (iv) a person having a material financial interest in the transaction (other than through the ownership of stock or securities of the Corporation); or (v) a person having any business, financial, or familial relationship with any person referred to in clauses (i)-(iv) above that would reasonably be expected to affect such person’s judgment in a manner adverse to the Corporation. A person shall not be disqualified from election or appointment to the Board by reason of this Section 3.15 solely because such person is a director or officer of the Corporation who receives normal and customary compensation as such and/or is a stockholder or affiliate of the Corporation.
A Business Combination shall be deemed pending for purposes of this Section 3.15 commencing on the date any offer or proposal for such transaction shall be made and until such time as the proposed transaction is abandoned or until such time as: (i) the party proposing such transaction shall have acquired beneficial ownership, as defined above, of 50% or more of the Corporation’s outstanding voting stock; and (ii) 10 business days shall have elapsed thereafter.
SECTION 4.01 Number . The officers of the Corporation shall be a Chairman of the Board, a President, a Chief Financial Officer, one or more Vice Presidents (the number thereof and their respective titles to be determined by the Board), and a Corporate Secretary. In addition, the Board may appoint such other officers as may be deemed expedient
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for the proper conduct of the business of the Corporation, each of whom shall have such authority and perform such duties as the Board may from time to time determine.
SECTION 4.02 Election, Term of Office and Qualifications . The officers of the Corporation, except such officers as may be appointed in accordance with Section 4.03, shall be chosen annually at the regular meeting of the Board held after the annual meeting of shareholders and shall serve at the pleasure of the Board. If officers are not chosen at such meeting of the Board, they shall be chosen as soon thereafter as shall be convenient. Each officer shall hold office until his successor shall have been duly chosen and shall qualify or until his resignation, death, disqualification or removal in the manner hereinafter provided.
SECTION 4.03 Assistants, Agents and Employees, Etc . In addition to the officers specified in Section 4.01, the Board may appoint other assistants, agents and employees as it may deem necessary or advisable, including one or more Assistant Secretaries, and one or more Assistant Financial Officers, each of whom shall hold office for such period, have such authority, and perform such duties as the Board may from time to time determine. The Board may delegate to any officer of the Corporation or any committee of the Board the power to appoint, remove and prescribe the duties of any such assistants, agents or employees.
SECTION 4.04 Removal . Any officer, assistant, agent or employee of the Corporation may be removed, with or without cause, at any time: (i) in the case of an officer, assistant, agent or employee appointed by the Board, only by resolution of the Board; and (ii) in the case of an officer, assistant, agent or employee, by any officer of the Corporation or committee of the Board upon whom or which such power of removal may be conferred by the Board.
SECTION 4.05 Resignations . Any officer or assistant may resign at any time by giving written notice of his resignation to the Board, the Chairman of the Board, the President or the Corporate Secretary of the Corporation. Any such resignation shall take effect at the time specified therein, or, if the time be not specified, upon receipt thereof by the Board, the Chairman of the Board, the President or the Corporate Secretary, as the case may be; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
SECTION 4.06 Vacancies . A vacancy in any office because of death, resignation, removal, disqualification, or other cause, may be filled by the Board for the unexpired portion of the term thereof.
SECTION 4.07 Inability to Act . In the case of absence or inability to act of any officer of the Corporation, the Board may from time to time delegate the powers or duties of such officer to any other officer, or any director or other person whom it may select.
SECTION 4.08 The Chairman of the Board . The Chairman of the Board shall preside at all meetings of the Board.
SECTION 4.09 The President . The President of the Corporation shall be the chief executive officer of the Corporation and, subject to the control of the Board, shall preside at all meetings of shareholders, shall have general and active supervision and management over the business of the Corporation and over its several officers, assistants, agents and employees, shall make reports to the Board and shareholders, and shall perform all such other duties as are incident to such office or are properly required by the Board.
SECTION 4.10 The Chief Financial Officer . The Chief Financial Officer shall have the general care and custody of the funds and securities of the Corporation, and shall
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deposit all such funds in the name of the Corporation in such banks, trust companies or other depositories as shall be selected by the Board, and shall keep regular books of account. He shall receive, and give receipts for, moneys due and payable to the Corporation from any source whatsoever. He shall exercise general supervision over expenditures and disbursements made by officers, agents and employees of the Corporation and the preparation of such records and reports in connection therewith as may be necessary or desirable. He shall, in general, perform all other duties incident to the office of Chief Financial Officer and such other duties as from time to time may be properly assigned to him by the Board or the President.
SECTION 4.11 The Vice Presidents . Each Vice President shall have such powers and perform such duties as the Board or the President may from time to time properly prescribe. At the request of the President, or in case of the President’s absence or inability to act upon the request of the Board, a Vice President shall perform the duties of the President and when so acting, shall have all the powers of, and be subject to all the restrictions upon, the President.
SECTION 4.12 The Corporate Secretary . The Corporate Secretary shall, if present, record the proceedings of all meetings of the Board, of the stockholders, and of all committees of which a secretary shall not have been appointed, in one or more books provided for that purpose; he shall see that all notices are duly given in accordance with these Bylaws and as required by law; and, in general, he shall perform all the duties incident to the office of Corporate Secretary and such other duties as may from time to time be properly assigned to him by the Board or the President.
SECTION 4.13 Compensation . The compensation of the officers of the Corporation shall be fixed from time to time by the Board. None of such officers shall be prevented from receiving such compensation by reason of the fact that he is also a director of the Corporation. Nothing contained herein shall preclude any officer from serving the Corporation, or any subsidiary corporation, in any other capacity and receiving proper compensation therefor.
SECTION 5.01 Execution of Contracts . The Board, except as in these Bylaws otherwise provided, may authorize any officer or officers, agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances; and unless so authorized by the Board or by these Bylaws, no officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or in any amount.
SECTION 5.02 Checks, Drafts, Etc . All checks, drafts or other orders for payment of money, notes or other evidence of indebtedness, issued in the name of or payable to the Corporation, shall be signed or endorsed by such person or persons and in such manner as, from time to time, shall be determined by resolution of the Board.
SECTION 5.03 Deposits . All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board may select, or as may be selected by any officer or officers, assistant or assistants, agent or agents, or attorney or attorneys of the Corporation to whom such power shall have been delegated by the Board. For the purpose of deposit and for the purpose of collection for the account of the Corporation, the Chairman of the
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Board, the President, the Chief Financial Officer or any Vice President (or any other officer or officers, assistant or assistants, agent or agents, or attorney or attorneys of the Corporation who shall from time to time be determined by the Board) may endorse, assign and deliver checks, drafts and other orders for the payment of money which are payable to the order of the Corporation.
SECTION 5.04 General and Special Bank Accounts . The Board may from time to time authorize the opening and keeping of general and special bank accounts with such banks, trust companies or other depositories as the Board may select or as may be selected by any officer or officers, assistant or assistants, agent or agents, or attorney or attorneys of the Corporation to whom such power shall have been delegated by the Board. The Board may make such special rules and regulations with respect to such bank accounts, not inconsistent with the provisions of these Bylaws, as it may deem expedient.
SECTION 6.01 Certificates for Stock . Every owner of stock of the Corporation shall be entitled to have a certificate or certificates, to be in such form as the Board shall prescribe, certifying the number and class of shares of the stock of the Corporation owned by him. The certificates representing shares of such stock shall be numbered in the order in which they shall be issued and shall be signed in the name of the Corporation by the Chairman of the Board or the President or a Vice President, and by the Chief Financial Officer or the Corporate Secretary or an Assistant Secretary. Any of or all of the signatures on the certificates may be a facsimile. In case any officer, transfer agent or registrar who has signed, or whose facsimile signature has been placed upon, any such certificate, shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may nevertheless be issued by the Corporation with the same effect as though the person who signed such certificate, or whose facsimile signature shall have been placed thereupon, were such officer, transfer agent or registrar at the date of issue. A record shall be kept of the respective names of the persons, firms or corporations owning the stock represented by such certificates, the number and class of shares represented by such certificates, respectively, and the respective dates thereof, and in case of cancellation, the respective dates of cancellation. Every certificate surrendered to the Corporation for exchange or transfer shall be canceled, and no new certificate or certificates shall be issued in exchange for any existing certificate until such existing certificate shall have been so canceled, except in cases provided for in Section 6.04.
SECTION 6.02 Transfers of Stock . Transfers of shares of stock of the Corporation shall be made only on the books of the Corporation by the registered holder thereof, or by his attorney thereunto authorized by power of attorney duly executed and filed with the Corporate Secretary, or with a transfer clerk or a transfer agent appointed as provided in Section 6.03, and upon surrender of the certificate or certificates for such shares properly endorsed and the payment of all taxes thereon. The person in whose name shares of stock stand on the books of the Corporation shall be deemed the owner thereof for all purposes as regards the Corporation. Whenever any transfer of shares shall be made for collateral security, and not absolutely, such fact shall be so expressed in the entry of transfer if, when the certificate or certificates shall be presented to the Corporation for transfer, both the transferor and the transferee request the Corporation to do so.
SECTION 6.03 Regulations . The Board may make such rules and regulations as it may deem expedient, not inconsistent with these Bylaws, concerning the issue, transfer and registration of certificates for shares of the stock of the Corporation. It may appoint,
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or authorize any officer or officers to appoint, one or more transfer clerks or one or more transfer agents and one or more registrars, and may require all certificates for stock to bear the signature or signatures of any of them.
SECTION 6.04 Lost, Stolen, Destroyed, and Mutilated Certificates . In any case of loss, theft, destruction, or mutilation of any certificate of stock, another may be issued in its place upon proof of such loss, theft, destruction, or mutilation and upon the giving of a bond of indemnity to the Corporation in such form and in such sum as the Board may direct; provided, however, that a new certificate may be issued without requiring any bond when, in the judgment of the Board, it is proper so to do.
SECTION 7.01 Indemnification . Subject to any limitation which may be contained in the Certificate of Incorporation, the Corporation shall to the full extent permitted by law, including, without limitation, Delaware General Corporation Law § 145, as such Section now exists or shall hereafter be amended, indemnify any person who was, is or is threatened to be made a party, a named defendant or respondent to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, arbitral, administrative, or investigative, any appeal in such action, suit, or proceeding, and any inquiry or investigation that could lead to such an action, suit, or proceeding, because such person is or was a director, officer employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, partner, venturer, proprietor, trustee, employee, agent, or similar functionary of another corporation, partnership, joint venture, sole proprietorship, trust, employee benefit plan, or other enterprise, against judgments, penalties (including excise and similar taxes), fines, settlements, and reasonable expenses (including attorneys’ fees) actually incurred by such person in connection with such action, suit, or proceeding. The termination of any action, suit or proceeding by judgment, order, settlement, or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that an individual did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.
SECTION 7.02 Expenses . Subject to any limitation which may be contained in the Certificate of Incorporation, the Corporation shall, to the full extent permitted by law, including, without limitation, § 145 of the Delaware General Corporation Law, as such Section now exists or shall hereafter be amended, pay or reimburse on a current basis the expenses incurred by any person described in Section 7.01 in connection with any such action, suit, or proceeding in advance of the final disposition thereof, if the Corporation has received (i) a written affirmation by the recipient of his good faith belief that he has met the standard of conduct necessary for indemnification under the Delaware General Corporation Law and (ii) a written undertaking by or on behalf of such director or officer to repay the amount paid or reimbursed if it is ultimately determined that he has not satisfied such standard of conduct or if indemnification is prohibited by law.
SECTION 7.03 Other Rights and Remedies . The indemnification provided by this Article shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any Bylaws, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs,
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executors and administrators of such a person. The rights provided in this Article VII shall be deemed to be provided by a contract between the Corporation and the individuals who serve in the capacities described in Section 7.01 at any time while these bylaws are in effect, and no repeal or modification of this Article VII by the stockholders shall adversely affect any right of any person otherwise entitled to indemnification by virtue of this Article VII at the time of such repeal or modification.
SECTION 7.04 Insurance . The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of this Article.
SECTION 7.05 Constituent Corporations . For the purposes of this Article, references to “the Corporation” include all constituent corporations absorbed in a consolidation or merger as well as the resulting or surviving corporation, so that any person who is or was a director, officer, employee or agent of such a constituent corporation or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise shall stand in the same position under the provisions of this Article with respect to the resulting or surviving corporation as such person would if such person had served the resulting or surviving corporation in the same capacity.
SECTION 8.01 Fiscal Year . The fiscal year of the Corporation shall end on the 31st day of December.
SECTION 8.02 Waiver of Notices . Whenever notice is required to be given by these Bylaws or the Certificate of Incorporation or by law, the person entitled to said notice may waive such notice in writing, either before or after the time stated therein, and such waiver shall be deemed equivalent to notice.
SECTION 8.03 Seal . The Corporation may have a corporate seal which shall have the name of the Corporation and shall be in such form as may be approved from time to time by the Board. The corporate seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced.
SECTION 8.04 Interested Directors; Quorum . No contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association or other organization in which one or more of its directors or officers are directors or officers, or have financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board or committee thereof which authorizes the contract or transaction, or solely because his or their votes are counted for such purpose, if: (1) the material facts as to his relationship or interest and as to the contract or transaction are disclosed or are known to the Board or the committee, and the Board or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (2) the material facts as to his
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relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (3) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board, a committee thereof or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board or of a committee which authorizes the contract or transaction.
SECTION 8.05 Amendments . These Bylaws may be amended only in accordance with Article IX of the Corporation’s Certificate of Incorporation.
SECTION 8.06 Representation of Shares in Other Corporations . Shares of other corporations standing in the name of this Corporation may be voted or represented and all incidents thereto may be exercised on behalf of the Corporation by the Chairman of the Board, the President or any Vice President and the Chief Financial Officer or the Corporate Secretary or an Assistant Secretary.
SECTION 8.07 Severability . Any determination that any provision of these Bylaws is for any reason inapplicable, illegal or ineffective shall not affect or invalidate any other provision of these Bylaws.
SECTION 8.08 Pronouns . All pronouns used in these Bylaws shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the person or persons may require.
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Exhibit 4.3
AMENDMENT NO. 1 TO CERTIFICATE OF DESIGNATIONS
OF SERIES A CUMULATIVE REDEEMABLE PREFERRED STOCK
(Par Value $0.01 Per Share)
OF
WILLIS LEASE FINANCE CORPORATION
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
We, Charles F. Willis, IV, as Chief Executive Officer, and Thomas C. Nord, Esq., as Corporate Secretary of Willis Lease Finance Corporation, a company organized and existing under the General Corporation Law of the State of Delaware (the “ Company ”), in accordance with the provisions of Section 103 thereof, DO HEREBY CERTIFY:
1. That pursuant to the authority conferred upon the Board of Directors of the Company by the Certificate of Incorporation of the Company and in accordance with the provisions of Section 151(g) of the General Corporation Law of the State of Delaware, as amended, the Board of Directors, on July 16, 2008, adopted the following resolution (the “ Board Resolution ”) reducing the number of authorized shares of Series A Cumulative Redeemable Preferred Stock (the “ Series A Preferred Shares ”) to 3,475,000:
RESOLVED, that pursuant to the authority conferred upon the Board of Directors by the Company’s Certificate of Incorporation, as amended (the “ Certificate of Incorporation ”), and Section 151(g) of the Delaware General Corporation Law, the Board of Directors of the Company hereby decreases the number of authorized Series A Preferred Shares to 3,475,000.
2. 3,475,000 Series A Preferred Shares have been issued since the Series A Preferred Shares were established on September 27, 2005, as set forth in the Company’s Certificate of Designations, dated and filed with the Delaware Secretary of State on January 30, 2006 (the “ Original Certificate of Designations ”).
3. Pursuant to the Board Resolution, the Series A Preferred Shares and the Original Certificate of Designations is hereby amended as follows:
a. Section 2 of the Original Certificate of Designations is hereby amended to replace “3,680,000” with “3,475,000”.
[signatures on following page]
IN WITNESS WHEREOF, Willis Lease Finance Corporation has authorized and caused this Certificate to be executed by its Chief Executive Officer and attested to by its Secretary, as of September 30, 2008.
WILLIS LEASE FINANCE CORPORATION
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Charles F. Willis, IV |
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Thomas C. Nord |
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Exhibit 4.5
SECOND AMENDMENT TO RIGHTS AGREEMENT
This SECOND AMENDMENT TO RIGHTS AGREEMENT, dated as of December 15, 2005 (this “Amendment”), is entered into by and between Willis Lease Finance Corporation, a Delaware corporation (the “Company”), and American Stock Transfer and Trust Company (the “Rights Agent”).
RECITALS
WHEREAS, the Company and the Rights Agent entered into a Rights Agreement, dated as of September 24, 1999, as amended by the First Amendment to Rights Agreement, by and between the Company and American Stock Transfer and Trust Company, dated as of November 30, 2000 (the “Rights Agreement”);
WHEREAS, Section 27 of the Rights Agreement provides that, in certain circumstances, the Company may supplement or amend the Rights Agreement in any respect, without the approval of any holders of Rights, by action of the Company’s Board of Directors, and the Rights Agent shall execute such supplement or amendment;
WHEREAS, the Company intends to issue a new series of preferred stock to be offered to the public, which it intends to designate the “Series A Preferred Stock”;
WHEREAS, the Company’s Board of Directors has determined that this Amendment in the best interests of the Company’s stockholders and has approved the execution and delivery of this Amendment; and
WHEREAS, the Company desires to modify the terms of the Rights Agreement in certain respects as set forth herein, and in connection therewith, is entering into this Amendment and directing the Rights Agent to enter into this Amendment;
NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows:
1. Effect of Amendment . On or after the date upon which the Amendment becomes effective (the “Effective Date”), each reference in the Rights Agreement to the term “Agreement,” “hereof,” or “herein” shall be deemed to refer to the Rights Agreement as amended hereby. This Amendment and the amendments to the Rights Agreement effected hereby shall be effective as of the Effective Date and, except as set forth herein, the Rights Agreement shall remain in full force and effect and shall otherwise be unaffected hereby.
2. Capitalized Terms . All capitalized, undefined terms used in this Amendment shall have the meanings assigned thereto in the Rights Agreement.
3. Amendment to Section 1 . The definition of “Preferred Share” in Section 1 of the Rights Agreement is hereby amended to read in its entirety as follows:
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“Preferred Share” shall mean one share of the Series I Junior Participating Preferred Stock, par value $.01 per share, of the Company, which shall have the rights and preferences set forth in the Certificate of Designations for the Preferred Shares.
4. Amendment to Exhibit A to Rights Agreement . Exhibit A to the Rights Agreement, entitled “Certificate of Designations of Series A Junior Participating Preferred Stock (Par Value of $.01) of Willis Lease Finance Corporation” (“Exhibit A”) is hereby amended to read as follows:
a. The title of Exhibit A is hereby amended to read in its entirety as follows:
Certificate of Designations of Series I Junior Participating Preferred Stock (Par Value of $.01) of Willis Lease Finance Corporation
b. The third paragraph of the recital in Exhibit A to the Rights Agreement is hereby amended to read in its entirety as follows:
RESOLVED, that pursuant to the authority conferred upon the Board of Directors of the Company by the Certificate of Incorporation, the Board of Directors hereby designates 200,000 shares of the preferred stock, par value $.01 per share, of the Company as “Series I Junior Participating Preferred Stock” (the “ Preferred Shares ”), and the powers, designations, preferences and relative, participating, optional and other rights of the Preferred Shares and the qualifications, limitations and restrictions thereof, be, and they hereby are, as set forth below:
c. Section 1 through Section 10 of Exhibit A is hereby amended to replace in each instance the phrase “Series A Preferred Stock” with the phrase “Series I Preferred Stock.”
5. Amendment to Exhibit B to Rights Agreement . The first paragraph of Exhibit B to the Rights Agreement, entitled “Form of Right Certificate” is hereby amended to read in its entirety as follows:
This certifies that , or registered assigns, is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions and conditions of the Rights Agreement dated as of September 24, 1999, as amended from time to time (the “ Rights Agreement ”) between Willis Lease Finance Corporation, a Delaware corporation (the “Company”), and American Stock Transfer and Trust Company, a trust company organized under the laws of the State of New York (the “ Rights Agent ”), to purchase from the Company at any time after the Distribution Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M., California time, on the later of October 12, 2009 or the
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tenth anniversary of the Distribution Date at the office or agency of the Rights Agent at 40 Wall Street, 46th Floor, New York, New York 10005, or at the office of its successors as Rights Agent, one one-hundredth of a fully paid non-assessable share of Series I Junior Participating Preferred Stock, $.01 par value.
6. Effective Date . This Amendment is effective as of December 15, 2005.
7. Governing Law . This Amendment shall be governed by, construed and enforced in accordance with the laws of the State of Delaware, without reference to the conflicts or choice of law principles thereof.
8. Counterparts; Facsimile Signatures . This Amendment may be executed in any number of counterparts (including facsimile signature) each of which shall be an original with the same effect as if the signatures thereto and hereto were upon the same instrument.
9. Headings . The headings in this Amendment are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed, all as of the day and year first above written.
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WILLIS LEASE FINANCE
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AMERICAN STOCK TRANSFER
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/s/ Herbert J. Lemmer |
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Vice President |
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Exhibit 4.6
THIRD AMENDMENT TO RIGHTS AGREEMENT
This THIRD AMENDMENT TO RIGHTS AGREEMENT, dated as of September 30, 2008 (this “ Amendment ”), is entered into by and between Willis Lease Finance Corporation, a Delaware corporation (the “ Company ”), and American Stock Transfer and Trust Company (the “ Rights Agent ”).
RECITALS
WHEREAS, the Company and the Rights Agent entered into a Rights Agreement, dated as of September 24, 1999 (as amended, supplemented or otherwise modified, the “ Rights Agreement ”);
WHEREAS, Section 27 of the Rights Agreement provides that, in certain circumstances, the Company may supplement or amend the Rights Agreement in any respect, without the approval of any holders of Rights, by action of the Company’s Board of Directors, and the Rights Agent shall execute such supplement or amendment;
WHEREAS, the Company intends to extend the effectiveness of the Rights Agreement through 2018;
WHEREAS, the Company’s Board of Directors has determined that this Amendment in the best interests of the Company’s stockholders and has approved the execution and delivery of this Amendment; and
WHEREAS, the Company desires to modify the terms of the Rights Agreement in certain respects as set forth herein, and in connection therewith, is entering into this Amendment and directing the Rights Agent to enter into this Amendment;
NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows:
1. Effect of Amendment . On or after the date upon which the Amendment becomes effective (the “ Effective Date ”), each reference in the Rights Agreement to the term “Agreement,” “hereof,” or “herein” shall be deemed to refer to the Rights Agreement as amended hereby. This Amendment and the amendments to the Rights Agreement effected hereby shall be effective as of the Effective Date and, except as set forth herein, the Rights Agreement shall remain in full force and effect and shall otherwise be unaffected hereby.
2. Capitalized Terms . All capitalized, undefined terms used in this Amendment shall have the meanings assigned thereto in the Rights Agreement.
3. Amendment to Section 1 . The definition of “Expiration Date” in Section 1 of the Rights Agreement is hereby amended to read in its entirety as follows:
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“Expiration Date” shall mean August 31, 2018.
4. Amendment to Exhibit B to Rights Agreement . The first paragraph of Exhibit B to the Rights Agreement, entitled “Form of Right Certificate” is hereby amended to read in its entirety as follows:
This certifies that , or registered assigns, is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions and conditions of the Rights Agreement dated as of September 24, 1999, as amended from time to time (the “ Rights Agreement ”) between Willis Lease Finance Corporation, a Delaware corporation (the “Company”), and American Stock Transfer and Trust Company, a trust company organized under the laws of the State of New York (the “ Rights Agent ”), to purchase from the Company at any time after the Distribution Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M., California time, on the later of August 31, 2018 or the tenth anniversary of the Distribution Date at the office or agency of the Rights Agent at 59 Maiden Lane, New York, New York 10038, or at the office of its successors as Rights Agent, one one-hundredth of a fully paid non-assessable share of Series I Junior Participating Preferred Stock, $.01 par value.
5. Effective Date . This Amendment is effective as of September 30, 2008.
6. Governing Law . This Amendment shall be governed by, construed and enforced in accordance with the laws of the State of Delaware, without reference to the conflicts or choice of law principles thereof.
7. Counterparts; Facsimile Signatures . This Amendment may be executed in any number of counterparts (including facsimile signature) each of which shall be an original with the same effect as if the signatures thereto and hereto were upon the same instrument.
8. Headings . The headings in this Amendment are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed, all as of the day and year first above written.
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WILLIS LEASE FINANCE
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Senior Vice
President & General
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AMERICAN STOCK TRANSFER
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Vice President |
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3
Exhibit 4.7
(Par Value $.01 Per Share)
OF
WILLIS LEASE FINANCE CORPORATION
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
We, Charles F. Willis, IV, President and Chief Executive Officer, and Rae A. Capps, Esq., Senior Vice President, General Counsel and Corporate Secretary of Willis Lease Finance Corporation, a company organized and existing under the General Corporation Law of the State of Delaware (the “ Company ”), in accordance with the provisions of Section 103 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors of the Company (the “ Board of Directors ”) by the Certificate of Incorporation of the Company (the “ Certificate of Incorporation ”), and in accordance with the provisions of Section 151 of the General Corporation Law of the State of Delaware, as amended (the “ GCL ”), the Board of Directors, on September 14, 1999, adopted the following resolution creating a series of its Preferred Stock, par value $.01 per share:
RESOLVED, that pursuant to the authority conferred upon the Board of Directors of the Company by the Certificate of Incorporation, the Board of Directors hereby designates 200,000 shares of the preferred stock, par value $.01 per share, of the Company as “Series A Junior Participating Preferred Stock” (the “ Preferred Shares ”), and the powers, designations, preferences and relative, participating, optional and other rights of the Preferred Shares and the qualifications, limitations and restrictions thereof, be, and they hereby are, as set forth below:
Section 1. Designation and Amount . The shares of such series shall be designated as “Series A Junior Participating Preferred Stock” and the number of shares constituting such series so designated shall be 200,000 (the “ Series A Preferred Stock ”). Such number of shares may be increased or decreased by resolution of the Board of Directors; provided , however , that no decrease shall reduce the number of shares of Series A Preferred Stock to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the Company convertible into Series A Preferred Stock.
Section 2. Dividends and Distributions .
(a) Subject to the rights of the holders of any shares of any series of Preferred Stock (or any similar stock) ranking prior and superior to the Series A Preferred Stock with respect to dividends, the holders of shares of Series A Preferred Stock, in preference to the holders of shares of Common Stock, par value $.01 per share (the “ Common Stock ”), of the Company, and of any other junior stock, shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the first day of March, June, September and December in each year (each such date being referred to herein as a “ Quarterly Dividend Payment Date ”), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (i) $.25 per share ($1.00 per annum) or (ii) subject to the provision for adjustment hereinafter set forth, 100 times the aggregate per share amount of all cash dividends, and 100 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions, other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Preferred Stock. In the event the Company shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such event the amount to which the holder of each share of Series A Preferred Stock was entitled immediately prior to such event under clause (ii) of the preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock outstanding immediately prior to such event.
(b) The Company shall declare a dividend or distribution on the Series A Preferred Stock as provided in paragraph (a) of this Section 2 immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided , however , that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $.25 per share ($1.00 per annum) on the Series A Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which event dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend
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Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall cumulate but shall not bear interest. Dividends paid on the shares of Series A Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be not more than 60 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights . The holders of shares of Series A Preferred Stock shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set forth, each share of Series A Preferred Stock shall entitle the holder thereof to 100 votes on all matters submitted to a vote of the stockholders of the Company. In the event the Company shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the number of votes per share to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock outstanding immediately prior to such event.
(b) Except as otherwise provided herein, in the Company’s Certificate of Incorporation, as amended (the “ Charter ”), in any other certificate of designations creating a series of Preferred Stock or any similar stock or by law, the holders of shares of Series A Preferred Stock and the holders of shares of Common Stock and any other capital stock of the Company having general voting rights shall vote together as one class on all matters submitted to a vote of stockholders of the Company.
(c) Except as set forth herein, or as otherwise provided by law, holders of Series A Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions .
(a) Whenever quarterly dividends or other dividends or distributions payable on the Series A Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not authorized or declared, on shares of Series A Preferred Stock outstanding shall have been paid in full, the Company shall not, directly or indirectly:
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(i) authorize, declare or pay dividends on, or make any other distributions with respect to, any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock;
(ii) authorize, declare or pay dividends on, or make any other distributions with respect to, any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Preferred Stock, except dividends paid ratably on the Series A Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock, provided that the Company may at any time redeem, purchase or otherwise acquire shares of any such junior stock in exchange for shares of any stock of the Company ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration any shares of Series A Preferred Stock, or any shares of stock ranking on a parity with the Series A Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes.
(b) The Company shall not permit any subsidiary of the Company to purchase or otherwise acquire for consideration, directly or indirectly, any shares of stock of the Company unless the Company could, under paragraph (a) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares . Any shares of Series A Preferred Stock purchased or otherwise acquired by the Company in any manner whatsoever shall be retired and canceled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock subject to the conditions and restrictions on issuance set forth herein, in the Charter, in any other certificate of designations creating a series of Preferred Stock or any similar stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up . Upon any liquidation, dissolution or winding up of the Company, no distribution shall be made to: (i) the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock unless, prior thereto, the holders of shares of Series A Preferred Stock shall have received the greater of (A) $100.00 per share ($1.00 per one one-hundredth of a share), plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment, or (B) an aggregate amount per share, subject to the provision for adjustment hereinafter set forth, equal to 100 times the aggregate amount to be distributed per share of Common Stock to holders thereof; or (ii) the holders of shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with
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the Series A Preferred Stock, except distributions made ratably on the Series A Preferred Stock and all such parity stock in proportion to the total amounts to which the holders of all such shares are entitled upon such liquidation, dissolution or winding up. In the event the Company shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such event the aggregate amount to which each holder of a share of Series A Preferred Stock was entitled immediately prior to such event under clause (i) of the preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock outstanding immediately prior to such event.
Section 7. Consolidation, Merger or Other . In the event the Company shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property or otherwise changed, then in any such event each share of Series A Preferred Stock shall at the same time be similarly exchanged or changed into an amount per share, subject to the provision for adjustment hereinafter set forth, equal to 100 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Company shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such event the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series A Preferred Stock shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event, and the denominator of which is the number of shares of Common Stock outstanding immediately prior to such event.
Section 8. No Redemption . The shares of Series A Preferred Stock shall not be redeemable.
Section 9. Rank . The Series A Preferred Stock shall rank, with respect to the payment of dividends and the distribution of assets, junior to all series or classes of the Company’s Preferred Stock whether issued before or after the issuance of the Series A Preferred Stock.
Section 10. Amendment . The Charter shall not be amended in any manner that would materially alter or change the powers, preferences or special rights of the Series A Preferred Stock, as set forth herein, so as to affect them adversely without the affirmative vote of the holders of at least two-thirds of the outstanding shares of Series A Preferred Stock, voting together as a single class.
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IN WITNESS WHEREOF, this Certificate is executed on behalf of the Company by its President and Chief Executive Officer and attested by its Corporate Secretary this 1st day of October, 1999.
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WILLIS LEASE FINANCE CORPORATION |
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By: |
/s/ Charles F. Willis, IV |
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Name: |
Charles F. Willis, IV |
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Title: |
President and Chief Executive Officer |
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Attest: |
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By: |
/s/ Rae A. Capps, Esq. |
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Name: |
Rae A. Capps, Esq. |
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Title: |
Senior Vice President, General |
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Counsel and Corporate Secretary |
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Exhibit 4.8
AMENDMENT
NO. 1 TO CERTIFICATE OF DESIGNATIONS
OF SERIES I JUNIOR PARTICIPATING
PREFERRED STOCK
(Par Value $0.01 Per Share)
OF
WILLIS LEASE FINANCE CORPORATION
Pursuant to
Section 151 of the
General Corporation Law of the State of Delaware
We, Charles F. Willis, IV, as Chief Executive Officer, and Thomas C. Nord, Esq., as Corporate Secretary of Willis Lease Finance Corporation, a company organized and existing under the General Corporation Law of the State of Delaware (the “ Company ”), in accordance with the provisions of Section 103 thereof, DO HEREBY CERTIFY:
1. That pursuant to the authority conferred upon the Board of Directors of the Company by the Certificate of Incorporation of the Company and in accordance with the provisions of Section 151(g) of the General Corporation Law of the State of Delaware, as amended, the Board of Directors, on September 27, 2005, adopted the following resolution (the “Board Resolution ”) redesignating its Series A Junior Participating Preferred Stock as Series I Junior Participating Preferred Stock (the “ Preferred Stock ”):
WHEREAS, Willis Lease Finance Corporation’s (the “Company”) and American Stock Transfer and Trust Company (the “Rights Agent”) entered into a Rights Agreement, dated as of September 24, 1999 (the “Rights Agreement”), as amended by the First Amendment to Rights Agreement by and between the Company and American Stock Transfer and Trust Company, dated as of November 30, 2000;
WHEREAS, the Company intends to issue a new series of preferred stock to be offered to the public, which it intends to designate the “Series A Preferred Stock”;
WHEREAS, it is deemed in the best interests of the Company to modify the terms of the Rights Agreement to change the name of the preferred stock issuable under the Rights Agreement from the ‘‘Series A Preferred Stock” to the “Series I Preferred Stock,” as set forth in the Second Amendment to Rights Agreement (the “Second Amendment”), with such changes that Charles F. Willis
IV, Donald A. Nunemaker, Monica J. Burke or Thomas C Nord (the “Authorized Officers”) shall deem necessary.
NOW, THEREFORE, BE IT RESOLVED, that the Second Amendment be, and hereby is, ratified and adopted in its entirety.
RESOLVED FURTHER, that the Authorized Officers of the Company be, and each of them hereby is, authorized, empowered and directed to execute the Second Amendment on behalf of the Company and in its name.
2. No shares of Preferred Stock have been issued since the Preferred Stock was established on September 14, 1999, as set forth in the Company’s Certificate of Designations, dated and filed with the Delaware Secretary of State on October 1, 1999 (the “ Original Certificate of Designations ”).
3. Pursuant to the Board Resolution, the Preferred Stock and Original Certificate of Designations is hereby amended as follows:
a. The title is hereby amended to read in its entirety as follows:
Certificate of Designations of Series I Junior Participating Preferred Stock (Par Value of $.01) of Willis Lease Finance Corporation
b. The third paragraph of the recital in the Original Certificate of Designations is hereby amended to read in its entirety as follows:
RESOLVED, that pursuant to the authority conferred upon the Board of Directors of the Company by the Certificate of Incorporation, the Board of Directors hereby designates 200,000 shares of the preferred stock, par value $.01 per share, of the Company as “Series I Junior Participating Preferred Stock” (the “Preferred Shares”), and the powers, designations, preferences and relative, participating, optional and other rights of the Preferred Shares and the qualifications, limitations and restrictions thereof, be, and they hereby are, as set forth below:
c. Section 1 through Section 10 of the Original Certificate of Designations is hereby amended to replace in each instance the phrase “Series A Preferred Stock” with the phrase “Series I Preferred Stock.”
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IN WITNESS WHEREOF, Willis Lease Finance Corporation has authorized and caused this Certificate to be executed by its Chief Executive Officer and attested to by its Secretary, as of January 30, 2006.
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WILLIS LEASE FINANCE CORPORATION |
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By: |
/s/ Charles F. Willis, IV |
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Charles F. Willis, IV |
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Chief Executive Officer |
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Attest: |
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/s/ Thomas C. Nord |
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Thomas C. Nord |
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Secretary |
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Exhibit 10.10
AMENDMENT No. 2 TO LOAN AND AIRCRAFT SECURITY AGREEMENT (S/N 3004)
This Amendment No. 2 is dated February 14, 2007 and amends the Loan and Aircraft Security Agreement (S/N 3004) dated as of October 29, 2004, as amended (the “Agreement”), entered into by and between Banc of America Leasing & Capital, LLC (formerly known as Fleet Capital Corporation), as lender, (“Lender”) and Willis Lease Finance Corporation, a Delaware corporation, as customer, (“Customer”).
RECITALS
A. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Loan.
B. Lender and Customer entered into that certain Loan and Certificate of Acceptance dated as of October 29, 2004 (collectively the “Loan”), which document was recorded as one document with the Federal Aviation Administration (“FAA”) on November 30, 2004 and assigned conveyance number M005128 regarding a certain Canadair Ltd. Model CL-600 (Challenger 601-1A) aircraft bearing U.S. Registration Mark N45PH and manufacturer’s serial number 3004 (the “Aircraft”), as amended by Loan Amendment No. 1 (“Amendment No.1”) dated December 9, 2004. The Loan and Amendment No. 1 are collectively referred to hereafter as the “Agreement”;
C. Pursuant to the Agreement, Customer is required to maintain a comprehensive aircraft liability insurance policy against bodily injury or property damage claims including, without limitation, contractual liability, premises damage, public liability, death and property damage liability, public and passenger legal liability coverage in an amount not less than $200,000,000.00 for each single occurrence;
D. Customer has requested that Lender consent to a reduction in the combined liability for bodily injury and property damage including passenger, premises, contractual and war risk and allied perils coverage from $200,000,000.00 to $150,000,000.00 for each occurrence; and,
E. Lender has given its consent to Customer’s request and has agreed to amend the Loan.
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
1. Subsection 4.6(a)(i)(A) of the Agreement is hereby deleted in its entirety, and the following new Subsection 4.6(a)(i)(A) is inserted in substitution:
4.6(a)(1) (A) comprehensive aircraft liability insurance against bodily injury or property damage claims including, without limitation, contractual liability, premises damage, public liability, death and property damage liability, public and passenger legal liability coverage in an amount not less than $150,000,000.00.
2. Affirmation. Customer hereby affirms and ratifies its obligations under the Agreement and agrees that the Agreement is in full Force and effect, except as otherwise amended hereby.
3. Representations. Customer hereby represents, warrants and covenants to Lender that (i) this Amendment is enforceable against Customer in accordance with its terms; (ii) Customer shall execute and deliver this Amendment to Lender; (iii) Customer shall deliver to Lender a Certificate of Insurance Coverage certifying Bodily Injury and Property Damage coverage insured at $150,000,000.00; (iv) all other provisions concerning insurance coverage in connection with the Agreement shall remain in full force and effect, and (v) that no Default or Event of Default presently exists.
4. Miscellaneous. This Amendment, together with the Agreement, constitute the entire agreement between the parties hereto, and supersede all prior or contemporaneous agreements, communications and understandings, both written or oral with respect to the subject matter of this Amendment. This Amendment may be executed in any number of counterparts and by the parties hereto in separate counterparts.
Except as expressly modified or amended by this Amendment, the terms and conditions of the Loan shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment by their respective duly authorized representative as of the date and year first above written.
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Banc of America Leasing & Capital, |
WILLIS LEASE FINANCE CORPORATION |
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LLC (as successor by merger with Fleet |
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Capital corporation) |
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By: |
/s/ Rhonda Maggiacomo |
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By: |
/s/ Bradley S. Forsyth |
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Name: |
Rhonda Maggiacomo |
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Name: |
Bradley S. Forsyth |
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Title: |
Sr. Vice President |
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Title: |
Senior Vice President |
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Chief Financial Officer |
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Exhibit 10.11
AMENDMENT NO. 3 TO LOAN AND AIRCRAFT SECURITY AGREEMENT (S/N 3004)
THIS AMENDMENT NO, 3 TO LOAN AND AIRCRAFT SECURITY AGREEMENT (S/N 3004) dated as of August 28 , 2008 ( “Amendment”) is executed by and between Banc of America Leasing & Capital, LLC, (as successor by merger with Fleet Capital Corporation) as lender (“Lender”), and Willis Lease Finance Corporation, as customer (“Customer”).
RECITALS
WHEREAS, Lender and Customer entered into a certain Loan and Aircraft Security Agreement (S/N 3004) dated as of October 29, 2004, which was recorded with the Federal Aviation Administration (“FAA”) on November 30, 2004, and assigned conveyance number M005128 (together with all exhibits annexes, riders and schedules, as amended, including by the Amendments (as defined below), the “Security Agreement”), regarding a certain Canadair Ltd. Model CL-600 2412 (Challenger 601-1A) aircraft bearing U.S. Registration Mark N45PH and manufacturer’s serial number 3004 (the “Airframe”), Two (2) General Electric Model CF-34-3A aircraft engines bearing manufacturer’s serial numbers 350110 and 350115, each of which engines has 550 or more rated takeoff horsepower or the equivalent of such horsepower (collectively, the “Engines”) and certain other property secured by the Security Agreement, all as more particularly described in the Security Agreement (collectively with the Airframe and the Engines, the “Aircraft”);
WHEREAS , Lender and Customer amended the Security Agreement (“Amendment No. 1”) on December 29, 2004, to obtain Lender’s consent for an Aircraft Management and Charter Agreement between TWC Aviation and Customer;
WHEREAS, Lender and Customer amended the Security Agreement (“Amendment No. 2”) on February 14, 2007 wherein Lender consented to a reduction in the combined liability insurance for bodily injury and property damage including passenger, premises, contractual and war risk and allied perils coverage from $200,000,000.00 to $150,000,000.00 for each occurrence. The Loan and Aircraft Security Agreement and Amendments No. 1 and 2 are collectively referred to herein as the Security Agreement;
WHEREAS, Customer has requested Lender make an additional loan for upgrades to the Aircraft;
WHEREAS, this Amendment will bring the Security Agreement within the provisions of the Cape Town Convention (as defined below); and
WHEREAS, the parties are entering into this Amendment to (i) amend the Security Agreement for the additional loan and the aircraft upgrades, (ii) make the Security Agreement compliant with the Cape Town Convention, and (iii) amend certain terms and conditions of the Security Agreement, as and to the extent provided in this Amendment.
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
1. Definitions. Capitalized terms used in this Amendment and not otherwise defined herein are defined in the Security Agreement (as amended by this Amendment).
2. Amendments.
a. The Security Agreement is amended by renumbering Section 1.3 to 1.4.
b. Section 1 of the Security Agreement is amended by replacing Section 1.3 “Prepayment” and inserting in lieu thereof the following:
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1809570 |
(AMENDMENT) |
“1.3 Tranche 3 Loan. Subject to the terms and conditions of this Agreement, Lender agrees to make a loan to Customer in the principal amount of $1,031,436.00 set forth in Annex B hereto and designated as the Tranche 3 Loan (the “Tranche 3 Loan”) on the Requested Advance Date (the “Tranche 3 Closing Date”). The Customer’s obligation to repay the Tranche 3 Loan shall be evidenced by a promissory note in substantially the same form as the Tranche 1 and 2 Notes, payable by Customer to the order of Lender in the original principal amount of the Tranche 3 Loan (as amended, modified, restated, extended and renewed from time to time, the “Tranche 3 Note”). The Tranche 3 Loan shall bear interest and be repaid by Customer at the times and in the manner set forth in the Tranche 3 Note. Unless sooner terminated pursuant to the provisions of this Agreement, the obligation of Lender to make the Tranche 3 Loan hereunder shall automatically terminate on September 1, 2008 without further action by, or notice of any kind from Lender. The Tranche 1 Note, Tranche 2 Note and Tranche 3 Note are collectively referred to as the “Note” or “Notes”.”
c. The Security Agreement is amended by changing Section 1.4 to read Section 1.5 and adding the following at the end of the provision, “and the proceeds of the Tranche 3 Loan to pay for Lender approved refurbishment and upgrades to the Aircraft”.
d. The Security Agreement is amended by adding the Cape Town Rider attached hereto and made a part hereof,
e. The following definitions are added to Annex A to the Security Agreement:
“Tranche 3 Note” shall mean that certain Promissory Note dated the date of this Amendment, having a term which shall be coterminous with the then remaining term of the Tranche 1 and Tranche 2 Notes, and in the amount set forth in Revised Annex B to this Amendment.
f. The following definitions in Annex A to the Security Agreement are amended:
i. The definition of “Applicable Law” is amended by adding, after the word “Aircraft”, the words “the Cape Town Convention,”
ii. The definition of “Liens” is amended by adding, after the word “leaseholds” the words, “ any International Interests”.
iii. The definition of “Loan Documents” is amended by adding, after the words “Tranche 2 Note”, “Tranche 3 Note”.
iv. The definition of “Loans” Is amended by adding to the end of the sentence, “and the Tranche 3 Loan”.
g. Annex B of the Security Agreement is amended by replacing it in its entirety with the Revised Annex B attached hereto and made a part hereof.
3. Conditions Precedent to the Tranche 3 Loan: On or prior to the Tranche 3 Closing Date and at least one full business Day prior to such date, Lender shall have received all of the following, in form and substance satisfactory to Lender: (a) all of the Conditions Precedent set forth in Section 8 of the Cape Town Rider, (b) a Pay Proceeds Letter, the Tranche 3 Note and the Certificate of Acceptance for the refurbishments and upgrades to the Aircraft all duly executed by Customer, and (c) copies of all vendor work orders and invoices for the refurbishment and upgrades and, if customer has previously paid such invoices, evidence of such payment,
4. Affirmation. Customer hereby (a) affirms and ratifies its obligations under the Security Agreement and the other Loan Documents, and (b) agrees that the Security Agreement and the other Loan Documents are in full force and effect, except as otherwise amended hereby.
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5. Representations. Customer hereby (a) restates all of its representations, warranties and agreements set forth in Section 3 of the Security Agreement, (b) confirms that after giving effect to the transactions contemplated herein and the amendments made hereby, the representations and warranties, taking into account such transactions and amendments, are accurate for all purposes as of the date hereof, and without limiting the foregoing, and (c) represents, warrants and covenants to Lender that (i) this Amendment is enforceable against Customer in accordance with its terms; (ii) Customer’s execution and delivery of this Amendment and any other documents, agreements and instruments executed or delivered in connection herewith have been, or will be, duly authorized on its part; and (iii) that no Default or Event of Default presently exists.
6. Miscellaneous.
(a) This Amendment, together with the Security Agreement and the other Loan Documents, constitute the entire agreement between the parties hereto, and supersede all prior or contemporaneous agreements, communications and understandings, both written or oral with respect to the subject matter of this Amendment. This Amendment may be executed in any number of counterparts and by the parties hereto in separate counterparts.
(b) No modification of any of the provisions of this Amendment shall be effective until and unless it is in writing and signed by the parties.
(c) All of the terms and conditions of this Amendment shall survive the execution and delivery of this Amendment. This Amendment may be executed in any number of counterparts, all of which when taken together shall constitute but a single instrument. The headings in this Amendment are for convenience only and shall not limit or otherwise affect any of the terms hereof.
(d) In the event that any provision of this Amendment is for any reason held to be invalid, illegal or unenforceable, in whole or in part or in any respect, then such provision only shall be deemed null and void and shall not affect any other provision hereof, and the remaining provisions shall remain operative and in full force and effect.
(e) This Amendment shall in all respects be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to its principles of conflicts of law or choice of law (except Title 14, Section 5-1401 of the New York General Obligations Law) and shall be binding upon and inure to the benefit of Lender and Customer and their respective successors and assigns.
(f) Customer shall pay all actual and reasonable fees, costs and expenses incurred by Lender in connection with this Amendment, whether or not the transactions contemplated hereby are consummated, including, without limitation, FAA and International Registry title and lien searches, reports, filing and recording fees. Customer also agrees to pay all fees and expenses of Lender’s counsel, FAA Counsel and all other third parties who are engaged by Lender to enforce Lender’s rights and/or remedies hereunder, to update any FAA, International Registry or UCC title and/or lien reports and/or to review, file and record any and all documents and instruments as required by Lender, the FAA or the International Registry during and after the Term of the Security Agreement.
[SIGNATURES ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties have executed this Amendment by their respective duly authorized representatives as of the date and year first above written.
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BANC OF AMERICA LEASING & CAPITAL, |
WILLIS LEASE FINANCE CORPORATION: |
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LLC (as successor by merger with Fleet |
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Capital Corporation) |
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By: |
/s/ Rhonda Maggiacomo |
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By: |
/s/ Bradley S. Forsyth |
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Name: |
Rhonda Maggiacomo |
Name: |
Bradley S. Forsyth |
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Sr Vice President |
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Senior Vice President, Chief |
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Financial Officer |
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ANNEX B TO AMENDMENT NO. 3
REVISED ANNEX B
LOAN AMOUNT AND CUSTOMER INFORMATION
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Customer’s Chief Executive Offices |
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And Principal Place of Business: |
773 SAN MARIN DRIVE, SUITE 2215 NOVATO, CA 94998 |
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Customer’s form of Organization: |
Corporation |
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State of Organization: |
Delaware |
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Additional State(s) in which Customer is qualified: |
California |
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State issued Organizational Identification Number: |
* |
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Federal Taxpayer ID Number: |
* |
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FAA Counsel: |
Daugherty Fowler Peregrin Naught and Jenson |
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Principal Amount of the Tranche 1 Loan Dated October 29, 2004: |
* |
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Principal Amount of the Tranche 2 Loan Dated February 15, 2005: |
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Principal Amount of the Tranche 3 Loan Dated August 30, 2008: |
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*INTENTIONALLY OMITTED
FROM FAA FILING COUNTERPART
AS CONTAINING CONFIDENTIAL,
PROPRIETARY INFORMATION
ANNEX B TO AMENDMENT NO. 3
Cape Town Convention Rider (“Rider”) to Loan and Aircraft Security Agreement (s/n 3004) dated as of October 29, 2004, as amended (the “Security Agreement”) by and between BANC OF AMERICA LEASING & CAPITAL, LLC, a Delaware limited liability company (as successor by merger with Fleet Capital Corporation) (“Lender”) and Willis Lease Finance Corporation, a Delaware corporation (“Borrower”).
All capitalized terms not defined in this Rider are defined in the Security Agreement. The terms and conditions of this Rider shall supplement and be a part of the Security Agreement.
This Rider will bring the Security Agreement In compliance with the provisions of the Cape Town Convention (as defined below).
1. Borrower hereby represents and warrants the following:
a. Borrower is ‘situated’ in a country that has ratified or acceded to the Cape Town Convention within the meaning of Article 4 of the Convention.
b. The Security Agreement does not require approval of, or notice to, any governmental body, authority, or agency in connection with either the execution, delivery or performance by Borrower of the Security Agreement, or the validity or enforceability of the Security Agreement, except for recordation of this Agreement with the FAA, the filing of UCC financing statements in the appropriate recording offices, and the filing of the appropriate documentation to register Lender’s International Interest In the Aircraft with the International Registry which shall have been duly effected as of the hereof.
c. Borrower has good and marketable title to the free an clear of all Liens except the security interest created by the Security Agreement in favor of Lender and the International Interest created by the sale of the aircraft to Borrower; and all filings, recordings or other actions necessary or desirable in order to establish, perfect and give first priority to such security interest (including, the filing of this Agreement with the FAA, any filings with the International Registry pursuant to the Cape Town Convention) have been duly effected.
d. There are no International Interests registered with the International Registry with respect to the Aircraft or the Security Agreement, and Borrower will not permit any International Interests to be filed with the International Registry except (1) with respect to Lender’s interest in the Aircraft or (2) as otherwise consented to in writing by Lender;
e. Borrower is a Transacting User Entity, has appointed an Administrator and has designated a Professional User Entity. Borrower has paid all required fees and taken all actions necessary to enable Lender to register any International Interest with the International Registry;
f. Borrower has the power to grant any security interests described in the Security Agreement, each within the meaning of Article 7(b) of the Convention;
g. Each of the Engines has at least 1,750 pounds of thrust or its equivalent;
h. The Airframe is type certified by the FAA to transport at least eight people (including crew) or goods in excess of 2,750 kilograms; and
2. Borrower agrees to promptly execute and deliver to Lender such International Registry filings and other documents, and take such further action, as Lender may from time to time reasonably request in order to further carry out the intent and purpose of this Rider and to establish and protect the rights, interests and remedies created, or intended to be created, in favor of Lender. Borrower further agrees not to discharge or allow to be discharged any International
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Interest created in favor of Lender without Lender’s prior written consent and to promptly cause any non-consensual lien that is filed on the International Registry to be discharged.
3. In addition to the security interests granted in the Security Agreement, Borrower further grants Lender a first priority security interest in and lien on, and collaterally assigns to Lender, all of Borrower’s right, title and interest in, to and under any and all Associated Rights.
4. Borrower hereby consents to the registration of any International Interest arising in connection with the Security Agreement in favor of Lender and hereby authorizes its Professional User Entity to consent to the registration (including all Final Consents thereto) of any International Interest with the International Registry upon request therefore by Lender. At closing, Borrower hereby agrees to authorize its Professional User Entity to consent to the registration(s) of any International Interest(s).
5. In addition to all other rights and remedies granted to it in the Security Agreement, Lender may exercise all rights and remedies of a creditor under the Cape Town Convention, which may be used successively and cumulatively and in addition to any other right or remedy referred to in the Security Agreement or otherwise available to Lender at law or in equity.
6. Borrower shall pay to Lender upon demand all fees, costs and expenses incurred by or on behalf of Lender at any time in connection with the Cape Town Convention and the International Registry.
7. Notwithstanding anything to the contrary contained in the Security Agreement, the parties may bring a judicial proceeding in the Republic of Ireland against the registrar of the International Registry solely and to the extent such proceeding seeks an order or judgment against the International Registry.
8. Conditions Precedent and Subsequent to Closing. On or prior to the date hereof, Borrower shall deliver the following to Lender and/or Lender’s Escrow Agent, all in form and substance satisfactory to Lender and Lender’s Escrow Agent: (a) evidence that Borrower is a Transacting User Entity and has designated a Professional User Entity, which shall be Lender’s Escrow Agent; (b) fully completed and authorized discharges of any International Interests (including Final Consents thereto); (c) duly completed AC Form 8050-135 FAA Entry Point Filing Forms International Registry with respect to the Security Agreement; (d) a Priority Search Certificate from the International Registry addressed to Lender indicating that the Aircraft is fee and clear of Encumbrances, and, on the date hereof, confirmation from Lender’s Escrow Agent that a Priority Search Certificate from the International Registry indicates that the Aircraft is free and clear of Liens; (e) at closing, Lender and Lender’s Escrow Agent shall receive confirmation by Borrower’s Professional User Entity that each such party has consented to the registration of all International Interests (including all required Final Consents); and (f) such other documents as are necessary, in the opinion of Lender’s Escrow Agent or Lender, to register Lender’s International Interest in the Aircraft, along with any Associated Rights thereto pursuant to the Cape Town Convention, free and clear of Encumbrances. Immediately after closing, but on the date hereof, Lender shall receive a Priority Search Certificate from the International Registry addressed to Lender evidencing that its International Interest in the Aircraft and any Associated Rights has been duly registered therein and is searchable. Within five (5) business days after the date hereof, Lender shall receive an opinion of Lender’s Escrow Agent satisfactory to Lender that title to the Airframe is vested in Borrower, that Lender has a valid and perfected security interest in the Aircraft, that Lender has a duly registered and searchable International Interest in the Aircraft, and that the Aircraft (including the Airframe and Engines) is free and clear of all other Encumbrances of
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record.
9. For purposes of this Rider, the following terms shall have the following meanings:
Administrator shall have the meaning ascribed thereto In the International Registry
Regulations.
Aircraft Protocol shall mean the official English language text of the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment, adopted on 16 November 2001 at a diplomatic conference held in Cape Town, as the same may be amended or modified from time to time.
Associated Rights shall have the meaning ascribed thereto in the Cape Town Convention, including all rights to payment or other performance by Borrower under the Security Agreement, the Note or Related Documents which are secured by or associated with the Collateral.
Cape Town Convention shall mean, collectively, the Aircraft Protocol, the Convention, the International Registry Procedures and the International Registry Regulations.
Convention shall mean the official English language text of the Convention on International Interests in Mobile Equipment, adopted on 16 November 2001 at a diplomatic conference held in Cape Town, South Africa, as the same may be amended or modified from time to time.
Final Consent shall have the meaning ascribed thereto in the International Registry Procedures.
International Interest shall have the meaning ascribed thereto in the Cape Town Convention.
International Registry shall mean the International Registry of Mobile Assets located in Dublin, Ireland and established pursuant to the Cape Town Convention, along with any successor registry thereto.
International Registry Procedures shall mean the official English language text of the procedures for the International Registry issued by the supervisory authority thereof pursuant to the Convention and the Aircraft Protocol, as the same may be amended or modified from time to time.
International Registry Regulations shall mean the official English language text of the regulations for the International Registry issued by the supervisory authority thereof pursuant to the Convention and the Aircraft Protocol, as the same may be amended or modified from time to time.
Lender’s Escrow Agent shall mean FAA Counsel as designated on Amended Annex B (Annex A to Amendment No. 3).
Priority Search Certificate shall have the meaning ascribed thereto in the International Registry Procedures.
Professional User Entity shall have the meaning ascribed thereto in the International Registry Regulations.
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Transacting User Entity shall have the meaning ascribed thereto in the International Registry Regulations.
9. Miscellaneous. This Rider, together with the Security Agreement, the Notes and Loan Documents, constitute the entire agreement between the parties hereto, and supersede all prior or contemporaneous agreements, communications and understandings, both written or oral with respect to the subject matter of this Rider.
SIGNATURE ON THE NEXT PAGE
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IN WITNESS WHEREOF, the parties hereto have caused this Rider to be duly executed and delivered by their proper and duly authorized officers as of the date first set forth above.
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BANC OF AMERICA LEASING & CAPITAL, |
WILLIS LEASE FINANCE CORPORATION: |
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LLC (as successor by merger with Fleet |
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Capital Corporation) |
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By: |
/s/ Rhonda Maggiacomo |
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By: |
/s/ Bradley S. Forsyth |
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Name: |
Rhonda Maggiacomo |
Name: |
Bradley S. Forsyth |
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Title: |
Sr Vice President |
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Senior Vice President, |
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Chief Financial Officer |
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CERTIFICATE OF ACCEPTANCE
In accordance with Amendment No. 3 dated as of August 28, 2008 (the “Amendment”) to Loan and Aircraft Security Agreement (S/N 3004) dated as of October 29, 2004 (the “Security Agreement”; the Amendment and Security Agreement are collectively referred to as the “Agreement”), between the undersigned Customer and BANC OF AMERICA LEASING & CAPITAL, LLC, a Delaware limited liability company (as successor by merger with Fleet Capital Corporation) (“Lender”), Customer hereby represents and warrants to Lender that on the date hereof:
(1) The representations and warranties of Customer set forth in the Agreement and all Loan Documents delivered in connection therewith were true and correct in all respects when made and are true and correct as of the date hereof, with the same force and effect as if the same had been made on this date.
(2) Customer has satisfied or complied with all conditions precedent and requirements as set forth in the Agreement which are required to be or to have been satisfied or complied with on or prior to the date thereof.
(3) No Default or Event of Default under the Agreement has occurred and is continuing on the date hereof.
(4) Customer has obtained, and there are in full force and effect, such insurance policies with respect to the Aircraft, as such term is defined in the Agreement, as are required to be obtained under the terms of the Agreement.
(5) Customer has furnished no other equipment for the Aircraft (other than any equipment of which Customer has expressly informed Lender), and all of the avionics and equipment set forth on Schedule A hereto are on board the Aircraft (the “Upgrades”) and are in proper working condition; and
(6) the Upgrades (i) have been delivered to Customer, are in Customer’s possession and are, as of the Tranche 3 Closing Date, unconditionally, irrevocably and fully accepted by Customer, (ii) have been inspected by Customer to Its complete satisfaction and, without limiting the foregoing, (A) have been found to be airworthy and otherwise in good working order, repair and condition and fully equipped to operate as required under Applicable Standards for its purpose, and (B) are in conformity with the requirements of the related purchase agreements and the Applicable Standards; (iii) are currently certified under existing Federal Aviation Administration rules and regulations and is completely airworthy in all respects.
(7) The Aircraft is and will remain primarily hangered at the location set forth herein;
All capitalized terms used herein that are not otherwise defined herein shall have the meaning given to such terms in this Agreement.
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PRIMARY HANGER LOCATION: |
Business Jet Center |
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9351 Earhart Road |
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Oakland, CA 94621 |
IN WITNESS WHEREOF, Customer has caused this Certificate of Acceptance to be executed by its duly authorized officer as August 28, 2008.
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WILLIS LEASE FINANCE CORPORATION |
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By: |
/s/ Bradley S. Forsyth |
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Name: |
Bradley S. Forsyth |
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Title: |
Senior Vice President |
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Chief Financial Officer |
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Exhibit 10.16
EXECUTION VERSION
WILLIS ENGINE SECURITIZATION TRUST,
as issuer of Series 2008-A1 Notes,
and
WILLIS LEASE FINANCE CORPORATION,
as Administrative Agent,
and
THE PERSONS LISTED ON THE SIGNATURE PAGE HEREOF,
as the initial Series 2008-A1 Holders
SERIES 2008-A1 NOTE PURCHASE AND LOAN AGREEMENT
Dated as of March 25 , 2008
SERIES 2008-A1 NOTES
TABLE OF CONTENTS
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ARTICLE I |
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DEFINITIONS |
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Section 1.01. |
Definitions |
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Section 1.02. |
Rules of Construction |
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ARTICLE II |
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PURCHASE AND SALE |
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Section 2.01. |
Sale and Delivery of Series 2008-A1 Notes |
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Section 2.02. |
Funding of Series 2008-A1 Loans |
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Section 2.03. |
Closing |
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ARTICLE III |
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CONDITIONS PRECEDENT TO OBLIGATIONS OF SERIES 2008-A1 HOLDERS |
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Section 3.01. |
Conditions Precedent to Obligations of Initial Series 2008-A1 Holders to Purchase Series 2008-A1 Notes |
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Section 3.02. |
Conditions Precedent to Obligation of WEST to Issue Series 2008-A1 Notes |
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ARTICLE IV |
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REPRESENTATIONS AND WARRANTIES OF WEST AND ADMINISTRATIVE AGENT |
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Section 4.01. |
Representations and Warranties of WEST |
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Section 4.02. |
Representations and Warranties of Administrative Agent |
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ARTICLE V |
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REPRESENTATIONS AND WARRANTIES OF SERIES 2008-A1 HOLDERS |
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Section 5.01. |
Execution, Delivery, Binding Obligation |
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Section 5.02. |
Securities Act |
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ARTICLE VI |
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CERTAIN COVENANTS OF PARTIES |
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Section 6.01. |
Securities Act |
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Section 6.02. |
Legal Conditions to Closing |
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ii
This SERIES 2008-A1 NOTE PURCHASE AND LOAN AGREEMENT (this “ Agreement ”), dated as of March 25, 2008, is made among WILLIS ENGINE SECURITIZATION TRUST, a Delaware statutory trust (“ WEST ”), WILLIS LEASE FINANCE CORPORATION, a Delaware corporation, as Administrative Agent (the “ Administrative Agent” ), and the Persons named on the signature page hereof as initial Series 2008-A1 Holders, together with any Person that becomes a Series 2008-A1 Holder in accordance with the terms hereof (the “ Series 2008-A1 Holders ”).
PREAMBLE
WHEREAS, WEST and Deutsche Bank Trust Company Americas, a New York banking corporation, as indenture trustee (“ Indenture Trustee ”), entered into the Indenture, dated as of August 9, 2005 (the “Original Indenture” ), as thereafter supplemented by the Series 2005-A1 Supplement, the Series 2005-A2 Supplement, the Series 2005-B1 Supplement and the Series 2005-B2 Supplement and as amended and restated in its entirety by the Amended and Restated Indenture, dated as of December 13, 2007, between WEST and the Indenture Trustee (as supplemented by the Supplements, and as amended, supplemented or otherwise modified from time to time, the “ Indenture ”), as the Indenture was further supplemented by the Series 2007-A2 Supplement and the Series 2007-B2 Supplement;
WHEREAS, the Series 2005-A1 Term Notes, Series 2005-A2 Warehouse Notes, Series 2005-B1 Term Notes and Series 2005-B2 Warehouse Notes were issued on August 9, 2005 pursuant to the Series 2005-A1 Supplement, the Series 2005-A2 Supplement, the Series 2005-B1 Supplement and the Series 2005-B2 Supplement, respectively, and the Series 2007-A2 Warehouse Notes and Series 2007-B2 Warehouse Notes were issued on December 13, 2007 pursuant to the Series 2007-A2 Supplement and the Series 2007-B2 Supplement, respectively;
WHEREAS, the Controlling Trustees of WEST have authorized the issuance of a Series of Additional Notes, to be issued as Series A Term Notes and designated as “ Willis Engine Securitization Trust Series 2008-A1 Floating Rate Secured Notes ”, the proceeds of which are to be used in part to refinance the Series 2005-A2 Warehouse Notes and in part to fund the acquisition of the Additional Engines described in Schedule 3 hereto (the “ 2008 Engines ”); and
WHEREAS, WEST and the Indenture Trustee will enter into the Series 2008-A1 Supplement to the Indenture, to be dated as of March 28, 2008 (as it may be amended or otherwise modified from time to time, the “ Series 2008-A1 Supplement ”), pursuant to which WEST is to issue the Series 2008-A1 Notes in the initial Outstanding Principal Balance of $212,384,958;
WHEREAS, each of the Series 2008-A1 Holders is willing to make a Series 2008-A1 Loan to WEST in the amount of its Commitment on the Closing Date, and the obligation of WEST to repay such Series 2008-A1 Loan to each Series 2008-A1 Holder will be represented by the Series 2008-A1 Note held by such Series 2008-A1 Holder;
NOW THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows:
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Section 1.01. Definitions . Capitalized terms used herein and not otherwise defined herein shall have the meaning set forth in the Indenture. Whenever used in this Agreement, 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.
“ Closing Date ” means, subject to Section 2.03(a), March 28, 2008 or, if later, the date on which the conditions set forth in Section 3.01 hereof shall have been satisfied.
“ Commitment ” shall mean (a), for all Series 2008-A1 Holders, $ 212,384,958 in the aggregate, and (b), for each Series 2008-A1 Holder, the amount set forth opposite the name of such Series 2008-A1 Holder in Schedule 2 attached hereto.
“ Marketing Materials ” means the investor presentations made to investors by or on behalf of WEST (whether in person or electronically), dated January, 2008 and distributed to prospective investors on or about January 28, 2008.
“ Material Adverse Effect ” has the meaning specified in Section 4.01(a) hereof.
“ Notes ” means the Series A Notes and the Series B Notes.
“ Preliminary Offering Memorandum ” means the Preliminary Offering Memorandum, dated January 18, 2008, prepared by WEST in connection with the offering of the Series 2008-A1 Notes.
“ Private Placement Memorandum ” means the Private Placement Memorandum, dated March 24, 2008, prepared by WEST in connection with the offering of the Series 2008-A1 Notes.
“ Series A Notes ” means, collectively, (a) the $200,000,000 in original principal amount of WEST’s Series 2005-A1 Term Notes, (b) the $175,000,000 in maximum principal amount of WEST’s Series 2007-A2 Warehouse Notes, (c) the Series 2008-A1 Notes, and (d) any other note that is designated as a Series A Note under the Indenture.
“ Series 2007-A2 Supplement ” means the Series 2007-A2 Supplement to the Indenture, dated as of December 13, 2 007 , between WEST and the Indenture Trustee.
“ Series 2007-A2 Warehouse Notes ” means the Series of Notes designated as the “Willis Engine Securitization Trust Series 2007-A2 Floating Rate Secured Notes” issued on December 13, 2007 pursuant to the Series 2007-A2 Supplement and having the terms and conditions specified therein, and including any and all replacements, extensions, substitutions or renewals of such Notes .
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“ Series 2007-B2 Supplement ” means the Series 2007-B2 Supplement to the Indenture, dated as of December 13, 2 007 , between WEST and the Indenture Trustee.
“ Series 2007-B2 Warehouse Notes ” means the Series of Notes designated as the “Willis Engine Securitization Trust Series 2007-B2 Floating Rate Secured Notes” issued on December 13, 2007 pursuant to the Series 2007-B2 Supplement and having the terms and conditions specified therein, and including any and all replacements, extensions, substitutions or renewals of such Notes .
“ Series 2008-A1 Holders ” means, initially, the Persons named as initial Series 2008-A1 Holders on the signature page hereof and, at any time of determination for the Series 2008-A1 Notes thereafter, any Person in whose name a Series 2008-A1 Note is registered in the Register for the Series 2008-A1 Notes.
“ Series 2008-A1 Loan ” means the loan made by a Series 2008-A1 Holder to WEST pursuant to Article II hereof.
“ Series 2008-A1 Notes ” means the Series of Notes designated as the “Willis Engine Securitization Trust Series 2008-A1 Floating Rate Secured Notes” to be issued on the Closing Date pursuant to the Series 2008-A1 Supplement and having the terms and conditions specified therein, and including any and all replacements, extensions, substitutions or renewals of such Notes .
“ Series 2008-A1 Related Documents ” means the Series 2008-A1 Transaction Documents, as defined in the Series 2008-A1 Supplement, and the Related Documents, as the same may be amended, supplemented, restated, replaced or otherwise modified from time to time.
“ Series B Notes ” means, collectively, (a) the $28,276,878 in original principal amount of WEST’s Series 2005-B1 Term Notes, (b) the $25,000,000 in maximum principal amount of WEST’s Series 2007-B2 Warehouse Notes, (c) the Series 2008-B1 Notes, and (d) any other note that is designated as a Series B Note under the Indenture.
“ Series 2008-B1 Holders ” means, on the Closing Date, the Persons named as Series 2008-B1 Holders in the Series 2008-B1 Note Purchase Agreement and, at any time of determination thereafter, any Person in whose name a Series 2008-B1 Note is registered in the Register.
“ Series 2008-B1 Loans ” means the loans made to WEST by the Series 2008-B1 Holder pursuant to the Series 2008-B1 Note Purchase Agreement.
“ Series 2008-B1 Note Purchase Agreement ” means the Series 2008-B1 Note Purchase and Loan Agreement, to be dated as of March 25, 2008 , among WEST, the Administrative Agent and the Series 2008-B1 Holders, as amended, modified or supplemented from time to time in accordance with its terms.
“ Series 2008-B1 Notes ” means the notes issued pursuant to the Series 2008-B1 Note Purchase Agreement and the Series 2008-B1 Supplement.
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“ Series 2008-B1 Related Documents ” means the Series 2008-B1 Transaction Documents, as defined in the Series 2008-B1 Supplement, and the Related Documents, as the same may be amended, supplemented, restated, replaced or otherwise modified from time to time.
“ Series 2008-B1 Supplement ” means the Series 2008-B1 Supplement to the Indenture, to be dated as of March 28, 2008 , between WEST and the Indenture Trustee.
Section 1.02. Rules of Construction . The conventions of construction and usage set forth in Section 1.02 of the Indenture are hereby incorporated by reference in this Agreement.
Section 2.01. Sale and Delivery of Series 2008-A1 Notes . In reliance on the representations, warranties and agreements and subject to the terms and conditions set forth herein and in the Indenture and the Series 2008-A1 Supplement, WEST agrees to sell, and each of the Series 2008-A1 Holders severally and not jointly agrees to purchase, on the Closing Date, a Series 2008-A1 Note with the initial Outstanding Principal Balance for each Series 2008-A1 Holder set forth in Schedule 2 hereto. The Series 2008-A1 Notes shall be duly executed by WEST, duly authenticated by the Indenture Trustee and registered in the names of the Series 2008-A1 Holders.
Section 2.02. Funding of Series 2008-A1 Loans . (a) On the terms and conditions hereinafter set forth, each Series 2008-A1 Holder severally and not jointly agrees that it will make a Series 2008-A1 Loan to WEST in an amount equal to such Series 2008-A1 Holder’s Commitment on the Closing Date, subject to satisfaction of the applicable conditions precedent set forth in Article III hereof and in Article IV of the Series 2008-A1 Supplement.
Section 2.03. Closing . (a) The issuance of the Series 2008-A1 Notes and the making of the Series 2008-A1 Loans shall occur at the offices of Pillsbury Winthrop Shaw Pittman LLP, New York, New York, at 10:00 a.m., New York time, at a closing (the “ Closing ”) on the Closing Date. At its option, WEST shall have the right to postpone the Closing Date to a later date as set forth in a written notice delivered to each of the Series 2008-A1 Holders and the Senior Liquidity Provider at least two (2) days prior to such Closing Date. At the Closing, WEST will cause Series 2008-A1 Notes in initial Outstanding Principal Balances equal to the amounts set forth beside the names of the initial Series 2008-A1 Holders in Schedule 2 to be issued and registered in the name of each Series 2008-A1 Holder or its nominee (if so stated) and delivered in definitive physical form to such Series 2008-A1 Holder or its agent at the address for delivery
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notified to WEST, subject to such Series 2008-A1 Holder making its Series 2008-A1 Loan in U.S. dollars in the amount of such Series 2008-A1 Holder’s Commitment set forth in Schedule 2 by wire transfer, in immediately available funds, in U.S. dollars, on the Closing Date to an account maintained by the Security Trustee and designated by WEST in accordance with the Indenture and the Security Trust Agreement.
(b) In the event of a postponement of the Closing Date (but subject to Section 2.03(a)), WEST shall compensate each of the Series 2008-A1 Holders upon written request for all losses, damages, liabilities and reasonable expenses that such Series 2008-A1 Holder sustains as a result of the failure of WEST to borrow all or any part of the applicable Series 2008-A1 Loan on the Closing Date, including, without limitation, breakage costs and any losses and expenses incurred in connection with the re-employment or reinstatement of such funds.
Section 3.01. Conditions Precedent to Obligations of Initial Series 2008-A1 Holders to Purchase Series 2008-A1 Notes . The obligations of the initial Series 2008-A1 Holders to purchase the Series 2008-A1 Notes and to make the Series 2008-A1 Loans on the Closing Date is subject to satisfaction of the following conditions precedent:
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ARTICLE IV
Section 4.01. Representations and Warranties of WEST . WEST represents and warrants to, as of the Closing Date, and agrees with, the Series 2008-A1 Holders that:
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Section 4.02. Representations and Warranties of Administrative Agent . T he Administrative Agent hereby represents and warrants, as of the Closing Date, to the Series 2008-A1 Holders that:
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ARTICLE V
Each of the Series 2008-A1 Holders hereby severally and not jointly makes the following representations and warranties as to itself to WEST and the Administrative Agent as of the Closing Date:
Section 5.01. Execution, Delivery, Binding Obligation . (a) This Agreement has been duly and validly executed and delivered by such Series 2008-A1 Holder and constitutes a legal, valid and binding obligation of such Series 2008-A1 Holder, enforceable against such Series 2008-A1 Holder 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.
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Section 5.02. Securities Act . (a) As of the Closing Date, such Series 2008-A1 Holder is a “qualified institutional buyer” as defined in Rule 144A under the Securities Act (a “ QIB ”), and such Series 2008-A1 Holder acknowledges that WEST is offering the Series 2008-A1 Notes in reliance on an exemption from the registration requirements of the Securities Act and such Series 2008-A1 Holder is acquiring the Series 2008-A1 Notes (i) for its own account or (ii) for one or more accounts, each of which is a QIB and as to each of which it exercises sole investment discretion. Such Series 2008-A1 Holder agrees that it will provide WEST from time to time such information as WEST may reasonably request in order to ascertain the accuracy of such Series 2008-A1 Holder’s representations in Section 5.01 and this clause (a) of Section 5.02.
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ARTICLE VI
CERTAIN COVENANTS OF PARTIES
Section 6.01. Securities Act . WEST 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 Series 2008-A1 Notes and the Series 2008-B1 Notes in a manner that would require the registration under the Securities Act of the sale to the Series 2008-A1 Holders and the Series 2008-B1 Holders of the Series 2008-A1 Notes and the Series 2008-B1 Notes, respectively.
Section 6.02. Legal Conditions to Closing . The Series 2008-A1 Holders, WEST and the Administrative Agent 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 consummation of the transactions contemplated by this Agreement and will promptly cooperate with and furnish information to one another in connection with any such legal requirements. The Series 2008-A1 Holders, WEST, and the Administrative Agent 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 Agreement.
Section 6.03. Expenses and Fees . Except as otherwise expressly provided herein, all Issuance Expenses incurred in connection with the entering into this Agreement and the transactions contemplated hereby shall be paid by WEST.
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Section 6.04. Further Assurances . On and after the date of this Agreement, the Series 2008-A1 Holders (at the expense of WEST), WEST and the Administrative Agent 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 Agreement.
ARTICLE VII
Section 7.01. Indemnification by WEST . WEST agrees to indemnify and hold harmless the Series 2008-A1 Holders 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 reasonable 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 WEST in this Agreement or any other Related Document or in any certificate or other written material delivered pursuant hereto; provided , however , that WEST 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 gross negligence, willful misconduct or bad faith. Notwithstanding the foregoing, WEST shall not be liable for any settlement of any proceeding effected without its written consent. All amounts due to an Indemnified Party under this Article VII shall be included in the amounts due to the Series 2008-A1 Notes and the Indenture Trustee shall pay such amounts to such Series 2008-A1 Holders as part of the increased costs on the Series 2008-A1 Notes out of the Available Collections Amount on each Payment Date as provided in Section 3.14 of the Indenture and Section 3.03 of the Series 2008-A1 Supplement.
Section 7.02. Indemnification by Administrative Agent . T he Administrative Agent agrees to indemnify and hold harmless an Indemnified Party against all 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 Administrative Agent in this Agreement or any other Related Document or in any certificate or other written material delivered pursuant hereto; provided , however , that the Administrative Agent 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 gross negligence, willful misconduct or bad faith. Notwithstanding the foregoing, the Administrative Agent shall not be liable for any settlement of any proceeding effected without its written consent.
Section 7.03. Procedure . In order for any Indemnified Party to be entitled to any indemnification provided for under this 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 WEST in writing of such Third Party Claim within five Business Days of receipt of a summons, complaint or other written 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 WEST, 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 such Third Party Claim.
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Section 7.04. Defense of Claims . If a Third Party Claim is made against an Indemnified Party, (a) WEST or the Administrative Agent, as the case may be, will be entitled to participate in the defense thereof and, (b) if it so chooses, to assume the defense thereof with counsel selected by WEST or the Administrative Agent, as the case may be, provided that in connection with such assumption (i) such counsel is not reasonably objected to by the Indemnified Party and (ii) WEST or the Administrative Agent, as the case may be, first admits in writing its liability to indemnify the Indemnified Party with respect to all elements of such claim in full. Should WEST or the Administrative Agent, as the case may be, so elect to assume the defense of a Third Party Claim, WEST or the Administrative Agent, as the case may be, will not be liable to the Indemnified Party for any legal expenses subsequently incurred by the Indemnified Party in connection with the defense thereof. If WEST or the Administrative Agent, as the case may be, elects to assume the defense of a Third Party Claim, the Indemnified Party will (i) cooperate in all reasonable respects with WEST or the Administrative Agent, as the case may be, in connection with such defense and (ii) not admit any liability with respect to, or settle, compromise or discharge, such Third Party Claim without WEST’s or the Administrative Agent’s, as the case may be, prior written consent. If WEST or the Administrative Agent, as the case may be, 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 WEST or the Administrative Agent, as the case may be, 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 WEST or the Administrative Agent, as the case may be, of such terms and, WEST or the Administrative Agent, as the case may be, will promptly reimburse the Indemnified Party upon written request.
ARTICLE VIII
Section 8.01. Amendments . No amendment or waiver of any provision of this 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 8.02. Notices . All notices and other communications provided for hereunder shall, unless otherwise stated herein, be send by a telecopy 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 Series 2008-A1 Holders, to the addresses set forth in Schedule 1 hereto.
If to WEST:
Willis Engine Securitization
Trust
c/o Willis Lease Finance Corporation
773 San Marin Drive, Suite 2215
21
Novato, California 94998
Attention: General Counsel
Facsimile No. (415) 408-4702
If to the Administrative Agent:
Willis Lease Finance Corporation
773 San Marin Drive, Suite 2215
Novato, California 94998
Attention: General Counsel
Facsimile No. (415) 408-4702
If to the Indenture Trustee:
Deutsche Bank Trust Company Americas
60 Wall Street
MS NYC 60-2606
New York, New York 10005
Attention: Trust & Securities Services - Structured Finance
Services
Facsimile No. (212) 553-2460
Section 8.03. 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 any Applicable Law.
Section 8.04. Binding Effect; Assignability; Continuing Obligation . This Agreement shall be binding upon and inure to the benefit of WEST, the Administrative Agent and the Series 2008-A1 Holders and their respective successors and assigns (including any subsequent Holders of the Series 2008-A1 Notes, subject to their executing and delivering an Assignment and Assumption); provided, however, that WEST 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 Series 2008-A1 Holders. This 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 Series 2008-A1 Notes shall have been paid in full.
Section 8.05. GOVERNING LAW; JURISDICTION . THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAWS BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES. Each of the parties hereto agrees that the United States federal and New York State courts located in The City of New York shall have non-exclusive jurisdiction to hear and determine any suit, action or proceeding, and to settle any disputes, which may arise out of or in connection with this Agreement and, for such purposes, submits to the jurisdiction of such courts. Each of the parties hereto waives any objection which it might now or hereafter have to such courts being nominated as the forum or venue to hear and
22
determine any suit, action or proceeding, and to settle any disputes, which may arise out of or in connection with this Agreement and agrees not to claim that any such court is not a convenient or appropriate forum. Each of the parties hereto consents to the granting of such legal or equitable relief as is deemed appropriate by such courts.
Section 8.06. Execution in Counterparts . This 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 8.07. Survival . All representations, warranties, guaranties and indemnifications contained in this Agreement and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the sale and transfer of the Series 2008-A1 Notes.
Section 8.08. Appointment of Agent for Service of Process . WEST hereby appoints Corporation Service Company having an address at 1133 Avenue of the Americas, New York, New York 10036 as its agent for service of process in the State of New York.
Section 8.09. Table of Contents; Headings. The Table of Contents preceding the Agreement and headings of the Articles and Sections of this Agreement have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms and provisions hereof.
Section 8.10. WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 8.11. USA PATRIOT Act . Each of the Series 2008-A1 Holders hereby notifies WEST that, should it be necessary, pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) it is required to obtain, verify and record information that identifies WEST, which information includes the name and address of WEST and other information that will allow such Series 2008-A1 Holder to identify WEST in accordance with said Act.
Section 8.12. Severability . Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and
23
enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
[Signatures follow]
24
IN WITNESS WHEREOF, the parties have caused this Series 2008-A1 Note Purchase and Loan Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
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WILLIS ENGINE SECURITIZATION TRUST |
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as issuer of Series 2008-A1 Notes, |
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By: |
/s/ Bradley S. Forsyth |
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Name: |
Bradley S. Forsyth |
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Title: |
Controlling Trustee |
Series 2008-A1 Note Purchase and Loan Agreement
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WILLIS LEASE FINANCE CORPORATION, |
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as Administrative Agent, |
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By: |
/s/ Thomas C. Nord |
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Name: |
Thomas C. Nord |
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Title: |
Senior Vice President |
Series 2008-A1 Note Purchase and Loan Agreement
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BAYERISCHE LANDESBANK , |
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as an initial Series 2008-A1 Holder |
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By: |
/s/ Melanie Feger |
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Name: |
Melanie Feger |
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Title: |
Vice President |
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By: |
/s/ Richard Lawrynowicz |
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Name: |
Richard Lawrynowicz |
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Title: |
Vice President |
Series 2008-A1 Note Purchase and Loan Agreement
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DEKABANK DEUTSCHE GIROZENTRALE , |
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as an initial Series 2008-A1 Holder |
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By: |
/s/ Angelika Beyer |
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Name: |
Angelika Beyer |
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Title: |
First Vice President |
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By: |
/s/ Carsten Grote |
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Name: |
Carsten Grote |
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Title: |
Authorized Officer |
Series 2008-A1 Note Purchase and Loan Agreement
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KFW IPEX-BANK GMBH , |
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as an initial Series 2008-A1 Holder |
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By: |
/s/ Thomas Brehler |
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Name: |
Thomas Brehler |
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Title: |
First Vice President |
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By: |
/s/ Anja Thiem |
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Name: |
Anja Thiem |
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Title: |
Project Manager |
Series 2008-A1 Note Purchase and Loan Agreement
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LANDESBANK BADEN-WUERTTEMBERG , |
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as an initial Series 2008-A1 Holder |
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By: |
/s/ Christien Bezner |
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Name: |
Christien Bezner |
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Title: |
AVP |
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By: |
/s/ Bethina Barth |
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Name: |
Bethina Barth |
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Title: |
SPM |
Series 2008-A1 Note Purchase and Loan Agreement
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NATIXIS TRANSPORT FINANCE , |
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as an initial Series 2008-A1 Holder |
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By: |
/s/ Jean-Fran ç ois Lascombe |
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Name: |
Jean-François Lascombe |
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Title: |
Senior Vice President |
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By: |
/s/ Alexis Fekete |
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Name: |
Alexis Fekete |
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Title: |
Vice-President |
Series 2008-A1 Note Purchase and Loan Agreement
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NORDDEUTSCHE LANDESBANK
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as an initial Series 2008-A1 Holder |
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By: |
/s/ Oliver Gruenke |
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Name: |
Oliver Gruenke |
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Title: |
Authorized Signatory |
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By: |
/s/ Jens Rieken |
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Name: |
Jens Rieken |
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Title: |
Authorized Signatory |
Series 2008-A1 Note Purchase and Loan Agreement
SERIES 2008-A1 NOTE PURCHASE AND LOAN AGREEMENT
SCHEDULE 1
ADDRESSES OF SERIES 2008-A1 HOLDERS
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Names of Series 2008-A1 Holders |
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Addresses of Series 2008-A1 Holders |
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Bayerische Landesbank |
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Business
Area Corporates
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DekaBank Deutsche Girozentrale |
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Mainzer
Landtrasse 16
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KfW IPEX-Bank GmbH |
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Attention.:
Dept.: X4b2
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Landesbank Baden-Wuerttemberg |
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6751
Structured Finance
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NATIXIS Transport Finance |
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BP
4
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Norddeutsche Landesbank Girozentrale |
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Attention:
Aviation Group 2214 / 9930
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SERIES 2008-A1 NOTE PURCHASE AND LOAN AGREEMENT
SCHEDULE 2
COMMITMENTS OF SERIES 2008-A1 HOLDERS
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Names of Series 2008-A1 Holders |
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Initial Outstanding
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Individual Commitments
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Bayerische Landesbank |
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$ |
24,134,654 |
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$ |
24,134,654 |
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DekaBank Deutsche Girozentrale |
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$ |
48,269,309 |
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$ |
48,269,309 |
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KfW IPEX-Bank GmbH |
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$ |
38,615,447 |
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$ |
38,615,447 |
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Landesbank Baden-Wuerttemberg |
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$ |
48,269,309 |
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$ |
48,269,309 |
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NATIXIS Transport Finance |
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$ |
24,134,654 |
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$ |
24,134,654 |
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Norddeutsche Landesbank Girozentrale |
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$ |
28,961,585 |
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$ |
28,961,585 |
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Total: |
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$ |
212,384,958 |
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$ |
212,384,958 |
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SERIES 2008-A1 NOTE PURCHASE AND LOAN AGREEMENT
SCHEDULE 3
2008 ENGINES
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ESN |
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Manufacturer |
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Model |
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894329 |
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CFM International |
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CFM56-7B |
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697496 |
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CFM International |
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CFM56-5B4/3 |
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894328 |
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CFM International |
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CFM56-7B |
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567323 |
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CFM International |
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CFM56-5C4/P |
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892939 |
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CFM International |
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CFM56-7B26 |
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V12471 |
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International Aero Engines |
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V2527-A5 |
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729086 |
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Pratt & Whitney |
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PW4062-3 |
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V12470 |
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International Aero Engines |
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V2527-A5 |
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896177 |
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CFM International |
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CFM56-7B/3 |
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697519 |
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CFM International |
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CFM56-5B4/3 |
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V12373 |
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International Aero Engines |
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V2527-A5 |
2
SERIES 2008-A1 NOTE PURCHASE AND LOAN AGREEMENT
EXHIBIT A
FORM OF CONTROLLING TRUSTEE CLOSING DATE CERTIFICATE
Date: [ ][ ], 20[ ]
The undersigned, a Controlling Trustee of Willis Engine Securitization Trust, a Delaware statutory trust (“ WEST ”), does hereby certify to the Series 2008-A1 Holders, in satisfaction of one of the conditions for purchase of the Series 2008-A1 Notes and the making of Series 2008-A1 Loans by the Series 2008-A1 Holders under the Series 2008-A1 Note Purchase and Loan Agreement (the “ Agreement ”), dated as of the date hereof, among Willis Lease Finance Corporation, WEST, and the Series 2008-A1 Holders, on the date first set forth above (the “ Closing Date ”), as follows (capitalized terms used herein having the same meanings as in the Agreement):
Executed as of the date first set forth above, by the undersigned, a Controlling Trustee of WEST.
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By: |
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Name: |
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Title: Controlling Trustee |
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2
SERIES 2008-A1 NOTE PURCHASE AND LOAN AGREEMENT
EXHIBIT B
FORM OF ADMINISTRATIVE AGENT
CLOSING DATE CERTIFICATE
Date: [ ][ ], 20[ ]
The undersigned, an officer of Willis Lease Finance Corporation, as Administrative Agent for Willis Engine Securitization Trust, a Delaware statutory trust (“ WEST ”), does hereby certify to the Series 2008-A1 Holders, in satisfaction of one of the conditions for purchase of the Series 2008-A1 Notes and the making of Series 2008-A1 Loans by the Series 2008-A1 Holders under the Series 2008-A1 Note Purchase and Loan Agreement (the “ Agreement ”), dated as of the date hereof, among Willis Lease Finance Corporation, WEST, and the Series 2008-A1 Holders, on the date first set forth above (the “ Closing Date ”), as follows (capitalized terms used herein having the same meanings as in the Agreement):
Executed as of the date first set forth above, by the undersigned, an officer of the Administrative Agent.
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By: |
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Name: |
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Title: |
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Exhibit 10.17
EXECUTION VERSION
WILLIS ENGINE SECURITIZATION TRUST,
as issuer of Series 2008-B1 Notes,
and
WILLIS LEASE FINANCE CORPORATION,
as Administrative Agent,
and
CALYON SECURITIES (USA) INC.,
as the Initial Series 2008-B1 Holder
SERIES 2008-B1 NOTE PURCHASE AND LOAN AGREEMENT
Dated as of March 25 , 2008
SERIES 2008-B1 NOTES
TABLE OF CONTENTS
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Page |
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ARTICLE I |
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DEFINITIONS |
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Section 1.01. |
Definitions |
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Section 1.02. |
Rules of Construction |
3 |
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ARTICLE II |
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PURCHASE AND SALE |
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Section 2.01. |
Sale and Delivery of Series 2008-B1 Notes |
4 |
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Section 2.02. |
Funding of Series 2008-B1 Loan |
4 |
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Section 2.03. |
Closing |
4 |
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ARTICLE III |
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CONDITIONS PRECEDENT TO OBLIGATIONS OF INITIAL SERIES 2008-B1 HOLDER |
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Section 3.01. |
Conditions Precedent to Obligations of Initial Series 2008-B1 Holder to Purchase Series 2008-B1 Notes |
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Section 3.02. |
Conditions Precedent to Obligation of WEST to Issue Series 2008-B1 Notes |
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ARTICLE IV |
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REPRESENTATIONS AND WARRANTIES OF WEST AND ADMINISTRATIVE AGENT |
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Section 4.01. |
Representations and Warranties of WEST |
10 |
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Section 4.02. |
Representations and Warranties of Administrative Agent |
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ARTICLE V |
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REPRESENTATIONS AND WARRANTIES OF INITIAL SERIES 2008-B1 HOLDER |
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Section 5.01. |
Execution, Delivery, Binding Obligation |
15 |
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Section 5.02. |
Securities Act |
16 |
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ARTICLE VI |
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CERTAIN COVENANTS OF PARTIES |
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Section 6.01. |
Securities Act |
18 |
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Section 6.02. |
Legal Conditions to Closing |
18 |
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ii
This SERIES 2008-B1 NOTE PURCHASE AND LOAN AGREEMENT (this “ Agreement ”), dated as of March 25, 2008, is made among WILLIS ENGINE SECURITIZATION TRUST, a Delaware statutory trust (“ WEST ”), WILLIS LEASE FINANCE CORPORATION, a Delaware corporation, as Administrative Agent (the “ Administrative Agent” ), and CALYON SECURITIES (USA) INC., as the initial Series 2008-B1 Holder (the “ Initial Series 2008-B1 Holder ”).
PREAMBLE
WHEREAS, WEST and Deutsche Bank Trust Company Americas, a New York banking corporation, as indenture trustee (“ Indenture Trustee ”), entered into the Indenture, dated as of August 9, 2005 (the “Original Indenture” ), as thereafter supplemented by the Series 2005-A1 Supplement, the Series 2005-A2 Supplement, the Series 2005-B1 Supplement and the Series 2005-B2 Supplement and as amended and restated in its entirety by the Amended and Restated Indenture, dated as of December 13, 2007, between WEST and the Indenture Trustee (as supplemented by the Supplements, and as amended, supplemented or otherwise modified from time to time, the “ Indenture ”), as the Indenture was further supplemented by the Series 2007-A2 Supplement and the Series 2007-B2 Supplement;
WHEREAS, the Series 2005-A1 Term Notes, Series 2005-A2 Warehouse Notes, Series 2005-B1 Term Notes and Series 2005-B2 Warehouse Notes were issued on August 9, 2005 pursuant to the Series 2005-A1 Supplement, the Series 2005-A2 Supplement, the Series 2005-B1 Supplement and the Series 2005-B2 Supplement, respectively, and the Series 2007-A2 Warehouse Notes and Series 2007-B2 Warehouse Notes were issued on December 13, 2007 pursuant to the Series 2007-A2 Supplement and the Series 2007-B2 Supplement, respectively;
WHEREAS, the Controlling Trustees of WEST have authorized the issuance of a Series of Additional Notes, to be issued as Series B Term Notes and designated as “ Willis Engine Securitization Trust Series 2008-B1 Floating Rate Secured Notes”, the proceeds of which are to be used to refinance the Series 2005-B2 Warehouse Notes; and
WHEREAS, WEST and the Indenture Trustee will enter into the Series 2008-B1 Supplement to the Indenture, to be dated as of March 28, 2008 (as it may be amended or otherwise modified from time to time, the “ Series 2008-B1 Supplement ”), pursuant to which WEST is to issue the Series 2008-B1 Notes in the initial Outstanding Principal Balance of $20,282,212;
WHEREAS, the Initial Series 2008-B1 Holder is willing to make the Series 2008-B1 Loan to WEST in the amount of its Commitment on the Closing Date, and the obligation of WEST to repay such Series 2008-B1 Loan to such Series 2008-B1 Holder will be represented by a Series 2008-B1 Note held by such Series 2008-B1 Holder;
NOW THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows:
1
Section 1.01. Definitions . Capitalized terms used herein and not otherwise defined herein shall have the meaning set forth in the Indenture. Whenever used in this Agreement, 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.
