INDENTURE

 

TABLE OF CONTENTS

			Page
ARTICLE I
DEFINITIONS; CALCULATION GUIDELINES
	Section 1.01.	Definitions	1
ARTICLE II
CREATION OF THE SERIES 2008-B1 NOTES
	Section 2.01.	Designation	4
	Section 2.02.	Authentication and Delivery	5
	Section 2.03.	Interest Payments on the Series 2008-B1 Notes	6
	Section 2.04.	Principal Payments on the Series 2008-B1 Notes	7
	Section 2.05.	Prepayment of Principal on the Series 2008-B1 Notes	7
	Section 2.06.	Manner of Payment	8
	Section 2.07.	Restrictions on Transfer	8
	Section 2.08.	Final Maturity Date	8
ARTICLE III
NOTE PROCEEDS; SERIES 2008-B1 ACCOUNT,
	APPLICATION OF AMOUNTS THEREIN
	Section 3.01.	Application of Note Proceeds	8
	Section 3.02.	Series 2008-B1 Series Account	8
	Section 3.03.	Distributions from Series 2008-B1 Series Account	9
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	11
ARTICLE V
REPRESENTATIONS AND WARRANTIES
	Section 5.01.	Indenture Representations and Warranties	11
ARTICLE VI
MISCELLANEOUS PROVISIONS
	Section 6.01.	Ratification of Indenture	11
	Section 6.02.	Counterparts	11
	Section 6.03.	Governing Law; Jurisdiction	11

 

i

 

	Section 6.04.	Notices to Rating Agencies	12
	Section 6.05.	Statutory References	12
	Section 6.06.	Amendments and Modifications	12
	Section 6.07.	Waiver of Jury Trial	12
	Section 6.08.	Appointment of Representative	12
	Section 6.09.	Tax Matters	12
EXHIBIT
	EXHIBIT A	Form of Series 2008-B1 Note
SCHEDULE
	SCHEDULE 1	Scheduled Targeted Principal Balance by Payment Date

 

ii

 

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:

 

Redemption Date		Redemption Premium Percentage
After the Initial Closing Date and on or before the first anniversary of the Closing Date		2.00	%
After the first anniversary of the Closing Date and on or before the second anniversary of the Closing Date		1.00	%
After the second anniversary of the Closing Date		0.00	%

 

2

 

“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.

 

3

 

“ 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

 

4

 

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;

 

5

 

 

(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

 

6

 

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

 

7

 

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 provide