“ Closing Date ” means, subject to Section 2.03(a), March 28, 2008 or, if later, the date on which the conditions set forth in Section 3.01 hereof shall have been satisfied.
“ Commitment ” shall mean, for the Initial Series 2008-B1 Holder, the amount set forth opposite the name of such Series 2008-B1 Holder in Schedule 2 attached hereto.
“ Material Adverse Effect ” has the meaning specified in Section 4.01(a) hereof.
“ Notes ” means the Series A Notes and the Series B Notes.
“ Series A Notes ” means, collectively, (a) the $200,000,000 in original principal amount of WEST’s Series 2005-A1 Term Notes, (b) the $175,000,000 in maximum principal amount of WEST’s Series 2007-A2 Warehouse Notes, (c) the Series 2008-A1 Notes, and (d) any other note that is designated as a Series A Note under the Indenture.
“ Series 2007-A2 Supplement ” means the Series 2007-A2 Supplement to the Indenture, dated as of December 13, 2 007 , between WEST and the Indenture Trustee.
“ Series 2007-A2 Warehouse Notes ” means the Series of Notes designated as the “Willis Engine Securitization Trust Series 2007-A2 Floating Rate Secured Notes” issued on December 13, 2007 pursuant to the Series 2007-A2 Supplement and having the terms and conditions specified therein, and including any and all replacements, extensions, substitutions or renewals of such Notes.
“ Series 2007-B2 Supplement ” means the Series 2007-B2 Supplement to the Indenture, dated as of December 13, 2 007 , between WEST and the Indenture Trustee.
“ Series 2007-B2 Warehouse Notes ” means the Series of Notes designated as the “Willis Engine Securitization Trust Series 2007-B2 Floating Rate Secured Notes” issued on December 13, 2007 pursuant to the Series 2007-B2 Supplement and having the terms and conditions specified therein, and including any and all replacements, extensions, substitutions or renewals of such Notes.
“ Series 2008-A1 Holders ” means, initially, the Persons named as initial Series 2008-A1 Holders on the signature pages to the Series 2008-A1 Note Purchase Agreement and, at any time of determination for the Series 2008-A1 Notes thereafter, any Person in whose name a Series 2008-A1 Note is registered in the Register for the Series 2008-A1 Notes.
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“ Series 2008-A1 Loan ” means the loan made by the Series 2008-A1 Holders to WEST pursuant to the Series 2008-A1 Supplement and the Series 2008-A1 Note Purchase Agreement.
“ Series 2008-A1 Note Purchase Agreement ” means the Series 2008-A1 Note Purchase and Loan Agreement, dated as of March 25, 2008 , among WEST, the Administrative Agent and the Series 2008-A1 Holders, as amended, modified or supplemented from time to time in accordance with its terms.
“ Series 2008-A1 Notes ” means the Series of Notes designated as the “Willis Engine Securitization Trust Series 2008-A1 Floating Rate Secured Notes” to be issued on the Closing Date pursuant to the Series 2008-A1 Supplement and having the terms and conditions specified therein, and including any and all replacements, extensions, substitutions or renewals of such Notes.
“ Series 2008-A1 Related Documents ” means the Series 2008-A1 Transaction Documents, as defined in the Series 2008-A1 Supplement, and the Related Documents, as the same may be amended, supplemented, restated, replaced or otherwise modified from time to time.
“ Series 2008-A1 Supplement ” means the Series 2008-A1 Supplement to the Indenture, to be dated as of March 28, 2008 , between WEST and the Indenture Trustee.
“ Series B Notes ” means, collectively, (a) the $28,276,878 in original principal amount of WEST’s Series 2005-B1 Term Notes, (b) the $25,000,000 in maximum principal amount of WEST’s Series 2007-B2 Warehouse Notes, (c) the Series 2008-B1 Notes, and (d) any other note that is designated as a Series B Note under the Indenture.
“ Series 2008-B1 Holders ” means, on the Closing Date, the Initial Series 2008-B1 Holder and, at any time of determination thereafter, any Person in whose name a Series 2008-B1 Note is registered in the Register.
“ Series 2008-B1 Loan ” means the loan made to WEST by the Initial Series 2008-B1 Holder pursuant to Article II hereof.
“ Series 2008-B1 Notes ” means the notes issued pursuant hereto and the Series 2008-B1 Supplement.
“ Series 2008-B1 Related Documents ” means the Series 2008-B1 Transaction Documents, as defined in the Series 2008-B1 Supplement, and the Related Documents, as the same may be amended, supplemented, restated, replaced or otherwise modified from time to time.
Section 1.02. Rules of Construction . The conventions of construction and usage set forth in Section 1.02 of the Indenture are hereby incorporated by reference in this Agreement.
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Section 2.01. Sale and Delivery of Series 2008-B1 Notes . In reliance on the representations, warranties and agreements and subject to the terms and conditions set forth herein and in the Indenture and the Series 2008-B1 Supplement, WEST agrees to sell, and the Initial Series 2008-B1 Holder, agrees to purchase, on the Closing Date, a Series 2008-B1 Note with the initial Outstanding Principal Balance for such Series 2008-B1 Holder set forth in Schedule 2 hereto. Such Series 2008-B1 Note shall be duly executed by WEST, duly authenticated by the Indenture Trustee and registered in the name of the Initial Series 2008-B1 Holder.
Section 2.03. Closing . (a) The issuance of the Series 2008-B1 Notes and the making of the Series 2008-B1 Loan shall occur at the offices of Pillsbury Winthrop Shaw Pittman LLP, New York, New York, at 10:00 a.m., New York time, at a closing (the “ Closing ”) on the Closing Date. At its option, WEST shall have the right to postpone the Closing Date to a later date as set forth in a written notice delivered to the Initial Series 2008-B1 Holder and the Senior Liquidity Provider at least two (2) days prior to such Closing Date. At the Closing, WEST will cause a Series 2008-B1 Note in an initial Outstanding Principal Balance equal to the amount set forth beside the name of the Initial Series 2008-B1 Holder in Schedule 2 to be issued and registered in the name of such Series 2008-B1 Holder or its nominee (if so stated) and delivered in definitive physical form to such Series 2008-B1 Holder or its agent at the address for delivery notified to WEST, subject to such Series 2008-B1 Holder making the Series 2008-B1 Loan in U.S. dollars in the amount of such Series 2008-B1 Holder’s Commitment set forth in Schedule 2 by wire transfer, in immediately available funds, in U.S. dollars, on the Closing Date to an account maintained by the Security Trustee and designated by WEST in accordance with the Indenture and the Security Trust Agreement.
(b) In the event of a postponement of the Closing Date (but subject to Section 2.03(a)), WEST shall compensate the Initial Series 2008-B1 Holder upon written request for all losses, damages, liabilities and reasonable expenses that such Series 2008-B1 Holder sustains as a result of the failure of WEST to borrow all or any part of the Series 2008-B1 Loan on the Closing Date, including, without limitation, breakage costs and any losses and expenses incurred in connection with the re-employment or reinstatement of such funds.
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ARTICLE III
Section 3.01. Conditions Precedent to Obligations of Initial Series 2008-B1 Holder to Purchase Series 2008-B1 Notes . The obligations of the Initial Series 2008-B1 Holder to purchase the Series 2008-B1 Notes and to make the Series 2008-B1 Loan on the Closing Date is subject to satisfaction of the following conditions precedent:
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ARTICLE IV
Section 4.01. Representations and Warranties of WEST . WEST represents and warrants to, as of the Closing Date, and agrees with, the Initial Series 2008-B1 Holder that:
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Section 4.02. Representations and Warranties of Administrative Agent . The Administrative Agent hereby represents and warrants, as of the Closing Date, to the Initial Series 2008-B1 Holder that:
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The Initial Series 2008-B1 Holder hereby makes the following representations and warranties to WEST and the Administrative Agent as of the Closing Date:
Section 5.01. Execution, Delivery, Binding Obligation . (a) This Agreement has been duly and validly executed and delivered by such Series 2008-B1 Holder and constitutes a legal, valid and binding obligation of such Series 2008-B1 Holder, enforceable against such Series 2008-B1 Holder 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.
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Section 5.02. Securities Act . (a) As of the Closing Date, such Series 2008-B1 Holder is a “qualified institutional buyer” as defined in Rule 144A under the Securities Act (a “ QIB ”), and such Series 2008-B1 Holder acknowledges that WEST is offering the Series 2008-B1 Notes in reliance on an exemption from the registration requirements of the Securities Act and such Series 2008-B1 Holder is acquiring the Series 2008-B1 Notes (i) for its own account or (ii) for one or more accounts, each of which is a QIB and as to each of which it exercises sole investment discretion. Such Series 2008-B1 Holder agrees that it will provide WEST from time to time such information as WEST may reasonably request in order to ascertain the accuracy of such Series 2008-B1 Holder’s representations in Section 5.01 and this clause (a) of Section 5.02.
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Section 6.01. Securities Act . WEST 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 Series 2008-B1 Notes and the Series 2008-A1 Notes in a manner that would require the registration under the Securities Act of the sale to the Initial Series 2008-B1 Holder and the Series 2008-A1 Holders of the Series 2008-B1 Notes and the Series 2008-A1 Notes, respectively.
Section 6.02. Legal Conditions to Closing . The Series 2008-B1 Holders, WEST and the Administrative Agent 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 consummation of the transactions contemplated by this Agreement and will promptly cooperate with and furnish information to one another in connection with any such legal requirements. The Series 2008-B1 Holders, WEST, and the Administrative Agent 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 Agreement.
Section 6.03. Expenses and Fees . Except as otherwise expressly provided herein, all Issuance Expenses incurred in connection with the entering into this Agreement and the transactions contemplated hereby shall be paid by WEST.
Section 6.04. Further Assurances . On and after the date of this Agreement, the Series 2008-B1 Holders (at the expense of WEST), WEST and the Administrative Agent 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 Agreement.
Section 7.01. Indemnification by WEST . WEST agrees to indemnify and hold harmless the Initial Series 2008-B1 Holder 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 reasonable 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 WEST in this Agreement or any other Related Document or in any certificate or other written material delivered pursuant hereto; provided , however , that WEST shall not be so required to indemnify any such Person or otherwise be liable to any such Person hereunder for
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any Losses arising from such Person’s gross negligence, willful misconduct or bad faith. Notwithstanding the foregoing, WEST shall not be liable for any settlement of any proceeding effected without its written consent. All amounts due to an Indemnified Party under this Article VII shall be included in the amounts due to the Series 2008-B1 Notes and the Indenture Trustee shall pay such amounts to such Series 2008-B1 Holder as part of the increased costs on the Series 2008-B1 Notes out of the Available Collections Amount on each Payment Date as provided in Section 3.14 of the Indenture and Section 3.03 of the Series 2008-B1 Supplement.
Section 7.02. Indemnification by Administrative Agent . The Administrative Agent agrees to indemnify and hold harmless an Indemnified Party against all 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 Administrative Agent in this Agreement or any other Related Document or in any certificate or other written material delivered pursuant hereto; provided , however , that the Administrative Agent 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 gross negligence, willful misconduct or bad faith. Notwithstanding the foregoing, the Administrative Agent shall not be liable for any settlement of any proceeding effected without its written consent.
Section 7.03. Procedure . In order for any Indemnified Party to be entitled to any indemnification provided for under this 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 WEST in writing of such Third Party Claim within five Business Days of receipt of a summons, complaint or other written 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 WEST, 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 such Third Party Claim.
Section 7.04. Defense of Claims . If a Third Party Claim is made against an Indemnified Party, (a) WEST or the Administrative Agent, as the case may be, will be entitled to participate in the defense thereof and, (b) if it so chooses, to assume the defense thereof with counsel selected by WEST or the Administrative Agent, as the case may be, provided that in connection with such assumption (i) such counsel is not reasonably objected to by the Indemnified Party and (ii) WEST or the Administrative Agent, as the case may be, first admits in writing its liability to indemnify the Indemnified Party with respect to all elements of such claim in full. Should WEST or the Administrative Agent, as the case may be, so elect to assume the defense of a Third Party Claim, WEST or the Administrative Agent, as the case may be, will not be liable to the Indemnified Party for any legal expenses subsequently incurred by the Indemnified Party in connection with the defense thereof. If WEST or the Administrative Agent, as the case may be, elects to assume the defense of a Third Party Claim, the Indemnified Party will (i) cooperate in all reasonable respects with WEST or the Administrative Agent, as the case may be, in connection with such defense and (ii) not admit any liability with respect to, or settle, compromise or discharge, such Third Party Claim without WEST’s or the Administrative Agent’s, as the case may be, prior written consent. If WEST or the Administrative Agent, as the case may be, shall assume the defense of any Third Party Claim, the Indemnified Party shall be
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entitled to participate in (but not control) such defense with its own counsel at its own expense. If WEST or the Administrative Agent, as the case may be, 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 WEST or the Administrative Agent, as the case may be, of such terms and, WEST or the Administrative Agent, as the case may be, will promptly reimburse the Indemnified Party upon written request.
Section 8.01. Amendments . No amendment or waiver of any provision of this 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 8.02. Notices . All notices and other communications provided for hereunder shall, unless otherwise stated herein, be send by a telecopy 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 Initial Series 2008-B1 Holder, to its address set forth in Schedule 1 hereto.
If to WEST:
Willis Engine
Securitization Trust
c/o Willis Lease Finance Corporation
773 San Marin Drive, Suite 2215
Novato, California 94998
Attention: General Counsel
Facsimile No. (415) 408-4702
If to the Administrative Agent:
Willis Lease Finance Corporation
773 San Marin Drive, Suite 2215
Novato, California 94998
Attention: General Counsel
Facsimile No. (415) 408-4702
If to the Indenture Trustee:
Deutsche Bank Trust Company Americas
60 Wall Street
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MS NYC 60-2606
New York, New York 10005
Attention: Trust & Securities Services - Structured Finance
Services
Facsimile No. (212) 553-2460
Section 8.03. 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 any Applicable Law.
Section 8.04. Binding Effect; Assignability; Continuing Obligation . This Agreement shall be binding upon and inure to the benefit of WEST, the Administrative Agent and the Series 2008-B1 Holders and their respective successors and assigns (including any subsequent Holders of the Series 2008-B1 Notes, subject to their executing and delivering an Assignment and Assumption); provided, however, that WEST 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 Series 2008-B1 Holders. This 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 Series 2008-B1 Notes shall have been paid in full.
Section 8.05. GOVERNING LAW; JURISDICTION . THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAWS BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES. Each of the parties hereto agrees that the United States federal and New York State courts located in The City of New York shall have non-exclusive jurisdiction to hear and determine any suit, action or proceeding, and to settle any disputes, which may arise out of or in connection with this Agreement and, for such purposes, submits to the jurisdiction of such courts. Each of the parties hereto waives any objection which it might now or hereafter have to such courts being nominated as the forum or venue to hear and determine any suit, action or proceeding, and to settle any disputes, which may arise out of or in connection with this Agreement and agrees not to claim that any such court is not a convenient or appropriate forum. Each of the parties hereto consents to the granting of such legal or equitable relief as is deemed appropriate by such courts.
Section 8.06. Execution in Counterparts . This 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 8.07. Survival . All representations, warranties, guaranties and indemnifications contained in this Agreement and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the sale and transfer of the Series 2008-B1 Notes.
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Section 8.08. Appointment of Agent for Service of Process . WEST hereby appoints Corporation Service Company having an address at 1133 Avenue of the Americas, New York, New York 10036 as its agent for service of process in the State of New York.
Section 8.09. Table of Contents; Headings. The Table of Contents preceding the Agreement and headings of the Articles and Sections of this Agreement have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms and provisions hereof.
Section 8.10. WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 8.11. USA PATRIOT Act . Should it be necessary, the Initial Series 2008-B1 Holder hereby notifies WEST that, pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), it is required to obtain, verify and record information that identifies WEST, which information includes the name and address of WEST and other information that will allow such Series 2008-B1 Holder to identify WEST in accordance with said Act.
Section 8.12. Severability . Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
[Signatures follow]
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IN WITNESS WHEREOF, the parties have caused this Series 2008-B1 Note Purchase and Loan Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
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WILLIS ENGINE SECURITIZATION TRUST |
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as issuer of Series 2008-B1 Notes, |
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By: |
/s/ Bradley S. Forsyth |
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Name: |
Bradley S. Forsyth |
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Title: |
Controlling Trustee |
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SERIES 2008-B1 NOTE PURCHASE AGREEMENT
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WILLIS LEASE FINANCE CORPORATION, |
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as Administrative Agent, |
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By: |
/s/ Thomas C. Nord |
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Name: |
Thomas C. Nord |
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Title: |
Senior Vice President |
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SERIES 2008-B1 NOTE PURCHASE AGREEMENT
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CALYON SECURITIES (USA) INC. , |
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as Initial Series 2008-B1 Holder |
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By: |
/s/ Olivier Delay |
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Name: |
Olivier Delay |
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Title: |
Managing Director |
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SERIES 2008-B1 NOTE PURCHASE AGREEMENT
SERIES 2008-B1 NOTE PURCHASE AND LOAN AGREEMENT
SCHEDULE 1
ADDRESS OF INITIAL SERIES 2008-B1 HOLDER
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Name of Initial Series 2008-B1 Holder |
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Address of Initial Series 2008-B1 Holder |
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Calyon Securities (USA) Inc. |
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1301 Avenue of the
Americas
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SERIES 2008-B1 NOTE PURCHASE AGREEMENT
SERIES 2008-B1 NOTE PURCHASE AND LOAN AGREEMENT
SCHEDULE 2
COMMITMENT OF INITIAL SERIES 2008-B1 HOLDER
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Name of Initial Series
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Initial Outstanding
Principal
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Commitment of Initial
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Calyon Securities (USA) Inc. |
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20,282,212 |
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20,282,212 |
SERIES 2008-B1 NOTE PURCHASE AND LOAN AGREEMENT
EXHIBIT A
FORM OF CONTROLLING TRUSTEE CLOSING DATE CERTIFICATE
Date: [ ][ ], 20[ ]
The undersigned, a Controlling Trustee of Willis Engine Securitization Trust, a Delaware statutory trust (“ WEST ”), does hereby certify to the Initial Series 2008-B1 Holder, in satisfaction of one of the conditions for purchase of the Series 2008-B1 Notes and the making of Series 2008-B1 Loan by the Initial Series 2008-B1 Holder under the Series 2008-B1 Note Purchase and Loan Agreement (the “ Agreement ”), dated as of the date hereof, among Willis Lease Finance Corporation, WEST, and the Initial Series 2008-B1 Holder, on the date first set forth above (the “ Closing Date ”), as follows (capitalized terms used herein having the same meanings as in the Agreement):
Executed as of the date first set forth above, by the undersigned, a Controlling Trustee of WEST.
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By: |
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Name: |
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Title: Controlling Trustee |
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SERIES 2008-B1 NOTE PURCHASE AND LOAN AGREEMENT
EXHIBIT B
FORM OF ADMINISTRATIVE AGENT
CLOSING DATE CERTIFICATE
Date: [ ][ ], 20[ ]
The undersigned, an officer of Willis Lease Finance Corporation, as Administrative Agent for Willis Engine Securitization Trust, a Delaware statutory trust (“ WEST ”), does hereby certify to the Initial Series 2008-B1 Holder, in satisfaction of one of the conditions for purchase of the Series 2008-B1 Notes and the making of Series 2008-B1 Loan by the Initial Series 2008-B1 Holder under the Series 2008-B1 Note Purchase and Loan Agreement (the “ Agreement ”), dated as of the date hereof, among Willis Lease Finance Corporation, WEST, and the Initial Series 2008-B1 Holder, on the date first set forth above (the “ Closing Date ”), as follows (capitalized terms used herein having the same meanings as in the Agreement):
Executed as of the date first set forth above, by the undersigned, an officer of the Administrative Agent.
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By: |
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Title: |
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Exhibit 10.18
EXECUTION VERSION
REDACTED COPY
Portions of this Exhibit 10.18 have been omitted pursuant to a confidential treatment request. The omitted material has been filed separately with the Securities and Exchange Commission.
AMENDED AND RESTATED INDENTURE
dated as of December 13, 2007
by and between
WILLIS ENGINE
SECURITIZATION TRUST,
a Delaware statutory trust,
as issuer of the Notes,
and
DEUTSCHE BANK TRUST COMPANY AMERICAS
,
as Indenture Trustee of the Notes
Table of Contents
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ARTICLE I |
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DEFINITIONS |
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Section 1.01 |
Definitions |
1 |
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Section 1.02 |
Rules of Construction |
49 |
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Section 1.03 |
Compliance Certificates and Opinions |
51 |
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Section 1.04 |
Acts of Noteholders |
52 |
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ARTICLE II |
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THE NOTES |
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Section 2.01 |
Authorization of Notes; Amount of Outstanding Principal Balance; Terms; Form; Execution and Delivery |
53 |
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Section 2.02 |
Restrictive Legends |
56 |
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Section 2.03 |
Note Registrar and Paying Agent |
58 |
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Section 2.04 |
Paying Agent to Hold Money in Trust |
59 |
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Section 2.05 |
Method of Payment |
60 |
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Section 2.06 |
Minimum Denomination |
61 |
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Section 2.07 |
Exchange Option |
61 |
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Section 2.08 |
Mutilated, Destroyed, Lost or Stolen Notes |
62 |
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Section 2.09 |
Payments of Transfer Taxes |
63 |
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Section 2.10 |
Additional Notes |
63 |
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Section 2.11 |
Book-Entry Registration |
66 |
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Section 2.12 |
Special Transfer Provisions |
68 |
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Section 2.13 |
Temporary Definitive Notes |
71 |
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Section 2.14 |
Statements to Noteholders |
72 |
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Section 2.15 |
CUSIP, CINS AND ISIN Numbers |
74 |
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Section 2.16 |
Debt Treatment of Notes |
74 |
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ARTICLE III |
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ACCOUNTS; PRIORITY OF PAYMENTS |
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Section 3.01 |
Establishment of Accounts; Investments |
74 |
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Section 3.02 |
Collections Account |
76 |
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Section 3.03 |
Engine Acquisition Account |
77 |
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Section 3.04 |
Senior Restricted Cash Account |
79 |
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Section 3.05 |
Junior Restricted Cash Account |
80 |
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Section 3.06 |
Engine Reserve Account |
81 |
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Section 3.07 |
Security Deposit/Lessee-Funded Account; Lease Sub-Account |
82 |
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Section 3.08 |
Expense Account |
83 |
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Section 3.09 |
Series Accounts |
84 |
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Section 3.10 |
Redemption/Defeasance Account |
84 |
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Section 3.11 |
Engine Replacement Account |
85 |
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Section 3.12 |
Hedge Payment Account |
86 |
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Section 3.13 |
Calculations |
86 |
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Section 3.14 |
Payment Date Distributions from the Collections Account |
90 |
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Section 3.15 |
Allocation Rules |
96 |
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Section 3.16 |
Certain Redemptions |
99 |
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Section 3.17 |
Procedure for Redemptions |
100 |
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Section 3.18 |
Collections Loans; Warehouse Loan |
101 |
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Section 3.19 |
Adjustments in Targeted Principal Balances |
102 |
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Section 3.20 |
Senior Liquidity Facility |
103 |
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ARTICLE IV |
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DEFAULT AND REMEDIES |
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Section 4.01 |
Events of Default |
108 |
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Section 4.02 |
Remedies Upon Event of Default |
110 |
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Section 4.03 |
Limitation on Suits |
112 |
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Section 4.04 |
Waiver of Existing Defaults |
112 |
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Section 4.05 |
Restoration of Rights and Remedies |
113 |
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Section 4.06 |
Remedies Cumulative |
113 |
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Section 4.07 |
Authority of Courts Not Required |
113 |
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Section 4.08 |
Rights of Noteholders to Receive Payment |
114 |
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Section 4.09 |
Indenture Trustee May File Proofs of Claim |
114 |
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Section 4.10 |
Undertaking for Costs |
114 |
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Section 4.11 |
Control by Noteholders |
114 |
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Section 4.12 |
Purchase Rights of the Series B Noteholders |
115 |
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ARTICLE V |
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REPRESENTATIONS, WARRANTIES AND COVENANTS |
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Section 5.01 |
Representations and Warranties |
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Section 5.02 |
General Covenants |
117 |
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Section 5.03 |
Portfolio Covenants |
126 |
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Section 5.04 |
Operating Covenants |
130 |
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ARTICLE VI |
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THE INDENTURE TRUSTEE |
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Section 6.01 |
Acceptance of Trusts and Duties |
134 |
ii
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Section 6.02 |
Absence of Duties |
135 |
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Section 6.03 |
Representations or Warranties |
135 |
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Section 6.04 |
Reliance; Agents; Advice of Counsel |
135 |
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Section 6.05 |
Not Acting in Individual Capacity |
137 |
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Section 6.06 |
No Compensation from Noteholders |
137 |
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Section 6.07 |
Notice of Defaults |
138 |
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Section 6.08 |
Indenture Trustee May Hold Securities |
138 |
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Section 6.09 |
Corporate Trustee Required; Eligibility |
138 |
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Section 6.10 |
Reports by WEST |
138 |
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Section 6.11 |
Compensation |
138 |
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Section 6.12 |
Conditions Precedent |
139 |
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ARTICLE VII |
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SUCCESSOR INDENTURE TRUSTEES |
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Section 7.01 |
Resignation and Removal of Indenture Trustee |
139 |
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Section 7.02 |
Appointment of Successor |
139 |
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ARTICLE VIII |
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INDEMNITY |
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Section 8.01 |
Indemnity |
141 |
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Section 8.02 |
Noteholders’ Indemnity |
141 |
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Section 8.03 |
Survival |
141 |
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ARTICLE IX |
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SUPPLEMENTAL INDENTURES |
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Section 9.01 |
Supplemental Indentures Without the Consent of the Noteholders |
142 |
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Section 9.02 |
Supplemental Indentures with the Consent of Noteholders |
143 |
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Section 9.03 |
Execution of Supplemental Indentures |
144 |
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Section 9.04 |
Effect of Supplemental Indentures |
144 |
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Section 9.05 |
Reference in Notes to Supplemental Indentures |
145 |
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ARTICLE X |
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MODIFICATION AND WAIVER |
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Section 10.01 |
Modification and Waiver with Consent of Holders |
145 |
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Section 10.02 |
Modification Without Consent of Holders |
146 |
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Section 10.03 |
Subordination and Priority of Payments |
146 |
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Section 10.04 |
Execution of Amendments by Indenture Trustee |
146 |
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ARTICLE XI |
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SUBORDINATION |
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Section 11.01 |
Subordination |
147 |
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Section 11.02 |
Rights of Subrogation |
148 |
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Section 11.03 |
Further Assurances of Junior Representatives |
148 |
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Section 11.04 |
Enforcement |
148 |
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Section 11.05 |
Continued Effectiveness |
148 |
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Section 11.06 |
Senior Claims and Junior Claims Unimpaired |
149 |
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ARTICLE XII |
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DISCHARGE OF INDENTURE; DEFEASANCE |
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Section 12.01 |
Discharge of Liability on the Notes; Defeasance |
149 |
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Section 12.02 |
Conditions to Defeasance |
150 |
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Section 12.03 |
Application of Trust Money |
151 |
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Section 12.04 |
Repayment to WEST |
151 |
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Section 12.05 |
Indemnity for Government Obligations and Corporate Obligations |
151 |
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Section 12.06 |
Reinstatement |
152 |
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ARTICLE XIII |
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MISCELLANEOUS |
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Section 13.01 |
Right of Indenture Trustee to Perform |
152 |
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Section 13.02 |
Waiver |
152 |
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Section 13.03 |
Severability |
153 |
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Section 13.04 |
Notices |
153 |
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Section 13.05 |
Assignments |
155 |
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Section 13.06 |
Currency Conversion |
155 |
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Section 13.07 |
Application to Court |
156 |
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Section 13.08 |
Governing Law |
157 |
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Section 13.09 |
Jurisdiction |
157 |
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Section 13.10 |
Counterparts |
157 |
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Section 13.11 |
Table of Contents, Headings, Etc. |
157 |
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Section 13.12 |
Compliance with Anti-Terrorism and Money-Laundering Regulations |
158 |
iv
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Schedule |
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Description |
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Schedule 1 |
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Engine Subsidiaries |
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Schedule 2-1 |
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Engine Trusts on Initial Closing Date |
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Schedule 2-2 |
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Engine Trusts on Effective Date |
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Schedule 3 |
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Leasing Subsidiaries |
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Schedule 4-1 |
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Initial Engines |
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Schedule 4-2 |
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Effective Date Engines |
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Schedule 5 |
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Conditions Precedent to Acquisition of Additional Engines |
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Schedule 6 |
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Conditions Precedent to Funding of Discretionary Engine Modifications |
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Schedule 7 |
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Agent for Service of Process |
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Exhibit |
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Description |
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Exhibit A-1 |
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Form of Series A Term Note |
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Exhibit A-2 |
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Form of Series A Warehouse Note |
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Exhibit B-1 |
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Form of Series B Term Note |
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Exhibit B-2 |
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Form of Series B Warehouse Note |
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Exhibit C-1 |
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Form of Certificate to be Given by Noteholders |
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Exhibit C-2 |
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Form of Certificate to be Given by Euroclear or Clearstream |
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Exhibit C-3 |
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Form of Certificate to Depository Regarding Interest |
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Exhibit C-4 |
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Form of Depositary Certificate Regarding Interest |
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Exhibit C-5 |
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Form of Transfer Certificate for Exchange or Transfer from 144A Book-Entry Note to Regulations S Book-Entry Note |
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Exhibit C-6 |
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Form of Initial Purchaser Exchange Instructions |
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Exhibit C-7 |
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Certificate to be Given by Transferee of Beneficial Interest in a Regulation S Temporary Book-Entry Note |
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Exhibit D |
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Form of Investment Letter to be Delivered in Connection with Transfers to Non-QIB Accredited Investors |
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Exhibit E |
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Concentration Limits |
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Exhibit F |
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PRI Guidelines |
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Exhibit G-1 |
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Form of Monthly Report |
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Exhibit G-2 |
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Form of Annual Report |
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Exhibit H |
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Insurance Provision |
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Exhibit I |
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Core Lease Provisions |
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Exhibit J |
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Required Acquisition Agreement Terms |
v
This AMENDED AND RESTATED INDENTURE, dated as of December 13, 2007 (the “ Amended and Restated Indenture ”), is by and between WILLIS ENGINE SECURITIZATION TRUST, a Delaware statutory trust, as issuer of the Notes ( “WEST” ), and DEUTSCHE BANK TRUST COMPANY AMERICAS, a New York banking corporation, as indenture trustee of each Series of Notes (the “ Indenture Trustee ”), and amends and restates the Indenture, dated as of August 9, 2005 (the “ Original Indenture ”), between WEST and the Indenture Trustee.
WITNESSETH:
WHEREAS, WEST and the Indenture Trustee entered into the Original Indenture, as thereafter supplemented by the Series A1 Supplement, dated as of August 9, 2005 (“ Series 2005-A1 Supplement ”), the Series A2 Supplement, dated as of August 9, 2005 (the “ Series 2005-A2 Supplement ”), the Series B1 Supplement, dated as of August 9, 2005 (the “ Series 2005-B1 Supplement ”), and the Series B2 Supplement, dated as of August 9, 2005 (the “ Series 2005-B2 Supplement ”), pursuant to which WEST issued the Initial Notes;
WHEREAS, WEST has requested that the Indenture Trustee agree to various amendments to the Original Indenture and, on behalf of the Indenture Trustee, WEST has delivered a notice of such request and proposed amendments to the Holders of all of the Notes issued under the Original Indenture, asking whether or not the Indenture Trustee should consent to such amendments;
WHEREAS, the Holders of all the Notes have consented to all of the amendments requested by WEST;
WHEREAS, WEST wishes to amend and restate the Original Indenture in its entirety by the execution and delivery of this Amended and Restated Indenture;
WHEREAS, this Amended and Restated Indenture, together with the Series 2005-A1 Supplement, the Series 2005-A2 Supplement, the Series 2005-B1 Supplement, the Series 2005-B2 Supplement and as hereafter supplemented, modified and amended, shall be referred to as, the “ Indenture ”;
NOW, THEREFORE, in consideration of the premises and mutual agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions .
For purposes of this Indenture, the following terms shall have the meanings indicated below:
“ 144A Book-Entry Note ” means a Note sold in reliance on Rule 144A, represented by a single permanent global note in fully registered form, without coupons, the form of which shall be substantially in the form of the applicable Note Form for such Note, with the legends required by Section 2.02 for a 144A Book-Entry Note inscribed thereon and with such changes therein and such additional information as may be specified in the Supplement pursuant to which such Note is issued.
“ Acceleration Default ” means any Event of Default of the type described in Section 4.01(f) or 4.01(g) hereof.
“ Account ” means each of the Collections Account, the Expense Account, the Engine Replacement Account, the Security Deposit/Lessee-Funded Account, each Series Account, the Senior Restricted Cash Account, the Junior Restricted Cash Account, the Engine Reserve Account, the Engine Acquisition Account, any Lessor Account, any Redemption/Defeasance Account, the Senior Cash Collateral Account, the Hedge Payment Account, the Qualified Escrow Account and any other accounts established and maintained in accordance with this Indenture, together with all sub-accounts and ledger and sub-ledger accounts maintained therein in accordance with this Indenture.
“ Acquisition Agreement ” means any agreement (other than the Asset Transfer Agreement) pursuant to which Additional Engines are acquired by a WEST Group Member in a Permitted Engine Acquisition.
“ Acquisition Balance Redemption ” has the meaning given to such term in Section 3.16(b) hereof.
“ Act ” has the meaning, with respect to any Noteholder, given to such term in Section 1.04(a) hereof.
“ Additional Certificates ” means any Beneficial Interest Certificates issued pursuant to the Trust Agreement, the proceeds of which are used, in substantial part, to acquire Additional Engines or to fund Discretionary Engine Modifications.
“ Additional Engine ” means each aircraft engine acquired by a WEST Group Member (other than an Initial Remaining Engine) subsequent to the Initial Closing Date in accordance with the conditions set forth in Section 5.03(b) of this Indenture.
“ Additional Interest ” means, with respect to a Series of Notes, the amount of interest due and payable in respect of any overdue payments in respect of such Series of Notes, as specified in the related Supplement.
“ Additional Interest Amount ” means, with respect to any Series of Notes, that amount of Additional Interest due and payable on such Series of Notes on a Payment Date, including any Additional Interest due and payable on a prior Payment Date that was not paid on such prior Payment Date.
“ Additional Issuance ” has the meaning given to such term in Section 2.10 hereof.
2
“ Additional Notes ” means the Notes evidencing any Additional Series issued by WEST from time to time subsequent to the Initial Closing Date.
“ Additional Series ” means any Series issued by WEST subsequent to the Initial Closing Date pursuant to a Supplement to this Indenture.
“ Adjusted Base Value ” means, with respect to an Engine or aircraft engine, such Engine’s or aircraft engine’s Base Value, adjusted for the actual maintenance status of such Engine or aircraft engine, but without regard to any Lease, Maintenance Reserve Payments, Security Deposits or other related assets.
“ Adjusted Borrowing Value ” means, for an Engine as of any date of determination, the Initial Borrowing Value of such Engine, as adjusted downward as of each Payment Date after the Delivery Date of such Engine at a rate per annum equal to *** of the Initial Borrowing Value of such Engine, provided that, if any Discretionary Engine Modification is made to an Engine, the cost of such Discretionary Engine Modification (reduced by the amount of such cost funded from the Engine Reserve Excess Balance in the Engine Acquisition Account) shall be added to the Adjusted Borrowing Value of such Engine as of the date of such Discretionary Engine Modification, and such cost as so added shall also be adjusted downward as of each Payment Date thereafter at a rate per annum equal to *** of such cost.
“ Administrative Agency Agreement ” means the Administrative Agency Agreement, dated as of the Initial Closing Date, among the Administrative Agent, the Security Trustee, the Indenture Trustee, WEST and each other WEST Group Member or any replacement administrative agency agreement, including the Back-Up Administrative Agency Agreement, with a replacement Administrative Agent, including the Back-Up Administrative Agent.
“ Administrative Agent ” means Willis, in its capacity as administrative agent under the Administrative Agency Agreement, including its successors in interest and permitted assigns, until another Person shall have become the administrative agent under such agreement, after which “Administrative Agent” means such other Person.
“ Administrative Agent Fee ” means, for any Payment Date, the compensation payable to the Administrative Agent on such Payment Date in accordance with the terms of, and designated in, the Administrative Agency Agreement.
“ Affiliate ” means, with respect to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with, such Person or is a director or officer of such Person; “control” of a Person means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting Stock, by contract or otherwise.
“ Aggregate Adjusted Borrowing Value ” means, as of any date of determination, an amount equal to the sum of (i) the Adjusted Borrowing Values (measured as of the last day of the month immediately preceding such date of determination) of all Engines then owned by any WEST Group Member, and (ii), during the Replacement Period in respect of each Engine that was the subject of an Engine Disposition in respect of which the Controlling Trustees have elected to reinvest all or a portion of the Modified Net Sale Proceeds in a Replacement Exchange,
*** Confidential information omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.
3
the amount of the Modified Net Sale Proceeds to be so reinvested, provided , however , that, for purposes of calculating Maximum Borrowing Base, Senior Borrowing Base, Junior Borrowing Base and Appraisal Deficiency Amount, (x) the Adjusted Borrowing Values of the Engines described in clause (i) shall be reduced by the aggregate amount of the Reserve Engine Adjusted Borrowing Values as of the date of determination, and (y) if all or a portion of the Adjusted Base Value of the Engine that was the subject of an Engine Disposition described in clause (ii) consists of a Reserve Engine Adjusted Borrowing Value, only the Modified Net Sale Proceeds in excess of such Reserve Engine Adjusted Borrowing Value of such Engine as of the date of such Engine Disposition shall be taken into account for purposes of clause (ii).
“ Aggregate Note Principal Balance ” means, as of any date of determination, an amount equal to the sum of the then Outstanding Principal Balance of all Series of Notes then Outstanding.
“ Aggregate Unused Commitments ” means, as of any date of determination, an amount equal to the sum of the then Unused Commitments of all Series of Warehouse Notes then outstanding.
“ Agreed Currency ” has the meaning given to such term in Section 13.06(a) hereof.
“ aircraft engine ” means a basic power jet propulsion engine assembly for an aircraft that is Stage 3 or later compliant (without reliance on a noise reduction or “hush” kit), including its essential accessories as supplied by the manufacturer of such aircraft engine, but excluding the nacelle, and including any QEC Kit and any and all modules and Parts incorporated in, installed on or attached to each such engine from time to time and any substitutions therefor.
“Airworthiness Directive” means any mandatory maintenance directive issued by any Aviation Authority having jurisdiction over any Engine or by the FAA or the EASA.
“ Allocable Minimum Principal Payment Amount ” means, for any Optional Redemption or Acquisition Balance Redemption for any Series of Notes, an amount equal to the product of the Minimum Principal Payment Amount for such Series of Notes on the Redemption Date and the applicable Redemption Fraction.
“ Allocable Scheduled Principal Payment Amount ” means, for any Optional Redemption or Acquisition Balance Redemption for any Series of Notes, an amount equal to the product of the Scheduled Principal Payment Amount for such Series of Notes on the Redemption Date and the applicable Redemption Fraction.
“ Allocated Amount ” means (a) for an Initial Engine (other than the Third Remaining Engine), an amount equal to the product of (i) the sum of (x) the Net Proceeds from the sale of all of the Term Notes on the Initial Closing Date and (y) the Loans made by the Holders of the Warehouse Notes on the Initial Closing Date, and (ii) a fraction, the numerator of which is the Initial Borrowing Value of such Initial Engine and the denominator of which is the sum of the Initial Borrowing Values of all Initial Engines (other than the Third Remaining Engine) and (b) for an Additional Engine, the amount stated in the related Supplement for the Series of Notes, the proceeds of which are used to finance the acquisition of such Additional Engine.
4
“ Allowed Restructuring ” has the meaning given to such term in Section 5.02(f)(i) hereof.
“ Amended and Restated Indenture ” has the meaning set forth in the preamble hereof.
“ Annual Appraised Value ” means, with respect to any Engine, the mathematical average of three Appraised Values of such Engine made in accordance with Section 5.03(f) hereof.
“ Annual Budget ” means an operating budget and an Engine expenses budget that has been adopted by WEST for the period beginning on the Initial Closing Date and ending December 31, 2005 and for each calendar year thereafter through December 31, 2007, and that will be adopted for each succeeding calendar year.
“ Annual Report ” has the meaning given to such term in Section 2.14(a) hereof.
“ Applicable Date ” means, (a) in respect of each annual Maintenance Reserve Evaluation, January 1 of the year in which it is delivered, and (b) in respect of any Maintenance Reserve Evaluation delivered in connection with the issuance of an Additional Series of Notes, the date specified in the related Supplement.
“ Applicable Law ” means all applicable laws, rules, statutes, ordinances, regulations and orders of Governmental Authorities, including, without limitation, the applicable laws, rules, regulations and orders of each Aviation Authority.
“ Applicable Percentage ” means, as of the Determination Date next preceding any Redemption Date in respect of an Additional Series of Fixed Rate Notes, a fraction the numerator of which is the excess, if any, of (i) the portion of the Outstanding Principal Balance of the Notes of such Additional Series being redeemed over (ii) the excess, if any, of (A) the Outstanding Principal Balance of such Notes as of such Determination Date (after giving effect to any reductions therein that would have been made on such Payment Date in the absence of any such Redemption) over (B) the Assumed Principal Balance of such Notes as of such Determination Date, and the denominator of which is the Assumed Principal Balance of such Notes as of such Determination Date.
“Applied Provider Advance” means the portion of any Provider Advance Balance in the Senior Cash Collateral Account withdrawn as a Shortfall Drawing.
“ Appraisal ” means a desktop appraisal of an Engine or an aircraft engine, i.e., an appraisal without a physical inspection of an Engine or an aircraft engine, performed by an Appraiser to determine the Appraised Value of such Engine or aircraft engine.
“ Appraisal Date ” has the meaning given to such term in Section 5.03(f) hereof.
“ Appraisal Deficiency Amount ” means, as of any date of determination, the amount, if any, by which the Aggregate Adjusted Borrowing Value exceeds the sum of (x) the most recent Annual Appraised Values of all Engines and (y) the Balance in the Engine Reserve Account on such date.
5
“ Appraised Value ” means, with respect to an Engine, the Adjusted Base Value of such Engine as determined in an Appraisal.
“ Appraiser ” means an independent appraiser that is a member of the International Society of Transport Aircraft Trading (“ ISTAT ”) or, if ISTAT ceases to exist, any similar professional aircraft appraiser organization in which at least one of the Initial Appraisers is a member that is approved by a Special Majority of the Controlling Trustees.
“ Approved Manufacturer ” means each of CFM International, General Electric Corporation, Pratt & Whitney, Rolls Royce, International Aero Engines and each other Person that is approved by a Special Majority of the Controlling Trustees.
“ Asset Transfer Agreement ” means the Asset Transfer Agreement, dated as of the Initial Closing Date, among WEST, Willis and WEST Funding.
“Assumed Principal Balance” means, as of the Determination Date immediately preceding any Redemption Date in respect of the Redemption of an Additional Series of Fixed Rate Notes, the sum of the Assumed Principal Payments for such Series.
“ Assumed Principal Payments ” means, as of the Determination Date immediately preceding any Redemption Date in respect of the Redemption of an Additional Series of Fixed Rate Notes, each of the principal payment amounts for such Additional Series of Fixed Rate Notes for each date specified in a schedule in the Supplement relating to such Additional Series of Fixed Rate Notes falling after such Redemption Date and ending on the final Payment Date for such Additional Series of Fixed Rate Notes or any other specified date.
“ Authorized Agent ” means, with respect to the Notes of any Series, any authorized Paying Agent or Note Registrar for the Notes of such Series.
“ Available Collections Amount ” means, for any Payment Date, the amount of Collections in the Collections Account on the immediately preceding Determination Date, plus or minus, as applicable, the aggregate amount of all transfers to be made to or from the Collections Account during the period beginning on such Determination Date and ending on such Payment Date, including Investment Earnings for the Collection Period ending on such Determination Date, the amount of any Collections Loan being made on such Payment Date and any transfers from the Security Deposit/Lessee-Funded Account and the Engine Reserve Account but excluding any Shortfall Advances and any Shortfall Drawings from the Senior Cash Collateral Account and any withdrawals from the Senior Restricted Cash Account or the Junior Restricted Cash Account.
“ Available Sale Proceeds ” means the following portions of Modified Net Sale Proceeds from an Engine Disposition:
(a) If WEST does not elect to reinvest any of the Modified Net Sale Proceeds from an Engine Disposition in a Replacement Exchange, the Available Sale Proceeds will be equal to the Modified Net Sale Proceeds in excess of the Reserve Proceeds from such Engine Disposition, and such Available Sale Proceeds will be included in the Available Collections Amount on the next Payment Date after the Engine Disposition.
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(b) If WEST elects to reinvest all of the Modified Net Sale Proceeds from an Engine Disposition in a Replacement Exchange but in fact reinvests less than all of such Modified Net Sale Proceeds within the Replacement Period, the Available Sale Proceeds will be equal to the amount of the Modified Net Sale Proceeds from such Engine Disposition, if any, which is in excess of the Reserve Proceeds from such Engine Disposition and which is transferred to the Collections Account at the end of the applicable Replacement Period, and such Available Sale Proceeds will be included in the Available Collections Amount on the first Payment Date succeeding the end of the Replacement Period.
(c) If WEST elects to reinvest less than all of the Modified Net Sale Proceeds from an Engine Disposition, the portion of the Modified Net Sale Proceeds, if any, which is in excess of the Reserve Proceeds from such Engine Disposition and which is not to be reinvested, will be treated as Available Sale Proceeds and will be included in the Available Collections Amount on the next succeeding Payment Date; if the portion of the Modified Net Sale Proceeds from such Engine Disposition that WEST elects to reinvest is not fully reinvested, then the excess, if any, of the amount that is not reinvested over the Reserve Proceeds from such Engine Disposition will be treated as Available Sale Proceeds and will be included in the Available Collections Amount on the first Payment Date succeeding the end of the Replacement Period.
“ Average Life Date ” means, with respect to any Additional Series of Fixed Rate Notes as of any Payment Date, the last day of a period equal to the Remaining Weighted Average Life of such Additional Series (as determined for such Payment Date) that begins on such Payment Date.
“ Aviation Authority ” means the FAA, the EASA and/or any other governmental authority which, from time to time, has control or supervision of civil aviation or has jurisdiction over the airworthiness, operation and/or maintenance of an Engine.
“ Back-Up Administrative Agency Agreement ” means the Back-Up Administrative Agency Agreement dated as of the Initial Closing Date among the Back-Up Administrative Agent, the Security Trustee, WEST and each other WEST Group Member or any replacement back-up administrative agency agreement with a replacement Back-Up Administrative Agent.
“ Back-Up Administrative Agent ” means UT Finance, in its capacity as Back-Up Administrative Agent under the Back-Up Administrative Agency Agreement, including its successors in interest and permitted assigns, until another Person shall have become the Back-Up Administrative Agent under such agreement, after which “Back-Up Administrative Agent” means such other Person.
“ Back-Up Administrative Agent Fee ” means the compensation (if any) payable to the Back-Up Administrative Agent on such Payment Date in accordance with the terms of the Back-Up Administrative Agency Agreement and designated as such therein.
“ Back-Up Servicer ” means UT Finance, in its capacity as Back-Up Servicer under the Back-Up Servicing Agreement, including its successors in interest, until another Person shall
7
have become the Back-Up Servicer under that agreement, after which “Back-Up Servicer” means such successor Person.
“ Back-Up Servicer Fee ” means, for any Payment Date, the compensation (if any) payable to the Back-Up Servicer on such Payment Date in accordance with the terms of the Back-Up Servicing Agreement and designated as such therein.
“ Back-Up Servicing Agreement ” means that certain back-up servicing agreement, dated as of the Initial Closing Date, among the Back-Up Servicer, the Security Trustee, WEST and each WEST Group Member or any replacement back-up servicing agreement with a replacement Back-Up Administrative Agent.
“ Balance ” means, with respect to any Account as of any date, the sum of the cash deposits in such account and the value of any Permitted Investments held in such Account as of such date, as determined in accordance with Section 1.02(m) hereof.
“ Base Interest ” has, with respect to a specific Series of Series B Notes, the meaning given to such term in the related Supplement.
“ Base Interest Amount ” means, with respect to any Series of Series B Notes, that amount of Base Interest due and payable on such Series B Notes on a Payment Date, including any Base Interest due and payable on such Series B Notes on a prior Payment Date that was not paid on such prior Payment Date .
“ Base Interest Shortfall” has the meaning given to such term in Section 3.13(d)(ii) hereof.
“ Base Value ” means, with respect to an Engine or an aircraft engine, an Appraiser’s opinion of the underlying economic value of the Engine or aircraft engine, in an open, unrestricted, stable market environment with a reasonable balance of supply and demand, and with full consideration of the Engine’s or aircraft engine’s “highest and best use,” the engine model’s historical trend of values and such Appraiser’s projection of value trends, presuming an arm’s-length, cash transaction between willing, able and knowledgeable parties, acting prudently, with an absence of duress and with a reasonable period of time available for marketing,
“ Beneficial Interest ” means, with respect to WEST, a beneficial interest in WEST consisting of a specified percentage interest in the residual value of WEST, the right to the allocations and distributions in respect of such beneficial interest and all other rights of a holder of a beneficial interest in WEST as a statutory trust.
“ Beneficial Interest Certificate ” has the meaning set forth in the Trust Agreement.
“ Benefit Plan ” of any Person, means, at any time, any employee benefit plan (including a multiemployer plan as defined in Section 4001(a)(3) of ERISA), the funding requirements of which (under Section 302 of ERISA or Section 412 of the Code) are, or at any time within six years immediately preceding the time in question were, in whole or in part, the responsibility of such Person.
8
“ Book-Entry Notes ” means the Regulation S Book-Entry Notes and the 144A Book-Entry Notes.
“ Borrowing Base Adjustment Amount ” means, as of any date of determination, an amount equal to the sum of (a) the applicable Appraisal Deficiency Amount as of such date, and (b) the sum of all applicable Sale Proceeds Surplus Amounts as of such date.
“ Business Day ” means any day except a Saturday, Sunday or other day on which commercial banks in New York, New York and San Francisco, California are authorized by law to close, and, for purposes of calculating LIBOR, London, England.
“ Buyer ” has the meaning set forth in Schedule 5 hereto.
“ Calyon ” means Calyon New York Branch, a société anonyme organized and existing under the laws of the Republic of France, acting through its New York branch.
“Cape Town Convention” means the Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment, signed in Cape Town, South Africa on December 16, 2001, together with all regulations and procedures issued in connection therewith, and all other rules, amendments, supplements, modifications, and revisions thereto, all as in effect under the laws of the United States of America, as a contracting state.
“ Cede ” means, Cede & Co., as nominee for DTC.
“ CFM56-7B Engine ” means a model CFM56-7B aircraft engine manufactured by CFM International.
“ Class ” means, if specified by a Supplement with respect to a Series, a class of Notes of such Series having the same rights to payment as all other Notes of such class, as specified by such Supplement.
“ Clearing Agency Participant ” means a Person who has an account with Clearstream.
“ Clearstream ” means Clearstream Banking, a French société anonyme.
“ Closing Date ” means in the case of (i) the Initial Notes, the Initial Closing Date, (ii) any Additional Notes, the relevant Series Issuance Date of such Notes.
“ Code ” means the Internal Revenue Code of 1986, as amended.
“ Collateral ” means the Trust Collateral and the Mortgage Collateral, collectively.
“ Collateral Liquidation Notice ” means a written notice from the Control Parties for the Senior Series representing a majority of the Outstanding Principal Balance of the Senior Series, directing the Indenture Trustee to liquidate the Collateral in accordance with Section 4.02(b) and the Security Trust Agreement.
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“ Collection Period ” means, unless otherwise specified in the Supplement for any Series of Notes, with respect to each Payment Date other than the first Payment Date in respect of a Series, the period commencing on the first day of the calendar month immediately preceding the month in which such Payment Date occurs and ending on the last day of such calendar month and, in the case of the first Payment Date in respect of a Series (other than the Initial Notes), the period commencing on the Series Issuance Date, for any Additional Series, and ending on the last day of the first full calendar month following such Series Issuance Date. There was no Collection Period for the first Payment Date in respect of the Initial Notes, and the payments of principal and interest made on such first Payment Date were funded in part out of the proceeds of the Initial Notes and deposited in the Collections Account.
“ Collections ” means, with respect to a Collection Period, all amounts (without duplication) received by the WEST Group, including, but not limited to, (i) Lease Payments, (ii) amounts withdrawn under any Security Deposit or other assurance in respect of a Lessee’s obligations under a Lease, (iii) amounts received in respect of claims for damages or in respect of any breach of contract for nonpayment of any of the foregoing, (iv) the Net Sale Proceeds of any Engine Disposition or amounts received under any Engine Disposition Agreement (except for any portion of such Net Sale Proceeds that WEST shall direct to be deposited into either the Engine Replacement Account or a Qualified Escrow Account), (v) Modified Net Sale Proceeds deposited in the Engine Replacement Account or a Qualified Escrow Account, not applied to the purchase or funding of an Additional Engine or Qualified Engine Modification and transferred from the Engine Replacement Account (or received from a Qualified Intermediary) due to a failure to acquire or fund Additional Engines or Qualified Engine Modifications within the relevant Replacement Period , (vi) net payments to WEST under any Hedging Agreement maintained in accordance with the terms of this Indenture, (vii) investment income, if any, on all amounts on deposit in the Accounts (except to the extent that any Lease requires such investment income to be maintained as Segregated Funds), (viii) any proceeds or other payments received under the Related Documents, including amounts transferred to the Collections Account from the Engine Acquisition Account, (ix) any proceeds of any Collections Loan made pursuant to Section 3.18 hereof, (x) the portion of the Net Proceeds of the Series 2005-A1 Term Notes and Series 2005-B1 Term Notes deposited in the Collections Account on the Initial Closing Date, and (xi) any other amounts received by WEST or any other WEST Group Member (including any amounts received from any other Subsidiary of WEST, whether by way of distribution, dividend, repayment of a loan or otherwise), but not including (w) any funds to be applied in connection with a Redemption, (x) any Shortfall Advances or Shortfall Drawings, (y) any amounts received as equity contributions permitted by Section 5.02(i) and (z) other amounts required to be paid over to any third party pursuant to any Related Document.
“ Collections Account ” has the meaning given to such term in Section 3.01(a) hereof.
“ Collections Loan ” means a Loan, the proceeds of which are to be deposited in the Collections Account pursuant to Section 3.18 hereof and used to increase the Available Collections Amount on the applicable Payment Date, subject to the terms of such Section 3.18.
“ Commitment Fee ” has, with respect to any Series of Warehouse Notes, the meaning set forth in the related Supplement.
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“ Commitment Fee Amount ” means, with respect to a specific Series of Warehouse Notes on a Payment Date, the amount of the Commitment Fee due and payable in respect of such Series of Warehouse Notes on such Payment Date, including any Commitment Fees due and payable on a prior Payment Date that were not paid on such prior Payment Date .
“ Concentration Limits ” means the limits set forth in Exhibit E hereto, as such limits may be adjusted from time to time as provided in Section 5.03(e).
“ Concentration Variance Limits ” has the meaning given to such term in Section 5.03(e) hereof.
“ Concentration Violation ” means a breach of the covenant set forth in Section 5.03(e) hereof (with or without regard to the Concentration Variance Limits as specified in this Indenture) if effect were given to any sale, transfer, lease or other disposition or any purchase or other acquisition pursuant to an Engine Disposition Agreement regardless of whether such sale, transfer, lease or other disposition or purchase or other acquisition is scheduled or expected to occur after the date on which such Engine Disposition Agreement becomes binding on WEST or a WEST Group Member.
“ Consent Fee ” means any fee paid to the Holders of a Series of Notes in connection with their review and/or approval of proposed amendments of the Indenture or any other matter requiring their consent, whether by a Required Majority or by all Holders, as such fee may be approved in accordance with Section 5.02(d).
“ Contract of Sale ” has the meaning given to such term in the Cape Town Convention.
“ Control Party ” means (a), in respect of any Series of Term Notes and any Series of Warehouse Notes after the occurrence of a Conversion Event with respect to such Series of Warehouse Notes, unless otherwise provided in the Supplement related to such Series, Holders of Notes of such Series representing more than fifty percent (50%) of the then aggregate Outstanding Principal Balance of all Outstanding Notes of such Series, and (b), in the case of any Series of Warehouse Notes prior to the occurrence of a Conversion Event with respect to such Series, unless otherwise provided in the Supplement related to such Series, Holders of Notes of such Series representing more than fifty percent (50%) of the aggregate Maximum Commitments of the holders of such Warehouse Notes; provided , however , that, for the Senior Liquidity Facility (including any Replacement Liquidity Facility), at any time from and including the date that is no earlier than 30 months from the date on which a Collateral Liquidation Notice has been delivered, the Senior Liquidity Provider shall have the right to elect, by at least fifteen (15) Business Days’ prior written notice to the Indenture Trustee, to become the Control Party for the Series A Notes thereafter, but only for so long as any Liquidity Obligations due to the Senior Liquidity Provider remain unpaid.
“ Controlling Trustee ” means each of the four (4) trustees of WEST designated as such in accordance with the terms of the Trust Agreement.
“ Conversion Date ” means, with respect to any Series of Warehouse Notes, the date specified as such in the related Supplement.
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“ Conversion Event ” means, with respect to a Series of Warehouse Note, the earliest to occur of (a) the Conversion Date for such Series of Warehouse Notes, (b) an Early Amortization Event, (c) an Event of Default, (d) a Servicer Termination Event and (e) any other event or condition specified in the related Supplement for such Series of Warehouse Notes.
“ Conversion Step-Up Interest ” has, with respect to a specific Series of Notes, the meaning given to such term in the related Supplement.
“ Conversion Step-Up Interest Amount ” means, with respect to any Series of Notes, that amount of Conversion Step-Up Interest due and payable on such Series of Note on a Payment Date, including any Conversion Step-Up Interest due and payable on a prior Payment Date that was not paid on such prior Payment Date .
“ Core Lease Provisions ” means the requirements for Leases set forth in Exhibit I.
“ Corporate Obligations ” has the meaning given to such term in Section 12.02(a) hereof.
“ Corporate Trust Office ” means, with respect to the Indenture Trustee, the office of such trustee in the city at which at any particular time its corporate trust business shall be principally administered and, with respect to the Indenture Trustee on the date hereof, shall be 60 Wall Street, MS NYC 60-2606, New York, NY 10005, Attention: Trust & Security Services - Structured Finance Services, or at any other time at such other address as the Indenture Trustee may designate from time to time by notice to the Holders and WEST.
“ Currency Hedge Agreements ” means an ISDA currency swap, options, and any other similar hedging arrangements (including, without limitation, the current or forward purchase and sale of non-Dollar currency) between WEST or any other WEST Group Member and the Eligible Hedge Counterparty named therein, including any schedules and confirmations prepared and delivered in connection therewith, in form and substance meeting the Rating Agency Hedging Requirements, pursuant to which (i) WEST will receive payments from, or make payments to, the Eligible Hedge Counterparty as provided therein and (ii) recourse by the Eligible Hedge Counterparty to WEST is limited to distributions in accordance with the priority of payments set forth in Section 3.14 hereof.
“ Custodial Agreement ” means the Custodial Agreement dated as of the Initial Closing Date among the Custodial Agent, the Security Trustee and WEST or any replacement custodial agreement with a replacement Custodial Agent.
“ Default ” means a condition, event or act which, with the giving of notice or the lapse of time or both, would constitute an Event of Default.
“ Default Notice ” has the meaning given to such term in Section 4.02(a) hereof.
“ Definitive Note ” means a note issued in definitive form pursuant to the terms and conditions of this Indenture and the related Supplement, the form of which shall be substantially in the form of the applicable Note Form for such Note, with the legends required by Section 2.02 for a Definitive Note inscribed thereon and with such changes therein and such additional information as may be specified in the Supplement pursuant to which such Note is issued.
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“ Delivery Date ” means, in the case of any Engine, the date on which title to such Engine or the Engine Interest in respect of such Engine is transferred to WEST or an Engine Subsidiary, provided that the Delivery Date for the Engines owned by WEST Funding on the Initial Closing Date is the Initial Closing Date.
“ Delivery Period ” means (i) with respect to the Initial Engines, the period commencing on the Initial Closing Date and continuing until the earlier to occur of (x) the date on which an Early Amortization Event or an Event of Default occurs and (y) October 9, 2005, (ii) with respect to any Additional Engines being acquired with the proceeds of Additional Notes that are Term Notes, the period beginning on the Closing Date for such Series of Term Notes, the proceeds of which are being used to finance such Additional Engines, and ending on the date specified in the related Supplement or, if earlier, the date on which an Early Amortization Event or an Event of Default occurs, and (iii) with respect to any Additional Engine being acquired with the proceeds of Warehouse Notes, the period beginning on the Funding Date on which WEST receives the proceeds of such Warehouse Notes to be used to acquire such Additional Engine and ending such number of days after such Funding Date as may be specified in the related Supplement for such Warehouse Notes or, if earlier, the date on which an Early Amortization Event or an Event of Default occurs.
“ Determination Date ” means the last day of the calendar month immediately preceding each Payment Date.
“ Direct Participants ” means securities brokers and dealers, banks, trust companies and clearing corporations, and may include certain other organizations which access the DTC system directly.
“ Direction ” has the meaning given to such term in Section 1.04(c) hereof.
“ Discretionary Engine Modification ” means a modification or improvement of an Engine, the cost of which is capitalized in accordance with U.S. GAAP that is not a Mandatory Engine Modification. A Discretionary Engine Modification shall include, without limitation, any Qualified Engine Modification, the cost of which is capitalized in accordance with U.S. GAAP.
“ Disposition Fee ” means, for any Engine Disposition (other than an Engine Disposition resulting from a Total Loss), an amount equal to the product of (i) three percent (3%) and (ii) the Net Sale Proceeds in respect of such Engine Disposition (such Net Sale Proceeds to be calculated without deducting the amount of the Disposition Fee).
“Dollars” or “$” means the lawful currency of the United States of America.
“Downgrade Advance” has the meaning given to such term in Section 3.20(c).
“ Downgrade Event ” has the meaning given to such term in the Senior Liquidity Facility.
“Downgraded Facility” has the meaning given to such term in Section 3.20(b).
“ DTC ” means The Depository Trust Company, a limited purpose trust company organized under the New York Banking Law, its nominees and their successors.
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“ DTC Participants ” means Euroclear, Clearstream or other Persons who have accounts with DTC.
“ Early Amortization Event ” means, as of any Payment Date, the existence of any one or more of the following events or conditions, unless the occurrence of such event or condition is waived by a Requisite Majority:
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“ EASA ” means the European Aviation Safety Agency.
“ EBIT ” means, for any fiscal period, WEST’s earnings (loss) before Interest Expense and taxes, including gains and losses from the sale of assets and foreign exchange transactions, in all cases determined in accordance with U.S. GAAP.
“ EBIT Ratio ” means, for WEST as of any Payment Date, the ratio of (a) EBIT to (b) Interest Expense, in each case for the most recently concluded four (4) calendar quarters; provided, however, that for the first three (3) calendar quarters of WEST following the Initial Closing Date, EBIT and Interest Expense through the end of any such quarter under consideration will, for purposes of this calculation, be calculated on an annualized basis by multiplying actual EBIT or Interest Expense for the calendar quarters which have been completed since the Closing Date 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 ” means the date of this Amended and Restated Indenture.
“ Effective Date Engines ” means the Initial Engines and all other Engines that have been acquired by WEST up to and including the Effective Date, as all such Engines are identified on Schedule 4-2 hereto.
“ Eligibility Requirements ” has the meaning given to such term in Section 2.03(b) hereof.
“ Eligible Account ” means a “deposit account” (within the meaning of Section 9-102(a)(29) of the UCC) or Securities Account (as defined in the Security Trust Agreement) maintained with an Eligible Institution in the name of WEST or another WEST Group Member in accordance with the Related Documents and pledged to the Security Trustee pursuant to the Security Trust Agreement.
“ Eligible Hedge Counterparty ” means either of the following: (a) at the time of execution and delivery of the related Interest Rate Hedge Agreement, any bank or other financial institution (or any party providing credit support on such Person’s behalf) that has (x) a long-term unsecured debt rating of at least “A” from Fitch and “A2” from Moody’s or (y) a short-term unsecured debt rating of at least “F-1” from Fitch and “P-1” from Moody’s or is otherwise approved by a Rating Agency Confirmation or (b), at the time of any transfer of an Interest Rate Hedge Agreement, any bank or other financial institution (or any party providing credit support on such Person’s behalf) that satisfies the criteria in clause (a).
“ Eligible Institution ” means (a) any depository institution or trust company, with a capital and surplus of not less than $250,000,000, whose long-term unsecured debt rating from each Rating Agency is not less than A (or the equivalent) and whose deposits are insured by the Federal Deposit Insurance Corporation or (b) a federally or state chartered depository institution,
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with a capital and surplus of not less than $250,000,000, subject to regulations regarding fiduciary funds on deposit substantially similar to 12 C.F.R. § 9.10(b), including, without limitation, a California chartered depository institution meeting such capital and surplus requirements, subject to regulation under California Financial Code section 1562, that in each case has a long-term unsecured debt rating from each Rating Agency of not less than A (or the equivalent) or a short-term unsecured debt rating of P-1 by Moody’s and, if rated by Fitch, at least F1 by Fitch, and including the Senior Liquidity Provider so long as the Senior Liquidity Provider shall otherwise so qualify and shall have waived all rights of set-off and counterclaim with respect to the account to be maintained as an Eligible Account.
“ Encumbrance ” means any mortgage, pledge, lien, encumbrance, charge or security interest, including, without limitation, any conditional sale, any sale without recourse against the sellers, or any agreement to give any security interest over or with respect to any WEST Group Member’s assets (excluding Lessee Funds that are Segregated Funds), including, without limitation, all Stock and any Indebtedness of any Subsidiary held by WEST or any other WEST Group Member.
“ Engine ” means an aircraft engine owned by any WEST Group Member that is subject to the Lien of the Security Trustee under an Engine Mortgage.
“ Engine Acquisition Account ” has the meaning given to such term in Section 3.01(a) hereof.
“ Engine Cycle ” means the operation of an Engine on an aircraft during a single flight from take-off to landing.
“ Engine Disposition ” means any sale, transfer or other disposition of any Engine (or an interest therein), including by reason of such Engine suffering a Total Loss.
“ Engine Disposition Agreement ” means any lease, sublease, conditional sale agreement, finance lease, hire purchase agreement or other agreement (other than an agreement relating to maintenance, modification or repairs) or any purchase option granted to a Person other than WEST or any other WEST Group Member to purchase an Engine pursuant to a purchase option agreement, in each case pursuant to which any Person acquires or is entitled to acquire legal title to, or the economic benefits of ownership of, such Engine.
“ Engine Interest ” means the ownership interest in an Engine Trust that owns an Engine. The acquisition or disposition of all of the Engine Interest with respect to an Engine Trust that holds an Engine constitutes, respectively, the acquisition or disposition of that Engine.
“ Engine Mortgage ” means each mortgage executed and delivered by WEST or a WEST Subsidiary substantially in the form attached to the Security Trust Agreement, pursuant to which WEST or such WEST Subsidiary shall grant a security interest to the Security Trustee in each Engine owned by it and related assets and in all Leases of such Engine.
“ Engine Replacement Account ” has the meaning given to such term in Section 3.01(a) hereof.
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“ Engine Reserve Account ” has the meaning given to such term in Section 3.01(a) hereof.
“ Engine Reserve Deposit ” has the meaning given to such term in Section 5.04(d) hereof.
“ Engine Reserve Excess Amount ” means, as of the Effective Date, the excess of the Balance in the Engine Reserve Account as of the Effective Date over the initial Engine Reserve Minimum Balance and, as of any Payment Date after the Effective Date, the excess of the Balance in the Engine Reserve Account as of the related Determination Date over the sum of (a) the Engine Reserve Minimum Balance as of such Determination Date and (b) the MRE Reserve Increment, if any, applicable as of such Determination Date, provided , that, if an Engine Reserve Deposit is greater than zero on any Payment Date, the Engine Reserve Excess Amount shall be deemed to be zero on such Payment Date.
“ Engine Reserve Excess Balance ” means the portion of the Balance in the Engine Acquisition Account equal to the sum of the Engine Reserve Excess Amounts deposited in the Engine Acquisition Account minus the amounts withdrawn from the Engine Acquisition Account that are designated as withdrawals of such Engine Reserve Excess Amounts in accordance with Section 3.03.
“ Engine Reserve Minimum Balance ” means (a) as of the Effective Date, the greater of the Engine Reserve Required Amount and the Half-Life Restoration Amount, each as determined in the Maintenance Reserve Appraisal, and (b) as of any Determination Date after the delivery of the Maintenance Reserve Evaluation during the first quarter of 2008, the amount specified as such in such Maintenance Reserve Evaluation or any subsequent Maintenance Reserve Evaluation that in each case is effective as of such Determination Date as provided in Section 5.04(d)(ii).
“ Engine Reserve Required Amount ” means, in respect of the Maintenance Reserve Appraisal and any Maintenance Reserve Evaluation, an amount equal to the product of (a) ten percent (10%) and (b) the sum of (i) the Engine Shop Visit Cost and (ii) the Life Limited Parts Cost, each as determined in the Maintenance Reserve Appraisal or such Maintenance Reserve Evaluation.
“ Engine Shop Visit Cost ” means the total cost of engine shop visits for all of the Engines in the Portfolio as of the Applicable Date in the Maintenance Reserve Evaluation setting forth such cost.
“ Engine Subsidiaries ” means, as of the Initial Closing Date, those Persons or other entities set forth on Schedule 1 to this Indenture as Engine Subsidiaries and their successors, together with any other WEST Subsidiary (other than any Engine Trust) holding title to Engines or holding Engine Interests.
“ Engine Thrust Upgrade ” means the modification of an Engine in accordance with the requirements of the manufacturer and the applicable Aviation Authority to increase its thrust rating.
“ Engine Trust Agreement ” means, as of the Initial Closing Date, each owner trust agreement with an Engine Trustee in effect on the Initial Closing Date, as set forth on Schedule
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2-1 hereto, together with any other trust agreement with an Engine Trustee under which an owner trust or statutory trust estate is created with respect to an Engine and an Engine Subsidiary holds the Engine Interest, whether or not such Engine Subsidiary was the original grantor of such owner trust estate or holder of such Engine Interest.
“ Engine Trustee ” means, as of the Initial Closing Date, Wells Fargo Bank Northwest, National Association, and its successors as owner trustee or statutory trustee under the Engine Trust Agreements set forth on Schedule 2-1 hereto, together with each other financial institution that acts as an owner trustee or statutory trustee under any other Engine Trust Agreement.
“ Engine Trusts ” means the owner trust or statutory trust estates created pursuant to the Engine Trust Agreements.
“ Enhancement Agreement ” means, any agreement, instrument or document governing the terms of any Series Enhancement or pursuant to which any Series Enhancement is issued or outstanding.
“ Equity Trustees ” means the three Controlling Trustees of WEST designated as such in the Trust Agreement.
“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.
“ Euroclear ” means Euroclear Bank S.N./N.V., as operator of the Euroclear System.
“ Event of Default ” means the existence of any of the events or conditions described in Section 4.01 hereof.
“ Exchange Act ” means the U.S. Securities Exchange Act of 1934, as amended.
“ Exchange Date ” means the date on which interests in each Regulation S Temporary Book-Entry Note will be exchangeable for interests in an Unrestricted Book-Entry Note, which shall be the later of (i) the fortieth (40 th ) day after the later of (a) the Closing Date and (b) the completion of the distribution of the related Series of Notes and (ii) the date on which the requisite certifications are due to and provided to the Indenture Trustee.
“ Expense Account ” has the meaning given to such term in Section 3.01(a) hereof.
“ FAA ” means the United States Federal Aviation Authority or any governmental authority succeeding to the functions thereof.
“Fee Letter” means the letter between WEST and the Senior Liquidity Provider establishing the fees and other amounts to be paid by WEST in respect of the Senior Liquidity Facility and any such letter between WEST and any replacement Senior Liquidity Provider.
“ Final Maturity Date ” means, with respect to a Series, the date set forth in the related Supplement on or prior to which the Outstanding Principal Balance of, and accrued interest on, all Notes of such Series are required to have been repaid in full.
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“ Fitch ” means Fitch, Inc., and any successor thereto, or, if such corporation or its successor shall for any reason no longer perform the functions of a securities rating agency, “ Fitch ” shall be deemed to refer to any other nationally recognized rating agency designated by WEST.
“ Fixed Rate Note ” means, as provided in the related Supplement, any Note having a Stated Rate that is a fixed percentage.
“ Floating Rate Note ” means, as provided in the related Supplement, any Note having a Stated Rate that varies with a specified index, such as LIBOR.
“ Funding Date ” means each date on which WEST borrows funds in respect of a Series of Warehouse Notes as set forth in the related Supplement for such Series of Warehouse Notes.
“ Future Lease ” means, in respect of any Engine, a Lease of such Engine entered into by any WEST Group Member and any Lessee at any time after the Delivery Date for such Engine.
“ 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 Applicable Law.
“ Governmental Authority ” means any government, legislative body, regulatory authority, court, administrative agency or commission or other governmental agency or instrumentality (or any officer or representative thereof), domestic, foreign or international, of competent jurisdiction, including the European Union.
“ Half-Life Restoration Amount ” means the sum, if positive, of the Maintenance Adjustment to Half-Life for each of the Engines in the Portfolio as of the Applicable Date of a Maintenance Reserve Evaluation; if such sum is negative, the Half-Life Restoration Amount shall be zero.
“ Hedge Counterparty ” means, in the singular, any one of, and in the plural, all of, the Eligible Hedge Counterparties and their successors and assigns which have entered into a Hedging Agreement.
“ Hedge Default ” means the occurrence of an Event of Default described in Section 4.01(a), (f) or (g).
“ Hedge Payment ” means Periodic Hedge Payments and Hedge Termination Payments.
“ Hedge Payment Account ” has the meaning given to such term in Section 3.12 hereof.
“ Hedge Payment Shortfall ” has the meaning given to such term in Section 3.13(d)(i) hereof.
“ Hedge Termination Payment ” means any payment due under a Hedging Agreement as a result of the termination of such Hedging Agreement for whatever reason.
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“ Hedged Lease ” means a Lease with an original term of more than one (1) year and which, in the case of the Initial Engines as of the Closing Date and in the case of any Additional Engine as of its Delivery Date, have more than one (1) year remaining in its term.
“ Hedging Agreement ” means an Interest Rate Hedge Agreement or a Currency Hedge Agreement, as applicable.
“ Increased Costs ” has the meaning, with respect to any Series of Warehouse Notes, given to such term in the Supplement for such Series of Warehouse Notes.
“ Indebtedness ” means, with respect to any Person at any date of determination (without duplication), (i) all indebtedness of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person in respect of letters of credit or other similar instruments (including reimbursement obligations with respect thereto), (iv) all obligations of such Person to pay the deferred and unpaid purchase price of property or services, which purchase price is due more than six months after the date of purchasing such property or service or taking delivery and title thereto or the completion of such services, and payment deferrals arranged primarily as a method of raising funds to acquire such property or service, (v) all obligations of such Person under a lease of (or other agreement conveying the right to use) any property (whether real, personal or mixed) that is required to be classified and accounted for as a capital lease obligation under U.S. GAAP, (vi) all Indebtedness (as defined in clauses (i) through (v) of this paragraph) of other Persons secured by a lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person, and (vii) all Indebtedness (as defined in clauses (i) through (v) of this paragraph) of other Persons guaranteed by such Person.
“ Indenture ” has the meaning set forth in the preamble hereof.
“ Indenture Trustee ” has the meaning given to such term in the preamble hereof, and any successor Indenture Trustee appointed in accordance with the terms hereof.
“ Indenture Trustee Fees ” means the compensation and expenses (including attorneys fees and expenses and indemnification payments) payable to the Indenture Trustee for its services under this Indenture and the other Related Documents to which it is a party.
“ Independent Controlling Trustee ” means the Controlling Trustee designated as such in the Trust Agreement.
“ Initial Appraisals ” means the Appraisals of the Initial Engines provided by the Initial Appraisers, each dated as of a date during December, 2004.
“ Initial Appraised Value ” means (i) in the case of each Initial Engine, the mathematical average of the Appraised Values of such Engine in the Initial Appraisals, (ii) in the case of any Additional Engine acquired with the proceeds of one or more Series of Warehouse Notes, the mathematical average of the Appraised Values of such Additional Engine provided in Appraisals by three (3) Appraisers, each such Appraisal to be as of a date not more than six (6) months prior to the Delivery Date of such Additional Engine by WEST or a WEST Group Member, and (iii) in the case of any other Additional Engine, the mathematical average of the Appraised Values of
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such Additional Engine provided in Appraisals by three (3) Appraisers, each such Appraisal to be as of a date not more than six (6) months prior to the Closing Date for the Series of Term Notes, the proceeds of which are to be used to finance the acquisition of such Additional Engine.
“ Initial Appraisers ” means any of or all of (as the context may require) AVITAS, Inc., BK Associates, Inc. and International Bureau of Aviation, Ltd.
“ Initial Borrowing Value ” means, (i) in respect of any Engine acquired from a Person that is not an Affiliate of WEST, the purchase price paid by WEST or a WEST Group Member to acquire such Engine and (ii) in respect of any Engine acquired from a Person that is an Affiliate of WEST, the lower of (a) its Initial Appraised Value and (ii) its book value on the records of the Affiliate seller as determined under U.S. GAAP as consistently applied by such Affiliate seller as of the date of acquisition. The Initial Borrowing Value of the Initial Engines is set forth in the Asset Transfer Agreement. A portion of the Initial Borrowing Value of an Engine may consist of a Reserve Engine Initial Borrowing Value, but any reference to the Initial Borrowing Value of an Engine shall be a reference to the entire Initial Borrowing Value of such Engine, without regard to any such Reserve Engine Initial Borrowing Value.
“ Initial Closing Date ” means August 9, 2005.
“ Initial Engine ” means each of the Engines (or an interest therein) identified on Schedule 4-1 hereto that was acquired by WEST through its acquisition of WEST Funding on the Initial Closing Date or by WEST Funding during the Delivery Period beginning thereon, in each case pursuant to the Asset Transfer Agreement.
“ Initial Notes ” means all Series of Notes issued on the Initial Closing Date.
“ Initial Remaining Engine ” means each of the Initial Engines that was not delivered on the Initial Closing Date.
“ Institutional Accredited Investor ” means a Person that is an “accredited investor” as that term is defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act.
“ Intercompany Loan ” has the meaning given to such term in Section 5.02(c)(vii) hereof.
“ Interest Accrual Period ” means, except as may be otherwise provided in the related Supplement for a Series of Notes, the period beginning on each Payment Date and ending on (but excluding) the next succeeding Payment Date, except that the initial Interest Accrual Period shall begin on the Initial Closing Date and end on (but exclude) the first Payment Date occurring after the Initial Closing Date.
“ Interest Expense ” means, for any period, the aggregate amount of interest expense as shown for such period on the income statement of WEST, determined in accordance with U.S. GAAP.
“ Interest Rate Hedge Agreement ” means an ISDA interest rate swap or cap agreement, collar or other interest rate hedging instrument between WEST and the Eligible Hedge Counterparty named therein, including any schedules and confirmations prepared and delivered
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in connection therewith, pursuant to which (i) WEST will receive payments from, or make payments to, the Eligible Hedge Counterparty as provided therein, and which (a) in form and substance complies with the Rating Agency Hedge Requirements for such agreements, (ii) limits recourse by the Eligible Hedge Counterparty to WEST to distributions in accordance with the priority of payments set forth in Section 3.14 hereof, and (iii) is consistent with the requirements of Section 5.02(f)(iv).
“International Interest” has the meaning set forth in the Cape Town Convention.
“International Registry” has the meaning set forth in the Cape Town Convention.
“ Investment Earnings ” means the actual amount of income earned on Permitted Investments during any specified period with respect to the Balance in any Account net of losses and investment expenses of the Administrative Agent in making such investments.
“ Investment Letter ” means a letter substantially in the form of Exhibit D attached hereto.
“ ISDA ” means International Swap and Derivatives Association, Inc.
“ Issuance Date ” means, in the case of a Series of Term Notes, the Series Issuance Date, and, in the case of a Series of Warehouse Notes, the date on which a Conversion Event occurs in respect of such Series of Warehouse Notes.
“ Issuance Expenses ” means the aggregate amount of all subscription discounts, brokerage commissions, placement fees, resale fees, structuring fees, out of pocket transaction expenses and other similar fees, commissions and expenses relating to the issuance of each Series of the Initial Notes or any Additional Series, as specified in the related Supplement for each Series.
“ JT8D-200 Engine ” means a model JT8D-200 aircraft engine manufactured by Pratt & Whitney, a division of United Technologies, Inc.
“ Junior Borrowing Base ” means, as of any date of determination, the sum of (a) ***of the then Aggregate Adjusted Borrowing Value plus (b) the Balance in the Engine Acquisition Account on such date plus (c) the Balance in the Junior Restricted Cash Account on such date plus (d) the Balance in the Senior Restricted Cash Account on such date, minus *** of the Borrowing Base Adjustment Amount as of such date, minus the Outstanding Principal Balance of the Series A Notes.
“ Junior Borrowing Base Deficiency ” means, as of any date of determination, the amount (if any) by which (i) the then Outstanding Principal Balance of all Series B Notes (after giving effect to any payments of Scheduled Principal Payment Amounts on one or more Series B Notes on such date), exceeds (ii) the Junior Borrowing Base as of such date.
“ Junior Claim ” means (a) with respect to WEST Expenses, all other amounts payable in accordance with Section 3.14 and (b) with respect to any other amount payable in accordance with Section 3.14, all amounts other than Prior Ranking Amounts in respect of such amount.
*** Confidential information omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.
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“ Junior Claimant ” means the holder of a Junior Claim.
“ Junior Restricted Cash Amount ” means, as of each Closing Date, Funding Date and Payment Date, an amount equal to the product of (i) three percent (3%) and (ii) the sum of the Outstanding Principal Balances of all Series B Notes as of such date, which Outstanding Principal Balances shall be calculated after giving effect to all Loans made and Term Notes issued on such date and all principal payments made on such date in respect of each Series B Note. The Junior Restricted Cash Amount may be reduced by WEST subject to (a) receipt of a Rating Agency Confirmation and (b) consent of the Control Party for each Outstanding Series B Note.
“ Junior Restricted Cash Account ” has the meaning given to such term in Section 3.01(a) hereof.
“ Junior Shortfall ” has the meaning given to such term in Section 3.13(d) hereof.
“ Junior Warehouse Note ” means any Warehouse Note that is designated as a Series B Note in the related Supplement.
“ Lease ” means, with respect to an Engine, any aircraft engine lease agreement, conditional sale agreement, hire purchase agreement or other similar arrangement, as may be in effect between a WEST Group Member that owns or leases-in such Engine (as Lessor) and a Person that is not a WEST Group Member (as Lessee), as such agreement or arrangement may be amended, modified, extended, supplemented, assigned or novated from time to time in accordance with the Related Documents; provided that if, under any sub-leasing arrangement with respect to an Engine permitted by the Lease of such Engine and executed by the Lessee and a sub-lessee, the Lessor of such Engine agrees to receive payments or collateral directly from, or is to make payments directly to, such sub-lessee, in any such case to the exclusion of the related Lessee, then the relevant sub-lease shall constitute the “Lease” of such Engine, and the sub-lessee shall constitute the related “Lessee” with respect to such Engine, but only to the extent of the provisions of such sub-lease agreement relevant to such payments and collateral and to the extent agreed by the relevant Lessor.
“ Lease Payments ” means all lease payments and other amounts payable by or on behalf of a Lessee under a Lease, including, without limitation, Rent Payments, Maintenance Reserve Payments and Security Deposits.
“ Lease Security Assignment ” means each lease security assignment executed and delivered by a WEST Subsidiary substantially in the form attached to the Security Trust Agreement, pursuant to which such WEST Subsidiary shall grant a security interest to the Security Trustee in its rights in the head Lease of the Engine from a WEST Group Member and related assets and in all Leases of such Engine.
“Lease Sub-Account” means a ledger account maintained by the Administrative Agent in accordance with Section 3.07 with respect to Security Deposits and with respect to Maintenance Reserve Payments that are to be maintained as Segregated Funds.
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“ Leasing Subsidiaries ” means, as of the Initial Closing Date, those Persons or other entities set forth on Schedule 3 hereto and their successors, together with any other bankruptcy remote special purpose entities to which the Engine Subsidiaries or the Engine Trusts may lease one or more of the Engines, which are Lessors under Leases of such Engines to Lessees and which are wholly owned directly or indirectly by WEST.
“ Lessee ” means each Person not a WEST Group Member who is the lessee or vendee under a Lease of an Engine from time to time with any WEST Group Member.
“ Lessee Funds ” means, either or both as the context may require, of (a) any Security Deposits provided by a Lessee under a Lease and (b) any Maintenance Reserve Payments that a Lessee is obligated to pay under a Lease and that are Segregated Funds.
“ Lessor ” means, with respect to any Lease, the WEST Group Member that is the lessor or vendor under such Lease.
“ Lessor Account ” has the meaning given to such term in Section 3.02(c).
“ LIBOR ” means, for any Interest Accrual Period in respect of any Series of Notes, the rate per annum, determined by the Indenture Trustee and notified in writing by the Indenture Trustee to the Administrative Agent, which is the arithmetic mean (rounded to the nearest 1/100 of 1%) of the offered rates for Dollar deposits having a maturity of the Specified Period for such Series commencing on the first day of such Interest Accrual Period that appears on the Reuters Screen LIBOR01 (or otherwise on such page or screen as may replace such Reuters Screen) at approximately 11:00 a.m., London time on the Reference Date such Interest Accrual Period; provided, however, that if there shall at any time no longer exist such Reuters Screen (or otherwise as aforesaid), “ LIBOR ” means the rate per annum equal to the average rate at which the principal London offices of Calyon are offered Dollar deposits for the Specified Period and in a principal amount equal to an amount of not less than one million Dollars ($1,000,000) at or about 10:00 a.m., New York City time, on the Reference Date specified for such Interest Accrual Period in the London Eurodollar interbank market for delivery on the first day of such Interest Accrual Period.
“ Lien ” means the security interest in the Mortgage Collateral created by the Engine Mortgages.
“ Life Limited Parts ” means all parts of the Engines in the Portfolio that must or should be replaced after their use for a specified number of Engine Cycles on the Engine in which any such part is installed.
“ Life Limited Parts Cost ” means the cost of replacing all Life Limited Parts in the Engines in the Portfolio as of the Applicable Date set forth in the Maintenance Reserve Evaluation setting forth such cost.
“ Liquidity Advance ” means a Shortfall Advance, a Non-Extension Advance or a Downgrade Advance.
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“ Liquidity Event of Default ” means the serving of a Collateral Liquidation Notice by the Control Party for the Senior Series under the Indenture to WEST following the occurrence of an Event of Default.
“ Liquidity Expenses ” means, with respect to the Senior Liquidity Facility, all Liquidity Obligations thereunder other than (a) the Liquidity Fee, (b) the principal amount of any Liquidity Advance under the Senior Liquidity Facility and (c) any interest accrued on any such Liquidity Obligations.
“ Liquidity Fee ” means the commitment fee payable to the Senior Liquidity Provider pursuant to the Fee Letter.
“ Liquidity Obligations ” means, with respect to the Senior Liquidity Facility, all principal, interest, fees and other amounts owing to the Senior Liquidity Provider under the Senior Liquidity Facility.
“ Loan ” means any amount borrowed by WEST from the Holder or Holders of any Series of Warehouse Notes, pursuant to the related Supplement for such Series.
“ Maintenance Adjustment to Half-Life ” means, for each Engine, an amount for each Engine equal to the sum, which may be positive or negative, of (a) the difference between (i) one-half of the cost of a shop visit for such Engine and (ii) the product of (A) the cost of such a shop visit and (B) a fraction, the numerator of which is the expected flight hours remaining to the next shop visit for such Engine and the denominator of which is the average total flight hours between shop visits for such Engine and (b) the difference between (i) one-half of the list price of each Life Limited Part in such Engine and (ii) the product of (A) such list price and (B) a fraction, the numerator of which is the remaining cycles before such Life Limited Part must be replaced and the denominator of which is the total number of allowable cycles for such Life Limited Part. The amount in clause (a) is positive if the Engine has less than one-half of the average total flight hours between shop visits remaining to the next shop visit and negative if it has more than one-half of the average total flight hours between shop visits remaining to the next shop visit; the amount in clause (b) is positive for each Life Limited Part if such Life Limited Part has less than one half of the allowable cycles for such Life Limited Part until replacement is required and negative for each Life Limited Part if such Life Limited Part has more than one half of the allowable cycles for such Life Limited Part until replacement is required.
“ Maintenance Reserve Appraisal ” means an appraisal, prepared by SH&E, of the Life Limited Parts Cost, the Engine Shop Visit Cost and the Engine Reserve Required Amount with respect to the Engines in the Portfolio as of the Effective Date.
“ Maintenance Reserve Deficit ” has the meaning given to such term in the definition of “Maintenance Reserve Evaluation.”
“ Maintenance Reserve Evaluation ” means (a) prior to the Effective Date, an evaluation prepared by SH&E, or other Person appointed by the Controlling Trustees, as to the projected maintenance costs of the Engines in the Portfolio over the lesser of their estimated remaining useful life and twenty-five (25) years, a projection of whether, taking into account expected Maintenance Reserve Payments from Lessees in respect of then existing Leases and Future
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Leases of the Engines, and making other assumptions reasonably acceptable to the Controlling Trustees, the funds available in the Engine Reserve Account will be sufficient to pay for such projected maintenance costs at all times, a schedule of the targeted balances in the Engine Reserve Account for each Payment Date during such remaining useful life or 25 year period and a schedule of the projected shortfalls between such balances and the projected maintenance costs, and (b) after the Effective Date, an evaluation prepared by SH&E, or other Person appointed by the Controlling Trustees, as to the following items:
(i) the Life Limited Parts Cost and the Engine Shop Visit Cost as of the Applicable Date for such evaluation and the Engine Reserve Required Amount based on such amounts,
(ii) the Maintenance Adjustment to Half-Life for each Engine in the Portfolio as of the Applicable Date for such evaluation and the Half-Life Restoration Amount based on such amounts,
(iii) the Engine Reserve Minimum Balance, which shall be the greater of the Engine Reserve Required Amount and the Half-Life Restoration Amount determined pursuant to clauses (i) and (ii),
(iv) the projected Lessor’s expenses related to maintenance of the Engines in the Portfolio during the lesser of twenty-five (25) years from the Applicable Date for such Maintenance Reserve Evaluation and the remaining expected life of all the Engines in the portfolio (as determined by the Person preparing the Maintenance Reserve Evaluation) as of such Applicable Date (such period, the “ Relevant Evaluation Period ”),
(v) the projected Maintenance Reserve Payments from Lessees and other Lessor’s revenues related to the maintenance of the Engines, taking into account then existing Leases and Future Leases using assumptions that are reasonably acceptable to the Controlling Trustees , and the resulting funds expected to be deposited in the Engine Reserve Account during the Relevant Evaluation Period,
(vi) a schedule of the projected balances in the Engine Reserve Account for each Payment Date during such Relevant Evaluation Period taking into account (x) the Balance in the Engine Reserve Account as of the Applicable Date, (y) the funds projected to be deposited in the Engine Reserve Account during the Relevant Evaluation Period (as determined pursuant to clause (v)) and (z) the projected maintenance costs during the Relevant Evaluation Period (as determined pursuant to clause (iv)), and assuming that all amounts in excess of the Engine Reserve Minimum Balance (as determined pursuant to clause (iii)) on each Payment Date during the Relevant Evaluation Period are transferred to the Engine Acquisition Account; and
(vii) the amounts, if any (each, a “ Maintenance Reserve Deficit ”) by which any of the projected balances in the schedule prepared pursuant to clause (vi) above is less than the projected costs of engine overhaul and maintenance for the Interest Accrual Period beginning on such Payment Date.
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“ Maintenance Reserve Payment ” means any payment (including any use payment) deposited in or credited to the Collections Account that is based on the usage of an Engine or which is based on, or in respect of which, the Lessor under a Lease may be obligated to reimburse the Lessee under such Lease for specified maintenance activities with respect to the Engine subject to such Lease.
“ Mandatory Engine Modification ” means a modification or improvement of an Engine, the cost of which will be capitalized in accordance with U.S. GAAP, required pursuant to the terms of the related Lease or the terms of Applicable Law or which, in the discretion of the Servicer, is commercially necessary in order to place such Engine in the minimum condition required to lease or re-lease such Engine.
“ Maximum Borrowing Base ” means, as of any date of determination, the sum of (a) *** of the then Aggregate Adjusted Borrowing Value, plus (b) the Balance in the Engine Acquisition Account on such date, plus (c) the Balance in the Senior Restricted Cash Account on such date plus (d) the Balance in the Junior Restricted Cash Account on such date minus *** of the Borrowing Base Adjustment Amount as of such date.
“ Maximum Borrowing Base Deficiency ” means, as of any date of determination, the amount (if any) by which (i) the then Aggregate Note Principal Balance (after giving effect to any payments of Minimum Principal Payment Amounts and Scheduled Principal Payment Amounts on all Notes on such date), exceeds (ii) the Maximum Borrowing Base as of such date.
“ Maximum Commitment ” means, with respect to any Series of Warehouse Notes, the maximum amount of loans that each Holder of such Warehouse Notes is committed to make to WEST in accordance with the terms and conditions of the related Supplement; provided that , on the occurrence of a Conversion Event with respect to any Series of Warehouse Notes, the Maximum Commitment of such Holder of such Warehouse Notes shall be the Outstanding Principal Balance of such Warehouse Notes on the date of such Conversion Event.
“ Maximum Principal Balance ” means, with respect to any Warehouse Note, the maximum amount that WEST may borrow from the Holder of such Warehouse Note, which shall be equal to the Maximum Commitment of such Holder.
“ Maximum Required Hedge Amount ” means, as of any date of determination, an amount equal to the product of (x) one hundred twenty-five percent (125%) and (y) the Outstanding Principal Balance of the Notes as of such date and (z) a fraction, the numerator of which is the sum of the Adjusted Borrowing Values of all Engines subject to a Hedged Lease as of such date and the denominator of which is the Aggregate Adjusted Borrowing Value as of such date.
“ Merger Transaction ” has the meaning given to such term in Section 5.02(g) hereof.
“ Minimum Principal Payment Amount ” means, for each Series of Notes for any Payment Date, the excess, if any, of (x) the sum of the then Outstanding Principal Balance of all Notes of such Series, assuming that all Minimum Principal Payment Amounts for all prior Payment Dates have been paid in full, over (y) the Minimum Targeted Principal Balance of such Series for such Payment Date.
*** Confidential information omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.
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“ Minimum Required Hedge Amount ” means, as of any date of determination, an amount equal to the product of (A) ninety percent (90%) and (y) the Outstanding Principal Balance of the Notes as of such date and (z) a fraction, the numerator of which is the sum of the Adjusted Borrowing Values of all Engines subject to a Hedged Lease as of such date and the denominator of which is the Aggregate Adjusted Borrowing Value as of such date.
“ Minimum Targeted Principal Balance ” means, for each Series of Notes on any Payment Date, the amount identified as such in the related Supplement, as it may be adjusted from time to time in accordance with this Indenture and such Supplement.
“ Modification Agreement ” means any agreement between a WEST Group Member and a Supplier for the purchase and/or installation of a Mandatory Engine Modification or a Discretionary Engine Modification.
“ Modified Net Sale Proceeds ” means, with respect to any Engine Disposition, the Net Sale Proceeds from such Engine Disposition minus the amount of any Disposition Fee payable to the Servicer in respect of such Engine Disposition.
“ Monthly Report ” has the meaning given to such term in Section 2.14(a) hereof.
“ Moody’s ” means Moody’s Investors Service, Inc.
“ Mortgage Collateral ” means the Engines, the Leases and the other collateral in which the Engine Mortgages and the Lease Security Assignments create a Lien.
“ MRE Balance Increment ” has the meaning given to such term in Section 5.04(d).
“ Net Proceeds ” means, with respect to the issuance of a Series of Notes, the aggregate amount of cash received by WEST in connection with such issuance after deducting therefrom (without duplication) all Issuance Expenses; provided that such amount shall not be less than zero.
“ Net Sale Proceeds ” means, with respect to any Engine Disposition, the aggregate amount of cash received by or on behalf of the seller in connection with such transaction after deducting therefrom (without duplication) (a) reasonable and customary brokerage commissions and other similar fees and commissions (other than any Disposition Fee payable to the Servicer), and (b) the amount of taxes payable in connection with or as a result of such transaction, in each case to the extent, but only to the extent, that amounts so deducted are, at the time of receipt of such cash, actually paid to a Person that is not an Affiliate of the seller and are properly attributable to such transaction or to the asset that is the subject thereof.
“ Net Senior Shortfall ” has the meaning given to such term in Section 3.13(d).
“Non-Extended Facility” has the meaning given to such term in Section 3.20(d).
“Non-Extension Advance” has the meaning given to such term in Section 3.20(d).
“ Non-U.S. Person ” means a person who is not a U.S. person, as defined in Regulation S.
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“ Note ” means any one of the promissory notes executed by WEST and authenticated by or on behalf of the Indenture Trustee, substantially in the form attached to the related Supplement.
“ Note Form ” means, (a) with respect to a Series A Term Note, the form of Note attached hereto as Exhibit A-1, with such changes therein and such additional information as may be provided in the Supplement under which such Series A Term Note is issued, (b) with respect to a Series A Warehouse Note, the form of Note attached hereto as Exhibit A-2, with such changes therein and such additional information as may be provided in the Supplement under which such Series A Warehouse Note is issued, (a) with respect to a Series B Term Note, the form of Note attached hereto as Exhibit B-1, with such changes therein and such additional information as may be provided in the Supplement under which such Series B Term Note is issued, (a) with respect to a Series B Warehouse Note, the form of Note attached hereto as Exhibit B-2, with such changes therein and such additional information as may be provided in the Supplement under which such Series Warehouse Note is issued.
“ Noteholder ” or “ Holder ” means any Person in whose name a Note is registered from time to time in the Register for such Notes.
“ Noteholder Indemnified Amounts ” means, in respect of any Series of Notes, all amounts due to the Holders of the Notes for Increased Costs, in the case of any Series of Warehouse Notes, and indemnification payments, in each case as specified in the Supplement that establishes such Series of Notes.
“ Note Registrar ” has the meaning given to such term in Section 2.03(a) hereof.
“ Notice of Sole Control ” has the meaning given to such term in the Security Trust Agreement.
“ Notices ” has the meaning given to such term in Section 13.04 hereof.
“ Officer’s Certificate ” means a certificate signed by, with respect to WEST, any Signatory Trustee and, with respect to any other Person, any officer, director, trustee or equivalent representative.
“ Off-Production Engine ” means, as of any date of determination, an Engine that can be installed only on aircraft types that are no longer being manufactured by the manufacturers of such aircraft types as of such date.
“ Operating Bank ” means any Eligible Institution at which any Account is held; provided that if at any time an Operating Bank ceases to be an Eligible Institution, a successor depository institution or trust company shall be appointed by the Administrative Agent on behalf of the Security Trustee and all Accounts at the predecessor Operating Bank shall thereafter be transferred to and be maintained at such successor depository institution or trust company and such successor depository institution or trust company shall thereafter be an “ Operating Bank ”. The initial Operating Bank is Deutsche Bank Trust Company Americas.
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“ Operating Expenses ” means (i) WEST Expenses, (ii) Ordinary Course Expenses, (iii) Mandatory Engine Modifications, but only to the extent of the excess of the cost of any Mandatory Engine Modification over the portion funded from the Balance in the Engine Reserve Account, and (iv) Liquidity Expenses.
“ Opinion of Counsel ” means a written opinion signed by legal counsel, who may be an employee of the Servicer or the Administrative Agent or counsel to WEST, that meets the requirements of Section 1.03 hereof.
“ Optional Redemption ” means, with respect to a Series, a voluntary prepayment by WEST of all or a portion of the Outstanding Principal Balance of such Series in accordance with the terms of the applicable Supplement.
“ Ordinary Course Expenses ” means, with respect to any Payment Date, all expenses and costs, incurred by, or on behalf of any WEST Group Member in connection with the ownership, use, leasing and/or operation of the Engines, during the related Collection Period that are not Service Provider Fees. Ordinary Course Expenses include the following: (i) costs for routine maintenance and repairs (but not Discretionary Engine Modifications) needed to return an Engine to “serviceable” condition, but only to the extent that the amounts then on deposit in the Engine Reserve Account that are available therefor are insufficient to cover these costs; (ii) the cost of repositioning an Engine in connection with the origination or termination of a Lease; (iii) legal fees and court costs incurred in connection with enforcing rights under a Lease of an Engine and/or repossessing such Engine (but excluding legal fees incurred by the Servicer in the negotiation and documentation of Future Leases or of amendments or renewals of Leases and Future Leases); (iv) the cost of obtaining and maintaining contingent and off-lease insurance with respect to the Engines; (v) taxes, levies, duties, charges, assessments, fees, penalties, deductions or withholdings assessed, charged or imposed upon or against the use and operation of the Engines; (vi) the cost of storing an off-lease Engine; (vii) expenses and costs (including legal fees) of pursuing claims against manufacturers or sellers of an Engine; (viii) non-recoverable sales and value-added taxes with respect to an Engine; and (ix) governmental filing fees necessary to perfect, or continue the perfection of, the security interest of the Security Trustee in an Engine and/or a Lease , including the registration of International Interests, Prospective International Interests and Contracts of Sale in the International Registry.
“ Original Indenture ” has the meaning set forth in the recitals hereof.
“ Outstanding ” means (a) with respect to the Notes of any Series at any time, all Notes of such Series theretofore authenticated and delivered by the Indenture Trustee except (i) any such Notes cancelled by, or delivered for cancellation to, the Indenture Trustee; (ii) any such Notes, or portions thereof, for which the payment of principal of and accrued and unpaid interest on which moneys have been deposited in the applicable Series Account or distributed to Noteholders by the Indenture Trustee and any such Notes, or portions thereof, for the payment or redemption of which moneys in the necessary amount have been deposited in the Redemption/Defeasance Account for such Notes; (iii) any such Notes in exchange or substitution for which other Notes, as the case may be, have been authenticated and delivered, or which have been paid pursuant to the terms of this Indenture (unless proof satisfactory to the Indenture Trustee is presented that any of such Notes is held by a Person in whose hands such Note is a legal, valid and binding
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obligation of WEST); and (iv) for the limited purposes set forth in Section 1.04(c), any Note held by WEST or any other affiliate thereof and (b) when used with respect to any other evidence of indebtedness means, at any time, any principal amount thereof then unpaid and outstanding (whether or not due or payable).
“ Outstanding Note ” means a Note that is Outstanding.
“ Outstanding Principal Balance ” means, with respect to any Outstanding Notes, the total principal balance of such Outstanding Notes unpaid and outstanding at any time.
“ Owner Trustee ” means Wilmington Trust Company, as Owner Trustee of WEST, and its successors in such capacity.
“ Part ” means any and all parts, avionics, attachments, accessions, appurtenances, furnishings, components, appliances, accessories, instruments and other equipment installed in, or attached to (or constituting a spare for any such item installed in or attached to) any Engine.
“ Paying Agent ” has the meaning given to such term in Section 2.03(a) hereof. The term “Paying Agent” includes any additional Paying Agent.
“ Payment Date ” means the 15 th day of each month, commencing on August 15, 2005; provided that if any Payment Date would otherwise fall on a day which is not a Business Day, such Payment Date shall be the first following day which is a Business Day.
“ Payment Date Schedule ” has the meaning given to such term in Section 3.13(e) hereof.
“ Periodic Hedge Payment ” means any payment under a Hedging Agreement other than a Hedge Termination Payment.
“ Permitted Encumbrance ” means (i) any Encumbrance for taxes, assessments and governmental charges or levies not yet due and payable or which are being contested in good faith by appropriate proceedings , provided that the proceedings relating to such Encumbrance or the continued existence of such Encumbrance does not give rise to any reasonable likelihood of the sale, forfeiture or other loss of the affected asset ; (ii) in respect of any Engine, any Encumbrance of a repairer, carrier or hangar keeper arising in the ordinary course of business by operation of law or similar Encumbrance , provided that the proceedings relating to such Encumbrance or the continued existence of such Encumbrance does not give rise to any reasonable likelihood of the sale, forfeiture or other loss of the affected asset; (iii) any Encumbrances on any Engines permitted under any Lease thereof (other than Encumbrances created by the relevant lessor); (iv) any Encumbrances created by or through or arising from debt or liabilities or any act or omission of any Lessee in each case either in contravention of the relevant Lease (whether or not such Lease has been terminated) or without the consent of the relevant lessor ( provided that if such lessor becomes aware of any such Encumbrance, it shall use commercially reasonable efforts to have any such Encumbrance lifted, removed and otherwise discharged); (v) any Encumbrance created in favor of WEST or any WEST Subsidiary or the Security Trustee, including any Encumbrance created or required to be created under the Security Trust Agreement or any Mortgage; (vi) any Encumbrance arising under any agreements the terms of which contemplate that custody of Lessee Funds held for Lessees with respect to
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Additional Engines is held by a third-party; (vii) any Lease in respect of any Engine and the rights of the Lessee under such Lease; (viii) any Encumbrance in respect of the deposit of any Disposition Proceeds in any Qualified Escrow Account with a Qualified Intermediary as part of a Replacement Exchange; and (ix) any Encumbrance arising under the Senior Liquidity Facility.
“ Permitted Engine Acquisition ” has the meaning given to such term in Section 5.03(b) hereof.
“ Permitted Engine Disposition ” has the meaning given to such term in Section 5.03(a) hereof.
“ Permitted Holder ” has the meaning given to such term in Section 5.02(i)(iii) hereof.
“ Permitted Investments ” means, in each case, book-entry securities, negotiable instruments or securities represented by instruments in bearer or registered form which evidence:
(a) direct obligations of, and obligations fully guaranteed as to timely payment by, the United States of America (having original maturities of no more than 365 days, or such lesser time as is required for the distribution of funds);
(b) demand deposits, time deposits or certificates of deposit of the Operating Bank or of depository institutions or trust companies organized under the laws of the United States of America or any state thereof, or the District of Columbia (or any domestic branch of a foreign bank) (i) having original maturities of no more than 365 days, or such lesser time as is required for the distribution of funds; provided that at the time of investment or contractual commitment to invest therein, the short-term debt rating of such depository institution or trust company shall be at least “F1+” by Fitch and “P-1” by Moody’s or (ii) having maturities of more than 365 days and, at the time of the investment or contractual commitment to invest therein, a rating of “AA” from Fitch and “Aa2” from Moody’s;
(c) corporate or municipal debt obligations (i) having remaining maturities of no more than 365 days, or such lesser time as is required for the distribution of funds, having, at the time of the investment or contractual commitment to invest therein, a rating of at least “F1+” or “AA” by Fitch and “P-1” or “Aa2” by Moody’s or (ii) having maturities of more than 365 days and, at the time of the investment or contractual commitment to invest therein, a rating of “AA” from Fitch and “Aa2” from Moody’s;
(d) investments in money market funds (including funds in respect of which the Indenture Trustee or any of its affiliates is investment manager or advisor) having a rating of at least “AA” by Fitch and “Aa2” by Moody’s;
(e) notes or bankers’ acceptances (having original maturities of no more than 365 days, or such lesser time as is required for the distribution of funds) issued by any depository institution or trust company referred to in (b) above; or
(f) any other investments approved pursuant to a Rating Agency Confirmation;
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provided, however , that no investment shall be made in any obligations of any depository institution or trust company which has a contractual right to set off and apply any deposits held, and other indebtedness owing, by any WEST Group Member to or for the credit or the account of such bank.
“ Person ” means any natural person, firm, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, government or any political subdivision thereof or any other legal entity, including public bodies.
“ Portfolio ” means, at any time, all Engines owned by WEST Group and the Leases related to such Engines.
“ Precedent Lease ” has the meaning given to such term in Section 5.03(d)(ii) hereof.
“ PRI ” has the meaning given to such term in Section 5.04(g) hereof.
“ PRI Guidelines ” means the list of prohibited countries and countries with respect to which PRI must be obtained as set forth in the PRI Guidelines attached as Exhibit F hereto, as amended from time to time subject to the receipt of a Rating Agency Confirmation.
“ Principal Terms ” means, with respect to any Series, all of the following information: (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 Series 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 on which principal is scheduled to 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 Maturity Date for the Series; (viii) if specified in the related Supplement, the number of Classes of Notes of the Series and the rights and priorities of each such Class; (ix) the priority of such Series with respect to any other Series; (x) the Control Party with respect to such Series; (xi) the Scheduled Principal Payment Amounts and the Minimum Principal Payment Amounts for such Series, (xii) the designation of a Series as a Term Series or a Warehouse Series, (xiii) the designation of such Series as Series A Notes or Series B Notes, and (xiv) any other terms of such Series.
“ Prior Ranking Amounts ” has the meaning given to such term in Section 3.14 hereof.
“ Private Placement Legend ” means the legend initially set forth on the Notes in the form set forth in Section 2.02 hereof.
“ Pro Forma Lease ” has the meaning given to such term in Section 5.03(d)(ii) hereof.
“ Proceeding ” means any suit in equity, action at law, or other judicial or administrative proceeding.
“ Prohibited Country ” has the meaning given to such term in Section 5.03(e) hereof.
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“ Projected Principal Payment Amounts ” means, as of the Determination Date immediately preceding any Redemption Date, the Applicable Percentage of the Assumed Principal Payments of each Series of Additional Notes that are Fixed Rate Notes.
“Prospective International Interest” has the meaning given to such term in the Cape Town Convention.
“Provider Advance” means a Downgrade Advance or a Non-Extension Advance.
“Provider Advance Balance” means the portion of the Balance in the Senior Cash Collateral Account equal to any Downgrade Advance or Non-Extension Advance deposited therein pursuant to Section 3.20 , d ecreased by the amount of any Shortfall Drawings withdrawn therefrom and increased by the amounts deposited therein pursuant to Section 3.14.
“ Purchase Option Notice ” has the meaning given to such term in Section 4.12.
“ Purchase Price ” means (a), in the case of a Permitted Engine Acquisition, the amount to be paid to the seller of an Engine pursuant to the Acquisition Agreement or the Asset Transfer Agreement and (b), in the case of a Mandatory Engine Modification or a Discretionary Engine Modification, the cost of such Mandatory Engine Modification or Discretionary Engine Modification as provided in the Modification Agreement with the Supplier of such Mandatory Engine Modification or Discretionary Engine Modification.
“ QEC Kit ” means a quick engine change kit, consisting of components and accessories installed or capable of being installed on an engine to speed the removal and installation of the engine on an aircraft.
“ QIB ” means a Qualified Institutional Buyer.
“ Qualified Engine Modification ” means an Engine Thrust Upgrade or the acquisition and installation of a QEC Kit on an Engine.
“ Qualified Escrow Account ” means an escrow account that is (i) established with a Qualified Intermediary pursuant to an agreement under which all or a portion of the Modified Net Sale Proceeds from an Engine Disposition are deposited in such escrow account in connection with a Replacement Exchange and are to be applied to the acquisition of an Additional Engine or the funding of Qualified Engine Modification designated by WEST or another WEST Group Member or, if and to the extent not so applied by the end of the applicable Replacement Period for such Engine Disposition, deposited by the Qualified Intermediary in the Collections Account and (ii) in respect of which WEST or the WEST Group Member has pledged its rights in such escrow account to the Security Trustee pursuant to the Security Trust Agreement.
“Q ualified Institutional Buyer ” means a “qualified institutional buyer” as defined in Rule 144A promulgated under the Securities Act.
“ Qualified Intermediary ” means a Person described in Treasury Regulations §1.1031(k)-1(g)(4) or any successor regulations, provided that such Person has a short term debt rating of, or
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the obligations of such Person are guaranteed by a Person that has a short term debt rating of, not lower than P-1 from Moody’s and/or F-1 from Fitch.
“ Rating Agency ” means, with respect to any Series of Notes, the nationally recognized statistical rating organization selected by WEST to issue a rating with respect to such Series of Notes; provided that such organizations shall only be deemed to be a Rating Agency for purposes of the Indenture with respect to Notes they are then rating, as specified in the related Supplement for each Series of Notes.
“ Rating Agency Confirmation ” means, with respect to any action or omission specified herein for which a Rating Agency Confirmation is required, a prior written confirmation from each Rating Agency then rating a Series of Notes then Outstanding that such action or omission in and of itself will not result in a lowering, qualification or withdrawal of the then current ratings on any such Series.
“ Rating Agency Hedge Requirements ” means the requirements in respect of any Hedging Agreement published by the Rating Agencies that are applicable to such Hedging Agreements.
“ Received Currency ” has the meaning given to such term in Section 13.06(a) hereof.
“ Record Date ” means with respect to each Payment Date, the close of business on the fifth Business Day immediately preceding such Payment Date and, with respect to the date on which any Direction is to be given by the Noteholders, the close of business on the last Business Day prior to the solicitation of such Direction.
“ Redemption ” means a Refinancing, an Optional Redemption, an Acquisition Balance Redemption, a Tax Redemption or a Warehouse Note Redemption.
“ Redemption/Defeasance Account ” means an account established by the Indenture Trustee pursuant to Section 3.10 hereof.
“ Redemption Date ” means the date, which shall in each case be a Payment Date, on which Notes of any Series are redeemed in whole or in part pursuant to a Redemption.
“ Redemption Fraction ” means, for any Series with respect to any Optional Redemption or Acquisition Balance Redemption, a fraction, the numerator of which is the principal amount of the Optional Redemption or Acquisition Balance Redemption and the denominator of which is the Outstanding Principal Balance of such Series immediately prior to such Optional Redemption or Acquisition Balance Redemption.
“ Redemption Notice ” means, a notice sent by the Indenture Trustee to each holder of the Series of Notes to be redeemed, as described in Section 3.17(d) hereof.
“ Redemption Premium ” means, with respect to any Series of Notes, such amount as may be payable in connection with a Redemption of such Series of Notes, in whole or in part, as part of or in addition to, the Redemption Price in respect of such Redemption, as specified in the applicable Supplement for such Series of Notes. The Redemption Premium on a ny Additional Series of Note s that are Fixed Rate Note s , if specified in the applicable Supplement for such
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Additional Series of Fixed Rate Notes , shall be equal to the excess, if any, of (1) the discounted present value of the Projected Principal Payment Amounts of such Additional Series of Fixed Rate Notes and interest thereon from the applicable Redemption Date and including the applicable final Payment Date by discounting such payments at a discount rate equal to the applicable Treasury Yield plus the margin, if any, specified in the applicable Supplement for such Additional Series of Fixed Rate Notes, over (2) the Applicable Percentage of such Additional Series of Fixed Note s and all accrued and unpaid interest thereon.
“ Redemption Price ” means, (a) with respect to any Series of Notes that will be the subject of a Refinancing or an Optional Redemption, an amount (determined as of the Determination Date for the Redemption Date for any Redemption) equal to, unless otherwise specified in the related Supplement, the Outstanding Principal Balance of the Series of Notes being repaid together with all accrued and unpaid interest thereon and, if specified in the related Supplement, the Redemption Premium specified in such Supplement, and (b) with respect to any Series of Notes that will be the subject of an Acquisition Balance Redemption, a Tax-Redemption or a Warehouse Note Redemption , an amount equal to the Outstanding Principal Balance of such Series with (other than in the case of a Warehouse Note Redemption) all accrued and unpaid interest thereon but without any Redemption Premium.
“ Reference Date ” means, with respect to each Interest Accrual Period, the day that is two (2) Business Days prior to the Payment Date on which such Interest Accrual Period commences; provided, however, that the Reference Date with respect to the initial Interest Accrual Period means the date that is two (2) Business Days before the Initial Closing Date.
“ Refinancing ” means the issuance of an Additional Series of Notes for the purpose of an Optional Redemption of all, and not less than all, of an outstanding Series of Notes.
“Refinancing Expenses” means all out-of-pocket costs and expenses incurred in connection with an offering and issuance of Additional Notes in a Refinancing.
“ Register ” has the meaning given to such term in Section 2.03(a) hereof.
“ Regulation S ” means Regulation S under the Securities Act.
“ Regulation S Book-Entry Notes ” means the Unrestricted Book-Entry Notes and the Regulation S Temporary Book-Entry Notes.
“ Regulation S Temporary Book-Entry Note ” means Notes initially sold outside the United States in reliance on Regulation S, represented by a single temporary global note in fully registered form, without interest coupons, the form of which shall be substantially in the form of the applicable Note Form for such Note, with the legends required by Section 2.02 for a Regulation S Temporary Book-Entry Note inscribed thereon and with such changes therein and such additional information as may be specified in the Supplement pursuant to which such Note is issued
“ Related Documents ” means the Acquisition Agreements, the Administrative Agency Agreement, the Servicing Agreement, the Back-Up Administrative Agency Agreement, the Back-Up Servicing Agreement, each Enhancement Agreement, this Indenture, any Hedging
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Agreements, the Notes, each Supplement, the Security Documents, the Fee Letter and the Senior Liquidity Facility, together with all certificates, documents and instruments delivered pursuant to any of the foregoing.
“ Relevant Evaluation Period ” has the meaning given to such term in the definition of “Maintenance Reserve Evaluation.”
“ Relevant Information ” means the information provided by the Service Providers to the Administrative Agent that is required to enable the Administrative Agent make the calculations contemplated by Section 3.13(a) through (e).
“ Remaining Engine ” means (a) any Initial Engine for which title thereto was not transferred to an Engine Subsidiary on or prior to the Initial Closing Date and which was expected to be acquired by an Engine Subsidiary during the Delivery Period beginning thereon, and (b) any Additional Engine for which title thereto has not been transferred to an Engine Subsidiary on or prior to the related Closing Date and which is expected to be acquired by an Engine Subsidiary during the related Delivery Period .
“ Remaining Weighted Average Life ” means, with respect to any Series of Notes on any Payment Date, (a) the sum of the products of (i) the portion of each Projected Principal Payment Amount allocable to such Series in accordance with Section 3.15 hereof on each subsequent Payment Date (each, a “ Subsequent Date ”) and (ii) the number of months remaining until such Subsequent Date divided by (b) the Outstanding Principal Balance of such Series on such Payment Date.
“ Renewal Lease ” has the meaning given to such term in Section 5.03(d) hereof.
“ Rent Payments ” means all payments of basic rent under a Lease that are payable in respect of periods specified under such Lease.
“ Replacement Exchange ” means the acquisition by any WEST Group Member of one or more Additional Engines in a Permitted Engine Acquisition or the funding of Qualified Engine Modifications with all or a portion of the Modified Net Sale Proceeds from a Permitted Engine Disposition by any Engine Subsidiary or Engine Trust in a Permitted Engine Disposition within the Replacement Period applicable to such Permitted Engine Disposition, provided that WEST shall have elected to use all or such portion of such Modified Net Sale Proceeds in a Replacement Exchange in accordance with Section 3.11 hereof.
“ Replacement Liquidity Facility ” means an irrevocable revolving credit agreement (or agreements), complying with all the requirements of Section 3.20(e) hereof, in substantially the form of the Senior Liquidity Facility, including reinstatement provisions, or in such other form or forms (which may include a letter of credit, surety bond, hedge, financial insurance policy or guaranty) as shall permit the Rating Agencies to confirm in writing their respective ratings then in effect for the Series A Notes (before downgrading of such ratings, if any, as a result of the downgrading of the ratings of the replaced Senior Liquidity Provider), and in a face amount (or in an aggregate face amount) equal to the then Senior Liquidity Facility Maximum Commitment for the replaced Senior Liquidity Facility and issued by a Person (or Persons) having an unsecured short-term or long-term (as the case may be) debt rating and a short-term or long-term
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issuer credit rating, as the case may be, issued by each Rating Agency which is equal to or higher than the Threshold Rating or such other ratings and qualifications as shall permit the Rating Agencies to confirm in writing their respective ratings then in effect for the Series A Notes (before downgrading of such ratings, if any, as a result of the downgrading of the ratings of the replaced Senior Liquidity Provider). Without limitation of the form that a Replacement Liquidity Facility otherwise may have pursuant to the preceding sentence, a Replacement Liquidity Facility may have a Stated Expiration Date earlier than fifteen (15) days after the Final Maturity Date of the Series A Notes, so long as such Replacement Liquidity Facility provides for a Non-Extension Advance as contemplated by Section 3.20(d).
“ Replacement Period ” means, with respect to any portion of the Modified Net Sale Proceeds of a Permitted Engine Disposition that WEST elects to use to acquire Additional Engines or Qualified Engine Modifications in a Replacement Exchange pursuant to Section 3.11 hereof, the period beginning on the date of such Engine Disposition and ending on the earlier of (i) the 120 th day after the date of such Engine Disposition and (ii) the occurrence of an Event of Default.
“Repurchase” means to repurchase, defease or otherwise acquire or retire any Notes.
“ Required Acquisition Agreement Terms ” means the terms and conditions set forth in Exhibit J, which must be included in any Acquisition Agreement.
“ Required Expense Amount ” means, with respect to a Payment Date, an amount equal to the sum of (i) the Operating Expenses payable on such Payment Date, consisting of all Operating Expenses incurred by the Service Providers and not previously reimbursed and the amounts shown on all invoices received from the Service Providers for the reimbursement or payment of Operating Expenses not previously paid or reimbursed, (ii) a reserve for Operating Expenses that are due and payable during the Interest Accrual Period beginning on such Payment Date and (iii) a reserve for Extraordinary Operating Expenses.
“ Required Expense Deposit ” has the meaning ascribed to such term in Section 3.13(a)(ii).
“ Required Expense Reserve ” means the sum of the amounts described in clauses (ii) and (iii) in the definition of “Required Expense Amount.”
“ Requisite Majority ” means, with respect to any action proposed to be taken pursuant to the terms of this Indenture, that the Control Party (or Control Parties) representing more than fifty percent (50%) of the sum of (a) the then Outstanding Principal Balance of the Notes (other than any Series of Warehouse Notes prior to a Conversion Event having occurred with respect to such Series of Warehouse Notes) and (b) the Maximum Commitments of all Series of Warehouse Notes prior to a Conversion Event having occurred with respect to such Series of Warehouse Notes shall approve or direct such proposed action, provided that, in making such a determination, each Control Party shall be deemed to have voted the entire Outstanding Principal Balance or Maximum Commitment, as applicable, of the related Series in favor of, or in opposition to, such proposed action, as the case may be.
“ Reserve Engine Adjusted Borrowing Value ” means the Reserve Engine Initial Borrowing Value of an Additional Engine, adjusted downward as provided in the definition of
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“Adjusted Borrowing Value.” If the Purchase Price of an Additional Engine is funded entirely with Engine Reserve Excess Amounts, then the Reserve Engine Adjusted Borrowing Value of such Additional Engine will be equal to the Adjusted Borrowing Value of such Additional Engine.
“ Reserve Engine Initial Borrowing Value ” means the portion of the Initial Borrowing Value of an Additional Engine proportionate to the portion of the Purchase Price of such Additional Engine funded with Engine Reserve Excess Amounts. If the Purchase Price of an Additional Engine is funded entirely with Engine Reserve Excess Amounts, then the Reserve Engine Initial Borrowing Value of such Additional Engine will be equal to the Initial Borrowing Value of such Additional Engine.
“ Reserve Proceeds ” means, with respect to an Engine Disposition, the portion of the Modified Net Sale Proceeds equal to the lesser of (a) the amount of such Modified Net Sale Proceeds and (b) the portion of the Adjusted Borrowing Value of the Engine that was the subject of such Engine Disposition consisting of Reserve Engine Adjusted Borrowing Value.
“ Responsible Officer ” means, (i) with respect to the Indenture Trustee and the Security Trustee, any officer within the Corporate Trust Office, including any Principal, Vice President, Managing Director, Director or any other officer of the Indenture Trustee customarily performing functions similar to those performed by any of the above designated officers and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer’s knowledge and familiarity with the particular subject, (ii) with respect to WEST, any Controlling Trustee and (iii) with respect to the Senior Liquidity Provider and the Administrative Agent, any Person designated as a Responsible Officer by such Senior Liquidity Provider or the Administrative Agent , as applicable .
“ Rule 144A ” means Rule 144A under the Securities Act.
“ Sale Proceeds Surplus Amount ” means, as of any date of determination in connection with an Engine for which an Engine Disposition has occurred since the most recent Appraisal Date, the Adjusted Borrowing Value of which is no longer included in Aggregate Adjusted Borrowing Value as of such date of determination, the amount, if any, by which (x) the Modified Net Sale Proceeds realized from such Engine Disposition exceeds (y) the Adjusted Borrowing Value of such Engine on the date of such Engine Disposition.
“ Scheduled Principal Payment Amount ” means, for each Series of Notes on any Payment Date, the excess, if any, of (x) the sum of the then Outstanding Principal Balance of all Notes of such Series (after giving effect to any payment of the Minimum Principal Payment Amount for such Series of Notes actually paid on such Payment Date, assuming that all Scheduled Principal Payment Amounts for all prior Payment Dates have been paid in full), over (y) the Scheduled Targeted Principal Balance for such Series for such Payment Date.
“ Scheduled Targeted Principal Balance ” means, for each Series of Notes on any Payment Date, the amount set forth in the related Supplement.
“ Secured Obligations ” has the meaning given to such term in the Security Trust Agreement.
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“ Secured Parties ” has the meaning given to such term in the Security Trust Agreement.
“ Securities Act ” means the Securities Act of 1933, as amended.
“ Security Deposit Account ” has the meaning given to such term in Section 3.01(a) hereof.
“ Security Deposit/Lessee-Funded Account ” has the meaning given to such term in Section 3.01(g) hereof.
“ Security Deposits ” means any cash deposits and other collateral provided by, or on behalf of, a Lessee to secure the obligations of such Lessee under a Lease.
“ Security Documents ” means the Security Trust Agreement, the Engine Mortgages, the Lease Security Assignments, the Custodial Agreement and each other agreement that creates a Security Interest in favor of the Secured Parties.
“ Security Interests ” means the security interests granted or expressed to be granted in the Collateral, and the International Interests constituted pursuant to, the Security Trust Agreement, the Engine Mortgages and the Lease Security Assignments.
“ Security Trust Agreement ” means the Security Trust Agreement dated as of the Initial Closing Date, among WEST, WEST Funding, each other party thereto and the Security Trustee, for the benefit of the Secured Parties.
“ Security Trustee ” means the trustee appointed pursuant to the Security Trust Agreement, initially Deutsche Bank Trust Company Americas.
“ Segregated Funds ” means all Lessee Funds that, pursuant to the terms of the related Lease, are not permitted to be commingled with the funds of the lessor under such Lease.
“ Seller ” means (i), with respect to the Asset Transfer Agreement, Willis and (ii) with respect to any Acquisition Agreement, Willis or any other seller of an Engine in a Permitted Engine Acquisition.
“ Senior Borrowing Base ” means, as of any date of determination, the sum of (a) seventy percent (70%) of the then Aggregate Adjusted Borrowing Value, plus (b) the Balance in the Engine Acquisition Account on such date, plus (c) the Balance in the Senior Restricted Cash Account on such date, minus seventy percent (70%) of the Borrowing Base Adjustment Amount as of such date.
“ Senior Borrowing Base Deficiency ” means, as of any date of determination, the amount (if any) by which (i) the then Outstanding Principal Balance of all Series A Notes (after giving effect to any payments of Minimum Principal Payment Amounts and Scheduled Principal Payment Amounts on one or more Series A Notes on such date) exceeds (ii) the Senior Borrowing Base as of such date.
“ Senior Claim ” has the meaning given thereto in Section 11.01(a) hereof.
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“ Senior Claimant ” has the meaning given thereto in Section 11.01(a) hereof.
“ Senior Cash Collateral Account ” has the meaning given to such term in Section 3.01(f) hereof.
“ Senior Liquidity Facility ” means the Revolving Credit Agreement, dated as of December 13, 2007, between WEST and the initial Senior Liquidity Provider or any Replacement Liquidity Facility entered into between WEST and a replacement Senior Liquidity Provider.
“ Senior Liquidity Facility Available Amount ” means, at any time of determination, (a) the Senior Liquidity Facility Required Amount at such time minus (b) the aggregate amount of each advance made under the Senior Liquidity Facility and Outstanding at such time; provided that following a Downgrade Advance or a Non-Extension Advance, the Senior Liquidity Facility Available Amount shall be zero.
“ Senior Liquidity Facility Maximum Commitment ” with respect to any Payment Date, means the product of (a) four percent (4%) and (b) the sum of (i) the Outstanding Principal Balance of all Series A Term Notes (other than the Series 2005-A1 Term Notes) as of such Payment Date and (ii) the Maximum Commitment under the Series A Warehouse Notes as of such Payment Date.
“ Senior Liquidity Facility Required Amount ” means, as of each Closing Date, Funding Date and Payment Date, an amount equal to the product of (i) four percent (4%) and (ii) the sum of the Outstanding Principal Balances of all Series A Notes (other than the Series 2005-A1 Term Notes) as of such date, which Outstanding Principal Balances shall be calculated after giving effect to all advances of principal and principal payments made on such date in respect of the Series A Notes. The Senior Liquidity Facility Required Amount may be reduced by WEST subject to receipt of a Rating Agency Confirmation.
“ Senior Liquidity Provider ” means Calyon or any Person that is the Senior Liquidity Provider under a Replacement Liquidity Facility that becomes the Senior Liquidity Facility.
“ Senior Restricted Cash Account ” has the meaning given to such term in Section 3.01(a) hereof.
“ Senior Restricted Cash Amount ” means, as of each Closing Date, Funding Date and Payment Date, an amount equal to the product of (i) four percent (4%), and (ii) the Outstanding Principal Balance of the Series 2005-A1 Term Notes as of such date, after giving effect to all principal payments made on such date in respect of such Series 2005-A1 Term Notes.
“ Senior Series ” means all Series of Series A Notes then outstanding, so long as any amounts are due in respect of any Series of Series A Notes, and, at such time that no such amounts are due, all Series of Series B Notes then outstanding.
“ Senior Shortfall ” has the meaning given to such term in Section 3.13(d) hereof.
“ Series ” means any series of Notes established pursuant to a Supplement.
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“ Series 2005-A1 Portion ” means, in respect of a Hedge Payment Shortfall on a Payment Date, the product of (a) such Hedge Payment Shortfall, and (b) a fraction, the numerator of which is the Stated Interest Amount for the Series 2005-A1 Term Notes on such Payment Date and the denominator of which is the sum of the Stated Interest Amounts for all Series A Notes on such Payment Date.
“ Series 2005-A1 Priority Principal Amount ” means the aggregate amount of all withdrawals from the Senior Restricted Cash Account pursuant to Section 3.04(c) that have not been replenished as of the delivery of a Collateral Liquidation Notice, minus the aggregate amount of all payments of principal on the Series 2005-A1 Term Notes after the delivery of the Collateral Liquidation Notice, provided that the Series 2005-A1 Priority Principal Amount shall not be less than zero.
“ Series 2005-A1 Shortfall ” has the meaning given to such term in Section 3.13(d) hereof.
“ Series 2005-A1 Supplement ” has the meaning set forth in the preamble hereof.
“ Series 2005-A1 Term Notes ” means the Series A1 Notes issued by WEST pursuant to the Series 2005-A1 Supplement.
“ Series 2005-A2 Supplement ” has the meaning set forth in the preamble hereof.
“ Series 2005-A2 Warehouse Notes ” means the Series A2 Floating Rate Secured Notes issued by WEST pursuant to the Series 2005-A2 Supplement.
“ Series 2005-B1 Supplement ” has the meaning set forth in the preamble hereof.
“ Series 2005-B1 Term Notes ” means the Series B1 Notes issued by WEST pursuant to the Series 2005-B1 Supplement.
“ Series 2005-B2 Supplement ” has the meaning set forth in the preamble hereof.
“ Series 2005-B2 Warehouse Notes ” means the Series B2 Floating Rate Secured Notes issued by WEST pursuant to the Series 2005-B2 Supplement.
“ Series Account ” has the meaning given to such term in Section 3.01(a) hereof.
“ Series Allocation Rules ” has the meaning given to such term in Section 3.15(c) hereof.
“ Series A Minimum Adjustment Fraction ” means, for any Series of Series A Notes as of any Payment Date, a fraction equal to one minus the sum of the Series A Payment Date Minimum Disposition Fractions for such Payment Date and for all preceding Payment Dates on which such Series of Series A Notes was outstanding, provided that the Series A Minimum Adjustment Fraction shall not be less than zero.
“ Series A Note ” means any note issued as part of a Series of Notes that is designated as “Series A Notes” in the related Supplement and further differentiated by a unique alpha-numeric designator.
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“ Series A Note Purchase Date ” has the meaning given to such term in Section 4.12 hereof.
“ Series A Note Purchaser ” has the meaning given to such term in Section 4.12 hereof.
“ Series A Payment Date Minimum Disposition Fraction ” means, for any Payment Date a fraction, the numerator of which is the product of (a) *** and (b) the Available Sale Proceeds included in the Available Collections Amount on that Payment Date and the denominator of which is the sum of the original Minimum Targeted Principal Balances for all Series A Notes on such Payment Date, as adjusted for any Optional Redemption pursuant to Section 3.19(b).
“ Series A Payment Date Scheduled Disposition Fraction ” means, for any Payment Date a fraction, the numerator of which is the product of (a) *** and (b) the Available Sale Proceeds included in the Available Collections Amount on that Payment Date and the denominator of which is the sum of the original Scheduled Targeted Principal Balances for all Series A Notes on such Payment Date, as adjusted for any Optional Redemption pursuant to Section 3.19(b).
“ Series A Scheduled Adjustment Fraction ” means, for any Series of Series A Notes as of any Payment Date, a fraction equal to one minus the sum of the Series A Payment Date Scheduled Disposition Fractions for such Payment Date and for all preceding Payment Dates on which such Series of Series A Notes was outstanding, provided that the Series A Scheduled Adjustment Fraction shall not be less than zero.
“ Series A Supplemental Principal Payment Amount ” means, on each Payment Date on which there is a Senior Borrowing Base Deficiency, an amount equal to such Senior Borrowing Base Deficiency.
“ Series A Term Note ” means a Term Note designated as a Series A Note.
“ Series A Warehouse Note ” means a Warehouse Note designated as a Series A Note.
“ Series B Note ” means any note issued as part of a Series of Notes that is designated as “Series B Notes” in the related Supplement and further differentiated by a unique alpha-numeric designator.
“ Series B Payment Date Scheduled Disposition Fraction ” means, for any Payment Date a fraction, the numerator of which is the product of (a) *** and (b) the Available Sale Proceeds included in the Available Collections Amount on that Payment Date and the denominator of which is the sum of the original Scheduled Targeted Principal Balances for all Series A Notes and Series B Notes on such Payment Date, as adjusted for any Optional Redemption pursuant to Section 3.19(b).
“ Series B Scheduled Adjustment Fraction ” means, for any Series of Series B Notes as of any Payment Date, a fraction equal to one minus the sum of the Series B Payment Date Scheduled Disposition Fractions for such Payment Date and for all preceding Payment Dates on which such Series of Series B Notes was outstanding, provided that the Series B Scheduled Adjustment Fraction shall not be less than zero.
*** Confidential information omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.
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“ Series B Supplemental Principal Payment Amount ” means, on each Payment Date on which there is a Junior Borrowing Base Deficiency, an amount equal to such Junior Borrowing Base Deficiency.
“ Series B Term Note ” means a Term Note designated as a Series B Note.
“ Series B Warehouse Note ” means a Warehouse Note designated as a Series B Note.
“ Series Enhancement ” means the rights and benefits provided to the Noteholders of any Series 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 or other similar arrangement. The subordination of any Series to another Series shall not be deemed to be a Series Enhancement, and the Senior Liquidity Facility shall not constitute a Series Enhancement.
“ Series Enhancer ” means, for each Series, the Person as set forth in the related Supplement then providing any Series Enhancement, other than the Noteholders of any Class which is subordinated to another Class.
“ Series Issuance Date ” has, with respect to any Series, the meaning given to such term in Section 2.10(d).
“ Service Provider ” means each of or all of (as the context may require) the Servicer, the Back-up Servicer, the Indenture Trustee, the Security Trustee, the Administrative Agent, the Back-Up Administrative Agent and the Operating Banks.
“ Service Provider Fees ” means any fees and expenses due or reimbursable to Service Providers in accordance with the applicable agreements with such Servicer Providers (including the Related Documents), including, without limitation, the Indenture Trustee Fees due to the Indenture Trustee hereunder.
“ Servicer ” means Willis, in its capacity as Servicer under the Servicing Agreement, including its successors in interest, until another Person shall have become the servicer under such agreement, after which “Servicer” means such other Person.
“ Servicer Fee ” means, for any Payment Date, the compensation payable to the Servicer on such Payment Date in accordance with the terms of, and designated in, the Servicing Agreement.
“ Servicer Termination Event ” has the meaning given to such term in the Servicing Agreement.
“ Servicing Agreement ” means that certain servicing agreement, dated as of the Initial Closing Date among the Servicer, the Security Trustee, each WEST Group Member and the other parties thereto or any replacement servicing agreement, including the Back-Up Servicing Agreement, with a replacement Servicer, including the Back-Up Servicer.
“ SH&E ” means Simat, Hellisen & Eichner, Inc., an independent consulting firm.
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“Shortfall Advance” has the meaning given to such term in Section 3.20(a) hereof.
“ Shortfall Drawing ” has the meaning given to such term in Section 3.20(f)(i) hereof .
“ Signatory Trustee ” has the meaning given to such term in the Trust Agreement.
“ Significant Operating Expenses ” means the following Operating Expenses to the extent included in the Annual Budget and other Operating Expenses (including, without limitation, significant repossession expenses) for which the Controlling Trustees shall determine that it is reasonable and prudent to establish a reserve during the twelve (12) month period prior to their being due and payable: costs of the Annual Appraisal, the Maintenance Reserve Evaluation and the Annual Audit, preparation of the audited financial statements for the Annual Report and insurance premiums.
“ Special Majority ” has the meaning given to such term in the Trust Agreement.
“ Specified Period ” means, with respect to any Series of Notes, the maturity of the Dollar deposits used in the definition of LIBOR, as specified in the related Supplement for such Series.
“ Stage 3 ” means, with respect to an aircraft engine, that such aircraft engine is capable of being operated on a “Stage 3 airplane,” as defined in 14 CFR §36.1(f)(6), in compliance with the Stage 3 noise levels prescribed in section B36.5(c) of appendix B to 14 CFR part 36.
“ Stated Expiration Date ” means, with respect to the Senior Liquidity Facility, the then applicable Expiry Date, as defined in such Senior Liquidity Facility.
“ Stated Interest ” means, with respect to any Note, the amount of interest payable on such Note at the Stated Rate set forth in the related Supplement.
“ Stated Interest Amount ” means, with respect to any Series of Notes, that amount of Stated Interest due and payable on such Series of Notes on a Payment Date, including any Stated Interest due and payable on a prior Payment Date that was not paid on such Payment Date.
“ Stated Interest Shortfall ” has the meaning given to such term in Section 3.13(d)(i) hereof.
“Stated Rate” means, as specified in the related Supplement, the rate of interest payable on a specific Note.
“ Stock ” means all shares of capital stock, all beneficial interests in trusts, all ordinary shares and preferred shares and any options, warrants and other rights to acquire such shares or interests.
“ Subsidiary ” means, as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership 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, partnership, limited liability company or other entity are at the
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time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person.
“ Substitute Engine ” means any Engine that is to be transferred to a WEST Group Member in place of any Remaining Engine, to the extent authorized by the applicable Acquisition Agreement.
“ Supplement ” means any supplement to this Indenture which sets forth the Principal Terms and other terms and conditions of the Series of Notes issued thereunder.
“ Supplemental Interest ” means, with respect to any Series of Notes, that portion (if any) of the interest payable on such Notes that has been designated as such in the related Supplement.
“ Supplemental Interest Amount ” means, with respect to any Series of Notes, that amount of Supplemental Interest due and payable on such Series of Note on a Payment Date, including any Supplemental Interest due and payable on a prior Payment Date that was not paid on such prior Payment Date.
“ Supplemental Payment Allocation Rules ” has the meaning given to such term in Section 3.15(c) hereof.
“ Supplier ” means the Person that supplies or installs a Mandatory Engine Modification or Discretionary Engine Modification and to whom payment for the Purchase Price of such Mandatory Engine Modification or Discretionary Engine Modification is to be made.
“ Tax ” and “ Taxes ” mean any and all taxes, fees, levies, duties, tariffs, imposts, and other charges of any kind (together with any and all interest, penalties, loss, damage, liability, expense, additions to tax and additional amounts or costs incurred or imposed with respect thereto) imposed or otherwise assessed by the United States or by any state, local or foreign government (or any subdivision or agency thereof) or other taxing authority, including, without limitation: taxes or other charges on or with respect to income, franchises, windfall or other profits, gross receipts, property, sales, use, capital stock, payroll, employment, social security, workers’ compensation, unemployment compensation, or net worth and similar charges; taxes or other charges in the nature of excise, withholding, ad valorem, stamp, transfer, value added, taxes on goods and services, gains taxes, license, registration and documentation fees, customs duties, tariffs, and similar charges.
“ Tax Redemption ” has the meaning given to such term in Section 3.16(c) hereof.
“ Term Note ” means each Note issued as part of a Term Series.
“ Term Series ” means a Series of Notes in which funds representing the full Outstanding Principal Balance of such Notes are fully disbursed to WEST on the Issuance Date of such Series.
“ Third Party Event ” has the meaning given to such term in Section 5.04 hereof.
“ Third Remaining Engine ” has the meaning given to such term in the Asset Transfer Agreement.
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“Threshold Rating” means either (x) a short-term unsecured debt rating of at least “F1” from Fitch and “P1” from Moody’s or (y), to the extent such short term rating is unavailable, a long-term unsecured debt rating of at least “A-” from Fitch and “A3” from Moody’s.
“ Total Loss ” means, with respect to any Engine (a) if the same is subject to a Lease, an Event of Loss (as defined in such Lease) or the like (however so defined); or (b) if the same is not subject to a Lease, (i) its actual, constructive, compromised, arranged or agreed total loss, (ii) its destruction, damage beyond economic repair or being rendered permanently unfit for normal use for any reason whatsoever, (iii) its requisition for title, confiscation, restraint, detention, forfeiture or any compulsory acquisition or seizure or requisition for hire (other than a requisition for hire for a temporary period not exceeding 180 days) by or under the order of any government (whether civil, military or de facto) or public or local authority or (iv) its hijacking, theft or disappearance, resulting in loss of possession by the owner or operator thereof for a period of ninety (90) consecutive days or longer. A Total Loss with respect to any Engine shall be deemed to occur on the date on which such Total Loss is deemed pursuant to the relevant Lease to have occurred or, if such Lease does not so deem or the relevant Engine is not subject to a Lease, (A) in the case of an actual total loss or destruction, damage beyond economic repair or being rendered permanently unfit, the date on which such loss, destruction, damage or rendering occurs (or, if the date of loss or destruction is not known, the date on which the relevant Engine was last heard of); (B) in the case of a constructive, compromised, arranged or agreed total loss, the earlier of (1) the date 30 days after the date on which notice claiming such total loss is issued to the insurers or brokers and (2) the date on which such loss is agreed or compromised by the insurers; (C) in the case of requisition for title, confiscation, restraint, detention, forfeiture, compulsory acquisition or seizure, the date on which the same takes effect; (D) in the case of a requisition for hire, the expiration of a period of 180 days from the date on which such requisition commenced (or, if earlier, the date upon which insurers make payment on the basis of a Total Loss); or (E) in the case of clause (iv) above, the final day of the period of 90 consecutive days referred to therein.
“ Treasury Yield ” means, with respect to any Redemption of each Additional Series of Notes that are Fixed Rate Notes (unless an alternative calculation is provided by the terms thereof), on any Payment Date, the interest rate (expressed as a semiannual decimal and, in the case of United States Treasury bills, converted to a bond equivalent yield) determined on the fourth Business Day prior to such Payment Date to be the per annum rate equal to the semiannual yield to maturity for United States Treasury securities maturing on the Average Life Date of such class and trading in the public securities markets either (i) as determined by interpolation between the most recent weekly average yield to maturity for two series of United States Treasury securities trading in the public securities markets, (A) one maturing as close as possible to, but earlier than, the Average Life Date of such class and (B) the other maturing as close as possible to, but later than, the Average Life Date of such class in each case as published in the most recent H.15 (519) or (ii) if a weekly average yield to maturity for United States Treasury securities maturing on the Average Life Date of such class is reported in the most recent H.15 (519), such weekly average yield to maturity as published in such H.15 (519). For the purposes of this definition, “ H.15 (519) ” means the weekly statistical release designated as such, or any successor publication, published by the Board of Governors of the Federal Reserve System, and the most recent H.15 (519) is the H.15 (519) published prior to the close of business on the fourth Business Day prior to the applicable Payment Date.
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“ Trust Agreement ” means that certain Trust Agreement, dated the Initial Closing Date, between the Owner Trustee and Willis, as Depositor.
“Trust Collateral” has the meaning given to such term in the Security Trust Agreement.
“ Trustee Resolution ” means a resolution adopted by a majority of the Controlling Trustees, evidenced by a certified copy of such resolution signed by a Signatory Trustee.
“ UCC ” means the Uniform Commercial Code as enacted in the State of New York.
“ United States Person ” and “ U.S. Person ” have the meanings given to such terms in Regulation S under the Securities Act.
“ Unused Commitment ” means, as of any date in respect of the Holder of any Warehouse Notes, the excess of the Maximum Commitment of such Holder in respect of such Warehouse Notes over the Outstanding Principal Balance of such Warehouse Notes.
“ Unrestricted Book-Entry Note ” shall have the meaning given to such term in Section 2.01(e)(iv) hereof, the form of which shall be substantially in the form of the applicable Note Form for such Note, with the legends required by Section 2.02 for an Unrestricted Book-Entry Note inscribed thereon and with such changes therein and such additional information as may be specified in the Supplement pursuant to which such Note is issued.
“ U.S. GAAP ” means generally accepted accounting principles in the United States, as in effect from time to time.
“ U.S. Government Obligations ” has the meaning given to such term in Section 12.02(a) hereof.
“ UT Finance ” means UT Finance Corporation, a Delaware corporation.
“ Warehouse Loan ” means a Loan the proceeds of which are to be deposited in the Engine Acquisition Account pursuant to Section 3.18 hereof and used to fund the acquisition of Additional Engines and/or the cost of Discretionary Engine Modifications.
“ Warehouse Loan Agreement ” means, with respect to any Series of Warehouse Notes, the note purchase agreement or other agreement pursuant to which the Holders of such Warehouse Notes agree to make Loans.
“ Warehouse Note ” means any Note issued as part of a Warehouse Series.
“ Warehouse Note Redemption ” has the meaning given to such term in Section 3.16(d) hereof.
“ Warehouse Series ” means a Series of Notes pursuant to which WEST will, upon meeting certain requirements, be entitled to request Loans from the Holders of such Notes up to Maximum Principal Balance during the period commencing on the Series Issuance Date of such
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Series and ending on (but excluding) the date on which a Conversion Event occurs in respect of such Series.
“ WEST ” has the meaning set forth in the preamble hereof.
“ WEST Expenses ” means, for any Payment Date, any costs directly incurred by WEST or any other WEST Group Member or incurred by the Servicer or the Administrative Agent in their performance of their obligations that are, in each case, reasonable in amount and are fairly attributable to WEST or any other WEST Group Member and their permitted activities hereunder during the related Collection Period and that are not Ordinary Course Expenses, Service Provider Fees or Liquidity Expenses. WEST Expenses include the following: (i) accounting and audit expenses, and tax preparation, filing and audit expenses; (ii) premiums for liability, casualty, fidelity, directors and officers and other insurance; (iii) directors’ and trustees’ fees and expenses, including fees and expenses of the Independent Controlling Trustee and Owner Trustee but excluding any fees to the Equity Trustees; (iv) legal fees and expenses not associated with the Engines and the Leases, including legal fees and expenses incurred in connection with the proposed issuance of any Additional Notes; (v) other professional fees, including the cost of obtaining the annual Appraisals of the Engines and the annual Maintenance Reserve Evaluation as described in Sections 5.04(d) and 5.04(e); (vi) taxes (including personal or other property taxes and all sales, value added, use and similar taxes) other than taxes assessed with respect to the ownership, use and/or operation of the Engines or that constitute Ordinary Course Expenses; (vii) taxes imposed in respect of any and all issuances of equity interests, stock exchange listing fees, registrar and transfer expenses and trustee’s fees with respect to any outstanding securities of WEST; and (viii) surveillance fees assessed by the Rating Agencies.
“ WEST Funding ” means WEST Engine Funding LLC, a Delaware limited liability company.
“ WEST Group ” means WEST, the Engine Subsidiaries (including WEST Funding), the Leasing Subsidiaries and the Engine Trusts.
“ WEST Group Member ” means WEST or any WEST Subsidiary.
“ WEST Subsidiary ” means either or both, as the context may require, of (i) each Subsidiary of WEST existing on the Initial Closing Date and listed on Schedule 1, Schedule 2-1, Schedule 2-2 and Schedule 3 to this Indenture, and (ii) each other direct or indirect Subsidiary of WEST (including each Engine Trust of which WEST or a Subsidiary thereof is the holder of a beneficial interest).
“ Willis ” means Willis Lease Finance Corporation, a Delaware corporation.
Section 1.02 Rules of Construction .
Unless the context otherwise requires:
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Section 1.03 Compliance Certificates and Opinions .
Upon any application or request by WEST to the Indenture Trustee to take any action under any provision of this Indenture, WEST shall furnish to the Indenture Trustee an Officer’s Certificate stating that, in the opinion of the signers thereof, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with, and 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.
Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture or any indenture supplemental hereto shall include:
(a) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions in this Indenture relating thereto;
(b) 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;
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(c) 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 or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.
Section 1.04 Acts of Noteholders .
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ARTICLE II
THE NOTES
Section 2.01 Authorization of Notes; Amount of Outstanding Principal Balance; Terms; Form; Execution and Delivery .
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Section 2.02 Restrictive Legends .
Except as specified in Section 2.1 2(f) hereof, each 144A Book-Entry Note, each Unrestricted Book-Entry Note and each Definitive Note issued in reliance on Section 4(2) of the Securities Act (and all Notes issued in exchange therefor or upon registration of transfer or substitution thereof) shall bear the following legend on the face thereof:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR WITH ANY SECURITIES REGULATORY AUTHORITY IN ANY JURISDICTION AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN “INSTITUTIONAL ACCREDITED INVESTOR”) OR (C) IT IS NOT
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A U.S. PERSON (WITHIN THE MEANING OF REGULATION S) AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT BEFORE TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE OF THIS NOTE AND THE LAST DATE THAT WILLIS ENGINE SECURITIZATION TRUST, A DELAWARE STATUTORY TRUST (“WEST”), OR ANY OF ITS AFFILIATES OWNED THIS NOTE, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO WEST OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE INDENTURE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE INDENTURE TRUSTEE) AND AN OPINION OF COUNSEL ACCEPTABLE TO WEST THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (D) IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT TO AN EXEMPTION FROM REGISTRATION IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH OF CASES (A) THROUGH (F) ABOVE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE IN THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN THE TWO-YEAR PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE TRANSFER NOTICE ATTACHED HERETO AND SUBMIT SUCH TRANSFER NOTICE TO THE INDENTURE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR IF THE TRANSFER IS PURSUANT TO AN EXEMPTION FROM REGISTRATION IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE INDENTURE TRUSTEE AND WEST SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE INDENTURE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.
Each Book-Entry Note shall also bear the following legend on the face thereof:
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UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO WEST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS BOOK-ENTRY NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS BOOK-ENTRY NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.12 OF THE INDENTURE.
Each Regulation S Temporary Book-Entry Note shall bear the following legend on the face thereof:
THIS NOTE IS A REGULATION S TEMPORARY BOOK-ENTRY NOTE WITHIN THE MEANING OF THE INDENTURE REFERRED TO HEREINAFTER AND IS SUBJECT TO RESTRICTIONS ON THE TRANSFER AND EXCHANGE THEREOF AND ON THE PAYMENT OF INTEREST THEREON AS SPECIFIED IN THE INDENTURE.
Section 2.03 Note Registrar and Paying Agent
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Section 2.04 Paying Agent to Hold Money in Trust .
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Section 2.05 Method of Payment .
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Section 2.06 Minimum Denomination .
Unless otherwise set forth in the Supplement for a Series, each Note shall be issued in minimum denominations of $100,000 and integral multiples of $1,000 in excess thereof.
Section 2.07 Exchange Option .
If the holder of a beneficial interest in an Unrestricted Book-Entry Note deposited with DTC wishes at any time to exchange its interest in the Unrestricted Book-Entry Note, or to transfer its interest in the Unrestricted Book-Entry Note to a Person who wishes to take delivery thereof in the form of an interest in the 144A Book-Entry Note, the holder may, subject to the rules and procedures of Euroclear or Clearstream and DTC, as the case may be, give directions for the Indenture Trustee and Note Registrar to exchange or cause the exchange or transfer or cause the transfer of the interest for an equivalent beneficial interest in the 144A Book-Entry Note. Upon receipt by the Indenture Trustee and Note Registrar of instructions from Euroclear or Clearstream (based on instructions from depositaries for Euroclear and Clearstream) or from a DTC Participant, as applicable, or DTC, as the case may be, directing the Indenture Trustee and Note Registrar to credit or cause to be credited a beneficial interest in the 144A Book-Entry Note equal to the beneficial interest in the Unrestricted Book-Entry Note to be exchanged or transferred (such instructions to contain information regarding the DTC Participant account to be credited with the increase, and, with respect to an exchange or transfer of an interest in the Unrestricted Book-Entry Note, information regarding the DTC Participant account to be debited with the decrease), the Indenture Trustee and Note Registrar shall instruct DTC to reduce the Unrestricted Book-Entry Note by the aggregate principal amount of the beneficial interest in the Unrestricted Book-Entry Note to be exchanged or transferred, and the Indenture Trustee shall instruct DTC, concurrently with the reduction, to increase the principal amount of the 144A Book-Entry Note by the aggregate principal amount of the beneficial interest in the Unrestricted Book-Entry Note to be so exchanged or transferred, and to credit or cause to be credited to the account of the Person specified in the instructions a beneficial interest in the 144A Book-Entry Note equal to the reduction in the principal amount of the Unrestricted Book-Entry Note.
If a holder of a beneficial interest in the 144A Book-Entry Note wishes at any time to exchange its interest in the 144A Book-Entry Note for an interest in a Regulation S Book-Entry Note, or to transfer its interest in the 144A Book-Entry Note to a Person who wishes to take delivery thereof in the form of an interest in the Regulation S Book-Entry Note, the holder may, subject to the rules and procedures of DTC, give directions for the Indenture Trustee and Note Registrar to exchange or cause the exchange or transfer or cause the transfer of the interest for an equivalent beneficial interest in the Regulation S Book-Entry Note. Upon receipt by the Indenture Trustee and Note Registrar of (a) instructions given in accordance with DTC’s procedures from a DTC Participant directing the Indenture Trustee and Note Registrar to credit or cause to be credited a beneficial interest in the Regulation S Book-Entry Note in an amount equal to the beneficial interest in the 144A Book-Entry Note to be exchanged or transferred, (b) a written order given in accordance with DTC’s procedures containing information regarding the account of the depositaries for Euroclear or Clearstream or another Clearing Agency Participant,
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as the case may be, to be credited with the increase and the name of the account and (c) certificates in the forms of Exhibits C-5 and C-7 hereto, respectively, given by the Noteholder and the proposed transferee of the interest, the Indenture Trustee and Note Registrar shall instruct DTC to reduce the 144A Book-Entry Note by the aggregate principal amount of the beneficial interest in the 144A Book-Entry Note to be so exchanged or transferred and the Indenture Trustee and Note Registrar shall instruct DTC, concurrently with the reduction, to increase the principal amount of the Regulation S Book-Entry Note by the aggregate principal amount of the beneficial interest in the 144A Book-Entry Note to be so exchanged or transferred, and to credit or cause to be credited to the account of the Person specified in the instructions a beneficial interest in the Regulation S Book-Entry Note equal to the reduction in the principal amount of the 144A Book-Entry Note.
Notwithstanding anything to the contrary herein, an Initial Purchaser may exchange beneficial interests in the Regulation S Temporary Book-Entry Note held by it for interests in the 144A Book-Entry Note only after delivery by the Initial Purchaser of instructions to DTC for the exchange, substantially in the form of Exhibit C-6 hereto. Upon receipt of the instructions provided in the preceding sentence, the Indenture Trustee and Note Registrar shall instruct DTC to reduce the principal amount of the Regulation S Temporary Book-Entry Note to be so transferred and shall instruct DTC to increase the principal amount of the 144A Book-Entry Note and credit or cause to be credited to the account of the placement agent a beneficial interest in the 144A Book-Entry Note having a principal amount equal to the amount by which the principal amount of the Regulation S Temporary Book-Entry Note was reduced upon the transfer pursuant to the instructions provided in the first sentence of this paragraph.
If a Book-Entry Note is exchanged for a Definitive Note, the Notes may be exchanged or transferred for one another only in accordance with such procedures as are substantially consistent with the provisions of the three immediately preceding paragraphs (including the certification requirements intended to ensure that the exchanges or transfers comply with Rule 144 or Regulation S, as the case may be) and as may be from time to time adopted by the Indenture Trustee.
Section 2.08 Mutilated, Destroyed, Lost or Stolen Notes .
If any Note shall become mutilated, destroyed, lost or stolen, WEST shall, upon the written request of the Holder thereof and presentation of the Note or satisfactory evidence of destruction, loss or theft thereof to the Indenture Trustee or Note Registrar, issue, and the Indenture Trustee shall authenticate and the Indenture Trustee or Note Registrar shall deliver in exchange therefor or in replacement thereof, a new Note of the same Series, payable to such Holder in the same principal amount, of the same maturity, with the same payment schedule, bearing the same interest rate and dated the date of its authentication. If the Note being replaced has become mutilated, such Note shall be surrendered to the Indenture Trustee or a Note Registrar and forwarded to WEST by the Indenture Trustee or such Note Registrar. If the Note being replaced has been destroyed, lost or stolen, the Holder thereof shall furnish to WEST, the Indenture Trustee or a Note Registrar (i) such security or indemnity as may be required by them to save WEST, the Indenture Trustee and such Note Registrar harmless and (ii) evidence satisfactory to WEST, the Indenture Trustee and such Note Registrar of the destruction, loss or theft of such Note and of the ownership thereof, provided that the requirements of this sentence
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with respect to any Holder that is a QIB shall be satisfied by delivery of an indemnity of such Holder in form and substance satisfactory to the Indenture Trustee and an affidavit of such Holder as to the destruction, loss or theft . The Noteholders will be required to pay any tax or other governmental charge imposed in connection with such exchange or replacement and any other expenses (including the fees and expenses of the Indenture Trustee and any Note Registrar) connected therewith.
Section 2.09 Payments of Transfer Taxes .
Upon the transfer of any Note or Notes pursuant to Section 2.07 hereof, WEST or the Indenture Trustee may require from the party requesting such new Note or Notes payment of a sum to reimburse WEST or the Indenture Trustee for, or to provide funds for the payment of, any transfer tax or similar governmental charge payable in connection therewith.
Section 2.10 Additional Notes .
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Upon satisfaction of the above conditions, the Indenture Trustee shall execute the Supplement and authenticate and deliver the Notes of such Series.
Section 2.11 Book-Entry Registration .
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None of WEST, the Note Registrar, the Paying Agent or the Indenture Trustee shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be fully protected in relying on, such registration instructions. Upon the issuance of Definitive Notes of such Series, the Indenture Trustee shall recognize the Persons in whose name the Definitive Notes are registered in the Register as Noteholders hereunder. Neither WEST nor the
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Indenture Trustee shall be liable if the Indenture Trustee or WEST is unable to locate a qualified successor DTC.
Definitive Notes of any Series will be freely transferable and exchangeable for Definitive Notes of the same Series at the office of the Indenture Trustee or the office of a Note Registrar upon compliance with the requirements set forth herein. In the case of a transfer of only part of a holding of Definitive Notes, a new Definitive Note shall be issued to the transferee in respect of the part transferred and a new Definitive Note in respect of the balance of the holding not transferred shall be issued to the transferor and may be obtained at the office of the applicable Note Registrar.
Section 2.12 Special Transfer Provisions .
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Section 2.13 Temporary Definitive Notes .
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Section 2.14 Statements to Noteholders .
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Section 2.15 CUSIP, CINS AND ISIN Numbers .
WEST in issuing the Notes may use “CUSIP”, “CINS”, “ISIN” or other identification numbers (if then generally in use), and if so, the Indenture Trustee shall use CUSIP numbers, CINS numbers, ISIN numbers or other identification numbers, as the case may be, in notices of redemption or exchange as a convenience to Holders; provided that any such notice shall state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of redemption or exchange and that reliance may be placed only on the other identification numbers printed on the Notes; provided further , that failure to use “CUSIP”, “CINS”, “ISIN” or other identification numbers in any notice of redemption or exchange shall not affect the validity or sufficiency of such notice.
Section 2.16 Debt Treatment of Notes .
The parties hereto agree, and the holders of the Notes by their purchase thereof shall be deemed to have agreed, to treat the Notes as debt for U.S. federal income tax purposes.
ARTICLE III
ACCOUNTS; PRIORITY OF PAYMENTS
Section 3.01 Establishment of Accounts; Investments .
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Section 3.02 Collections Account .
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Section 3.03 Engine Acquisition Account .
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Section 3.04 Senior Restricted Cash Account .
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Section 3.05 Junior Restricted Cash Account .
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Section 3.06 Engine Reserve Account .
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Section 3.07 Security Deposit/Lessee-Funded Account .
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Section 3.08 Expense Account .
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Section 3.09 Series Accounts .
Section 3.10 Redemption/Defeasance Account .
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Section 3.11 Engine Replacement Account .
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Section 3.12 Hedge Payment Account .
Section 3.13 Calculations .
(a) As soon as reasonably practicable after each Determination Date, but in no event later than 12:00 noon (New York City time) on the third Business Day prior to the immediately succeeding Payment Date, WEST shall cause the Administrative Agent, based on information known to it or Relevant Information provided to it, determine the amount of Collections received during the Collection Period ending on such Determination Date (including the amount of any Investment Earnings on the Balances in the Collections Account, if any, as of such Determination Date) and shall calculate the following amounts:
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provided that, if the Administrative Agent has not received all of the Relevant Information for such Payment Date, the Administrative Agent shall make reasonable assumptions for purposes of the calculations contemplated by this Section 3.13.
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Section 3.14 Payment Date Distributions from the Collections Account .
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Section 3.15 Allocation Rules .
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Section 3.16 Certain Redemptions .
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then WEST shall inform the Indenture Trustee in writing at such time of any such requirement or imposition and shall use its best efforts to avoid the effect of the same; subject to WEST obtaining the consent of the Control Party for each affected Series of Notes and the Senior Liquidity Provider, in the case of the Series A Notes (other than the Series 2005-A1 Term Notes) and a Rating Agency Confirmation with respect to any proposed action. If, after using its best efforts to avoid the adverse effect described above, WEST or any of its Subsidiaries has not avoided such effects, WEST may, at its election, redeem the Notes to which such withholding or deduction applies on any Payment Date in whole at the Outstanding Principal Balance thereof plus accrued and unpaid interest but without premium on any Payment Date (a “ Tax Redemption ”). However, any Tax Redemption may not occur more than thirty (30) days prior to such time as the requirement or imposition described in (i) or (ii) above is to become effective. In the event of any Tax Redemption of part of a Series of Notes, such Tax Redemption shall be deemed an Optional Redemption for purposes of calculating the adjustments in the Targeted Principal Balances on the Redemption Date and on subsequent Payment Dates in accordance with Section 3.19 hereof.
Section 3.17 Procedure for Redemptions .
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Section 3.18 Collections Loans; Warehouse Loan .
The Supplements for the Warehouse Notes shall provide that all Loans under the Warehouse Notes shall be deposited in the Collections Account. If permitted under the related
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Supplement for any Series A Warehouse Notes or Series B Warehouse Notes, the Administrative Agent may direct the Indenture Trustee, in writing, to apply the proceeds of the Loan made on any Funding Date that is a Payment Date in respect of such Warehouse Notes as a Collections Loan and to retain any such Collections Loan in the Collections Account for inclusion in the Available Collections Amount on such Payment Date on which such Loan is made, subject to satisfaction of the conditions under each such Supplement for such a Collections Loan. Except to the extent that any Loans made in respect of Warehouse Notes constitute Collections Loans in accordance with the preceding sentence, such Loans shall constitute Warehouse Loans, and the Indenture Trustee, as directed in writing by the Administrative Agent, shall deposit any such Warehouse Loan in the Engine Acquisition Account to be held in and disbursed from the Engine Acquisition Account in accordance with Section 3.03 hereof.
Section 3.19 Adjustments in Targeted Principal Balances .
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Section 3.20 Senior Liquidity Facility .
The Indenture Trustee shall make drawings on the Senior Liquidity Facility as provided in this Section 3.20.
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ARTICLE IV
DEFAULT AND REMEDIES
Section 4.01 Events of Default .
Each of the following events shall constitute an “ Event of Default ” hereunder, and each such Event of Default shall be deemed to exist and continue so long as, but only so long as, it shall not have been remedied:
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Section 4.02 Remedies Upon Event of Default .
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Section 4.03 Limitation on Suits .
Without limiting the provisions of Section 4.11, no Holder shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, the Security Trust Agreement or the Notes, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:
No one or more Noteholders may use this Indenture to affect, disturb or prejudice the rights of another Noteholder or to obtain or seek to obtain any preference or priority not otherwise created by this Indenture and the terms of the Notes over any other Holder or to enforce any right under this Indenture, except in the manner herein provided.
Section 4.04 Waiver of Existing Defaults .
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Section 4.05 Restoration of Rights and Remedies .
If the Indenture Trustee or any Holder of Series A Notes has instituted any proceeding to enforce any right or remedy under this Indenture, and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Indenture Trustee or such Holder, then in every such case WEST, the Indenture Trustee and the Noteholders shall, subject to any determination in such proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Indenture Trustee and the Noteholders shall continue as though no such proceeding has been instituted.
Section 4.06 Remedies Cumulative .
Each and every right, power and remedy herein given to the Indenture Trustee (or the Control Parties or the Requisite Majority) specifically or otherwise in this Indenture shall be cumulative and shall be in addition to every other right, power and remedy herein specifically given or now or hereafter existing at law, in equity or by statute, and each and every right, power and remedy whether specifically herein given or otherwise existing may be exercised from time to time and as often and in such order as may be deemed expedient by the Indenture Trustee (or the Control Parties or the Requisite Majority), and the exercise or the beginning of the exercise of any power or remedy shall not be construed to be a waiver of the right to exercise at the same time or thereafter any other right, power or remedy. No delay or omission by the Indenture Trustee (or the Control Parties or the Requisite Majority) in the exercise of any right, remedy or power or in the pursuance of any remedy shall impair any such right, power or remedy or be construed to be a waiver of any Default on the part of WEST or to be an acquiescence.
Section 4.07 Authority of Courts Not Required .
The parties hereto agree that, to the greatest extent permitted by law, the Indenture Trustee shall not be obliged or required to seek or obtain the authority of, or any judgment or order of, the courts of any jurisdiction in order to exercise any of its rights, powers and remedies under this Indenture, and the parties hereby waive any such requirement to the greatest extent permitted by law.
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Section 4.08 Rights of Noteholders to Receive Payment .
Notwithstanding any other provision of this Indenture, the right of any Noteholder to receive payment of interest on, principal of, or premium, if any, on its Note on or after the respective due dates therefor expressed in such Note, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Noteholder.
Section 4.09 Indenture Trustee May File Proofs of Claim .
The Indenture Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee and of any Noteholder allowed in any judicial proceedings relating to any obligor on the Notes, its creditors or its property.
Section 4.10 Undertaking for Costs .
All parties to this Indenture agree, and each Noteholder by its acceptance thereof shall be deemed to have agreed, that 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 or omitted by it as the Indenture Trustee, a court in its discretion may require the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and the court in its discretion may 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 defense made by the party litigant. This Section 4.10 does not apply to a suit instituted by the Indenture Trustee, a suit instituted by any Noteholder for the enforcement of the payment of interest, principal, or premium, if any, on his Note on or after the respective due dates expressed in such Note, or a suit by a Noteholder or Noteholders of more than 10% of the Outstanding Principal Balance of any Series of the Notes.
Section 4.11 Control by Noteholders .
Subject to Sections 4.01 and 4.03 hereof and to the rights of the Control Party hereunder, the Noteholders holding Notes of any Series of not less than 25% of the Outstanding Principal Balance of Notes of such 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 under this Indenture; provided that, for such Series:
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Section 4.12 Purchase Rights of the Series B Noteholders .
Upon the occurrence of an Event of Default, whether or not the Control Parties for the Senior Series have delivered a Collateral Liquidation Notice, one or more of the Holders of the Series B Notes (each, a “ Series A Note Purchaser ”) may elect to purchase all, but not less than all, of the Series A Notes, for a purchase price equal to the Outstanding Principal Balance of the Series A Notes and all accrued and unpaid interest and premium thereon, if any. Such right shall be exercised by giving the Indenture Trustee written notice of the intent to purchase the Series A Notes (a “ Purchase Option Notice ”) and the date on which such purchase is to be consummated (the “ Series A Note Purchase Date ”), which shall be not less than ten (10) Business Days nor more than twenty (20) Business Days after the date of the Purchase Option Notice. If there is more than one Series A Note Purchaser, the Series A Notes shall be allocated between or among the Series A Note Purchasers in proportion to the Outstanding Principal Balance of their Series B Notes or on such other basis as such Holders of Series B Notes may agree, and the Series A Note Purchase Date shall be the date specified in the related Purchase Option Notice delivered by such Series A Note Purchasers. The Indenture Trustee shall promptly deliver a copy of each Purchase Option Notice to the Holders of the Series A Notes, WEST, the Servicer and the Administrative Agent. On the date specified in the Purchase Option Notice, the Series A Noteholders shall transfer the Series A Notes to the Series A Note Purchasers upon the tender to them of the purchase price described in this Section 4.12. If any Series A Note Purchaser fails to consummate the purchase of the Series A Notes, such Holder shall be deemed to have irrevocably waived its rights to purchase the Series A Notes, and, if there are multiple Series A Note Purchasers, the remaining Series A Note Purchasers must tender the purchase price allocable to the portion of the Series A Notes allocable to such defaulting Series A Note Purchaser, in such manner as they shall agree, or all such Series A Notes Purchasers shall be deemed to have cancelled the purchase of the Series A Notes pursuant to such Purchase Option Notice. The non-defaulting Series A Note Purchasers may elect to defer the Series A Note Purchase Date by not more than three (3) Business Days for purposes of arranging such tender.
ARTICLE V
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 5.01 Representations and Warranties .
WEST represents and warrants to the Indenture Trustee as of the Initial Closing Date and each other Closing Date thereafter as follows:
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The representations and warranties made by WEST and each WEST Group Member in any of the other Related Documents are true and accurate as of the date made.
Section 5.02 General Covenants .
WEST covenants with the Indenture Trustee as follows:
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Each Additional Series of Notes issued pursuant to clause (ii), clause (iii) or clause (iv) above shall also satisfy the following conditions:
(x) Such Additional Series of Notes (1) shall be amortized on a level basis over a period of not less than thirteen (13) years for Scheduled Principal Payment Amounts on any Series A Notes, fifteen (15) years for Scheduled Principal Payment Amounts on any Series B Notes and twenty (20) years for Minimum Principal Payment Amounts, or (2) if not amortized on a level basis, (i) shall have a weighted average life that is less than the Remaining Weighted Average Life of any Series of Notes then Outstanding and (ii) shall provide for Minimum Principal Payment Amounts and Scheduled Principal Payment Amounts during the period of such Remaining Weighted Average Life that are more than the Minimum Principal Payment Amounts and Scheduled Principal Payment Amounts, respectively, that would be payable under the level amortization described in clause (1), provided that (A) the foregoing requirements shall not apply to any Series of Additional Notes that are Warehouse Notes prior to the occurrence of a Conversion Event with respect to such Additional Notes and (B) satisfaction of the foregoing requirements with respect to any Series of Additional Notes that are Warehouse Notes shall be determined as of the date of a Conversion Event with respect to such Warehouse Notes; and
(y) as of the Series Issuance Date for such Additional Series, the percentage of Off-Production Engines in the Portfolio (measured by Adjusted Borrowing Value) shall not exceed *** during the period beginning on the Initial Closing Date and ending on the fourth (4th) anniversary of the Initial Closing Date, *** during the period beginning on (but excluding) the fourth (4th) anniversary of the Initial Closing Date and ending on the tenth (10 th ) anniversary of the Initial Closing Date, and *** thereafter.
*** Confidential information omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.
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The term “ investment ” for purposes of the above restriction means any loan or advance to a Person, any purchase or other acquisition of any Stock or Indebtedness of such Person, any capital contribution to such Person or any other investment in such Person.
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Section 5.03 Portfolio Covenants .
WEST covenants with the Indenture Trustee as follows:
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*** Confidential information omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.
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*** Confidential information omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.
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WEST shall not permit any WEST Group Member to (i) lease (including any renewal or extension of any existing Lease) any Engine to any Lessee habitually based or domiciled in any of the jurisdictions set forth as “Prohibited” in clause (a) of the PRI Guidelines, as amended from time to time upon the receipt of a Rating Agency Confirmation (each such jurisdiction, a “ Prohibited Country ”), (ii) enter into any Lease (including any renewal or extension of any existing Lease) that expressly permits the Lessee to sublease an Engine to a sublessee habitually based or domiciled in a Prohibited Country, or (iii) consent to a sublease of an Engine to a sublessee habitually based or domiciled in a Prohibited Country.
Section 5.04 Operating Covenants .
WEST covenants with the Indenture Trustee as follows, provided that any of the following covenants with respect to the Engines shall not be deemed to have been breached by virtue of any act or omission of a Lessee or sub-lessee, or of any Person which has possession of an Engine for the purpose of repairs, maintenance, modification or storage, or by virtue of any
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requisition, seizure, or confiscation of an Engine (other than seizure or confiscation arising from a breach by WEST or any other WEST Group Member of such covenant) (each, a “Third Party Event” ), so long as (i) neither WEST nor any other WEST Group Member consents or has consented to such Third Party Event; and (ii) WEST or any other WEST Group Member which is the lessor or owner of such Engine promptly and diligently takes such commercially reasonable actions as a leading international engine operating lessor would reasonably take in respect of such Third Party Event, including, as deemed appropriate (taking into account, among other things, the laws of the jurisdiction in which such Engine is located), seeking to compel such Lessee or other relevant Person to remedy such Third Party Event or seeking to repossess the relevant Engine:
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In determining the amount of insurance required to be maintained by this Section 5.04(g), WEST may take into account any indemnification from, or insurance provided by, any governmental, supranational or inter-governmental authority or agency (other than, with respect to PRI, any governmental authority or agency of any jurisdiction for which PRI must be obtained), the sovereign foreign currency debt of which is rated at least AA, or the equivalent, by at least one of the Rating Agencies, against any risk with respect to an Engine at least in an amount which, when added to the amount of insurance against such risk maintained by WEST (or which WEST has caused to be maintained), shall be at least equal to the amount of insurance against such risk otherwise required by this Section 5.04(g) (taking into account self-insurance permitted by this Section 5.04(g)). Any such indemnification or insurance provided by such government shall provide substantially similar protection as the insurance required by this Section 5.04g). WEST will not be required to maintain (or to cause to be maintained) any insurance otherwise required hereunder to the extent that such insurance is not generally available in the relevant insurance market at commercially reasonable rates from time to time.
Section 6.01 Acceptance of Trusts and Duties .
The duties and responsibilities of the Indenture Trustee shall be as expressly set forth herein, and no implied covenants or obligations shall be read into the Indenture against the Indenture Trustee. The Indenture Trustee accepts the trusts hereby created and applicable to it and agrees to perform the same but only upon the terms of this Indenture and agrees to receive and disburse all moneys received by it in accordance with the terms hereof. The Indenture Trustee in its individual capacity shall not be answerable or accountable under any circumstances, except for its own willful misconduct or negligence or bad faith or breach of its representations, warranties and/or covenants and the Indenture Trustee shall not be liable for any action or inaction of WEST or any other parties to any of the Related Documents.
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Section 6.02 Absence of Duties .
The Indenture Trustee shall have no duty to ascertain or inquire as to the performance or observance of any covenants, conditions or agreements on the part of any Lessee. Notwithstanding the foregoing, the Indenture Trustee, upon written request, shall furnish to any Noteholder, promptly upon receipt thereof, duplicates or copies of all reports, Notices, requests, demands, certificates, financial statements and other instruments furnished to the Indenture Trustee under this Indenture.
Section 6.03 Representations or Warranties .
The Indenture Trustee does not make and shall not be deemed to have made any representation or warranty as to the validity, legality or enforceability of this Indenture, the Notes, any other securities or any other document or instrument or as to the correctness of any statement contained in any thereof, except that the Indenture Trustee in its individual capacity hereby represents and warrants (i) that each such specified document to which it is a party has been or will be duly executed and delivered by one of its officers who is and will be duly authorized to execute and deliver such document on its behalf, and (ii) this Indenture is the legal, valid and binding obligation of Deutsche Bank Trust Company Americas, enforceable against Deutsche Bank Trust Company Americas in accordance with its terms, subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors’ rights generally.
Section 6.04 Reliance; Agents; Advice of Counsel .
The Indenture Trustee shall incur no liability to anyone acting upon any signature, instrument, notice, resolution, request, consent, order, certificate, report, opinion, bond or other document or paper believed by it to be genuine and believed by it to be signed by the proper party or parties. The Indenture Trustee may accept a copy of a resolution of, in the case of WEST, the Controlling Trustees and, in the case of any other party to any Related Document, the governing body of such Person, certified in an accompanying Officer’s Certificate as duly adopted and in full force and effect, as conclusive evidence that such resolution has been duly adopted and that the same is in full force and effect. As to any fact or matter the manner of ascertainment of which is not specifically described herein, the Indenture Trustee shall be entitled to receive and may for all purposes hereof conclusively rely on a certificate, signed by an officer of any duly authorized Person, as to such fact or matter, and such certificate shall constitute full protection to the Indenture Trustee for any action taken or omitted to be taken by it in good faith in reliance thereon. The Indenture Trustee shall furnish to the Servicer or the Administrative Agent upon written request such information and copies of such documents as the Indenture Trustee may have and as are necessary for the Servicer or the Administrative Agent to perform its duties under Articles II and III hereof. The Indenture Trustee shall assume, and shall be fully protected in assuming, that WEST is authorized by its constitutional documents to enter into this Indenture and to take all action permitted to be taken by it pursuant to the provisions hereof, and shall not inquire into the authorization of WEST with respect thereto.
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The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within its rights or powers or for any action it takes or omits to take in accordance with the direction of the Holders in accordance with Section 4.11 hereof 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.
The Indenture Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys or a custodian or nominee, and the Indenture Trustee shall not be responsible for any misconduct or negligence on the part of, or for the supervision of, any such agent, attorney, custodian or nominee appointed with due care by it hereunder.
The Indenture Trustee may consult with counsel as to any matter relating to this Indenture and any Opinion of Counsel or 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 with such advice or Opinion of Counsel.
The Indenture Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture, or to institute, conduct or defend any litigation hereunder or in relation hereto, at the request, order or direction of any of the Holders, pursuant to the provisions of this Indenture, unless such Holders shall have offered to the Indenture Trustee security or indemnity reasonably satisfactory to it against the costs, expenses and liabilities which may be incurred therein or thereby.
The Indenture Trustee shall not be required to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if there is reasonable ground for believing that the repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it, and none of the provisions contained in this Indenture shall in any event require the Indenture Trustee to perform, or be responsible or liable for the manner of performance of, any obligations of WEST or the Administrative Agent under this Indenture or any of the Related Documents.
The Indenture Trustee shall not be liable for any losses or Taxes (except for Taxes relating to any compensation, fees or commissions of any entity acting in its capacity as Indenture Trustee hereunder) or in connection with the selection of Permitted Investments or for any investment losses resulting from Permitted Investments.
When the Indenture Trustee incurs expenses or renders services in connection with an Acceleration Default such expenses (including the fees and expenses of its counsel) and the compensation for such services are intended to constitute expenses of administration under any bankruptcy law or law relating to creditors’ rights generally.
The Indenture Trustee shall not be charged with knowledge of an Event of Default unless a Responsible Officer of the Indenture Trustee obtains actual knowledge of such event or the Indenture Trustee receives written notice of such event from WEST, the Administrative Agent or
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Noteholders owning Notes aggregating not less than 10% of the outstanding principal amount of the Notes.
The Indenture Trustee shall have no duty to monitor the performance of WEST, the Servicer, the Administrative Agent or any other party to the Related Documents, nor shall it have any liability in connection with the malfeasance or nonfeasance by such parties. The Indenture Trustee shall have no liability in connection with compliance by WEST, the Servicer, the Administrative Agent or any Lessee under a Lease with statutory or regulatory requirements related to any Engine or any Lease. The Indenture Trustee shall not make or be deemed to have made any representations or warranties with respect to any Engine or any Lease or the validity or sufficiency of any assignment or other disposition of any Engine or any Lease.
The Indenture Trustee shall not be liable for any error of judgment reasonably made in good faith by an officer or officers of the Indenture Trustee, unless it shall be determined by a court of competent jurisdiction in a non-appealable judgment that the Indenture Trustee was grossly negligent or willfully blind in making such judgment.
Except as expressly set forth in the Related Documents, 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, entitlement order, approval or other paper document, unless any such Related Document directs the Indenture Trustee to make such investigation.
The Indenture Trustee shall have no obligation to invest and reinvest any cash held in the Accounts in the absence of timely and specific written investment direction from the Administrative Agent or as expressly provided herein or in a Supplement hereto. In no event shall the Indenture Trustee be liable for the selection of investments or for investment losses incurred thereon in accordance with the Related Documents. The Indenture Trustee shall have no liability in respect of losses incurred as a result of the liquidation of any investment prior to its stated maturity in accordance with the Related Documents or by any other Person or the failure of the Administrative Agent to provide timely written investment direction.
Section 6.05 Not Acting in Individual Capacity .
The Indenture Trustee acts hereunder solely as trustee unless otherwise expressly provided; and all Persons, other than the Noteholders to the extent expressly provided in this Indenture, having any claim against the Indenture Trustee by reason of the transactions contemplated hereby shall look, subject to the lien and priorities of payment as herein provided, only to the property of WEST for payment or satisfaction thereof.
Section 6.06 No Compensation from Noteholders .
The Indenture Trustee agrees that it shall have no right against the Noteholders for any fee as compensation for its services hereunder.
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Section 6.07 Notice of Defaults .
As promptly and soon as practicable after, and in any event within thirty (30) days after, the occurrence of any Default hereunder, the Indenture Trustee shall transmit by mail to WEST, the Senior Liquidity Provider and the Noteholders holding Notes of the related Series, notice of such Default hereunder actually known to a Responsible Officer of the Indenture Trustee, unless such Default shall have been cured or waived; provided, however , that, except in the case of a Default on the payment of the interest, principal, or premium, if any, on any Note, the Indenture Trustee shall be fully protected in withholding such notice if and so long as a trust committee of Responsible Officers of the Indenture Trustee in good faith determines that the withholding of such notice is in the interests of the Noteholders of the related Series; provided further that the Indenture Trustee shall in any event notify the Senior Liquidity Provider of any such Default.
Section 6.08 Indenture Trustee May Hold Securities .
The Indenture Trustee, any Paying Agent, the Note Registrar or any of their Affiliates or any other agent in their respective individual or any other capacity, may become the owner or pledgee of securities and, may otherwise deal with WEST with the same rights it would have if it were not the Indenture Trustee, Paying Agent, Note Registrar or such other agent.
Section 6.09 Corporate Trustee Required; Eligibility .
There shall at all times be an Indenture Trustee which shall meet the Eligibility Requirements. If such corporation publishes reports of conditions at least annually, pursuant to law or to the requirements of federal, state, territorial or District of Columbia supervising or examining authority, then for the purposes of this Section 6.09, 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 conditions so published. In case at any time the Indenture Trustee shall cease to be eligible in accordance with the provisions of this Section 6.09 to act as Indenture Trustee, the Indenture Trustee shall resign immediately as Indenture Trustee in the manner and with the effect specified in Section 7.01 hereof.
Section 6.10 Reports by WEST .
WEST shall furnish to the Indenture Trustee, within 120 days after the end of each fiscal year, a brief certificate from the principal executive officer, principal accounting officer or principal financial officer of the Administrative Agent, as applicable, as to his or her knowledge of WEST’s compliance with all conditions and covenants under this Indenture (it being understood that for purposes of this Section 6.10, such compliance shall be determined without regard to any period of grace or requirement of notice provided under this Indenture).
Section 6.11 Compensation .
WEST covenants and agrees to pay to the Indenture Trustee from time to time, and the Indenture Trustee shall be entitled to, the fees and expenses agreed in writing between WEST and the Indenture Trustee, and will further pay or reimburse the Indenture Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Indenture Trustee in accordance with any of the provisions hereof or any other documents
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executed in connection herewith (including the reasonable compensation and the reasonable expenses and disbursements of its counsel and of all persons not regularly in its employ).
Section 6.12 Conditions Precedent .
WEST agrees, and each Person entitled to the benefits of this Indenture, by its acceptance of such benefits, agrees that the Indenture Trustee shall not have any obligations or responsibility for, or be liable in respect of, (a) the satisfaction of the conditions precedent set forth in Schedule 5 hereto (other than to the extent such conditions expressly provide for the Indenture Trustee to be reasonably satisfied with any document or act and then only in respect of such determination by the Indenture Trustee and subject to the limitations on the liability of the Indenture Trustee in Section 6.01 hereof); (b) determining that all the conditions in Schedule 5 hereto have been satisfied; or (c) the verification of the accurateness or completeness of any certificates or representations made by any other Person in connection with the acquisition of any Additional Engines or the funding of any Discretionary Engine Modifications.
Section 7.01 Resignation and Removal of Indenture Trustee .
The Indenture Trustee may resign as to all or any of the Series of the Notes at any time without cause by giving at least sixty (60) days’ prior written notice to WEST, the Servicer, the Administrative Agent, the Senior Liquidity Provider and the Holders; provided that the Indenture Trustee shall continue to serve as Indenture Trustee until a successor has been appointed pursuant to Section 7.02 hereof. The Requisite Majority may at any time remove the Indenture Trustee as to such Series without cause by an instrument in writing delivered to WEST, the Servicer, the Administrative Agent, the Security Trustee and the Indenture Trustee being removed. In addition, WEST may remove the Indenture Trustee as to any of the Series of the Notes if: (i) such Indenture Trustee fails to comply with Section 7.02(d) hereof, (ii) such Indenture Trustee is adjudged a bankrupt or an insolvent, (iii) a receiver or public officer takes charge of such Indenture Trustee or its property or (iv) such Indenture Trustee becomes incapable of acting. References to the Indenture Trustee in this Indenture include any successor Indenture Trustee as to all or any of the Series of the Notes appointed in accordance with this Article VII.
Section 7.02 Appointment of Successor .
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Section 8.01 Indemnity .
WEST shall indemnify the Indenture Trustee (and its officers, directors, employees and agents) for, and hold it harmless from and against, any loss, liability, claim, obligation, damage, injury, penalties, actions, suits, judgments or expense (including attorney’s fees and expenses) incurred by it without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of this Indenture and its duties under this Indenture and the Notes, including the costs and expenses of defending itself against any claim or liability and of complying with any process served upon it or any of its officers in connection with the exercise or performance of any of its powers or duties and hold it harmless against, any loss, liability or reasonable expense incurred without negligence or bad faith on its part, arising out of or in connection with actions taken or omitted to be taken in reliance on any Officer’s Certificate furnished hereunder, or the failure to furnish any such Officers’ Certificate required to be furnished hereunder. The Indenture Trustee shall notify the Holders, WEST, the Senior Liquidity Provider and the Servicer and, in the case of any such claim in excess of 5% of the Appraised Value of the Portfolio, the Rating Agencies, promptly of any claim asserted against the Indenture Trustee for which it may seek indemnity; provided , however , that failure to provide such notice shall not invalidate any right to indemnity hereunder except to the extent WEST is prejudiced by such delay. WEST shall defend the claim and the Indenture Trustee shall cooperate in the defense unless the Indenture Trustee determines that an actual or potential conflict of interest exists, in which case the Indenture Trustee shall be entitled to retain separate counsel and WEST shall pay the reasonable fees and expenses of such counsel. WEST need not pay for any settlements made without its consent; provided that such consent shall not be unreasonably withheld. WEST need not reimburse any expense or indemnity against any loss or liability incurred by the Indenture Trustee through negligence or bad faith.
Section 8.02 Noteholders’ Indemnity .
The Indenture Trustee shall be entitled, subject to such Indenture Trustee’s duty during a default to act with the required standard of care, to be indemnified by the Holders of the applicable Series of the Notes before proceeding to exercise any right or power under this Indenture or the Administrative Agency Agreement at the request or direction of such Holders.
Section 8.03 Survival .
The provisions of Sections 8.01 and 8.02 hereof shall survive the termination of this Indenture or the earlier resignation or removal of the Indenture Trustee.
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Section 9.01 Supplemental Indentures Without the Consent of the Noteholders .
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Section 9.02 Supplemental Indentures with the Consent of Noteholders .
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Prior to the execution of any Supplement issued pursuant to this Section 9.02, WEST shall provide a written notice to each Rating Agency setting forth in general terms the substance of any such Supplement. WEST shall not amend Section 3.14 in any manner that would adversely affect any Eligible Hedge Counterparty without its prior consent. WEST shall solicit the consent of the Holders to any proposed Supplement in accordance with the first paragraph in Section 10.01.
WEST shall solicit the consent of the Senior Liquidity Provider and, if applicable, any Eligible Hedge Counterparty described in the preceding sentence to the execution of any Supplement issued pursuant to this Section 9.02 by providing a copy of the written notice sent to the Rating Agencies setting forth the substance of such Supplement. It shall not be necessary for the consent of the Senior Liquidity Provider or any Eligible Hedge Counterparty under this Section 9.02 to approve the particular form of the Supplement, but it shall be sufficient if such consent approves the substance thereof.
Section 9.03 Execution of Supplemental Indentures .
In executing, or accepting the additional terms created by, a Supplement permitted by this Article IX or the modification thereby of the terms created by this Indenture, the Indenture Trustee shall be entitled to receive, and shall be fully protected in relying upon, (i) an Opinion of Counsel stating that the execution of such Supplement is authorized or permitted by this Indenture and that such amendment or modification complies with the terms thereof and hereof and (ii) an Officer’s Certificate stating that all conditions precedent to the execution, delivery and performance of such amendment have been satisfied in full. 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 9.04 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. No amendment or waiver of any provision of any Supplement, and no consent to any departure by any party from the provisions of any Supplement, shall in any event be effective unless the same shall be in writing and signed by the Indenture Trustee, and
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then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.
Section 9.05 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 WEST, bear a notation in form as to any matter provided for in such Supplement. If WEST shall so determine, new Notes so modified as to conform may be prepared and executed by WEST and authenticated and delivered by the Indenture Trustee in exchange for Outstanding Notes.
Section 10.01 Modification and Waiver with Consent of Holders .
In the event that the Indenture Trustee receives a request for its consent to an amendment, modification or waiver under the Indenture, the Notes or any Related Document relating to the Notes, or if WEST proposes the execution and delivery of any Supplement pursuant to Section 9.02 requiring the consent of the Holders, WEST shall mail a notice of such proposed amendment, modification or waiver or such Supplement to each Noteholder, with a copy to the Senior Liquidity Provider, asking whether or not the Indenture Trustee should consent to such amendment, modification or waiver or to execute such Supplement, in each case if such Noteholder’s consent is required pursuant to the Indenture; provided that any amendment, modification or waiver described in Section 9.02 hereof or any Supplement taking any of the actions described in Section 9.02 hereof is not permitted without the consent of each Noteholder of any Notes affected thereby; provided further, however, that any Event of Default may be waived in accordance with Section 4.04 hereof. The foregoing shall not prevent WEST or any Subsidiary from amending any Lease of an Engine, provided that such amendment is otherwise permitted by the Indenture. In addition, a notice of any proposed amendment, modification or waiver under any Related Document permitted by the terms of such Related Document or the consent of the Noteholders to any such amendment, modification or waiver shall not be required, provided that WEST provides an Opinion of Counsel to the Indenture Trustee to the effect that such amendment, modification or waiver is permitted by the terms of such Related Document.
It shall not be necessary for the consent of the Holders under this Section 10.01 to approve the particular form of any proposed amendment, modification or waiver, but it shall be sufficient if such consent approves the substance thereof. Any such amendment, modification or waiver approved by a Requisite Majority will be binding on all Noteholders. After an amendment under this Section 10.01 becomes effective, it shall bind every Holder, whether or not notation thereof is made on any Note held by such Holder.
WEST shall give each Rating Agency and the Senior Liquidity Provider prior notice of any amendment under this Section 10.01 and of any amendments of the constitutive documents by WEST or any other WEST Group Member, and, after an amendment under this Section 10.01
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becomes effective, WEST shall mail to the Holders, the Senior Liquidity Provider and the Rating Agencies a notice briefly describing such amendment and shall deliver a copy of each such amendment to the Indenture Trustee. Such notice to the Holders may be contained in the next Monthly Report. Any failure of WEST to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amendment.
Section 10.02 Modification Without Consent of Holders .
Subject to Section 9.01 hereof, the Indenture Trustee may agree, without the consent of any Noteholder or the Senior Liquidity Provider, to any modification (other than those referred to in Section 10.01) of, or the waiver or authorization of any breach or prospective breach of, any provision of any Related Document or of the relevant Notes to correct a manifest error or an error which is of a formal, minor or technical nature. Any such modification shall be notified to the Holders as soon as practicable thereafter and shall be binding on all the Holders. WEST shall cause the Administrative Agent to include in the Monthly Report delivered pursuant to Section 2.14(a) a description of all amendments to the Related Documents.
Section 10.03 Subordination and Priority of Payments .
The subordination provisions contained in Section 3.14 and Article XI hereof may not be amended or modified without the consent of each Noteholder of the Notes affected thereby and the Senior Liquidity Provider and Noteholder of Notes ranking senior thereto. In no event shall the provisions set forth in Section 3.14 relating to the priority of the Service Provider Fees, Operating Expenses and Hedge Payments be amended or modified.
Section 10.04 Execution of Amendments by Indenture Trustee .
In executing, or accepting the additional trusts created by, any amendment or modification to this Indenture permitted by this Article X or the modifications 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 Officer’s Certificate stating that all conditions precedent to the execution, delivery and performance of such amendment have been satisfied in full and an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Indenture. The Indenture Trustee may, but shall not be obligated to, enter into any such amendment which affects the Indenture Trustee’s own rights, duties or immunities under this Indenture or otherwise. No amendment or waiver of any provision of this Indenture, and no consent to any departure by any party from the provisions of this Indenture, shall in any event be effective unless the same shall be in writing and signed by the Indenture Trustee, and then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.
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Section 11.01 Subordination .
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Section 11.02 Rights of Subrogation .
The Junior Claimants (and each Junior Representative of any thereof) agree that no payment or distributions to any Senior Claimant (or the Indenture Trustee therefor) pursuant to the provisions of this Indenture shall entitle any Junior Claimant (or any Junior Representative thereof) to exercise any rights of subrogation in respect thereof until all Senior Claims with respect to such Person shall have been paid in full.
Section 11.03 Further Assurances of Junior Representatives .
Each of the Junior Representatives shall, at the expense of WEST, at any time and from time to time promptly execute and deliver all further instruments and documents, and take all further action, that the Controlling Party may reasonably request, in order to effectuate the provisions of this Article XI.
Section 11.04 Enforcement .
Each Junior Claimant (and the Junior Representative therefor) agree that the provisions of this Article XI shall be enforceable against them under all circumstances, including without limitation in any proceeding referred to in Sections 4.01(f) and 4.01(g) hereof.
Section 11.05 Continued Effectiveness .
The provisions of this Article XI shall continue to be effective or shall be revived or reinstated, as the case may be, if at any time any payment of any of the Senior Claims is rescinded or must otherwise be returned by any Senior Claimant upon the insolvency, bankruptcy or reorganization of any WEST Group Member, or otherwise, all as though such payment had not been made.
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Section 11.06 Senior Claims and Junior Claims Unimpaired .
Nothing in this Article XI shall impair, as between WEST and any Senior Claimant or any Junior Claimant, the obligations of WEST to such Person, including without limitation the Senior Claims and the Junior Claims; provided that it is understood that the enforcement of rights and remedies shall be subject to the terms of this Indenture, the Security Trust Agreement and the other Security Documents
Section 12.01 Discharge of Liability on the Notes; Defeasance .
If WEST exercises its legal defeasance option, payment of any Notes subject to such legal defeasance may not be accelerated because of an Event of Default. If WEST exercises its covenant defeasance option, payment of the Notes may not be accelerated because of an Event of Default (other than with respect to a failure to comply with Section 5.02(j), 4.01(a), 4.01(b), 4.01(c), 4.01(f) and 4.01(g)).
Upon satisfaction of the conditions set forth herein and upon request of WEST, the Indenture Trustee shall acknowledge in writing the discharge of those obligations that WEST terminates.
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Section 12.02 Conditions to Defeasance .
WEST may exercise its legal defeasance option or its covenant defeasance option only if:
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Section 12.03 Application of Trust Money .
The Indenture Trustee shall hold in trust in the Redemption/Defeasance Account money, U.S. Government Obligations or Corporate Obligations deposited with it pursuant to this Article XII. It shall apply the deposited money and the money from U.S. Government Obligations or Corporate Obligations in accordance with this Indenture to the payment of principal, premium, if any, and interest on the Class or Series of Notes. Money and securities so held in trust are not subject to Article XI hereof.
Section 12.04 Repayment to WEST .
The Indenture Trustee shall promptly turn over to WEST upon request any excess money or securities held by it at any time.
Subject to any applicable abandoned property law, the Indenture Trustee shall pay to WEST upon written request any money held by it for the payment of principal or interest that remains unclaimed for two (2) years and, thereafter, Noteholders entitled to the money must look to WEST for payment as general creditors. Such unclaimed funds shall remain uninvested and in no event shall the Indenture Trustee be liable for interest on such unclaimed funds.
Section 12.05 Indemnity for Government Obligations and Corporate Obligations .
WEST shall pay and shall indemnify the Indenture Trustee against any tax, fee or other charge imposed on or assessed against deposited U.S. Government Obligations or Corporate Obligations, or the principal and interest received on such U.S. Government Obligations or Corporate Obligations.
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Section 12.06 Reinstatement .
If the Indenture Trustee is unable to apply any money or U.S. Government Obligations or Corporate Obligations in accordance with this Article XII by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, WEST’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to this Article XII until such time as the Indenture Trustee is permitted to apply all such money, U.S. Government Obligations or Corporate Obligations in accordance with this Article XII; provided, however, that, if WEST has made any payment of interest on or principal of any Notes because of the reinstatement of its obligations, WEST shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money, U.S. Government Obligations or Corporate Obligations held by the Indenture Trustee.
Section 13.01 Right of Indenture Trustee to Perform .
If WEST for any reason fails to observe or punctually to perform any of its obligations to the Indenture Trustee, whether under this Indenture or any of the other Related Documents or otherwise, the Indenture Trustee shall have power (but shall have no obligation), on behalf of or in the name of WEST or otherwise, to perform such obligations and to take any steps which the Indenture Trustee may, in its absolute discretion, consider appropriate with a view to remedying, or mitigating the consequences of, such failure by WEST; provided that no exercise or failure to exercise this power by the Indenture Trustee shall in any way prejudice the Indenture Trustee’s other rights under this Indenture or any of the other Related Documents.
Section 13.02 Waiver .
Any waiver by any party of any provision of this Indenture or any right, remedy or option hereunder shall only prevent and estop such party from thereafter enforcing such provision, right, remedy or option if such waiver is given in writing and only as to the specific instance and for the specific purpose for which such waiver was given. The failure or refusal of any party hereto to insist in any one or more instances, or in a course of dealing, upon the strict performance of any of the terms or provisions of this Indenture by any party hereto or the partial exercise of any right, remedy or option hereunder shall not be construed as a waiver or relinquishment of any such term or provision, but the same shall continue in full force and effect. No failure on the part of the Indenture Trustee to exercise, and no delay on its part in exercising, any right or remedy under this Indenture will operate as a waiver thereof, nor will any single or partial exercise of any right or remedy preclude any other or further exercise thereof or the exercise of any other right or remedy. The rights and remedies provided in this Indenture are cumulative and not exclusive of any rights or remedies provided by law.
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Section 13.03 Severability .
In the event that any provision of this Indenture or the application thereof to any party hereto or to any circumstance or in any jurisdiction governing this Indenture shall, to any extent, be invalid or unenforceable under any applicable statute, regulation or rule of law, then such provision shall be deemed inoperative to the extent that it is invalid or unenforceable and the remainder of this Indenture, and the application of any such invalid or unenforceable provision to the parties, jurisdictions or circumstances other than to whom or to which it is held invalid or unenforceable, shall not be affected thereby nor shall the same affect the validity or enforceability of this Indenture. The parties hereto further agree that the holding by any court of competent jurisdiction that any remedy pursued by the Indenture Trustee hereunder is unavailable or unenforceable shall not affect in any way the ability of the Indenture Trustee to pursue any other remedy available to it.
Section 13.04 Notices .
All notices, demands, certificates, requests, directions, instructions and communications hereunder (“ Notices ”) shall be in writing and shall be effective (a) upon receipt when sent through the mails, registered or certified mail, return receipt requested, postage prepaid, with such receipt to be effective the date of delivery indicated on the return receipt, or (b) one Business Day after delivery to an overnight courier, or (c) on the date personally delivered to an authorized officer of the party to which sent, or (d) on the date transmitted by legible telecopier transmission with a confirmation of receipt, in all cases addressed to the recipient as follows:
if to WEST , to:
Willis
Engine Securitization Trust
c/o Wilmington Trust Company
1100 North Market Street
Rodney Square North
Wilmington, Delaware 19890
Attention: Corporate Trust Administrator
Facsimile: (302) 651-8882
with copies to:
Willis
Lease Finance Corporation
2320 Marinship Way, Suite 300
Sausalito, CA 94965
Attention: General Counsel
Facsimile: (415) 275-5106
As of March 1, 2008:
Willis Lease Finance Corporation
773 San Marin Drive
Novato, CA 94945
Attn: General Counsel
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and
Pillsbury
Winthrop Shaw Pittman LLP
1540 Broadway
New York, NY 10036
Attention: William C. Bowers
Facsimile: (212) 858-1500
if to the Administrative Agent , to:
Willis
Lease Finance Corporation
2320 Marinship Way, Suite 300
Sausalito, CA 94965
Attention: General Counsel
Facsimile: (415) 275-5106
As of March 1, 2008:
Willis Lease Finance Corporation
773 San Marin Drive
Novato, CA 94945
Attn: General Counsel
if to the Indenture Trustee, the Security Trustee, the Note Registrar or the Paying Agent , to:
Deutsche
Bank Trust Company Americas
60 Wall Street
MS NYC 60-2606
New York, New York 10005
Attention: Trust & Securities Services - Structured Finance Services
Facsimile: 212-553-2460
if to the Servicer , to:
Willis
Lease Finance Corporation
2320 Marinship Way, Suite 300
Sausalito, CA 94965
Attention: General Counsel
Facsimile: (415) 275-5106
As of March 1, 2008:
Willis Lease Finance Corporation
773 San Marin Drive
Novato, CA 94945
Attn: General Counsel
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if to the Senior Liquidity Provider , to:
Calyon
New York Branch
1301 Avenue of the Americas
New York, NY 10019
Attention: Neil Spier
Facsimile: (212) 459-3258
if to the Rating Agencies , to:
Fitch, Inc.
55 E. Monroe, Suite 3500
Chicago, IL 60603
Attention: ABS Monitoring Group - Equipment Leases
Facsimile: (312) 368-2069
Moody’s
Investors Service, Inc.
99 Church Street
New York, New York 10007
Attention: Monitoring Group
Facsimile: (212) 553-0573
A copy of each notice given hereunder to any party hereto shall also be given to each of the other parties hereto. Each party hereto may, by notice given in accordance herewith to each of the other parties hereto, designate any further or different address to which subsequent Notices shall be sent.
Section 13.05 Assignments .
(b) Each Hedge Counterparty and the Senior Liquidity Provider shall be an express third party beneficiary of Sections 3.08, 9.01 and 9.03 hereof, as applicable. The Servicer shall be an express third party beneficiary of each provision of this Indenture that affects any of its rights or obligations under this Indenture or any other Related Document, including the provisions hereof providing for payment of Expenses and Lien priority for amounts payable to the Servicer under the Servicing Agreement or any other Related Document.
Section 13.06 Currency Conversion .
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Section 13.07 Application to Court .
The Security Trustee may at any time after the service of a Default Notice apply to any court of competent jurisdiction for an order that the terms of this Indenture be carried into execution under the direction of such court and for the appointment of a receiver of the Collateral or any part thereof and for any other order in relation to the administration of this Indenture as the Requisite Majority shall deem fit and it may assent to or approve any application to any court of competent jurisdiction made at the instigation of any of the Noteholders and shall be indemnified by WEST against all costs, charges and expenses incurred by it in relation to any such application or proceedings.
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Section 13.08 Governing Law .
THIS INDENTURE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAWS BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
Section 13.09 Jurisdiction .
Section 13.10 Counterparts .
This Indenture may be executed in two or more counterparts by the parties hereto, and each such counterpart shall be considered an original and all such counterparts shall constitute one and the same instrument.
Section 13.11 Table of Contents, Headings, Etc .
The Table of Contents and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms and provisions hereof.
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Section 13.12 Compliance with Anti-Terrorism and Money-Laundering Regulations .
In order to comply with the laws, rules, regulations and executive orders in effect from time to time applicable to banking institutions, including those relating to the funding of terrorist activities and money laundering, the Indenture Trustee is required to obtain, verify and record certain information relating to individuals and entities which maintain a business relationship with the Indenture Trustee. Accordingly, each of the parties agree to provide to the Indenture Trustee, upon its request from time to time such identifying information and documentation as may be available for such party in order to enable the Indenture Trustee to comply with such laws, rules, regulations and executive orders.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, all as of the date first written above.
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WILLIS ENGINE SECURITIZATION TRUST, |
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as issuer of the Notes |
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/s/ Bradley S. Forsyth |
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Bradley S. Forsyth |
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Title: |
Controlling Trustee |
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DEUTSCHE BANK
TRUST COMPANY
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By: |
/s/ Irene Siegel |
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Name: |
Irene Siegel |
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Vice President |
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/s/ Aranka R. Paul |
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Aranka R. Paul |
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Assistant Vice President |
SCHEDULE 1
ENGINE SUBSIDIARIES
WEST Engine Funding LLC, a Delaware limited liability company
SCHEDULE 2-1
ENGINE TRUSTS ON INITIAL CLOSING DATE
1. Trust Agreement No. 30771 dated as of February 16, 2005, between WEST Funding, as owner participant, and Wells Fargo Bank Northwest, National Association (“ Wells Fargo ”), as owner trustee.
2. Trust Agreement No. 311498 dated as of December 19, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
3. Trust Agreement No. 312234 dated as of December 19, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
4. Trust Agreement No. 575283 dated as of September 12, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
5. Trust Agreement No. 575573 dated as of March 18, 2003, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
6. Trust Agreement No. 577214 dated as of February 14, 2005, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
7. Trust Agreement No. 695530 dated as of March 18, 2003, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
8. Trust Agreement No. 704371 dated as of December 19, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
9. Trust Agreement No. 704447 dated as of December 19, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
10. Trust Agreement No. 704638 dated as of September 12, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
11. Trust Agreement No. 708173 dated as of February 4, 2005, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
12. Trust Agreement No. 716430 dated as of September 12, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
13. Trust Agreement No. 716779 dated as of September 12, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
14. Trust Agreement No. 718210 dated as of September 22, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
15. Trust Agreement No. 718262 dated as of October 10, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
16. Trust Agreement No. 721877 dated as of September 12, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
17. Trust Agreement No. 724721 dated as of November 6, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
18. Trust Agreement No. 724862 dated as of January 12, 2005, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
19. Trust Agreement No. 725183 dated as of September 12, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
20. Trust Agreement No. 725434 dated as of July 20, 2005, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
21. Trust Agreement No. 725522 dated as of November 26, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
22. Trust Agreement No. 726169 dated as of February 2, 2005, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
23. Trust Agreement No. 726173 dated as of February 2, 2005, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
24. Trust Agreement No. 726195 dated as of February 2, 2005, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
25. Trust Agreement No. 726203 dated as of February 2, 2005, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
26. Trust Agreement No. 727057 dated as of September 12, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
27. Trust Agreement No. 727255 dated as of March 18, 2003, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
28. Trust Agreement No. 727340 dated as of September 12, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
29. Trust Agreement No. 727393 dated as of September 12, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
30. Trust Agreement No. 728154 dated as of October 4, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
31. Trust Agreement No. 728173 dated as of September 12, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
32. Trust Agreement No. 731570 dated as of September 12, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
33. Trust Agreement No. 731812 dated as of December 19, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
34. Trust Agreement No. 731999 dated as of December 19, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
35. Trust Agreement No. 733172 dated as of September 12, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
36. Trust Agreement No. 733175 dated as of October 24, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
37. Trust Agreement No. 733186 dated as of October 23, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
38. Trust Agreement No. 733438 dated as of October 29, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
39. Trust Agreement No. 733471 dated as of October 21, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
40. Trust Agreement No. 733587 dated as of May 25, 2005, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
41. Trust Agreement No. 733715 dated as of December 19, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
42. Trust Agreement No. 733758 dated as of December 19, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
43. Trust Agreement No. 740342 dated as of September 12, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
44. Trust Agreement No. 741414 dated as of September 12, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
45. Trust Agreement No. 741573 dated as of October 23, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
46. Trust Agreement No. 741822 dated as of March 18, 2003, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
47. Trust Agreement No. 779194 dated as of October 4, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
48. Trust Agreement No. 779484 dated as of September 12, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
49. Trust Agreement No. 856690 dated as of March 25, 2005, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
50. Trust Agreement No. 858327 dated as of September 12, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
51. Trust Agreement No. 858788 dated as of September 12, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
52. Trust Agreement No. 858789 dated as of September 12, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
53. Trust Agreement No. 872554 dated as of May 12, 2003, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
54. Trust Agreement No. 874243 dated as of September 12, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
55. Trust Agreement No. 876272 dated as of February 22, 2005, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
56. Trust Agreement No. 888763 dated as of March 3, 2005, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
57. Trust Agreement No. 890704 dated as of January 12, 2005, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
58. Trust Agreement No. 890988 dated as of September 10, 2004, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
59. Trust Agreement No. 695344 dated as of October 6, 2005, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
60. Trust Agreement No. 695495 dated as of October 6, 2005, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
61. Trust Agreement No. 702668 dated as of August 22, 2005, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
SCHEDULE 2-2
ENGINE TRUSTS ON EFFECTIVE DATE
1. Trust Agreement No. 30771 dated as of February 16, 2005, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
2. Trust Agreement No. 311498 dated as of December 19, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
3. Trust Agreement No. 312234 dated as of December 19, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
4. Trust Agreement No. 575573 dated as of March 18, 2003, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
5. Trust Agreement No. 577214 dated as of February 14, 2005, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
6. Trust Agreement No. 704638 dated as of September 12, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
7. Trust Agreement No. 708173 dated as of February 4, 2005, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
8. Trust Agreement No. 716430 dated as of September 12, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
9. Trust Agreement No. 716779 dated as of September 12, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
10. Trust Agreement No. 721877 dated as of September 12, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
11. Trust Agreement No. 724721 dated as of November 6, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
12. Trust Agreement No. 724862 dated as of January 12, 2005, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
13. Trust Agreement No. 725183 dated as of September 12, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
14. Trust Agreement No. 725434 dated as of July 20, 2005, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
15. Trust Agreement No. 725522 dated as of November 26, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
16. Trust Agreement No. 726195 dated as of February 2, 2005, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
17. Trust Agreement No. 726203 dated as of February 2, 2005, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
18. Trust Agreement No. 727057 dated as of September 12, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
19. Trust Agreement No. 727255 dated as of March 18, 2003, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
20. Trust Agreement No. 727340 dated as of September 12, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
21. Trust Agreement No. 727393 dated as of September 12, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
22. Trust Agreement No. 728154 dated as of October 4, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
23. Trust Agreement No. 728173 dated as of September 12, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
24. Trust Agreement No. 731812 dated as of December 19, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
25. Trust Agreement No. 731999 dated as of December 19, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
26. Trust Agreement No. 733172 dated as of September 12, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
27. Trust Agreement No. 733175 dated as of October 24, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
28. Trust Agreement No. 733186 dated as of October 23, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
29. Trust Agreement No. 733438 dated as of October 29, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
30. Trust Agreement No. 733471 dated as of October 21, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
31. Trust Agreement No. 733587 dated as of May 25, 2005, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
32. Trust Agreement No. 733715 dated as of December 19, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
33. Trust Agreement No. 733758 dated as of December 19, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
34. Trust Agreement No. 740342 dated as of September 12, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
35. Trust Agreement No. 741414 dated as of September 12, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
36. Trust Agreement No. 741573 dated as of October 23, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
37. Trust Agreement No. 741822 dated as of March 18, 2003, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
38. Trust Agreement No. 779484 dated as of September 12, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
39. Trust Agreement No. 858788 dated as of September 12, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
40. Trust Agreement No. 872554 dated as of May 12, 2003, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
41. Trust Agreement No. 874243 dated as of September 12, 2002, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
42. Trust Agreement No. 876272 dated as of February 22, 2005, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
43. Trust Agreement No. 888763 dated as of March 3, 2005, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
44. Trust Agreement No. 890704 dated as of January 12, 2005, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
45. Trust Agreement No. 890988 dated as of September 10, 2004, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
46. Trust Agreement No. 695344 dated as of October 6, 2005, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
47. Trust Agreement No. 695495 dated as of October 6, 2005, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
48. Trust Agreement No. 702668 dated as of August 22, 2005, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
49. Trust Agreement No. V12145 dated as of October 8, 2005, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
50. Trust Agreement No. 725623 dated as of July 21, 2005, between Willis, as owner participant, and Wells Fargo, as owner trustee, as amended by the Trust Amendment and Supplement No. 1 dated as of November 11, 2005 among Willis, WEST Funding, as successor owner participant, and Wells Fargo, as owner trustee, transferring all of the rights and obligations of Willis as owner participant to WEST Funding.
51. Trust Agreement No. 725299 dated as of July 21, 2005, between Willis, as owner participant, and Wells Fargo, as owner trustee, as amended by the Trust Amendment and Supplement No. 1 dated as of November 11, 2005 among Willis, WEST Funding, as successor owner participant, and Wells Fargo, as owner trustee, transferring all of the rights and obligations of Willis as owner participant to WEST Funding.
52. Trust Agreement No. 726245 dated as of July 21, 2005, between Willis, as owner participant, and Wells Fargo, as owner trustee, as amended by the Trust Amendment and Supplement No. 1 dated as of November 11, 2005 among Willis, WEST Funding, as successor owner participant, and Wells Fargo, as owner trustee, transferring all of the rights and obligations of Willis as owner participant to WEST Funding.
53. Trust Agreement No. 702823 dated as of July 21, 2005, between Willis, as owner participant, and Wells Fargo, as owner trustee, as amended by the Trust Amendment and Supplement No. 1 dated as of November 11, 2005 among Willis, WEST Funding, as successor owner participant, and Wells Fargo, as owner trustee, transferring all of the rights and obligations of Willis as owner participant to WEST Funding.
54. Trust Agreement No. 704299 dated as of July 21, 2005, Willis, as owner participant, and Wells Fargo, as owner trustee, as amended by the Trust Amendment and Supplement No. 1 dated as of November 11, 2005 among Willis, WEST Funding, as successor owner participant, and Wells Fargo, as owner trustee, transferring all of the rights and obligations of Willis as owner participant to WEST Funding.
55. Trust Agreement No. V12177 dated as of November 15, 2005, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
56. Trust Agreement No. 779360 dated as of December 21, 2005, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
57. Trust Agreement No. 892706 dated as of January 17, 2006, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
58. Trust Agreement No. 892702 dated as of January 17, 2006, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
59. Trust Agreement No. 892707 dated as of January 17, 2006, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
60. Trust Agreement No. 733325 dated as of February 8, 2006, between Willis, as owner participant, and Wells Fargo, as owner trustee, as amended by the Trust Amendment and Supplement No. 1 dated as of February 8, 2006 among Willis, WEST Funding, as successor owner participant, and Wells Fargo, as owner trustee, transferring all of the rights and obligations of Willis as owner participant to WEST Funding.
61. Trust Agreement No. V12361 dated as of June 16, 2006, between Willis, as owner participant, and Wells Fargo, as owner trustee, as amended by the Trust Amendment and Supplement No. 1 dated as of October 2, 2006 among Willis, WEST Funding, as successor owner participant, and Wells Fargo, as owner trustee, transferring all of the rights and obligations of Willis as owner participant to WEST Funding.
62. Trust Agreement No. V12346 dated as of June 12, 2006, between Willis, as owner participant, and Wells Fargo, as owner trustee, as amended by the Trust Amendment and Supplement No. 1 dated as of August 31, 2006 among Willis, WEST Funding, as successor owner participant, and Wells Fargo, as owner trustee, transferring all of the rights and obligations of Willis as owner participant to WEST Funding.
63. Trust Agreement No. 891264 dated as of March 30, 2006, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
64. Trust Agreement No. 695357 dated as of June 1, 2006, between Willis, as owner participant, and Wells Fargo, as owner trustee, as amended by the Trust Amendment and Supplement No. 1 dated as of August 4, 2006 among Willis, WEST Funding, as successor owner participant, and Wells Fargo, as owner trustee, transferring all of the rights and obligations of Willis as owner participant to WEST Funding.
65. Trust Agreement No. 894269 dated as of September 28, 2006, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
66. Trust Agreement No. 892355 dated as of December 12, 2006, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
67. Trust Agreement No. 697257 dated as of March 23, 2007, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
68. Trust Agreement No. 567319 dated as of May 8, 2007, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
69. Trust Agreement No. 894798 dated as of June 29, 2007, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
70. Trust Agreement No. 567321 dated as of July 11, 2007, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
71. Trust Agreement No. V12696 dated as of July 16, 2007, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
72. Trust Agreement No. V12694 dated as of July 16, 2007, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
73. Trust Agreement No. 697433 dated as of August 3, 2007, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
74. Trust Agreement No. 892688 dated as of November 22, 2006, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
75. Trust Agreement No. 890916 dated as of December 12, 2006, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
76. Trust Agreement No. 31267 dated as of December 14, 2006, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
77. Trust Agreement No. 697146 dated as of January 5, 2007, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
78. Trust Agreement No. 872016 dated as of June 29, 2007, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
79. Trust Agreement No. 872170 dated as of June 29, 2007, between WEST Funding, as owner participant, and Wells Fargo, as owner trustee.
SCHEDULE 3
LEASING SUBSIDIARIES
WEST Engine Funding (Ireland) Limited, an Irish private limited company
SCHEDULE 4-1
INITIAL ENGINES
|
No. |
|
Manufacturer |
|
Model |
|
Engine Serial Number |
|
|
|
|
|
|
|
|
|
|
|
1. |
|
Rolls Royce |
|
RB211-535E4 |
|
30771 |
|
|
2. |
|
Rolls Royce |
|
3007A |
|
311498 |
|
|
3. |
|
Rolls Royce |
|
3007A |
|
312234 |
|
|
4. |
|
CFM International |
|
CFM56-5B |
|
575283 |
|
|
5. |
|
CFM International |
|
CFM56-5B |
|
575573 |
|
|
6. |
|
CFM International |
|
CFM56-5B |
|
577214 |
|
|
7. |
|
General Electric |
|
CF6-80C2A |
|
695530 |
|
|
8. |
|
General Electric |
|
CF6-80C2B |
|
704371 |
|
|
9. |
|
General Electric |
|
CF6-80C2B |
|
704447 |
|
|
10. |
|
General Electric |
|
CF6-80C2D1F |
|
704638 |
|
|
11. |
|
Pratt & Whitney |
|
JT8D-200 |
|
708173 |
|
|
12. |
|
Pratt & Whitney |
|
PW2037 |
|
716430 |
|
|
13. |
|
Pratt & Whitney |
|
JT8D-200 |
|
716779 |
|
|
14. |
|
Pratt & Whitney |
|
JT8D-200 |
|
718210 |
|
|
15. |
|
Pratt & Whitney |
|
JT8D-200 |
|
718262 |
|
|
16. |
|
CFM International |
|
CFM56-3C1 |
|
721877 |
|
|
17. |
|
Pratt & Whitney |
|
PW4060 |
|
724721 |
|
|
18. |
|
Pratt & Whitney |
|
PW4158 |
|
724862 |
|
|
19. |
|
CFM International |
|
CFM56-3C1 |
|
725183 |
|
|
20. |
|
Pratt & Whitney |
|
JT8D-200 |
|
725434 |
|
|
21. |
|
CFM International |
|
CFM56-3C1 |
|
725522 |
|
|
22. |
|
Pratt & Whitney |
|
JT8D-200 |
|
726169 |
|
|
23. |
|
Pratt & Whitney |
|
JT8D-200 |
|
726173 |
|
|
24. |
|
Pratt & Whitney |
|
JT8D-200 |
|
726195 |
|
|
25. |
|
Pratt & Whitney |
|
JT8D-200 |
|
726203 |
|
|
26. |
|
Pratt & Whitney |
|
PW2037 |
|
727057 |
|
|
27. |
|
CFM International |
|
CFM56-3C1 |
|
727255 |
|
|
28. |
|
Pratt & Whitney |
|
PW4060 |
|
727340 |
|
|
29. |
|
Pratt & Whitney |
|
PW4060 |
|
727393 |
|
|
30. |
|
Pratt & Whitney |
|
JT8D-200 |
|
728154 |
|
|
31. |
|
Pratt & Whitney |
|
JT8D-200 |
|
728173 |
|
|
32. |
|
CFM International |
|
CFM56-5A |
|
731570 |
|
|
33. |
|
CFM International |
|
CFM56-5A |
|
731812 |
|
|
34. |
|
CFM International |
|
CFM56-5A |
|
731999 |
|
|
35. |
|
CFM International |
|
CFM56-5A |
|
733172 |
|
|
36. |
|
CFM International |
|
CFM56-5A |
|
733175 |
|
|
37. |
|
CFM International |
|
CFM56-5A |
|
733186 |
|
|
38. |
|
Pratt & Whitney |
|
PW4168A |
|
733438 |
|
|
39. |
|
Pratt & Whitney |
|
PW4168A |
|
733471 |
|
|
40. |
|
Pratt & Whitney |
|
PW4168A |
|
733587 |
|
|
41. |
|
Pratt & Whitney |
|
PW4462-3 |
|
733715 |
|
|
42. |
|
Pratt & Whitney |
|
PW4462-3 |
|
733758 |
|
|
43. |
|
CFM International |
|
CFM56-5C |
|
740342 |
|
|
44. |
|
CFM International |
|
CFM56-5C |
|
741414 |
|
|
45. |
|
CFM International |
|
CFM56-5C |
|
741573 |
|
|
46. |
|
CFM International |
|
CFM56-5C |
|
741822 |
|
|
47. |
|
CFM International |
|
CFM56-5B |
|
779194 |
|
|
48. |
|
CFM International |
|
CFM56-5B |
|
779484 |
|
|
49. |
|
CFM International |
|
CFM56-3C1 |
|
856690 |
|
|
50. |
|
CFM International |
|
CFM56-3C1 |
|
858327 |
|
|
51. |
|
CFM International |
|
CFM56-3C1 |
|
858788 |
|
|
52. |
|
CFM International |
|
CFM56-3C1 |
|
858789 |
|
|
53. |
|
General Electric |
|
CF34-3A/B |
|
872554 |
|
|
54. |
|
CFM International |
|
CFM56-7B |
|
874243 |
|
|
55. |
|
CFM International |
|
CFM56-7B |
|
876272 |
|
|
56. |
|
CFM International |
|
CFM56-7B |
|
888763 |
|
|
57. |
|
CFM International |
|
CFM56-7B |
|
890704 |
|
|
58. |
|
CFM International |
|
CFM56-7B |
|
890988 |
|
|
59. |
|
General Electric |
|
CF6-80C2B6 |
|
695344 |
|
|
60. |
|
General Electric |
|
CF6-80C2B6 |
|
695495 |
|
|
61. |
|
General Electric |
|
CF6-80C2B6F |
|
702668 |
|
SCHEDULE 4-2
EFFECTIVE DATE ENGINES
|
No. |
|
Manufacturer |
|
Model |
|
Engine Serial Number |
|
|
|
|
|
|
|
|
|
|
|
1. |
|
Rolls Royce |
|
RB211-535E4 |
|
30771 |
|
|
2. |
|
Rolls Royce |
|
3007A |
|
311498 |
|
|
3. |
|
Rolls Royce |
|
3007A |
|
312234 |
|
|
4. |
|
CFM International |
|
CFM56-5B |
|
575573 |
|
|
5. |
|
CFM International |
|
CFM56-5B |
|
577214 |
|
|
6. |
|
General Electric |
|
CF6-80C2D1F |
|
704638 |
|
|
7. |
|
Pratt & Whitney |
|
JT8D-200 |
|
708173 |
|
|
8. |
|
Pratt & Whitney |
|
PW2037 |
|
716430 |
|
|
9. |
|
Pratt & Whitney |
|
JT8D-200 |
|
716779 |
|
|
10. |
|
CFM International |
|
CFM56-3C1 |
|
721877 |
|
|
11. |
|
Pratt & Whitney |
|
PW4060 |
|
724721 |
|
|
12. |
|
Pratt & Whitney |
|
PW4158 |
|
724862 |
|
|
13. |
|
CFM International |
|
CFM56-3C1 |
|
725183 |
|
|
14. |
|
Pratt & Whitney |
|
JT8D-200 |
|
725434 |
|
|
15. |
|
CFM International |
|
CFM56-3C1 |
|
725522 |
|
|
16. |
|
Pratt & Whitney |
|
JT8D-200 |
|
726195 |
|
|
17. |
|
Pratt & Whitney |
|
JT8D-200 |
|
726203 |
|
|
18. |
|
Pratt & Whitney |
|
PW2037 |
|
727057 |
|
|
19. |
|
CFM International |
|
CFM56-3C1 |
|
727255 |
|
|
20. |
|
Pratt & Whitney |
|
PW4060 |
|
727340 |
|
|
21. |
|
Pratt & Whitney |
|
PW4060 |
|
727393 |
|
|
22. |
|
Pratt & Whitney |
|
JT8D-200 |
|
728154 |
|
|
23. |
|
Pratt & Whitney |
|
JT8D-200 |
|
728173 |
|
|
24. |
|
CFM International |
|
CFM56-5A |
|
731812 |
|
|
25. |
|
CFM International |
|
CFM56-5A |
|
731999 |
|
|
26. |
|
CFM International |
|
CFM56-5A |
|
733172 |
|
|
27. |
|
CFM International |
|
CFM56-5A |
|
733175 |
|
|
28. |
|
CFM International |
|
CFM56-5A |
|
733186 |
|
|
29. |
|
Pratt & Whitney |
|
PW4168A |
|
733438 |
|
|
30. |
|
Pratt & Whitney |
|
PW4168A |
|
733471 |
|
|
31. |
|
Pratt & Whitney |
|
PW4168A |
|
733587 |
|
|
32. |
|
Pratt & Whitney |
|
PW4462-3 |
|
733715 |
|
|
33. |
|
Pratt & Whitney |
|
PW4462-3 |
|
733758 |
|
|
34. |
|
CFM International |
|
CFM56-5C |
|
740342 |
|
|
35. |
|
CFM International |
|
CFM56-5C |
|
741414 |
|
|
36. |
|
CFM International |
|
CFM56-5C |
|
741573 |
|
|
37. |
|
CFM International |
|
CFM56-5C |
|
741822 |
|
|
38. |
|
CFM International |
|
CFM56-5B |
|
779484 |
|
|
39. |
|
CFM International |
|
CFM56-3C1 |
|
858788 |
|
|
40. |
|
General Electric |
|
CF34-3A/B |
|
872554 |
|
|
41. |
|
CFM International |
|
CFM56-7B |
|
874243 |
|
|
42. |
|
CFM International |
|
CFM56-7B |
|
876272 |
|
|
43. |
|
CFM International |
|
CFM56-7B |
|
888763 |
|
|
44. |
|
CFM International |
|
CFM56-7B |
|
890704 |
|
|
45. |
|
CFM International |
|
CFM56-7B |
|
890988 |
|
|
46. |
|
General Electric |
|
CF6-80C2B6 |
|
695344 |
|
|
47. |
|
General Electric |
|
CF6-80C2B6 |
|
695495 |
|
|
48. |
|
General Electric |
|
CF6-80C2B6F |
|
702668 |
|
|
49. |
|
International Aero |
|
V2527-A5 |
|
V12145 |
|
|
50. |
|
CFM International |
|
CFM56-3C1 |
|
725623 |
|
|
51. |
|
CFM International |
|
CFM56-3C1 |
|
725299 |
|
|
52. |
|
CFM International |
|
CFM56-3C1 |
|
726245 |
|
|
53. |
|
General Electric |
|
CF6-80C2B1F |
|
702823 |
|
|
54. |
|
General Electric |
|
CF6-80C2B2F |
|
704299 |
|
|
55. |
|
International Aero |
|
V2527-A5 |
|
V12177 |
|
|
56. |
|
CFM International |
|
CFM56-5B4/P |
|
779360 |
|
|
57. |
|
CFM International |
|
CFM56-7B |
|
892706 |
|
|
58. |
|
CFM International |
|
CFM56-7B |
|
892702 |
|
|
59. |
|
CFM International |
|
CFM56-7B |
|
892707 |
|
|
60. |
|
Pratt & Whitney |
|
4168A |
|
733325 |
|
|
61. |
|
International Aero |
|
V2527-A5 |
|
V12361 |
|
|
62. |
|
International Aero |
|
V2500 |
|
V12346 |
|
|
63. |
|
CFM International |
|
CFM56-7B27 |
|
891264 |
|
|
64. |
|
General Electric |
|
CF6-80C2B4 |
|
695357 |
|
|
65. |
|
CFM International |
|
CFM56-7B |
|
894269 |
|
|
66. |
|
CFM International |
|
CFM56-7B22 |
|
892355 |
|
|
67. |
|
CFM International |
|
CFM56-5B4/P |
|
697257 |
|
|
68. |
|
CFM International |
|
CFM56-5C4/P |
|
567319 |
|
|
69. |
|
CFM International |
|
CFM56-7B24 |
|
894798 |
|
|
70. |
|
CFM International |
|
CFM56-5C41P |
|
567321 |
|
|
71. |
|
International Aero |
|
V2533-A5 |
|
V12696 |
|
|
72. |
|
International Aero |
|
V2533-A5 |
|
V12694 |
|
|
73. |
|
CFM International |
|
CFM56-5B4 |
|
697433 |
|
|
74. |
|
CFM International |
|
CFM56-7B22 |
|
892688 |
|
|
75. |
|
CFM International |
|
CFM56-7B22 |
|
890916 |
|
|
76. |
|
Rolls Royce |
|
RB211-535E4 |
|
31267 |
|
|
77. |
|
CFM International |
|
CFM56-5B4/P |
|
697146 |
|
|
78. |
|
General Electric |
|
CF34-3B1 |
|
872016 |
|
|
79. |
|
General Electric |
|
CF34-3B1 |
|
872170 |
|
SCHEDULE 5
CONDITIONS PRECEDENT TO ACQUISITION OF ADDITIONAL ENGINES
On any Delivery Date on which an Additional Engine is to be acquired with funds withdrawn from the Engine Acquisition Account, the Administrative Agent shall give a written direction to the Indenture Trustee to transfer funds to the applicable Seller of such Additional Engine only upon satisfaction of the following conditions precedent:
(a) Each of the following shall be true, and each of the Indenture Trustee and Security Trustee shall have received a certificate substantially in the form of Annex A to this Schedule 5 signed by any Controlling Trustee of WEST stating that:
(i) the approvals by the Controlling Trustees required by Section 5.03(b) of this Indenture have been obtained, including the resolutions required by Section 5.03 of the Indenture for such Additional Engine that is being acquired as part of Replacement Exchange, and a copy of such resolutions are attached to such Certificate;
(ii) such Additional Engine satisfies the requirements in the definition of an “Engine” in this Indenture, and the purchase price for such Additional Engine satisfies the requirements of Section 5.03(b) of this Indenture;
(iii) no Event of Loss has occurred with respect to such Additional Engine and that no other damage has occurred with respect to such Additional Engine that would materially adversely affect the value of such Additional Engine;
(iv) all conditions precedent under the applicable Asset Purchase Agreement for such Additional Engine have been satisfied or waived by the relevant parties;
(v) after the acquisition of such Additional Engine (and any other Additional Engines being acquired on such Delivery Date) the percentage of Off-Production Engines in the Portfolio (measured by Adjusted Borrowing Value as of such Delivery Date) does not exceed *** until August 9, 2009 and *** thereafter;
(vi) if such Additional Engine is subject to a Lease, such Lease meets the requirements of this Indenture; and
(vii) the acquisition of such Additional Engine does not result in a Concentration Violation (without regard to the Concentration Variance Limits) and does not cause the percentage of Engines not on lease (measured by Adjusted Borrowing Value) to exceed ***.
(b) With respect to each such Additional Engine owned or to be owned by an Engine Trustee, the Security Trustee shall have received from such Engine Trustee a copy of the Engine Trust Agreement for the Engine Trust of such Engine Trustee, duly executed by the Engine Trustee and WEST, WEST Funding or another Subsidiary of WEST (other than an Engine Trust).
*** Confidential information omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.
(c) The Security Trustee shall have received a copy of the following documents:
(i) the Acquisition Agreement for each such Additional Engine, duly executed and delivered by WEST, the applicable Seller and any WEST Subsidiary a party thereto (including the Engine Subsidiary or Engine Trust, if applicable, that will own such Additional Engine (the “ Buyer ”)), provided that, if the Buyer is obligated to the Seller of such Additional Engine to keep all or a portion of such Acquisition Agreement confidential, such portions may be kept confidential in an appropriate manner;
(ii) a bill of sale or other instrument transferring all right, title and interest of the Seller in such Additional Engine or the Engine Interest in respect of such Additional Engine to the Buyer; and
(iii) if any such Additional Engine is being acquired from an Affiliate of WEST, an invoice, contract or other written document evidencing the amount of the Purchase Price of such Additional Engine and the cost of such Additional Engine, in each case reasonably acceptable to the Security Trustee.
(d) The following documents shall have been duly executed and delivered by the indicated parties:
(i) an Engine Mortgage in respect of each Additional Engine between the Security Trustee and the Buyer;
(ii) a Grantor Supplement from each Engine Trustee that is owns or is acquiring a Additional Engine; and
(iii) a Collateral Supplement from WEST, WEST Funding or any other Subsidiary that is to own any Engine or Engine Trust;
(e) The Lien created by the Engine Mortgage in respect of such Additional Engine shall constitute a first priority security interest in such Additional Engine and any other Collateral (including the Accounts) owned by WEST and the Buyer of such Additional Engine free and clear of liens (other than Permitted Liens), and the following actions to perfect the security interest of the Security Trustee in such Additional Engine and the related Collateral shall have been taken:
(i) the Engine Mortgage with respect to such Additional Engine and any Lease of such Additional Engine shall have been duly filed with the FAA, and the International Interest created by such Engine Mortgage shall have been registered with the International Registry;
(ii) UCC financing statements and other appropriate financing statements (including one or more financing statements to be filed with respect to any Lease for such Additional Engine) or notices and consents, duly executed by WEST or the Engine Subsidiary or Engine Trust that will own such Additional Engine or other
2
appropriate Person, and duly filed with the appropriate offices or registers as designated by the Security Trustee,
(iii) the sale of the Additional Engine to the Buyer and the International Interest created by the Engine Mortgage shall have been registered with the International Registry and, if the Additional Engine is subject to a Lease, the Buyer shall have taken such actions to perfect the security interest of the Security Trustee in such Lease as are required by the Engine Mortgage;
(iv) any prior financing in respect of such Additional Engine shall have been fully paid and satisfied and any Liens and International Interests created in connection with such prior financing shall have been released and discharged on all applicable public records, including the International Registry, or the Security Trustee has received such evidence of the release and discharge of such Liens or the obligation of the lender under such prior financing to release and discharge such Liens as shall be acceptable to the Security Trustee;
(iv) all necessary fees and Taxes relating to such filings and registration have been paid; and
(vi) WEST and the Buyer of such Additional Engine shall have done such other acts required by Applicable Law to perfect the security interest or charge in any Collateral and shall have made such other filings and taken such other actions as are necessary to establish the priority and perfection of the Lien of the Security Trustee in such Additional Engine and the other Collateral.
(f) The Administrative Agent shall have provided a certificate to the Indenture Trustee substantially in the form of Annex B to this Schedule 5 setting forth the Initial Appraised Value and Initial Borrowing Value of such Additional Engine, to which shall be attached the following items:
(i) a schedule as to the following matters, in each case taking into account such Additional Engine and any other Additional Engines being acquired on such Delivery Date:
(A) the total amounts of the Initial Borrowing Values of such Additional Engines and the Adjusted Borrowing Values of all other Engines within each Concentration Limit category and of Off-Production Engines as a percentage of the Aggregate Adjusted Borrowing Value of the Portfolio; and
(B) the total amounts of the Initial Borrowing Values of the Additional Engines and the Adjusted Borrowing Values of all other Engines in relation to the Outstanding Principal Balance under the Series A Notes, Outstanding Principal Balance under Series B Notes and Aggregate Note Principal Balance after all Loans are made on the Funding Date;
(ii) a copy of the Appraisals for each Additional Engine, dated not more than six (6) months prior to the Funding Date, and
3
(iii) if the Seller is an Affiliate of WEST, evidence of the book value of the Additional Engine in the hands of the Seller reasonably acceptable to each of the Indenture Trustee and Security Trustee.
(g) If such Additional Engine is subject to a Lease,
(i) a chattel paper copy of the Lease for such Additional Engine and a chattel paper copy of any Lease supplement for such Additional Engine shall have been delivered pursuant to the requirements of the Security Trust Agreement and the Custodial Agreement (or if any such chattel paper copy does not exist, appropriate evidence with respect to the missing chattel paper copy reasonably acceptable to the Security Trustee), and
(ii) the Lessee under such Lease relating shall have been directed to remit to the Collections Account all Lease Payments owing pursuant to such Lease.
(h) If such Additional Engine is subject to a Lease that requires Maintenance Reserve Payments, any Maintenance Reserve Payment balance for each such Additional Engine shall have been transferred to the Collections Account.
(i) If such Additional Engine is subject to a Lease that requires Security Deposits, such Security Deposits, if any, for each such Additional Engine that are in the form of cash or funds shall have been transferred to the Security Deposit/Lessee-Funded Account and such Security Deposits, if any, in the form of letters of credit or similar collateral shall have been transferred to the Buyer.
(j) The Security Trustee shall have received (i) an opinion of special FAA counsel in the United States as to the creation, priority and perfection of the security interest created by the Engine Mortgage in such Additional Engine and the other Collateral effected pursuant to clause (e) above, (ii) an opinion of special FAA counsel or other counsel reasonably acceptable to the Security Trustee as to the registration and priority of the International Interests of the Security Trustee in such Additional Engine and, if applicable, the Lease of such Additional Engine, in each case in form and substance satisfactory to the Security Trustee, and (iii) the results of searches on the International Registry evidencing the priority of the security interest in the Additional Engine.
(k) If such Additional Engine is subject to a Lease, the Servicer shall have received a certificate from an insurance broker, naming the Security Trustee as the sole loss payee and an additional insured, and copy of such certificate shall have been delivered to the Security Trustee.
4
Annex A
to Schedule 5 to the Amended and Restated Indenture
[FORM OF]
CONTROLLING TRUSTEE DELIVERY DATE CERTIFICATE
Date: [ ][ ], 20[ ]
The undersigned, a Controlling Trustee of Willis Engine Securitization Trust, a Delaware statutory trust (“ WEST ”), does hereby certify to Deutsche Bank Trust Company Americas, as Indenture Trustee under the Indenture, dated as of August 9, 2005 and as amended and restated as of December 13, 2007 (as amended, modified or supplemented, the “ Indenture ”), in satisfaction of one of the conditions under the Indenture to acquisition of an Additional Engine on the date first set forth above (the “ Delivery Date ”), as follows (capitalized terms used herein having the same meanings as in the Indenture):
(i) the approvals by the Controlling Trustees required by Section 5.03(b) of the Indenture have been obtained, including the resolutions required by Section 5.03 of the Indenture for such Additional Engine that is being acquired as part of Replacement Exchange, and a copy of such resolutions are attached to this Certificate;
(ii) such Additional Engine satisfies the requirements in the definition of an “Engine” in the Indenture, and the Purchase Price for each such Additional Engine satisfies the requirements of Section 5.03(b) of the Indenture;
(iii) no Event of Loss has occurred with respect to such Additional Engine and that no other damage has occurred with respect to such Additional Engine that would materially adversely affect the value of such Additional Engine;
(iv) all conditions precedent under the applicable Asset Purchase Agreement for such Additional Engine have been satisfied or waived by the relevant parties;
(v) after the acquisition of each such Additional Engine (and any other Additional Engines being acquired on such Delivery Date) the percentage of Off-Production Engines in the Portfolio (measured by Adjusted Borrowing Value as of such Delivery Date) does not exceed *** until August 9, 2009 and *** thereafter;
(vi) if such Additional Engine is subject to a Lease, such Lease meets the requirements of the Indenture; and
(vii) the acquisition of such Additional Engine does not result in a Concentration Violation (without regard to the Concentration Variance Limits) and does not cause the percentage of Engines not on lease (measured by Adjusted Borrowing Value) to exceed ***.
*** Confidential information omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.
Executed as of the date first set forth above, by the undersigned, a Controlling Trustee of WEST.
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Title: Controlling Trustee |
2
Annex B
to Schedule 5 to the Amended and Restated Indenture
[FORM OF]
ADMINISTRATIVE AGENT DELIVERY DATE CERTIFICATE
Date: [ ][ ], 20[ ]
The undersigned, an officer of Willis Lease Finance Corporation, as Administrative Agent for Willis Engine Securitization Trust, a Delaware statutory trust (“ WEST ”), does hereby certify to Deutsche Bank Trust Company Americas, as Indenture Trustee under the Indenture, dated as of August 9, 2005 and as amended and restated as of December 13, 2007 (as amended, modified or supplemented, the “ Indenture ”), in satisfaction of one of the conditions under the Indenture to acquisition of an Additional Engine on the date first set forth above (the “ Delivery Date ”), as follows (capitalized terms used herein having the same meanings as in the Indenture):
(i) the Initial Appraised Value and Initial Borrowing Value of such Additional Engine are set forth in a schedule attached to this Certificate;
(ii) a schedule as to the following matters, in each case taking into account such Additional Engine and any other Additional Engines being acquired on such Delivery Date, is attached to this Certificate:
(A) the total amounts of the Initial Borrowing Values of such Additional Engines and the Adjusted Borrowing Values of all other Engines within each Concentration Limit category and of Off-Production Engines as a percentage of the Aggregate Adjusted Borrowing Value of the Portfolio, and
(B) the total amounts of the Initial Borrowing Values of the Additional Engines and the Adjusted Borrowing Values of all other Engines in relation to the Outstanding Principal Balance under the Series A Notes, Outstanding Principal Balance under Series B Notes and Aggregate Note Principal Balance after all Series [ ] Loans are made on the Funding Date and; and
(iii) copies of the Appraisals for each Additional Engine, dated not more than six (6) months prior to the Delivery Date, are attached to this Certificate, and
(iv) if the Seller is an Affiliate of WEST, evidence of the book value of the Additional Engine in the hands of the Seller reasonably acceptable to the Indenture Trustee and the Series [ ] Holders is attached to this Certificate.
Executed as of the date first set forth above, by the undersigned, an officer of the Administrative Agent.
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SCHEDULE 6
CONDITIONS PRECEDENT TO FUNDING OF DISCRETIONARY ENGINE MODIFICATION
On any Delivery Date on which a Discretionary Engine Modification is to be funded with amounts withdrawn from the Engine Acquisition Account, the Administrative Agent shall give a written direction to the Indenture Trustee to transfer funds to the applicable Supplier of such Discretionary Engine Modification only upon satisfaction of the following conditions precedent:
(a) The Indenture Trustee shall have received a certificate signed by any Controlling Trustee of WEST stating that the approvals by the Controlling Trustees required by Section 5.03(c) of this Indenture have been obtained, with a copy of such resolutions attached to such certificate.
(b) The Indenture Trustee shall have received a copy of the following documents:
(i) the Modification Agreement for each such Discretionary Engine Modification; and
(ii) an invoice, contract or other written document evidencing the amount of the Purchase Price and/or cost of such Discretionary Engine Modification, in each case reasonably acceptable to the Indenture Trustee.
Annex A
to Schedule 6 to the Amended and Restated Indenture
[FORM OF]
CONTROLLING TRUSTEE DELIVERY DATE CERTIFICATE
Date: [ ][ ], 20[ ]
The undersigned, a Controlling Trustee of Willis Engine Securitization Trust, a Delaware statutory trust (“ WEST ”), does hereby certify to Deutsche Bank Trust Company Americas, as Indenture Trustee under the Indenture, dated as of August 9, 2005 and as amended and restated as of December 13, 2007 (as amended, modified or supplemented, the “ Indenture ”), in satisfaction of one of the conditions under the Indenture to funding of a Discretionary Engine Modification on the date first set forth above, that the approvals by the Controlling Trustees required by Section 5.03(c) of the Indenture have been obtained, including the resolutions required by Section 5.03 of the Indenture for such Discretionary Engine Modification, and a copy of such resolutions are attached to this Certificate.
Executed as of the date first set forth above, by the undersigned, a Controlling Trustee of WEST.
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Name: |
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Title: Controlling Trustee |
SCHEDULE 7
AGENT FOR SERVICE OF PROCESS
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Party |
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Jurisdiction |
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Appointed Agent |
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Willis Engine Securitization
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Delaware |
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Corporation Service Company
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WEST Engine Funding LLC |
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Delaware |
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Corporation Service Company
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EXHIBIT A-1
FORM OF SERIES A TERM NOTE
Except as specified in Section 2.1 2 (f) of the Indenture, each 144A Book-Entry Note, each Unrestricted Book-Entry Note and each Definitive Note issued in reliance on Section 4(2) of the Securities Act (and all Notes issued in exchange therefor or upon registration of transfer or substitution thereof) shall bear the following legend on the face thereof:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR WITH ANY SECURITIES REGULATORY AUTHORITY IN ANY JURISDICTION AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN “INSTITUTIONAL ACCREDITED INVESTOR”) OR (C) IT IS NOT A U.S. PERSON (WITHIN THE MEANING OF REGULATION S) AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT BEFORE TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE OF THIS NOTE AND THE LAST DATE THAT WILLIS ENGINE SECURITIZATION TRUST, A DELAWARE STATUTORY TRUST (“WEST”), OR ANY OF ITS AFFILIATES OWNED THIS NOTE, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO WEST OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE INDENTURE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE INDENTURE TRUSTEE) AND AN OPINION OF COUNSEL ACCEPTABLE TO WEST THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (D) IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT TO AN EXEMPTION FROM REGISTRATION IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH OF CASES (A) THROUGH (F) ABOVE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE IN THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN THE TWO-YEAR PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE TRANSFER NOTICE ATTACHED HERETO AND SUBMIT SUCH TRANSFER
NOTICE TO THE INDENTURE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR IF THE TRANSFER IS PURSUANT TO AN EXEMPTION FROM REGISTRATION IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE INDENTURE TRUSTEE AND WEST SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE INDENTURE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.
Each Book-Entry Note shall also bear the following legend on the face thereof:
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO WEST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS BOOK-ENTRY NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS BOOK-ENTRY NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.12 OF THE INDENTURE.
Each Regulation S Temporary Book-Entry Note shall bear the following legend on the face thereof:
THIS NOTE IS A REGULATION S TEMPORARY BOOK-ENTRY NOTE WITHIN THE MEANING OF THE INDENTURE REFERRED TO HEREINAFTER AND IS SUBJECT TO RESTRICTIONS ON THE TRANSFER AND EXCHANGE THEREOF AND ON THE PAYMENT OF INTEREST THEREON AS SPECIFIED IN THE INDENTURE.
2
WILLIS ENGINE SECURITIZATION TRUST
SERIES [ ]-A1 FLOATING RATE SECURED NOTE
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$[XX] |
CUSIP No.: |
No.
[ ,
],
[ ]
KNOW ALL PERSONS BY THESE PRESENTS that WILLIS ENGINE SECURITIZATION TRUST, a Delaware statutory trust (“ WEST ”), for value received, hereby promises to pay to [ ], or registered assigns, at the principal corporate trust office of the Indenture Trustee named below, (i) the Series [ ]-A1 Loans in the principal sum of [ ] Dollars ($ ), which sum shall be payable on each Payment Date on the dates and in the amounts set forth in the Indenture, dated as of August 9, 2005 and amended and restated as of December 13, 2007 (as amended, restated or otherwise modified from time to time, the “ Indenture ”), and the Series [ ]-A1 Supplement, dated as of [ ], [ ] (as amended, restated or otherwise modified from time to time, the “ Series [ ]-A1 Supplement ”), each between WEST and Deutsche Bank Trust Company Americas, as indenture trustee (the “ Indenture Trustee ”), and (ii) interest on the outstanding principal amount of this Series [ ]-A1 Floating Rate Secured Note (this “ Series [ ]-A1 Note ”) on the dates and in the amounts set forth in the Indenture and the Series [ ]-A1 Supplement. Capitalized terms not otherwise defined herein will have the meaning set forth in the Indenture and the Series [ ]-A1 Supplement.
Payment of the principal of and interest on this Series [ ]-A1 Note shall be made in lawful money of the United States of America which at the time of payment is legal tender for payment of public and private debts. The principal balance of, and interest on, this Series [ ]-A1 Note is payable at the times and in the amounts set forth in the Indenture and the Series [ ]-A1 Supplement by wire transfer of immediately available funds to the account designated by the Holder of record on the related Record Date.
This Series [ ]-A1 Note is one of the authorized notes identified in the title hereto and issued pursuant to the Indenture and the Series [ ]-A1 Supplement.
The Series [ ]-A1 Notes shall be an obligation of WEST and shall be secured by the Collateral, all as defined in, and subject to limitations set forth in, the Indenture.
This Series [ ]-A1 Note is transferable as provided in the Indenture and the Series [ ]-A1 Supplement, subject to certain limitations therein contained, only upon the books for registration and transfer kept by the Indenture Trustee, and only upon surrender of this Series [ ]-A1 Note for transfer to the Indenture Trustee duly endorsed by, or accompanied by a written instrument of transfer in form reasonably satisfactory to the Indenture Trustee duly executed by, the registered Holder hereof or his attorney duly authorized in writing. The Indenture Trustee or WEST may require payment by the Holder of a sum sufficient to cover any tax expense or other governmental charge payable in connection with any transfer or exchange of the Series [ ]-A1 Notes.
WEST, the Indenture Trustee and any other agent of WEST may treat the Person in whose name this Series [ ]-A1 Note is registered as the absolute owner hereof for all
3
purposes, and neither WEST, the Indenture Trustee, nor any other such agent shall be affected by notice to the contrary.
The Series [ ]-A1 Note are subject to Optional Redemption, at the times and subject to the conditions set forth in the Indenture and the Series [ ]-A1 Supplement.
If an Event of Default under the Indenture shall occur and be continuing, the principal of and accrued interest on this Series [ ]-A1 Note may be declared to be due and payable in the manner and with the effect provided in the Indenture and the Series [ ]-A1 Supplement.
The Indenture permits, with certain exceptions as therein provided, the issuance of supplemental indentures with the consent of the Requisite Majority, in certain specifically described instances. Any consent given by the Requisite Majority shall be conclusive and binding upon the Holder of this Series [ ]-A1 Note and on all future holders of this Series [ ]-A1 Note and of any Series [ ]-A1 Note issued in lieu hereof whether or not notation of such consent is made upon this Series [ ]-A1 Note. Supplements and amendments to the Indenture and the Series [ ]-A1 Supplement may be made only to the extent and in circumstances permitted by the Indenture and the Series [ ]-A1 Supplement.
The Holder of this Series [ ]-A1 Note shall have no right to enforce the provisions of the Indenture and the Series [ ]-A1 Supplement or to institute action to enforce the covenants, or to take any action with respect to a default under the Indenture and the Series [ ]-A1 Supplement, or to institute, appear in or defend any suit or other proceedings with respect thereto, except as provided under certain circumstances described in the Indenture and the Series [ ]-A1 Supplement; provided, however, that nothing contained in the Indenture and the Series [ ]-A1 Supplement shall affect or impair any right of enforcement conferred on the Holder hereof to enforce any payment of the principal of and interest on this Series [ ]-A1 Note on or after the due date thereof; provided further, however, that by acceptance hereof the Holder is deemed to have covenanted and agreed that it will not institute against WEST any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any applicable bankruptcy or similar law, at any time other than at such time as permitted by the Indenture and the Series [ ]-A1 Supplement.
This Series [ ]-A1 Note, and the rights and obligations of the parties hereunder, shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York without giving effect to principles of conflict of laws, other than Sections 5-1401 and 5-1402 of the New York General Obligations Laws.
All terms and provisions of the Indenture and the Series [ ]-A1 Supplement are herein incorporated by reference as if set forth herein in their entirety.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED, that all acts, conditions and things required to exist, happen and be performed precedent to the execution and delivery of the Indenture and the Series [ ]-A1 Supplement and the issuance of this Series [ ]-A1 Note and the issue of which it is a part, do exist, have happened and have been timely performed in regular form and manner as required by law.
4
Unless the certificate of authentication hereon has been executed by the Indenture Trustee by manual signature of one of its Responsible Officers, this Series [ ]-A1 Note shall not be entitled to any benefit under the Indenture and the Series [ ]-A1 Supplement, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, WEST has caused this Series [ ]-A1 Note to be duly executed by its duly authorized representative, as of the date first set above.
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WILLIS ENGINE
SECURITIZATION TRUST,
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This Note is one of the Series [ ]-A1 Notes described in the within-mentioned Series [ ]-A1 Supplement.
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DEUTSCHE BANK TRUST
COMPANY
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By: |
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Title: |
5
Schedule A to Series [ ] -A1 Note
Aggregate principal amount of any Series [ ]-A1 Note issued in exchange for a portion or portions hereof and any portion or portions of any Series [ ]-A1 Note exchanged for a portion or portions hereof:
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Principal Amount Issued
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Remaining Principal Amount
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Notation
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6
TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered Holder hereby sell(s), assign(s) and transfer(s) unto
Taxpayer identification No.
Address:
the within Series [ ]-A1 Note and all rights thereunder, hereby irrevocably constituting and appointing attorney to transfer said Series [ ]-A1 Note on the books of WEST with full power of substitution in the premises.
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NOTE: The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever. |
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7
In connection with any transfer of this Series [ ]-A1 Note occurring prior to the date which is the earlier of the end of the period referred to in Rule 144(k) under the Securities Act, the undersigned confirms that without utilizing any general solicitation or general advertising:
{Check One}
{ } (a) this Series [ ]-A1 Note is being transferred in compliance with the exemption from registration under the Securities Act provided by Rule 144A thereunder;
or
{ } (b) this Series [ ]-A1 Note is being transferred other than in accordance with (a) above and documents are being furnished which comply with the conditions of transfer set forth in this Series [ ]-A1 Note and the Indenture.
If none of the foregoing boxes is checked, the Indenture Trustee or other Note Registrar shall not be obligated to register this Series [ ]-A1 Note in the name of any Person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 2.12 of the Indenture shall have been satisfied.
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NOTE: The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever. |
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TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED: The undersigned represents and warrants that it is purchasing this Series [ ]-A1 Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding WEST as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.
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9
EXHIBIT A-2
FORM OF SERIES A WAREHOUSE NOTE
Except as specified in Section 2.1 2 (f) of the Indenture, each 144A Book-Entry Note, each Unrestricted Book-Entry Note and each Definitive Note issued in reliance on Section 4(2) of the Securities Act (and all Notes issued in exchange therefor or upon registration of transfer or substitution thereof) shall bear the following legend on the face thereof:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR WITH ANY SECURITIES REGULATORY AUTHORITY IN ANY JURISDICTION AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN “INSTITUTIONAL ACCREDITED INVESTOR”) OR (C) IT IS NOT A U.S. PERSON (WITHIN THE MEANING OF REGULATION S) AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT BEFORE TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE OF THIS NOTE AND THE LAST DATE THAT WILLIS ENGINE SECURITIZATION TRUST, A DELAWARE STATUTORY TRUST (“WEST”), OR ANY OF ITS AFFILIATES OWNED THIS NOTE, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO WEST OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE INDENTURE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE INDENTURE TRUSTEE) AND AN OPINION OF COUNSEL ACCEPTABLE TO WEST THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (D) IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT TO AN EXEMPTION FROM REGISTRATION IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH OF CASES (A) THROUGH (F) ABOVE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE IN THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN THE TWO-YEAR PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE TRANSFER NOTICE ATTACHED HERETO AND SUBMIT SUCH TRANSFER
NOTICE TO THE INDENTURE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR IF THE TRANSFER IS PURSUANT TO AN EXEMPTION FROM REGISTRATION IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE INDENTURE TRUSTEE AND WEST SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE INDENTURE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.
Each Book-Entry Note shall also bear the following legend on the face thereof:
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO WEST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS BOOK-ENTRY NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS BOOK-ENTRY NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.12 OF THE INDENTURE.
Each Regulation S Temporary Book-Entry Note shall bear the following legend on the face thereof:
THIS NOTE IS A REGULATION S TEMPORARY BOOK-ENTRY NOTE WITHIN THE MEANING OF THE INDENTURE REFERRED TO HEREINAFTER AND IS SUBJECT TO RESTRICTIONS ON THE TRANSFER AND EXCHANGE THEREOF AND ON THE PAYMENT OF INTEREST THEREON AS SPECIFIED IN THE INDENTURE.
WILLIS ENGINE SECURITIZATION TRUST
SERIES [ ] - A2 FLOATING RATE SECURED NOTE
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$[XX] |
No. |
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[ ], [ ] |
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KNOW ALL PERSONS BY THESE PRESENTS that WILLIS ENGINE SECURITIZATION TRUST, a Delaware statutory trust (“ WEST ”), for value received, hereby promises to pay to [ ], or registered assigns, at the principal corporate trust office of the Indenture Trustee named below, (i) the principal amount of the Series [ ] -A2 Loans made by the holder hereof to WEST in an amount up to the Maximum Principal Balance of Dollars ($ ),which principal amount shall be payable on each Payment Date on the dates and in the amounts set forth in the Indenture, dated as of August 9, 2005 and amended and restated as of December 13, 2007 (as amended, restated or otherwise modified from time to time, the “ Indenture ”), and the Series [ ] - A2 Supplement, dated as of [ , ], [ ] (as amended, restated or otherwise modified from time to time, the “ Series [ ] - A2 Supplement ”), each between WEST and Deutsche Bank Trust Company Americas, as indenture trustee (the “ Indenture Trustee ”), and (ii) interest on the outstanding principal amount of this Series [ ]-A2 Floating Rate Secured Note (this “ Series [ ] - A2 Note ”) on the dates and in the amounts set forth in the Indenture and the Series [ ] - A2 Supplement. Capitalized terms not otherwise defined herein will have the meaning set forth in the Indenture and the Series [ ]-A2 Supplement.
Payment of the principal of, interest on and Increased Costs for this Series [ ] - A2 Note shall be made in lawful money of the United States of America which at the time of payment is legal tender for payment of public and private debts. The principal balance of, and interest on, this Series [ ] - A2 Note and any Increased Costs are payable at the times and in the amounts set forth in the Indenture and the Series [ ] - A2 Supplement by wire transfer of immediately available funds to the account designated by the Holder of record on the related Record Date.
This Series [ ] - A2 Note is one of the authorized notes identified in the title hereto and issued pursuant to the Indenture and the Series [ ] - A2 Supplement.
The Series [ ] - A2 Notes shall be an obligation of WEST and shall be secured by the Collateral, all as defined in, and subject to limitations set forth in, the Indenture.
This Series [ ] - A2 Note is transferable as provided in the Indenture and the Series [ ] - A2 Supplement, subject to certain limitations therein contained, only upon the books for registration and transfer kept by the Indenture Trustee, and only upon surrender of this Series [ ]-A2 Note for transfer to the Indenture Trustee duly endorsed by, or accompanied by a written instrument of transfer and an assumption of the obligation of the transferor to make the Series [ ] -A2 Loans in form reasonably satisfactory to the Indenture Trustee duly executed by, the registered Holder hereof or his attorney duly authorized in writing. The Indenture Trustee shall not recognize any transfer of this Series [ ] - A2 Note prior to the occurrence of a Conversion Event, unless the transferee meets the requirements for an Eligible Transferee in the Series [ ] - A2 Supplement and agrees to make the Series [ ] -A2 Loans up to an
amount equal to the excess of the Maximum Principal Balance of this Series [ ] - A2 Note at the time of transfer over the Outstanding Principal Balance of this Series [ ]-A2 Note at such time. The Indenture Trustee or WEST may require payment by the Holder of a sum sufficient to cover any tax expense or other governmental charge payable in connection with any transfer or exchange of the Series [ ] - A2 Notes.
WEST, the Indenture Trustee and any other agent of WEST may treat the Person in whose name this Series [ ] - A2 Note is registered as the absolute owner hereof for all purposes, and neither WEST, the Indenture Trustee, nor any other such agent shall be affected by notice to the contrary.
The Series [ ] - A2 Notes are subject to Optional Redemption, at the times and subject to the conditions set forth in the Indenture and the Series [ ] - A2 Supplement.
If an Event of Default under the Indenture shall occur and be continuing, the principal of and accrued interest on this Series [ ] - A2 Note may be declared to be due and payable in the manner and with the effect provided in the Indenture and the Series [ ] - A2 Supplement.
The Indenture permits, with certain exceptions as therein provided, the issuance of supplemental indentures with the consent of the Requisite Majority, in certain specifically described instances. Any consent given by the Requisite Majority shall be conclusive and binding upon the Holder of this Series [ ] - A2 Note and on all future holders of this Series [ ] - A2 Note and of any Series [ ] - A2 Note issued in lieu hereof whether or not notation of such consent is made upon this Series [ ] - A2 Note. Supplements and amendments to the Indenture and the Series [ ] - A2 Supplement may be made only to the extent and in circumstances permitted by the Indenture and the Series [ ] - A2 Supplement.
The Holder of this Series [ ] - A2 Note shall have no right to enforce the provisions of the Indenture and the Series [ ] - A2 Supplement or to institute action to enforce the covenants, or to take any action with respect to a default under the Indenture and the Series [ ] - A2 Supplement, or to institute, appear in or defend any suit or other proceedings with respect thereto, except as provided under certain circumstances described in the Indenture and the Series [ ] - A2 Supplement; provided , however , that nothing contained in the Indenture and the Series [ ] - A2 Supplement shall affect or impair any right of enforcement conferred on the Holder hereof to enforce any payment of the principal of and interest on this Series [ ] - A2 Note on or after the due date thereof; provided further, however , that by acceptance hereof the Holder is deemed to have covenanted and agreed that it will not institute against WEST any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any applicable bankruptcy or similar law, at any time other than at such time as permitted by the Indenture and the Series [ ] - A2 Supplement.
This Series [ ] - A2 Note, and the rights and obligations of the parties hereunder, shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York without giving effect to principles of conflict of laws, other than Sections 5-1401 and 5-1402 of the New York General Obligations Laws.
All terms and provisions of the Indenture and the Series [ ] - A2 Supplement are herein incorporated by reference as if set forth herein in their entirety.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED, that all acts, conditions and things required to exist, happen and be performed precedent to the execution and delivery of the Indenture and the Series [ ]-A2 Supplement and the issuance of this Series [ ]-A2 Note and the issue of which it is a part, do exist, have happened and have been timely performed in regular form and manner as required by law.
Unless the certificate of authentication hereon has been executed by the Indenture Trustee by manual signature of one of its Responsible Officers, this Series [ ] - A2 Note shall not be entitled to any benefit under the Indenture and the Series [ ]-A2 Supplement, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, WEST has caused this Series [ ] - A2 Note to be duly executed by its duly authorized representative, as of the date first set above.
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WILLIS ENGINE
SECURITIZATION
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This Note is one of the Series [ ] - A2 Notes described in the within-mentioned Series [ ] - A2 Supplement.
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DEUTSCHE BANK TRUST
COMPANY
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Schedule A to Series [ ]-A2 Note
Aggregate principal amount of any Series [ ] - A2 Note issued in exchange for a portion or portions hereof and any portion or portions of any Series [ ] - A2 Note exchanged for a portion or portions hereof:
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TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered Holder hereby sell(s), assign(s) and transfer(s) unto
Taxpayer identification No.
Address:
the within Series [ ]-A2 Note and all rights thereunder, hereby irrevocably constituting and appointing attorney to transfer said Series [ ]-A2 Note on the books of WEST with full power of substitution in the premises.
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NOTE: The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever. |
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In connection with any transfer of this Series [ ]-A2 Note occurring prior to the date which is the earlier of the end of the period referred to in Rule 144(k) under the Securities Act, the undersigned confirms that without utilizing any general solicitation or general advertising:
{Check One}
{ } (a) this Series [ ]-A2 Note is being transferred in compliance with the exemption from registration under the Securities Act provided by Rule 144A thereunder;
or
{ } (b) this Series [ ]-A2 Note is being transferred other than in accordance with (a) above and documents are being furnished which comply with the conditions of transfer set forth in this Series [ ]-A2 Note and the Indenture.
If none of the foregoing boxes is checked, the Indenture Trustee or other Note Registrar shall not be obligated to register this Series [ ]-A2 Note in the name of any Person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 2.12 of the Indenture shall have been satisfied.
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NOTE: The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever. |
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TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED: The undersigned represents and warrants that it is purchasing this Series [ ]-A2 Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding WEST as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.
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EXHIBIT B-1
FORM OF SERIES B TERM NOTE
Except as specified in Section 2.1 2 (f) of the Indenture, each 144A Book-Entry Note, each Unrestricted Book-Entry Note and each Definitive Note issued in reliance on Section 4(2) of the Securities Act (and all Notes issued in exchange therefor or upon registration of transfer or substitution thereof) shall bear the following legend on the face thereof:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR WITH ANY SECURITIES REGULATORY AUTHORITY IN ANY JURISDICTION AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN “INSTITUTIONAL ACCREDITED INVESTOR”) OR (C) IT IS NOT A U.S. PERSON (WITHIN THE MEANING OF REGULATION S) AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT BEFORE TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE OF THIS NOTE AND THE LAST DATE THAT WILLIS ENGINE SECURITIZATION TRUST, A DELAWARE STATUTORY TRUST (“WEST”), OR ANY OF ITS AFFILIATES OWNED THIS NOTE, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO WEST OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE INDENTURE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE INDENTURE TRUSTEE) AND AN OPINION OF COUNSEL ACCEPTABLE TO WEST THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (D) IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT TO AN EXEMPTION FROM REGISTRATION IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH OF CASES (A) THROUGH (F) ABOVE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE IN THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN THE TWO-YEAR PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE TRANSFER NOTICE ATTACHED HERETO AND SUBMIT SUCH TRANSFER
NOTICE TO THE INDENTURE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR IF THE TRANSFER IS PURSUANT TO AN EXEMPTION FROM REGISTRATION IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE INDENTURE TRUSTEE AND WEST SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE INDENTURE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.
Each Book-Entry Note shall also bear the following legend on the face thereof:
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO WEST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS BOOK-ENTRY NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS BOOK-ENTRY NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.12 OF THE INDENTURE.
Each Regulation S Temporary Book-Entry Note shall bear the following legend on the face thereof:
THIS NOTE IS A REGULATION S TEMPORARY BOOK-ENTRY NOTE WITHIN THE MEANING OF THE INDENTURE REFERRED TO HEREINAFTER AND IS SUBJECT TO RESTRICTIONS ON THE TRANSFER AND EXCHANGE THEREOF AND ON THE PAYMENT OF INTEREST THEREON AS SPECIFIED IN THE INDENTURE.
WILLIS ENGINE SECURITIZATION TRUST
SERIES [ ]-B1 FLOATING RATE SECURED NOTE
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$[XX] |
CUSIP No.: |
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No. |
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[ , ], [ ]
KNOW ALL PERSONS BY THESE PRESENTS that WILLIS ENGINE SECURITIZATION TRUST, a Delaware statutory trust (“ WEST ”), for value received, hereby promises to pay to [ ], or registered assigns, at the principal corporate trust office of the Indenture Trustee named below, (i) the principal sum of Dollars ($ ), which sum shall be payable on each Payment Date on the dates and in the amounts set forth in the Indenture, dated as of August 9, 2005 and amended and restated as of December 13, 2007 (as amended, restated or otherwise modified from time to time, the “ Indenture ”), and the Series [ ]-B1 Supplement, dated as of [ , ], [ ] (as amended, restated or otherwise modified from time to time, the “ Series [ ]-B1 Supplement ”), each between WEST and Deutsche Bank Trust Company Americas, as indenture trustee (the “ Indenture Trustee ”), and (ii) interest on the outstanding principal amount of this Series [ ]-B1 Floating Rate Secured Note (this “ Series [ ]- B1 Note ”) on the dates and in the amounts set forth in the Indenture and the Series [ ]-B1 Supplement. Capitalized terms not otherwise defined herein will have the meaning set forth in the Indenture and the Series [ ]-B1 Supplement.
Payment of the principal of and interest on this Series [ ]-B1 Note shall be made in lawful money of the United States of America which at the time of payment is legal tender for payment of public and private debts. The principal balance of, and interest on, this Series [ ]-B1 Note is payable at the times and in the amounts set forth in the Indenture and the Series [ ]-B1 Supplement by wire transfer of immediately available funds to the account designated by the Holder of record on the related Record Date.
This Series [ ]-B1 Note is one of the authorized notes identified in the title hereto and issued pursuant to the Indenture and the Series [ ]-B1 Supplement.
The Series [ ]-B1 Notes shall be an obligation of WEST and shall be secured by the Collateral, all as defined in, and subject to limitations set forth in, the Indenture.
This Series [ ]-B1 Note is transferable as provided in the Indenture and the Series [ ]-B1 Supplement, subject to certain limitations therein contained, only upon the books for registration and transfer kept by the Indenture Trustee, and only upon surrender of this Series [ ]-B1 Note for transfer to the Indenture Trustee duly endorsed by, or accompanied by a written instrument of transfer in form reasonably satisfactory to the Indenture Trustee duly executed by, the registered Holder hereof or his attorney duly authorized in writing. The Indenture Trustee or WEST may require payment by the Holder of a sum sufficient to cover any tax expense or other governmental charge payable in connection with any transfer or exchange of the Series [ ]-B1 Notes.
WEST, the Indenture Trustee and any other agent of WEST may treat the Person in whose name this Series [ ]-B1 Note is registered as the absolute owner hereof for all
purposes, and neither WEST, the Indenture Trustee, nor any other such agent shall be affected by notice to the contrary.
The Series [ ]-B1 Notes are subject to prepayment, at the times and subject to the conditions set forth in the Indenture and the Series [ ]-B1 Supplement.
If an Event of Default under the Indenture shall occur and be continuing, the principal of and accrued interest on this Series [ ]-B1 Note may be declared to be due and payable in the manner and with the effect provided in the Indenture and the Series [ ]-B1 Supplement.
The Indenture permits, with certain exceptions as therein provided, the issuance of supplemental indentures with the consent of the Requisite Majority, in certain specifically described instances. Any consent given by the Requisite Majority shall be conclusive and binding upon the Holder of this Series [ ]-B1 Note and on all future holders of this Series [ ]-B1 Note and of any Series [ ]-B1 Note issued in lieu hereof whether or not notation of such consent is made upon this Series [ ]-B1 Note. Supplements and amendments to the Indenture and the Series [ ]-B1 Supplement may be made only to the extent and in circumstances permitted by the Indenture and the Series [ ]-B1 Supplement.
The Holder of this Series [ ]-B1 Note shall have no right to enforce the provisions of the Indenture and the Series [ ]-B1 Supplement or to institute action to enforce the covenants, or to take any action with respect to a default under the Indenture and the Series [ ]-B1 Supplement, or to institute, appear in or defend any suit or other proceedings with respect thereto, except as provided under certain circumstances described in the Indenture and the Series [ ]-B1 Supplement; provided , however , that nothing contained in the Indenture and the Series [ ]-B1 Supplement shall affect or impair any right of enforcement conferred on the Holder hereof to enforce any payment of the principal of and interest on this Series [ ]-B1 Note on or after the due date thereof; provided further , however , that by acceptance hereof the Holder is deemed to have covenanted and agreed that it will not institute against WEST any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any applicable bankruptcy or similar law, at any time other than at such time as permitted by the Indenture and the Series [ ]-B1 Supplement.
The indebtedness evidenced by the Notes issued under the Series [ ] -B1 Supplement is, to the extent and in the manner provided in the Indenture, subordinate and subject in right of payment to the prior payment in full of all Senior Claims (as defined in the Indenture), and this Series [ ]-B1 Note is issued subject to such provisions. Each Holder of this Series [ ]-B1 Note, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Indenture Trustee on his behalf to take such action as may be necessary or appropriate to effectuate the subordination as provided in the Indenture and (c) appoints the Indenture Trustee his attorney-in-fact for such purpose.
The maturity of this Series [ ] -B1 Note is subject to acceleration upon the occurrence and during the continuance of the Events of Default specified in the Indenture. The Holders of the Notes issued under the Series [ ]-B1 Supplement shall not be permitted to deliver a Default Notice or to exercise any remedy in respect of any such Event of Default until all interest on and principal of the Series A Notes have been paid in full.
The Holder of this Series [ ] -B1 Note agrees, by acceptance hereof, to pay over to the Administrative Agent any money (including principal, premium and interest) paid to it in respect of this Series [ ]-B1 Note in the event that the Indenture Trustee, acting in good faith, determines subsequently that such monies were not paid in accordance with the priority of payment provisions of the Indenture or as a result of any other mistake of fact or law on the part of the Administrative Agent in making such payment.
The subordination provisions contained in Section 3.14 and Article XI of the Indenture may not be amended or modified without the consent of each Hedge Counterparty, each Holder of the subclass affected thereby and each Noteholder of any subclass of Notes ranking senior thereto.
The Indenture also contains provisions permitting the Holders of Notes representing a majority of the Outstanding Principal Balance of the Senior Series of Notes to waive compliance by WEST with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver shall be conclusive and binding upon all present and future Holders of this Series [ ] -B1 Note and of any Series [ ]-B1 Note issued upon the registration of transfer of, in exchange or in lieu of or upon the refinancing of this Series [ ]-B1 Note, whether or not notation of such consent or waiver is made upon this Series [ ]-B1 Note.
This Series [ ]-B1 Note, and the rights and obligations of the parties hereunder, shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York without giving effect to principles of conflict of laws, other than Section 5-1401 and 5-1402 of the New York General Obligation Law.
All terms and provisions of the Indenture and the Series [ ]-B1 Supplement are herein incorporated by reference as if set forth herein in their entirety.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED, that all acts, conditions and things required to exist, happen and be performed precedent to the execution and delivery of the Indenture and the Series [ ]-B1 Supplement and the issuance of this Series [ ]-B1 Note and the issue of which it is a part, do exist, have happened and have been timely performed in regular form and manner as required by law.
Unless the certificate of authentication hereon has been executed by the Indenture Trustee by manual signature of one of its Responsible Officers, this Series [ ]-B1 Note shall not be entitled to any benefit under the Indenture and the Series [ ]-B1 Supplement, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, WEST has caused this Series [ ]-B1 Note to be duly executed by its duly authorized representative, as of the date first set above.
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WILLIS ENGINE
SECURITIZATION TRUST,
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This Note is one of the Series [ ]-B1 Notes described in the within-mentioned Series [ ]-B1 Supplement.
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DEUTSCHE
BANK TRUST COMPANY
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Schedule A to Series [ ]-B1 Note
Aggregate principal amount of any Series [ ]-B1 Note issued in exchange for a portion or portions hereof and any portion or portions of any Series [ ]-B1 Note exchanged for a portion or portions hereof:
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TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered Holder hereby sell(s), assign(s) and transfer(s) unto
Taxpayer identification No.
Address:
the within Series [ ]-B1 Note and all rights thereunder, hereby irrevocably constituting and appointing attorney to transfer said Series [ ]-B1 Note on the books of WEST with full power of substitution in the premises.
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NOTE: The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever. |
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In connection with any transfer of this Series [ ]-B1 Note occurring prior to the date which is the earlier of the end of the period referred to in Rule 144(k) under the Securities Act, the undersigned confirms that without utilizing any general solicitation or general advertising:
{Check One}
{ } (a) this Series [ ]-B1 Note is being transferred in compliance with the exemption from registration under the Securities Act provided by Rule 144A thereunder;
or
{ } (b) this Series [ ]-B1 Note is being transferred other than in accordance with (a) above and documents are being furnished which comply with the conditions of transfer set forth in this Series [ ]-B1 Note and the Indenture.
If none of the foregoing boxes is checked, the Indenture Trustee or other Note Registrar shall not be obligated to register this Series [ ]-B1 Note in the name of any Person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 2.12 of the Indenture shall have been satisfied.
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NOTE: The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever. |
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TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED: The undersigned represents and warrants that it is purchasing this Series [ ]-B1 Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding WEST as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.
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EXHIBIT B-2
FORM OF SERIES B WAREHOUSE NOTE
Except as specified in Section 2.1 2(f) of the Indenture, each 144A Book-Entry Note, each Unrestricted Book-Entry Note and each Definitive Note issued in reliance on Section 4(2) of the Securities Act (and all Notes issued in exchange therefor or upon registration of transfer or substitution thereof) shall bear the following legend on the face thereof:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR WITH ANY SECURITIES REGULATORY AUTHORITY IN ANY JURISDICTION AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN “INSTITUTIONAL ACCREDITED INVESTOR”) OR (C) IT IS NOT A U.S. PERSON (WITHIN THE MEANING OF REGULATION S) AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT BEFORE TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE OF THIS NOTE AND THE LAST DATE THAT WILLIS ENGINE SECURITIZATION TRUST, A DELAWARE STATUTORY TRUST (“WEST”), OR ANY OF ITS AFFILIATES OWNED THIS NOTE, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO WEST OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE INDENTURE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE INDENTURE TRUSTEE) AND AN OPINION OF COUNSEL ACCEPTABLE TO WEST THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (D) IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT TO AN EXEMPTION FROM REGISTRATION IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH OF CASES (A) THROUGH (F) ABOVE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE IN THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN THE TWO-YEAR PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE TRANSFER NOTICE ATTACHED HERETO AND SUBMIT SUCH TRANSFER
NOTICE TO THE INDENTURE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR IF THE TRANSFER IS PURSUANT TO AN EXEMPTION FROM REGISTRATION IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE INDENTURE TRUSTEE AND WEST SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE INDENTURE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.
Each Book-Entry Note shall also bear the following legend on the face thereof:
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO WEST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS BOOK-ENTRY NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS BOOK-ENTRY NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.12 OF THE INDENTURE.
Each Regulation S Temporary Book-Entry Note shall bear the following legend on the face thereof:
THIS NOTE IS A REGULATION S TEMPORARY BOOK-ENTRY NOTE WITHIN THE MEANING OF THE INDENTURE REFERRED TO HEREINAFTER AND IS SUBJECT TO RESTRICTIONS ON THE TRANSFER AND EXCHANGE THEREOF AND ON THE PAYMENT OF INTEREST THEREON AS SPECIFIED IN THE INDENTURE.
WILLIS ENGINE SECURITIZATION TRUST
SERIES [ ] -B2 FLOATING RATE SECURED NOTE
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$[XX] |
No. |
[ ], [ ]
KNOW ALL PERSONS BY THESE PRESENTS that WILLIS ENGINE SECURITIZATION TRUST, a Delaware statutory trust (“ WEST ”), for value received, hereby promises to pay to [ ], or registered assigns, at the principal corporate trust office of the Indenture Trustee named below, (i) the principal amount of the Series [ ]-B2 Loans made by the holder hereof to WEST in an amount up to the Maximum Principal Balance of Dollars ($ ),which principal amount shall be payable on each Payment Date on the dates and in the amounts set forth in the Indenture, dated as of August 9, 2005 and amended and restated as of December 13, 2007 (as amended, restated or otherwise modified from time to time, the “ Indenture ”), and the Series [ ]-B2 Supplement, dated as of [ , ], [ ] (as amended, restated or otherwise modified from time to time, the “ Series [ ] -B2 Supplement ”), each between WEST and Deutsche Bank Trust Company Americas, as indenture trustee (the “ Indenture Trustee ”), and (ii) interest on the outstanding principal amount of this Series [ ]-B2 Floating Rate Secured Note (this “ Series [ ] -B2 Note ”) on the dates and in the amounts set forth in the Indenture and the Series [ ]-B2 Supplement. Capitalized terms not otherwise defined herein will have the meaning set forth in the Indenture and the Series [ ]-B2 Supplement.
Payment of the principal of, interest on and Increased Costs for this Series [ ] -B2 Note shall be made in lawful money of the United States of America which at the time of payment is legal tender for payment of public and private debts. The principal balance of, and interest on, this Series [ ]-B2 Note and any Increased Costs are payable at the times and in the amounts set forth in the Indenture and the Series [ ]-B2 Supplement by wire transfer of immediately available funds to the account designated by the Holder of record on the related Record Date.
This Series [ ] -B2 Note is one of the authorized notes identified in the title hereto and issued pursuant to the Indenture and the Series [ ]-B2 Supplement.
The Series [ ] -B2 Notes shall be an obligation of WEST and shall be secured by the Collateral, all as defined in, and subject to limitations set forth in, the Indenture.
This Series [ ] -B2 Note is transferable as provided in the Indenture and the Series [ ]-B2 Supplement, subject to certain limitations therein contained, only upon the books for registration and transfer kept by the Indenture Trustee, and only upon surrender of this Series [ ]-B2 Note for transfer to the Indenture Trustee duly endorsed by, or accompanied by a written instrument of transfer and an assumption of the obligation of the transferor to make the Series [ ]-B2 Loans in form reasonably satisfactory to the Indenture Trustee duly executed by, the registered Holder hereof or his attorney duly authorized in writing. The Indenture Trustee shall not recognize any transfer of this Series [ ]-B2 Note prior to the occurrence of a Conversion Event, unless the transferee meets the requirements for an Eligible Transferee in the Series [ ]-B2 Supplement and agrees to make the Series [ ]-B2 Loans up to an amount
equal to the excess of the Maximum Principal Balance of this Series [ ] -B2 Note at the time of transfer over the Outstanding Principal Balance of this Series [ ]-B2 Note at such time. The Indenture Trustee or WEST may require payment by the Holder of a sum sufficient to cover any tax expense or other governmental charge payable in connection with any transfer or exchange of the Series [ ]-B2 Notes.
WEST, the Indenture Trustee and any other agent of WEST may treat the Person in whose name this Series [ ] -B2 Note is registered as the absolute owner hereof for all purposes, and neither WEST, the Indenture Trustee, nor any other such agent shall be affected by notice to the contrary.
The Series [ ] -B2 Notes are subject to Optional Redemption, at the times and subject to the conditions set forth in the Indenture and the Series [ ]-B2 Supplement.
If an Event of Default under the Indenture shall occur and be continuing, the principal of and accrued interest on this Series [ ] -B2 Note may be declared to be due and payable in the manner and with the effect provided in the Indenture and the Series [ ]-B2 Supplement.
The Indenture permits, with certain exceptions as therein provided, the issuance of supplemental indentures with the consent of the Requisite Majority, in certain specifically described instances. Any consent given by the Requisite Majority shall be conclusive and binding upon the Holder of this Series [ ] -B2 Note and on all future holders of this Series [ ]-B2 Note and of any Series [ ]-B2 Note issued in lieu hereof whether or not notation of such consent is made upon this Series [ ]-B2 Note. Supplements and amendments to the Indenture and the Series [ ]-B2 Supplement may be made only to the extent and in circumstances permitted by the Indenture and the Series [ ]-B2 Supplement.
The Holder of this Series [ ] -B2 Note shall have no right to enforce the provisions of the Indenture and the Series [ ]-B2 Supplement or to institute action to enforce the covenants, or to take any action with respect to a default under the Indenture and the Series [ ]-B2 Supplement, or to institute, appear in or defend any suit or other proceedings with respect thereto, except as provided under certain circumstances described in the Indenture and the Series [ ]-B2 Supplement; provided , however , that nothing contained in the Indenture and the Series [ ]-B2 Supplement shall affect or impair any right of enforcement conferred on the Holder hereof to enforce any payment of the principal of and interest on this Series [ ]-B2 Note on or after the due date thereof; provided further , however , that by acceptance hereof the Holder is deemed to have covenanted and agreed that it will not institute against WEST any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any applicable bankruptcy or similar law, at any time other than at such time as permitted by the Indenture and the Series [ ]-B2 Supplement.
The indebtedness evidenced by the Notes issued under the Series [ ] -B2 Supplement is, to the extent and in the manner provided in the Indenture, subordinate and subject in right of payment to the prior payment in full of all Senior Claims (as defined in the Indenture), and this Series [ ]-B2 Note is issued subject to such provisions. Each Holder of this Series [ ]-B2 Note, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Indenture Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination as provided in the Indenture, and (c) appoints the Indenture Trustee his attorney-in-fact for such purpose.
The maturity of this Series [ ] -B2 Note is subject to acceleration upon the occurrence and during the continuance of the Events of Default specified in the Indenture. The Holders of the Notes issued under the Series [ ]-B2 Supplement shall not be permitted to deliver a Default Notice or to exercise any remedy in respect of any such Event of Default until all interest on and principal of the Series A Notes have been paid in full.
The Holder of this Series [ ] -B2 Note agrees, by acceptance hereof, to pay over to the Administrative Agent any money (including principal, premium and interest) paid to it in respect of this Series [ ]-B2 Note in the event that the Indenture Trustee, acting in good faith, determines subsequently that such monies were not paid in accordance with the priority of payment provisions of the Indenture or as a result of any other mistake of fact or law on the part of the Administrative Agent in making such payment.
The subordination provisions contained in Section 3.14 and Article XI of the Indenture may not be amended or modified without the consent of each Hedge Counterparty, each Holder of the subclass affected thereby and each Holder of any subclass of Notes ranking senior thereto.
The Indenture also contains provisions permitting the Holders of Notes representing a majority of the Outstanding Principal Balance of the Senior Series of Notes to waive compliance by WEST with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver shall be conclusive and binding upon all present and future Holders of this Series [ ] -B2 Note and of any Series [ ]-B2 Note issued upon the registration of transfer of, in exchange or in lieu of or upon the refinancing of this Series [ ]-B2 Note, whether or not notation of such consent or waiver is made upon this Series [ ]-B2 Note.
This Series [ ] -B2 Note, and the rights and obligations of the parties hereunder, shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York without giving effect to principles of conflict of laws, other than Sections 5-1401 and 5-1402 of the New York General Obligations Laws.
All terms and provisions of the Indenture and the Series [ ] -B2 Supplement are herein incorporated by reference as if set forth herein in their entirety.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED, that all acts, conditions and things required to exist, happen and be performed precedent to the execution and delivery of the Indenture and the Series [ ]-B2 Supplement and the issuance of this Series [ ]-B2 Note and the issue of which it is a part, do exist, have happened and have been timely performed in regular form and manner as required by law.
Unless the certificate of authentication hereon has been executed by the Indenture Trustee by manual signature of one of its Responsible Officers, this Series [ ] -B2 Note shall not be entitled to any benefit under the Indenture and the Series [ ]-B2 Supplement, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, WEST has caused this Series [ ] -B2 Note to be duly executed by its duly authorized representative, as of the date first set above.
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WILLIS ENGINE
SECURITIZATION
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This Note is one of the Series [ ] -B2 Notes described in the within-mentioned Series [ ]-B2 Supplement.
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DEUTSCHE BANK TRUST
COMPANY
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Schedule A to Series [ ]-B2 Note
Aggregate principal amount of any Series [ ] -B2 Note issued in exchange for a portion or portions hereof and any portion or portions of any Series [ ]-B2 Note exchanged for a portion or portions hereof:
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Remaining Principal Amount
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TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered Holder hereby sell(s), assign(s) and transfer(s) unto
Taxpayer identification No.
Address:
the within Series [ ]-B2 Note and all rights thereunder, hereby irrevocably constituting and appointing attorney to transfer said Series [ ]-B2 Note on the books of WEST with full power of substitution in the premises.
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NOTE: The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever. |
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In connection with any transfer of this Series [ ]-B2 Note occurring prior to the date which is the earlier of the end of the period referred to in Rule 144(k) under the Securities Act, the undersigned confirms that without utilizing any general solicitation or general advertising:
{Check One}
{ } (a) this Series [ ]-B2 Note is being transferred in compliance with the exemption from registration under the Securities Act provided by Rule 144A thereunder;
or
{ } (b) this Series [ ]-B2 Note is being transferred other than in accordance with (a) above and documents are being furnished which comply with the conditions of transfer set forth in this Series [ ]-B2 Note and the Indenture.
If none of the foregoing boxes is checked, the Indenture Trustee or other Note Registrar shall not be obligated to register this Series [ ]-B2 Note in the name of any Person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 2.12 of the Indenture shall have been satisfied.
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NOTE: The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever. |
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TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED: The undersigned represents and warrants that it is purchasing this Series [ ]-B2 Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding WEST as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.
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EXHIBIT C-1
FORM OF CERTIFICATE TO BE GIVEN BY NOTEHOLDERS
[Euroclear
151 Boulevard Jacqmain
B-1210 Brussels, Belgium]
[Clearstream Banking, société anonyme
f/k/a CedelBank, société anonyme
67 Boulevard Grand-Duchesse Charlotte
L-1331 Luxembourg]
Re: Series [ ] Floating Rate Secured Notes (the “ Offered Notes ”) issued pursuant to the Series [ ] Supplement, dated as of [ ], [ ], between Willis Engine Securitization Trust (“ WEST ”) and Deutsche Bank Trust Company Americas (the “ Indenture Trustee ”) to the Indenture, dated as of August 9, 2005 and amended and restated as of December 13, 2007, between WEST and the Indenture Trustee.
This is to certify that as of the date hereof, and except as set forth below, the beneficial interest in the Offered Notes held by you for our account is owned by persons that are not U.S. persons (as defined in Rule 902 under the Securities Act of 1933, as amended).
The undersigned undertakes to advise you promptly by tested telex on or prior to the date on which you intend to submit your certification relating to the Offered Notes held by you in which the undersigned has acquired, or intends to acquire, a beneficial interest in accordance with your operating procedures if any applicable statement herein is not correct on such date. In the absence of any such notification, it may be assumed that this certification applies as of such date.
[This certification excepts beneficial interests in and does not relate to U.S. $ principal amount of the Offered Notes appearing in your books as being held for our account but that we have sold or as to which we are not yet able to certify.]
We understand that this certification is required in connection with certain securities laws in the United States of America. If administrative or legal proceedings are commenced or threatened in connection with which this certification is or would be relevant, we irrevocably authorize you to produce this certification or a copy thereof to any interested party in such proceedings.
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Dated:* |
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By: |
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Account Holder |
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*Certification must be dated on or after the 15th day before the date of the Euroclear or Clearstream certificate to which this certification relates.
EXHIBIT C-2
FORM OF
CERTIFICATE TO BE GIVEN BY EUROCLEAR OR CLEARSTREAM
Deutsche Bank Trust Company Americas
as Indenture Trustee and Note Registrar
[ ]
New York, New York [ ]
Attention: [ ]
Re: Series [ ] Floating Rate Secured Notes (the “ Offered Notes ”) issued pursuant to the Series [ ] Supplement, dated as of [ , ], [ ], between Willis Engine Securitization Trust (“ WEST ”) and Deutsche Bank Trust Company Americas (the “ Indenture Trustee ”) to the Indenture, dated as of August 9, 2005 and amended and restated as of December 13, 2007, between WEST and the Indenture Trustee. (Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.)
This is to certify that, based solely on certifications we have received in writing or by electronic transmission from member organizations appearing in our records as persons being entitled to a portion of the principal amount set forth below (our “ Member Organizations ”) as of the date hereof, $ principal amount of the Offered Notes is owned by persons (a) that are not U.S. persons (as defined in Rule 902 under the Securities Act of 1933, as amended (the “ Securities Act ”)) or (b) who purchased their Offered Notes (or interests therein) in a transaction or transactions that did not require registration under the Securities Act.
We further certify (a) that we are not making available herewith for exchange any portion of the related Regulation S Temporary Book-Entry Note excepted in such certifications and (b) that as of the date hereof we have not received any notification from any of our Member Organizations to the effect that the statements made by them with respect to any portion of the part submitted herewith for exchange are no longer true and cannot be relied upon as of the date hereof.
We understand that this certification is required in connection with certain securities laws of the United States of America. If administrative or legal proceedings are commenced or threatened in connection with which this certification is or would be relevant, we irrevocably authorize you to produce this certification or a copy hereof to any interested party in such proceedings.
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Date: |
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Yours faithfully, |
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By: |
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[Morgan Guaranty Trust Company of New York, Brussels Office, as Operator of the Euroclear Clearance System] [Clearstream, société anonyme] |
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EXHIBIT C-3
FORM OF CERTIFICATE TO DEPOSITORY REGARDING INTEREST
[Euroclear
151 Boulevard Jacqmain
B-1210 Brussels, Belgium]
[Clearstream Banking, société anonyme
f/k/a CedelBank, société anonyme
67 Boulevard Grand-Duchesse Charlotte
L-1331 Luxembourg]
Re: Series [ ] Floating Rate Secured Notes (the “ Offered Notes ”) issued pursuant to the Series [ ] Supplement, dated as of [ ], [ ], between Willis Engine Securitization Trust (“ WEST ”) and Deutsche Bank Trust Company Americas (the “ Indenture Trustee ”) to the Indenture, dated as of August 9, 2005 and amended and restated as of December 13, 2007, between WEST and the Indenture Trustee. (Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.)
This letter relates to $[ ] principal amount of the Offered Notes that are held in the form of a beneficial interest in the Regulation S Temporary Book-Entry Note (CUSIP No. ) through [insert name of Depository] by the undersigned (the “ Holder ”) in the name of [insert name of Participant]. The Holder of such Regulation S Temporary Book-Entry Note hereby requests the receipt of payment of interest installments due and payable [on the applicable Payment Date] pursuant to Section 2.05 of the Indenture.
The Holder hereby represents and warrants that it (i) is not a U.S. person and (ii) does not hold the above-referenced Regulation S Temporary Book-Entry Note for the account or benefit of a U.S. person (other than a distributor). Terms in this sentence have the meanings given to them in Regulation S under the Securities Act of 1933, as amended.
This certificate and the statements contained herein are made for your benefit and the benefit of the Paying Agent.
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[Name of Holder] |
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EXHIBIT C-4
FORM OF DEPOSITORY CERTIFICATE REGARDING INTEREST
[ ], as Paying Agent
[Address]
Re: Series [ ] Floating Rate Secured Notes (the “ Offered Notes ”) issued pursuant to the Series [ ] Supplement, dated as of [ }, [ ], between Willis Engine Securitization Trust (“ WEST ”) and Deutsche Bank Trust Company Americas (the “ Indenture Trustee ”) to the Indenture, dated as of August 9, 2005 and amended and restated as of December 13, 2007 , between WEST and the Indenture Trustee. (Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.)
This letter relates to $ principal amount of Series [ ] Notes that are held in the form of a beneficial interest in the Regulation S Temporary Book-Entry Note (CUSIP No. ) through [insert name of Depository] by the undersigned (the “ Holder ”) in the name of [insert name of Participant]. Certain Holders of the beneficial interests in such Regulation S Temporary Book-Entry Note have requested the receipt of payment of interests installments due and payable [on the applicable Payment Date] pursuant to Section 2.05 of the Indenture.
We have received from such Holders certifications to the effect that they (i) are not U.S. persons and (ii) do not hold the above-referenced Regulation S Temporary Book-Entry Note for the account or benefit of U.S. persons (other than distributors). Terms in this sentence have the meanings given to them in Regulation S under the Securities Act of 1933, as amended.
Accordingly, the Holders of the beneficial interests in the Regulation S Temporary Book-Entry Note are entitled to receive interest, principal and premium, if any, in accordance with the terms of the Indenture in the amount of $ .
[Morgan Guaranty Trust Company of New York, Brussels Office, as Operator of the Euroclear Clearance System] [Clearstream, société anonyme]
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EXHIBIT C-5
FORM OF
TRANSFER CERTIFICATE FOR EXCHANGE OR
TRANSFER FROM 144A BOOK-ENTRY NOTE
TO REGULATION S BOOK-ENTRY NOTE
Deutsche Bank Trust Company Americas,
as Indenture Trustee and Note Registrar
[ ]
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New York, New York [ |
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Attention: [ |
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Re: Series [ ] Floating Rate Secured Notes (the “ Offered Notes ”) issued pursuant to the Series [ ] Supplement, dated as of [ ], [ ], between Willis Engine Securitization Trust (“ WEST ”) and Deutsche Bank Trust Company Americas (the “ Indenture Trustee ”) to the Indenture, dated as of August 9, 2005 and amended and restated as of December 13, 2007 (as supplemented, the “ Indenture ”), between WEST and the Indenture Trustee. (Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.)
This letter relates to U.S. $ principal amount of Offered Notes that are held as a beneficial interest in the 144A Book-Entry Note (CUSIP No. ) with DTC in the name of [insert name of transferor] (the “ Transferor ”). The Transferor has requested an exchange or transfer of the beneficial interest for an interest in the Regulation S Book-Entry Note (CUSIP No. ) to be held with [Euroclear] [Clearstream] through DTC.
In connection with the request and in receipt of the Offered Notes, the Transferor does hereby certify that the exchange or transfer has been effected in accordance with the transfer restrictions set forth in the Indenture and the Offered Notes and:
(a) pursuant to and in accordance with Regulation S under the Securities Act of 1933, as amended (the “ Securities Act ”), and accordingly the Transferor does hereby certify that:
(i) the offer of the Offered Notes was not made to a person in the United States of America,
(ii) either (A) at the time the buy order was originated, the transferee was outside the United States of America or the Transferor and any person acting on its behalf reasonably believed that the transferee was outside the United States of America, or (B) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither the Transferor nor any person acting on its behalf knows that the transaction was pre-arranged with a buyer in the United States of America,
(iii) no directed selling efforts have been made in contravention of the requirements of Rule 903 or 904 of Regulation S, as applicable, and the other
conditions of Rule 903 or Rule 904 of Regulation S, as applicable, have been satisfied and
(iv) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act, and
(b) with respect to transfers made in reliance on Rule 144A under the Securities Act, the Transferor does hereby certify that the Notes are being transferred in a transaction permitted by Rule 144A under the Securities Act.
This certification and the statements contained herein are made for your benefit and the benefit of WEST.
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[Insert name of Transferor] |
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EXHIBIT C-6
FORM OF INITIAL PURCHASER EXCHANGE INSTRUCTIONS
Depository Trust Company
55 Water Street
50th Floor
New York, New York 10041
Re: Series [ ] Floating Rate Secured Notes (the “ Offered Notes ”) issued pursuant to the Series [ ] Supplement, dated as of [ ], [ ], between Willis Engine Securitization Trust (“ WEST ”) and Deutsche Bank Trust Company Americas (the “ Indenture Trustee ”) to the Indenture, dated as of August 9, 2005 and amended and restated as of December 13, 2007, between WEST and the Indenture Trustee. (Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.)
Pursuant to Section 2.07 of the Indenture, [insert name of an Initial Purchaser] (the “ Initial Purchaser ”) hereby requests that $ aggregate principal amount of the Offered Notes held by you for our account and represented by the Regulation S Temporary Book-Entry Note (CUSIP No. ) be exchanged for an equal principal amount represented by the 144A Book-Entry Note (CUSIP No. ) to be held by you for our account.
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[insert name of the Initial Purchaser] |
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as Initial Purchaser |
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EXHIBIT C-7
FORM OF
CERTIFICATE TO BE GIVEN BY TRANSFEREE OF BENEFICIAL INTEREST IN A REGULATION S
TEMPORARY BOOK ENTRY NOTE
[Euroclear
151 Boulevard Jacqmain
B-1210 Brussels, Belgium]
[Clearstream Banking, société anonyme
f/k/a CedelBank, société anonyme
67 Boulevard Grand-Duchesse Charlotte
L-1331 Luxembourg]
Re: Series [ ] Floating Rate Secured Notes (the “ Offered Notes ”) issued pursuant to the Series [ ] Supplement, dated as of [ ], [ ], between Willis Engine Securitization Trust (“ WEST ”) and Deutsche Bank Trust Company Americas (the “ Indenture Trustee ”) to the Indenture, dated as of August 9, 2005 and amended and restated as of December 13, 2007, between WEST and the Indenture Trustee.
This is to certify that as of the date hereof, and except as set forth below, for purposes of acquiring a beneficial interest in the Offered Notes, the undersigned certifies that it is not a U.S. person (as defined in Rule 902 under the Securities Act of 1933, as amended).
The undersigned undertakes to advise you promptly by tested telex on or prior to the date on which you intend to submit your certification relating to the Offered Notes held by you in which the undersigned intends to acquire a beneficial interest in accordance with your operating procedures if any applicable statement herein is not correct on such date. In the absence of any such notification, it may be assumed that this certification applies as of such date.
We understand that this certification is required in connection with certain securities laws in the United States of America. If administrative or legal proceedings are commenced or threatened in connection with which this certification is or would be relevant, we irrevocably authorize you to produce this certification or a copy thereof to any interested party in such proceedings.
Dated: By:
EXHIBIT D
FORM OF INVESTMENT LETTER TO BE DELIVERED IN CONNECTION WITH TRANSFERS TO NON-QIB ACCREDITED INVESTORS
,
Deutsche Bank Trust Company
Americas
60 Wall Street
MS NYC 60-2606
New York, New York 10005
Ladies and Gentlemen:
In connection with our proposed purchase of $ of the Series Floating Rate Notes (the “ Notes ”) issued by Willis Engine Securitization Trust (“ WEST ”), we confirm that:
(i) we have received a copy of the offering memorandum (the “ Offering Memorandum ”) relating to the Notes and such other information as we deem necessary in order to make our investment decision. We acknowledge that we have read and agree to the matters stated under the caption “TRANSFER RESTRICTIONS” in such Offering memorandum, and the restrictions on duplication or circulation of, or disclosure relating to, such Offering Memorandum;
(ii) we understand that any subsequent transfer of the Notes is subject to certain restrictions and conditions set forth in the indenture relating to the Notes (the “ Indenture ”) and that any subsequent transfer of the Notes is subject to certain restrictions and conditions set forth under “TRANSFER RESTRICTIONS” in the Offering Memorandum and the undersigned agree to be bound by, and not to resell, pledge or otherwise transfer the Notes except in compliance with, such restrictions and conditions and the Securities Act of 1933, as amended (the “ Securities Act ”);
(iii) we understand that the offer and sale of the Notes have not been registered under the Securities Act, and that the Notes may not be offered or sold except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we sell any Notes, we will do so only (A) to WEST, (B) in accordance with Rule 144A under the Securities Act to a “qualified institutional buyer” (as defined therein), (C) to an Institutional Accredited Investor” (as defined below) that, prior to such transfer, furnishes to the Trustee (as defined in the Offering Memorandum) (the “ Trustee ”), a signed letter containing certain representations and agreements relating to the restrictions on transfer of the Notes (substantially in the form of this letter), (D) in an offshore transaction in accordance with Rule 903 or Rule 904 of Regulation S under the Securities Act, (E) pursuant to the exemption from registration provided by Rule 144 under the Securities Act (if available), (F) pursuant to another applicable exemption from registration under the Securities Act, provided we provide an opinion of counsel acceptable to WEST or (G) pursuant to an effective registration statement under the Securities Act, and we further agree to provide to any
person purchasing any of the Notes from us a notice advising such purchaser that resales of the Notes are restricted as stated herein;
(iv) we (or any account for which we are exercising sole investment discretion) are an “Institutional Accredited Investor” (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we and any accounts for which are acting are each able to bear the economic risk of our or its investment for an indefinite period of time;
(v) we are acquiring Notes for or own account (or an account for which we are exercising sole investment discretion) for investment and not with a view to any distribution thereof in a transaction that would violate the Securities Act or the securities laws of any state of the United States or any other applicable jurisdiction; provided that the disposition of our property and the property of any accounts (each of which is an Institutional Accredited Investor) for which we are acting as fiduciary shall remain at all times within our control;
(vi) we represent and warrant with respect to any Notes that either (i) no assets of a Plan (as defined in the Offering Memorandum) have been used to purchase the Notes or (ii) one or more statutory or administrative exemptions applies so that the use of such Plan assets to purchase and hold the Notes will not constitute a non-exempt Prohibited Transaction (as defined in the Offering Memorandum); and
(vii) We understand that, on any proposed resale of any Notes, we will be required to furnish to the Trustee and WEST such certifications, legal opinions and other information as the Trustee and WEST may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that the Notes purchased by us will bear a legend substantially to the foregoing effect.
Terms used in this letter and not defined shall have the meanings assigned in the Offering Memorandum.
WEST, the Initial Purchaser (as defined in the Offering Memorandum) and the Trustee are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.
Very truly yours,
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EXHIBIT E
CONCENTRATION LIMITS
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Percentage
of Aggregate Net
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Engine Type Concentration Limits |
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Single Engine type (except CFM56-7B) |
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*** |
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CFM56-7B Engines |
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Single supported narrow body aircraft type |
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Single supported wide body aircraft type |
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Aggregated supported wide body aircraft type |
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Lessee Concentration Limit |
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Single lessee |
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Top 3 lessees |
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Lessee locations : |
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North America |
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South America |
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Western Europe |
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Eastern Europe |
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Africa/Middle East |
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Asia/Pacific |
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Any emerging country |
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Aggregate emerging country |
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Total below investment grade lessees domiciled in accession countries with ownership rights not protected by insurance policy or recognition of rights agreements |
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*** Confidential information omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.
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Single below investment grade lessee domiciled in accession country with ownership rights not protected by insurance policy or recognition of rights agreements |
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Lease Maturity Concentration Limit |
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Leases maturing during any 12 consecutive months |
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*** Confidential information omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.
EXHIBIT F
PRI GUIDELINES
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(a) |
Prohibited Countries: |
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Burma |
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Cuba |
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Iran |
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Iraq |
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Libya |
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North Korea |
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Sudan |
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Syria |
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(b) |
Countries with respect to which PRI must be procured: |
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Angola |
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Congo |
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Mongolia |
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Armenia |
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Equatorial Guinea |
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Niger |
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Azerbaijan |
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Eritrea |
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Sao Tome & Principe |
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Belarus |
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Ethiopia |
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Somalia |
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Benin |
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Grenada |
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Sudan |
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Bhutan |
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Kazakhstan |
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Syria |
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Cameroon |
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Kirbati |
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Turkmenistan |
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Cape Verde Islands |
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Kyrgistan |
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Uzbekistan |
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Chad |
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Liberia |
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Comoros |
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Moldova |
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EXHIBIT G-1
FORM OF MONTHLY REPORT
(i) With respect to each Payment Date and for each of the Engine Acquisition Account, Engine Replacement Account, Engine Reserve Account, Security Deposit Account, Senior Restricted Cash Account, Junior Restricted Cash Account, Engine Reserve Account, Security Deposit/Lessee-Funded Account and any other Account specified by the Administrative Agent, the following information:
(a) the balances on deposit in each such Account on the Determination Date immediately preceding the prior Payment Date,
(b) the aggregate amounts of deposits and withdrawals from each such Account between such Determination Date and the Determination Date immediately preceding the Payment Date,
(c) the balances on deposit in each such Account on the Determination Date immediately preceding such Payment Date, and
(d) in the case of the Security Deposit/Lessee-Funded Account, the amount of any segregated funds accounted for in such account.
(ii) With respect to each Payment Date, an analysis of activity in the Expense Account since the preceding Determination Date
· Balance in the Expense Account on the prior Determination Date
· Required Expense Amount transferred to the Expense Account on the prior Payment Date, including information on the WEST Expenses and Ordinary Course Expenses, identifying any Significant Operating Expense accruals
· Aggregate payments made from the Expense Account during the period between prior Determination Date and the relevant Determination Date, including information on WEST Expenses and Ordinary Course Expenses, identifying any Significant Operating Expenses
· Balance in Expense Account on relevant Determination Date
· The amount of the Required Expense Reserve included in such Balance
(iii) With respect to each Payment Date, an analysis of activity in the Collections Account since preceding Determination Date
(a) Account Activity
· Balance in Collections Account on preceding Determination Date
· Collections during period beginning on the preceding Determination Date and ending on the applicable Determination Date
· Transfers between the Security Deposit Account and the Collections Account, including transfers on the prior Payment Date
· Transfers between the Engine Reserve Account and the Collections Account, including transfers on the prior Payment Date
· Total disbursements to Series Accounts on the prior Payment Date
· Hedge Payments paid and/or received on and since the prior Payment Date including Hedge Termination Payments
· Transfers to be made to and from Collections Account during the period beginning on the Determination Date and ending on the Payment Date
· Transfers of Collections Loans on the prior Payment Date
(b) Available Collections Amount for such Payment Date, including all amounts transferred to Collections Account during the period beginning on the Determination Date and through and including the current Payment Date, including any Collections Loans made on such Payment Date
(iv) With respect to each Payment Date and any other distribution date, the payments to be made on each Series for the current Payment Date (as applicable)
(a) Floating Rate Notes (by Series) – Payment Date
(1) Interest
· One-Month LIBOR for the Interest Accrual Period ending on the Payment Date
· Applicable interest rate for the Interest Accrual Period ending on the Payment Date
· Stated Interest Amount for Series A Notes
· Base Interest Amount for Series B Notes
· Supplemental Interest Amount for Series B Notes
· Conversion Step-Up Interest, if any
· Additional Interest, if any
· Commitment Fees, if any
(2) Principal
· Opening Outstanding Principal Balance
· Minimum Principal Payment Amounts for Series A Notes
· Scheduled Principal Payment Amounts for Series A Notes and Series B Notes
· Series A and Series B Supplemental Principal Payment Amounts
· Outstanding Principal Balance after all payments of principal on Payment Date
(b) Fixed Rate Notes (by Series)
(1) Interest
· Applicable interest rate
· Stated Interest Amount for Series A Notes
· Base Interest Amount for Series B Notes
· Supplemental Interest Amount for Series B Notes
· Conversion Step-Up Interest, if any
· Additional Interest, if any
· Commitment Fees, if any
(2) Principal
· Opening Outstanding Principal Balance
· Minimum Principal Payment Amounts for Series A Notes
· Scheduled Principal Payment Amounts for Series A Notes and Series B Notes
· Supplemental Principal Payment Amounts
· Outstanding Principal Balance after all payments of principal on Payment Date
(c) Redemption Date
(1) Interest
· Applicable interest rate
· Stated Interest Amount for Series A Notes
· Base Interest Amount for Series B Notes
(2) Principal
· Redemption Amount
· Redemption Price
· Redemption Premium, if any
(v) With respect to each Payment Date, the following information with respect to Permitted Engine Dispositions, Permitted Engine Acquisitions and Discretionary and Mandatory Engine Modifications during period between prior Determination Date and relevant Determination Date
· Identification of Engines subject to Permitted Engine Dispositions
· Cost of all Discretionary Engine Modifications
· Cost of all Mandatory Engine Modifications
· Pending or completed Replacement Exchanges during such period
(vi) With respect to each Payment Date, the Maximum Borrowing Base, the Senior Borrowing Base and the Junior Borrowing Base during the period beginning on the day after the prior Payment Date and ending on the current Payment Date and the amounts of any advances in respect of the Warehouse Notes and whether such advances (a) are to be deposited in the Engine Acquisition Account and used to
fund the acquisition of Additional Engines or the cost of Discretionary Engine Modifications or (b) are to be deposited in the Collections Account as Collections Loans and added to the Available Collections Amount for the current Payment Date.
(vii) With respect to the Collection Period ending on the immediately preceding Determination Date
· a discussion of any significant developments affecting WEST in period
· an updated description of the Engines then in the portfolio (showing Engine acquisitions and sales by WEST during the preceding month) and the related leases and lessees, in substantially the same form as the following tables, respectively, in the following sections of the Offering Memorandum relating to the Series 2005-A1 Term Notes, dated July 28, 2005: “The Engines in the Initial Portfolio – Appraisers’ Report” and the first table in “Initial Leases – Initial Lessees.”
EXHIBIT G-2
FORM OF ANNUAL REPORT
With respect to any Series of Notes, a statement setting forth the sum of all interest (including the Conversion Step-Up Interest, Additional Interest and Supplemental Interest) paid to each Holder of such Series for the most recent calendar year ending prior to the year in which the Annual Report is furnished, or, in the event a Person was a Holder of record of any Series during only a portion of such calendar year, for the applicable portion of such calendar year.
In addition, the following information shall be provided:
(i) audited financial statements of WEST for such calendar year;
(ii) a statement of the Engines off-lease due to any repossession during such calendar year;
(iii) a comparison of actual against expected principal payments on the Notes during such calendar year; and
(iv) a comparison of WEST’s performance to the Annual Budget and a statement setting forth an analysis of Collections Account activity, each for such calendar year.
EXHIBIT H
INSURANCE PROVISION
MINIMUM COVERAGE AMOUNTS
1. Hull Insurance : With respect to any Engine, hull insurance shall be maintained by the Lessee and, to the extent such hull insurance is not maintained by Lessee, WEST shall maintain contingent hull insurance coverage, in each case, in an amount at least equal to Adjusted Borrowing Value for such Engine; provided, however, that in the event that an agreement with respect to hull insurance cannot be reached with any particular Lessee pursuant to which such Lessee will pay the premiums to procure such insurance in amounts consistent with the foregoing, hull insurance shall be procured by the Servicer on behalf of WEST in an amount equal to the amount set forth above, at the expense of WEST. Parts, if any, shall be insured on the basis of their replacement cost under similar circumstances.
2. Liability Insurance : Liability insurance shall be maintained by the Lessee and, to the extent such liability insurance is not maintained by the Lessee, WEST shall maintain contingent liability insurance coverage, in each case, for each Engine and occurrence in an amount consistent with the reasonable commercial practices of leading international aircraft engine operating lessors.
3. Insurance Deductibles
(a) Deductibles and self-insurance for Engines subject to a Lease may be maintained in an amount pursuant to deductible and self-insurance arrangements (taking into account, inter alia , the creditworthiness and experience of the Lessee, the type of aircraft engine and market practices in the aircraft engine insurance industry generally) consistent with the Servicer’s commercially reasonable practices for its own aircraft engines.
(b) Deductibles for Engines off-lease shall be maintained in respect of any one occurrence in respect of such Engines in an amount consistent with the Servicer’s commercially reasonable practice for its own aircraft engines with any difference between such amount and $500,000 (or such other amount as WEST may direct in writing from time to time), taking into account any deductible insurance procured, to be notified to WEST by the Servicer.
4. Other Insurance Matters : Apart from the matters set forth above, the coverage and terms of any insurance with respect to any Engine not subject to a Lease, shall be substantially consistent with the reasonable commercial practices of the Servicer with respect to its own aircraft engines.
5. Additional Insureds : Any insurance arrangements entered into with respect to any Engine shall include as named insureds the Indenture Trustee and such persons as are reasonably requested by WEST.
6. Currencies : All amounts payable under any insurance policy shall be denominated in U.S. dollar terms.
7. Availability : The insurance guidelines set forth herein are subject to such insurance being generally available in the relevant insurance market at commercially reasonable rates from time to time.
EXHIBIT I
CORE LEASE PROVISIONS
Each Lease of an Engine with a Lessee shall comply with the following requirements:
1) The Lessee is obligated to comply with maintenance, return, alteration and replacement conditions typically found in financings and leases for aircraft engines and as necessary to maintain such Engine’s serviceability status pursuant to the Applicable Law.
2) The Lessee is obligated to provide liability insurance, aircraft hull insurance covering all risks, ground and flight, engine coverage for damage/loss of Engine, and war risk insurance (including the risk of confiscation and requisition by any government), and the Indenture Trustee and Security Trustee are named as additional insureds and the Security Trustee is named as sole loss payee.
3) The Lease requires that such Engine be kept and operated in locations covered by the requisite insurance and must not be flown or transported to any airport or country in violation of United States laws.
4) Any fixed price purchase option must provide for a net purchase price not less than the projected Adjusted Borrowing Value of such Engine as of the date the option is exercisable.
5) The Lease must be triple net, non-cancelable and contain a customary “hell or high water” clause under which the Lessee is unconditionally obligated to make all Lease Payments without any right of setoff for liabilities of the Lessor due to the Lessee.
6) The Lease must contain limitations on the ability of the Lessee to sublease such Engine or otherwise surrender possession of such Engine to other parties consistent with the requirements of this Indenture.
7) The Lease shall not contain any provisions inconsistent with the obligations of WEST under this Indenture.
EXHIBIT J
REQUIRED ACQUISITION AGREEMENT TERMS
1) Customary representations and warranties as to the title in the asset, free and clear of any Encumbrances, and if the seller is an Affiliate of WEST, that any Lease of an Engine is valid, binding and enforceable
2) Condition to acquisition that all recordations and filings necessary to establish clear title in acquiring WEST Group Member be satisfied before transfer to such WEST Group Member
3) Agreement of seller not to file insolvency petition against WEST or any WEST Subsidiary
4) In the acquisition of an Engine, customary cross-indemnification for event occurring before (by the seller) and after (by the buyer) the closing of the acquisition
Exhibit 10.21
EXECUTION VERSION
WILLIS ENGINE SECURITIZATION TRUST,
as issuer of Series 2007-A2 Notes,
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Indenture Trustee
SERIES 2007-A2 SUPPLEMENT
Dated as of December 13, 2007
to
INDENTURE
dated as of August 9, 2005,
and amended and restated as of
December 13, 2007
SERIES 2007-A2 NOTES
TABLE OF CONTENTS
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ARTICLE I |
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DEFINITIONS; CALCULATION GUIDELINES |
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Section 1.01 |
Definitions |
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1 |
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ARTICLE II |
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CREATION OF THE SERIES 2007-A2 NOTES |
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Section 2.01 |
Designation |
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Section 2.02 |
Authentication and Delivery |
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Section 2.03 |
Series 2007-A2 Loans |
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Section 2.04 |
Interest Payments; Commitment Fee |
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Section 2.05 |
Payments of Principal |
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Section 2.06 |
Series 2007-A2 Final Maturity Date |
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14 |
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Section 2.07 |
Manner of Payments |
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Section 2.08 |
Increased Costs |
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14 |
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Section 2.09 |
Increased Capital |
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14 |
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Section 2.10 |
Payments of Principal and Interest |
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Section 2.11 |
Breakage Costs |
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Section 2.12 |
Restrictions on Transfer |
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Section 2.13 |
Payment Date Schedule |
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ARTICLE III |
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SERIES 2007-A2 SERIES ACCOUNT, ALLOCATION AND |
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APPLICATION OF AMOUNTS THEREIN |
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Section 3.01 |
Series 2007-A2 Series Account |
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Section 3.02 |
Distributions from Series 2007-A2 Series Account |
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ARTICLE IV |
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CONDITIONS PRECEDENT TO OBLIGATIONS OF SERIES 2007-A2 HOLDERS |
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Section 4.01 |
Conditions Precedent to Obligations of Series 2007-A2 Holders to Purchase Series 2007-A2 Notes |
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Section 4.02 |
Conditions Precedent to Obligations of Series 2007-A2 Holders to Make Series 2007-A2 Loans |
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Section 4.03 |
Deposit and Disbursement of Series 2007-A2 Loans |
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This SERIES 2007-A2 SUPPLEMENT, dated as of December 13, 2007 (as amended, modified or supplemented from time to time, this “ Supplement ” or the “ Series 2007-A2 Supplement ”), issued pursuant to, and incorporating the terms of, the Indenture, dated as of August 9, 2005 and amended and restated as of December 13, 2007 (as previously supplemented and as amended, modified or supplemented from time to time, the “Indenture” ), is entered into between WILLIS ENGINE SECURITIZATION TRUST, a Delaware statutory trust ( “WEST” ), and DEUTSCHE BANK TRUST COMPANY AMERICAS, a New York banking corporation, as Indenture Trustee (the “Indenture Trustee” ).
WITNESSETH THAT:
WHEREAS, WEST and the Indenture Trustee wish to set forth the Principal Terms of a Series of Notes to be issued pursuant to this Supplement and designated as “Willis Engine Securitization Trust Series 2007-A2 Floating Rate Secured Notes”.
NOW THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; CALCULATION GUIDELINES
Section 1.01 Definitions . (a) Capitalized terms used herein and not otherwise defined shall have the meaning set forth 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.
“Acquisition Redemption Date” shall have the meaning set forth in Section 2.05(d) hereof.
“Additional Interest” means, for the Series 2007-A2 Notes, interest at the Series 2007-A2 Stated Rate on the aggregate amount of any unpaid interest on the Series 2007-A2 Notes (including any unpaid portion of any Stated Interest Amount, Conversion Step-Up Interest Amount and Additional Interest Amount) and the other amounts described in Section 2.04(c) hereof.
“Additional Interest Amount” means, for any Payment Date for the Series 2007-A2 Notes, an amount equal to the Additional Interest for the Series 2007-A2 Notes on the aggregate amount of unpaid interest (including any unpaid portion of any Stated Interest Amount, Conversion Step-Up Interest Amount and Additional Interest Amount for the Series 2007-A2 Notes and the other amounts described in Section 2.04(c) hereof) that was due and payable (but not paid) on, or with respect to, the Series 2007-A2 Notes on any prior Payment Date. The amount described in the preceding sentence constitutes the Additional Interest Amount for the Series 2007-A2 Notes for purposes of Sections 3.13 and 3.14 of the Indenture.
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“ Adjusted Eurodollar Rate ” means, for any Interest Accrual Period and each Series 2007-A2 Loans, the quotient, expressed as a percentage and rounded upwards (if necessary) to the nearest 1/100 of 1%, obtained by dividing (a) the One Month LIBOR for such Interest Accrual Period, by (b) the decimal equivalent of 100% minus the Eurodollar Reserve Percentage on the first day of such Interest Accrual Period.
“Allocated Amount” shall mean, with respect to any Additional Engine acquired with the proceeds of Series 2007-A2 Loans, such amount as is specified in the Acquisition Agreement relating to such Additional Engine.
“ Assignment and Assumption ” means an Assignment and Assumption, as defined in the Series 2007-A2 Note Purchase Agreement, pursuant to which the transferee of a Series 2007-A2 Note agrees to make Series 2007-A2 Loans to the extent of the Unused Commitment allocable to the Series 2007-A2 Note that is transferred to such transferee.
“ Base Rate ” means, on any date of determination, an interest rate per annum equal to the higher of (i) the Prime Rate in effect on such date, and (ii) the Federal Funds Effective Rate in effect on such date plus one half of one percent (.50%) per annum. Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective on the opening of business on the date of such change.
“ Calyon ” means Calyon New York Branch, a société anonyme organized and existing under the laws of the Republic of France, acting through its New York branch.
“ Collections Loans ” means any Series 2007-A2 Loans made pursuant to Section 3.18 of the Indenture, this Supplement and the Series 2007-A2 Note Purchase Agreement on any Payment Date, to be included in the Available Collections Amount on such Payment Date.
“Commitment Fee” shall have the meaning set forth in Section 2.04(b).
“Commitment Fee Amount” means, for any Payment Date for the Series 2007-A2 Holders, an amount equal to the accrued and unpaid Commitment Fee as of such Payment Date. The Commitment Fee Amount described in the preceding sentence constitutes the Commitment Fee Amount for the Series 2007-A2 Notes for purposes of Sections 3.13 and 3.14 of the Indenture.
“Conversion Date” means, for the Series 2007-A2 Notes, December 15, 2010.
“Conversion Step-Up Interest” means, for the Series 2007-A2 Notes, interest at the Series 2007-A2 Conversion Step-Up Interest Rate on the Outstanding Principal Balance of the Series 2007-A2 Notes after the occurrence of a Conversion Event with respect to the Series 2007-A2 Notes, for the Interest Accrual Period ending on (but excluding) a Payment Date occurring on or after the occurrence of such Conversion Event.
“Conversion Step-Up Interest Amount” means, for any Payment Date occurring on or after the occurrence of a Conversion Event with respect to the Series 2007-A2 Notes, an amount equal to the accrued and unpaid Conversion Step-Up Interest. The amount described in the
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preceding sentence constitutes the Conversion Step-Up Interest Amount for the Series 2007-A2 Notes for purposes of Sections 3.13 and 3.14 of the Indenture.
“ Delivery Period ” means the period beginning on any Funding Date and ending on the earlier of the (a) the 180-day period beginning on such Funding Date and (b) the occurrence of an Event of Default or an Early Amortization Event.
“ Effective Date ” means December 13, 2007 or, if later, the date on which the conditions set forth in Section 3.01 of the Series 2007-A2 Note Purchase Agreement shall have been satisfied.
“Excluded Taxes” shall have the meaning specified in Section 2.10(a).
“Eligible Transferee” means the following: (i) an Affiliate of a Series 2007-A2 Holder, or (ii) any other then existing Series 2007-A2 Holder, or (iii) a commercial bank, insurance company or other financial institution that (x) complies with the transfer provisions of Section 2.12 of the Indenture, and (y) if such transfer is to occur prior to the occurrence of any Conversion Event, such transferee has the capability, in the reasonable determination of WEST, to make Series 2007-A2 Loans to WEST up to the Unused Commitment in respect of the Series 2007-A2 Note being transferred to such financial institution and is otherwise reasonably acceptable to WEST, as evidenced to the Indenture Trustee in writing.
“ Eurodollar Disruption Event ” means, with respect to any Series 2007-A2 Holder, any of the following: (i) a determination by a Series 2007-A2 Holder that it would be contrary to law or to the directive of any central bank or other Governmental Authority (whether or not having the force of law) to obtain Dollars in the London interbank market to make, fund or maintain any Series 2007-A2 Loan for such Interest Accrual Period; (ii) a determination by a Series 2007-A2 Holder that the rate at which deposits of Dollars are being offered to such lender in the London interbank market does not accurately reflect the cost to such Series 2007-A2 Holder of making, funding or maintaining any Series 2007-A2 Loan for such Interest Accrual Period; or (iii) the inability of a Series 2007-A2 Holder to obtain Dollars in the London interbank market to make, fund or maintain any Series 2007-A2 Loan for such Interest Accrual Period.
“ Eurodollar Reserve Percentage ” means, with respect to any Series 2007-A2 Holder for any Interest Accrual Period, the reserve percentage (expressed as a decimal, rounded upward to the nearest 1/100 th of one percent (0.01%)) applicable on the first day of such Interest Accrual Period under regulations issued from time to time by the Federal Reserve Board (or any successor) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for such Series 2007-A2 Holder, with respect to liabilities or assets consisting of or including Eurocurrency Liabilities (as defined in Regulation D of the Federal Reserve Board, as in effect from time to time) and having a term equal to such Interest Accrual Period.
“ Federal Funds Effective Rate ” means, on any date of determination, the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published on the next
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succeeding Business Day, the average of the quotations for the day of such transactions received by the Indenture Trustee from three federal funds brokers of recognized standing selected by it.
“Funding Date” means, as to any Series 2007-A2 Loan, the Business Day that is specified in the Funding Request for such Series 2007-A2 Loan in accordance with Section 2.02 of the Series 2007-A2 Note Purchase Agreement.
“Funding Request” shall have the meaning specified in the Series 2007-A2 Note Purchase Agreement.
“Increased Costs” shall mean, for any Interest Accrual Period, (a) the aggregate amount payable to all Series 2007-A2 Holders pursuant to Sections 2.08, 2.09, 2.10 and 2.11 of this Supplement and Section 7.1 of the Series 2007-A2 Note Purchase 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.
“Interest Amount” means, for any Payment Date for the Series 2007-A2 Notes, an amount equal to the sum of the Stated Interest Amount, the Conversion Step-Up Interest Amount and the Additional Interest Amount for the Series 2007-A2 Notes on such Payment Date.
“Issuance Expenses” means (a) the structuring and underwriting fees payable to the Calyon in respect to the issuance of the Series 2007-A2 Notes, and (b) the portion of the expenses of Calyon that are allocable to the Series 2007-A2 Notes, as agreed by WEST and such parties.
“Majority of Holders” means, with respect to the Series 2007-A2 Notes as of any date of determination, Series 2007-A2 Holders that, individually or in the aggregate, own Series 2007-A2 Notes representing more than fifty percent (50%) of the Maximum Commitment or, if a Conversion Event shall have occurred, the then aggregate Outstanding Principal Balance of the Series 2007-A2 Notes.
“Maximum Commitment” shall mean (a), for all Series 2007-A2 Holders, $175,000,000 in the aggregate and (b), for each Series 2007-A2 Holder, the amount set forth opposite the name of such Series 2007-A2 Holder in Schedule 3 attached hereto.
“Maximum Principal Balance” shall mean, with respect to any Warehouse Note, the maximum amount that WEST may borrow from the holder of such Warehouse Note, which shall be equal to the Maximum Commitment of such holder.
“Minimum Targeted Principal Balance” means, for the Series 2007-A2 Notes for each Payment Date after a Conversion Event, the amount set forth for such Payment Date in the schedule of Minimum Targeted Principal Balances delivered pursuant to Section 2.05(b)(i) hereof, as adjusted from time to time pursuant to Section 2.05(e) hereof.
“Holder Indemnified Amounts” s hall mean, for the Series 2007-A2 Holders, (i) all Increased Costs of the Series 2007-A2 Holders and (ii) all indemnification payments owing by WEST to the Series 2007-A2 Holders pursuant to Section 7.01 of the Series 2007-A2 Note Purchase Agreement.
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“One-Month LIBOR” means, for any Interest Accrual Period, LIBOR, as defined in the Indenture, for the Specified Period as of the Reference Date for such Interest Accrual Period.
“Optional Redemption” means a voluntary prepayment by WEST of all, or a portion of the Outstanding Principal Balance of the Series 2007-A2 Notes in accordance with the terms of this Supplement and the Indenture.
“Optional Redemption Date” shall have the meaning set forth in Section 2.05(c) hereof.
“ Prime Rate ” means the rate announced by Calyon from time to time as its “prime rate” or “base rate” in the United States, such rate to change as and when such designated rate changes.
“Rating Agencies” means, for the Series 2007-A2 Notes, Fitch and Moody’s.
“Redemption Price” shall mean the Outstanding Principal Balance of the Series 2007-A2 Notes in an Optional Redemption in whole, and the portion of the Outstanding Principal Balance being redeemed, in an Optional Redemption in part, in each case, without premium.
“Scheduled Targeted Principal Balance” means, for the Series 2007-A2 Notes for each Payment Date after a Conversion Event, the amount set forth for such Payment Date in the schedule of Scheduled Targeted Principal Balances delivered pursuant to Section 2.05(b)(i) hereof, as adjusted from time to time pursuant to Section 2.05(e) hereof.
“Section 2.10(a) Amount” shall have the meaning set forth in Section 2.10(a) hereof.
“Series 2007-A2 144A Book Entry Note” means a Series 2007-A2 Note represented by a single permanent global note in fully registered form, without coupons, the form of which shall be substantially in the form attached as Exhibit A hereto, with the legends required by Section 2.02 of the Indenture for a 144A Book-Entry Note (as defined in the Indenture) inscribed thereon.
“Series 2007-A2 Commitment Fee Rate” has the meaning given to such term in the Series 2007-A2 Note Purchase Agreement.
“Series 2007-A2 Conversion Step-Up Interest Rate” means one half of one percent (.50%) per annum.
“Series 2007-A2 Definitive Notes” means Series 2007-A2 Notes in the form attached as Exhibit A hereto, with the applicable legend for Definitive Notes required by Section 2.02 of the Indenture inscribed on the face thereof.
“Series 2007-A2 Expected Final Payment Date” means the thirteenth anniversary of the first Payment Date after the Conversion Date.
“Series 2007-A2 Final Maturity Date” means December 15, 2035.
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“Series 2007-A2 Loan” means, individually or in the aggregate, a loan to WEST by the Holder or Holders of the Series 2007-A2 Notes pursuant to this Supplement and the Series 2007-A2 Note Purchase Agreement.
“Series 2007-A2 Holder” means, at any time of determination for the Series 2007-A2 Notes thereafter, any Person in whose name a Series 2007-A2 Note is registered in the Register.
“Series 2007-A2 Notes” means the Series of Notes designated as the “Willis Engine Securitization Trust Series 2007-A2 Floating Rate Secured Notes” to be issued on the Effective Date and having the terms and conditions specified in this Supplement, substantially in the form of Exhibit A hereto, and including any and all replacements, extensions, substitutions or renewals of such Notes.
“Series 2007-A2 Note Purchase Agreement” means the Series 2007-A2 Note Purchase and Loan Agreement, dated as of December 13, 2007, among WEST, Willis, and the Persons named therein as the initial Series 2007-A2 Holders, together with any other Persons that become Series 2007-A2 Holders.
“Series 2007-A2 Series Account” means the Series Account of that name established in accordance with Section 3.01 hereof and Sections 3.01 and 3.09 of the Indenture.
“Series 2007-A2 Stated Rate” means, for each Series 2007-A2 Loan, an interest rate per annum equal to the sum of (i) the Adjusted Eurodollar Rate applicable to such Series 2007-A2 Loan for such Interest Accrual Period and (ii) one and one-quarter percent (1.25%) per annum; provided , however , that for purposes of clause (i) above, the Base Rate will be used in lieu of the Adjusted Eurodollar Rate for the unpaid Series 2007-A2 Loans if (a) on or before the first day of such Interest Accrual Period an affected Series 2007-A2 Holder shall have notified WEST that a Eurodollar Disruption Event is then continuing, (b) such Interest Accrual Period is for a period of less than one month or if an Indenture Event of Default is then continuing on the first day of such Interest Accrual Period, or (c) the then unpaid principal balance of such Series 2007-A2 Loans on the first day of such Interest Accrual Period is less than Five Million Dollars ($5,000,000).
“Series 2007-A2 Transaction Documents” means any and all of this Supplement, the Series 2007-A2 Notes and the Series 2007-A2 Note Purchase Agreement, as any of the foregoing may from time to time be amended, modified, supplemented or renewed.
“Series 2007-B2 Holders” means, on the Effective Date, each of the Persons named therein as the initial Series 2007-B2 Holders in the Series 2007-B2 Note Purchase Agreement and, at any time of determination thereafter, any Person in whose name a Series 2007-B2 Note is registered in the Register.
“Series 2007-B2 Note Purchase Agreement” means the Series 2007-B2 Note Purchase and Loan Agreement, dated as of December 13, 2007, among WEST, Willis and the Persons named therein as the initial Series 2007-B2 Holders, together with any other Persons that become Series 2007-B2 Holders, as the same may be amended, modified or supplemented from time to time in accordance with its terms.
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“Series 2007-B2 Notes ” means the notes issued pursuant to the Series 2007-B2 Note Purchase Agreement and the Series 2007-B2 Supplement.
“Series 2007-B2 Supplement” means the Series 2007-B2 Supplement to the Indenture, dated as of December 13, 2007, between WEST and the Indenture Trustee, as amended, modified or supplemented from time to time in accordance with its terms.
“Series Issuance Date” means, for the Series 2007-A2 Notes, December 13, 2007.
“Specified Period” means, for the Series 2007-A2 Notes, one month.
“Stated Interest Amount” means, for any Payment Date for the Series 2007-A2 Notes, an amount equal to the sum for each day during the related Interest Accrual Period of accrued and unpaid interest at the Series 2007-A2 Stated Rate on the Outstanding Principal Balance of the Series 2007-A2 Notes on such date. The amount described in the preceding sentence constitutes the Stated Interest Amount for the Series 2007-A2 Notes for purposes of Sections 3.13 and 3.14 of the Indenture.
“Supplemental Principal Payment Amount” means, for the Series 2007-A2 Notes on any Payment Date, the amount of a Series A Supplemental Principal Payment Amount allocated and paid to the holders of the Series 2007-A2 Notes on such Payment Date in accordance with the provisions of Sections 3.14 and 3.15(b) of the Indenture and Sections 2.05(a) and 3.02 hereof.
“Taxes” shall have the meaning set forth in Section 2.10(a).
“Tax Benefit” shall have the meaning set forth in Section 2.10(a).
“ Warehouse Loans ” means any Series 2007-A2 Loans to be used to fund the Purchase Prices of Additional Engines or Discretionary Engine Modifications.
(b) The conventions of construction and usage set forth in Section 1.02 of the Indenture are hereby incorporated by reference in this Supplement.
ARTICLE II
CREATION OF THE SERIES 2007-A2 NOTES
Section 2.01 Designation . (a) There is hereby created a Series of Series A Warehouse Notes to be issued pursuant to the Indenture and this Supplement and to be known as the “Willis Engine Securitization Trust Series 2007-A2 Floating Rate Secured Notes”, referred to herein as the “Series 2007-A2 Notes”. The Series 2007-A2 Notes will be issued with aggregate Maximum Principal Balances in the amount of $175,000,000 and will not have priority over any other Series of Series A Notes except to the extent set forth in the Supplement for such other Series and Section 3.15 of the Indenture. The Series Issuance Date of the Series 2007-A2 Notes is December 13, 2007. The Series 2007-A2 Notes are classified as “Warehouse Notes”, “Series A Warehouse Notes”, “Series A Notes” and “Floating Rate Notes”, as each such term is used in the
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Indenture. The Series 2007-A2 Notes will be rated on the Effective Date by each of Moody’s and Fitch.
(b) The first Payment Date with respect to the Series 2007-A2 Notes shall be December 15, 2007.
(c) Payments of principal on the Series 2007-A2 Notes shall be made from funds on deposit in the Series 2007-A2 Series Account or otherwise at the times and in the amounts set forth in Article III of the Indenture and Sections 2.04, 2.05, 2.06 and 3.02 of this Supplement. The Minimum Principal Payment Amount and Scheduled Principal Payment Amounts for the Series 2007-A2 Notes shall be calculated on the date on which a Conversion Event occurs in accordance with the terms of the Indenture and Section 2.05 of this Supplement.
(d) 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 2.02 Authentication and Delivery . (a) On the Series Issuance Date, WEST shall sign, and shall direct the Indenture Trustee in writing pursuant to Section 2.01(c) of the Indenture to duly authenticate, and the Indenture Trustee, upon receiving such direction, (i) shall authenticate, subject to compliance with the conditions precedent set forth in Section 4.01 hereof, the Series 2007-A2 Notes in accordance with such written directions, and (ii) subject to compliance with the conditions precedent set forth in Section 4.01 hereof, shall deliver such Series 2007-A2 Notes to the initial Series 2007-A2 Holders, in accordance with such written directions.
(b) The Series 2007-A2 Notes are not being registered with the SEC and may not be sold, transferred or otherwise disposed of except to Institutional Accredited Investors and QIB’s that deliver an Investment Letter to the Indenture Trustee in compliance with the provisions of the Indenture and that, prior to the occurrence of a Conversion Event, are Eligible Transferees and execute and deliver an Assignment and Assumption with respect to the Series 2007-A2 Note Purchase Agreement.
(c) The Series 2007-A2 Notes shall be represented by one or more Series 2007-A2 Definitive Notes issued to the Series 2007-A2 Holders until the occurrence of a Conversion Event. After the occurrence of a Conversion Event, a Series 2007-A2 Holder that is a QIB and that holds all of the Series 2007-A2 Notes or all of the Series 2007-A2 Holders acting jointly may exchange its or their Series 2007-A2 Definitive Notes for an interest or interests in a Series 2007-A2 144A Book Entry Note in accordance with the requirements of the Indenture. WEST shall pay all costs of the Series 2007-A2 Holders incurred in connection with such exchange and registration.
(d) The Series 2007-A2 Notes shall be executed by manual or facsimile signature on behalf of WEST by any officer of the Owner Trustee and shall be substantially in the form of Exhibit A hereto, as applicable, with the appropriate legend required by Section 2.02 of the Indenture inscribed on the face thereof.
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(e) The Series 2007-A2 Notes shall be issued in minimum denominations of $100,000 and in integral multiples of $1,000 in excess thereof.
Section 2.03 Series 2007-A2 Loans . (a) WEST shall have the right, pursuant to this Supplement and the Series 2007-A2 Note Purchase Agreement, to borrow Series 2007-A2 Loans from the Series 2007-A2 Holders up to the Maximum Commitment of the Series 2007-A2 Holders, and each Series 2007-A2 Holder has severally agreed, pursuant to the Series 2007-A2 Note Purchase Agreement, to make Series 2007-A2 Loans, in each case in proportion to, and up to the amount of, its Maximum Commitment, on any Funding Date after the Effective Date and prior to the date on which a Conversion Event occurs, subject to the satisfaction of all applicable conditions precedent set forth in Article IV hereof and in Article III of the Series 2007-A2 Note Purchase Agreement. Each such Series 2007-A2 Loan shall increase the Outstanding Principal Balance of the Series 2007-A2 Note held by such Series 2007-A2 Holder, and each payment of principal to a Series 2007-A2 Holder in respect of its Series 2007-A2 Note shall reduce the Outstanding Principal Balance of such Series 2007-A2 Note. The Indenture Trustee shall maintain a record of all Series 2007-A2 Loans and repayments made on the Series 2007-A2 Notes and absent manifest error such records shall be conclusive.
(b) Each Funding Request for Series 2007-A2 Loans after the Effective Date shall constitute a reaffirmation by WEST that (1) no Event of Default, Servicer Termination Event or Early Amortization Event has occurred and is continuing, or would result from the making of such Series 2007-A2 Loan, as of the date of the Funding Request and (2) the representations and warranties of WEST contained in the Series 2007-A2 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 Funding 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.
(c) WEST shall designate the application of the proceeds of the Series 2007-A2 Loans made on each Funding Date as either or both of the following: (i) a Warehouse Loan to be deposited in the Engine Acquisition Account as provided in Section 3.18 of the Indenture and used to acquire Additional Engines or to fund Discretionary Engine Modifications (including Qualified Engine Modifications), in each case whether or not such acquisition or funding is in connection with a Replacement Exchange, or (ii) a Collections Loan, to be deposited in the Collections Account as provided in Section 3.18 of the Indenture and used to increase the Available Collections Amount on any Payment Date, provided that the application of any Series 2007-A2 Loan as a Collections Loan shall be subject to the Available Collections Amount on such Payment Date being in an amount, calculated without the proceeds of such Collections Loan, sufficient to fund the payment in full of accrued Base Interest on all Series B Notes on such Payment Date and all amounts ranking senior thereto as provided in Section 3.14 of the Indenture.
(d) WEST may, on any Payment Date upon at least five (5) Business Days’ notice to the Series 2007-A2 Holders, with a copy to the Indenture Trustee, terminate in whole or reduce in part the aggregate Maximum Commitments of the Series 2007-A2 Holders and the Maximum Principal Balances of the Series 2007-A2 Notes in an aggregate amount not to exceed the excess of such Maximum Principal Balances over the then aggregate Outstanding Principal
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Balance of the Series 2007-A2 Notes; provided that any partial reduction (based on the ratio of the then Maximum Commitments of such Series prior to such reduction) of the aggregate Maximum Commitments of the Series 2007-A2 Holders and the Maximum Principal Balances of the Series 2007-A2 Notes (i) shall be applied pro rata to the individual Maximum Commitments of the Series 2007-A2 Holders and the Maximum Principal Balances of the Series 2007-A2 Notes, respectively, and (ii) shall be accompanied by a proportionate partial reduction of the aggregate Maximum Commitments of the Series 2007-B2 Holders. Each notice of reduction or termination pursuant to this Section 2.03(d) shall be irrevocable, and such reduction shall be deemed to occur without any Series 2007-A2 Holder having to surrender its Series 2007-A2 Notes in exchange for a new Series 2007-A2 Note reflecting the reduced Maximum Principal Balance.
(e) WEST, on any Payment Date prior to the occurrence of a Conversion Event, may terminate the agreements of the Series 2007-A2 Holders to make Series 2007-A2 Loans and repay the Outstanding Principal Balance of the Series 2007-A2 Notes for the Redemption Price, upon (A) at least five (5) Business Days’ prior written notice to each Series 2007-A2 Holder, with a copy to the Indenture Trustee, specifying the proposed Payment Date of such termination, and (B) payment in full of (i) the principal of, and interest on, the Series 2007-A2 Notes, (ii) Increased Costs, if any, and (iii) all other amounts then due and payable (or that become due and payable as a result of such reduction) to a Series 2007-A2 Holder under the Series 2007-A2 Note Purchase Agreement, this Supplement and the Indenture and (c) the simultaneous termination of the commitments of the Series 2007-B2 Holders and the payment in full of all amounts owing with respect to the Series 2007-B2 Notes.
(f) If any Series 2007-A2 Holder shall default on its obligation to make a Series 2007-A2 Loan on any Funding Date, one or more of the other Series 2007-A2 Holders may elect (but shall not be obligated) to make the Series 2007-A2 Loan of the defaulting Series 2007-A2 Holder. In such event, the Maximum Principal Balance of the Series 2007-A2 Note held by the defaulting Series 2007-A2 Holder and the Maximum Commitment of the Series 2007-A2 Holder shall be reduced by the amount of the Series 2007-A2 Loan so made, and the Maximum Principal Balance of the Series 2007-A2 Note held by the Series 2007-A2 Holder making such Series 2007-A2 Loan and the Maximum Commitment of such Series 2007-A2 Holder shall be increased by the amount of such Series 2007-A2 Loan.
(g) Upon the occurrence of a Conversion Event, (i) the right of WEST to borrow under the Series 2007-A2 Notes shall terminate, (ii) Conversion Step-Up Interest shall begin to accrue on the Outstanding Principal Balance of the Series 2007-A2 Notes as provided in Section 2.04(a), and (iii) the Outstanding Principal Balance of the Series 2007-A2 Notes shall become payable as provided in Section 2.05(a) and (b), provided, however, that, if all of the Series 2007-A2 Holders and Series 2007-B2 Holders as of the date of the occurrence of any Conversion Event elect to waive the occurrence of such Conversion Event within ninety (90) days of such occurrence, such Conversion Event shall be disregarded as long as such waiver is in effect, except that any such waiver in respect of a Conversion Event based on the occurrence of the Conversion Date shall not be for a period extending beyond the first anniversary of such Conversion Date, unless a Rating Agency Confirmation is obtained with respect to any waiver extending beyond such first anniversary; and provided, further , that, if WEST subsequently cures an Early Amortization Event, Event of Default or Servicer Termination Event that resulted in a
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Conversion Event that was not so waived, WEST may request the Series 2007-A2 Holders and Series 2007-B2 Holders to waive the original occurrence of such Conversion Event, Early Amortization Event, Event of Default or Servicer Termination Event and rescind and revoke the consequences described in clause (i), (ii) and (iii) of this Section 2.03(g) occurring as a result of such Conversion Event, which waiver, rescission and revocation shall be effective only if Series 2007-A2 Holders and Series 2007-B2 Holders representing 100% of the Outstanding Principal Balance of the Series 2007-A2 Notes and Series 2007-B2 Notes consent thereto. The termination of any waiver pursuant to the provisos in the preceding sentence shall be treated as the occurrence on the date of such termination of the Conversion Event that was the subject of the waiver.
Section 2.04 Interest Payments; Commitment Fee .
(a) Interest on Series 2007-A2 Notes . Interest shall accrue (i) at the Series 2007-A2 Stated Rate on the Outstanding Principal Balance of each Series 2007-A2 Note during all or each portion of each Interest Accrual Period from the Effective Date to (but excluding) the date on which a Conversion Event occurs, and (ii) at a combined rate equal to the sum of the Series 2007-A2 Stated Rate and the Series 2007-A2 Conversion Step-Up Rate on the Outstanding Principal Balance of each Series 2007-A2 Note during all or the portion of each Interest Accrual Period from and after the date on which a Conversion Event occurs, in each case on the basis of actual days elapsed over a year of 360 days and shall be due and payable in arrears on each Payment Date for the Interest Accrual Period ending on such Payment Date. The Stated Interest Amount and the Conversion Step-Up Interest Amount for each Interest Accrual Period shall be calculated separately and paid separately as provided in Section 3.14 of the Indenture and Section 3.02 hereof. All amounts of the Stated Interest Amount and the Conversion Step-Up Interest Amount shall be due and payable on the earlier to occur of (i) the date on which the Series 2007-A2 Notes have been accelerated in accordance with the provisions of Section 4.02 of the Indenture and (ii) the Series 2007-A2 Final Maturity Date. On each Reference Date, the Indenture Trustee shall promptly deliver a written notice to the Series 2007-A2 Holders specifying the Series 2007-A2 Stated Rate for the related Interest Accrual Period.
(b) Commitment Fee on Series 2007-A2 Notes . A fee (the “ Commitment Fee ”) shall accrue at the Series 2007-A2 Commitment Fee Rate on the Unused Commitment of the Series 2007-A2 Holders during all or the portion of each Interest Accrual Period from the Effective Date to (but excluding) the date on which a Conversion Event occurs and shall be due and payable in arrears on each Payment Date for the Interest Accrual Period ending on such Payment Date. The Commitment Fee shall be calculated on the basis of actual days elapsed over a year of 360 days and shall be due and payable in arrears on each Payment Date for the Interest Accrual Period ending on (but excluding) such Payment Date.
(c) Additional Interest . If WEST shall fail to pay in full (i) any Stated Interest Amount, Conversion Step-Up Interest Amount or Commitment Fee on any Series 2007-A2 Note when due, (ii) any Increased Costs or (iii) any other amount becoming due under this Supplement (other than payments of principal on the Series 2007-A2 Notes), WEST shall, from time to time, pay Additional Interest on such unpaid amounts, to the extent permitted by Applicable Law, to, but not including, the date of actual payment (after as well as before judgment), for the period during which such interest or other amount shall be unpaid from the
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due date of such payment to the date of actual payment thereof. Any such Additional Interest shall be payable at the times and subject to the priorities set forth in Section 3.02 of this Supplement and Section 3.14 of the Indenture. All amounts of the Additional Interest shall be due and payable on the earlier to occur of (i) the date on the Series 2007-A2 Notes have been accelerated in accordance with the provisions of Section 4.02 of the Indenture and (ii) the Series 2007-A2 Final Maturity Date.
(d) Maximum Interest Rate . In no event shall the interest charged with respect to a Series 2007-A2 Note exceed the maximum amount permitted by Applicable Law. If at any time the Interest Amount charged with respect to the Series 2007-A2 Notes exceeds the maximum rate permitted by Applicable Law, the rate of interest to accrue pursuant to this Supplement and such Series 2007-A2 Note shall be limited to the maximum rate permitted by Applicable Law, but any subsequent reductions in One-Month LIBOR shall not reduce the interest to accrue on such Series 2007-A2 Note below the maximum amount permitted by Applicable Law until the total amount of interest accrued on such Series 2007-A2 Note equals the amount of interest that would have accrued if a varying rate per annum equal to the interest rate had at all times been in effect. If the total amount of interest paid or accrued on the Series 2007-A2 Note under the foregoing provisions is less than the total amount of interest that would have accrued if the interest rate had at all times been in effect, WEST agrees to pay to the Series 2007-A2 Holders an amount equal to the difference between (a) the lesser of (i) the amount of interest that would have accrued if the maximum rate permitted by Applicable Law had at all times been in effect, or (ii) the amount of interest that would have accrued if the interest rate had at all times been equal to the Interest Amount, and (b) the amount of interest accrued in accordance with the other provisions of this Supplement.
Section 2.05 Payments of Principal . (a) On each Payment Date prior to the date on which a Conversion Event occurs on which there is a Senior Borrowing Base Deficiency, principal shall be payable on the Series 2007-A2 Notes out of the Series A Supplemental Principal Payment Amount, to the extent and as provided in Sections 3.14 and 3.15(b) of the Indenture and in Section 3.02 hereof, provided that, on any Payment Date prior to the date on which a Conversion Event occurs, the Series 2007-A2 Notes shall be treated as Warehouse Notes for purposes of Section 3.15(b) of the Indenture and, on any Payment Date on or after a Conversion Event, the Series 2007-A2 Notes shall be treated as Term Notes for such purposes.
(b) (i) Within ten (10) Business Days after the occurrence of a Conversion Event (or, if earlier, by the first Payment Date following the occurrence of a Conversion Event), WEST shall cause the Administrative Agent to prepare and deliver to the Indenture Trustee and the Series 2007-A2 Holders a schedule of the Minimum Targeted Principal Balances and a schedule of the Scheduled Targeted Principal Balances for the Series 2007-A2 Notes substantially in the form of Schedule 1 and Schedule 2 attached hereto, respectively. In each case, Payment Date Number 1 in Schedule 1 or Schedule 2 , as applicable, shall be on the first Payment Date after the date on which a Conversion Event occurs, and each succeeding numbered Payment Date in such Schedule 1 or Schedule 2 , as applicable, shall occur on each succeeding Payment Date, and the amount due on each such Payment Date shall be the product of (x) the Outstanding Principal Balance of the Series 2007-A2 Notes as of the close of business on the date on which the Conversion Event occurs and (y) the percentage specified for such Payment Date specified in Schedule 1 or Schedule 2 , as applicable. If the Series 2007-A2
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Holders and Series 2007-B2 Holders waive the occurrence of a Conversion Event as provided in Section 2.03(g), the schedules delivered pursuant to this Section 2.05(b)(i) in respect of such Conversion Event shall be of no further force and effect and, upon the termination of such waiver or the subsequent occurrence of a Conversion Event that is not waived by the Series 2007-A2 Holders and Series 2007-B2 Holders as provided by Section 2.03(g) hereof, the Administrative Agent shall deliver new schedules in accordance with this Section 2.01(b)(i), calculated as of the date of such termination or the date of such Conversion Event, as applicable.
(ii) On each Payment Date after a Conversion Event, unless and until the Series 2007-A2 Holders and Series 2007-B2 Holders waive such Conversion Event as provided in Section 2.03(g), the Minimum Principal Payment Amount and the Scheduled Principal Payment Amount calculated for the Series 2007-A2 Notes for each such Payment Date shall be payable to the Holders of the Series 2007-A2 Notes on each such Payment Date from amounts deposited in the Series 2007-A2 Series Account on such Payment Date as provided in Section 3.14 of the Indenture and Section 3.02 of this Supplement. So long as an Early Amortization Event or an Event of Default is then continuing, the Outstanding Principal Balance of the Series 2007-A2 Notes shall be payable on each such Payment Date to the extent that amounts are available for such purpose in accordance with the provisions of Section 3.14 of the Indenture and Section 3.02 of this Supplement. The then Outstanding Principal Balance of all Series 2007-A2 Notes shall be due and payable on the earlier to occur of (i) the date on which the Series 2007-A2 Notes have been accelerated in accordance with the provisions of Section 4.02 of the Indenture and (ii) the Series 2007-A2 Final Maturity Date.
(c) WEST will have the option to prepay, on any Payment Date after a Conversion Event (each such Payment Date, an “Optional Redemption Date” ), all or any portion of the Outstanding Principal Balance of the Series 2007-A2 Notes on such Payment Date, in a minimum amount of Two Hundred Fifty Thousand Dollars ($250,000) in the case of any prepayment in part, for the Redemption Price together with accrued interest thereon to the date of such prepayment. WEST may not make such prepayment from funds in the Collections Account, except to the extent that funds in the Collections Account would otherwise be payable to WEST in accordance with the terms of this Supplement and the Indenture, and may make any such prepayment in part from funds in the Series 2007-A2 Series Account, provided that funds in such Account may be used to fund a prepayment in whole but not in part. Any Optional Redemption in connection with a Refinancing funded with the proceeds of Additional Notes must be in whole, and any other Optional Redemption financed with funds other than funds in the Collections Account or the proceeds of Additional Notes may be in whole or in part.
(d) If there is any Balance in the Engine Acquisition Account at the end of any Delivery Period beginning on a Funding Date on which Series 2007-A2 Loans were made by the Series 2007-A2 Holders, the portion thereof allocated to the Series 2007-A2 Notes in accordance with Section 3.03(b) of the Indenture shall be applied to the prepayment of the Series 2007-A2 Notes as provided in Section 3.16(b) of the Indenture on the next succeeding Payment Date (the “Acquisition Redemption Date” ) after the end of such Delivery Period.
(e) The Minimum Targeted Principal Balances and the Scheduled Targeted Principal Balances for the Series 2007-A2 Notes, as determined pursuant to Section 2.05(b)(i)
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hereof, shall be adjusted at the times and in the manner indicated in Section 3.19 of the Indenture.
Section 2.06 Series 2007-A2 Final Maturity Date . The unpaid principal amount of the Series 2007-A2 Notes together with all unpaid interest (including all Additional Interest and Conversion Step-Up Interest), fees, expenses, costs and other amounts payable by WEST pursuant to the terms of the Indenture, this Supplement and the other Series 2007-A2 Transaction Documents shall be due and payable in full on the earlier to occur of (i) the date on which the Series 2007-A2 Notes have been accelerated in accordance with the provisions of Section 4.02 of the Indenture and (ii) the Series 2007-A2 Final Maturity Date.
Section 2.07 Manner of Payments . All payments of principal and interest on the Series 2007-A2 Notes payable on each Payment Date shall be paid to the Series 2007-A2 Holders reflected in the Register as of the related Record Date by wire transfer of immediately available funds for receipt prior to 1:00 p.m. (New York City time) on such Payment Date. Any payments received by the Series 2007-A2 Holders after 1:00 p.m. (New York City time) on any day shall be considered to have been received on the next succeeding Business Day.
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 Series Issuance Date of the Series 2007-A2 Notes reflecting such change, there shall be an increase in the cost to a Series 2007-A2 Holder of making or maintaining any investment in the Series 2007-A2 Note or any interest therein or of agreeing to purchase or invest in the Series 2007-A2 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 Series 2007-A2 Holder shall promptly submit to WEST, the Administrative Agent and the Indenture Trustee, a certificate setting forth in reasonable detail, the calculation of such increased costs incurred by such Series 2007-A2 Holder. In determining such amount, such Series 2007-A2 Holder may use any reasonable averaging and attribution methods, consistent with the averaging and attribution methods generally used by such Series 2007-A2 Holder 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 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 Indenture Trustee shall pay such Increased Costs to such Series 2007-A2 Holders as part of the Increased Costs out of the Available Collections Amount on each Payment Date as provided in Section 3.14 of the Indenture and Section 3.02 hereof.
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 Series Issuance Date of the Series 2007-A2 Notes affects or would affect the amount of capital required or expected to be maintained by any Series 2007-A2 Holder, and such Series 2007-A2 Holder determines that the amount of such capital is increased as a result of (i) the existence of the
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Series 2007-A2 Holder’s agreement to make or maintain an investment in the Series 2007-A2 Notes or any interest therein and other similar agreements or facilities, or (ii) the existence of any agreement by Series 2007-A2 Holders to make or maintain an investment in the Series 2007-A2 Notes or any interest therein or to fund any such investment and any other commitments of the same type, such Series 2007-A2 Holder shall promptly submit to WEST, the Administrative Agent and the Indenture Trustee a certificate setting forth, in reasonable detail, the calculation of the additional amounts required to compensate such Series 2007-A2 Holder in light of such circumstances. In determining such amount, such Series 2007-A2 Holder may use any reasonable averaging and attribution methods, consistent with the averaging and attribution methods generally used by such Series 2007-A2 Holder 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 Increased Costs for the Interest Accrual Period immediately succeeding the date on which such certificate was delivered, and to the extent remaining outstanding, each Interest Accrual Period thereafter until paid in full. The Indenture Trustee shall pay such Increased Costs to such Series 2007-A2 Holders as part of the Increased Costs out of the Available Collections Amount on each Payment Date as provided in Section 3.14 of the Indenture and Section 3.02 hereof.
Section 2.10 Payments of Principal and Interest . (a) Any and all payments and deposits required to be made under this Supplement, the Series 2007-A2 Notes or the Indenture by WEST or the Indenture Trustee to or for the benefit of a Series 2007-A2 Holder 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 (all of the foregoing collectively, “ Taxes ”)are required to be withheld from any amount payable to any Series 2007-A2 Holder hereunder, the amount so payable to such Series 2007-A2 Holder shall be increased to the extent necessary to yield to such Series 2007-A2 Holder (after payment of all taxes, levies, imposts, duties, charges or fees) the amount stated to be payable to such Series 2007-A2 Holder hereunder (such increase and any similar increase described in this Section 2.10(a), 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 Series 2007-A2 Holder, in each case, as a result of a present or former connection (other than any connection arising out of the transactions contemplated by this Supplement) between the jurisdiction of the government or taxing authority imposing such tax and such Series 2007-A2 Holder; (ii) any taxes, levies, imposts, duties, charges or fees that would not have been imposed but for the failure by such Series 2007-A2 Holder to provide and keep current any certification or other documentation permitted by Applicable Law to be delivered by such Series 2007-A2 Holder 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 Series 2007-A2 Holder of the office through which the Series 2007-A2 Note or any interest hereunder is acquired, accounted for or booked as a result of the sale, transfer or assignment by any Series
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2007-A2 Holder 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 Series 2007-A2 Note or interest therein is acquired, accounted for or booked; (iv) taxes measured by income, gross receipts, assets or capital of any Series 2007-A2 Holder by the taxing authority of the jurisdiction where such Series 2007-A2 Holder 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 such Series 2007-A2 Holder under this Supplement 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 Series 2007-A2 Holder as a result of payments not related to this Supplement; and (vi) any withholding tax with respect to any Series 2007-A2 Holder that has not provided the documentation referred to in Section 2.10(c) (all such exclusions being hereinafter called “Excluded Taxes” ). To the extent that any Series 2007-A2 Holder 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 WEST or the Indenture Trustee of any such Taxes on behalf of such Series 2007-A2 Holder, such Series 2007-A2 Holder shall reimburse WEST 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 Series 2007-A2 Holder; provided, however, that for purposes of reimbursing WEST, such Series 2007-A2 Holder shall calculate the amount of the Tax Benefit realized that is attributable to WEST’s or the Indenture Trustee’s payment of such Taxes on behalf of such Series 2007-A2 Holder as if such Series 2007-A2 Holder realized or received such Tax Benefit pro rata with all other Tax Benefits available to it for such year.
(b) Any Section 2.10(a) Amounts payable to a Series 2007-A2 Holder hereunder shall be included in the 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 Indenture Trustee shall pay such Section 2.10(a) Amounts to the Series 2007-A2 Holders as part of the Increased Costs out of the Available Collections Amount on each Payment Date as provided in Section 3.14 of the Indenture and Section 3.02 hereof.
(c) Each Series 2007-A2 Holder not organized under the laws of the United States or a State thereof shall, to the extent that it is entitled to receive payments under this Supplement without deduction or withholding of any United States federal income taxes (other than withholding Taxes), provide a W-8 ECI, W-8 BEN or any other information and documentation that may be necessary in order to obtain such exemption.
Section 2.11 Breakage Costs . If (i) any payment of principal on any Series 2007-A2 Loan is made on a day other than a Payment Date, or (ii) any Series 2007-A2 Loan requested by WEST is not, for any reason whatsoever related to a default or nonperformance by WEST, made or effectuated, as the case may be, on the date specified therefor, WEST shall indemnify the Series 2007-A2 Holders against any reasonable loss, cost or expense incurred by the Series 2007-A2 Holders, 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 Series 2007-A2 Holders to fund or maintain such Series 2007-A2 Loan during such Interest Accrual Period. The Indenture Trustee shall pay any amounts due under this
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Section 2.11 to the Series A Holders as part of the Increased Costs out of the Available Collections Amount on each Payment Date as provided in Section 3.14 of the Indenture and Section 3.02 hereof.
Section 2.12 Restrictions on Transfer . On the Effective Date, WEST shall sell the Series 2007-A2 Notes to the Persons named as the initial Series 2007-A2 Holders in and pursuant to the Series 2007-A2 Note Purchase Agreement and deliver such Series 2007-A2 Notes in accordance herewith and therewith. Thereafter, no Series 2007-A2 Note may be sold, transferred or otherwise disposed of except in compliance with the provisions of the Indenture, this Supplement and the Series 2007-A2 Note Purchase Agreement. Except as provided herein and in the Indenture, the Indenture Trustee shall have no obligations or duties with respect to determining whether any transfers of the Series 2007-A2 Notes are made in accordance with the Securities Act or any other law; provided that with respect to the Series 2007-A2 Definitive Notes, the Indenture Trustee shall enforce such transfer restrictions in accordance with the terms set forth in this Supplement. Prior to the occurrence of a Conversion Event that is not waived by the Series 2007-A2 Holders and Series 2007-B2 Holders as provided by Section 2.03(g) hereof, the Indenture Trustee shall not register any transfer of a Series 2007-A2 Note, in whole or in part, unless the transferee of such Series 2007-A2 Note is an Eligible Transferee and executes and delivers to the Indenture Trustee an Assignment and Assumption of the transferor’s obligations under the Series 2007-A2 Note Purchase Agreement to make the Series 2007-A2 Loans in an amount equal to the excess of the Maximum Principal Balance of the Series 2007-A2 Note being transferred at the time of transfer over the Outstanding Principal Balance of such Series 2007-A2 Note at such time. After the occurrence of a Conversion Event that is not waived by the Series 2007-A2 Holders and Series 2007-B2 Holders as provided by Section 2.03(g) hereof, the Series 2007-A2 Notes shall be transferred in accordance with the terms of the Indenture without regard to whether any transferee of a Series 2007-A2 Note is an Eligible Transferee.
Section 2.13 Payment Date Schedule . WEST shall cause the Administrative Agent to distribute a copy of each Payment Date Schedule delivered pursuant to Section 3.13(e) of the Indenture to the Series 2007-A2 Holders.
Section 3.01 Series 2007-A2 Series Account . The Indenture Trustee shall establish on or prior to the Effective Date pursuant to Sections 3.01 and 3.09 of the Indenture and shall maintain, so long as any Series 2007-A2 Note is Outstanding, an Eligible Account which shall be designated as the “Series 2007-A2 Series Account”, which account shall be held in the name of the Indenture Trustee for the benefit of the Series 2007-A2 Holders. All deposits of funds by, or for the benefit of, the Series 2007-A2 Holders from the Collections Account and otherwise shall be accumulated in, and withdrawn from, the Series 2007-A2 Series Account in accordance with the provisions of the Indenture and this Supplement.
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Section 3.02 Distributions from Series 2007-A2 Series Account. On each Payment Date, the Indenture Trustee shall distribute funds then on deposit in the Series 2007-A2 Series Account in accordance with the provisions of either subsection (a), (b) or (c) of this Section 3.02, in the following order of priority, in each case in accordance with the Payment Date Schedule and only to the extent that the Prior Ranking Amounts have been paid in full:
(a) If neither an Early Amortization Event nor an Event of Default shall have occurred and be continuing with respect to any Series of Notes:
(b) If either an Early Amortization Event or an Event of Default (or combination of both) has occurred and is then continuing, so long as the Indenture Trustee shall not have received a Collateral Liquidation Notice:
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(c) If an Event of Default has occurred and is continuing, and the Indenture Trustee has received a Collateral Liquidation Notice:
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Section 4.01 Conditions Precedent to Obligations of Series 2007-A2 Holders to Purchase Series 2007-A2 Notes . The Indenture Trustee shall not authenticate the Series 2007-A2 Notes unless (a) all conditions to the issuance of the Series 2007-A2 Notes set forth in Section 3.01 of the Series 2007-A2 Note Purchase Agreement shall have been satisfied, and (b) WEST shall have delivered a certificate to the Indenture Trustee to the effect that all conditions set forth in Section 3.01 of the Series 2007-A2 Note Purchase Agreement have been satisfied.
Section 4.02 Conditions Precedent to Obligations of Series 2007-A2 Holders to Make Series 2007-A2 Loans . The obligations of the Series 2007-A2 Holders to make the Series 2007-A2 Loans to WEST under this Supplement and the Series 2007-A2 Note Purchase Agreement on any Funding Date on and after the Effective Date are subject to the conditions precedent set forth in Section 3.02 of the Series 2007-A2 Note Purchase Agreement.
Section 4.03 Deposit and Disbursement of Series 2007-A2 Loans . The Administrative Agent may direct the Indenture Trustee, in writing, to apply the proceeds of the Series 2007-A2 Loan made on any Funding Date that is a Payment Date as a Collections Loan and to retain such Collections Loan in the Collections Account for inclusion in the Available Collections Amount on such Payment Date. Except to the extent that any Series 2007-A2 Loans made on any Funding Date constitute Collections Loans in accordance with the preceding sentence, such Series 2007-A2 Loans shall constitute Warehouse Loans, and the Administrative Agent shall direct the Indenture Trustee, in writing, to deposit such Warehouse Loans in the Engine Acquisition Account in accordance with such written direction, to be disbursed in accordance with Section 3.03 of the Indenture, subject to satisfaction or waiver of the conditions precedent set forth in Sections 3.03 and 3.04 of the Series 2007-A2 Note Purchase Agreement.
ARTICLE V
Section 5.01 Indenture Representations and Warranties . To induce the Series 2007-A2 Holders to purchase the Series 2007-A2 Notes hereunder and to make the Series 2007-A2 Loans from time to time, WEST hereby makes to the Indenture Trustee for the benefit of the Series 2007-A2 Holders as of the Effective Date and as of each Funding Date all of the representations and warranties set forth in Section 5.01 of the Indenture.
Section 5.02 Additional Representations and Warranties . To induce the Series 2007-A2 Holders to purchase the Series 2007-A2 Notes hereunder and to make the Series 2007-A2 Loans from time to time, WEST hereby makes to the Indenture Trustee for the benefit of the Series
20
2007-A2 Holders each of the following additional representations and warranties as of the Effective Date:
(a) Power and Authority . WEST has the power and is duly authorized to execute and deliver this Supplement and the other Series 2007-A2 Transaction Documents to which it is a party, WEST is and will continue to be duly authorized to borrow monies hereunder, and WEST is and will continue to be authorized to perform its obligations under this Supplement and under the other Series 2007-A2 Transaction Documents. The execution, delivery and performance by WEST of this Supplement and the other Series 2007-A2 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.
(b) No Conflict; No Default . The execution, delivery and performance of this Supplement and each of the Series 2007-A2 Transaction Documents and the execution, delivery and payment of the Series 2007-A2 Notes will not: (a) contravene any provision of WEST’s declaration of trust and the Trust Agreement; (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 to which WEST is a party or by which WEST, or its property and assets may be bound or affected.
(c) Validity and Binding Effect . This Supplement is, and each Series 2007-A2 Transaction Document to which WEST is a party, when duly executed and delivered, will be, legal, valid and binding obligations of WEST, enforceable against WEST 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 5.03 Covenants . To induce the Series 2007-A2 Holders to purchase the Series 2007-A2 Notes hereunder and to make Series 2007-A2 Loans from time to time, WEST hereby covenants with the Indenture Trustee for the benefit of the Series 2007-A2 Holders as follows:
(a) Issuance of Series of Additional Notes . Each Series of Additional Notes issued by WEST while the Series 2007-A2 Notes are outstanding, (A) shall be amortized on a level basis over a period of not less than thirteen (13) years for Scheduled Principal Payment Amounts on any Series A Notes, fifteen (15) years for Scheduled Principal Payment Amounts on any Series B Notes and twenty (20) years for Minimum Principal Payment Amounts or (B) if not amortized on a level basis (x) have a weighted average life that is not less than the remaining weighted average life of any Series of Notes then outstanding and (y) provide for Minimum Principal Payment Amounts and Scheduled Principal Payment Amounts during the period of such remaining weighted average life that are not more than the Minimum Principal Payment Amounts and Scheduled Principal Payment Amounts that would be payable under the level amortization described in clause (A), provided that such requirements shall not apply to any Series of Additional Notes that is a Series of Warehouse Notes until a Conversion Event occurs with respect to such Warehouse Notes.
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ARTICLE VI
Section 6.01 Ratification 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 6.02 Counterparts . 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 6.03 Governing Law; Jurisdiction . THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAWS BUT OTHERWISE WITHOUT REFERENCE TO ITS CONFLICTS OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. Each of the parties hereto agrees that the United States federal and New York State courts located in The City of New York shall have jurisdiction to hear and determine any suit, action or proceeding, and to settle any disputes, which may arise out of or in connection with this Supplement and, for such purposes, submits to the jurisdiction of such courts. Each of the parties hereto waives any objection which it might now or hereafter have to such courts being nominated as the forum or venue to hear and determine any suit, action or proceeding, and to settle any disputes, which may arise out of or in connection with this Supplement and agrees not to claim that any such court is not a convenient or appropriate forum. Each of the parties hereto consents to the granting of such legal or equitable relief as is deemed appropriate by such courts.
Section 6.04 Notices to Rating Agencies . Whenever any notice or other communication is required to be given to the Rating Agencies pursuant to the Indenture or this Supplement, such notice or communication shall be delivered as follows: (i) to Moody’s at Moody’s Investors Service, Inc., 99 Church Street, New York, New York 10004, Attention: Monitoring Group and (ii) if to Fitch at One State Street Plaza, New York, New York 10004, Attention: ABS Monitoring Group - Equipment Leases. Any rights to notices conveyed to a Rating Agency pursuant to the terms of this Supplement shall terminate immediately if such Rating Agency no longer has a rating outstanding with respect to the Series 2007-A2 Notes.
Section 6.05 Statutory References . References in this Supplement and any other Series 2007-A2 Transaction Document to any section of the Uniform Commercial Code or the UCC shall mean, on or after the effective date of adoption of any revision to the Uniform Commercial Code or the UCC in the applicable jurisdiction, such revised or successor section thereto.
Section 6.06 Amendments And Modifications . The terms of this Supplement may be waived, modified or amended only in a written instrument signed by each of WEST and the Indenture Trustee and, except with respect to the matters set forth in (and subject to the terms of) Sections 9.01 and 10.02 of the Indenture, only with the prior written consent of the Majority of
22
Holders or, with respect to the matters set forth in Section 9.02(a) of the Indenture, the prior written consent of the Holders of all Series 2007-A2 Notes then Outstanding.
Section 6.07 Waiver of Jury Trial . EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, AS AGAINST THE OTHER PARTIES HERETO, ANY RIGHTS IT MAY HAVE TO A JURY TRIAL IN RESPECT OF ANY CIVIL ACTION OR PROCEEDING (WHETHER ARISING IN CONTRACT OR TORT OR OTHERWISE), INCLUDING ANY COUNTERCLAIM, ARISING UNDER OR RELATING TO THIS SUPPLEMENT OR ANY OTHER SERIES 2007-A2 TRANSACTION DOCUMENT, INCLUDING IN RESPECT OF THE NEGOTIATION, ADMINISTRATION OR ENFORCEMENT HEREOF OR THEREOF.
Section 6.08 Appointment of Representative . The Majority of Holders shall be authorized to appoint a representative to act on their behalf with such authority as shall be provided in such appointment, provided that, such authority shall not extend to the taking of any action under the Related Documents requiring the consent of all Series 2007-A2 Holders.
[Signature page follows.]
23
IN WITNESS WHEREOF, WEST and the Indenture Trustee have caused this Supplement to be duly executed and delivered by their respective officers all as of the day and year first above written.
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WILLIS ENGINE
SECURITIZATION
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By: |
/s/ Bradley S. Forsyth |
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Name: Bradley S. Forsyth |
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Title: Controlling Trustee |
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DEUTSCHE BANK TRUST
COMPANY
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By: |
/s/ Irene Siegel |
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Name: Irene Siegel |
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Title: Vice President |
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By: |
/s/ Aranka R. Paul |
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Name: Aranka R. Paul |
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Title: Assistant Vice President |
EXHIBIT A
to SERIES 2007-A2 SUPPLEMENT
FORM OF SERIES 2007-A2 NOTE
Except as specified in Section 2.1 2(f) of the Indenture, each 144A Book-Entry Note, each Unrestricted Book-Entry Note and each Definitive Note issued in reliance on Section 4(2) of the Securities Act (and all Notes issued in exchange therefor or upon registration of transfer or substitution thereof) shall bear the following legend on the face thereof:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR WITH ANY SECURITIES REGULATORY AUTHORITY IN ANY JURISDICTION AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN “INSTITUTIONAL ACCREDITED INVESTOR”) OR (C) IT IS NOT A U.S. PERSON (WITHIN THE MEANING OF REGULATION S) AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT BEFORE TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE OF THIS NOTE AND THE LAST DATE THAT WILLIS ENGINE SECURITIZATION TRUST, A DELAWARE STATUTORY TRUST (“WEST”), OR ANY OF ITS AFFILIATES OWNED THIS NOTE, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO WEST OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE INDENTURE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE INDENTURE TRUSTEE) AND AN OPINION OF COUNSEL ACCEPTABLE TO WEST THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (D) IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT TO AN EXEMPTION FROM REGISTRATION IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH OF CASES (A) THROUGH (F) ABOVE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE IN THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN THE TWO-YEAR PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON
THE TRANSFER NOTICE ATTACHED HERETO AND SUBMIT SUCH TRANSFER NOTICE TO THE INDENTURE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR IF THE TRANSFER IS PURSUANT TO AN EXEMPTION FROM REGISTRATION IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE INDENTURE TRUSTEE AND WEST SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE INDENTURE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.
Each Book-Entry Note shall also bear the following legend on the face thereof:
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO WEST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS BOOK-ENTRY NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS BOOK-ENTRY NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.12 OF THE INDENTURE.
WILLIS ENGINE SECURITIZATION TRUST
SERIES 2007-A2 FLOATING RATE SECURED NOTE
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$[XX] |
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CUSIP No.: |
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No. |
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December 13 , 2007 |
KNOW ALL PERSONS BY THESE PRESENTS that WILLIS ENGINE SECURITIZATION TRUST, a Delaware statutory trust (“ WEST ”), for value received, hereby promises to pay to [ ], or registered assigns, at the principal corporate trust office of the Indenture Trustee named below, (i) the principal amount of the Series 2007-A2 Loans made by the holder hereof to WEST in an amount up to the Maximum Principal Balance of Dollars ($ ), which principal amount shall be payable on each Payment Date on the dates and in the amounts set forth in the Indenture, dated as of August 9, 2005 and amended and restated as of December 13, 2007 (as amended, restated or otherwise modified from time to time, the “ Indenture ”), and the Series 2007-A2 Supplement, dated as of December 13, 2007 (as amended, restated or otherwise modified from time to time, the “ Series 2007- A2 Supplement ”), each between WEST and Deutsche Bank Trust Company Americas, as indenture trustee (the “ Indenture Trustee ”), and (ii) interest on the outstanding principal amount of this Series 2007-A2 Floating Rate Secured Note (this “ Series 2007- A2 Note ”) on the dates and in the amounts set forth in the Indenture and the Series 2007-A2 Supplement. Capitalized terms not otherwise defined herein will have the meaning set forth in the Indenture and the Series 2007-A2 Supplement.
Payment of the principal of, interest on and Increased Costs for this Series 2007-A2 Note shall be made in lawful money of the United States of America which at the time of payment is legal tender for payment of public and private debts. The principal balance of, and interest on, this Series 2007-A2 Note and any Increased Costs are payable at the times and in the amounts set forth in the Indenture and the Series 2007-A2 Supplement by wire transfer of immediately available funds to the account designated by the Holder of record on the related Record Date.
This Series 2007-A2 Note is one of the authorized notes identified in the title hereto and issued pursuant to the Indenture and the Series 2007-A2 Supplement.
The Series 2007-A2 Notes shall be an obligation of WEST and shall be secured by the Collateral, all as defined in, and subject to limitations set forth in, the Indenture.
This Series 2007-A2 Note is transferable as provided in the Indenture and the Series 2007-A2 Supplement, subject to certain limitations therein contained, only upon the books for registration and transfer kept by the Indenture Trustee, and only upon surrender of this Series 2007-A2 Note for transfer to the Indenture Trustee duly endorsed by, or accompanied by a written instrument of transfer and an assumption of the obligation of the transferor to make the Series 2007-A2 Loans in form reasonably satisfactory to the Indenture Trustee duly executed by, the registered Holder hereof or his attorney duly authorized in writing. The Indenture Trustee shall not recognize any transfer of this Series 2007-A2 Note prior to the occurrence of a
Conversion Event, unless the transferee meets the requirements for an Eligible Transferee in the Series 2007-A2 Supplement and agrees to make the Series 2007-A2 Loans up to an amount equal to the excess of the Maximum Principal Balance of this Series 2007-A2 Note at the time of transfer over the Outstanding Principal Balance of this Series 2007-A2 Note at such time. The Indenture Trustee or WEST may require payment by the Holder of a sum sufficient to cover any tax expense or other governmental charge payable in connection with any transfer or exchange of the Series 2007-A2 Notes.
WEST, the Indenture Trustee and any other agent of WEST may treat the Person in whose name this Series 2007-A2 Note is registered as the absolute owner hereof for all purposes, and neither WEST, the Indenture Trustee, nor any other such agent shall be affected by notice to the contrary.
The Series 2007-A2 Notes are subject to Optional Redemption, at the times and subject to the conditions set forth in the Indenture and the Series 2007-A2 Supplement.
If an Event of Default under the Indenture shall occur and be continuing, the principal of and accrued interest on this Series 2007-A2 Note may be declared to be due and payable in the manner and with the effect provided in the Indenture and the Series 2007-A2 Supplement.
The Indenture permits, with certain exceptions as therein provided, the issuance of supplemental indentures with the consent of the Requisite Majority, in certain specifically described instances. Any consent given by the Requisite Majority shall be conclusive and binding upon the Holder of this Series 2007-A2 Note and on all future holders of this Series 2007-A2 Note and of any Series 2007-A2 Note issued in lieu hereof whether or not notation of such consent is made upon this Series 2007-A2 Note. Supplements and amendments to the Indenture and the Series 2007-A2 Supplement may be made only to the extent and in circumstances permitted by the Indenture and the Series 2007-A2 Supplement.
The Holder of this Series 2007-A2 Note shall have no right to enforce the provisions of the Indenture and the Series 2007-A2 Supplement or to institute action to enforce the covenants, or to take any action with respect to a default under the Indenture and the Series 2007-A2 Supplement, or to institute, appear in or defend any suit or other proceedings with respect thereto, except as provided under certain circumstances described in the Indenture and the Series 2007-A2 Supplement; provided , however , that nothing contained in the Indenture and the Series 2007-A2 Supplement shall affect or impair any right of enforcement conferred on the Holder hereof to enforce any payment of the principal of and interest on this Series 2007-A2 Note on or after the due date thereof; provided further, however , that by acceptance hereof the Holder is deemed to have covenanted and agreed that it will not institute against WEST any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any applicable bankruptcy or similar law, at any time other than at such time as permitted by the Indenture and the Series 2007-A2 Supplement.
This Series 2007-A2 Note, and the rights and obligations of the parties hereunder, shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York without giving effect to principles of conflict of laws, other than Sections 5-1401 and 5-1402 of the New York General Obligations Laws.
All terms and provisions of the Indenture and the Series 2007-A2 Supplement are herein incorporated by reference as if set forth herein in their entirety.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED, that all acts, conditions and things required to exist, happen and be performed precedent to the execution and delivery of the Indenture and the Series 2007-A2 Supplement and the issuance of this Series 2007-A2 Note and the issue of which it is a part, do exist, have happened and have been timely performed in regular form and manner as required by law.
Unless the certificate of authentication hereon has been executed by the Indenture Trustee by manual signature of one of its Responsible Officers, this Series 2007-A2 Note shall not be entitled to any benefit under the Indenture and the Series 2007-A2 Supplement, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, WEST has caused this Series 2007-A2 Note to be duly executed by its duly authorized representative, as of the date first set above.
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WILLIS ENGINE
SECURITIZATION
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By: |
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Name: |
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Title: |
This Note is one of the Series 2007-A2 Notes described in the within-mentioned Series 2007-A2 Supplement.
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DEUTSCHE BANK TRUST
COMPANY
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By: |
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Name: |
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Title: |
Schedule A to Series 2007-A2 Note
Aggregate principal amount of any Series 2007-A2 Note issued in exchange for a portion or portions hereof and any portion or portions of any Series 2007-A2 Note exchanged for a portion or portions hereof:
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Date |
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Principal
Amount Issued
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Remaining
Principal Amount
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Notation
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1
TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered Holder hereby sell(s), assign(s) and transfer(s) unto
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Taxpayer identification No. |
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Address: |
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the within Series 2007-A2 Note and all rights thereunder, hereby irrevocably constituting and appointing attorney to transfer said Series 2007-A2 Note on the books of WEST with full power of substitution in the premises.
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Date: |
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By: |
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Name: |
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Title: |
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NOTE: The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever. |
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2
In connection with any transfer of this Series 2007-A2 Note occurring prior to the date which is the earlier of the end of the period referred to in Rule 144(k) under the Securities Act, the undersigned confirms that without utilizing any general solicitation or general advertising:
{Check One}
{ } (a) this Series 2007-A2 Note is being transferred in compliance with the exemption from registration under the Securities Act provided by Rule 144A thereunder;
or
{ } (b) this Series 2007-A2 Note is being transferred other than in accordance with (a) above and documents are being furnished which comply with the conditions of transfer set forth in this Series 2007-A2 Note and the Indenture.
If none of the foregoing boxes is checked, the Indenture Trustee or other Note Registrar shall not be obligated to register this Series 2007-A2 Note in the name of any Person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 2.12 of the Indenture shall have been satisfied.
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NOTE: The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever. |
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3
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED: The undersigned represents and warrants that it is purchasing this Series 2007-A2 Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding WEST as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.
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4
SCHEDULE 1
to SERIES 2007-A2 SUPPLEMENT
MINIMUM TARGETED PRINCIPAL BALANCES
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Payment Date Number |
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Minimum Targeted Principal Balances
for
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1 |
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99.583333 |
% |
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2 |
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99.166667 |
% |
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3 |
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98.750000 |
% |
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4 |
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98.333333 |
% |
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5 |
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97.916667 |
% |
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6 |
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97.500000 |
% |
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7 |
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97.083333 |
% |
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8 |
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96.666667 |
% |
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9 |
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96.250000 |
% |
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10 |
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95.833333 |
% |
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11 |
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95.416667 |
% |
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12 |
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95.000000 |
% |
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13 |
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94.583333 |
% |
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14 |
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94.166667 |
% |
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15 |
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93.750000 |
% |
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16 |
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93.333333 |
% |
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17 |
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92.916667 |
% |
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18 |
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92.500000 |
% |
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19 |
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92.083333 |
% |
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20 |
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91.666667 |
% |
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21 |
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91.250000 |
% |
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22 |
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90.833333 |
% |
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23 |
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90.416667 |
% |
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24 |
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90.000000 |
% |
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25 |
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89.583333 |
% |
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26 |
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89.166667 |
% |
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27 |
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88.750000 |
% |
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28 |
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88.333333 |
% |
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29 |
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87.916667 |
% |
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30 |
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87.500000 |
% |
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31 |
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87.083333 |
% |
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32 |
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86.666667 |
% |
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33 |
|
86.250000 |
% |
|
34 |
|
85.833333 |
% |
|
35 |
|
85.416667 |
% |
|
36 |
|
85.000000 |
% |
|
37 |
|
84.583333 |
% |
|
38 |
|
84.166667 |
% |
|
39 |
|
83.750000 |
% |
|
40 |
|
83.333333 |
% |
|
41 |
|
82.916667 |
% |
|
42 |
|
82.500000 |
% |
|
43 |
|
82.083333 |
% |
|
44 |
|
81.666667 |
% |
|
45 |
|
81.250000 |
% |
1
|
Payment Date Number |
|
Minimum Targeted Principal Balances
for
|
|
|
46 |
|
80.833333 |
% |
|
47 |
|
80.416667 |
% |
|
48 |
|
80.000000 |
% |
|
49 |
|
79.583333 |
% |
|
50 |
|
79.166667 |
% |
|
51 |
|
78.750000 |
% |
|
52 |
|
78.333333 |
% |
|
53 |
|
77.916667 |
% |
|
54 |
|
77.500000 |
% |
|
55 |
|
77.083333 |
% |
|
56 |
|
76.666667 |
% |
|
57 |
|
76.250000 |
% |
|
58 |
|
75.833333 |
% |
|
59 |
|
75.416667 |
% |
|
60 |
|
75.000000 |
% |
|
61 |
|
74.583333 |
% |
|
62 |
|
74.166667 |
% |
|
63 |
|
73.750000 |
% |
|
64 |
|
73.333333 |
% |
|
65 |
|
72.916667 |
% |
|
66 |
|
72.500000 |
% |
|
67 |
|
72.083333 |
% |
|
68 |
|
71.666667 |
% |
|
69 |
|
71.250000 |
% |
|
70 |
|
70.833333 |
% |
|
71 |
|
70.416667 |
% |
|
72 |
|
70.000000 |
% |
|
73 |
|
69.583333 |
% |
|
74 |
|
69.166667 |
% |
|
75 |
|
68.750000 |
% |
|
76 |
|
68.333333 |
% |
|
77 |
|
67.916667 |
% |
|
78 |
|
67.500000 |
% |
|
79 |
|
67.083333 |
% |
|
80 |
|
66.666667 |
% |
|
81 |
|
66.250000 |
% |
|
82 |
|
65.833333 |
% |
|
83 |
|
65.416667 |
% |
|
84 |
|
65.000000 |
% |
|
85 |
|
64.583333 |
% |
|
86 |
|
64.166667 |
% |
|
87 |
|
63.750000 |
% |
|
88 |
|
63.333333 |
% |
|
89 |
|
62.916667 |
% |
|
90 |
|
62.500000 |
% |
|
91 |
|
62.083333 |
% |
|
92 |
|
61.666667 |
% |
|
93 |
|
61.250000 |
% |
|
94 |
|
60.833333 |
% |
|
95 |
|
60.416667 |
% |
|
96 |
|
60.000000 |
% |
2
|
Payment Date Number |
|
Minimum Targeted Principal Balances
for
|
|
|
97 |
|
59.583333 |
% |
|
98 |
|
59.166667 |
% |
|
99 |
|
58.750000 |
% |
|
100 |
|
58.333333 |
% |
|
101 |
|
57.916667 |
% |
|
102 |
|
57.500000 |
% |
|
103 |
|
57.083333 |
% |
|
104 |
|
56.666667 |
% |
|
105 |
|
56.250000 |
% |
|
106 |
|
55.833333 |
% |
|
107 |
|
55.416667 |
% |
|
108 |
|
55.000000 |
% |
|
109 |
|
54.583333 |
% |
|
110 |
|
54.166667 |
% |
|
111 |
|
53.750000 |
% |
|
112 |
|
53.333333 |
% |
|
113 |
|
52.916667 |
% |
|
114 |
|
52.500000 |
% |
|
115 |
|
52.083333 |
% |
|
116 |
|
51.666667 |
% |
|
117 |
|
51.250000 |
% |
|
118 |
|
50.833333 |
% |
|
119 |
|
50.416667 |
% |
|
120 |
|
50.000000 |
% |
|
121 |
|
49.583333 |
% |
|
122 |
|
49.166667 |
% |
|
123 |
|
48.750000 |
% |
|
124 |
|
48.333333 |
% |
|
125 |
|
47.916667 |
% |
|
126 |
|
47.500000 |
% |
|
127 |
|
47.083333 |
% |
|
128 |
|
46.666667 |
% |
|
129 |
|
46.250000 |
% |
|
130 |
|
45.833333 |
% |
|
131 |
|
45.416667 |
% |
|
132 |
|
45.000000 |
% |
|
133 |
|
44.583333 |
% |
|
134 |
|
44.166667 |
% |
|
135 |
|
43.750000 |
% |
|
136 |
|
43.333333 |
% |
|
137 |
|
42.916667 |
% |
|
138 |
|
42.500000 |
% |
|
139 |
|
42.083333 |
% |
|
140 |
|
41.666667 |
% |
|
141 |
|
41.250000 |
% |
|
142 |
|
40.833333 |
% |
|
143 |
|
40.416667 |
% |
|
144 |
|
40.000000 |
% |
|
145 |
|
39.583333 |
% |
|
146 |
|
39.166667 |
% |
|
147 |
|
38.750000 |
% |
3
|
Payment Date Number |
|
Minimum Targeted Principal Balances
for
|
|
|
148 |
|
38.333333 |
% |
|
149 |
|
37.916667 |
% |
|
150 |
|
37.500000 |
% |
|
151 |
|
37.083333 |
% |
|
152 |
|
36.666667 |
% |
|
153 |
|
36.250000 |
% |
|
154 |
|
35.833333 |
% |
|
155 |
|
35.416667 |
% |
|
156 |
|
35.000000 |
% |
|
157 |
|
34.583333 |
% |
|
158 |
|
34.166667 |
% |
|
159 |
|
33.750000 |
% |
|
160 |
|
33.333333 |
% |
|
161 |
|
32.916667 |
% |
|
162 |
|
32.500000 |
% |
|
163 |
|
32.083333 |
% |
|
164 |
|
31.666667 |
% |
|
165 |
|
31.250000 |
% |
|
166 |
|
30.833333 |
% |
|
167 |
|
30.416667 |
% |
|
168 |
|
30.000000 |
% |
|
169 |
|
29.583333 |
% |
|
170 |
|
29.166667 |
% |
|
171 |
|
28.750000 |
% |
|
172 |
|
28.333333 |
% |
|
173 |
|
27.916667 |
% |
|
174 |
|
27.500000 |
% |
|
175 |
|
27.083333 |
% |
|
176 |
|
26.666667 |
% |
|
177 |
|
26.250000 |
% |
|
178 |
|
25.833333 |
% |
|
179 |
|
25.416667 |
% |
|
180 |
|
25.000000 |
% |
|
181 |
|
24.583333 |
% |
|
182 |
|
24.166667 |
% |
|
183 |
|
23.750000 |
% |
|
184 |
|
23.333333 |
% |
|
185 |
|
22.916667 |
% |
|
186 |
|
22.500000 |
% |
|
187 |
|
22.083333 |
% |
|
188 |
|
21.666667 |
% |
|
189 |
|
21.250000 |
% |
|
190 |
|
20.833333 |
% |
|
191 |
|
20.416667 |
% |
|
192 |
|
20.000000 |
% |
|
193 |
|
19.583333 |
% |
|
194 |
|
19.166667 |
% |
|
195 |
|
18.750000 |
% |
|
196 |
|
18.333333 |
% |
|
197 |
|
17.916667 |
% |
|
198 |
|
17.500000 |
% |
4
|
Payment Date Number |
|
Minimum Targeted Principal Balances for
|
|
|
199 |
|
17.083333 |
% |
|
200 |
|
16.666667 |
% |
|
201 |
|
16.250000 |
% |
|
202 |
|
15.833333 |
% |
|
203 |
|
15.416667 |
% |
|
204 |
|
15.000000 |
% |
|
205 |
|
14.583333 |
% |
|
206 |
|
14.166667 |
% |
|
207 |
|
13.750000 |
% |
|
208 |
|
13.333333 |
% |
|
209 |
|
12.916667 |
% |
|
210 |
|
12.500000 |
% |
|
211 |
|
12.083333 |
% |
|
212 |
|
11.666667 |
% |
|
213 |
|
11.250000 |
% |
|
214 |
|
10.833333 |
% |
|
215 |
|
10.416667 |
% |
|
216 |
|
10.000000 |
% |
|
217 |
|
9.583333 |
% |
|
218 |
|
9.166667 |
% |
|
219 |
|
8.750000 |
% |
|
220 |
|
8.333333 |
% |
|
221 |
|
7.916667 |
% |
|
222 |
|
7.500000 |
% |
|
223 |
|
7.083333 |
% |
|
224 |
|
6.666667 |
% |
|
225 |
|
6.250000 |
% |
|
226 |
|
5.833333 |
% |
|
227 |
|
5.416667 |
% |
|
228 |
|
5.000000 |
% |
|
229 |
|
4.583333 |
% |
|
230 |
|
4.166667 |
% |
|
231 |
|
3.750000 |
% |
|
232 |
|
3.333333 |
% |
|
233 |
|
2.916667 |
% |
|
234 |
|
2.500000 |
% |
|
235 |
|
2.083333 |
% |
|
236 |
|
1.666667 |
% |
|
237 |
|
1.250000 |
% |
|
238 |
|
0.833333 |
% |
|
239 |
|
0.416667 |
% |
|
240 |
|
0.000000 |
% |
5
SCHEDULE 2
to SERIES 2007-A2 SUPPLEMENT
SCHEDULED TARGETED PRINCIPAL BALANCES
|
Payment Date Number |
|
Scheduled Targeted Principal Balances for
|
|
|
1 |
|
99.358974 |
% |
|
2 |
|
98.717949 |
% |
|
3 |
|
98.076923 |
% |
|
4 |
|
97.435897 |
% |
|
5 |
|
96.794872 |
% |
|
6 |
|
96.153846 |
% |
|
7 |
|
95.512821 |
% |
|
8 |
|
94.871795 |
% |
|
9 |
|
94.230769 |
% |
|
10 |
|
93.589744 |
% |
|
11 |
|
92.948718 |
% |
|
12 |
|
92.307692 |
% |
|
13 |
|
91.666667 |
% |
|
14 |
|
91.025641 |
% |
|
15 |
|
90.384615 |
% |
|
16 |
|
89.743590 |
% |
|
17 |
|
89.102564 |
% |
|
18 |
|
88.461538 |
% |
|
19 |
|
87.820513 |
% |
|
20 |
|
87.179487 |
% |
|
21 |
|
86.538462 |
% |
|
22 |
|
85.897436 |
% |
|
23 |
|
85.256410 |
% |
|
24 |
|
84.615385 |
% |
|
25 |
|
83.974359 |
% |
|
26 |
|
83.333333 |
% |
|
27 |
|
82.692308 |
% |
|
28 |
|
82.051282 |
% |
|
29 |
|
81.410256 |
% |
|
30 |
|
80.769231 |
% |
|
31 |
|
80.128205 |
% |
|
32 |
|
79.487179 |
% |
|
33 |
|
78.846154 |
% |
|
34 |
|
78.205128 |
% |
|
35 |
|
77.564103 |
% |
|
36 |
|
76.923077 |
% |
|
37 |
|
76.282051 |
% |
|
38 |
|
75.641026 |
% |
|
39 |
|
75.000000 |
% |
|
40 |
|
74.358974 |
% |
|
41 |
|
73.717949 |
% |
|
42 |
|
73.076923 |
% |
|
43 |
|
72.435897 |
% |
|
44 |
|
71.794872 |
% |
|
45 |
|
71.153846 |
% |
|
46 |
|
70.512821 |
% |
1
|
Payment Date Number |
|
Scheduled Targeted Principal Balances for
|
|
|
47 |
|
69.871795 |
% |
|
48 |
|
69.230769 |
% |
|
49 |
|
68.589744 |
% |
|
50 |
|
67.948718 |
% |
|
51 |
|
67.307692 |
% |
|
52 |
|
66.666667 |
% |
|
53 |
|
66.025641 |
% |
|
54 |
|
65.384615 |
% |
|
55 |
|
64.743590 |
% |
|
56 |
|
64.102564 |
% |
|
57 |
|
63.461538 |
% |
|
58 |
|
62.820513 |
% |
|
59 |
|
62.179487 |
% |
|
60 |
|
61.538462 |
% |
|
61 |
|
60.897436 |
% |
|
62 |
|
60.256410 |
% |
|
63 |
|
59.615385 |
% |
|
64 |
|
58.974359 |
% |
|
65 |
|
58.333333 |
% |
|
66 |
|
57.692308 |
% |
|
67 |
|
57.051282 |
% |
|
68 |
|
56.410256 |
% |
|
69 |
|
55.769231 |
% |
|
70 |
|
55.128205 |
% |
|
71 |
|
54.487179 |
% |
|
72 |
|
53.846154 |
% |
|
73 |
|
53.205128 |
% |
|
74 |
|
52.564103 |
% |
|
75 |
|
51.923077 |
% |
|
76 |
|
51.282051 |
% |
|
77 |
|
50.641026 |
% |
|
78 |
|
50.000000 |
% |
|
79 |
|
49.358974 |
% |
|
80 |
|
48.717949 |
% |
|
81 |
|
48.076923 |
% |
|
82 |
|
47.435897 |
% |
|
83 |
|
46.794872 |
% |
|
84 |
|
46.153846 |
% |
|
85 |
|
45.512821 |
% |
|
86 |
|
44.871795 |
% |
|
87 |
|
44.230769 |
% |
|
88 |
|
43.589744 |
% |
|
89 |
|
42.948718 |
% |
|
90 |
|
42.307692 |
% |
|
91 |
|
41.666667 |
% |
|
92 |
|
41.025641 |
% |
|
93 |
|
40.384615 |
% |
|
94 |
|
39.743590 |
% |
|
95 |
|
39.102564 |
% |
|
96 |
|
38.461538 |
% |
|
97 |
|
37.820513 |
% |
|
98 |
|
37.179487 |
% |
|
99 |
|
36.538462 |
% |
2
|
Payment Date Number |
|
Scheduled Targeted Principal Balances for
|
|
|
100 |
|
35.897436 |
% |
|
101 |
|
35.256410 |
% |
|
102 |
|
34.615385 |
% |
|
103 |
|
33.974359 |
% |
|
104 |
|
33.333333 |
% |
|
105 |
|
32.692308 |
% |
|
106 |
|
32.051282 |
% |
|
107 |
|
31.410256 |
% |
|
108 |
|
30.769231 |
% |
|
109 |
|
30.128205 |
% |
|
110 |
|
29.487179 |
% |
|
111 |
|
28.846154 |
% |
|
112 |
|
28.205128 |
% |
|
113 |
|
27.564103 |
% |
|
114 |
|
26.923077 |
% |
|
115 |
|
26.282051 |
% |
|
116 |
|
25.641026 |
% |
|
117 |
|
25.000000 |
% |
|
118 |
|
24.358974 |
% |
|
119 |
|
23.717949 |
% |
|
120 |
|
23.076923 |
% |
|
121 |
|
22.435897 |
% |
|
122 |
|
21.794872 |
% |
|
123 |
|
21.153846 |
% |
|
124 |
|
20.512821 |
% |
|
125 |
|
19.871795 |
% |
|
126 |
|
19.230769 |
% |
|
127 |
|
18.589744 |
% |
|
128 |
|
17.948718 |
% |
|
129 |
|
17.307692 |
% |
|
130 |
|
16.666667 |
% |
|
131 |
|
16.025641 |
% |
|
132 |
|
15.384615 |
% |
|
133 |
|
14.743590 |
% |
|
134 |
|
14.102564 |
% |
|
135 |
|
13.461538 |
% |
|
136 |
|
12.820513 |
% |
|
137 |
|
12.179487 |
% |
|
138 |
|
11.538462 |
% |
|
139 |
|
10.897436 |
% |
|
140 |
|
10.256410 |
% |
|
141 |
|
9.615385 |
% |
|
142 |
|
8.974359 |
% |
|
143 |
|
8.333333 |
% |
|
144 |
|
7.692308 |
% |
|
145 |
|
7.051282 |
% |
|
146 |
|
6.410256 |
% |
|
147 |
|
5.769231 |
% |
|
148 |
|
5.128205 |
% |
|
149 |
|
4.487179 |
% |
|
150 |
|
3.846154 |
% |
|
151 |
|
3.205128 |
% |
|
152 |
|
2.564103 |
% |
3
|
Payment Date Number |
|
Scheduled Targeted Principal Balances for
|
|
|
153 |
|
1.923077 |
% |
|
154 |
|
1.282051 |
% |
|
155 |
|
0.641026 |
% |
|
156 |
|
0.000000 |
% |
4
SCHEDULE 3
to SERIES 2007-A2 SUPPLEMENT
MAXIMUM COMMITMENTS OF SERIES 2007-A2 HOLDERS
|
Names of Series 2007-A2 Holders |
|
Individual Maximum Commitments of
|
|
|
|
CALYON NEW YORK BRANCH |
|
$ |
46,250,000 |
|
|
CRÉDIT INDUSTRIEL ET COMMERCIAL, NEW YORK BRANCH |
|
$ |
13,125,000 |
|
|
EUROPE ARAB BANK PLC — PARIS BRANCH |
|
$ |
50,000,000 |
|
|
BAYERISCHE LANDESBANK |
|
$ |
65,625,000 |
|
|
Total: |
|
$ |
175,000,000 |
|
1
Exhibit 10.22
EXECUTION VERSION
WILLIS ENGINE SECURITIZATION TRUST,
as issuer of Series 2007-B2 Notes,
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Indenture Trustee
SERIES 2007-B2 SUPPLEMENT
Dated as of December 13, 2007
to
INDENTURE
dated as of August 9, 2005,
and amended and restated as of
December 13, 2007
SERIES 2007-B2 NOTES
TABLE OF CONTENTS
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Page |
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ARTICLE I |
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DEFINITIONS; CALCULATION GUIDELINES |
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Section 1.01 |
Definitions |
1 |
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ARTICLE II |
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CREATION OF THE SERIES 2007-B2 NOTES |
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Section 2.01 |
Designation |
7 |
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Section 2.02 |
Authentication and Delivery |
8 |
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Section 2.03 |
Series 2007-B2 Loans |
9 |
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Section 2.04 |
Interest Payments; Commitment Fee |
11 |
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Section 2.05 |
Payments of Principal |
12 |
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Section 2.06 |
Series 2007-B2 Final Maturity Date |
14 |
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Section 2.07 |
Manner of Payments |
14 |
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Section 2.08 |
Increased Costs |
14 |
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Section 2.09 |
Increased Capital |
14 |
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Section 2.10 |
Payments of Principal and Interest |
15 |
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Section 2.11 |
Breakage Costs |
17 |
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Section 2.12 |
Restrictions on Transfer |
17 |
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Section 2.13 |
Payment Date Schedule |
17 |
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ARTICLE III |
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SERIES 2007-B2 SERIES ACCOUNT, ALLOCATION AND |
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APPLICATION OF AMOUNTS THEREIN |
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Section 3.01 |
Series 2007-B2 Series Account |
18 |
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Section 3.02 |
Distributions from Series 2007-B2 Series Account |
18 |
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ARTICLE IV |
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CONDITIONS PRECEDENT TO OBLIGATIONS OF SERIES 2007-B2 HOLDERS |
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Section 4.01 |
Conditions Precedent to Obligations of Series 2007-B2 Holders to Purchase Series 2007-B2 Notes |
20 |
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Section 4.02 |
Conditions Precedent to Obligations of Series 2007-B2 Holders to Make Series 2007-B2 Loans |
20 |
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Section 4.03 |
Deposit and Disbursement of Series 2007-B2 Loans |
20 |
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ARTICLE V |
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REPRESENTATIONS WARRANTIES AND COVENANTS |
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Section 5.01 |
Indenture Representations and Warranties |
20 |
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Section 5.02 |
Additional Representations and Warranties |
20 |
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Section 5.03 |
Covenants |
21 |
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ARTICLE VI |
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MISCELLANEOUS PROVISIONS |
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Section 6.01 |
Ratification of Indenture |
22 |
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Section 6.02 |
Counterparts |
22 |
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Section 6.03 |
Governing Law; Jurisdiction |
22 |
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Section 6.04 |
Notices to Rating Agencies |
22 |
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Section 6.05 |
Statutory References |
22 |
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Section 6.06 |
Amendments And Modifications |
22 |
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Section 6.07 |
Waiver of Jury Trial |
23 |
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Section 6.08 |
Appointment of Representative |
23 |
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EXHIBITS |
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EXHIBIT A |
Form of Series 2007-B2 Note |
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SCHEDULES |
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SCHEDULE 1 |
Scheduled Targeted Principal Balance by Payment Date |
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SCHEDULE 2 |
Maximum Commitments of Series 2007-B2 Holders |
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ii
This SERIES 2007-B2 SUPPLEMENT, dated as of December 13, 2007 (as amended, modified or supplemented from time to time, this “ Supplement ” or the “ Series 2007-B2 Supplement ”), issued pursuant to, and incorporating the terms of, the Indenture, dated as of August 9, 2005 and amended and restated as of December 13, 2007 (as previously supplemented and as amended, modified or supplemented from time to time, the “Indenture” ), is entered into between WILLIS ENGINE SECURITIZATION TRUST, a Delaware statutory trust ( “WEST” ), and DEUTSCHE BANK TRUST COMPANY AMERICAS, a New York banking corporation, as Indenture Trustee (the “Indenture Trustee” ).
WITNESSETH THAT:
WHEREAS, WEST and the Indenture Trustee wish to set forth the Principal Terms of a Series of Notes to be issued pursuant to this Supplement and designated as “Willis Engine Securitization Trust Series 2007-B2 Floating Rate Secured Notes”.
NOW THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; CALCULATION GUIDELINES
Section 1.01 Definitions . (a) Capitalized terms used herein and not otherwise defined shall have the meaning set forth 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.
“Acquisition Redemption Date” shall have the meaning set forth in Section 2.05(d) hereof.
“Additional Interest” means, for the Series 2007-B2 Notes, interest at the Series 2007-B2 Base Interest Rate on the aggregate amount of any unpaid interest on the Series 2007-B2 Notes (including any unpaid portion of any Base Interest Amount, Conversion Step-Up Interest Amount and Additional Interest Amount) and the other amounts described in Section 2.04(c) hereof.
“Additional Interest Amount” means, for any Payment Date for the Series 2007-B2 Notes, an amount equal to the Additional Interest for the Series 2007-B2 Notes on the aggregate amount of unpaid interest (including any unpaid portion of any Base Interest Amount, Conversion Step-Up Interest Amount and Additional Interest Amount for the Series 2007-B2 Notes and the other amounts described in Section 2.04(c) hereof) that was due and payable (but not paid) on, or with respect to, the Series 2007-B2 Notes on any prior Payment Date. The amount described in the preceding sentence constitutes the Additional Interest Amount for the Series 2007-B2 Notes for purposes of Sections 3.13 and 3.14 of the Indenture.
1
“ Adjusted Eurodollar Rate ” means, for any Interest Accrual Period and each Series 2007-B2 Loans, the quotient, expressed as a percentage and rounded upwards (if necessary) to the nearest 1/100 of 1%, obtained by dividing (a) the One Month LIBOR for such Interest Accrual Period, by (b) the decimal equivalent of 100% minus the Eurodollar Reserve Percentage on the first day of such Interest Accrual Period.
“Allocated Amount” shall mean, with respect to any Additional Engine acquired with the proceeds of the Series 2007-B2 Loans, such amount as is specified in the Acquisition Agreement relating to such Additional Engine.
“ Assignment and Assumption ” means an Assignment and Assumption, as defined in the Series 2007-B2 Note Purchase Agreement, pursuant to which the transferee of a Series 2007-B2 Note agrees to make Series 2007-B2 Loans to the extent of the Unused Commitment allocable to the Series 2007-B2 Note that is transferred to such transferee.
“ Base Interest Amount ” means, for any Payment Date, an amount equal to the accrued and unpaid interest at the Series 2007-B2 Base Interest Rate on the Outstanding Principal Balance of the Series 2007-B2 Notes for the Interest Accrual Period ending on such Payment Date. The amount described in the preceding sentence constitutes the Base Interest Amount for the Series 2007-B2 Notes for purposes of Sections 3.13 and 3.14 of the Indenture.
“ Base Rate ” means, on any date of determination, an interest rate per annum equal to the higher of (i) the Prime Rate in effect on such date, and (ii) the Federal Funds Effective Rate in effect on such date plus one half of one percent (.50%) per annum. Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective on the opening of business on the date of such change.
“ Calyon ” means Calyon New York Branch, a société anonyme organized and existing under the laws of the Republic of France, acting through its New York branch.
“ Collections Loans ” means any Series 2007-B2 Loans made pursuant to Section 3.18 of the Indenture, this Supplement and the Series 2007-B2 Note Purchase Agreement on any Payment Date, to be included in the Available Collections Amount on such Payment Date.
“Commitment Fee” shall have the meaning set forth in Section 2.04(b).
“Commitment Fee Amount” means, for any Payment Date for the Series 2007-B2 Holders, an amount equal to the accrued and unpaid Commitment Fee as of such Payment Date. The amount described in the preceding sentence constitutes the Commitment Fee Amount for the Series 2007-B2 Notes for purposes of Sections 3.13 and 3.14 of the Indenture.
“Conversion Date” means, for the Series 2007-B2 Notes, December 15, 2010.
“Conversion Step-Up Interest” means, for the Series 2007-B2 Notes, interest at the Series 2007-B2 Conversion Step-Up Interest Rate on the Outstanding Principal Balance of the Series 2007-B2 Notes after the occurrence of a Conversion Event with respect to the Series 2007-B2 Notes, for the Interest Accrual Period ending on (but excluding) a Payment Date occurring on or after the occurrence of such Conversion Event.
2
“Conversion Step-Up Interest Amount” means, for any Payment Date occurring on or after the occurrence of a Conversion Event with respect to the Series 2007-B2 Notes, an amount equal to the accrued and unpaid Conversion Step-Up Interest. The amount described in the preceding sentence constitutes the Conversion Step-Up Interest Amount for the Series 2007-B2 Notes for purposes of Sections 3.13 and 3.14 of the Indenture.
“ Delivery Period ” means the period beginning on any Funding Date and ending on the earlier of the (a) the 180-day period beginning on such Funding Date and (b) the occurrence of an Event of Default or an Early Amortization Event.
“ Effective Date ” means December 13, 2007 or, if later, the date on which the conditions set forth in Section 3.01 of the Series 2007-B2 Note Purchase Agreement shall have been satisfied.
“Excluded Taxes” shall have the meaning specified in Section 2.10(a).
“Eligible Transferee” means the following: (i) an Affiliate of a Series 2007-B2 Holder, or (ii) any other then existing Series 2007-B2 Holder, or (iii) a commercial bank, insurance company or other financial institution that (x) complies with the transfer provisions of Section 2.12 of the Indenture, and (y) if such transfer is to occur prior to the occurrence of any Conversion Event, such transferee has the capability, in the reasonable determination of WEST, to make Series 2007-B2 Loans to WEST up to the Unused Commitment in respect of the Series 2007-B2 Note being transferred to such financial institution and is otherwise reasonably acceptable to WEST, as evidenced to the Indenture Trustee in writing.
“ Eurodollar Disruption Event ” means, with respect to any Series 2007-B2 Holder, any of the following: (i) a determination by a Series 2007-B2 Holder that it would be contrary to law or to the directive of any central bank or other Governmental Authority (whether or not having the force of law) to obtain Dollars in the London interbank market to make, fund or maintain any Series 2007-B2 Loan for such Interest Accrual Period; (ii) a determination by a Series 2007-B2 Holder that the rate at which deposits of Dollars are being offered to such lender in the London interbank market does not accurately reflect the cost to such Series 2007-B2 Holder of making, funding or maintaining any Series 2007-B2 Loan for such Interest Accrual Period; or (iii) the inability of a Series 2007-B2 Holder to obtain Dollars in the London interbank market to make, fund or maintain any Series 2007-B2 Loan for such Interest Accrual Period.
“ Eurodollar Reserve Percentage ” means, with respect to any Series 2007-B2 Holder for any Interest Accrual Period, the reserve percentage (expressed as a decimal, rounded upward to the nearest 1/100 th of one percent (0.01%)) applicable on the first day of such Interest Accrual Period under regulations issued from time to time by the Federal Reserve Board (or any successor) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for such Series 2007-B2 Holder, with respect to liabilities or assets consisting of or including Eurocurrency Liabilities (as defined in Regulation D of the Federal Reserve Board, as in effect from time to time) and having a term equal to such Interest Accrual Period.
3
“ Federal Funds Effective Rate ” means, on any date of determination, the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published on the next succeeding Business Day, the average of the quotations for the day of such transactions received by the Indenture Trustee from three federal funds brokers of recognized standing selected by it.
“Funding Date” means, as to any Series 2007-B2 Loan, the Business Day that is specified in the Funding Request for such Series 2007-B2 Loan in accordance with Section 2.02 of the Series 2007-B2 Note Purchase Agreement.
“Funding Request” shall have the meaning specified in the Series 2007-B2 Note Purchase Agreement.
“Increased Costs” shall mean, for any Interest Accrual Period, (a) the aggregate amount payable to all Series 2007-B2 Holders pursuant to Sections 2.08, 2.09, 2.10 and 2.11 of this Supplement and Section 7.1 of the Series 2007-B2 Note Purchase 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.
“Interest Amount” means, for any Payment Date for the Series 2007-B2 Notes, an amount equal to the sum of the Base Interest Amount, Conversion Step-Up Interest Amount and the Additional Interest Amount for the Series 2007-B2 Notes on such Payment Date.
“Issuance Expenses” means (a) the structuring and underwriting fees payable to the Calyon in respect to the issuance of the Series 2007-B2 Notes, and (b) the portion of the expenses of Calyon that are allocable to the Series 2007-B2 Notes, as agreed by WEST and such parties.
“Majority of Holders” means, with respect to the Series 2007-B2 Notes as of any date of determination, Series 2007-B2 Holders that, individually or in the aggregate, own Series 2007-B2 Notes representing more than fifty percent (50%) of the Maximum Commitment or, if a Conversion Event shall have occurred, the then aggregate Outstanding Principal Balance of the Series 2007-B2 Notes.
“Maximum Commitment” shall mean (a), for all Series 2007-B2 Holders, $25,000,000 in the aggregate and (b), for each Series 2007-B2 Holder, the amount set forth opposite the name of such Series 2007-B2 Holder in Schedule 2 attached hereto.
“Maximum Principal Balance” shall mean, with respect to any Warehouse Note, the maximum amount that WEST may borrow from the holder of such Warehouse Note, which shall be equal to the Maximum Commitment of such holder.
“Holder Indemnified Amounts” s hall mean, for the Series 2007-B2 Holders, (i) all Increased Costs of the Series 2007-B2 Holders and (ii) all indemnification payments owing by WEST to the Series 2007-B2 Holders pursuant to Section 7.01 of the Series 2007-B2 Note Purchase Agreement.
4
“One-Month LIBOR” means, for any Interest Accrual Period, LIBOR, as defined in the Indenture, for the Specified Period as of the Reference Date for such Interest Accrual Period.
“Optional Redemption” means a voluntary prepayment by WEST of all, or a portion of the Outstanding Principal Balance of the Series 2007-B2 Notes in accordance with the terms of this Supplement and the Indenture.
“Optional Redemption Date” shall have the meaning set forth in Section 2.05(c) hereof.
“ Prime Rate ” means the rate announced by Calyon from time to time as its “prime rate” or “base rate” in the United States, such rate to change as and when such designated rate changes.
“Rating Agencies” means, for the Series 2007-B2 Notes, Fitch and Moody’s.
“Redemption Price” shall mean the Outstanding Principal Balance of the Series 2007-B2 Notes in an Optional Redemption in whole, and the portion of the Outstanding Principal Balance being redeemed, in an Optional Redemption in part, in each case, without premium.
“Scheduled Targeted Principal Balance” means, for the Series 2007-B2 Notes for each Payment Date after a Conversion Event, the amount set forth for such Payment Date in the schedule of Scheduled Targeted Principal Balances delivered pursuant to Section 2.05(b)(i) hereof, as adjusted from time to time pursuant to Section 2.05(e) hereof.
“Section 2.10(a) Amount” shall have the meaning set forth in Section 2.10(a) hereof.
“Series 2007-A2 Holders” means, on the Effective Date, each of the Persons named therein as the initial Series 2007-A2 Holders in the Series 2007-A2 Note Purchase Agreement and, at any time of determination thereafter, any Person in whose name a Series 2007-A2 Note is registered in the Register.
“Series 2007-A2 Note Purchase Agreement” means the Series 2007-A2 Note Purchase and Loan Agreement, dated as of December 13, 2007, among WEST, Willis and the Persons named therein as the initial Series 2007-A2 Holders, together with any other Persons that become Series 2007-A2 Holders, as the same may be amended, modified or supplemented from time to time in accordance with its terms.
“Series 2007-A2 Notes ” means the notes issued pursuant to the Series 2007-A2 Note Purchase Agreement and the Series 2007-A2 Supplement.
“Series 2007-A2 Supplement” means the Series 2007-A2 Supplement to the Indenture, dated as of December 13, 2007, between WEST and the Indenture Trustee, as amended, modified or supplemented from time to time in accordance with its terms.
“Series 2007-B2 Note Purchase Agreement” means the Series 2007-B2 Note Purchase Agreement, dated as of the date of issuance of the Series 2007-B2 Notes (as defined therein), among WEST, Willis and the Persons named therein as the initial Series 2007-B2 Holders,
5
together with any other Persons that become Series 2007-B2 Holders, as the same may be amended, modified or supplemented from time to time in accordance with its terms.
“Series 2007-B2 Supplement” means the Series 2007-B2 Supplement to the Indenture, dated as of the date of Series 2007-B2 Note Purchase Agreement, between WEST and the Indenture Trustee, as amended, modified or supplemented from time to time in accordance with its terms.
“Series 2007-B2 144A Book Entry Note” means a Series 2007-B2 Note represented by a single permanent global note in fully registered form, without coupons, the form of which shall be substantially in the form attached as Exhibit A hereto, with the legends required by Section 2.02 of the Indenture for a 144A Book-Entry Note (as defined in the Indenture) inscribed thereon.
“ Series 2007-B2 Base Interest Rate ” means, for each Series 2007-B2 Loan and each Interest Accrual Period, an interest rate per annum equal to the sum of (i) the Adjusted Eurodollar Rate applicable to such Series 2007-B2 Loan for such Interest Accrual Period and (ii) two and three-quarters percent (2.75%) per annum; provided , however , that, for purposes of clause (i) above, the Base Rate will be used in lieu of the Adjusted Eurodollar Rate for an unpaid Series 2007-B2 Loan if (a) on or before the first day of such Interest Accrual Period an affected Series 2007-B2 Holder shall have notified WEST that a Eurodollar Disruption Event is then continuing, (b) such Interest Accrual Period is for a period of less than one month or if an Event of Default under the Indenture is then continuing on the first day of such Interest Accrual Period, or (c) the then unpaid principal balance of such Series 2007-B2 Loan on the first day of such Interest Accrual Period is less than Five Million Dollars ($5,000,000).
“Series 2007-B2 Commitment Fee Rate” has the meaning given to such term in the Series 2007-B2 Note Purchase Agreement.
“Series 2007-B2 Conversion Step-Up Interest Rate” means one percent (1.00%) per annum.
“Series 2007-B2 Definitive Notes” means Series 2007-B2 Notes in the form attached as Exhibit A hereto, with the applicable legend for Definitive Notes required by Section 2.02 of the Indenture inscribed on the face thereof.
“Series 2007-B2 Expected Final Payment Date” means the fifteenth anniversary of the first Payment Date after a Conversion Event.
“Series 2007-B2 Final Maturity Date” means December 15, 2032.
“Series 2007-B2 Loan” means, individually or in the aggregate, a loan to WEST by the Holder or Holders of the Series 2007-B2 Notes pursuant to this Supplement and the Series 2007-B2 Note Purchase Agreement.
“Series 2007-B2 Holder” means, at any time of determination for the Series 2007-B2 Notes thereafter, any Person in whose name a Series 2007-B2 Note is registered in the Register.
6
“Series 2007-B2 Note Purchase Agreement” means the Series 2007-B2 Note Purchase and Loan Agreement, dated as of December 13, 2007, among WEST, Willis, and the Persons named therein as the initial Series 2007-B2 Holders, together with any other Persons that become Series 2007-B2 Holders.
“Series 2007-B2 Notes” means the Series of Notes designated as the “Willis Engine Securitization Trust Series 2007-B2 Floating Rate Secured Notes” to be issued on the Effective Date and having the terms and conditions specified in this Supplement, substantially in the form of Exhibit A hereto, and including any and all replacements, extensions, substitutions or renewals of such Notes.
“Series 2007-B2 Series Account” means the Series Account of that name established in accordance with Section 3.01 hereof and Sections 3.01 and 3.09 of the Indenture.
“Series 2007-B2 Transaction Documents” means any and all of this Supplement, the Series 2007-B2 Notes and the Series 2007-B2 Note Purchase Agreement, as any of the foregoing may from time to time be amended, modified, supplemented or renewed.
“Series Issuance Date” means, for the Series 2007-B2 Notes, December 13, 2007.
“Specified Period” means, for the Series 2007-B2 Notes, one month.
“Supplemental Principal Payment Amount” means, for the Series 2007-B2 Notes on any Payment Date, the amount of a Series B Supplemental Principal Payment Amount allocated and paid to the holders of the Series 2007-B2 Notes on such Payment Date in accordance with the provisions of Sections 3.14 and 3.15(b) of the Indenture and Sections 2.05(a) and 3.02 hereof.
“Taxes” shall have the meaning set forth in Section 2.10(a).
“Tax Benefit” shall have the meaning set forth in Section 2.10(a).
“ Warehouse Loans ” means any Series 2007-B2 Loans to be used to fund the Purchase Prices of Additional Engines or Discretionary Engine Modifications.
(b) The conventions of construction and usage set forth in Section 1.02 of the Indenture are hereby incorporated by reference in this Supplement.
ARTICLE II
CREATION OF THE SERIES 2007-B2 NOTES
Section 2.01 Designation . (a) There is hereby created a Series of Series A Warehouse Notes to be issued pursuant to the Indenture and this Supplement and to be known as the “Willis Engine Securitization Trust Series 2007-B2 Floating Rate Secured Notes”, referred to herein as the “Series 2007-B2 Notes”. The Series 2007-B2 Notes will be issued with aggregate Maximum Principal Balances in the amount of $25,000,000 and will not have priority over any other Series of Series A Notes except to the extent set forth in the Supplement for such other Series and Section 3.15 of the Indenture. The Series Issuance Date of the Series 2007-B2 Notes is
7
December 13 . 2007. The Series 2007-B2 Notes are classified as “Warehouse Notes”, “Series A Warehouse Notes”, “Series A Notes” and “Floating Rate Notes”, as each such term is used in the Indenture. The Series 2007-B2 Notes will be rated on the Effective Date by each of Moody’s and Fitch.
(b) The first Payment Date with respect to the Series 2007-B2 Notes shall be on December 15, 2007.
(c) Payments of principal on the Series 2007-B2 Notes shall be made from funds on deposit in the Series 2007-B2 Series Account or otherwise at the times and in the amounts set forth in Article III of the Indenture and Sections 2.04, 2.05, 2.06 and 3.02 of this Supplement. The Scheduled Principal Payment Amounts for the Series 2007-B2 Notes shall be calculated on the date on which a Conversion Event occurs in accordance with the terms of the Indenture and Section 2.05 of this Supplement.
(d) 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 2.02 Authentication and Delivery . (a) On the Series Issuance Date, WEST shall sign, and shall direct the Indenture Trustee in writing pursuant to Section 2.01(c) of the Indenture to duly authenticate, and the Indenture Trustee, upon receiving such direction, (i) shall authenticate, subject to compliance with the conditions precedent set forth in Section 4.01 hereof, the Series 2007-B2 Notes in accordance with such written directions, and (ii) subject to compliance with the conditions precedent set forth in Section 4.01 hereof, shall deliver such Series 2007-B2 Notes to the Series 2007-B2 Holders, in accordance with such written directions.
(b) The Series 2007-B2 Notes are not being registered with the SEC and may not be sold, transferred or otherwise disposed of except to Institutional Accredited Investors and QIB’s that deliver an Investment Letter to the Indenture Trustee in compliance with the provisions of the Indenture and that, prior to the occurrence of a Conversion Event, are Eligible Transferees and execute and deliver an Assignment and Assumption with respect to the Series 2007-B2 Note Purchase Agreement.
(c) The Series 2007-B2 Notes shall be represented by one or more Series 2007-B2 Definitive Notes issued to the Series 2007-B2 Holders until the occurrence of a Conversion Event. After the occurrence of a Conversion Event, a Series 2007-B2 Holder that is a QIB and that holds all of the Series 2007-B2 Notes or all of the Series 2007-B2 Holders acting jointly may exchange its or their Series 2007-B2 Definitive Notes for an interest or interests in a Series 2007-B2 144A Book Entry Note in accordance with the requirements of the Indenture. WEST shall pay all costs of the Series 2007-B2 Holders incurred in connection with such exchange and registration.
(d) The Series 2007-B2 Notes shall be executed by manual or facsimile signature on behalf of WEST by any officer of the Owner Trustee and shall be substantially in the form of Exhibit A hereto, as applicable, with the appropriate legend required by Section 2.02 of the Indenture inscribed on the face thereof.
8
(e) The Series 2007-B2 Notes shall be issued in minimum denominations of $100,000 and in integral multiples of $1,000 in excess thereof.
Section 2.03 Series 2007-B2 Loans . (a) WEST shall have the right, pursuant to this Supplement and the Series 2007-B2 Note Purchase Agreement, to borrow Series 2007-B2 Loans from the Series 2007-B2 Holders up to the Maximum Commitment of the Series 2007-B2 Holders, and each Series 2007-B2 Holder has severally agreed, pursuant to the Series 2007-B2 Note Purchase Agreement, to make Series 2007-B2 Loans, in each case in proportion to, and up to the amount of, its Maximum Commitment, on any Funding Date after the Effective Date and prior to the date on which a Conversion Event occurs, subject to the satisfaction of all applicable conditions precedent set forth in Article IV hereof and in Article III of the Series 2007-B2 Note Purchase Agreement. Each such Series 2007-B2 Loan shall increase the Outstanding Principal Balance of the Series 2007-B2 Note held by such Series 2007-B2 Holder, and each payment of principal to a Series 2007-B2 Holder in respect of its Series 2007-B2 Note shall reduce the Outstanding Principal Balance of such Series 2007-B2 Note. The Indenture Trustee shall maintain a record of all Series 2007-B2 Loans and repayments made on the Series 2007-B2 Notes and absent manifest error such records shall be conclusive.
(b) Each Funding Request for Series 2007-B2 Loans after the Effective Date shall constitute a reaffirmation by WEST that (1) no Event of Default, Servicer Termination Event or Early Amortization Event has occurred and is continuing, or would result from the making of such Series 2007-B2 Loan, as of the date of the Funding Request, and (2) the representations and warranties of WEST contained in the Series 2007-B2 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 Funding 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.
(c) WEST shall designate the application of the proceeds of the Series 2007-B2 Loans made on each Funding Date as either or both of the following: (i) a Warehouse Loan to be deposited in the Engine Acquisition Account as provided in Section 3.18 of the Indenture and used to acquire Additional Engines or to fund Discretionary Engine Modifications (including Qualified Engine Modifications), in each case whether or not such acquisition or funding is in connection with a Replacement Exchange, or (ii) a Collections Loan, to be deposited in the Collections Account as provided in Section 3.18 of the Indenture and used to increase the Available Collections Amount on any Payment Date, provided that the application of any Series 2007-B2 Loan as a Collections Loan shall be subject to the Available Collections Amount on such Payment Date being in an amount, calculated without the proceeds of such Collections Loan, sufficient to fund the payment in full of accrued Base Interest on all Series B Notes on such Payment Date and all amounts ranking senior thereto as provided in Section 3.14 of the Indenture.
(d) WEST may, on any Payment Date upon at least five (5) Business Days’ notice to the Series 2007-B2 Holders, with a copy to the Indenture Trustee, terminate in whole or reduce in part the aggregate Maximum Commitments of the Series 2007-B2 Holders and the Maximum Principal Balances of the Series 2007-B2 Notes in an aggregate amount not to exceed the excess of such Maximum Principal Balances over the then aggregate Outstanding Principal
9
Balance of the Series 2007-B2 Notes; provided that any partial reduction (based on the ratio of the then Maximum Commitments of such Series prior to such reduction) of the aggregate Maximum Commitments of the Series 2007-B2 Holders and the Maximum Principal Balances of the Series 2007-B2 Notes (i) shall be applied pro rata to the individual Maximum Commitments of the Series 2007-B2 Holders and the Maximum Principal Balances of the Series 2007-B2 Notes, respectively, and (ii) shall be accompanied by a proportionate partial reduction (based on the ratio of the Maximum Commitments of such Series prior to such reduction) of the aggregate Maximum Commitments of the Series 2007-A2 Holders. Each notice of reduction or termination pursuant to this Section 2.03(d) shall be irrevocable, and such reduction shall be deemed to occur without any Series 2007-B2 Holder having to surrender its Series 2007-B2 Notes in exchange for a new Series 2007-B2 Note reflecting the reduced Maximum Principal Balance.
(e) WEST, on any Payment Date prior to the occurrence of a Conversion Event, may terminate the agreements of the Series 2007-B2 Holders to make Series 2007-B2 Loans and repay the Outstanding Principal Balance of the Series 2007-B2 Notes for the Redemption Price, upon (A) at least five (5) Business Days’ prior written notice to each Series 2007-B2 Holder, with a copy to the Indenture Trustee, specifying the proposed Payment Date of such termination, and (B) payment in full of (i) the principal of, and interest on, the Series 2007-B2 Notes, (ii) Increased Costs, if any, and (iii) all other amounts then due and payable (or that become due and payable as a result of such reduction) to a Series 2007-B2 Holder under the Series 2007-B2 Note Purchase Agreement, this Supplement and the Indenture and (c) the simultaneous termination of the commitments of the Series 2007-A2 Holders and the payment in full of all amounts owing with respect to the Series 2007-A2 Notes.
(f) If any Series 2007-B2 Holder shall default on its obligation to make a Series 2007-B2 Loan on any Funding Date, one or more of the other Series 2007-B2 Holders may elect (but shall not be obligated) to make the Series 2007-B2 Loan of the defaulting Series 2007-B2 Holder. In such event, the Maximum Principal Balance of the Series 2007-B2 Note held by the defaulting Series 2007-B2 Holder and the Maximum Commitment of the Series 2007-B2 Holder shall be reduced by the amount of the Series 2007-B2 Loan so made, and the Maximum Principal Balance of the Series 2007-B2 Note held by the Series 2007-B2 Holder making such Series 2007-B2 Loan and the Maximum Commitment of such Series 2007-B2 Holder shall be increased by the amount of such Series 2007-B2 Loan.
(g) Upon the occurrence of a Conversion Event, (i) the right of WEST to borrow under the Series 2007-B2 Notes shall terminate, (ii) Conversion Step-Up Interest shall begin to accrue on the Outstanding Principal Balance of the Series 2007-B2 Notes as provided in Section 2.04(a), and (iii) the Outstanding Principal Balance of the Series 2007-B2 Notes shall become payable as provided in Section 2.05(a) and (b), provided, however, that, if all of the Series 2007-B2 Holders and Series 2007-A2 Holders as of the date of the occurrence of any Conversion Event elect to waive the occurrence of such Conversion Event within ninety (90) days of such occurrence, such Conversion Event shall be disregarded as long as such waiver is in effect, except that any such waiver in respect of a Conversion Event based on the occurrence of the Conversion Date shall not be for a period extending beyond the first anniversary of such Conversion Date, unless a Rating Agency Confirmation is obtained with respect to any waiver extending beyond such first anniversary; and provided, further , that, if WEST subsequently cures an Early Amortization Event, Event of Default or Servicer Termination Event that resulted in a
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Conversion Event that was not so waived, WEST may request the Series 2007-B2 Holders and Series 2007-A2 Holders to waive the original occurrence of such Conversion Event, Early Amortization Event, Event of Default or Servicer Termination Event and rescind and revoke the consequences described in clause (i), (ii) and (iii) of this Section 2.03(g) occurring as a result of such Conversion Event, which waiver, rescission and revocation shall be effective only if Series 2007-B2 Holders and Series 2007-A2 Holders representing 100% of the Outstanding Principal Balance of the Series 2007-B2 Notes and Series 2007-A2 Notes consent thereto. The termination of any waiver pursuant to the provisos in the preceding sentence shall be treated as the occurrence on the date of such termination of the Conversion Event that was the subject of the waiver.
Section 2.04 Interest Payments; Commitment Fee .
(a) Interest on Series 2007-B2 Notes . Interest shall accrue (i) at the Series 2007-B2 Base Interest Rate on the Outstanding Principal Balance of each Series 2007-B2 Note during all or each portion of each Interest Accrual Period from the Effective Date to (but excluding) the date on which a Conversion Event occurs, and (ii) at a combined rate equal to the sum of the Series 2007-B2 Base Interest Rate and the Series 2007-B2 Conversion Step-Up Rate on the Outstanding Principal Balance of each Series 2007-B2 Note during all or the portion of each Interest Accrual Period from and after the date on which a Conversion Event occurs, in each case on the basis of actual days elapsed over a year of 360 days and shall be due and payable in arrears on each Payment Date for the Interest Accrual Period ending on such Payment Date. The Base Interest Amount and the Conversion Step-Up Interest Amount for each Interest Accrual Period shall be calculated separately and paid separately as provided in Section 3.14 of the Indenture and Section 3.02 hereof. All amounts of the Base Interest Amount and the Conversion Step-Up Interest Amount shall be due and payable on the earlier to occur of (i) the date on which the Series 2007-B2 Notes have been accelerated in accordance with the provisions of Section 4.02 of the Indenture and (ii) the Series 2007-B2 Final Maturity Date. On each Reference Date, the Indenture Trustee shall promptly deliver a written notice to the Series 2007-B2 Holders specifying the Series 2007-B2 Base Interest Rate for the related Interest Accrual Period.
(b) Commitment Fee on Series 2007-B2 Notes . A fee (the “ Commitment Fee ”) shall accrue at the Series 2007-B2 Commitment Fee Rate on the Unused Commitment of the Series 2007-B2 Holders during all or the portion of each Interest Accrual Period from the Effective Date to (but excluding) the date on which a Conversion Event occurs and shall be due and payable in arrears on each Payment Date for the Interest Accrual Period ending on such Payment Date. The Commitment Fee shall be calculated on the basis of actual days elapsed over a year of 360 days and shall be due and payable in arrears on each Payment Date for the Interest Accrual Period ending on (but excluding) such Payment Date.
(c) Additional Interest . If WEST shall fail to pay in full (i) any Base Interest Amount, Conversion Step-Up Interest Amount or Commitment Fee on any Series 2007-B2 Note when due, (ii) any Increased Costs or (iii) any other amount becoming due under this Supplement (other than payments of principal on the Series 2007-B2 Notes), WEST shall, from time to time, pay Additional Interest on such unpaid amounts, to the extent permitted by Applicable Law, to, but not including, the date of actual payment (after as well as before judgment), for the period during which such interest or other amount shall be unpaid from the
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due date of such payment to the date of actual payment thereof. Any such Additional Interest shall be payable at the times and subject to the priorities set forth in Section 3.02 of this Supplement and Section 3.14 of the Indenture. All amounts of the Additional Interest shall be due and payable on the earlier to occur of (i) the date on the Series 2007-B2 Notes have been accelerated in accordance with the provisions of Section 4.02 of the Indenture and (ii) the Series 2007-B2 Final Maturity Date.
(d) Maximum Interest Rate . In no event shall the interest charged with respect to a Series 2007-B2 Note exceed the maximum amount permitted by Applicable Law. If at any time the Interest Amount charged with respect to the Series 2007-B2 Notes exceeds the maximum rate permitted by Applicable Law, the rate of interest to accrue pursuant to this Supplement and such Series 2007-B2 Note shall be limited to the maximum rate permitted by Applicable Law, but any subsequent reductions in One-Month LIBOR shall not reduce the interest to accrue on such Series 2007-B2 Note below the maximum amount permitted by Applicable Law until the total amount of interest accrued on such Series 2007-B2 Note equals the amount of interest that would have accrued if a varying rate per annum equal to the interest rate had at all times been in effect. If the total amount of interest paid or accrued on the Series 2007-B2 Note under the foregoing provisions is less than the total amount of interest that would have accrued if the interest rate had at all times been in effect, WEST agrees to pay to the Series 2007-B2 Holders an amount equal to the difference between (a) the lesser of (i) the amount of interest that would have accrued if the maximum rate permitted by Applicable Law had at all times been in effect, or (ii) the amount of interest that would have accrued if the interest rate had at all times been equal to the Interest Amount, and (b) the amount of interest accrued in accordance with the other provisions of this Supplement.
Section 2.05 Payments of Principal . (a) On each Payment Date prior to the date on which a Conversion Event occurs on which there is a Junior Borrowing Base Deficiency, principal shall be payable on the Series 2007-B2 Notes out of the Series B Supplemental Principal Payment Amount, to the extent and as provided in Sections 3.14 and 3.15(b) of the Indenture and in Section 3.02 hereof, provided that, on any Payment Date prior to the date on which a Conversion Event occurs, the Series 2007-B2 Notes shall be treated as Warehouse Notes for purposes of Section 3.15(b) of the Indenture and, on any Payment Date on or after a Conversion Event, the Series 2007-B2 Notes shall be treated as Term Notes for such purposes.
(b) (i) Within ten (10) Business Days after the occurrence of a Conversion Event (or, if earlier, by the first Payment Date following the occurrence of a Conversion Event), WEST shall cause the Administrative Agent to prepare and deliver to the Indenture Trustee and the Series 2007-B2 Holders a schedule of Scheduled Targeted Principal Balances for the Series 2007-B2 Notes substantially in the form of Schedule 1 attached hereto. Payment Date Number 1 in Schedule 1 shall be on the first Payment Date after the date on which a Conversion Event occurs, and each succeeding numbered Payment Date in such Schedule 1 shall occur on each succeeding Payment Date, and the amount due on each such Payment Date shall be the product of (x) the Outstanding Principal Balance of the Series 2007-B2 Notes as of the close of business on the date on which the Conversion Event occurs and (y) the percentage specified for such Payment Date specified in Schedule 1 . If the Series 2007-B2 Holders and Series 2007-A2 Holders waive the occurrence of a Conversion Event as provided in Section 2.03(g), the schedules delivered pursuant to this Section 2.05(b)(i) in respect of such Conversion Event shall
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be of no further force and effect and, upon the termination of such waiver or the subsequent occurrence of a Conversion Event that is not waived by the Series 2007-B2 Holders and Series 2007-A2 Holders as provided by Section 2.03(g) hereof, the Administrative Agent shall deliver a new schedule in accordance with this Section 2.01(b)(i), calculated as of the date of such termination or the date of such Conversion Event, as applicable.
(ii) On each Payment Date after a Conversion Event, unless and until the Series 2007-B2 Holders and Series 2007-A2 Holders waive such Conversion Event as provided in Section 2.03(g), the Scheduled Principal Payment Amount calculated for the Series 2007-B2 Notes for each such Payment Date shall be payable to the Holders of the Series 2007-B2 Notes on each such Payment Date from amounts deposited in the Series 2007-B2 Series Account on such Payment Date as provided in Section 3.14 of the Indenture and Section 3.02 of this Supplement. So long as an Early Amortization Event or an Event of Default is then continuing, the Outstanding Principal Balance of the Series 2007-B2 Notes shall be payable on each such Payment Date to the extent that amounts are available for such purpose in accordance with the provisions of Section 3.14 of the Indenture and Section 3.02 of this Supplement. The then Outstanding Principal Balance of all Series 2007-B2 Notes shall be due and payable on the earlier to occur of (i) the date on which the Series 2007-B2 Notes have been accelerated in accordance with the provisions of Section 4.02 of the Indenture and (ii) the Series 2007-B2 Final Maturity Date.
(c) WEST will have the option to prepay, on any Payment Date after a Conversion Event (each such Payment Date, an “Optional Redemption Date” ), all or any portion of the Outstanding Principal Balance of the Series 2007-B2 Notes on such Payment Date, in a minimum amount of Two Hundred Fifty Thousand Dollars ($250,000) in the case of any prepayment in part, for the Redemption Price together with accrued interest thereon to the date of such prepayment; provided that , (i) as a condition to any such prepayment, the Outstanding Principal Balance of the Series 2007-B2 Notes shall be prepaid by a proportionate amount, such prepayment to be made as provided in the Series 2007-B2 Supplement, and (ii) as a condition to any such prepayment in part on a date on which an Early Amortization Event is continuing, the Outstanding Principal Balance of each other Series of Notes shall be prepaid in a proportionate amount, such prepayments to be made as provided in the relevant Supplements. WEST may not make such prepayment from funds in the Collections Account, except to the extent that funds in the Collections Account would otherwise be payable to WEST in accordance with the terms of this Supplement and the Indenture, and may make any such prepayment in part from funds in the Series 2007-B2 Series Account, provided that funds in such Account may be used to fund a prepayment in whole but not in part. Any Optional Redemption in connection with a Refinancing funded with the proceeds of Additional Notes must be in whole, and any other Optional Redemption financed with funds other than funds in the Collections Account or the proceeds of Additional Notes may be in whole or in part.
(d) If there is any Balance in the Engine Acquisition Account at the end of any Delivery Period beginning on a Funding Date on which Series 2007-B2 Loans were made by the Series 2007-B2 Holders, the portion thereof allocated to the Series 2007-B2 Notes in accordance with Section 3.03 (b) of the Indenture shall be applied to the prepayment of the
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Series 2007-B2 Notes as provided in Section 3.16(b) of the Indenture on the next succeeding Payment Date (the “Acquisition Redemption Date” ) after the end of such Delivery Period.
(e) The Scheduled Targeted Principal Balances for the Series 2007-B2 Notes, as determined pursuant to Section 2.05(b)(i) hereof, shall be adjusted at the times and in the manner indicated in Section 3.19 of the Indenture.
Section 2.06 Series 2007-B2 Final Maturity Date . The unpaid principal amount of the Series 2007-B2 Notes together with all unpaid interest (including all Additional Interest and Conversion Step-Up Interest), fees, expenses, costs and other amounts payable by WEST pursuant to the terms of the Indenture, this Supplement and the other Series 2007-B2 Transaction Documents shall be due and payable in full on the earlier to occur of (i) the date on which the Series 2007-B2 Notes have been accelerated in accordance with the provisions of Section 4.02 of the Indenture and (ii) the Series 2007-B2 Final Maturity Date.
Section 2.07 Manner of Payments . All payments of principal and interest on the Series 2007-B2 Notes payable on each Payment Date shall be paid to the Series 2007-B2 Holders reflected in the Register as of the related Record Date by wire transfer of immediately available funds for receipt prior to 1:00 p.m. (New York City time) on such Payment Date. Any payments received by the Series 2007-B2 Holders after 1:00 p.m. (New York City time) on any day shall be considered to have been received on the next succeeding Business Day.
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 Series Issuance Date of the Series 2007-B2 Notes reflecting such change, there shall be an increase in the cost to a Series 2007-B2 Holder of making or maintaining any investment in the Series 2007-B2 Note or any interest therein or of agreeing to purchase or invest in the Series 2007-B2 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 Series 2007-B2 Holder shall promptly submit to WEST, the Administrative Agent and the Indenture Trustee, a certificate setting forth in reasonable detail, the calculation of such increased costs incurred by such Series 2007-B2 Holder. In determining such amount, such Series 2007-B2 Holder may use any reasonable averaging and attribution methods, consistent with the averaging and attribution methods generally used by such Series 2007-B2 Holder 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 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 Indenture Trustee shall pay such Increased Costs to such Series 2007-B2 Holders as part of the Increased Costs out of the Available Collections Amount on each Payment Date as provided in Section 3.14 of the Indenture and Section 3.02 hereof.
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
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central bank or other Governmental Authority reflecting such change after the Series Issuance Date of the Series 2007-B2 Notes affects or would affect the amount of capital required or expected to be maintained by any Series 2007-B2 Holder, and such Series 2007-B2 Holder determines that the amount of such capital is increased as a result of (i) the existence of the Series 2007-B2 Holder’s agreement to make or maintain an investment in the Series 2007-B2 Notes or any interest therein and other similar agreements or facilities, or (ii) the existence of any agreement by Series 2007-B2 Holders to make or maintain an investment in the Series 2007-B2 Notes or any interest therein or to fund any such investment and any other commitments of the same type, such Series 2007-B2 Holder shall promptly submit to WEST, the Administrative Agent and the Indenture Trustee a certificate setting forth, in reasonable detail, the calculation of the additional amounts required to compensate such Series 2007-B2 Holder in light of such circumstances. In determining such amount, such Series 2007-B2 Holder may use any reasonable averaging and attribution methods, consistent with the averaging and attribution methods generally used by such Series 2007-B2 Holder 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 Increased Costs for the Interest Accrual Period immediately succeeding the date on which such certificate was delivered, and to the extent remaining outstanding, each Interest Accrual Period thereafter until paid in full. The Indenture Trustee shall pay such Increased Costs to such Series 2007-B2 Holders as part of the Increased Costs out of the Available Collections Amount on each Payment Date as provided in Section 3.14 of the Indenture and Section 3.02 hereof.
Section 2.10 Payments of Principal and Interest . (a) Any and all payments and deposits required to be made under this Supplement, the Series 2007-B2 Notes or the Indenture by WEST or the Indenture Trustee to or for the benefit of a Series 2007-B2 Holder 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 (all of the foregoing collectively, “ Taxes ”) are required to be withheld from any amount payable to any Series 2007-B2 Holder hereunder, the amount so payable to such Series 2007-B2 Holder shall be increased to the extent necessary to yield to such Series 2007-B2 Holder (after payment of all taxes, levies, imposts, duties, charges or fees) the amount stated to be payable to such Series 2007-B2 Holder hereunder (such increase and any similar increase described in this Section 2.10(a), 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 Series 2007-B2 Holder, in each case, as a result of a present or former connection (other than any connection arising out of the transactions contemplated by this Supplement) between the jurisdiction of the government or taxing authority imposing such tax and such Series 2007-B2 Holder; (ii) any taxes, levies, imposts, duties, charges or fees that would not have been imposed but for the failure by such Series 2007-B2 Holder to provide and keep current any certification or other documentation permitted by Applicable Law to be delivered by such Series 2007-B2
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Holder 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 Series 2007-B2 Holder of the office through which the Series 2007-B2 Note or any interest hereunder is acquired, accounted for or booked as a result of the sale, transfer or assignment by any Series 2007-B2 Holder 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 Series 2007-B2 Note or interest therein is acquired, accounted for or booked; (iv) taxes measured by income, gross receipts, assets or capital of any Series 2007-B2 Holder by the taxing authority of the jurisdiction where such Series 2007-B2 Holder 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 such Series 2007-B2 Holder under this Supplement 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 Series 2007-B2 Holder as a result of payments not related to this Supplement; and (vi) any withholding tax with respect to any Series 2007-B2 Holder that has not provided the documentation referred to in Section 2.10(c) (all such exclusions being hereinafter called “Excluded Taxes” ). To the extent that any Series 2007-B2 Holder 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 WEST or the Indenture Trustee of any such Taxes on behalf of such Series 2007-B2 Holder, such Series 2007-B2 Holder shall reimburse WEST 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 Series 2007-B2 Holder; provided, however, that for purposes of reimbursing WEST, such Series 2007-B2 Holder shall calculate the amount of the Tax Benefit realized that is attributable to WEST’s or the Indenture Trustee’s payment of such Taxes on behalf of such Series 2007-B2 Holder as if such Series 2007-B2 Holder realized or received such Tax Benefit pro rata with all other Tax Benefits available to it for such year.
(b) Each of WEST and, to the extent not prohibited by Applicable Law (including the Code), each Series 2007-B2 Noteholder agrees that, with respect to all federal, state and local income taxes, it will treat the Series 2007-B2 Notes as indebtedness.
(c) Any Section 2.10(a) Amounts payable to a Series 2007-B2 Holder hereunder shall be included in the 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 Indenture Trustee shall pay such Section 2.10(a) Amounts to the Series 2007-B2 Holders as part of the Increased Costs out of the Available Collections Amount on each Payment Date as provided in Section 3.14 of the Indenture and Section 3.02 hereof.
(d) Each Series 2007-B2 Holder not organized under the laws of the United States or a State thereof shall, to the extent that it is entitled to receive payments under this Supplement without deduction or withholding of any United States federal income taxes (other than withholding Taxes), provide a W-8 ECI, W-8 BEN or any other information and documentation that may be necessary in order to obtain such exemption.
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Section 2.11 Breakage Costs . If (i) any payment of principal on any Series 2007-B2 Loan is made on a day other than a Payment Date, or (ii) any Series 2007-B2 Loan requested by WEST is not, for any reason whatsoever related to a default or nonperformance by WEST, made or effectuated, as the case may be, on the date specified therefor, WEST shall indemnify the Series 2007-B2 Holders against any reasonable loss, cost or expense incurred by the Series 2007-B2 Holders, 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 Series 2007-B2 Holders to fund or maintain such Series 2007-B2 Loan during such Interest Accrual Period. The Indenture Trustee shall pay any amounts due under this Section 2.11 to the Series A Holders as part of the Increased Costs out of the Available Collections Amount on each Payment Date as provided in Section 3.14 of the Indenture and Section 3.02 hereof.
Section 2.12 Restrictions on Transfer . On the Effective Date, WEST shall sell the Series 2007-B2 Notes to the Persons named as the initial Series 2007-B2 Holders in and pursuant to the Series 2007-B2 Note Purchase Agreement and deliver such Series 2007-B2 Notes in accordance herewith and therewith. Thereafter, no Series 2007-B2 Note may be sold, transferred or otherwise disposed of except in compliance with the provisions of the Indenture, this Supplement and the Series 2007-B2 Note Purchase Agreement. Except as provided herein and in the Indenture, the Indenture Trustee shall have no obligations or duties with respect to determining whether any transfers of the Series 2007-B2 Notes are made in accordance with the Securities Act or any other law; provided that with respect to the Series 2007-B2 Definitive Notes, the Indenture Trustee shall enforce such transfer restrictions in accordance with the terms set forth in this Supplement. Prior to the occurrence of a Conversion Event that is not waived by the Series 2007-B2 Holders and Series 2007-A2 Holders as provided by Section 2.03(g) hereof, the Indenture Trustee shall not register any transfer of a Series 2007-B2 Note, in whole or in part, unless the transferee of such Series 2007-B2 Note is an Eligible Transferee and executes and delivers to the Indenture Trustee an Assignment and Assumption of the transferor’s obligations under the Series 2007-B2 Note Purchase Agreement to make the Series 2007-B2 Loans in an amount equal to the excess of the Maximum Principal Balance of the Series 2007-B2 Note being transferred at the time of transfer over the Outstanding Principal Balance of such Series 2007-B2 Note at such time. After the occurrence of a Conversion Event that is not waived by the Series 2007-B2 Holders and Series 2007-A2 Holders as provided by Section 2.03(g) hereof, the Series 2007-B2 Notes shall be transferred in accordance with the terms of the Indenture without regard to whether any transferee of a Series 2007-B2 Note is an Eligible Transferee.
Section 2.13 Payment Date Schedule . WEST shall cause the Administrative Agent to distribute a copy of each Payment Date Schedule delivered pursuant to Section 3.13(e) of the Indenture to the Series 2007-B2 Holders.
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Section 3.01 Series 2007-B2 Series Account . The Indenture Trustee shall establish on or prior to the Effective Date pursuant to Sections 3.01 and 3.09 of the Indenture and shall maintain, so long as any Series 2007-B2 Note is Outstanding, an Eligible Account which shall be designated as the “Series 2007-B2 Series Account”, which account shall be held in the name of the Indenture Trustee for the benefit of the Series 2007-B2 Holders. All deposits of funds by, or for the benefit of, the Series 2007-B2 Holders from the Collections Account and otherwise shall be accumulated in, and withdrawn from, the Series 2007-B2 Series Account in accordance with the provisions of the Indenture and this Supplement.
Section 3.02 Distributions from Series 2007-B2 Series Account . On each Payment Date, the Indenture Trustee shall distribute funds then on deposit in the Series 2007-B2 Series Account in accordance with the provisions of either subsection (a), (b) or (c) of this Section 3.02, in the following order of priority, in each case in accordance with the Payment Date Schedule and only to the extent that the Prior Ranking Amounts have been paid in full:
(a) If neither an Early Amortization Event nor an Event of Default shall have occurred and be continuing with respect to any Series of Notes:
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(b) If either an Early Amortization Event or an Event of Default (or combination of both) has occurred and is then continuing, so long as the Indenture Trustee shall not have received a Collateral Liquidation Notice:
(c) If an Event of Default has occurred and is continuing, and the Indenture Trustee has received a Collateral Liquidation Notice:
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Section 4.01 Conditions Precedent to Obligations of Series 2007-B2 Holders to Purchase Series 2007-B2 Notes . The Indenture Trustee shall not authenticate the Series 2007-B2 Notes unless (a) all conditions to the issuance of the Series 2007-B2 Notes set forth in Section 3.01 of the Series 2007-B2 Note Purchase Agreement shall have been satisfied, and (b) WEST shall have delivered a certificate to the Indenture Trustee to the effect that all conditions set forth in Section 3.01 of the Series 2007-B2 Note Purchase Agreement have been satisfied.
Section 4.02 Conditions Precedent to Obligations of Series 2007-B2 Holders to Make Series 2007-B2 Loans . The obligations of the Series 2007-B2 Holders to make the Series 2007-B2 Loans to WEST under this Supplement and the Series 2007-B2 Note Purchase Agreement on any Funding Date on and after the Effective Date are subject to the conditions precedent set forth in Section 3.02 of the Series 2007-B2 Note Purchase Agreement.
Section 4. 03 Deposit and Disbursement of Series 2007-B2 Loans . The Administrative Agent may direct the Indenture Trustee, in writing, to apply the proceeds of the Series 2007-B2 Loan made on any Funding Date that is a Payment Date as a Collections Loan and to retain such Collections Loan in the Collections Account for inclusion in the Available Collections Amount on such Payment Date. Except to the extent that any Series 2007-B2 Loans made on any Funding Date constitute Collections Loans in accordance with the preceding sentence, such Series 2007-B2 Loans shall constitute Warehouse Loans, and the Administrative Agent shall direct the Indenture Trustee, in writing, to deposit such Warehouse Loans in the Engine Acquisition Account in accordance with such written direction, to be disbursed in accordance with Section 3.03 of the Indenture, subject to satisfaction or waiver of the conditions precedent set forth in Sections 3.03 and 3.04 of the Series 2007-B2 Note Purchase Agreement.
Section 5.01 Indenture Representations and Warranties . To induce the Series 2007-B2 Holders to purchase the Series 2007-B2 Notes hereunder and to make the Series 2007-B2 Loans from time to time, WEST hereby makes to the Indenture Trustee for the benefit of the Series 2007-B2 Holders as of the Effective Date and as of each Funding Date all of the representations and warranties set forth in Section 5.01 of the Indenture.
Section 5.02 Additional Representations and Warranties . To induce the Series 2007-B2 Holders to purchase the Series 2007-B2 Notes hereunder and to make the Series 2007-B2 Loans from time to time, WEST hereby makes to the Indenture Trustee for the benefit of the Series
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2007-B2 Holders each of the following additional representations and warranties as of the Effective Date:
(a) Power and Authority . WEST has the power and is duly authorized to execute and deliver this Supplement and the other Series 2007-B2 Transaction Documents to which it is a party, WEST is and will continue to be duly authorized to borrow monies hereunder, and WEST is and will continue to be authorized to perform its obligations under this Supplement and under the other Series 2007-B2 Transaction Documents. The execution, delivery and performance by WEST of this Supplement and the other Series 2007-B2 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.
(b) No Conflict; No Default . The execution, delivery and performance of this Supplement and each of the Series 2007-B2 Transaction Documents and the execution, delivery and payment of the Series 2007-B2 Notes will not: (a) contravene any provision of WEST’s declaration of trust and the Trust Agreement; (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 to which WEST is a party or by which WEST, or its property and assets may be bound or affected.
(c) Validity and Binding Effect . This Supplement is, and each Series 2007-B2 Transaction Document to which WEST is a party, when duly executed and delivered, will be, legal, valid and binding obligations of WEST, enforceable against WEST 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 5.03 Covenants . To induce the Series 2007-B2 Holders to purchase the Series 2007-B2 Notes hereunder and to make Series 2007-B2 Loans from time to time, WEST hereby covenants with the Indenture Trustee for the benefit of the Series 2007-B2 Holders as follows:
(a) Issuance of Series of Additional Notes . In addition to the condition precedent set forth in Section 2.10 of the Indenture, it shall be an additional condition precedent to the issuance of each Series of Additional Notes issued by WEST while the Series 2007-B2 Notes are outstanding, that: (1) the principal balance of such Series of Additional Notes (A) shall be amortized on a level basis over a period of not less than fifteen (15) years for Scheduled Principal Payment Amounts on any Series B Notes, or (B) if not amortized on a level basis (x) have a weighted average life that is not less than the remaining weighted average life of any Series of Notes then outstanding and (y) provide for Scheduled Principal Payment Amounts during the period of such remaining weighted average life that are not more than the Scheduled Principal Payment Amounts that would be payable under the level amortization described in clause (A), provided that such requirements shall not apply to any Series of Additional Notes that is a Series of Warehouse Notes until a Conversion Event occurs with respect to such Warehouse Notes; and (2) all Scheduled Principal Payment Amounts owing on or prior to the Series
21
Issuance Date on the Series 2007-B2 Notes shall have been paid in full as of the issuance date of such Series of Additional Notes.
Section 6.01 Ratification 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 6.02 Counterparts . 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 6.03 Governing Law; Jurisdiction . THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAWS BUT OTHERWISE WITHOUT REFERENCE TO ITS CONFLICTS OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. Each of the parties hereto agrees that the United States federal and New York State courts located in The City of New York shall have jurisdiction to hear and determine any suit, action or proceeding, and to settle any disputes, which may arise out of or in connection with this Supplement and, for such purposes, submits to the jurisdiction of such courts. Each of the parties hereto waives any objection which it might now or hereafter have to such courts being nominated as the forum or venue to hear and determine any suit, action or proceeding, and to settle any disputes, which may arise out of or in connection with this Supplement and agrees not to claim that any such court is not a convenient or appropriate forum. Each of the parties hereto consents to the granting of such legal or equitable relief as is deemed appropriate by such courts.
Section 6.04 Notices to Rating Agencies . Whenever any notice or other communication is required to be given to the Rating Agencies pursuant to the Indenture or this Supplement, such notice or communication shall be delivered as follows: (i) to Moody’s at Moody’s Investors Service, Inc., 99 Church Street, New York, New York 10004, Attention: Monitoring Group and (ii) if to Fitch at One State Street Plaza, New York, New York 10004, Attention: ABS Monitoring Group — Equipment Leases. Any rights to notices conveyed to a Rating Agency pursuant to the terms of this Supplement shall terminate immediately if such Rating Agency no longer has a rating outstanding with respect to the Series 2007-B2 Notes.
Section 6.05 Statutory References . References in this Supplement and any other Series 2007-B2 Transaction Document to any section of the Uniform Commercial Code or the UCC shall mean, on or after the effective date of adoption of any revision to the Uniform Commercial Code or the UCC in the applicable jurisdiction, such revised or successor section thereto.
Section 6.06 Amendments And Modifications . The terms of this Supplement may be waived, modified or amended only in a written instrument signed by each of WEST and the
22
Indenture Trustee and, except with respect to the matters set forth in (and subject to the terms of) Sections 9.01 and 10.02 of the Indenture, only with the prior written consent of the Majority of Holders or, with respect to the matters set forth in Section 9.02(a) of the Indenture, the prior written consent of the Holders of all Series 2007-B2 Notes then Outstanding.
Section 6.07 Waiver of Jury Trial . EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, AS AGAINST THE OTHER PARTIES HERETO, ANY RIGHTS IT MAY HAVE TO A JURY TRIAL IN RESPECT OF ANY CIVIL ACTION OR PROCEEDING (WHETHER ARISING IN CONTRACT OR TORT OR OTHERWISE), INCLUDING ANY COUNTERCLAIM, ARISING UNDER OR RELATING TO THIS SUPPLEMENT OR ANY OTHER SERIES 2007-B2 TRANSACTION DOCUMENT, INCLUDING IN RESPECT OF THE NEGOTIATION, ADMINISTRATION OR ENFORCEMENT HEREOF OR THEREOF.
Section 6.08 Appointment of Representative . The Majority of Holders shall be authorized to appoint a representative to act on their behalf with such authority as shall be provided in such appointment, provided that, such authority shall not extend to the taking of any action under the Related Documents requiring the consent of all Series 2007-B2 Holders.
[Signature page follows.]
23
IN WITNESS WHEREOF, WEST and the Indenture Trustee have caused this Supplement to be duly executed and delivered by their respective officers all as of the day and year first above written.
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WILLIS ENGINE SECURITIZATION |
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TRUST, as issuer of Series 2007-B2 Notes |
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By: |
/s/ Bradley S. Forsyth |
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Name: Bradley S. Forsyth |
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Title: Controlling Trustee |
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DEUTSCHE BANK TRUST COMPANY |
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AMERICAS, not in its individual capacity but solely as Indenture Trustee |
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By: |
/s/ Irene Siegel |
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Name: Irene Siegel |
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Title: Vice President |
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By: |
/s/ Aranka R. Paul |
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Name: Aranka R. Paul |
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Title: Assistant Vice President |
EXHIBIT A
to SERIES 2007-B2 SUPPLEMENT
FORM OF SERIES 2007-B2 NOTE
Except as specified in Section 2.1 2(f) of the Indenture, each 144A Book-Entry Note, each Unrestricted Book-Entry Note and each Definitive Note issued in reliance on Section 4(2) of the Securities Act (and all Notes issued in exchange therefor or upon registration of transfer or substitution thereof) shall bear the following legend on the face thereof:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR WITH ANY SECURITIES REGULATORY AUTHORITY IN ANY JURISDICTION AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN “INSTITUTIONAL ACCREDITED INVESTOR”) OR (C) IT IS NOT A U.S. PERSON (WITHIN THE MEANING OF REGULATION S) AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT BEFORE TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE OF THIS NOTE AND THE LAST DATE THAT WILLIS ENGINE SECURITIZATION TRUST, A DELAWARE STATUTORY TRUST (“WEST”), OR ANY OF ITS AFFILIATES OWNED THIS NOTE, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO WEST OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE INDENTURE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE INDENTURE TRUSTEE) AND AN OPINION OF COUNSEL ACCEPTABLE TO WEST THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (D) IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT TO AN EXEMPTION FROM REGISTRATION IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH OF CASES (A) THROUGH (F) ABOVE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE IN THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN THE TWO-YEAR PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON
A-1
THE TRANSFER NOTICE ATTACHED HERETO AND SUBMIT SUCH TRANSFER NOTICE TO THE INDENTURE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR IF THE TRANSFER IS PURSUANT TO AN EXEMPTION FROM REGISTRATION IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE INDENTURE TRUSTEE AND WEST SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE INDENTURE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.
Each Book-Entry Note shall also bear the following legend on the face thereof:
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO WEST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS BOOK-ENTRY NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS BOOK-ENTRY NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.12 OF THE INDENTURE.
A-2
WILLIS ENGINE SECURITIZATION TRUST
SERIES 2007-B2 FLOATING RATE SECURED NOTE
$[XX] CUSIP No.:
No.
December 13, 2007
KNOW ALL PERSONS BY THESE PRESENTS that WILLIS ENGINE SECURITIZATION TRUST, a Delaware statutory trust (“ WEST ”), for value received, hereby promises to pay to [ ], or registered assigns, at the principal corporate trust office of the Indenture Trustee named below, (i) the principal amount of the Series 2007-B2 Loans made by the holder hereof to WEST in an amount up to the Maximum Principal Balance of Dollars ($ ), which principal amount shall be payable on each Payment Date on the dates and in the amounts set forth in the Indenture, dated as of August 9, 2005 and amended and restated as of December 13, 2007 (as amended, restated or otherwise modified from time to time, the “ Indenture ”), and the Series 2007-B2 Supplement, dated as of December 13, 2007 (as amended, restated or otherwise modified from time to time, the “ Series 2007-B2 Supplement ”), each between WEST and Deutsche Bank Trust Company Americas, as indenture trustee (the “ Indenture Trustee ”), and (ii) interest on the outstanding principal amount of this Series 2007-B2 Floating Rate Secured Note (this “ Series 2007-B2 Note ”) on the dates and in the amounts set forth in the Indenture and the Series 2007-B2 Supplement. Capitalized terms not otherwise defined herein will have the meaning set forth in the Indenture and the Series 2007-B2 Supplement.
Payment of the principal of, interest on and Increased Costs for this Series 2007-B2 Note shall be made in lawful money of the United States of America which at the time of payment is legal tender for payment of public and private debts. The principal balance of, and interest on, this Series 2007-B2 Note and any Increased Costs are payable at the times and in the amounts set forth in the Indenture and the Series 2007-B2 Supplement by wire transfer of immediately available funds to the account designated by the Holder of record on the related Record Date.
This Series 2007-B2 Note is one of the authorized notes identified in the title hereto and issued pursuant to the Indenture and the Series 2007-B2 Supplement.
The Series 2007-B2 Notes shall be an obligation of WEST and shall be secured by the Collateral, all as defined in, and subject to limitations set forth in, the Indenture.
This Series 2007-B2 Note is transferable as provided in the Indenture and the Series 2007-B2 Supplement, subject to certain limitations therein contained, only upon the books for registration and transfer kept by the Indenture Trustee, and only upon surrender of this Series 2007-B2 Note for transfer to the Indenture Trustee duly endorsed by, or accompanied by a written instrument of transfer and an assumption of the obligation of the transferor to make the Series 2007-B2 Loans in form reasonably satisfactory to the Indenture Trustee duly executed by, the registered Holder hereof or his attorney duly authorized in writing. The Indenture Trustee shall not recognize any transfer of this Series 2007-B2 Note prior to the occurrence of a
A-3
Conversion Event, unless the transferee meets the requirements for an Eligible Transferee in the Series 2007-B2 Supplement and agrees to make the Series 2007-B2 Loans up to an amount equal to the excess of the Maximum Principal Balance of this Series 2007-B2 Note at the time of transfer over the Outstanding Principal Balance of this Series 2007-B2 Note at such time. The Indenture Trustee or WEST may require payment by the Holder of a sum sufficient to cover any tax expense or other governmental charge payable in connection with any transfer or exchange of the Series 2007-B2 Notes.
WEST, the Indenture Trustee and any other agent of WEST may treat the Person in whose name this Series 2007-B2 Note is registered as the absolute owner hereof for all purposes, and neither WEST, the Indenture Trustee, nor any other such agent shall be affected by notice to the contrary.
The Series 2007-B2 Notes are subject to Optional Redemption, at the times and subject to the conditions set forth in the Indenture and the Series 2007-B2 Supplement.
If an Event of Default under the Indenture shall occur and be continuing, the principal of and accrued interest on this Series 2007-B2 Note may be declared to be due and payable in the manner and with the effect provided in the Indenture and the Series 2007-B2 Supplement.
The Indenture permits, with certain exceptions as therein provided, the issuance of supplemental indentures with the consent of the Requisite Majority, in certain specifically described instances. Any consent given by the Requisite Majority shall be conclusive and binding upon the Holder of this Series 2007-B2 Note and on all future holders of this Series 2007-B2 Note and of any Series 2007-B2 Note issued in lieu hereof whether or not notation of such consent is made upon this Series 2007-B2 Note. Supplements and amendments to the Indenture and the Series 2007-B2 Supplement may be made only to the extent and in circumstances permitted by the Indenture and the Series 2007-B2 Supplement.
The Holder of this Series 2007-B2 Note shall have no right to enforce the provisions of the Indenture and the Series 2007-B2 Supplement or to institute action to enforce the covenants, or to take any action with respect to a default under the Indenture and the Series 2007-B2 Supplement, or to institute, appear in or defend any suit or other proceedings with respect thereto, except as provided under certain circumstances described in the Indenture and the Series 2007-B2 Supplement; provided , however , that nothing contained in the Indenture and the Series 2007-B2 Supplement shall affect or impair any right of enforcement conferred on the Holder hereof to enforce any payment of the principal of and interest on this Series 2007-B2 Note on or after the due date thereof; provided further , however , that by acceptance hereof the Holder is deemed to have covenanted and agreed that it will not institute against WEST any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any applicable bankruptcy or similar law, at any time other than at such time as permitted by the Indenture and the Series 2007-B2 Supplement.
The indebtedness evidenced by the Notes issued under the Series 2007-B2 Supplement is, to the extent and in the manner provided in the Indenture, subordinate and subject in right of payment to the prior payment in full of all Senior Claims (as defined in the Indenture), and this Series 2007-B2 Note is issued subject to such provisions. Each Holder of this Series 2007-B2
A-4
Note, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Indenture Trustee on his behalf to take such action as may be necessary or appropriate to effectuate the subordination as provided in the Indenture, and (c) appoints the Indenture Trustee his attorney-in-fact for such purpose.
The maturity of this Series 2007-B2 Note is subject to acceleration upon the occurrence and during the continuance of the Events of Default specified in the Indenture. The Holders of the Notes issued under the Series 2007-B2 Supplement shall not be permitted to deliver a Default Notice or to exercise any remedy in respect of any such Event of Default until all interest on and principal of the Series A Notes have been paid in full.
The Holder of this Series 2007-B2 Note agrees, by acceptance hereof, to pay over to the Administrative Agent any money (including principal, premium and interest) paid to it in respect of this Series 2007-B2 Note in the event that the Indenture Trustee, acting in good faith, determines subsequently that such monies were not paid in accordance with the priority of payment provisions of the Indenture or as a result of any other mistake of fact or law on the part of the Administrative Agent in making such payment.
The subordination provisions contained in Section 3.14 and Article XI of the Indenture may not be amended or modified without the consent of each Hedge Counterparty, each Holder of the subclass affected thereby and each Holder of any subclass of Notes ranking senior thereto.
The Indenture also contains provisions permitting the Holders of Notes representing a majority of the Outstanding Principal Balance of the Senior Series of Notes to waive compliance by WEST with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver shall be conclusive and binding upon all present and future Holders of this Series 2007-B2 Note and of any Series 2007-B2 Note issued upon the registration of transfer of, in exchange or in lieu of or upon the refinancing of this Series 2007-B2 Note, whether or not notation of such consent or waiver is made upon this Series 2007-B2 Note.
This Series 2007-B2 Note, and the rights and obligations of the parties hereunder, shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York without giving effect to principles of conflict of laws, other than Sections 5-1401 and 5-1402 of the New York General Obligations Laws.
All terms and provisions of the Indenture and the Series 2007-B2 Supplement are herein incorporated by reference as if set forth herein in their entirety.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED, that all acts, conditions and things required to exist, happen and be performed precedent to the execution and delivery of the Indenture and the Series 2007-B2 Supplement and the issuance of this Series 2007-B2 Note and the issue of which it is a part, do exist, have happened and have been timely performed in regular form and manner as required by law.
Unless the certificate of authentication hereon has been executed by the Indenture Trustee by manual signature of one of its Responsible Officers, this Series 2007-B2 Note shall not be
A-5
entitled to any benefit under the Indenture and the Series 2007-B2 Supplement, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, WEST has caused this Series 2007-B2 Note to be duly executed by its duly authorized representative, as of the date first set above.
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WILLIS ENGINE SECURITIZATION |
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TRUST, as issuer of Series 2007-B2 Notes |
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By: |
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Name: |
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Title: |
This Note is one of the Series 2007-B2 Notes described in the within-mentioned Series 2007-B2 Supplement.
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DEUTSCHE BANK TRUST COMPANY |
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AMERICAS, not in its individual capacity but solely as Indenture Trustee |
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By: |
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Name: |
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Title: |
A-6
Schedule A to Series 2007-B2 Note
Aggregate principal amount of any Series 2007-B2 Note issued in exchange for a portion or portions hereof and any portion or portions of any Series 2007-B2 Note exchanged for a portion or portions hereof:
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Date |
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Principal Amount Issued
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Remaining Principal Amount
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Notation
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A-7
TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered Holder hereby sell(s), assign(s) and transfer(s) unto
Taxpayer identification No.
Address:
the within Series 2007-B2 Note and all rights thereunder, hereby irrevocably constituting and appointing attorney to transfer said Series 2007-B2 Note on the books of WEST with full power of substitution in the premises.
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By: |
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Title: |
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NOTE: The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever. |
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A-8
In connection with any transfer of this Series 2007-B2 Note occurring prior to the date which is the earlier of the end of the period referred to in Rule 144(k) under the Securities Act, the undersigned confirms that without utilizing any general solicitation or general advertising:
{Check One}
{ } (a) this Series 2007-B2 Note is being transferred in compliance with the exemption from registration under the Securities Act provided by Rule 144A thereunder;
or
{ } (b) this Series 2007-B2 Note is being transferred other than in accordance with (a) above and documents are being furnished which comply with the conditions of transfer set forth in this Series 2007-B2 Note and the Indenture.
If none of the foregoing boxes is checked, the Indenture Trustee or other Note Registrar shall not be obligated to register this Series 2007-B2 Note in the name of any Person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 2.12 of the Indenture shall have been satisfied.
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NOTE: The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever. |
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A-9
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED: The undersigned represents and warrants that it is purchasing this Series 2007-B2 Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding WEST as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.
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A-10
SCHEDULE 1
to SERIES 2007-B2 SUPPLEMENT
SCHEDULED TARGETED PRINCIPAL BALANCES
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Payment Date Number |
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Scheduled Targeted Principal Balances for
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1 |
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99.444444 |
% |
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2 |
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98.888889 |
% |
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3 |
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98.333333 |
% |
|
4 |
|
97.777778 |
% |
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5 |
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97.222222 |
% |
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6 |
|
96.666667 |
% |
|
7 |
|
96.111111 |
% |
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8 |
|
95.555556 |
% |
|
9 |
|
95.000000 |
% |
|
10 |
|
94.444444 |
% |
|
11 |
|
93.888889 |
% |
|
12 |
|
93.333333 |
% |
|
13 |
|
92.777778 |
% |
|
14 |
|
92.222222 |
% |
|
15 |
|
91.666667 |
% |
|
16 |
|
91.111111 |
% |
|
17 |
|
90.555556 |
% |
|
18 |
|
90.000000 |
% |
|
19 |
|
89.444444 |
% |
|
20 |
|
88.888889 |
% |
|
21 |
|
88.333333 |
% |
|
22 |
|
87.777778 |
% |
|
23 |
|
87.222222 |
% |
|
24 |
|
86.666667 |
% |
|
25 |
|
86.111111 |
% |
|
26 |
|
85.555556 |
% |
|
27 |
|
85.000000 |
% |
|
28 |
|
84.444444 |
% |
|
29 |
|
83.888889 |
% |
|
30 |
|
83.333333 |
% |
|
31 |
|
82.777778 |
% |
|
32 |
|
82.222222 |
% |
|
33 |
|
81.666667 |
% |
|
34 |
|
81.111111 |
% |
|
35 |
|
80.555556 |
% |
|
36 |
|
80.000000 |
% |
|
37 |
|
79.444444 |
% |
|
38 |
|
78.888889 |
% |
|
39 |
|
78.333333 |
% |
|
40 |
|
77.777778 |
% |
|
41 |
|
77.222222 |
% |
|
42 |
|
76.666667 |
% |
|
43 |
|
76.111111 |
% |
|
44 |
|
75.555556 |
% |
|
45 |
|
75.000000 |
% |
|
46 |
|
74.444444 |
% |
1
|
Payment Date Number |
|
Scheduled Targeted Principal Balances for
|
|
|
47 |
|
73.888889 |
% |
|
48 |
|
73.333333 |
% |
|
49 |
|
72.777778 |
% |
|
50 |
|
72.222222 |
% |
|
51 |
|
71.666667 |
% |
|
52 |
|
71.111111 |
% |
|
53 |
|
70.555556 |
% |
|
54 |
|
70.000000 |
% |
|
55 |
|
69.444444 |
% |
|
56 |
|
68.888889 |
% |
|
57 |
|
68.333333 |
% |
|
58 |
|
67.777778 |
% |
|
59 |
|
67.222222 |
% |
|
60 |
|
66.666667 |
% |
|
61 |
|
66.111111 |
% |
|
62 |
|
65.555556 |
% |
|
63 |
|
65.000000 |
% |
|
64 |
|
64.444444 |
% |
|
65 |
|
63.888889 |
% |
|
66 |
|
63.333333 |
% |
|
67 |
|
62.777778 |
% |
|
68 |
|
62.222222 |
% |
|
69 |
|
61.666667 |
% |
|
70 |
|
61.111111 |
% |
|
71 |
|
60.555556 |
% |
|
72 |
|
60.000000 |
% |
|
73 |
|
59.444444 |
% |
|
74 |
|
58.888889 |
% |
|
75 |
|
58.333333 |
% |
|
76 |
|
57.777778 |
% |
|
77 |
|
57.222222 |
% |
|
78 |
|
56.666667 |
% |
|
79 |
|
56.111111 |
% |
|
80 |
|
55.555556 |
% |
|
81 |
|
55.000000 |
% |
|
82 |
|
54.444444 |
% |
|
83 |
|
53.888889 |
% |
|
84 |
|
53.333333 |
% |
|
85 |
|
52.777778 |
% |
|
86 |
|
52.222222 |
% |
|
87 |
|
51.666667 |
% |
|
88 |
|
51.111111 |
% |
|
89 |
|
50.555556 |
% |
|
90 |
|
50.000000 |
% |
|
91 |
|
49.444444 |
% |
|
92 |
|
48.888889 |
% |
|
93 |
|
48.333333 |
% |
|
94 |
|
47.777778 |
% |
|
95 |
|
47.222222 |
% |
|
96 |
|
46.666667 |
% |
|
97 |
|
46.111111 |
% |
|
98 |
|
45.555556 |
% |
|
99 |
|
45.000000 |
% |
2
|
Payment Date Number |
|
Scheduled Targeted Principal Balances for
|
|
|
100 |
|
44.444444 |
% |
|
101 |
|
43.888889 |
% |
|
102 |
|
43.333333 |
% |
|
103 |
|
42.777778 |
% |
|
104 |
|
42.222222 |
% |
|
105 |
|
41.666667 |
% |
|
106 |
|
41.111111 |
% |
|
107 |
|
40.555556 |
% |
|
108 |
|
40.000000 |
% |
|
109 |
|
39.444444 |
% |
|
110 |
|
38.888889 |
% |
|
111 |
|
38.333333 |
% |
|
112 |
|
37.777778 |
% |
|
113 |
|
37.222222 |
% |
|
114 |
|
36.666667 |
% |
|
115 |
|
36.111111 |
% |
|
116 |
|
35.555556 |
% |
|
117 |
|
35.000000 |
% |
|
118 |
|
34.444444 |
% |
|
119 |
|
33.888889 |
% |
|
120 |
|
33.333333 |
% |
|
121 |
|
32.777778 |
% |
|
122 |
|
32.222222 |
% |
|
123 |
|
31.666667 |
% |
|
124 |
|
31.111111 |
% |
|
125 |
|
30.555556 |
% |
|
126 |
|
30.000000 |
% |
|
127 |
|
29.444444 |
% |
|
128 |
|
28.888889 |
% |
|
129 |
|
28.333333 |
% |
|
130 |
|
27.777778 |
% |
|
131 |
|
27.222222 |
% |
|
132 |
|
26.666667 |
% |
|
133 |
|
26.111111 |
% |
|
134 |
|
25.555556 |
% |
|
135 |
|
25.000000 |
% |
|
136 |
|
24.444444 |
% |
|
137 |
|
23.888889 |
% |
|
138 |
|
23.333333 |
% |
|
139 |
|
22.777778 |
% |
|
140 |
|
22.222222 |
% |
|
141 |
|
21.666667 |
% |
|
142 |
|
21.111111 |
% |
|
143 |
|
20.555556 |
% |
|
144 |
|
20.000000 |
% |
|
145 |
|
19.444444 |
% |
|
146 |
|
18.888889 |
% |
|
147 |
|
18.333333 |
% |
|
148 |
|
17.777778 |
% |
|
149 |
|
17.222222 |
% |
|
150 |
|
16.666667 |
% |
|
151 |
|
16.111111 |
% |
|
152 |
|
15.555556 |
% |
3
|
Payment Date Number |
|
Scheduled Targeted Principal Balances for
|
|
|
153 |
|
15.000000 |
% |
|
154 |
|
14.444444 |
% |
|
155 |
|
13.888889 |
% |
|
156 |
|
13.333333 |
% |
|
157 |
|
12.777778 |
% |
|
158 |
|
12.222222 |
% |
|
159 |
|
11.666667 |
% |
|
160 |
|
11.111111 |
% |
|
161 |
|
10.555556 |
% |
|
162 |
|
10.000000 |
% |
|
163 |
|
9.444444 |
% |
|
164 |
|
8.888889 |
% |
|
165 |
|
8.333333 |
% |
|
166 |
|
7.777778 |
% |
|
167 |
|
7.222222 |
% |
|
168 |
|
6.666667 |
% |
|
169 |
|
6.111111 |
% |
|
170 |
|
5.555556 |
% |
|
171 |
|
5.000000 |
% |
|
172 |
|
4.444444 |
% |
|
173 |
|
3.888889 |
% |
|
174 |
|
3.333333 |
% |
|
175 |
|
2.777778 |
% |
|
176 |
|
2.222222 |
% |
|
177 |
|
1.666667 |
% |
|
178 |
|
1.111111 |
% |
|
179 |
|
0.555556 |
% |
|
180 |
|
0.000000 |
% |
4
SCHEDULE 2
to SERIES 2007-B2 SUPPLEMENT
MAXIMUM COMMITMENTS OF SERIES 2007-B2 HOLDERS
|
Names of Series 2007-B2 Holders |
|
Individual Maximum Commitments of
|
|
|
|
|
|
|
|
|
|
CALYON NEW YORK BRANCH |
|
$ |
13,750,000 |
|
|
|
|
|
|
|
|
CRÉDIT INDUSTRIEL ET COMMERCIAL, NEW YORK BRANCH |
|
$ |
1,875,000 |
|
|
|
|
|
|
|
|
BAYERISCHE LANDESBANK |
|
$ |
9,375,000 |
|
|
|
|
|
|
|
|
Total: |
|
$ |
25,000,000 |
|
1
Exhibit 10.23
EXECUTION VERSION
WILLIS ENGINE SECURITIZATION TRUST,
as issuer of Series 2008-A1 Notes,
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Indenture Trustee
SERIES 2008-A1 SUPPLEMENT
Dated as of March 28, 2008
to
INDENTURE
amended and restated as of December 13, 2007
SERIES 2008-A1 NOTES
TABLE OF CONTENTS
|
|
|
Page |
|
|
|
|
|
ARTICLE I |
||
|
|
|
|
|
DEFINITIONS; CALCULATION GUIDELINES |
||
|
|
|
|
|
Section 1.01. |
Definitions |
1 |
|
|
|
|
|
ARTICLE II |
||
|
|
|
|
|
CREATION OF THE SERIES 2008-A1 NOTES |
||
|
|
|
|
|
Section 2.01. |
Designation |
5 |
|
Section 2.02. |
Authentication and Delivery |
6 |
|
Section 2.03. |
Interest Payments on the Series 2008-A1 Notes |
7 |
|
Section 2.04. |
Principal Payments on the Series 2008-A1 Notes |
8 |
|
Section 2.05. |
Prepayment of Principal on the Series 2008-A1 Notes |
8 |
|
Section 2.06. |
Manner of Payment |
9 |
|
Section 2.07. |
Restrictions on Transfer |
9 |
|
Section 2.08. |
Final Maturity Date |
9 |
|
|
|
|
|
ARTICLE III |
||
|
|
|
|
|
NOTE PROCEEDS; SERIES 2008-A1 ACCOUNT, |
||
|
APPLICATION OF AMOUNTS THEREIN |
||
|
|
|
|
|
Section 3.01. |
Application of Note Proceeds |
9 |
|
Section 3.02. |
Series 2008-A1 Series Account |
10 |
|
Section 3.03. |
Distributions from Series 2008-A1 Series Account |
10 |
|
|
|
|
|
ARTICLE IV |
||
|
|
|
|
|
CONDITIONS PRECEDENT TO OBLIGATIONS OF SERIES 2008-A1 HOLDERS |
||
|
|
|
|
|
Section 4.01. |
Conditions Precedent to Obligations of Series 2008-A1 Holders to Purchase Series 2008-A1 Notes |
12 |
|
|
|
|
|
ARTICLE V |
||
|
|
|
|
|
REPRESENTATIONS AND WARRANTIES |
||
|
|
|
|
|
Section 5.01. |
Indenture Representations and Warranties |
12 |
|
|
|
|
|
ARTICLE VI |
||
|
|
|
|
|
MISCELLANEOUS PROVISIONS |
||
|
|
|
|
|
Section 6.01. |
Ratification of Indenture |
13 |
|
Section 6.02. |
Counterparts |
13 |
|
Section 6.03. |
Governing Law; Jurisdiction |
13 |
i
ii
This SERIES 2008-A1 SUPPLEMENT, dated as of March 28, 2008 (as amended, modified or supplemented from time to time, this “ Supplement ” or the “ Series 2008-A1 Supplement ”), issued pursuant to, and incorporating the terms of, the Indenture, dated as of August 9, 2005 and amended and restated as of December 13, 2007 (as previously supplemented and as further amended, modified or supplemented from time to time, the “ Indenture ”), is entered into between WILLIS ENGINE SECURITIZATION TRUST, a Delaware statutory trust (“ WEST ”), and DEUTSCHE BANK TRUST COMPANY AMERICAS, a New York banking corporation, as Indenture Trustee (the “ Indenture Trustee ”).
WITNESSETH THAT:
WHEREAS, the Controlling Trustees of WEST have authorized the issuance of a Series of Additional Notes, to be issued as Series A Term Notes, the proceeds of which are to be used in part to refinance the Series 2005-A2 Warehouse Notes and in part to fund the acquisition of the Additional Engines described in Schedule 2 hereto (the “ 2008 Engines ”, as designated in such Schedule 2); and
WHEREAS, WEST and the Indenture Trustee wish to set forth the Principal Terms of such Additional Notes to be issued pursuant to this Supplement and designated as “Series 2008-A1 Floating Rate Secured Notes”.
NOW THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; CALCULATION GUIDELINES
Section 1.01. Definitions . (a) Capitalized terms used herein and not otherwise defined shall have the meaning set forth 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.
“ Acquisition Redemption Date ” shall have the meaning set forth in Section 2.05(b) hereof.
“ Additional Interest ” means, for the Series 2008-A1 Notes, interest at the Series 2008-A1 Stated Rate on the aggregate amount of any unpaid interest on the Series 2008-A1 Notes (including any unpaid portion of the Stated Interest Amount and any Additional Interest Amount).
“ Additional Interest Amount ” means, for any Payment Date for the Series 2008-A1 Notes, an amount equal to the Additional Interest for the Series 2008-A1 Notes on the aggregate amount of unpaid interest (including any unpaid portion of any Stated Interest Amount and any Additional Interest Amount for the Series 2008-A1 Notes and the other amounts described in Section 2.03(b) hereof) that was due and payable (but not paid) on, or with respect to, the Series 2008-A1 Notes on any prior Payment Date. The amount described in the preceding
sentence constitutes the Additional Interest Amount for the Series 2008-A1 Notes for purposes of Sections 3.13 and 3.14 of the Indenture.
“ Calyon ” means Calyon Securities (USA) Inc.
“Closing Date” means March 28, 2008.
“ Delivery Period ” means, with respect to the 2008 Engines being acquired with the proceeds of the Series 2008-A1 Notes, the period beginning on the Closing Date and ending on the date that is ninety (90) days from the Closing Date or, if earlier, the date on which an Early Amortization Event or an Event of Default occurs.
“ Holder Indemnified Amounts ” means indemnification payments as provided for in Article 7 of the Series 2008-A1 Note Purchase Agreement.
“ Interest Amount ” means, for any Payment Date for the Series 2008-A1 Holders, an amount equal to the sum of the Stated Interest Amount and the Additional Interest Amount due and payable on the Series 2008-A1 Notes on such Payment Date.
“ Issuance Expenses ” means (a) the structuring and underwriting fees payable to Calyon in respect of the issuance of the Series 2008-A1 Notes, and (b) the portion of the expenses of Calyon that are allocable to the Series 2008-A1 Notes, as agreed by WEST and such parties.
“ Majority of Holders ” means, with respect to the Series 2008-A1 Notes as of any date of determination, Series 2008-A1 Holders that, individually or in the aggregate, own Series 2008-A1 Notes representing more than fifty percent (50%) of the then aggregate Outstanding Principal Balance of the Series 2008-A1 Notes.
“ Minimum Targeted Principal Balance ” means, for the Series 2008-A1 Notes for each Payment Date, the amount set forth opposite such Payment Date on Schedule 1 hereto under the column entitled “Minimum Targeted Principal Balance”, as adjusted from time to time pursuant to Section 2.04(b) or Section 2.05(c) hereof.
“ One-Month LIBOR ” means, for any Interest Accrual Period, LIBOR, as defined in the Indenture, for the Specified Period as of the Reference Date for such Interest Accrual Period.
“ Optional Redemption ” means a voluntary prepayment by WEST of all or a portion of the Outstanding Principal Balance of the Series 2008-A1 Notes in accordance with the terms of this Supplement.
“ Optional Redemption Date ” shall have the meaning set forth in Section 2.05(a) hereof.
“Private Placement Memorandum” means the Private Placement Memorandum, dated March 24, 2008, prepared by WEST in connection with the offering of the Series 2008-A1 Notes.
2
“ Rating Agencies ” means Fitch and Moody’s.
“ Redemption Premium ” shall mean, for any Optional Redemption, the applicable Redemption Premium calculated as a percentage of the Outstanding Principal Balance of the Series 2008-A1 Notes being redeemed in such Optional Redemption depending on the date of the Optional Redemption, as set forth below. No Redemption Premium shall be payable in any Acquisition Balance Redemption:
|
Redemption Date |
|
Redemption Premium
|
|
|
After the Initial Closing Date and on or before the first anniversary of the Closing Date |
|
2 |
% |
|
After the first anniversary of the Closing Date and on or before the second anniversary of the Closing Date |
|
1 |
% |
|
After the second anniversary of the Closing Date |
|
0 |
% |
“Redemption Price” shall mean, in any Optional Redemption, the Outstanding Principal Balance of the Series 2008-A1 Notes in an Optional Redemption in whole, and the portion of the Outstanding Principal Balance being redeemed in an Optional Redemption in part, in each case together with the Redemption Premium, if any, as of the applicable Redemption Date specified in the definition of “Redemption Premium.”
“Refinancing Expenses” means all out-of-pocket costs and expenses incurred in connection with an offering and issuance of the Series 2008-A1 Notes.
“ Scheduled Targeted Principal Balance ” means for the Series 2008-A1 Notes for each Payment Date, the amount set forth opposite such Payment Date on Schedule 1 hereto under the column entitled “Scheduled Targeted Principal Balance”, as adjusted from time to time pursuant to Section 2.04(b) or Section 2.05(c) hereof.
“ Series 2008-A1 144A Book Entry Note ” means a Series 2008-A1 Note represented by a single permanent global note in fully registered form, without coupons, the form of which shall be substantially in the form attached as Exhibit A hereto, with the legends required by Section 2.02 of the Indenture for a 144A Book-Entry Note (as defined in the Indenture) inscribed thereon.
3
“ Series 2008-A1 Definitive Notes ” means Series 2008-A1 Notes in the form attached as Exhibit A hereto, with the applicable legend for Definitive Notes required by Section 2.02 of the Indenture inscribed on the face thereof.
“ Series 2008-A1 Expected Final Payment Date ” means March 15, 2021.
“ Series 2008-A1 Final Maturity Date ” means December 15, 2032.
“ Series 2008-A1 Holders ” means, on the Closing Date, the Persons named as Series 2008-A1 Holders in the Series 2008-A1 Note Purchase Agreement and, at any time of determination thereafter, any Person in whose name a Series 2008-A1 Note is registered in the Register.
“ Series 2008-A1 Note Purchase Agreement ” means the Series 2008-A1 Note Purchase and Loan Agreement, dated as of March 25, 2008 , among WEST, the Administrative Agent and the Series 2008-A1 Holders, as amended, modified or supplemented from time to time in accordance with its terms.
“ Series 2008-A1 Notes ” means the Series of Notes designated as the “Series 2008-A1 Floating Rate Secured Notes” to be issued on the Closing Date and having the terms and conditions specified in this Supplement, substantially in the form of Exhibit A hereto, and including any and all replacements, extensions, substitutions or renewals of such Notes.
“ Series 2008-A1 Regulation S Temporary Book Entry Notes ” means Series 2008-A1 Notes in the form attached as Exhibit A hereto, with the applicable legend for Regulation S Temporary Book Entry Notes required by Section 2.02 of the Indenture inscribed on the face thereof.
“ Series 2008-A1 Series Account ” means the Series Account of that name established in accordance with Section 3.02 hereof and Sections 3.01 and 3.09 of the Indenture.
“ Series 2008-A1 Stated Rate ” means, for each Interest Accrual Period, One-Month LIBOR plus 1.50% per annum.
“ Series 2008-A1 Transaction Documents ” means any and all of this Supplement, the Series 2008-A1 Notes, and the other Related Documents, as any of the foregoing may from time to time be amended, modified, supplemented or renewed.
“ Series 2008-A1 Unrestricted Book-Entry Notes ” means Series 2008-A1 Notes in the form of Exhibit A hereto, with the applicable legend required by Section 2.02 of the Indenture for Unrestricted Book-Entry Notes inscribed on the face thereof.
“ Series 2008-B1 Holders ” means, on the Closing Date, the Persons named as Series 2008-B1 Holders in the Series 2008-B1 Note Purchase Agreement and, at any time of determination thereafter, any Person in whose name a Series 2008-B1 Note is registered in the Register.
4
“Series 2008-B1 Notes ” means the notes issued pursuant to the Series 2008-B1 Note Purchase Agreement and the Series 2008-B1 Supplement.
“ Series 2008-B1 Note Purchase Agreement ” means the Series 2008-B1 Note Purchase and Loan Agreement, dated as of March 25, 2008 , among WEST, the Administrative Agent and the Series 2008-B1 Holders, as amended, modified or supplemented from time to time in accordance with its terms.
“Series 2008-B1 Supplement” means the Series 2008-B1 Supplement to the Indenture, dated as of March 28, 2008, between WEST and the Indenture Trustee, as amended, modified or supplemented from time to time in accordance with its terms.
“ Specified Period ” means one month.
“ Stated Interest Amount ” means, for any Payment Date for the Series 2008-A1 Notes, an amount equal to the sum for each day during the related Interest Accrual Period of accrued and unpaid interest at the Series 2008-A1 Stated Rate on the Outstanding Principal Balance of the Series 2008-A1 Notes on such date. The amount described in the preceding sentence constitutes the Stated Interest Amount for the Series 2008-A1 Notes for purposes of Sections 3.13 and 3.14 of the Indenture.
“ Supplemental Principal Payment Amount ” means, for the Series 2008-A1 Notes on any Payment Date, the amount (if any) of a Series A Supplemental Principal Payment Amount allocated and paid to the Series 2008-A1 Notes on such Payment Date in accordance with the provisions of Sections 3.14 and 3.15(b) of the Indenture and Sections 2.04(a) and 3.03 hereof.
“ Willis ” means Willis Lease Finance Corporation, a Delaware corporation.
(b) The conventions of construction and usage set forth in Section 1.02 of the Indenture are hereby incorporated by reference in this Supplement.
ARTICLE II
CREATION OF THE SERIES 2008-A1 NOTES
Section 2.01. Designation .
(a) There is hereby created a Series of Series A Term Notes to be issued pursuant to the Indenture and this Supplement and to be known as the “Series 2008-A1 Floating Rate Secured Notes”, referred to herein as the “Series 2008-A1 Notes”. The Series 2008-A1 Notes will be issued in the initial principal balance of $212,384,958.00 and will not have priority over any other Series of Series A Notes except to the extent set forth in the Supplement for such other Series and the Indenture. The Series Issuance Date of the Series 2008-A1 Notes is March 28, 2008. The Series 2008-A1 Notes are classified as “Term Notes”, “Series A Notes”, “Series A Term Notes”, and “Floating Rate Notes”, as each such term is used in the Indenture. The Series 2008-A1 Notes will be rated on the Closing Date by each of Moody’s and Fitch.
5
(b) The first Payment Date with respect to the Series 2008-A1 Notes shall be on April 15, 2008.
(c) Payments of principal on the Series 2008-A1 Notes shall be made from funds on deposit in the Series 2008-A1 Series Account or otherwise at the times and in the amounts set forth in Article III of the Indenture and Sections 2.04, 2.05 and 3.03 of this Supplement.
(d) 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 2.02. Authentication and Delivery .
(a) On the Series Issuance Date, WEST shall sign, and shall direct the Indenture Trustee in writing pursuant to Section 2.01(c) of the Indenture to duly authenticate and deliver, and the Indenture Trustee, upon receiving such direction, subject to compliance with the conditions precedent set forth in Section 4.01 hereof, (i) shall authenticate the Series 2008-A1 Notes in accordance with such written direction and (ii) shall deliver such Series 2008-A1 Notes to the Series 2008-A1 Holders, in accordance with such written direction.
(b) The Series 2008-A1 Notes are not being registered with the SEC and may not be sold, transferred or otherwise disposed of except in compliance with the provisions of the Indenture and except as follows:
(i) to Persons that the transferring Person reasonably believes are Qualified Institutional Buyers, in reliance on the exemption from the registration requirements of the Securities Act provided by Rule 144A;
(ii) in offshore transactions in reliance on Regulation S;
(iii) to Institutional Accredited Investors that deliver an Investment Letter to the Indenture Trustee;
(c) In accordance with Section 2.01(e) of the Indenture, the Series 2008-A1 Notes resold in reliance on Rule 144A shall be represented by one Series 2008-A1 144A Book-Entry Note. Any Series 2008-A1 Notes sold in reliance on Regulation S shall initially be represented by one Series 2008-A1 Regulation S Temporary Book-Entry Note and shall be exchangeable for interests in the related Unrestricted Book-Entry Note. Any Series 2008-A1 Notes sold to Institutional Accredited Investors shall be represented by one or more Series 2008-A1 Definitive Notes.
(d) The Series 2008-A1 Notes shall be executed by manual or facsimile signature on behalf of WEST and authenticated by a Responsible Officer of the Indenture Trustee and shall be substantially in the form of Exhibit A hereto, as applicable, with the appropriate legend required by Section 2.02 of the Indenture inscribed on the face thereof.
6
(e) The Series 2008-A1 Notes shall be issued in minimum denominations of $100,000 and in integral multiples of $1,000 in excess thereof.
Section 2.03. Interest Payments on the Series 2008-A1 Notes .
(a) Interest on Series 2008-A1 Notes . Interest on each Series 2008-A1 Note shall (i) accrue during each Interest Accrual Period at the Series 2008-A1 Stated Rate, (ii) be calculated on the basis of actual days elapsed over a year of 360 days, (iii) be due and payable in arrears on each Payment Date, and (iv) be calculated based on the Outstanding Principal Balance of such Series 2008-A1 Note during such Interest Accrual Period. All amounts of the Stated Interest Amount for Series 2008-A1 Notes shall be due and payable on the earlier to occur of (i) the date on which the Series 2008-A1 Notes have been accelerated in accordance with the provisions of Section 4.02 of the Indenture and (ii) the Series 2008-A1 Final Maturity Date. The Administrative Agent shall include in the Monthly Report delivered to the Series 2008-A1 Holders the Series 2008-A1 Stated Rate for the Interest Accrual Period beginning in the month after the month covered by such Monthly Report.
(b) Additional Interest . If WEST shall fail to pay the Stated Interest Amount on any Series 2008-A1 Note when due, or any other amount becoming due under this Supplement (other than payments of principal on the Series 2008-A1 Notes), WEST shall, from time to time, pay Additional Interest on such unpaid amounts, to the extent permitted by Applicable Law, to, but not including, the date of actual payment (after as well as before judgment), for the period during which such interest or other amount shall be unpaid from the due date of such payment to the date of actual payment thereof. Any such interest shall be payable at the times and subject to the priorities set forth in Section 3.03 of this Supplement and Section 3.14 of the Indenture. All amounts of Additional Interest shall be due and payable on the earlier to occur of (i) the date on which the Series 2008-A1 Notes have been accelerated in accordance with the provisions of Section 4.02 of the Indenture and (ii) the Series 2008-A1 Final Maturity Date.
(c) Maximum Interest Rate . In no event shall the interest charged with respect to a Series 2008-A1 Note exceed the maximum amount permitted by Applicable Law. If at any time the Interest Amount charged with respect to the Series 2008-A1 Notes exceeds the maximum rate permitted by Applicable Law, the rate of interest to accrue pursuant to this Supplement and such Series 2008-A1 Note shall be limited to the maximum rate permitted by Applicable Law, but any subsequent reductions in the One-Month LIBOR shall not reduce the interest to accrue on such Series 2008-A1 Note below the maximum amount permitted by Applicable Law until the total amount of interest accrued on such Series 2008-A1 Note equals the amount of interest that would have accrued if a varying rate per annum equal to the interest rate had at all times been in effect. If the total amount of interest paid or accrued on the Series 2008-A1 Note under the foregoing provisions is less than the total amount of interest that would have accrued if the interest rate had at all times been in effect, WEST agrees to pay to the Series 2008-A1 Holders an amount equal to the difference between (a) the lesser of (i) the amount of interest that would have accrued if the maximum rate permitted by Applicable Law had at all times been in effect, or (ii) the amount of interest that would have accrued if the interest rate had at all times been equal to the Interest Amount, and (b) the amount of interest accrued in accordance with the other provisions of this Supplement.
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Section 2.04. Principal Payments on the Series 2008-A1 Notes .
(a) The Minimum Principal Payment Amount and the Scheduled Principal Payment Amount calculated for the Series 2008-A1 Notes for each Payment Date shall be payable to the Holders of the Series 2008-A1 Notes on each Payment Date from amounts deposited in the Series 2008-A1 Series Account on such Payment Date as provided in Section 3.14 of the Indenture and Section 3.03 of this Supplement. In addition, any portion of the Supplemental Principal Payment Amount for any Payment Date allocated to the Series 2008-A1 Notes pursuant to Section 3.15(b) of the Indenture shall be payable to the Holders of the Series 2008-A1 Notes on such Payment Date from amounts deposited in the Series 2008-A1 Series Account as provided in Section 3.14 of the Indenture and Section 3.03 of this Supplement. So long as an Early Amortization Event or an Event of Default is then continuing, then, in addition to the foregoing, the Outstanding Principal Balance of the Series 2008-A1 Notes shall be payable on each Payment Date to the extent that amounts are available for such purpose in accordance with the provisions of Section 3.14 of the Indenture and Section 3.03 of this Supplement. The unpaid principal amount of the Series 2008-A1 Notes together with all unpaid interest (including all Additional Interest), fees, expenses, costs and other amounts payable by WEST pursuant to the terms of the Indenture and this Supplement shall be due and payable in full on the Series 2008-A1 Final Maturity Date.
(b) The Minimum Targeted Principal Balances and the Scheduled Targeted Principal Balances for the Series 2008-A1 Notes shall be adjusted at the times and in the manner indicated in Section 3.19 of the Indenture.
Section 2.05. Prepayment of Principal on the Series 2008-A1 Notes .
(a) WEST will have the option to prepay, in an Optional Redemption on any Payment Date (each such Payment Date, an “ Optional Redemption Date ”) all, or any portion, of the Outstanding Principal Balance of the Series 2008-A1 Notes on such Payment Date, in a minimum amount of Two Hundred Fifty Thousand Dollars ($250,000), in the case of any prepayment in part, for the applicable Redemption Price as of such Optional Redemption Date, provided that, as a condition to any such prepayment in part, the Outstanding Principal Balance of the Series 2008-B1 Notes shall be prepaid by a proportionate amount to the Series 2008-B1 Holders, such prepayment to be made as provided in the Series 2008-B1 Supplement. WEST may not make such prepayment from funds in the Collections Account, except to the extent that funds in any such Account would otherwise be payable to WEST in accordance with the terms of this Supplement and the Indenture, and may make any such prepayment in part from funds in the Series 2008-A1 Series Account, provided that funds in such Account may be used to fund a prepayment in whole but not in part. Any Optional Redemption in connection with a Refinancing funded with the proceeds of Additional Notes must be in whole, and any other Optional Redemption financed with funds other than funds in the Collections Account or the proceeds of Additional Notes may be in whole or in part.
(b) If there is any Balance in the Engine Acquisition Account at the end of the Delivery Period beginning on the Closing Date, the portion thereof allocated to the Series 2008-A1 Notes in accordance with Section 3.03(b) of the Indenture shall be applied to the prepayment of the Series 2008-A1 Notes as provided in Section 3.16(b) of the Indenture on the next
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succeeding Payment Date (the “ Acquisition Redemption Date ”) after the end of such Delivery Period.
(c) The Minimum Targeted Principal Balances and the Scheduled Targeted Principal Balances on any Optional Redemption Date for an Optional Redemption in part or on the Acquisition Redemption Date, as applicable, and on each succeeding Payment Date shall be adjusted as provided in Section 3.19(b) of the Indenture.
Section 2.06. Manner of Payment . All payments of principal and interest on the Series 2008-A1 Notes payable on each Payment Date shall be paid to the Series 2008-A1 Holders reflected in the Register as of the related Record Date by wire transfer of immediately available funds for receipt prior to 1:00 p.m. (New York City time) on such Payment Date. Any payments received by the Series 2008-A1 Holders after 1:00 p.m. (New York City time) on any day shall be considered to have been received on the next succeeding Business Day.
Section 2.07. Restrictions on Transfer . On the Closing Date, WEST shall sell, pursuant to the Series 2008-A1 Note Purchase Agreement, the Series 2008-A1 Notes to the Persons named as Series 2008-A1 Holders in the Series 2008-A1 Note Purchase Agreement and deliver such Series 2008-A1 Notes in accordance herewith and therewith. Thereafter, no Series 2008-A1 Note may be sold, transferred or otherwise disposed of except in compliance with the provisions of the Indenture, this Supplement and the Series 2008-A1 Note Purchase Agreement. Except as provided in the Indenture, the Indenture Trustee shall have no obligations or duties with respect to determining whether any transfers of the Series 2008-A1 Notes are made in accordance with the Securities Act or any other law; provided that with respect to Series 2008-A1 Definitive Notes, the Indenture Trustee shall enforce such transfer restrictions in accordance with the terms set forth in this Supplement.
Section 2.08. Final Maturity Date . The unpaid principal amount of the Series 2008-A1 Notes together with all unpaid interest (including all Additional Interest), fees, expenses, costs and other amounts payable by WEST pursuant to the terms of the Indenture, this Supplement and the other Series 2008-A1 Transaction Documents shall be due and payable in full on the earlier to occur of (i) the date on which the Series 2008-A1 Notes have been accelerated in accordance with the provisions of Section 4.02 of the Indenture and (ii) the Series 2008-A1 Final Maturity Date.
ARTICLE III
NOTE PROCEEDS; SERIES 2008-A1 ACCOUNT,
APPLICATION OF AMOUNTS THEREIN
Section 3.01. Application of Note Proceeds . The Administrative Agent shall, on the Closing Date, upon the Operating Bank’s receipt of the Net Proceeds of the Series 2008-A1 Notes and the Series 2008-B1 Notes, make, or direct the Operating Bank in writing to make, the following transfers, payments and deposits as set forth below:
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Section 3.02. Series 2008-A1 Series Account . The Indenture Trustee shall establish on or before the Closing Date pursuant to Sections 3.01 and 3.09 of the Indenture and shall maintain, so long as any Series 2008-A1 Note is Outstanding, an Eligible Account which shall be designated as the “Series 2008-A1 Series Account”, which account shall be held in the name of the Indenture Trustee for the benefit of the Series 2008-A1 Holders. All deposits of funds by, or for the benefit of, the Series 2008-A1 Holders from the Collections Account and otherwise shall be accumulated in, and withdrawn from, the Series 2008-A1 Series Account in accordance with the provisions of the Indenture and this Supplement.
Section 3.03. Distributions from Series 2008-A1 Series Account . On each Payment Date, the Indenture Trustee shall distribute funds then on deposit in the Series 2008-A1 Series Account in accordance with the provisions of either subsection (a), (b) or (c) of this Section 3.03, in each case in accordance with the Payment Date Schedule and only to the extent that the Prior Ranking Amounts have been paid in full.
(a) If neither an Early Amortization Event nor an Event of Default shall have occurred and be continuing with respect to any Series of Notes:
i. To each Holder of a Series 2008-A1 Note on the related Record Date, an amount equal to its pro rata portion of the Stated Interest Amount for each such Payment Date;
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ii. To each Holder of a Series 2008-A1 Note on the related Record Date, an amount equal to its pro rata portion of the Minimum Principal Payment Amount then due and payable to the Holders of the Series 2008-A1 Notes on such Payment Date;
iii. To each Holder of a Series 2008-A1 Note on the related Record Date, an amount equal to its pro rata portion of the Scheduled Principal Payment Amount then due and payable to the Holders of the Series 2008-A1 Notes on such Payment Date;
iv. To each Holder of a Series 2008-A1 Note on the related Record Date, an amount equal to its pro rata portion of the Series A Supplemental Principal Payment Amount (if any) then due and payable to the Holders of the Series 2008-A1 Notes on such Payment Date;
v. To each Holder of a Series 2008-A1 Note on the related Record Date, an amount equal to its pro rata portion of any Additional Interest Amount then due and payable by WEST to the Series 2008-A1 Holders;
vi. To each Holder of a Series 2008-A1 Note on the related Record Date, an amount equal to its pro rata portion of the Holder Indemnified Amounts due and payable to the Series 2008-A1 Holders; and
vii. After payment in full of the foregoing amounts pursuant to this Section 3.03(a) of this Supplement, to WEST, any remaining amounts then on deposit in the Series 2008-A1 Series Account.
(b) If either an Early Amortization Event or an Event of Default shall have occurred and be continuing, so long as the Indenture Trustee shall not have received a Collateral Liquidation Notice:
i. To each Holder of a Series 2008-A1 Note on the related Record Date, an amount equal to its pro rata portion of the Stated Interest Amount for such Payment Date;
ii. To each Holder of a Series 2008-A1 Note on the related Record Date, an amount equal to its pro rata portion of the Minimum Principal Payment Amount then due and payable to the Holders of the Series 2008-A1 Notes on such Payment Date;
iii. To each Holder of a Series 2008-A1 Note on the related Record Date, an amount equal to its pro rata portion of the Scheduled Principal Payment Amount then due and payable to the Holders of the Series 2008-A1 Notes on such Payment Date;
iv. To each Holder of a Series 2008-A1 Note on the related Record Date, an amount equal to its pro rata portion of the then unpaid principal balances of
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the Series 2008-A1 Notes then Outstanding until the Outstanding Principal Balance of the Series 2008-A1 Notes has been reduced to zero;
v. To each Holder of a Series 2008-A1 Note on the related Record Date, an amount equal to its pro rata portion of any Additional Interest Amount then due and payable by WEST to the Series 2008-A1 Holders;
vi. To each Holder of a Series 2008-A1 Note on the related Record Date, an amount equal to its pro rata portion of the Holder Indemnified Amounts due and payable to the Series 2008-A1 Holders; and
vii. After payment in full of the foregoing amounts pursuant to this Section 3.03(b) of this Supplement, to WEST, any remaining amounts then on deposit in the Series 2008-A1 Series Account.
(c) If an Event of Default shall have occurred and be continuing, and the Indenture Trustee shall have received a Collateral Liquidation Notice:
i. To each Holder of a Series 2008-A1 Note on the related Record Date, an amount equal to its pro rata portion of the Stated Interest Amount for such Payment Date;
ii. To each Holder of a Series 2008-A1 Note on the related Record Date, an amount equal to its pro rata portion of the then unpaid principal balances of the Series 2008-A1 Notes then Outstanding until the Outstanding Principal Balance of the Series 2008-A1 Notes has been reduced to zero;
iii. To each Holder of a Series 2008-A1 Note on the related Record Date, an amount equal to its pro rata portion of any Additional Interest Amount then due and payable by WEST to the Series 2008-A1 Holders;
iv. To each Holder of a Series 2008-A1 Note on the related Record Date, an amount equal to its pro rata portion of the Holder Indemnified Amounts due and payable to the Series 2008-A1 Holders; and
v. After payment in full of the foregoing amounts pursuant to this Section 3.03(c) of this Supplement, to WEST, any remaining amounts then on deposit in the Series 2008-A1 Series Account.
ARTICLE IV
CONDITIONS PRECEDENT TO OBLIGATIONS OF SERIES 2008-A1 HOLDERS
Section 4.01. Conditions Precedent to Obligations of Series 2008-A1 Holders to Purchase Series 2008-A1 Notes . The Indenture Trustee shall not authenticate the Series 2008-A1 Notes unless (a) all conditions to the issuance of the Series 2008-A1 Notes set forth in Section 2.10(d) of the Indenture and in Article 3 of the Series 2008-A1 Note Purchase Agreement shall have been satisfied, and (b) WEST shall have delivered an Officer’s Certificate
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to the Indenture Trustee to the effect that all such conditions set forth in Section 2.10(d) of the Indenture and in the Series 2008-A1 Note Purchase Agreement shall have been satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.01. Indenture Representations and Warranties . To induce the Series 2008-A1 Holders to purchase the Series 2008-A1 Notes hereunder, WEST hereby makes to the Indenture Trustee for the benefit of the Series 2008-A1 Holders as of the Closing Date all of the representations and warranties set forth in Section 5.01 of the Indenture.
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.01. Ratification 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 6.02. Counterparts . 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 6.03. Governing Law; Jurisdiction . THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAWS BUT OTHERWISE WITHOUT REFERENCE TO ITS CONFLICTS OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. Each of the parties hereto agrees that the United States federal and New York State courts located in The City of New York shall have jurisdiction to hear and determine any suit, action or proceeding, and to settle any disputes, which may arise out of or in connection with this Supplement and, for such purposes, submits to the jurisdiction of such courts. Each of the parties hereto waives any objection which it might now or hereafter have to such courts being nominated as the forum or venue to hear and determine any suit, action or proceeding, and to settle any disputes, which may arise out of or in connection with this Supplement and agrees not to claim that any such court is not a convenient or appropriate forum. Each of the parties hereto consents to the granting of such legal or equitable relief as is deemed appropriate by such courts.
Section 6.04. Notices to Rating Agencies . Whenever any notice or other communication is required to be given to the Rating Agencies pursuant to the Indenture or this Supplement, such notice or communication shall be delivered as follows: (i) if to Moody’s, at Moody’s Investors Service, Inc., 25 th Floor, 7 World Trade Center, 250 Greenwich Street, New York, New York 10007, Attention: ABS/RMBS Monitoring Department and (ii) if to Fitch, at One State Street Plaza, New York, New York 10004, Attention: ABS Monitoring Group — Equipment Leases. Any rights to notices conveyed to a Rating Agency pursuant to the terms of
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this Supplement shall terminate immediately if such Rating Agency no longer has a rating outstanding with respect to the Series 2008-A1 Notes.
Section 6.05. Statutory References . References in this Supplement and any other Series 2008-A1 Transaction Document to any section of the Uniform Commercial Code or the UCC shall mean, on or after the effective date of adoption of any revision to the Uniform Commercial Code or the UCC in the applicable jurisdiction, such revised or successor section thereto.
Section 6.06. Amendments and Modifications . T he terms of this Supplement may be waived, modified or amended only in a written instrument signed by each of WEST and the Indenture Trustee and, except with respect to the matters set forth in (and subject to the terms of) Section 9.01 and 10.02 of the Indenture, only with the prior written consent of the Majority of Holders or, with respect to the matters set forth in Sections 9.02(a) of the Indenture, the prior written consent of the Holders of all Series 2008-A1 Notes then Outstanding.
Section 6.07. Waiver of Jury Trial . EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, AS AGAINST THE OTHER PARTIES HERETO, ANY RIGHTS IT MAY HAVE TO A JURY TRIAL IN RESPECT OF ANY CIVIL ACTION OR PROCEEDING (WHETHER ARISING IN CONTRACT OR TORT OR OTHERWISE), INCLUDING ANY COUNTERCLAIM, ARISING UNDER OR RELATING TO THIS SUPPLEMENT OR ANY OTHER SERIES 2008-A1 TRANSACTION DOCUMENT, INCLUDING IN RESPECT OF THE NEGOTIATION, ADMINISTRATION OR ENFORCEMENT HEREOF OR THEREOF.
Section 6.08. Appointment of Representative . The Majority of Holders shall be authorized to appoint a representative to act on their behalf with such authority as shall be provided in such appointment, provided that, such authority shall not extend to the taking of any action under the Related Documents requiring the consent of all Series 2008-A1 Holders.
Section 6.09. Tax Matters . (a) In accordance with United States Treasury regulations governing debt instruments issued with original issue discount, WEST will treat the Series 2008-A1 Notes as “contingent payment debt instruments” for United States federal income tax purposes. By purchasing Series 2008-A1 Notes, each holder thereof will be deemed to have agreed to such treatment and to be bound by WEST’s application of the United States Treasury regulations governing contingent payment debt instruments, including WEST’s determination of a “comparable yield” and a “projected payment schedule” for the Series 2008-A1 Notes, each within the meaning of such regulations. Such disclosure shall be consistent with the disclosure on such matters set forth in the Private Placement Memorandum.
(b) To the extent required by law, WEST will timely file any tax returns, reports or information statements in respect of the Series 2008-A1 Notes, including, without limitation, Form 8281, to the extent applicable.
[Signature page follows.]
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IN WITNESS WHEREOF, WEST and the Indenture Trustee have caused this Supplement to be duly executed and delivered by their respective officers all as of the day and year first above written.
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WILLIS ENGINE SECURITIZATION TRUST |
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By: |
/s/ Bradley S. Forsyth |
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Name: Bradley S. Forsyth |
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Title: Controlling Trustee |
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DEUTSCHE
BANK TRUST COMPANY
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By: |
/s/ Irene Siegel |
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Name: Irene Siegel |
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Title: Vice President |
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By: |
/s/ Aranka R. Paul |
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Name: Aranaka R. Paul |
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Title: Assistant Vice President |
EXHIBIT A
SERIES 2008-A1 SUPPLEMENT
FORM OF SERIES 2008-A1 NOTE
Except as specified in Section 2.1 2(f) of the Indenture, each 144A Book-Entry Note, each Unrestricted Book-Entry Note and each Definitive Note issued in reliance on Section 4(2) of the Securities Act (and all Notes issued in exchange therefor or upon registration of transfer or substitution thereof) shall bear the following legend on the face thereof:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR WITH ANY SECURITIES REGULATORY AUTHORITY IN ANY JURISDICTION AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN “INSTITUTIONAL ACCREDITED INVESTOR”) OR (C) IT IS NOT A U.S. PERSON (WITHIN THE MEANING OF REGULATION S) AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT BEFORE TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE OF THIS NOTE AND THE LAST DATE THAT WILLIS ENGINE SECURITIZATION TRUST, A DELAWARE STATUTORY TRUST (“WEST”), OR ANY OF ITS AFFILIATES OWNED THIS NOTE, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO WEST OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE INDENTURE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE INDENTURE TRUSTEE) AND AN OPINION OF COUNSEL ACCEPTABLE TO WEST THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (D) IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT TO AN EXEMPTION FROM REGISTRATION IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH OF CASES (A) THROUGH (F) ABOVE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE IN THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN THE TWO-YEAR PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON
A-1
THE TRANSFER NOTICE ATTACHED HERETO AND SUBMIT SUCH TRANSFER NOTICE TO THE INDENTURE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR IF THE TRANSFER IS PURSUANT TO AN EXEMPTION FROM REGISTRATION IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE INDENTURE TRUSTEE AND WEST SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE INDENTURE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.
Each Book-Entry Note shall also bear the following legend on the face thereof:
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO WEST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS BOOK-ENTRY NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS BOOK-ENTRY NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.12 OF THE INDENTURE.
Each Regulation S Temporary Book-Entry Note shall bear the following legend on the face thereof:
THIS NOTE IS A REGULATION S TEMPORARY BOOK-ENTRY NOTE WITHIN THE MEANING OF THE INDENTURE REFERRED TO HEREINAFTER AND IS SUBJECT TO RESTRICTIONS ON THE TRANSFER AND EXCHANGE THEREOF AND ON THE PAYMENT OF INTEREST THEREON AS SPECIFIED IN THE INDENTURE.
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WILLIS ENGINE SECURITIZATION TRUST
SERIES 2008-A1 FLOATING RATE SECURED NOTE
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No. |
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March, [ ], 2008 |
KNOW ALL PERSONS BY THESE PRESENTS that WILLIS ENGINE SECURITIZATION TRUST, a Delaware statutory trust (“ WEST ”), for value received, hereby promises to pay to [ ], or registered assigns, at the principal corporate trust office of the Indenture Trustee named below, (i) the principal sum of [ ] Dollars ($ ), which sum shall be payable on each Payment Date on the dates and in the amounts set forth in the Indenture, dated as of August 9, 2005 and amended and restated as of December 13, 2007 (as amended, restated or otherwise modified from time to time, the “ Indenture ”), and the Series 2008-A1 Supplement, dated as of March 28, 2008 (as amended, restated or otherwise modified from time to time, the “ Series 2008-A1 Supplement ”), each between WEST and Deutsche Bank Trust Company Americas, as indenture trustee (the “ Indenture Trustee ”), and (ii) interest on the outstanding principal amount of this Series 2008-A1 Floating Rate Secured Note (this “ Series 2008-A1 Note ”) on the dates and in the amounts set forth in the Indenture and the Series 2008-A1 Supplement. Capitalized terms not otherwise defined herein will have the meaning set forth in the Indenture and the Series 2008-A1 Supplement.
Payment of the principal of and interest on this Series 2008-A1 Note shall be made in lawful money of the United States of America which at the time of payment is legal tender for payment of public and private debts. The principal balance of, and interest on, this Series 2008-A1 Note is payable at the times and in the amounts set forth in the Indenture and the Series 2008-A1 Supplement by wire transfer of immediately available funds to the account designated by the Holder of record on the related Record Date.
This Series 2008-A1 Note is one of the authorized notes identified in the title hereto and issued pursuant to the Indenture and the Series 2008-A1 Supplement.
The Series 2008-A1 Notes shall be an obligation of WEST and shall be secured by the Collateral, all as defined in, and subject to limitations set forth in, the Indenture.
This Series 2008-A1 Note is transferable as provided in the Indenture and the Series 2008-A1 Supplement, subject to certain limitations therein contained, only upon the books for registration and transfer kept by the Indenture Trustee, and only upon surrender of this Series 2008-A1 Note for transfer to the Indenture Trustee duly endorsed by, or accompanied by a written instrument of transfer in form reasonably satisfactory to the Indenture Trustee duly executed by, the registered Holder hereof or his attorney duly authorized in writing. The Indenture Trustee or WEST may require payment by the Holder of a sum sufficient to cover any tax expense or other governmental charge payable in connection with any transfer or exchange of the Series 2008-A1 Notes.
WEST, the Indenture Trustee and any other agent of WEST may treat the Person in whose name this Series 2008-A1 Note is registered as the absolute owner hereof for all purposes, and neither WEST, the Indenture Trustee, nor any other such agent shall be affected by notice to the contrary.
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The Series 2008-A1 Note are subject to Optional Redemption, at the times and subject to the conditions set forth in the Indenture and the Series 2008-A1 Supplement.
If an Event of Default under the Indenture shall occur and be continuing, the principal of and accrued interest on this Series 2008-A1 Note may be declared to be due and payable in the manner and with the effect provided in the Indenture and the Series 2008-A1 Supplement.
The Indenture permits, with certain exceptions as therein provided, the issuance of supplemental indentures with the consent of the Requisite Majority, in certain specifically described instances. Any consent given by the Requisite Majority shall be conclusive and binding upon the Holder of this Series 2008-A1 Note and on all future holders of this Series 2008-A1 Note and of any Series 2008-A1 Note issued in lieu hereof whether or not notation of such consent is made upon this Series 2008-A1 Note. Supplements and amendments to the Indenture and the Series 2008-A1 Supplement may be made only to the extent and in circumstances permitted by the Indenture and the Series 2008-A1 Supplement.
The Holder of this Series 2008-A1 Note shall have no right to enforce the provisions of the Indenture and the Series 2008-A1 Supplement or to institute action to enforce the covenants, or to take any action with respect to a default under the Indenture and the Series 2008-A1 Supplement, or to institute, appear in or defend any suit or other proceedings with respect thereto, except as provided under certain circumstances described in the Indenture and the Series 2008-A1 Supplement; provided, however, that nothing contained in the Indenture and the Series 2008-A1 Supplement shall affect or impair any right of enforcement conferred on the Holder hereof to enforce any payment of the principal of and interest on this Series 2008-A1 Note on or after the due date thereof.
This Series 2008-A1 Note, and the rights and obligations of the parties hereunder, shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York without giving effect to principles of conflict of laws, other than Sections 5-1401 and 5-1402 of the New York General Obligations Laws.
All terms and provisions of the Indenture and the Series 2008-A1 Supplement are herein incorporated by reference as if set forth herein in their entirety.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED, that all acts, conditions and things required to exist, happen and be performed precedent to the execution and delivery of the Indenture and the Series 2008-A1 Supplement and the issuance of this Series 2008-A1 Note and the issue of which it is a part, do exist, have happened and have been timely performed in regular form and manner as required by law.
Unless the certificate of authentication hereon has been executed by the Indenture Trustee by manual signature of one of its Responsible Officers, this Series 2008-A1 Note shall not be entitled to any benefit under the Indenture and the Series 2008-A1 Supplement, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, WEST has caused this Series 2008-A1 Note to be duly executed by its duly authorized representative, as of the date first set above.
A-4
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WILLIS
ENGINE SECURITIZATION TRUST,
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By: |
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Name: |
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Title: |
This Note is one of the Series 2008-A1 Notes described in the within-mentioned Series 2008-A1 Supplement.
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DEUTSCHE
BANK TRUST COMPANY
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By: |
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Name: |
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Title: |
A-5
Schedule A to Series 2008-A1 Note
Aggregate principal amount of any Series 2008-A1 Note issued in exchange for a portion or portions hereof and any portion or portions of any Series 2008-A1 Note exchanged for a portion or portions hereof:
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Date |
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Principal Amount Issued
|
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Remaining Principal Amount
|
|
Notation
|
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A-6
TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered Holder hereby sell(s), assign(s) and transfer(s) unto
Taxpayer identification No.
Address:
the within Series 2008- A1 Note and all rights thereunder, hereby irrevocably constituting and appointing attorney to transfer said Series 2008- A1 Note on the books of WEST with full power of substitution in the premises.
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Date: |
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By: |
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Name: |
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Title: |
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NOTE: The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever. |
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A-7
In connection with any transfer of this Series 2008- A1 Note occurring prior to the date which is the earlier of the end of the period referred to in Rule 144(k) under the Securities Act, the undersigned confirms that without utilizing any general solicitation or general advertising:
{Check One}
{ } (a) this Series 2008- A1 Note is being transferred in compliance with the exemption from registration under the Securities Act provided by Rule 144A thereunder;
or
{ } (b) this Series 2008- A1 Note is being transferred other than in accordance with (a) above and documents are being furnished which comply with the conditions of transfer set forth in this Series 2008- A1 Note and the Indenture.
If none of the foregoing boxes is checked, the Indenture Trustee or other Note Registrar shall not be obligated to register this Series 2008- A1 Note in the name of any Person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 2.12 of the Indenture shall have been satisfied.
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Date: |
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By: |
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Name: |
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Title: |
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NOTE: The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever. |
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A-8
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED: The undersigned represents and warrants that it is purchasing this Series 2008- A1 Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding WEST as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.
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Date: |
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By: |
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Name: |
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Title: |
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A-9
SCHEDULE 1
SERIES 2008-A1 SUPPLEMENT
SCHEDULES OF MINIMUM TARGETED PRINCIPAL BALANCES
AND SCHEDULED TARGETED PRINCIPAL BALANCES
Series 2008-A1 Minimum Targeted Principal Balances by Period
|
Period |
|
Payment
|
|
Minimum
|
|
Period |
|
Payment
|
|
Minimum
|
|
Period |
|
Payment
|
|
Minimum
|
|
|
1 |
|
4/15/2008 |
|
211,500,021 |
|
41 |
|
8/15/2011 |
|
176,102,528 |
|
81 |
|
12/15/2014 |
|
140,705,035 |
|
|
2 |
|
5/15/2008 |
|
210,615,084 |
|
42 |
|
9/15/2011 |
|
175,217,591 |
|
82 |
|
1/15/2015 |
|
139,820,098 |
|
|
3 |
|
6/15/2008 |
|
209,730,146 |
|
43 |
|
10/15/2011 |
|
174,332,653 |
|
83 |
|
2/15/2015 |
|
138,935,160 |
|
|
4 |
|
7/15/2008 |
|
208,845,209 |
|
44 |
|
11/15/2011 |
|
173,447,716 |
|
84 |
|
3/15/2015 |
|
138,050,223 |
|
|
5 |
|
8/15/2008 |
|
207,960,272 |
|
45 |
|
12/15/2011 |
|
172,562,779 |
|
85 |
|
4/15/2015 |
|
137,165,286 |
|
|
6 |
|
9/15/2008 |
|
207,075,334 |
|
46 |
|
1/15/2012 |
|
171,677,841 |
|
86 |
|
5/15/2015 |
|
136,280,348 |
|
|
7 |
|
10/15/2008 |
|
206,190,397 |
|
47 |
|
2/15/2012 |
|
170,792,904 |
|
87 |
|
6/15/2015 |
|
135,395,411 |
|
|
8 |
|
11/15/2008 |
|
205,305,460 |
|
48 |
|
3/15/2012 |
|
169,907,967 |
|
88 |
|
7/15/2015 |
|
134,510,474 |
|
|
9 |
|
12/15/2008 |
|
204,420,522 |
|
49 |
|
4/15/2012 |
|
169,023,029 |
|
89 |
|
8/15/2015 |
|
133,625,536 |
|
|
10 |
|
1/15/2009 |
|
203,535,585 |
|
50 |
|
5/15/2012 |
|
168,138,092 |
|
90 |
|
9/15/2015 |
|
132,740,599 |
|
|
11 |
|
2/15/2009 |
|
202,650,648 |
|
51 |
|
6/15/2012 |
|
167,253,155 |
|
91 |
|
10/15/2015 |
|
131,855,662 |
|
|
12 |
|
3/15/2009 |
|
201,765,710 |
|
52 |
|
7/15/2012 |
|
166,368,217 |
|
92 |
|
11/15/2015 |
|
130,970,724 |
|
|
13 |
|
4/15/2009 |
|
200,880,773 |
|
53 |
|
8/15/2012 |
|
165,483,280 |
|
93 |
|
12/15/2015 |
|
130,085,787 |
|
|
14 |
|
5/15/2009 |
|
199,995,836 |
|
54 |
|
9/15/2012 |
|
164,598,343 |
|
94 |
|
1/15/2016 |
|
129,200,850 |
|
|
15 |
|
6/15/2009 |
|
199,110,898 |
|
55 |
|
10/15/2012 |
|
163,713,405 |
|
95 |
|
2/15/2016 |
|
128,315,912 |
|
|
16 |
|
7/15/2009 |
|
198,225,961 |
|
56 |
|
11/15/2012 |
|
162,828,468 |
|
96 |
|
3/15/2016 |
|
127,430,975 |
|
|
17 |
|
8/15/2009 |
|
197,341,024 |
|
57 |
|
12/15/2012 |
|
161,943,531 |
|
97 |
|
4/15/2016 |
|
126,546,038 |
|
|
18 |
|
9/15/2009 |
|
196,456,086 |
|
58 |
|
1/15/2013 |
|
161,058,593 |
|
98 |
|
5/15/2016 |
|
125,661,100 |
|
|
19 |
|
10/15/2009 |
|
195,571,149 |
|
59 |
|
2/15/2013 |
|
160,173,656 |
|
99 |
|
6/15/2016 |
|
124,776,163 |
|
|
20 |
|
11/15/2009 |
|
194,686,212 |
|
60 |
|
3/15/2013 |
|
159,288,719 |
|
100 |
|
7/15/2016 |
|
123,891,226 |
|
|
21 |
|
12/15/2009 |
|
193,801,274 |
|
61 |
|
4/15/2013 |
|
158,403,781 |
|
101 |
|
8/15/2016 |
|
123,006,288 |
|
|
22 |
|
1/15/2010 |
|
192,916,337 |
|
62 |
|
5/15/2013 |
|
157,518,844 |
|
102 |
|
9/15/2016 |
|
122,121,351 |
|
|
23 |
|
2/15/2010 |
|
192,031,400 |
|
63 |
|
6/15/2013 |
|
156,633,907 |
|
103 |
|
10/15/2016 |
|
121,236,414 |
|
|
24 |
|
3/15/2010 |
|
191,146,462 |
|
64 |
|
7/15/2013 |
|
155,748,969 |
|
104 |
|
11/15/2016 |
|
120,351,476 |
|
|
25 |
|
4/15/2010 |
|
190,261,525 |
|
65 |
|
8/15/2013 |
|
154,864,032 |
|
105 |
|
12/15/2016 |
|
119,466,539 |
|
|
26 |
|
5/15/2010 |
|
189,376,588 |
|
66 |
|
9/15/2013 |
|
153,979,095 |
|
106 |
|
1/15/2017 |
|
118,581,602 |
|
|
27 |
|
6/15/2010 |
|
188,491,651 |
|
67 |
|
10/15/2013 |
|
153,094,157 |
|
107 |
|
2/15/2017 |
|
117,696,664 |
|
|
28 |
|
7/15/2010 |
|
187,606,713 |
|
68 |
|
11/15/2013 |
|
152,209,220 |
|
108 |
|
3/15/2017 |
|
116,811,727 |
|
|
29 |
|
8/15/2010 |
|
186,721,776 |
|
69 |
|
12/15/2013 |
|
151,324,283 |
|
109 |
|
4/15/2017 |
|
115,926,790 |
|
|
30 |
|
9/15/2010 |
|
185,836,839 |
|
70 |
|
1/15/2014 |
|
150,439,345 |
|
110 |
|
5/15/2017 |
|
115,041,852 |
|
|
31 |
|
10/15/2010 |
|
184,951,901 |
|
71 |
|
2/15/2014 |
|
149,554,408 |
|
111 |
|
6/15/2017 |
|
114,156,915 |
|
|
32 |
|
11/15/2010 |
|
184,066,964 |
|
72 |
|
3/15/2014 |
|
148,669,471 |
|
112 |
|
7/15/2017 |
|
113,271,978 |
|
|
33 |
|
12/15/2010 |
|
183,182,027 |
|
73 |
|
4/15/2014 |
|
147,784,534 |
|
113 |
|
8/15/2017 |
|
112,387,040 |
|
|
34 |
|
1/15/2011 |
|
182,297,089 |
|
74 |
|
5/15/2014 |
|
146,899,596 |
|
114 |
|
9/15/2017 |
|
111,502,103 |
|
|
35 |
|
2/15/2011 |
|
181,412,152 |
|
75 |
|
6/15/2014 |
|
146,014,659 |
|
115 |
|
10/15/2017 |
|
110,617,166 |
|
i
|
36 |
|
3/15/2011 |
|
180,527,215 |
|
76 |
|
7/15/2014 |
|
145,129,722 |
|
116 |
|
11/15/2017 |
|
109,732,228 |
|
|
37 |
|
4/15/2011 |
|
179,642,277 |
|
77 |
|
8/15/2014 |
|
144,244,784 |
|
117 |
|
12/15/2017 |
|
108,847,291 |
|
|
38 |
|
5/15/2011 |
|
178,757,340 |
|
78 |
|
9/15/2014 |
|
143,359,847 |
|
118 |
|
1/15/2018 |
|
107,962,354 |
|
|
39 |
|
6/15/2011 |
|
177,872,403 |
|
79 |
|
10/15/2014 |
|
142,474,910 |
|
119 |
|
2/15/2018 |
|
107,077,416 |
|
|
40 |
|
7/15/2011 |
|
176,987,465 |
|
80 |
|
11/15/2014 |
|
141,589,972 |
|
120 |
|
3/15/2018 |
|
106,192,479 |
|
|
121 |
|
4/15/2018 |
|
105,307,542 |
|
161 |
|
8/15/2021 |
|
69,910,049 |
|
201 |
|
12/15/2024 |
|
34,512,556 |
|
|
122 |
|
5/15/2018 |
|
104,422,605 |
|
162 |
|
9/15/2021 |
|
69,025,111 |
|
202 |
|
1/15/2025 |
|
33,627,618 |
|
|
123 |
|
6/15/2018 |
|
103,537,667 |
|
163 |
|
10/15/2021 |
|
68,140,174 |
|
203 |
|
2/15/2025 |
|
32,742,681 |
|
|
124 |
|
7/15/2018 |
|
102,652,730 |
|
164 |
|
11/15/2021 |
|
67,255,237 |
|
204 |
|
3/15/2025 |
|
31,857,744 |
|
|
125 |
|
8/15/2018 |
|
101,767,793 |
|
165 |
|
12/15/2021 |
|
66,370,299 |
|
205 |
|
4/15/2025 |
|
30,972,806 |
|
|
126 |
|
9/15/2018 |
|
100,882,855 |
|
166 |
|
1/15/2022 |
|
65,485,362 |
|
206 |
|
5/15/2025 |
|
30,087,869 |
|
|
127 |
|
10/15/2018 |
|
99,997,918 |
|
167 |
|
2/15/2022 |
|
64,600,425 |
|
207 |
|
6/15/2025 |
|
29,202,932 |
|
|
128 |
|
11/15/2018 |
|
99,112,981 |
|
168 |
|
3/15/2022 |
|
63,715,487 |
|
208 |
|
7/15/2025 |
|
28,317,994 |
|
|
129 |
|
12/15/2018 |
|
98,228,043 |
|
169 |
|
4/15/2022 |
|
62,830,550 |
|
209 |
|
8/15/2025 |
|
27,433,057 |
|
|
130 |
|
1/15/2019 |
|
97,343,106 |
|
170 |
|
5/15/2022 |
|
61,945,613 |
|
210 |
|
9/15/2025 |
|
26,548,120 |
|
|
131 |
|
2/15/2019 |
|
96,458,169 |
|
171 |
|
6/15/2022 |
|
61,060,676 |
|
211 |
|
10/15/2025 |
|
25,663,182 |
|
|
132 |
|
3/15/2019 |
|
95,573,231 |
|
172 |
|
7/15/2022 |
|
60,175,738 |
|
212 |
|
11/15/2025 |
|
24,778,245 |
|
|
133 |
|
4/15/2019 |
|
94,688,294 |
|
173 |
|
8/15/2022 |
|
59,290,801 |
|
213 |
|
12/15/2025 |
|
23,893,308 |
|
|
134 |
|
5/15/2019 |
|
93,803,357 |
|
174 |
|
9/15/2022 |
|
58,405,864 |
|
214 |
|
1/15/2026 |
|
23,008,370 |
|
|
135 |
|
6/15/2019 |
|
92,918,419 |
|
175 |
|
10/15/2022 |
|
57,520,926 |
|
215 |
|
2/15/2026 |
|
22,123,433 |
|
|
136 |
|
7/15/2019 |
|
92,033,482 |
|
176 |
|
11/15/2022 |
|
56,635,989 |
|
216 |
|
3/15/2026 |
|
21,238,496 |
|
|
137 |
|
8/15/2019 |
|
91,148,545 |
|
177 |
|
12/15/2022 |
|
55,751,052 |
|
217 |
|
4/15/2026 |
|
20,353,559 |
|
|
138 |
|
9/15/2019 |
|
90,263,607 |
|
178 |
|
1/15/2023 |
|
54,866,114 |
|
218 |
|
5/15/2026 |
|
19,468,621 |
|
|
139 |
|
10/15/2019 |
|
89,378,670 |
|
179 |
|
2/15/2023 |
|
53,981,177 |
|
219 |
|
6/15/2026 |
|
18,583,684 |
|
|
140 |
|
11/15/2019 |
|
88,493,733 |
|
180 |
|
3/15/2023 |
|
53,096,240 |
|
220 |
|
7/15/2026 |
|
17,698,747 |
|
|
141 |
|
12/15/2019 |
|
87,608,795 |
|
181 |
|
4/15/2023 |
|
52,211,302 |
|
221 |
|
8/15/2026 |
|
16,813,809 |
|
|
142 |
|
1/15/2020 |
|
86,723,858 |
|
182 |
|
5/15/2023 |
|
51,326,365 |
|
222 |
|
9/15/2026 |
|
15,928,872 |
|
|
143 |
|
2/15/2020 |
|
85,838,921 |
|
183 |
|
6/15/2023 |
|
50,441,428 |
|
223 |
|
10/15/2026 |
|
15,043,935 |
|
|
144 |
|
3/15/2020 |
|
84,953,983 |
|
184 |
|
7/15/2023 |
|
49,556,490 |
|
224 |
|
11/15/2026 |
|
14,158,997 |
|
|
145 |
|
4/15/2020 |
|
84,069,046 |
|
185 |
|
8/15/2023 |
|
48,671,553 |
|
225 |
|
12/15/2026 |
|
13,274,060 |
|
|
146 |
|
5/15/2020 |
|
83,184,109 |
|
186 |
|
9/15/2023 |
|
47,786,616 |
|
226 |
|
1/15/2027 |
|
12,389,123 |
|
|
147 |
|
6/15/2020 |
|
82,299,171 |
|
187 |
|
10/15/2023 |
|
46,901,678 |
|
227 |
|
2/15/2027 |
|
11,504,185 |
|
|
148 |
|
7/15/2020 |
|
81,414,234 |
|
188 |
|
11/15/2023 |
|
46,016,741 |
|
228 |
|
3/15/2027 |
|
10,619,248 |
|
|
149 |
|
8/15/2020 |
|
80,529,297 |
|
189 |
|
12/15/2023 |
|
45,131,804 |
|
229 |
|
4/15/2027 |
|
9,734,311 |
|
|
150 |
|
9/15/2020 |
|
79,644,359 |
|
190 |
|
1/15/2024 |
|
44,246,866 |
|
230 |
|
5/15/2027 |
|
8,849,373 |
|
|
151 |
|
10/15/2020 |
|
78,759,422 |
|
191 |
|
2/15/2024 |
|
43,361,929 |
|
231 |
|
6/15/2027 |
|
7,964,436 |
|
|
152 |
|
11/15/2020 |
|
77,874,485 |
|
192 |
|
3/15/2024 |
|
42,476,992 |
|
232 |
|
7/15/2027 |
|
7,079,499 |
|
|
153 |
|
12/15/2020 |
|
76,989,547 |
|
193 |
|
4/15/2024 |
|
41,592,054 |
|
233 |
|
8/15/2027 |
|
6,194,561 |
|
|
154 |
|
1/15/2021 |
|
76,104,610 |
|
194 |
|
5/15/2024 |
|
40,707,117 |
|
234 |
|
9/15/2027 |
|
5,309,624 |
|
|
155 |
|
2/15/2021 |
|
75,219,673 |
|
195 |
|
6/15/2024 |
|
39,822,180 |
|
235 |
|
10/15/2027 |
|
4,424,687 |
|
|
156 |
|
3/15/2021 |
|
74,334,735 |
|
196 |
|
7/15/2024 |
|
38,937,242 |
|
236 |
|
11/15/2027 |
|
3,539,749 |
|
|
157 |
|
4/15/2021 |
|
73,449,798 |
|
197 |
|
8/15/2024 |
|
38,052,305 |
|
237 |
|
12/15/2027 |
|
2,654,812 |
|
|
158 |
|
5/15/2021 |
|
72,564,861 |
|
198 |
|
9/15/2024 |
|
37,167,368 |
|
238 |
|
1/15/2028 |
|
1,769,875 |
|
|
159 |
|
6/15/2021 |
|
71,679,923 |
|
199 |
|
10/15/2024 |
|
36,282,430 |
|
239 |
|
2/15/2028 |
|
884,937 |
|
|
160 |
|
7/15/2021 |
|
70,794,986 |
|
200 |
|
11/15/2024 |
|
35,397,493 |
|
240 |
|
3/15/2028 |
|
— |
|
ii
Series 2008-A1 Scheduled Targeted Principal Balances by Payment Date
|
Period |
|
Payment
|
|
Scheduled
|
|
Period |
|
Payment
|
|
Scheduled
|
|
Period |
|
Payment
|
|
Scheduled
|
|
|
1 |
|
4/15/2008 |
|
211,023,516 |
|
41 |
|
8/15/2011 |
|
156,565,835 |
|
81 |
|
12/15/2014 |
|
102,108,153 |
|
|
2 |
|
5/15/2008 |
|
209,662,074 |
|
42 |
|
9/15/2011 |
|
155,204,393 |
|
82 |
|
1/15/2015 |
|
100,746,711 |
|
|
3 |
|
6/15/2008 |
|
208,300,632 |
|
43 |
|
10/15/2011 |
|
153,842,951 |
|
83 |
|
2/15/2015 |
|
99,385,269 |
|
|
4 |
|
7/15/2008 |
|
206,939,190 |
|
44 |
|
11/15/2011 |
|
152,481,509 |
|
84 |
|
3/15/2015 |
|
98,023,827 |
|
|
5 |
|
8/15/2008 |
|
205,577,748 |
|
45 |
|
12/15/2011 |
|
151,120,067 |
|
85 |
|
4/15/2015 |
|
96,662,385 |
|
|
6 |
|
9/15/2008 |
|
204,216,306 |
|
46 |
|
1/15/2012 |
|
149,758,624 |
|
86 |
|
5/15/2015 |
|
95,300,943 |
|
|
7 |
|
10/15/2008 |
|
202,854,864 |
|
47 |
|
2/15/2012 |
|
148,397,182 |
|
87 |
|
6/15/2015 |
|
93,939,501 |
|
|
8 |
|
11/15/2008 |
|
201,493,422 |
|
48 |
|
3/15/2012 |
|
147,035,740 |
|
88 |
|
7/15/2015 |
|
92,578,059 |
|
|
9 |
|
12/15/2008 |
|
200,131,980 |
|
49 |
|
4/15/2012 |
|
145,674,298 |
|
89 |
|
8/15/2015 |
|
91,216,617 |
|
|
10 |
|
1/15/2009 |
|
198,770,538 |
|
50 |
|
5/15/2012 |
|
144,312,856 |
|
90 |
|
9/15/2015 |
|
89,855,175 |
|
|
11 |
|
2/15/2009 |
|
197,409,096 |
|
51 |
|
6/15/2012 |
|
142,951,414 |
|
91 |
|
10/15/2015 |
|
88,493,733 |
|
|
12 |
|
3/15/2009 |
|
196,047,654 |
|
52 |
|
7/15/2012 |
|
141,589,972 |
|
92 |
|
11/15/2015 |
|
87,132,291 |
|
|
13 |
|
4/15/2009 |
|
194,686,212 |
|
53 |
|
8/15/2012 |
|
140,228,530 |
|
93 |
|
12/15/2015 |
|
85,770,849 |
|
|
14 |
|
5/15/2009 |
|
193,324,770 |
|
54 |
|
9/15/2012 |
|
138,867,088 |
|
94 |
|
1/15/2016 |
|
84,409,407 |
|
|
15 |
|
6/15/2009 |
|
191,963,328 |
|
55 |
|
10/15/2012 |
|
137,505,646 |
|
95 |
|
2/15/2016 |
|
83,047,964 |
|
|
16 |
|
7/15/2009 |
|
190,601,886 |
|
56 |
|
11/15/2012 |
|
136,144,204 |
|
96 |
|
3/15/2016 |
|
81,686,522 |
|
|
17 |
|
8/15/2009 |
|
189,240,444 |
|
57 |
|
12/15/2012 |
|
134,782,762 |
|
97 |
|
4/15/2016 |
|
80,325,080 |
|
|
18 |
|
9/15/2009 |
|
187,879,002 |
|
58 |
|
1/15/2013 |
|
133,421,320 |
|
98 |
|
5/15/2016 |
|
78,963,638 |
|
|
19 |
|
10/15/2009 |
|
186,517,560 |
|
59 |
|
2/15/2013 |
|
132,059,878 |
|
99 |
|
6/15/2016 |
|
77,602,196 |
|
|
20 |
|
11/15/2009 |
|
185,156,118 |
|
60 |
|
3/15/2013 |
|
130,698,436 |
|
100 |
|
7/15/2016 |
|
76,240,754 |
|
|
21 |
|
12/15/2009 |
|
183,794,675 |
|
61 |
|
4/15/2013 |
|
129,336,994 |
|
101 |
|
8/15/2016 |
|
74,879,312 |
|
|
22 |
|
1/15/2010 |
|
182,433,233 |
|
62 |
|
5/15/2013 |
|
127,975,552 |
|
102 |
|
9/15/2016 |
|
73,517,870 |
|
|
23 |
|
2/15/2010 |
|
181,071,791 |
|
63 |
|
6/15/2013 |
|
126,614,110 |
|
103 |
|
10/15/2016 |
|
72,156,428 |
|
|
24 |
|
3/15/2010 |
|
179,710,349 |
|
64 |
|
7/15/2013 |
|
125,252,668 |
|
104 |
|
11/15/2016 |
|
70,794,986 |
|
|
25 |
|
4/15/2010 |
|
178,348,907 |
|
65 |
|
8/15/2013 |
|
123,891,226 |
|
105 |
|
12/15/2016 |
|
69,433,544 |
|
|
26 |
|
5/15/2010 |
|
176,987,465 |
|
66 |
|
9/15/2013 |
|
122,529,784 |
|
106 |
|
1/15/2017 |
|
68,072,102 |
|
|
27 |
|
6/15/2010 |
|
175,626,023 |
|
67 |
|
10/15/2013 |
|
121,168,342 |
|
107 |
|
2/15/2017 |
|
66,710,660 |
|
|
28 |
|
7/15/2010 |
|
174,264,581 |
|
68 |
|
11/15/2013 |
|
119,806,900 |
|
108 |
|
3/15/2017 |
|
65,349,218 |
|
|
29 |
|
8/15/2010 |
|
172,903,139 |
|
69 |
|
12/15/2013 |
|
118,445,458 |
|
109 |
|
4/15/2017 |
|
63,987,776 |
|
|
30 |
|
9/15/2010 |
|
171,541,697 |
|
70 |
|
1/15/2014 |
|
117,084,015 |
|
110 |
|
5/15/2017 |
|
62,626,334 |
|
|
31 |
|
10/15/2010 |
|
170,180,255 |
|
71 |
|
2/15/2014 |
|
115,722,573 |
|
111 |
|
6/15/2017 |
|
61,264,892 |
|
|
32 |
|
11/15/2010 |
|
168,818,813 |
|
72 |
|
3/15/2014 |
|
114,361,131 |
|
112 |
|
7/15/2017 |
|
59,903,450 |
|
|
33 |
|
12/15/2010 |
|
167,457,371 |
|
73 |
|
4/15/2014 |
|
112,999,689 |
|
113 |
|
8/15/2017 |
|
58,542,008 |
|
|
34 |
|
1/15/2011 |
|
166,095,929 |
|
74 |
|
5/15/2014 |
|
111,638,247 |
|
114 |
|
9/15/2017 |
|
57,180,566 |
|
|
35 |
|
2/15/2011 |
|
164,734,487 |
|
75 |
|
6/15/2014 |
|
110,276,805 |
|
115 |
|
10/15/2017 |
|
55,819,124 |
|
|
36 |
|
3/15/2011 |
|
163,373,045 |
|
76 |
|
7/15/2014 |
|
108,915,363 |
|
116 |
|
11/15/2017 |
|
54,457,682 |
|
|
37 |
|
4/15/2011 |
|
162,011,603 |
|
77 |
|
8/15/2014 |
|
107,553,921 |
|
117 |
|
12/15/2017 |
|
53,096,240 |
|
|
38 |
|
5/15/2011 |
|
160,650,161 |
|
78 |
|
9/15/2014 |
|
106,192,479 |
|
118 |
|
1/15/2018 |
|
51,734,798 |
|
|
39 |
|
6/15/2011 |
|
159,288,719 |
|
79 |
|
10/15/2014 |
|
104,831,037 |
|
119 |
|
2/15/2018 |
|
50,373,356 |
|
|
40 |
|
7/15/2011 |
|
157,927,277 |
|
80 |
|
11/15/2014 |
|
103,469,595 |
|
120 |
|
3/15/2018 |
|
49,011,913 |
|
iii
|
|
|
|
|
|
|
Period |
|
Payment
|
|
Scheduled
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
121 |
|
4/15/2018 |
|
47,650,471 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
122 |
|
5/15/2018 |
|
46,289,029 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
123 |
|
6/15/2018 |
|
44,927,587 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
124 |
|
7/15/2018 |
|
43,566,145 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
125 |
|
8/15/2018 |
|
42,204,703 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
126 |
|
9/15/2018 |
|
40,843,261 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
127 |
|
10/15/2018 |
|
39,481,819 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
128 |
|
11/15/2018 |
|
38,120,377 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
129 |
|
12/15/2018 |
|
36,758,935 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
130 |
|
1/15/2019 |
|
35,397,493 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
131 |
|
2/15/2019 |
|
34,036,051 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
132 |
|
3/15/2019 |
|
32,674,609 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
133 |
|
4/15/2019 |
|
31,313,167 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
134 |
|
5/15/2019 |
|
29,951,725 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
135 |
|
6/15/2019 |
|
28,590,283 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
136 |
|
7/15/2019 |
|
27,228,841 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
137 |
|
8/15/2019 |
|
25,867,399 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
138 |
|
9/15/2019 |
|
24,505,957 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
139 |
|
10/15/2019 |
|
23,144,515 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
140 |
|
11/15/2019 |
|
21,783,073 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
141 |
|
12/15/2019 |
|
20,421,631 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
142 |
|
1/15/2020 |
|
19,060,189 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
143 |
|
2/15/2020 |
|
17,698,747 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
144 |
|
3/15/2020 |
|
16,337,304 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
145 |
|
4/15/2020 |
|
14,975,862 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
146 |
|
5/15/2020 |
|
13,614,420 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
147 |
|
6/15/2020 |
|
12,252,978 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
148 |
|
7/15/2020 |
|
10,891,536 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
149 |
|
8/15/2020 |
|
9,530,094 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
150 |
|
9/15/2020 |
|
8,168,652 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
151 |
|
10/15/2020 |
|
6,807,210 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
152 |
|
11/15/2020 |
|
5,445,768 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
153 |
|
12/15/2020 |
|
4,084,326 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
154 |
|
1/15/2021 |
|
2,722,884 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
155 |
|
2/15/2021 |
|
1,361,442 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
156 |
|
3/15/2021 |
|
— |
|
|
|
|
|
|
|
|
iv
SCHEDULE 2
SERIES 2008-A1 SUPPLEMENT
2008 ENGINES
|
Engine Serial
|
|
Manufacturer |
|
Model |
|
|
894329 |
|
CFM International |
|
CFM56-7B |
|
|
697496 |
|
CFM International |
|
CFM56-5B4/3 |
|
|
894328 |
|
CFM International |
|
CFM56-7B |
|
|
567323 |
|
CFM International |
|
CFM56-5C4/P |
|
|
892939 |
|
CFM International |
|
CFM56-7B26 |
|
|
V12471 |
|
International Aero Engines |
|
V2527-A5 |
|
|
729086 |
|
Pratt & Whitney |
|
PW4062-3 |
|
|
V12470 |
|
International Aero Engines |
|
V2527-A5 |
|
|
896177 |
|
CFM International |
|
CFM56-7B/3 |
|
|
697519 |
|
CFM International |
|
CFM56-5B4/3 |
|
|
V12373 |
|
International Aero Engines |
|
V2527-A5 |
|
i
Exhibit 10.24
EXECUTION VERSION
WILLIS ENGINE SECURITIZATION TRUST,
as issuer of Series 2008-B1 Notes,
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Indenture Trustee
SERIES 2008-B1 SUPPLEMENT
Dated as of March 28, 2008
to
INDENTURE
amended and restated as of December 13, 2007
SERIES 2008-B1 NOTES
TABLE OF CONTENTS
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ARTICLE I |
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DEFINITIONS; CALCULATION GUIDELINES |
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Section 1.01. |
Definitions |
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ARTICLE II |
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CREATION OF THE SERIES 2008-B1 NOTES |
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Section 2.01. |
Designation |
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Section 2.02. |
Authentication and Delivery |
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Section 2.03. |
Interest Payments on the Series 2008-B1 Notes |
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Section 2.04. |
Principal Payments on the Series 2008-B1 Notes |
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Section 2.05. |
Prepayment of Principal on the Series 2008-B1 Notes |
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Section 2.06. |
Manner of Payment |
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Section 2.07. |
Restrictions on Transfer |
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Section 2.08. |
Final Maturity Date |
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ARTICLE III |
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NOTE PROCEEDS; SERIES 2008-B1 ACCOUNT, |
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APPLICATION OF AMOUNTS THEREIN |
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Section 3.01. |
Application of Note Proceeds |
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Section 3.02. |
Series 2008-B1 Series Account |
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Section 3.03. |
Distributions from Series 2008-B1 Series Account |
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ARTICLE IV |
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CONDITIONS PRECEDENT TO OBLIGATIONS OF SERIES 2008-B1 HOLDERS |
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Section 4.01. |
Conditions Precedent to Obligations of Series 2008-B1 Holders to Purchase Series 2008-B1 Notes |
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ARTICLE V |
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REPRESENTATIONS AND WARRANTIES |
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Section 5.01. |
Indenture Representations and Warranties |
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ARTICLE VI |
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MISCELLANEOUS PROVISIONS |
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Section 6.01. |
Ratification of Indenture |
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Section 6.02. |
Counterparts |
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Section 6.03. |
Governing Law; Jurisdiction |
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Section 6.04. |
Notices to Rating Agencies |
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Section 6.05. |
Statutory References |
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Section 6.06. |
Amendments and Modifications |
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Section 6.07. |
Waiver of Jury Trial |
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Section 6.08. |
Appointment of Representative |
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Section 6.09. |
Tax Matters |
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EXHIBIT |
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EXHIBIT A |
Form of Series 2008-B1 Note |
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SCHEDULE |
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SCHEDULE 1 |
Scheduled Targeted Principal Balance by Payment Date |
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This SERIES 2008-B1 SUPPLEMENT, dated as of March 28, 2008 (as amended, modified or supplemented from time to time, this “ Supplement ” or the “ Series 2008-B1 Supplement ” ), issued pursuant to, and incorporating the terms of, the Indenture, dated as of August 9, 2005 and amended and restated as of December 13, 2007 (as previously supplemented and as further amended, modified or supplemented from time to time, the “ Indenture ”), is entered into between WILLIS ENGINE SECURITIZATION TRUST, a Delaware statutory trust (“ WEST ”), and DEUTSCHE BANK TRUST COMPANY AMERICAS, a New York banking corporation, as Indenture Trustee (the “ Indenture Trustee ”).
WITNESSETH THAT:
WHEREAS, the Controlling Trustees of WEST have authorized the issuance of a Series of Additional Notes, to be issued as Series B Term Notes, the proceeds of which are to be used to refinance the Series 2005-B2 Warehouse Notes; and
WHEREAS, WEST and the Indenture Trustee wish to set forth the Principal Terms of such Additional Notes to be issued pursuant to this Supplement and designated as “Series 2008-B1 Floating Rate Secured Notes”.
NOW THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; CALCULATION GUIDELINES
Section 1.01. Definitions . (a) Capitalized terms used herein and not otherwise defined shall have the meaning set forth 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.
“ Additional Interest ” means, for the Series 2008-B1 Notes, interest at the Series 2008-B1 Base Interest Rate on the aggregate amount of any unpaid interest on the Series 2008-B1 Notes (including any unpaid portion of the Base Interest Amount and any Additional Interest Amount).
“ Additional Interest Amount ” means, for any Payment Date for the Series 2008-B1 Notes, an amount equal to the Additional Interest for the Series 2008-B1 Notes on the aggregate amount of unpaid interest (including any unpaid portion of any Base Interest Amount and any Additional Interest Amount for the Series 2008-B1 Notes and the other amounts described in Section 2.03(b) hereof) that was due and payable (but not paid) on, or with respect to, the Series 2008-B1 Notes on any prior Payment Date. The amount described in the preceding sentence constitutes the Additional Interest Amount for the Series 2008-B1 Notes for purposes of Sections 3.13 and 3.14 of the Indenture.
“ Base Interest Amount ” means, for any Payment Date for the Series 2008-B1 Notes, an amount equal to the accrued and unpaid interest at the Series 2008-B1 Base Interest
Rate on the Outstanding Principal Balance of the Series 2008-B1 Notes for the Interest Accrual Period ending on such date. The amount described in the preceding sentence constitutes the Base Interest Amount for the Series 2008-B1 Notes for purposes of Sections 3.13 and 3.14 of the Indenture.
“ Calyon ” means Calyon Securities (USA) Inc.
“Closing Date” means March 28, 2008.
“ Holder Indemnified Amounts ” means indemnification payments as provided for in Article 7 of the Series 2008-B1 Note Purchase Agreement.
“ Interest Amount ” means, for any Payment Date for the Series 2008-B1 Holders, an amount equal to the sum of the Base Interest Amount and the Additional Interest Amount due and payable on the Series 2008-B1 Notes on such Payment Date.
“ Majority of Holders ” means, with respect to the Series 2008-B1 Notes as of any date of determination, Series 2008-B1 Holders that, individually or in the aggregate, own Series 2008-B1 Notes representing more than fifty percent (50%) of the then aggregate Outstanding Principal Balance of the Series 2008-B1 Notes.
“ One-Month LIBOR ” means, for any Interest Accrual Period, LIBOR, as defined in the Indenture, for the Specified Period as of the Reference Date for such Interest Accrual Period.
“ Optional Redemption ” means a voluntary prepayment by WEST of all or a portion of the Outstanding Principal Balance of the Series 2008-B1 Notes in accordance with the terms of this Supplement.
“ Optional Redemption Date ” shall have the meaning set forth in Section 2.05(a) hereof.
“ Rating Agencies ” means Fitch and Moody’s.
“ Redemption Premium ” shall mean, for any Optional Redemption, the applicable Redemption Premium calculated as a percentage of the Outstanding Principal Balance of the Series 2008-B1 Notes being redeemed in such Optional Redemption depending on the date of the Optional Redemption, as set forth below. No Redemption Premium shall be payable in any Acquisition Balance Redemption:
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Redemption Date |
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Redemption Premium
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After the Initial Closing Date and on or before the first anniversary of the Closing Date |
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2.00 |
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After the first anniversary of the Closing Date and on or before the second anniversary of the Closing Date |
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1.00 |
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After the second anniversary of the Closing Date |
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0.00 |
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“Redemption Price” shall mean, in any Optional Redemption, the Outstanding Principal Balance of the Series 2008-B1 Notes in an Optional Redemption in whole, and the portion of the Outstanding Principal Balance being redeemed in an Optional Redemption in part, in each case together with the Redemption Premium, if any, as of the applicable Redemption Date specified in the definition of “Redemption Premium”.
“ Scheduled Targeted Principal Balance ” means for the Series 2008-B1 Notes for each Payment Date, the amount set forth opposite such Payment Date on Schedule 1 hereto under the column entitled “Scheduled Targeted Principal Balance”, as adjusted from time to time pursuant to Section 2.04(b) or Section 2.05(c) hereof.
“ Series 2008-A1 Holders ” means, on the Closing Date, the Persons named as Series 2008-A1 Holders in the Series 2008-A1 Note Purchase Agreement and, at any time of determination thereafter, any Person in whose name a Series 2008-A1 Note is registered in the Register.
“Series 2008-A1 Notes ” means the notes issued pursuant to the Series 2008-A1 Note Purchase Agreement and the Series 2008-A1 Supplement.
“ Series 2008-A1 Note Purchase Agreement ” means the Series 2008-A1 Note Purchase and Loan Agreement, dated as of March 25, 2008 , among WEST, the Administrative Agent and the Series 2008-A1 Holders, as amended, modified or supplemented from time to time in accordance with its terms.
“Series 2008-A1 Supplement” means the Series 2008-A1 Supplement to the Indenture, dated as of March 28, 2008, between WEST and the Indenture Trustee, as amended, modified or supplemented from time to time in accordance with its terms.
“ Series 2008-B1 Base Interest Rate ” means, for each Interest Accrual Period, One-Month LIBOR plus 3.50% per annum.
“ Series 2008-B1 Definitive Notes ” means Series 2008-B1 Notes in the form attached as Exhibit A hereto, with the applicable legend for Definitive Notes required by Section 2.02 of the Indenture inscribed on the face thereof.
“ Series 2008-B1 Expected Final Payment Date ” means March 15, 2023.
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“ Series 2008-B1 Final Maturity Date ” means December 15, 2032.
“ Series 2008-B1 Holders ” means, on the Closing Date, the Initial Series 2008-B1 Holder (as defined in the Series 2008-B1 Note Purchase Agreement) and, at any time of determination thereafter, any Person in whose name a Series 2008-B1 Note is registered in the Register.
“ Series 2008-B1 Note Purchase Agreement ” means the Series 2008-B1 Note Purchase and Loan Agreement, dated as of March 25, 2008 , among WEST, the Administrative Agent and the Initial Series 2008-B1 Holder, as amended, modified or supplemented from time to time in accordance with its terms.
“ Series 2008-B1 Notes ” means the Series of Notes designated as the “Series 2008-B1 Floating Rate Secured Notes” to be issued on the Closing Date and having the terms and conditions specified in this Supplement, substantially in the form of Exhibit A hereto, and including any and all replacements, extensions, substitutions or renewals of such Notes.
“ Series 2008-B1 Series Account ” means the Series Account of that name established in accordance with Section 3.02 hereof and Sections 3.01 and 3.09 of the Indenture.
“ Series 2008-B1 Transaction Documents ” means any and all of this Supplement, the Series 2008-B1 Notes, and the other Related Documents, as any of the foregoing may from time to time be amended, modified, supplemented or renewed.
“ Specified Period ” means one month.
“ Supplemental Principal Payment Amount ” means, for the Series 2008-B1 Notes on any Payment Date, the amount (if any) of a Series B Supplemental Principal Payment Amount allocated and paid to the Series 2008-B1 Notes on such Payment Date in accordance with the provisions of Sections 3.14 and 3.15(b) of the Indenture and Sections 2.04(a) and 3.03 hereof.
“ Willis ” means Willis Lease Finance Corporation, a Delaware corporation.
(b) The conventions of construction and usage set forth in Section 1.02 of the Indenture are hereby incorporated by reference in this Supplement.
ARTICLE II
CREATION OF THE SERIES 2008-B1 NOTES
Section 2.01. Designation .
(a) There is hereby created a Series of Series B Term Notes to be issued pursuant to the Indenture and this Supplement and to be known as the “Series 2008-B1 Floating Rate Secured Notes”, referred to herein as the “Series 2008-B1 Notes”. The Series 2008-B1 Notes may be issued in an aggregate principal amount up to $32,000,000, provided that Series 2008-B1 Note in the initial principal balance of $20,282,212.00 will be issued on the Closing
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Date. WEST may, from time to time after the Closing Date and up to and including September 30, 2008 (the “Issuance Period”), issue additional Series 2008-B1 Notes in an aggregate initial principal balance up to $11,717,788.00 adjusted as provided below. The Series 2008-B1 Notes and will not have priority over any other Series of Series B Notes except to the extent set forth in the Supplement for such other Series and the Indenture. The Series Issuance Date of the Series 2008-B1 Notes (including Series 2008-B1 Notes issued during the Issuance Period) is March 28, 2008. The Series 2008-B1 Notes are classified as “Term Notes”, “Series B Notes”, “Series B Term Notes”, and “Floating Rate Notes”, as each such term is used in the Indenture. The Series 2008-B1 Notes will be rated on the Closing Date by each of Moody’s and Fitch. The Series 2008-B1 Notes shall be issued in the form of Definitive Notes.
(b) The first Payment Date with respect to the Series 2008-B1 Notes shall be on April 15, 2008.
(c) Payments of principal on the Series 2008-B1 Notes shall be made from funds on deposit in the Series 2008-B1 Series Account or otherwise at the times and in the amounts set forth in Article III of the Indenture and Sections 2.04, 2.05 and 3.03 of this Supplement. If, at the time any Series 2008-B1 Notes are issued after the Closing Date and, during the Issuance Period, the Outstanding Principal Balance of the Series 2008-B1 Notes issued on the Closing Date has been reduced by principal payments made in accordance with Section 2.04 hereof, the initial principal amount of the Series 2008-B1 Notes issued after the Closing Date shall be reduced in proportion to the principal payments so made, and the remaining Scheduled Targeted Principal Balances shall be increased proportionately to the initial principal balance of the Series 2008-B1 Notes being issued after the Closing Date.
(d) 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 2.02. Authentication and Delivery .
(a) On the Series Issuance Date, WEST shall sign, and shall direct the Indenture Trustee in writing pursuant to Section 2.01(c) of the Indenture to duly authenticate and deliver, and the Indenture Trustee, upon receiving such direction, subject to compliance with the conditions precedent set forth in Section 4.01 hereof, (i) shall authenticate the Series 2008-B1 Notes in accordance with such written direction and (ii) shall deliver such Series 2008-B1 Notes to the Series 2008-B1 Holders, in accordance with such written direction.
(b) The Series 2008-B1 Notes are not being registered with the SEC and may not be sold, transferred or otherwise disposed of except in compliance with the provisions of the Indenture and except as follows:
(i) to Persons that the transferring Person reasonably believes are Qualified Institutional Buyers, in reliance on the exemption from the registration requirements of the Securities Act provided by Rule 144A;
(ii) in offshore transactions in reliance on Regulation S;
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(iii) to Institutional Accredited Investors that deliver an Investment Letter to the Indenture Trustee;
(c) The Series 2008-B1 Notes shall be executed by manual or facsimile signature on behalf of WEST and authenticated by a Responsible Officer of the Indenture Trustee and shall be substantially in the form of Exhibit A hereto, as applicable, with the appropriate legend required by Section 2.02 of the Indenture inscribed on the face thereof.
(d) The Series 2008-B1 Notes shall be issued in minimum denominations of $100,000 and in integral multiples of $1,000 in excess thereof.
Section 2.03. Interest Payments on the Series 2008-B1 Notes .
(a) Interest on Series 2008-B1 Notes . Interest on each Series 2008-B1 Note shall (i) accrue during each Interest Accrual Period at the Series 2008-B1 Base Interest Rate, (ii) be calculated on the basis of actual days elapsed over a year of 360 days, (iii) be due and payable in arrears on each Payment Date, and (iv) be calculated based on the Outstanding Principal Balance of such Series 2008-B1 Note during such Interest Accrual Period. All amounts of the Base Interest Amount for Series 2008-B1 Notes shall be due and payable on the earlier to occur of (i) the date on which the Series 2008-B1 Notes have been accelerated in accordance with the provisions of Section 4.02 of the Indenture and (ii) the Series 2008-B1 Final Maturity Date. The Administrative Agent shall include in the Monthly Report delivered to the Series 2008-B1 Holders the Series 2008-B1 Base Interest Rate for the Interest Accrual Period beginning in the month after the month covered by such Monthly Report.
(b) Additional Interest . If WEST shall fail to pay the Base Interest Amount on any Series 2008-B1 Note when due, or any other amount becoming due under this Supplement (other than payments of principal on the Series 2008-B1 Notes), WEST shall, from time to time, pay Additional Interest on such unpaid amounts, to the extent permitted by Applicable Law, to, but not including, the date of actual payment (after as well as before judgment), for the period during which such interest or other amount shall be unpaid from the due date of such payment to the date of actual payment thereof. Any such interest shall be payable at the times and subject to the priorities set forth in Section 3.03 of this Supplement and Section 3.14 of the Indenture. All amounts of Additional Interest shall be due and payable on the earlier to occur of (i) the date on which the Series 2008-B1 Notes have been accelerated in accordance with the provisions of Section 4.02 of the Indenture and (ii) the Series 2008-B1 Final Maturity Date.
(c) Maximum Interest Rate . In no event shall the interest charged with respect to a Series 2008-B1 Note exceed the maximum amount permitted by Applicable Law. If at any time the Interest Amount charged with respect to the Series 2008-B1 Notes exceeds the maximum rate permitted by Applicable Law, the rate of interest to accrue pursuant to this Supplement and such Series 2008-B1 Note shall be limited to the maximum rate permitted by Applicable Law, but any subsequent reductions in the One-Month LIBOR shall not reduce the interest to accrue on such Series 2008-B1 Note below the maximum amount permitted by Applicable Law until the total amount of interest accrued on such Series 2008-B1 Note equals the amount of interest that would have accrued if a varying rate per annum equal to the interest
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rate had at all times been in effect. If the total amount of interest paid or accrued on the Series 2008-B1 Note under the foregoing provisions is less than the total amount of interest that would have accrued if the interest rate had at all times been in effect, WEST agrees to pay to the Series 2008-B1 Holders an amount equal to the difference between (a) the lesser of (i) the amount of interest that would have accrued if the maximum rate permitted by Applicable Law had at all times been in effect, or (ii) the amount of interest that would have accrued if the interest rate had at all times been equal to the Interest Amount, and (b) the amount of interest accrued in accordance with the other provisions of this Supplement.
Section 2.04. Principal Payments on the Series 2008-B1 Notes .
(a) The Scheduled Principal Payment Amount calculated for the Series 2008-B1 Notes for each Payment Date shall be payable to the Holders of the Series 2008-B1 Notes on each Payment Date from amounts deposited in the Series 2008-B1 Series Account on such Payment Date as provided in Section 3.14 of the Indenture and Section 3.03 of this Supplement. In addition, any portion of the Supplemental Principal Payment Amount for any Payment Date allocated to the Series 2008-B1 Notes pursuant to Section 3.15(b) of the Indenture shall be payable to the Holders of the Series 2008-B1 Notes on such Payment Date from amounts deposited in the Series 2008-B1 Series Account as provided in Section 3.14 of the Indenture and Section 3.03 of this Supplement. So long as an Early Amortization Event or an Event of Default is then continuing, then, in addition to the foregoing, the Outstanding Principal Balance of the Series 2008-B1 Notes shall be payable on each Payment Date to the extent that amounts are available for such purpose in accordance with the provisions of Section 3.14 of the Indenture and Section 3.03 of this Supplement. The unpaid principal amount of the Series 2008-B1 Notes together with all unpaid interest (including all Additional Interest), fees, expenses, costs and other amounts payable by WEST pursuant to the terms of the Indenture and this Supplement shall be due and payable in full on the Series 2008-B1 Final Maturity Date.
(b) The Scheduled Targeted Principal Balances for the Series 2008-B1 Notes shall be adjusted at the times and in the manner indicated in Section 3.19 of the Indenture.
Section 2.05. Prepayment of Principal on the Series 2008-B1 Notes .
(a) WEST will have the option to prepay, in an Optional Redemption on any Payment Date (each such Payment Date, an “ Optional Redemption Date ”) all, or any portion, of the Outstanding Principal Balance of the Series 2008-B1 Notes on such Payment Date, in a minimum amount of Two Hundred Fifty Thousand Dollars ($250,000), in the case of any prepayment in part, for the applicable Redemption Price as of such Optional Redemption Date, provided that, as a condition to any such prepayment in part, the Outstanding Principal Balance of the Series 2008-B1 Notes shall be prepaid by a proportionate amount to the Series 2008-B1 Holders, such prepayment to be made as provided in the Series 2008-B1 Supplement. WEST may not make such prepayment from funds in the Collections Account, except to the extent that funds in any such Account would otherwise be payable to WEST in accordance with the terms of this Supplement and the Indenture, and may make any such prepayment in part from funds in the Series 2008-B1 Series Account, provided that funds in such Account may be used to fund a prepayment in whole but not in part. Any Optional Redemption in connection with a Refinancing funded with the proceeds of Additional Notes must be in whole, and any other Optional
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Redemption financed with funds other than funds in the Collections Account or the proceeds of Additional Notes may be in whole or in part.
(b) The Scheduled Targeted Principal Balances on any Optional Redemption Date for an Optional Redemption in part and on each succeeding Payment Date shall be adjusted as provided in Section 3.19(b) of the Indenture.
Section 2.06. Manner of Payment . All payments of principal and interest on the Series 2008-B1 Notes payable on each Payment Date shall be paid to the Series 2008-B1 Holders reflected in the Register as of the related Record Date by wire transfer of immediately available funds for receipt prior to 1:00 p.m. (New York City time) on such Payment Date. Any payments received by the Series 2008-B1 Holders after 1:00 p.m. (New York City time) on any day shall be considered to have been received on the next succeeding Business Day.
Section 2.07. Restrictions on Transfer . On the Closing Date, WEST shall sell, pursuant to the Series 2008-B1 Note Purchase Agreement, the Series 2008-B1 Notes to the Persons named as Series 2008-B1 Holders in the Series 2008-B1 Note Purchase Agreement and deliver such Series 2008-B1 Notes in accordance herewith and therewith. Thereafter, no Series 2008-B1 Note may be sold, transferred or otherwise disposed of except in compliance with the provisions of the Indenture, this Supplement and the Series 2008-B1 Note Purchase Agreement. Except as provided in the Indenture, the Indenture Trustee shall have no obligations or duties with respect to determining whether any transfers of the Series 2008-B1 Notes are made in accordance with the Securities Act or any other law; provided that with respect to Series 2008-B1 Definitive Notes, the Indenture Trustee shall enforce such transfer restrictions in accordance with the terms set forth in this Supplement.
Section 2.08. Final Maturity Date . The unpaid principal amount of the Series 2008-B1 Notes together with all unpaid interest (including all Additional Interest), fees, expenses, costs and other amounts payable by WEST pursuant to the terms of the Indenture, this Supplement and the other Series 2008-B1 Transaction Documents shall be due and payable in full on the earlier to occur of (i) the date on which the Series 2008-B1 Notes have been accelerated in accordance with the provisions of Section 4.02 of the Indenture and (ii) the Series 2008-B1 Final Maturity Date.
ARTICLE III
NOTE PROCEEDS; SERIES 2008-B1 ACCOUNT,
APPLICATION OF AMOUNTS THEREIN
Section 3.01. Application of Note Proceeds . The Administrative Agent shall, on the Closing Date, upon the Operating Bank’s receipt of the Net Proceeds of the Series 2008-A1 Notes and the Series 2008-B1 Notes, make, or direct the Operating Bank in writing to deposit in the Redemption/Defeasance Account, out of the Net Proceeds of the Series 2008-B1 Notes, an amount to be used to repay the Series 2005-B2 Warehouse Notes.
Section 3.02. Series 2008-B1 Series Account . The Indenture Trustee shall establish on or before the Closing Date pursuant to Sections 3.01 and 3.09 of the Indenture and
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shall maintain, so long as any Series 2008-B1 Note is Outstanding, an Eligible Account which shall be designated as the “Series 2008-B1 Series Account”, which account shall be held in the name of the Indenture Trustee for the benefit of the Series 2008-B1 Holders. All deposits of funds by, or for the benefit of, the Series 2008-B1 Holders from the Collections Account and otherwise shall be accumulated in, and withdrawn from, the Series 2008-B1 Series Account in accordance with the provisions of the Indenture and this Supplement.
Section 3.03. Distributions from Series 2008-B1 Series Account . On each Payment Date, the Indenture Trustee shall distribute funds then on deposit in the Series 2008-B1 Series Account in accordance with the provisions of either subsection (a), (b) or (c) of this Section 3.03, in each case in accordance with the Payment Date Schedule and only to the extent that the Prior Ranking Amounts have been paid in full.
(a) If neither an Early Amortization Event nor an Event of Default shall have occurred and be continuing with respect to any Series of Notes:
i. To each Holder of a Series 2008-B1 Note on the related Record Date, an amount equal to its pro rata portion of the Base Interest Amount for each such Payment Date;
ii. To each Holder of a Series 2008-B1 Note on the related Record Date, an amount equal to its pro rata portion of the Scheduled Principal Payment Amount then due and payable to the Holders of the Series 2008-B1 Notes on such Payment Date;
iii. To each Holder of a Series 2008-B1 Note on the related Record Date, an amount equal to its pro rata portion of the Series B Supplemental Principal Payment Amount (if any) then due and payable to the Holders of the Series 2008-B1 Notes on such Payment Date;
iv. To each Holder of a Series 2008-B1 Note on the related Record Date, an amount equal to its pro rata portion of any Additional Interest Amount then due and payable by WEST to the Series 2008-B1 Holders;
v. To each Holder of a Series 2008-B1 Note on the related Record Date, an amount equal to its pro rata portion of the Holder Indemnified Amounts due and payable to the Series 2008-B1 Holders; and
vi. After payment in full of the foregoing amounts pursuant to this Section 3.03(a) of this Supplement, to WEST, any remaining amounts then on deposit in the Series 2008-B1 Series Account.
(b) If either an Early Amortization Event or an Event of Default shall have occurred and be continuing, so long as the Indenture Trustee shall not have received a Collateral Liquidation Notice:
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i. To each Holder of a Series 2008-B1 Note on the related Record Date, an amount equal to its pro rata portion of the Base Interest Amount for such Payment Date;
ii. To each Holder of a Series 2008-B1 Note on the related Record Date, an amount equal to its pro rata portion of the Scheduled Principal Payment Amount then due and payable to the Holders of the Series 2008-B1 Notes on such Payment Date;
iii. To each Holder of a Series 2008-B1 Note on the related Record Date, an amount equal to its pro rata portion of any Additional Interest Amount then due and payable by WEST to the Series 2008-B1 Holders;
iv. To each Holder of a Series 2008-B1 Note on the related Record Date, an amount equal to its pro rata portion of the then unpaid principal balances of the Series 2008-B1 Notes then Outstanding until the Outstanding Principal Balance of the Series 2008-B1 Notes has been reduced to zero;
v. To each Holder of a Series 2008-B1 Note on the related Record Date, an amount equal to its pro rata portion of the Holder Indemnified Amounts due and payable to the Series 2008-B1 Holders; and
vi. After payment in full of the foregoing amounts pursuant to this Section 3.03(b) of this Supplement, to WEST, any remaining amounts then on deposit in the Series 2008-B1 Series Account.
(c) If an Event of Default shall have occurred and be continuing, and the Indenture Trustee shall have received a Collateral Liquidation Notice:
i. To each Holder of a Series 2008-B1 Note on the related Record Date, an amount equal to its pro rata portion of the Base Interest Amount for such Payment Date;
ii. To each Holder of a Series 2008-B1 Note on the related Record Date, an amount equal to its pro rata portion of any Additional Interest Amount then due and payable by WEST to the Series 2008-B1 Holders;
iii. To each Holder of a Series 2008-B1 Note on the related Record Date, an amount equal to its pro rata portion of the then unpaid principal balances of the Series 2008-B1 Notes then Outstanding until the Outstanding Principal Balance of the Series 2008-B1 Notes has been reduced to zero;
iv. To each Holder of a Series 2008-B1 Note on the related Record Date, an amount equal to its pro rata portion of the Holder Indemnified Amounts due and payable to the Series 2008-B1 Holders; and
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v. After payment in full of the foregoing amounts pursuant to this Section 3.03(c) of this Supplement, to WEST, any remaining amounts then on deposit in the Series 2008-B1 Series Account.
ARTICLE IV
CONDITIONS PRECEDENT TO OBLIGATIONS OF SERIES 2008-B1 HOLDERS
Section 4.01. Conditions Precedent to Obligations of Series 2008-B1 Holders to Purchase Series 2008-B1 Notes . The Indenture Trustee shall not authenticate the Series 2008-B1 Notes unless (a) all conditions to the issuance of the Series 2008-B1 Notes set forth in Section 2.10(d) of the Indenture and in Article 3 of the Series 2008-B1 Note Purchase Agreement shall have been satisfied, and (b) WEST shall have delivered an Officer’s Certificate to the Indenture Trustee to the effect that all such conditions set forth in Section 2.10(d) of the Indenture and in the Series 2008-B1 Note Purchase Agreement shall have been satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.01. Indenture Representations and Warranties . To induce the Series 2008-B1 Holders to purchase the Series 2008-B1 Notes hereunder, WEST hereby makes to the Indenture Trustee for the benefit of the Series 2008-B1 Holders as of the Closing Date all of the representations and warranties set forth in Section 5.01 of the Indenture.
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.01. Ratification 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 6.02. Counterparts . 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 6.03. Governing Law; Jurisdiction . THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAWS BUT OTHERWISE WITHOUT REFERENCE TO ITS CONFLICTS OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. Each of the parties hereto agrees that the United States federal and New York State courts located in The City of New York shall have jurisdiction to hear and determine any suit, action or proceeding, and to settle any disputes, which may arise out of or in connection with this Supplement and, for such purposes, submits to the jurisdiction of such courts. Each of the parties hereto waives any objection which it might now or hereafter have to such courts being
11
nominated as the forum or venue to hear and determine any suit, action or proceeding, and to settle any disputes, which may arise out of or in connection with this Supplement and agrees not to claim that any such court is not a convenient or appropriate forum. Each of the parties hereto consents to the granting of such legal or equitable relief as is deemed appropriate by such courts.
Section 6.04. Notices to Rating Agencies . Whenever any notice or other communication is required to be given to the Rating Agencies pursuant to the Indenture or this Supplement, such notice or communication shall be delivered as follows: (i) if to Moody’s, at Moody’s Investors Service, Inc., 25 th Floor, 7 World Trade Center, 250 Greenwich Street, New York, New York 10007, Attention: ABS/RMBS Monitoring Department and (ii) if to Fitch, at One State Street Plaza, New York, New York 10004, Attention: ABS Monitoring Group – Equipment Leases. Any rights to notices conveyed to a Rating Agency pursuant to the terms of this Supplement shall terminate immediately if such Rating Agency no longer has a rating outstanding with respect to the Series 2008-B1 Notes.
Section 6.05. Statutory References . References in this Supplement and any other Series 2008-B1 Transaction Document to any section of the Uniform Commercial Code or the UCC shall mean, on or after the effective date of adoption of any revision to the Uniform Commercial Code or the UCC in the applicable jurisdiction, such revised or successor section thereto.
Section 6.06. Amendments and Modifications . The terms of this Supplement may be waived, modified or amended only in a written instrument signed by each of WEST and the Indenture Trustee and, except with respect to the matters set forth in (and subject to the terms of) Section 9.01 and 10.02 of the Indenture, only with the prior written consent of the Majority of Holders or, with respect to the matters set forth in Sections 9.02(a) of the Indenture, the prior written consent of the Holders of all Series 2008-B1 Notes then Outstanding.
Section 6.07. Waiver of Jury Trial . EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, AS AGAINST THE OTHER PARTIES HERETO, ANY RIGHTS IT MAY HAVE TO A JURY TRIAL IN RESPECT OF ANY CIVIL ACTION OR PROCEEDING (WHETHER ARISING IN CONTRACT OR TORT OR OTHERWISE), INCLUDING ANY COUNTERCLAIM, ARISING UNDER OR RELATING TO THIS SUPPLEMENT OR ANY OTHER SERIES 2008-B1 TRANSACTION DOCUMENT, INCLUDING IN RESPECT OF THE NEGOTIATION, ADMINISTRATION OR ENFORCEMENT HEREOF OR THEREOF.
Section 6.08. Appointment of Representative . The Majority of Holders shall be authorized to appoint a representative to act on their behalf with such authority as shall be provided in such appointment, provided that, such authority shall not extend to the taking of any action under the Related Documents requiring the consent of all Series 2008-B1 Holders.
Section 6.09. Tax Matters . To the extent required by law, WEST will timely file any tax returns, reports or information statements in respect of the Series 2008-B1 Notes, including, without limitation, Form 8281, to the extent applicable.
12
[Signature page follows.]
13
IN WITNESS WHEREOF, WEST and the Indenture Trustee have caused this Supplement to be duly executed and delivered by their respective officers all as of the day and year first above written.
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WILLIS ENGINE SECURITIZATION TRUST |
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By: |
/s/ Bradley S. Forsyth |
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Name: Bradley S. Forsyth |
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Title: Controlling Trustee |
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DEUTSCHE BANK TRUST COMPANY AMERICAS, not in its individual capacity but solely as Indenture Trustee |
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By: |
/s/ Irene Siegel |
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Name: Irene Siegel |
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Title: Vice President |
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By: |
/s/ Aranka R. Paul |
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Name: Arankra R. Paul |
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Title: Assistant Vice President |
14
EXHIBIT A
SERIES 2008-B1 SUPPLEMENT
FORM OF SERIES 2008-B1 NOTE
Except as specified in Section 2.1 2(f) of the Indenture, each 144A Book-Entry Note, each Unrestricted Book-Entry Note and each Definitive Note issued in reliance on Section 4(2) of the Securities Act (and all Notes issued in exchange therefor or upon registration of transfer or substitution thereof) shall bear the following legend on the face thereof:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR WITH ANY SECURITIES REGULATORY AUTHORITY IN ANY JURISDICTION AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN “INSTITUTIONAL ACCREDITED INVESTOR”) OR (C) IT IS NOT A U.S. PERSON (WITHIN THE MEANING OF REGULATION S) AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT BEFORE TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE OF THIS NOTE AND THE LAST DATE THAT WILLIS ENGINE SECURITIZATION TRUST, A DELAWARE STATUTORY TRUST (“WEST”), OR ANY OF ITS AFFILIATES OWNED THIS NOTE, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO WEST OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE INDENTURE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE INDENTURE TRUSTEE) AND AN OPINION OF COUNSEL ACCEPTABLE TO WEST THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (D) IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT TO AN EXEMPTION FROM REGISTRATION IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH OF CASES (A) THROUGH (F) ABOVE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE IN THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN THE TWO-YEAR PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON
A-1
THE TRANSFER NOTICE ATTACHED HERETO AND SUBMIT SUCH TRANSFER NOTICE TO THE INDENTURE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR IF THE TRANSFER IS PURSUANT TO AN EXEMPTION FROM REGISTRATION IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE INDENTURE TRUSTEE AND WEST SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE INDENTURE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.
Each Book-Entry Note shall also bear the following legend on the face thereof:
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO WEST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS BOOK-ENTRY NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS BOOK-ENTRY NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.12 OF THE INDENTURE.
Each Regulation S Temporary Book-Entry Note shall bear the following legend on the face thereof:
THIS NOTE IS A REGULATION S TEMPORARY BOOK-ENTRY NOTE WITHIN THE MEANING OF THE INDENTURE REFERRED TO HEREINAFTER AND IS SUBJECT TO RESTRICTIONS ON THE TRANSFER AND EXCHANGE THEREOF AND ON THE PAYMENT OF INTEREST THEREON AS SPECIFIED IN THE INDENTURE.
A-2
WILLIS ENGINE SECURITIZATION TRUST
SERIES 2008-B1 FLOATING RATE SECURED NOTE
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$[XX] |
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No. |
March, [ ], 2008
KNOW ALL PERSONS BY THESE PRESENTS that WILLIS ENGINE SECURITIZATION TRUST, a Delaware statutory trust (“ WEST ”), for value received, hereby promises to pay to [ ], or registered assigns, at the principal corporate trust office of the Indenture Trustee named below, (i) the principal sum of [ ] Dollars ($ ), which sum shall be payable on each Payment Date on the dates and in the amounts set forth in the Indenture, dated as of August 9, 2005 and amended and restated as of December 13, 2007 (as amended, restated or otherwise modified from time to time, the “ Indenture ”), and the Series 2008-B1 Supplement, dated as of March 28, 2008 (as amended, restated or otherwise modified from time to time, the “ Series 2008-B1 Supplement ”), each between WEST and Deutsche Bank Trust Company Americas, as indenture trustee (the “ Indenture Trustee ”), and (ii) interest on the outstanding principal amount of this Series 2008-B1 Floating Rate Secured Note (this “ Series 2008-B1 Note ”) on the dates and in the amounts set forth in the Indenture and the Series 2008-B1 Supplement. Capitalized terms not otherwise defined herein will have the meaning set forth in the Indenture and the Series 2008-B1 Supplement.
Payment of the principal of and interest on this Series 2008-B1 Note shall be made in lawful money of the United States of America which at the time of payment is legal tender for payment of public and private debts. The principal balance of, and interest on, this Series 2008-B1 Note is payable at the times and in the amounts set forth in the Indenture and the Series 2008-B1 Supplement by wire transfer of immediately available funds to the account designated by the Holder of record on the related Record Date.
This Series 2008-B1 Note is one of the authorized notes identified in the title hereto and issued pursuant to the Indenture and the Series 2008-B1 Supplement.
The Series 2008-B1 Notes shall be an obligation of WEST and shall be secured by the Collateral, all as defined in, and subject to limitations set forth in, the Indenture.
This Series 2008-B1 Note is transferable as provided in the Indenture and the Series 2008-B1 Supplement, subject to certain limitations therein contained, only upon the books for registration and transfer kept by the Indenture Trustee, and only upon surrender of this Series 2008-B1 Note for transfer to the Indenture Trustee duly endorsed by, or accompanied by a written instrument of transfer in form reasonably satisfactory to the Indenture Trustee duly executed by, the registered Holder hereof or his attorney duly authorized in writing. The Indenture Trustee or WEST may require payment by the Holder of a sum sufficient to cover any tax expense or other governmental charge payable in connection with any transfer or exchange of the Series 2008-B1 Notes.
WEST, the Indenture Trustee and any other agent of WEST may treat the Person in whose name this Series 2008-B1 Note is registered as the absolute owner hereof for all purposes, and neither WEST, the Indenture Trustee, nor any other such agent shall be affected by notice to the contrary.
A-3
The Series 2008-B1 Note are subject to Optional Redemption, at the times and subject to the conditions set forth in the Indenture and the Series 2008-B1 Supplement.
If an Event of Default under the Indenture shall occur and be continuing, the principal of and accrued interest on this Series 2008-B1 Note may be declared to be due and payable in the manner and with the effect provided in the Indenture and the Series 2008-B1 Supplement.
The Indenture permits, with certain exceptions as therein provided, the issuance of supplemental indentures with the consent of the Requisite Majority, in certain specifically described instances. Any consent given by the Requisite Majority shall be conclusive and binding upon the Holder of this Series 2008-B1 Note and on all future holders of this Series 2008-B1 Note and of any Series 2008-B1 Note issued in lieu hereof whether or not notation of such consent is made upon this Series 2008-B1 Note. Supplements and amendments to the Indenture and the Series 2008-B1 Supplement may be made only to the extent and in circumstances permitted by the Indenture and the Series 2008-B1 Supplement.
The Holder of this Series 2008-B1 Note shall have no right to enforce the provisions of the Indenture and the Series 2008-B1 Supplement or to institute action to enforce the covenants, or to take any action with respect to a default under the Indenture and the Series 2008-B1 Supplement, or to institute, appear in or defend any suit or other proceedings with respect thereto, except as provided under certain circumstances described in the Indenture and the Series 2008-B1 Supplement; provided, however, that nothing contained in the Indenture and the Series 2008-B1 Supplement shall affect or impair any right of enforcement conferred on the Holder hereof to enforce any payment of the principal of and interest on this Series 2008-B1 Note on or after the due date thereof.
The indebtedness evidenced by the Notes issued under the Series 2008-B1 Supplement is, to the extent and in the manner provided in the Indenture, subordinate and subject in right of payment to the prior payment in full of all Senior Claims (as defined in the Indenture), and this Series 2008-B1 Note is issued subject to such provisions. Each Holder of this Series 2008-B1 Note, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Indenture Trustee on his behalf to take such action as may be necessary or appropriate to effectuate the subordination as provided in the Indenture, and (c) appoints the Indenture Trustee his attorney-in-fact for such purpose.
The maturity of this Series 2008-B1 Note is subject to acceleration upon the occurrence and during the continuance of the Events of Default specified in the Indenture. The Holders of the Notes issued under the Series 2008-B1 Supplement shall not be permitted to deliver a Default Notice or to exercise any remedy in respect of any such Event of Default until all interest on and principal of the Series B Notes have been paid in full.
The Holder of this Series 2008-B1 Note agrees, by acceptance hereof, to pay over to the Administrative Agent any money (including principal, premium and interest) paid to it in respect of this Series 2008-B1 Note in the event that the Indenture Trustee, acting in good faith, determines subsequently that such monies were not paid in accordance with the priority of payment provisions of the Indenture or as a result of any other mistake of fact or law on the part of the Administrative Agent in making such payment.
A-4
The subordination provisions contained in Section 3.14 and Article XI of the Indenture may not be amended or modified without the consent of each Hedge Counterparty, each Holder of the subclass affected thereby and each Holder of any subclass of Notes ranking senior thereto.
The Indenture also contains provisions permitting the Holders of Notes representing a majority of the Outstanding Principal Balance of the Senior Series of Notes to waive compliance by WEST with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver shall be conclusive and binding upon all present and future Holders of this Series 2008-B1 Note and of any Series 2008-B1 Note issued upon the registration of transfer of, in exchange or in lieu of or upon the refinancing of this Series 2008-B1 Note, whether or not notation of such consent or waiver is made upon this Series 2008-B1 Note.
This Series 2008-B1 Note, and the rights and obligations of the parties hereunder, shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York without giving effect to principles of conflict of laws, other than Sections 5-1401 and 5-1402 of the New York General Obligations Laws.
All terms and provisions of the Indenture and the Series 2008-B1 Supplement are herein incorporated by reference as if set forth herein in their entirety.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED, that all acts, conditions and things required to exist, happen and be performed precedent to the execution and delivery of the Indenture and the Series 2008-B1 Supplement and the issuance of this Series 2008-B1 Note and the issue of which it is a part, do exist, have happened and have been timely performed in regular form and manner as required by law.
Unless the certificate of authentication hereon has been executed by the Indenture Trustee by manual signature of one of its Responsible Officers, this Series 2008-B1 Note shall not be entitled to any benefit under the Indenture and the Series 2008-B1 Supplement, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, WEST has caused this Series 2008-B1 Note to be duly executed by its duly authorized representative, as of the date first set above.
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WILLIS ENGINE SECURITIZATION TRUST, as issuer of Series 2008-B1 Notes |
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By: |
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Name: |
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Title: |
A-5
This Note is one of the Series 2008-B1 Notes described in the within-mentioned Series 2008-B1 Supplement.
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DEUTSCHE BANK TRUST COMPANY AMERICAS, not in individual capacity but solely as Indenture Trustee |
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By: |
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Name: |
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Title: |
A-6
Schedule A to Series 2008-B1 Note
Aggregate principal amount of any Series 2008-B1 Note issued in exchange for a portion or portions hereof and any portion or portions of any Series 2008-B1 Note exchanged for a portion or portions hereof:
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Date |
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Principal Amount Issued
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Remaining Principal Amount
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Notation
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A-7
TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered Holder hereby sell(s), assign(s) and transfer(s) unto
Taxpayer identification No.
Address:
the within Series 2008- B1 Note and all rights thereunder, hereby irrevocably constituting and appointing attorney to transfer said Series 2008-B1 Note on the books of WEST with full power of substitution in the premises.
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Date: |
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By: |
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Name: |
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Title: |
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NOTE: The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever. |
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A-8
In connection with any transfer of this Series 2008- B1 Note occurring prior to the date which is the earlier of the end of the period referred to in Rule 144(k) under the Securities Act, the undersigned confirms that without utilizing any general solicitation or general advertising:
{Check One}
{ } (a) this Series 2008- B1 Note is being transferred in compliance with the exemption from registration under the Securities Act provided by Rule 144A thereunder;
or
{ } (b) this Series 2008- B1 Note is being transferred other than in accordance with (a) above and documents are being furnished which comply with the conditions of transfer set forth in this Series 2008-B1 Note and the Indenture.
If none of the foregoing boxes is checked, the Indenture Trustee or other Note Registrar shall not be obligated to register this Series 2008- B1 Note in the name of any Person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 2.12 of the Indenture shall have been satisfied.
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Date: |
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By: |
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Title: |
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NOTE: The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever. |
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A-9
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED: The undersigned represents and warrants that it is purchasing this Series 2008- B1 Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding WEST as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.
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Date: |
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Title: |
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A-10
SCHEDULE 1
SERIES 2008-B1 SUPPLEMENT
SCHEDULED TARGETED PRINCIPAL BALANCES
Series 2008-B1 Scheduled Targeted Principal Balances by Period
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Period |
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Payment
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Scheduled
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Period |
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Payment
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Scheduled
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Period |
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Payment
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Scheduled
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1 |
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4/15/2008 |
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20,169,533 |
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41 |
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8/15/2011 |
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15,662,375 |
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81 |
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12/15/2014 |
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11,155,217 |
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2 |
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5/15/2008 |
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20,056,854 |
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42 |
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9/15/2011 |
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15,549,696 |
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82 |
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1/15/2015 |
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11,042,538 |
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3 |
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6/15/2008 |
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19,944,175 |
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43 |
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10/15/2011 |
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15,437,017 |
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83 |
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2/15/2015 |
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10,929,859 |
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4 |
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7/15/2008 |
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19,831,496 |
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44 |
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11/15/2011 |
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15,324,338 |
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84 |
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3/15/2015 |
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10,817,180 |
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5 |
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8/15/2008 |
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19,718,817 |
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45 |
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12/15/2011 |
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15,211,659 |
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85 |
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4/15/2015 |
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10,704,501 |
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6 |
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9/15/2008 |
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19,606,138 |
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46 |
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1/15/2012 |
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15,098,980 |
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86 |
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5/15/2015 |
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10,591,822 |
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7 |
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10/15/2008 |
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19,493,459 |
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47 |
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2/15/2012 |
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14,986,301 |
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87 |
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6/15/2015 |
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10,479,143 |
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8 |
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11/15/2008 |
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19,380,780 |
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48 |
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3/15/2012 |
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14,873,622 |
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88 |
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7/15/2015 |
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10,366,464 |
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9 |
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12/15/2008 |
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19,268,101 |
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49 |
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4/15/2012 |
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14,760,943 |
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89 |
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8/15/2015 |
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10,253,785 |
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10 |
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1/15/2009 |
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19,155,422 |
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50 |
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5/15/2012 |
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14,648,264 |
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90 |
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9/15/2015 |
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10,141,106 |
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11 |
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2/15/2009 |
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19,042,743 |
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51 |
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6/15/2012 |
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14,535,585 |
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91 |
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10/15/2015 |
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10,028,427 |
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12 |
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3/15/2009 |
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18,930,065 |
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52 |
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7/15/2012 |
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14,422,906 |
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92 |
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11/15/2015 |
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9,915,748 |
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13 |
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4/15/2009 |
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18,817,386 |
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53 |
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8/15/2012 |
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14,310,227 |
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93 |
|
12/15/2015 |
|
9,803,069 |
|
|
14 |
|
5/15/2009 |
|
18,704,707 |
|
54 |
|
9/15/2012 |
|
14,197,548 |
|
94 |
|
1/15/2016 |
|
9,690,390 |
|
|
15 |
|
6/15/2009 |
|
18,592,028 |
|
55 |
|
10/15/2012 |
|
14,084,869 |
|
95 |
|
2/15/2016 |
|
9,577,711 |
|
|
16 |
|
7/15/2009 |
|
18,479,349 |
|
56 |
|
11/15/2012 |
|
13,972,190 |
|
96 |
|
3/15/2016 |
|
9,465,032 |
|
|
17 |
|
8/15/2009 |
|
18,366,670 |
|
57 |
|
12/15/2012 |
|
13,859,512 |
|
97 |
|
4/15/2016 |
|
9,352,353 |
|
|
18 |
|
9/15/2009 |
|
18,253,991 |
|
58 |
|
1/15/2013 |
|
13,746,833 |
|
98 |
|
5/15/2016 |
|
9,239,674 |
|
|
19 |
|
10/15/2009 |
|
18,141,312 |
|
59 |
|
2/15/2013 |
|
13,634,154 |
|
99 |
|
6/15/2016 |
|
9,126,995 |
|
|
20 |
|
11/15/2009 |
|
18,028,633 |
|
60 |
|
3/15/2013 |
|
13,521,475 |
|
100 |
|
7/15/2016 |
|
9,014,316 |
|
|
21 |
|
12/15/2009 |
|
17,915,954 |
|
61 |
|
4/15/2013 |
|
13,408,796 |
|
101 |
|
8/15/2016 |
|
8,901,637 |
|
|
22 |
|
1/15/2010 |
|
17,803,275 |
|
62 |
|
5/15/2013 |
|
13,296,117 |
|
102 |
|
9/15/2016 |
|
8,788,959 |
|
|
23 |
|
2/15/2010 |
|
17,690,596 |
|
63 |
|
6/15/2013 |
|
13,183,438 |
|
103 |
|
10/15/2016 |
|
8,676,280 |
|
|
24 |
|
3/15/2010 |
|
17,577,917 |
|
64 |
|
7/15/2013 |
|
13,070,759 |
|
104 |
|
11/15/2016 |
|
8,563,601 |
|
|
25 |
|
4/15/2010 |
|
17,465,238 |
|
65 |
|
8/15/2013 |
|
12,958,080 |
|
105 |
|
12/15/2016 |
|
8,450,922 |
|
|
26 |
|
5/15/2010 |
|
17,352,559 |
|
66 |
|
9/15/2013 |
|
12,845,401 |
|
106 |
|
1/15/2017 |
|
8,338,243 |
|
|
27 |
|
6/15/2010 |
|
17,239,880 |
|
67 |
|
10/15/2013 |
|
12,732,722 |
|
107 |
|
2/15/2017 |
|
8,225,564 |
|
|
28 |
|
7/15/2010 |
|
17,127,201 |
|
68 |
|
11/15/2013 |
|
12,620,043 |
|
108 |
|
3/15/2017 |
|
8,112,885 |
|
|
29 |
|
8/15/2010 |
|
17,014,522 |
|
69 |
|
12/15/2013 |
|
12,507,364 |
|
109 |
|
4/15/2017 |
|
8,000,206 |
|
|
30 |
|
9/15/2010 |
|
16,901,843 |
|
70 |
|
1/15/2014 |
|
12,394,685 |
|
110 |
|
5/15/2017 |
|
7,887,527 |
|
|
31 |
|
10/15/2010 |
|
16,789,164 |
|
71 |
|
2/15/2014 |
|
12,282,006 |
|
111 |
|
6/15/2017 |
|
7,774,848 |
|
|
32 |
|
11/15/2010 |
|
16,676,485 |
|
72 |
|
3/15/2014 |
|
12,169,327 |
|
112 |
|
7/15/2017 |
|
7,662,169 |
|
|
33 |
|
12/15/2010 |
|
16,563,806 |
|
73 |
|
4/15/2014 |
|
12,056,648 |
|
113 |
|
8/15/2017 |
|
7,549,490 |
|
|
34 |
|
1/15/2011 |
|
16,451,128 |
|
74 |
|
5/15/2014 |
|
11,943,969 |
|
114 |
|
9/15/2017 |
|
7,436,811 |
|
|
35 |
|
2/15/2011 |
|
16,338,449 |
|
75 |
|
6/15/2014 |
|
11,831,290 |
|
115 |
|
10/15/2017 |
|
7,324,132 |
|
|
36 |
|
3/15/2011 |
|
16,225,770 |
|
76 |
|
7/15/2014 |
|
11,718,611 |
|
116 |
|
11/15/2017 |
|
7,211,453 |
|
|
37 |
|
4/15/2011 |
|
16,113,091 |
|
77 |
|
8/15/2014 |
|
11,605,932 |
|
117 |
|
12/15/2017 |
|
7,098,774 |
|
|
38 |
|
5/15/2011 |
|
16,000,412 |
|
78 |
|
9/15/2014 |
|
11,493,253 |
|
118 |
|
1/15/2018 |
|
6,986,095 |
|
|
39 |
|
6/15/2011 |
|
15,887,733 |
|
79 |
|
10/15/2014 |
|
11,380,575 |
|
119 |
|
2/15/2018 |
|
6,873,416 |
|
|
40 |
|
7/15/2011 |
|
15,775,054 |
|
80 |
|
11/15/2014 |
|
11,267,896 |
|
120 |
|
3/15/2018 |
|
6,760,737 |
|
i
|
Period |
|
Payment
|
|
Scheduled
|
|
Period |
|
Payment
|
|
Scheduled
|
|
|
121 |
|
4/15/2018 |
|
6,648,058 |
|
161 |
|
8/15/2021 |
|
2,140,900 |
|
|
122 |
|
5/15/2018 |
|
6,535,379 |
|
162 |
|
9/15/2021 |
|
2,028,221 |
|
|
123 |
|
6/15/2018 |
|
6,422,700 |
|
163 |
|
10/15/2021 |
|
1,915,542 |
|
|
124 |
|
7/15/2018 |
|
6,310,022 |
|
164 |
|
11/15/2021 |
|
1,802,863 |
|
|
125 |
|
8/15/2018 |
|
6,197,343 |
|
165 |
|
12/15/2021 |
|
1,690,184 |
|
|
126 |
|
9/15/2018 |
|
6,084,664 |
|
166 |
|
1/15/2022 |
|
1,577,505 |
|
|
127 |
|
10/15/2018 |
|
5,971,985 |
|
167 |
|
2/15/2022 |
|
1,464,826 |
|
|
128 |
|
11/15/2018 |
|
5,859,306 |
|
168 |
|
3/15/2022 |
|
1,352,147 |
|
|
129 |
|
12/15/2018 |
|
5,746,627 |
|
169 |
|
4/15/2022 |
|
1,239,469 |
|
|
130 |
|
1/15/2019 |
|
5,633,948 |
|
170 |
|
5/15/2022 |
|
1,126,790 |
|
|
131 |
|
2/15/2019 |
|
5,521,269 |
|
171 |
|
6/15/2022 |
|
1,014,111 |
|
|
132 |
|
3/15/2019 |
|
5,408,590 |
|
172 |
|
7/15/2022 |
|
901,432 |
|
|
133 |
|
4/15/2019 |
|
5,295,911 |
|
173 |
|
8/15/2022 |
|
788,753 |
|
|
134 |
|
5/15/2019 |
|
5,183,232 |
|
174 |
|
9/15/2022 |
|
676,074 |
|
|
135 |
|
6/15/2019 |
|
5,070,553 |
|
175 |
|
10/15/2022 |
|
563,395 |
|
|
136 |
|
7/15/2019 |
|
4,957,874 |
|
176 |
|
11/15/2022 |
|
450,716 |
|
|
137 |
|
8/15/2019 |
|
4,845,195 |
|
177 |
|
12/15/2022 |
|
338,037 |
|
|
138 |
|
9/15/2019 |
|
4,732,516 |
|
178 |
|
1/15/2023 |
|
225,358 |
|
|
139 |
|
10/15/2019 |
|
4,619,837 |
|
179 |
|
2/15/2023 |
|
112,679 |
|
|
140 |
|
11/15/2019 |
|
4,507,158 |
|
180 |
|
3/15/2023 |
|
— |
|
|
141 |
|
12/15/2019 |
|
4,394,479 |
|
181 |
|
4/15/2023 |
|
— |
|
|
142 |
|
1/15/2020 |
|
4,281,800 |
|
182 |
|
5/15/2023 |
|
— |
|
|
143 |
|
2/15/2020 |
|
4,169,121 |
|
183 |
|
6/15/2023 |
|
— |
|
|
144 |
|
3/15/2020 |
|
4,056,442 |
|
184 |
|
7/15/2023 |
|
— |
|
|
145 |
|
4/15/2020 |
|
3,943,763 |
|
185 |
|
8/15/2023 |
|
— |
|
|
146 |
|
5/15/2020 |
|
3,831,084 |
|
186 |
|
9/15/2023 |
|
— |
|
|
147 |
|
6/15/2020 |
|
3,718,406 |
|
187 |
|
10/15/2023 |
|
— |
|
|
148 |
|
7/15/2020 |
|
3,605,727 |
|
188 |
|
11/15/2023 |
|
— |
|
|
149 |
|
8/15/2020 |
|
3,493,048 |
|
189 |
|
12/15/2023 |
|
— |
|
|
150 |
|
9/15/2020 |
|
3,380,369 |
|
190 |
|
1/15/2024 |
|
— |
|
|
151 |
|
10/15/2020 |
|
3,267,690 |
|
191 |
|
2/15/2024 |
|
— |
|
|
152 |
|
11/15/2020 |
|
3,155,011 |
|
192 |
|
3/15/2024 |
|
— |
|
|
153 |
|
12/15/2020 |
|
3,042,332 |
|
193 |
|
4/15/2024 |
|
— |
|
|
154 |
|
1/15/2021 |
|
2,929,653 |
|
194 |
|
5/15/2024 |
|
— |
|
|
155 |
|
2/15/2021 |
|
2,816,974 |
|
195 |
|
6/15/2024 |
|
— |
|
|
156 |
|
3/15/2021 |
|
2,704,295 |
|
196 |
|
7/15/2024 |
|
— |
|
|
157 |
|
4/15/2021 |
|
2,591,616 |
|
197 |
|
8/15/2024 |
|
— |
|
|
158 |
|
5/15/2021 |
|
2,478,937 |
|
198 |
|
9/15/2024 |
|
— |
|
|
159 |
|
6/15/2021 |
|
2,366,258 |
|
199 |
|
10/15/2024 |
|
— |
|
|
160 |
|
7/15/2021 |
|
2,253,579 |
|
200 |
|
11/15/2024 |
|
— |
|
ii
Exhibit 10.25
EXECUTION VERSION
WILLIS ENGINE SECURITIZATION TRUST,
as issuer of Series 2008-A1 Notes,
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Indenture Trustee
GENERAL SUPPLEMENT 2008-1
Dated as of March 28, 2008
to
INDENTURE
amended and restated as of December 13, 2007
TABLE OF CONTENTS
|
|
|
|
Page |
|
|
|
|
|
|
ARTICLE I |
|||
|
|
|
|
|
|
DEFINITIONS |
|||
|
|
|
|
|
|
Section 1.01. |
Definitions |
|
1 |
|
|
|
|
|
|
ARTICLE II |
|||
|
|
|
|
|
|
AMENDMENTS |
|||
|
|
|
|
|
|
Section 2.01. |
Definition of Hedged Leases |
|
1 |
|
Section 2.02. |
Definition of Aggregate Adjusted Borrowing Value |
|
2 |
|
Section 2.03. |
Issuance of Definitive Notes |
|
2 |
|
Section 2.04. |
Exchange and Cancellation |
|
2 |
|
Section 2.05. |
Book-Entry Note Registration |
|
4 |
|
Section 2.06. |
Notices |
|
5 |
|
|
|
|
|
|
ARTICLE III |
|||
|
|
|
|
|
|
EFFECTIVE DATE |
|||
|
|
|
|
|
|
Section 3.01. |
Effective Date |
|
5 |
|
|
|
|
|
|
ARTICLE IV |
|||
|
|
|
|
|
|
MISCELLANEOUS PROVISIONS |
|||
|
|
|
|
|
|
Section 4.01. |
Ratification of Indenture |
|
6 |
|
Section 4.02. |
Counterparts |
|
6 |
|
Section 4.03. |
Governing Law; Jurisdiction |
|
6 |
|
Section 4.04. |
Notices to Rating Agencies |
|
6 |
|
Section 4.05. |
Amendments and Modifications |
|
6 |
|
Section 4.06. |
Waiver of Jury Trial |
|
7 |
i
This GENERAL SUPPLEMENT 2008-1, dated as of March 28, 2008 (as amended, modified or supplemented from time to time, this “ Supplement ”), issued pursuant to, and incorporating the terms of, the Indenture, dated as of August 9, 2005 and amended and restated as of December 13, 2007 (as previously supplemented and as further amended, modified or supplemented from time to time, the “ Indenture ”), is entered into between WILLIS ENGINE SECURITIZATION TRUST, a Delaware statutory trust (“ WEST ”), and DEUTSCHE BANK TRUST COMPANY AMERICAS, a New York banking corporation, as Indenture Trustee (the “ Indenture Trustee ”).
WITNESSETH THAT:
WHEREAS, WEST has requested that the Indenture Trustee agree to an amendment to the Indenture and, on behalf of the Indenture Trustee, WEST has delivered a notice of such request and proposed amendment to the Holders of all of the Notes issued under the Indenture, asking whether or not the Indenture Trustee should consent to such amendments;
WHEREAS, a Requisite Majority of the Holders of the Notes have consented to the amendments requested by WEST;
WHEREAS, WEST wishes to amend a provision of the Indenture dealing with the conversion of Book-Entry Notes and Definitive Notes in a manner that does not materially adversely affect the Holders of the Notes;
WHEREAS, WEST wishes to amend the Indenture in the foregoing respects and in other respects by the execution and delivery of this Supplement;
NOW THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Capitalized terms used herein and not otherwise defined shall have the meaning set forth in the Indenture. The conventions of construction and usage set forth in Section 1.02 of the Indenture are hereby incorporated by reference in this Supplement.
ARTICLE II
AMENDMENTS
Section 2.01. Definition of Hedged Leases . The definition of “Hedged Lease” is hereby amended and restated in its entirety to read as follows:
“ Hedged Lease ” means, as of any Determination Date, a Lease with more than one (1) year remaining in its term as of such Determination Date.
Section 2.02. Definition of Aggregate Adjusted Borrowing Value . The definition of “Aggregate Adjusted Borrowing Value” is hereby amended and restated in its entirety to read as follows:
“ Aggregate Adjusted Borrowing Value ” means, as of any date of determination, an amount equal to the sum of (i) the Adjusted Borrowing Values of all Engines then owned by any WEST Group Member (using the Adjusted Borrowing Values of such Engines as of the last day of the month immediately preceding such date of determination; provided that if any Engine has been acquired after the last day of such month but before or on such date of determination, the Initial Borrowing Value of such Engine shall be used in the determination), and (ii), during the Replacement Period in respect of each Engine that was the subject of an Engine Disposition in respect of which the Controlling Trustees have elected to reinvest all or a portion of the Modified Net Sale Proceeds in a Replacement Exchange, the amount of the Modified Net Sale Proceeds to be so reinvested, provided , however , that, for purposes of calculating Maximum Borrowing Base, Senior Borrowing Base, Junior Borrowing Base and Appraisal Deficiency Amount, (x) the Adjusted Borrowing Values of the Engines described in clause (i) shall be reduced by the aggregate amount of the Reserve Engine Adjusted Borrowing Values as of the date of determination, and (y) if all or a portion of the Adjusted Base Value of the Engine that was the subject of an Engine Disposition described in clause (ii) consists of a Reserve Engine Adjusted Borrowing Value, only the Modified Net Sale Proceeds in excess of such Reserve Engine Adjusted Borrowing Value of such Engine as of the date of such Engine Disposition shall be taken into account for purposes of clause (ii).
Section 2.03. Issuance of Definitive Notes . Section 2.01(e) is hereby amended by adding the following new clause (vii) at the end thereof:
“(vii) Notwithstanding clause (i) of this Section 2.01(e), the Supplement authorizing the issuance of any Series of Additional Notes may provide that such Additional Notes may be issued as Definitive Notes upon a purchaser’s request. In addition, WEST may elect to issue all or any portion of any Series of Additional Notes as Definitive Notes in a transaction that qualifies as a “private placement” under Section 4(2) of the Securities Act, whether pursuant to Regulation D of the Securities Act or on the basis of the facts and circumstances in respect of the issuance of such Definitive Note, provided that in each case, such Definitive Notes shall bear the legends described in Section 2.02.”
Section 2.04. Exchange and Cancellation . Article II is hereby amended by adding the following new Section 2.07A immediately following Section 2.07:
“Section 2.07A Transfer and Cancellation .
A Holder may transfer a Definitive Note only by written application to the applicable Note Registrar stating the name of the proposed transferee and otherwise complying with the terms of this Indenture. No such transfer shall be effective until, and such transferee shall succeed to the rights of a Holder only upon, final acceptance and registration of the transfer of such Definitive Note by the Note Registrar in the Register.
2
Prior to the due presentment for registration of transfer of a Definitive Note, WEST and the Indenture Trustee may deem to treat the applicable registered Holder as the absolute owner and Holder of such Definitive Note for the purpose of receiving payment of all amounts payable with respect to such Definitive Note and for all other purposes and shall not be affected by any notice to the contrary. The Note Registrar (if different from the Indenture Trustee) shall promptly notify the Indenture Trustee and the Indenture Trustee shall promptly notify WEST of each request for a registration of transfer of a Definitive Note by furnishing WEST a copy of such request.
Furthermore, any Holder of a Book-Entry Note shall, by acceptance of such Book-Entry Note, agree that, subject to Section 2.11(b) hereof, transfers of beneficial interests in such Book-Entry Note may be effected only through a book-entry system maintained by the Holder of such Book-Entry Note (or its agent) and that ownership of a beneficial interest in such Note shall be required to be reflected in a book-entry.
When Definitive Notes are presented to the Note Registrar with a request to register the transfer or to exchange them for an equal principal amount of Notes of other authorized denominations, the Note Registrar shall register the transfer or make the exchange as requested by the Holders if the requirements for such transactions are met (including, in the case of a transfer, that such Definitive Notes are duly endorsed or accompanied by a written instrument of transfer in a form satisfactory to the Indenture Trustee and Note Registrar duly executed by the Holder thereof or by an attorney who is authorized in writing to act on behalf of the Holder). To permit registrations of transfers and exchanges, WEST shall execute and the Indenture Trustee shall authenticate Definitive Notes at WEST’s request. No service charge shall be made for any registration of transfer or exchange or redemption of the Notes.
WEST shall not be required to exchange or register the transfer of any Definitive Notes as above provided during the 15-day period preceding the Final Maturity Date of any such Definitive Notes or during a 15-day period preceding the first mailing of any notice of Optional Redemption of Notes to be redeemed or refinanced in a Refinancing. WEST shall not be required to exchange or register the transfer of any Notes that have been selected, called or are being called for Optional Redemption except, in the case of any Notes where notice has been given that such Definitive Notes are to be redeemed in part, the portion thereof not so to be redeemed.
WEST at any time may deliver Definitive Notes to the Indenture Trustee for cancellation. The Indenture Trustee and no one else shall cancel and destroy in accordance with its customary practices in effect from time to time (subject to the record retention requirements of the Exchange Act) any such Definitive Notes, together with any other Notes surrendered to it for registration of transfer, exchange or payment. WEST may not issue new Notes (other than Additional Notes issued in connection with any Refinancing) to replace Notes it has redeemed, paid or delivered to the Indenture Trustee for cancellation.”
3
Section 2.05. Book-Entry Note Registration . (a) Section 2.11(b) is hereby amended and restated in its entirety as follows:
“(b) So long as DTC, or its nominee, is the registered owner or holder of a Book-Entry Note, DTC or such nominee, as the case may be, will be considered the sole owner or Noteholder represented by such Book-Entry Note for all purposes under this Indenture, the Supplements and the Book-Entry Notes. No beneficial owner of an interest in a Book-Entry Note will be able to transfer that interest except in accordance with DTC’s applicable procedures (in addition to those under the Supplements and, if applicable, those of Clearstream and Euroclear). Unless (a) DTC notifies WEST that it is unwilling or unable to continue as depository for a Book-Entry Note, (b) WEST elects to terminate the book-entry system for the Book-Entry Notes, or (c) an Event of Default has occurred and the Control Party of such Series certifies that continuation of a book-entry system through DTC (or a successor) for such Series is no longer in the best interests of such Noteholders of such Series, owners of beneficial interests in a Book-Entry Note will not be entitled to have any portion of such Book-Entry Note registered in their names, will not receive or be entitled to receive physical delivery of Notes in definitive form and will not be considered to be the owners or Noteholders under this Indenture, the Supplements or the Book-Entry Notes. Upon the occurrence of any event described in the immediately preceding sentence, the Indenture Trustee shall notify all Holders of each affected Series, through DTC, of the occurrence of such event and of the availability of Definitive Notes of such Series; provided , however , that in no event shall the Regulation S Temporary Book-Entry Note be exchanged for Definitive Notes prior to the later of (x) the Exchange Date and (y) the date of receipt by WEST of any certificates determined by it to be required pursuant to Rule 903 under the Securities Act.
Upon surrender to the Indenture Trustee of the Book-Entry Notes of such Series held by DTC, accompanied by registration instructions from DTC for registration of Definitive Notes in the names of Holders of such Series, WEST shall issue and the Indenture Trustee shall authenticate and deliver the Definitive Notes of such Series to the beneficial owners of such Series or their nominees in accordance with the instructions of DTC. None of WEST, the Note Registrar, the Paying Agent or the Indenture Trustee shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be fully protected in relying on, such registration instructions.
Upon the issuance of Definitive Notes of such Series, the Indenture Trustee shall recognize the Persons in whose name the Definitive Notes are registered in the Register as Holders hereunder. Neither WEST nor the Indenture Trustee shall be liable if the Indenture Trustee or WEST is unable to locate a qualified successor to DTC. Definitive Notes of any Series will be freely transferable and exchangeable for Definitive Notes of the same Series at the office of the Indenture Trustee or the office of a Note Registrar upon compliance with the requirements set forth herein. In the case of a transfer of only part of a holding of Definitive Notes, a new Definitive Note shall be issued to the transferee in respect of the part transferred and a new Definitive Note in respect of the balance of the holding not transferred shall be issued to the transferor and may be obtained at the office of the applicable Note Registrar.”
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Section 2.06. Notices . The Notice addresses for each of WEST and the Administrative Agent in Section 13.04 are hereby amended and restated in their entirety to read as follows:
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“if to WEST , to: |
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Willis Engine Securitization Trust |
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c/o Wilmington Trust Company |
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1100 North Market Street |
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Rodney Square North |
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Wilmington, Delaware 19890 |
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Attention: Corporate Trust Administrator |
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Facsimile: (302) 651-8882 |
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with copies to: |
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Willis Engine Securitization Trust |
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c/o Willis Lease Finance Corporation |
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773 San Marin Drive, Suite 2215 |
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Novato, California 94998 |
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Attention: General Counsel |
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Facsimile: (415) 408-4702 |
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and |
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Pillsbury Winthrop Shaw Pittman LLP |
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1540 Broadway |
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New York, NY 10036 |
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Attention: William C. Bowers |
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Facsimile: (212) 858-1500 |
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if to the Administrative Agent , to: |
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Willis Lease Finance Corporation |
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773 San Marin Drive, Suite 2215 |
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Novato, California 94998 |
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Attention: General Counsel |
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Facsimile: (415) 408-4702” |
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ARTICLE III
EFFECTIVE DATE
Section 3.01. Effective Date . This Supplement shall become effective upon the date first set forth above.
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ARTICLE IV
MISCELLANEOUS PROVISIONS
Section 4.01. Ratification of Indenture . As supplemented and amended 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 4.02. Counterparts . 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 4.03. Governing Law; Jurisdiction . THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAWS BUT OTHERWISE WITHOUT REFERENCE TO ITS CONFLICTS OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. Each of the parties hereto agrees that the United States federal and New York State courts located in The City of New York shall have jurisdiction to hear and determine any suit, action or proceeding, and to settle any disputes, which may arise out of or in connection with this Supplement and, for such purposes, submits to the jurisdiction of such courts. Each of the parties hereto waives any objection which it might now or hereafter have to such courts being nominated as the forum or venue to hear and determine any suit, action or proceeding, and to settle any disputes, which may arise out of or in connection with this Supplement and agrees not to claim that any such court is not a convenient or appropriate forum. Each of the parties hereto consents to the granting of such legal or equitable relief as is deemed appropriate by such courts.
Section 4.04. Notices to Rating Agencies . Whenever any notice or other communication is required to be given to the Rating Agencies pursuant to the Indenture or this Supplement, such notice or communication shall be delivered as follows: (i) if to Moody’s, at Moody’s Investors Service, Inc., 25 th Floor, 7 World Trade Center, 250 Greenwich Street, New York, New York 10007, Attention: ABS/RMBS Monitoring Department and (ii) if to Fitch, at One State Street Plaza, New York, New York 10004, Attention: ABS Monitoring Group — Equipment Leases. Any rights to notices conveyed to a Rating Agency pursuant to the terms of this Supplement shall terminate immediately if such Rating Agency no longer has a rating outstanding with respect to the Series 2008-A1 Notes.
Section 4.05. Amendments and Modifications . The terms of this Supplement may be waived, modified or amended only in a written instrument signed by each of WEST and the Indenture Trustee and, except with respect to the matters set forth in (and subject to the terms of) Section 9.01 and 10.02 of the Indenture, only with the prior written consent of the Majority of Holders or, with respect to the matters set forth in Sections 9.02(a) of the Indenture, the prior written consent of the Holders of all Series 2008-A1 Notes then Outstanding.
6
Section 4.06. Waiver of Jury Trial . EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, AS AGAINST THE OTHER PARTIES HERETO, ANY RIGHTS IT MAY HAVE TO A JURY TRIAL IN RESPECT OF ANY CIVIL ACTION OR PROCEEDING (WHETHER ARISING IN CONTRACT OR TORT OR OTHERWISE), INCLUDING ANY COUNTERCLAIM, ARISING UNDER OR RELATING TO THIS SUPPLEMENT OR ANY OTHER SERIES 2008-A1 TRANSACTION DOCUMENT, INCLUDING IN RESPECT OF THE NEGOTIATION, ADMINISTRATION OR ENFORCEMENT HEREOF OR THEREOF.
[Signature page follows.]
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IN WITNESS WHEREOF, WEST and the Indenture Trustee have caused this Supplement to be duly executed and delivered by their respective officers all as of the day and year first above written.
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WILLIS ENGINE SECURITIZATION TRUST |
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By: |
/s/ Thomas C. Nord |
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Name: Thomas C. Nord |
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Title: Controlling Trustee |
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DEUTSCHE BANK TRUST COMPANY AMERICAS, not in its individual capacity but solely as Indenture Trustee |
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By: |
/s/ Irene Siegel |
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Name: Irene Siegel |
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Title: Vice President |
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By: |
/s/ Aranka R. Paul |
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Name: Aranka R. Paul |
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Title: Assistant Vice President |
Exhibit 10.26
WILLIS ENGINE SECURITIZATION TRUST,
as issuer of the Notes,
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Indenture Trustee
GENERAL SUPPLEMENT 2009-1
Dated as of March 20, 2009
to
AMENDED AND RESTATED INDENTURE
Dated as of December 13, 2007
TABLE OF CONTENTS
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ARTICLE I |
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DEFINITIONS |
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Section 1.01. |
Definitions |
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ARTICLE II |
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AMENDMENTS |
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Section 2.01. |
Amendments to Definitions |
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Section 2.02. |
Amendment to Section 5.02(m)(i) of the Indenture |
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Section 2.03. |
Deletion of Section 5.02(m)(iii) of the Indenture |
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ARTICLE III |
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EFFECTIVE DATE |
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Section 3.01. |
Effective Date |
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ARTICLE IV |
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MISCELLANEOUS PROVISIONS |
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Section 4.01. |
Ratification of Indenture |
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Section 4.02. |
Counterparts |
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Section 4.03. |
Governing Law; Jurisdiction |
3 |
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Section 4.04. |
Amendments and Modifications |
3 |
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Section 4.05. |
Waiver of Jury Trial |
3 |
i
This GENERAL SUPPLEMENT 2009-1, dated as of March 20, 2009 (as amended, modified or supplemented from time to time, this “ Supplement ”), issued pursuant to, and incorporating the terms of, the Amended and Restated Indenture, dated as of December 13, 2007 (as previously supplemented and as further amended, modified or supplemented from time to time, the “ Indenture ”), is entered into between WILLIS ENGINE SECURITIZATION TRUST, a Delaware statutory trust, as issuer of the Notes under the Indenture (“ WEST ”), and DEUTSCHE BANK TRUST COMPANY AMERICAS, a New York banking corporation, as Indenture Trustee (the “ Indenture Trustee ”).
WITNESSETH THAT:
WHEREAS, WEST has requested that the Indenture Trustee agree to amendments to the Indenture and, on behalf of the Indenture Trustee, WEST has delivered a written notice of such request and proposed amendments to the Holders of all of the Notes issued under the Indenture, asking whether or not the Indenture Trustee should consent to such amendments;
WHEREAS, a Requisite Majority of the Holders of the Notes has consented to the amendments requested by WEST;
WHEREAS, WEST has delivered a written notice of such amendments to the Senior Liquidity Provider, and the Senior Liquidity Provider has consented to such amendments, subject to certain limitations;
WHEREAS, as required under the Indenture, WEST has provided a prior written notice to the Rating Agencies setting forth the substance of such amendments; and
WHEREAS, WEST wishes to amend the Indenture in the foregoing respects by the execution and delivery of this Supplement.
NOW THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions . Capitalized terms used herein and not otherwise defined shall have the meaning set forth in the Indenture. The conventions of construction and usage set forth in Section 1.02 of the Indenture are hereby incorporated by reference in this Supplement.
ARTICLE II
AMENDMENTS
Section 2.01. Amendments to Definitions . (a) The definitions of “Hedged Lease” and “Maximum Required Hedge Amount” in the Indenture are hereby deleted.
(b) Clause (f) of the definition of “Early Amortization Event” in the Indenture is hereby amended and restated in its entirety to read as follows:
(f) The actual notional amount of the Interest Rate Hedge Agreements to which WEST and all WEST Group Members are parties as provided in Section 5.02(m) hereof has been less than the Minimum Required Hedge Amount for a period of more than sixty (60) days; provided that such Early Amortization Event shall terminate on the date on which the Administrative Agent certifies to the Indenture Trustee in writing that the actual notional amount of WEST’s Interest Rate Hedge Agreements is greater than the Minimum Required Hedge Amount.
(c) The definition of “Minimum Required Hedge Amount” in the Indenture is hereby amended and restated in its entirety to read as follows:
“ Minimum Required Hedge Amount ” means, as of any date of determination, an amount equal to the product of forty-five percent (45%) and the Outstanding Principal Balance of the Notes as of such date.
Section 2.02. Amendment to Section 5.02(m)(i) of the Indenture . Section 5.02(m)(i) of the Indenture is hereby amended and restated in its entirety to read as follows:
(i) WEST will maintain, directly or through one or more WEST Group Members, one or more Interest Rate Hedge Agreements and will use commercially reasonable efforts to maintain such Interest Rate Hedge Agreements in an aggregate notional balance that is not less than the Minimum Required Hedge Amount and that will obligate WEST or the applicable Eligible Hedge Counterparty to make a Periodic Hedge Payment on each Payment Date. Any Hedge Payments from an Eligible Hedge Counterparty (including Hedge Termination Payments) shall be deposited by WEST directly into the Collections Account, and any Hedge Payment due from WEST (including Hedge Termination Payments) will be made to the extent of the Available Collections Amount as provided in Section 3.14.
Section 2.03. Deletion of Section 5.02(m)(iii) of the Indenture . Section 5.02(m)(iii) of the Indenture is hereby deleted.
ARTICLE III
EFFECTIVE DATE
Section 3.01. Effective Date . This Supplement shall become effective upon the date first set forth above.
ARTICLE IV
MISCELLANEOUS PROVISIONS
Section 4.01. Ratification of Indenture . As supplemented and amended by this Supplement, the Indenture is in all respects ratified and confirmed and the Indenture as so
2
supplemented by this Supplement shall be read, taken and construed as one and the same instrument.
Section 4.02. Counterparts . 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 4.03. Governing Law; Jurisdiction . THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAWS BUT OTHERWISE WITHOUT REFERENCE TO ITS CONFLICTS OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. Each of the parties hereto agrees that the United States federal and New York State courts located in The City of New York shall have jurisdiction to hear and determine any suit, action or proceeding, and to settle any disputes, which may arise out of or in connection with this Supplement and, for such purposes, submits to the jurisdiction of such courts. Each of the parties hereto waives any objection which it might now or hereafter have to such courts being nominated as the forum or venue to hear and determine any suit, action or proceeding, and to settle any disputes, which may arise out of or in connection with this Supplement and agrees not to claim that any such court is not a convenient or appropriate forum. Each of the parties hereto consents to the granting of such legal or equitable relief as is deemed appropriate by such courts.
Section 4.04. Amendments and Modifications . T he terms of this Supplement may be waived, modified or amended only in a written instrument signed by each of WEST and the Indenture Trustee and, except with respect to the matters set forth in (and subject to the terms of) Section 9.01 and 10.02 of the Indenture, only with the prior written consent of the Requisite Majority of the Holders.
Section 4.05. Waiver of Jury Trial . EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, AS AGAINST THE OTHER PARTY HERETO, ANY RIGHTS IT MAY HAVE TO A JURY TRIAL IN RESPECT OF ANY CIVIL ACTION OR PROCEEDING (WHETHER ARISING IN CONTRACT OR TORT OR OTHERWISE), INCLUDING ANY COUNTERCLAIM, ARISING UNDER OR RELATING TO THIS SUPPLEMENT, INCLUDING IN RESPECT OF THE NEGOTIATION, ADMINISTRATION OR ENFORCEMENT HEREOF.
[ Signatures follow .]
3
IN WITNESS WHEREOF, WEST and the Indenture Trustee have caused this Supplement to be duly executed and delivered by their respective officers all as of the day and year first above written.
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WILLIS ENGINE SECURITIZATION TRUST |
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By: |
/s/ Thomas C. Nord |
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Name: Thomas C. Nord |
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Title: Controlling Trustee |
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DEUTSCHE BANK TRUST COMPANY AMERICAS, not in its individual capacity but solely as Indenture Trustee |
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By: |
/s/ Irene Siegel |
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Name: Irene Siegel |
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Title: Vice President |
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By: |
/s/ Jenna Kaufman |
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Name: Jenna Kaufman |
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Title: Director |
Exhibit 10.31
Execution Copy
FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT AND JOINDER AGREEMENT
This FIRST AMENDMENT TO THE SECOND AMENDED AND RESTATED CREDIT AGREEMENT and JOINDER AGREEMENT (this “ Amendment ”), is entered into as of December 13, 2006 and amends in certain respects that certain that Second Amended and Restated Credit Agreement, dated as of June 29, 2006, by and among WILLIS LEASE FINANCE CORPORATION , a Delaware corporation (the “ Borrower ”), each of the financial institutions that is, or pursuant to the terms thereof may become, a party as a Bank thereto (individually, a “ Bank ”, and collectively, the “ Banks ”), NATIONAL CITY BANK (“ NatCity ”), in its capacity as Administrative Agent for the Banks (the “ Administrative Agent ”), FORTIS BANK (NEDERLAND) N.V. (“ Fortis ”), in its capacity as Structuring Agent and Security Agent for the Banks (the “ Security Agent ”), and CALYON NEW YORK BRANCH (the “ Additional Bank ”) (as the same may from time to time be amended, supplemented or otherwise modified, the “ Credit Agreement ”).
W I T N E S S E T H :
WHEREAS , the Borrower desires to prepay Fortis in full, and Fortis is willing to withdraw as a Bank in connection with such prepayment and desires to resign as Security Agent under the Credit Agreement;
WHEREAS , pursuant to Section 9.11 of the Credit Agreement, the Banks desire to appoint NatCity as successor Security Agent, and the Borrower is willing to consent to such appointment;
WHEREAS , the Additional Bank desires to join the Credit Agreement as an Additional Bank pursuant to Section 10.01 of the Credit Agreement, and the execution and delivery of this Amendment is a condition precedent to the Additional Bank becoming a party to, and a Bank under, the Credit Agreement; and
WHEREAS , in connection with the foregoing transactions, the Borrower, the Agents and the Banks desire to amend the Credit Agreement in certain respects, as hereinafter provided;
NOW, THEREFORE , for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
Section 1. Defined Terms . Capitalized terms used and not otherwise defined herein shall have the respective meanings ascribed to them in the Credit Agreement.
Section 2. Appointment and Consent .
Section 2.1. Appointment of Security Agent . The Banks hereby jointly appoint NatCity as successor Security Agent to Fortis pursuant to Section 9.11 of the Credit Agreement, such appointment to become effective as provided in Section 5 of this Amendment; the Borrower hereby consents to such appointment and NatCity hereby accepts such appointment. Pursuant to such appointment, NatCity shall succeed to and shall become vested with the duties, rights, powers and privileges of Fortis, as Security Agent, and, subject to the last sentence of this Section 2(a), Fortis shall be discharged from all duties and liabilities as Security Agent, in each case under the Credit Agreement and the other Loan Documents. Concurrently with such discharge, Fortis hereby assigns to NatCity, as successor Security Agent under the Loan Documents (the “ Successor Agent ”), all of its rights, powers, entitlements, benefits and privileges as Security Agent and beneficiary under the Security Documents, including without limitation all Liens held by it as Security Agent. Fortis agrees to execute and deliver to the Successor Agent from time to time, at the request of the Borrower or the Successor Agent, and at the sole expense of the Borrower, such documents, confirmations and instruments as shall be required or reasonably requested in order to effectuate the intent and purposes of this Amendment, including, without limitation, all assignments of Liens in favor of the Successor Agent.
Section 2.2. Waiver . The Borrower and the Banks hereby waive the requirement for 30 days’ prior written notice of resignation from the Security Agent pursuant to Section 9.11 of the Credit Agreement.
Section 3. Joinder of Additional Bank . The Borrower and the Agents (including the Successor Agent) hereby agree as follows:
Section 3.1. Joinder in the Credit Agreement . The Additional Bank hereby joins the Credit Agreement and accepts and agrees to be bound by all of the terms and conditions thereof, and the Borrower, the Administrative Agent and the Security Agent (including the Successor Agent) hereby consent to such joinder in the Credit Agreement by the Additional Bank. The Additional Bank confirms the appointment and authorization of the Administrative Agent and the Security Agent (including the Successor Agent) pursuant to Section 9.01 of the Credit Agreement and expressly acknowledges to the Agents (including the Successor Agent) the matters referred to in Section 9.03 of the Credit Agreement.
Section 3.2. “Bank” under the Loan Documents . The Additional Bank shall henceforth be deemed a “Bank” for all purposes of the Credit Agreement, the Security Agreement and the other Loan Documents.
Section 3.3. Obligations of the Borrower . The Obligations of the Borrower to the Additional Bank shall be secured by the Collateral pursuant to the Security Agreement and the other Loan Documents with all other Obligations of the Borrower to all other Banks and the Agents in accordance with the Credit Agreement, the Security Agreement and the other Loan Documents.
Section 3.4. Commitment . The amount of the Additional Bank’s Commitment is TWENTY MILLION Dollars ($20,000,000) and its Commitment Percentage is 9.22%.
2
Section 3.5. Notices . The address of the Additional Bank for purposes of Section 11.09 of the Credit Agreement is 1301 Avenue of the Americas, New York, New York 10019-6022, Attention: Charles Moran, unless changed in accordance with the terms thereof.
Section 3.6. Separate Joinder Agreement Not Required . This Section 3 shall be in lieu of a separate Joinder Agreement required by Section 10.01 of the Credit Agreement.
Section 4. Amendments to Credit Agreement .
Section 4.1. Amendment to Certain Defined Terms . Clause “(i)” of the definition of “Asset Base” in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
Section 4.2. Amendment relating to Section 9.03 . Section 9.03(a) is hereby amended by deleting the word “not” from where it appears therein.
Section 4.3. Amendment relating to Section 9.11 . Section 9.11 of the Credit Agreement is hereby amended by substituting the reference “Majority Banks” for the reference in the second sentence thereof to “Banks”.
Section 4.4. Amendment relating to Aggregate Revolving Loan Commitment . In accordance with Section 2.01(a) of the Credit Agreement, the Borrower hereby elects, and the Agents (including the Successor Agent) hereby consent, to increase the Aggregate Revolving Loan Commitment to $217,000,000. Accordingly, Schedule 1.01(a) to the Credit Agreement is hereby amended and restated in its entirety to read as set forth in Schedule 1.01(a) annexed hereto.
Section 5. Withdrawal of Fortis as a Bank . Fortis agrees that, upon receipt of payment in full of all amounts owed to it under the Credit Agreement and the other Loan Documents, its Commitment will be automatically terminated and it will no longer be a “Bank” or “Structuring Agent” under the Credit Agreement and any other Loan Document. Each of the Banks hereby acknowledges and agrees to the prepayment of all amounts owed to Fortis and to Fortis’s withdrawal as a Bank and as Structuring Agent under the Credit Agreement and the other Loan Documents.
Section 6. Effectiveness . The effectiveness of this Amendment shall be conditioned upon the fulfillment to the satisfaction of the Administrative Agent of each of the following conditions by no later than December 31, 2006:
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(i) |
The Administrative Agent shall have received counterparts of this Amendment executed by each of the parties required to execute the same pursuant to the Credit Agreement and the other Loan Documents. |
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(ii) |
The Administrative Agent shall have received confirmation from the Additional Bank that all documentation required in connection with its joinder as an Additional Bank under the Credit Agreement shall have been received. |
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(iii) |
The Additional Bank shall have received a new promissory note duly executed by the Borrower, and each Bank, whose Commitment is changed, as set forth on Schedule 1.01(a) attached hereto, shall have received a substitute promissory note duly executed by the Borrower in the amount of such changed Commitment. |
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(iv) |
No Material Adverse Change shall have occurred since June 30, 2006. |
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(v) |
The Administrative Agent shall receive written confirmation from Fortis that it has received payment in full of all amounts owed to it under the Credit Agreement and the other Loan Documents. |
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(vi) |
Each of the Banks who shall have executed and delivered a counterpart to this Amendment, or the Administrative Agent on behalf of such Bank, shall have received the fee to which such Bank is entitled in accordance with Annex A hereto. |
Notwithstanding the foregoing, if any amendment set forth in Section 4 hereof or any other provision hereof shall not become effective due to the failure to satisfy a condition of this Section 6, that shall not limit the effectiveness of any other provision hereof if the conditions to effectiveness thereof shall be satisfied. For purposes of determining compliance with the conditions specified in this Section 6, each Bank that has executed this Amendment shall be deemed to have consented to, approved or accepted, or to be satisfied with, each document or other matter either sent, or made available for inspection, by the Administrative Agent to such Bank for consent, approval, acceptance or satisfaction, or required thereunder to be consented to or approved by or acceptable or satisfactory to the Administrative Agent and the requisite Banks pursuant to the Credit Agreement .
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Section 11. Governing Law . THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
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[Remainder of page intentionally left blank; signatures on following pages]
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IN WITNESS WHEREOF , the parties hereto have caused this Amendment to be executed as of the date first above written.
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BORROWER : |
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WILLIS LEASE FINANCE CORPORATION , |
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By: |
/s/ Robert M. Warwick |
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Name: |
Robert M. Warwick |
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Executive Vice President |
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Chief Financial Officer |
SIGNATURE PAGE TO FIRST AMENDMENT TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
AND JOINDER AGREEMENT
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AGENTS : |
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FORTIS BANK (NEDERLAND) N.V. , |
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as Structuring Agent and Security Agent |
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By: |
/s/ J.F.G.M. Wolfhagen |
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Name: J.F.G.M. Wolfhagen |
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Title: Director Portfolio Riskmanagement |
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By: |
/s/ M.H. Schipper |
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Name: M.H. Schipper |
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Title: |
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SIGNATURE PAGE TO FIRST AMENDMENT TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
AND JOINDER AGREEMENT
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NATIONAL CITY BANK , |
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as Administrative Agent, Successor Agent and Swing Line Lender |
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By: |
/s/ Christos Kytzidis |
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Name: Christos Kytzidis |
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Title: Senior Vice President |
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SIGNATURE PAGE TO FIRST AMENDMENT TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
AND JOINDER AGREEMENT
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BANKS : |
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CALYON NEW YORK BRANCH , |
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as Additional Bank |
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By: |
/s/ Brian Bolotin |
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Name: Brian Bolotin |
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Title: Managing Director |
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By: |
/s/ Charles Moran |
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Name: Charles Moran |
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Title: Director |
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SIGNATURE PAGE TO FIRST AMENDMENT TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
AND JOINDER AGREEMENT
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NATIONAL CITY BANK |
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By: |
/s/ Christos Kytzidis |
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Name: |
Christos Kytzidis |
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Title: |
Senior Vice President |
SIGNATURE PAGE TO FIRST AMENDMENT TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
AND JOINDER AGREEMENT
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CALIFORNIA BANK & TRUST, |
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By: |
/s/ J. Michael Sullivan |
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Name: J. Michael Sullivan |
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Title: Vice President |
SIGNATURE PAGE TO
JOINDER AGREEMENT AND AMENDMENT TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
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KfW |
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By: |
/s/ Thomas Brehler |
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Name: Thomas Brehler |
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Title: First Vice President |
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By: |
/s/ Andreas Roth |
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Name: Andreas Roth |
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Title: Senior Project Manager |
SIGNATURE PAGE TO
JOINDER AGREEMENT AND AMENDMENT TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
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CITY NATIONAL BANK |
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By: |
/s/ Nanci Brusati Dias |
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Name: Nanci Brusati Dias |
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Title: Senior Vice President |
SIGNATURE PAGE TO
JOINDER AGREEMENT AND AMENDMENT TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
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ALLIANCE & LEICESTER
COMMERCIAL
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By: |
/s/ Martin Wells |
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Name: Martin Wells |
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Title: Head of Aviation Finance |
SIGNATURE PAGE TO
JOINDER AGREEMENT AND AMENDMENT TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
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CREDIT INDUSTRIEL ET COMMERCIAL,
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By: |
/s/ Alex Aupoix |
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Name: Alex Aupoix |
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Title: Vice President |
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By: |
/s/ Adrienne Molloy |
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Name: Adrienne Molloy |
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Title: Vice President |
SIGNATURE PAGE TO
JOINDER AGREEMENT AND AMENDMENT TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
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HSH NORDBANK AG, NEW YORK BRANCH |
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By: |
/s/ Wolfgang Arbaczewski |
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Name: |
Wolfgang Arbaczewski |
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Title: |
Vice President – Transportation Americas HSH Nordbank AG, New York Branch |
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By: |
/s/ Klaus Bernhart |
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Name: |
Klaus Bernhart |
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Title: |
General Manager
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SIGNATURE PAGE TO
JOINDER AGREEMENT AND AMENDMENT TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
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STATE BANK OF INDIA, LOS ANGELES AGENCY |
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By: |
/s/ K.S.S. Naidu |
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Name: Mr. K.S.S. Naidu |
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Title: V.P. (Credit) |
SIGNATURE PAGE TO
JOINDER AGREEMENT AND AMENDMENT TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
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LANDESBANKI ISLANDS HF. |
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By: |
/s/ Hlynur Sigursveinsson |
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Name: Hlynur Sigursveinsson |
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Title: Senior Manager |
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By: |
/s/ Magnus Karlsson |
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Name: Magnus Karlsson |
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Title: Senior Account Manager |
SIGNATURE PAGE TO
JOINDER AGREEMENT AND AMENDMENT TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
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BNP PARIBAS |
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By: |
/s/ Antoine Treguer |
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Name: Antoine Treguer |
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Title: VP Aviation Finance Group |
SIGNATURE PAGE TO
JOINDER AGREEMENT AND AMENDMENT TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
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FORTIS BANK (NEDERLAND) N.V. , |
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By: |
/s/ J.F.G.M. Wolfhagen |
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Name: J.F.G.M. Wolfhagen |
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Title: Director Portfolio Riskmanagement |
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By: |
/s/ M.H. Schipper |
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Name: M.H. Schipper |
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Title: |
SIGNATURE PAGE TO
JOINDER AGREEMENT AND AMENDMENT TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
SCHEDULE 1.01(a)
COMMITMENT PERCENTAGES AND LOAN COMMITMENTS
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Bank Name |
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Commitment |
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Commitment
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National City Bank |
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$ |
35,000,000 |
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16.13 |
% |
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California Bank & Trust |
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$ |
25,000,000 |
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11.52 |
% |
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KfW |
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$ |
25,000,000 |
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11.52 |
% |
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Calyon New York Branch |
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$ |
20,000,000 |
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9.22 |
% |
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City National Bank |
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$ |
20,000,000 |
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9.22 |
% |
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Alliance & Leicester Commercial Finance Plc |
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$ |
20,000,000 |
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9.22 |
% |
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Credit Industriel et Commercial, New York Branch |
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$ |
20,000,000 |
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9.22 |
% |
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HSH Nordbank AG, New York Branch |
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$ |
15,000,000 |
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6.91 |
% |
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State Bank of India, Los Angeles Agency |
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$ |
15,000,000 |
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6.91 |
% |
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Landesbanki Islands hf. |
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$ |
12,000,000 |
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5.53 |
% |
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BNP Paribas |
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$ |
10,000,000 |
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4.60 |
% |
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Total |
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$ |
217,000,000 |
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100.00 |
% |
S-1
Exhibit 11.1
WILLIS LEASE FINANCE CORPORATION
AND SUBSIDIARIES
Computation of Earnings Per Share
(in thousands, except per share amounts)
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Year ended December 31, |
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2008 |
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2007 |
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2006 |
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Basic |
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Net income attributable to common shareholders |
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$ |
23,473 |
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$ |
14,536 |
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$ |
14,941 |
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Shares: |
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Average common shares outstanding |
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8,242 |
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8,115 |
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9,169 |
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Basic earnings per common share |
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$ |
2.85 |
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$ |
1.79 |
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$ |
1.63 |
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Assuming full dilution |
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Net income attributable to common shareholders |
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$ |
23,473 |
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$ |
14,536 |
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$ |
14,941 |
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Shares: |
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Average common shares outstanding |
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8,242 |
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8,115 |
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9,169 |
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Potentially dilutive common shares outstanding |
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518 |
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627 |
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437 |
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Diluted average common shares outstanding |
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8,760 |
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8,742 |
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9,606 |
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Diluted earnings per common share |
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$ |
2.68 |
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$ |
1.66 |
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$ |
1.56 |
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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 restricted stock issued under the 2007 Stock Incentive Plan.
The calculation of diluted earnings per share for 2008 excluded from the denominator 111,000 options, for 2007 excluded from the denominator 161,000 options and 66,000 restricted stock awards and for 2006 excluded from the denominator 636,000 options, granted to employees and directors because their effect would have been anti-dilutive.
Exhibit 12.1
WILLIS LEASE FINANCE CORPORATION
AND
SUBSIDIARIES
Statement of Computation of Ratios of
Earnings to Fixed Charges and
Preferred Dividends and Distributions
(In thousands)
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Years Ended December 31, |
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2004 |
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2005 |
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2006 |
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2007 |
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2008 |
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Earnings |
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Pretax income from continuing operations |
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4,541 |
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4,694 |
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26,963 |
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27,733 |
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41,999 |
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Preferred dividends |
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— |
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— |
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2,945 |
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3,128 |
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3,128 |
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Fixed Charges |
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Interest expense |
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16,350 |
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24,514 |
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31,610 |
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37,940 |
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38,640 |
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Estimated interest expense within rental expense (1) |
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165 |
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181 |
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207 |
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217 |
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220 |
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Total fixed charges and Preferred dividends |
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16,515 |
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24,695 |
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34,762 |
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41,285 |
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41,988 |
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Earnings Before Fixed Charges and Preferred Dividends |
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$ |
21,056 |
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$ |
29,389 |
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$ |
61,725 |
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$ |
69,018 |
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$ |
83,987 |
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Ratio of Earnings to Fixed Charges and Preferred Dividends and Distributions |
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1.27 |
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1.19 |
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1.78 |
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1.67 |
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2.00 |
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(1) All rental expense is derived from operating leases. There is no expressed interest expense within rental expense. Rather, the imputed interest expense within rental expense is calculated by multiplying by 30%, the office rent for each of the years ended, as indicated above.
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
The
Board of Directors
Willis Lease Finance Corporation:
We consent to the incorporation by reference in the registration statements (No. 333-15343, 333-48258, 33-63830 and 333- 109140) on Form S-8 of Willis Lease Finance Corporation of our report dated March 30, 2009 related to the consolidated balance sheets of Willis Lease Finance Corporation and subsidiaries as of December 31, 2008 and 2007, and the related consolidated statements of income, shareholders’ equity and comprehensive income, and cash flows for each of the years in the three-year period ended December 31, 2008 and the related financial statement schedules I and II, which report appears in the annual report, on Form 10-K of Willis Lease Finance Corporation.
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/s/ KPMG LLP |
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San Francisco, California |
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March 30, 2009 |
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Exhibit 31.1
CERTIFICATIONS
I, Charles F. Willis IV, certify that:
1. I have reviewed this report on Form 10-K of Willis Lease Finance Corporation;
2. Based on my knowledge, this 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 report;
3. Based on my knowledge, the financial statements, and other financial information included in this 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 report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;
c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based such evaluations; and
d) disclosed in this report any change in the registrant’s internal controls that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design or operation of internal controls which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: |
March 30, 2009 |
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/s/ Charles F. Willis, IV |
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Charles F. Willis, IV |
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Chief Executive Officer |
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President |
Exhibit 31.2
CERTIFICATIONS
I, Bradley S. Forsyth, certify that:
1. I have reviewed this report on Form 10-K of Willis Lease Finance Corporation;
2. Based on my knowledge, this 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 report;
3. Based on my knowledge, the financial statements, and other financial information included in this 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 report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;
c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based such evaluations; and
d) disclosed in this report any change in the registrant’s internal controls that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design or operation of internal controls which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: |
March 30, 2009 |
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/s/ Bradley S. Forsyth |
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Bradley S. Forsyth |
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Chief Financial Officer |
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Senior Vice President |
Exhibit 32
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 Annual Report of the Company on Form 10-K for the year ended December 31, 2008 fully complies with the requirements of Section 13(a) or 15(d) 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.
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Dated: March 30, 2009 |
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/s/ Charles F. Willis, IV |
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President and Chief Executive Officer |
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/s/ Bradley S. Forsyth |
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Senior Vice President and Chief Financial Officer |
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