Exhibit 4.9


 




EXECUTION VERSION


 





 



 


 


INDENTURE AND SECURITY AGREEMENT


 


(N126FE)


 


Dated as of August 13, 2020


 


between


 


FEDERAL EXPRESS CORPORATION,


 


and


 


WILMINGTON TRUST COMPANY,


 


as Loan Trustee


 


One Boeing 767-3S2F


Generic Manufacturer and Model Boeing 767-300F
Aircraft

U.S. Registration No. N126FE


 





 



 




 






    


     


    

 


Table of Contents


Page


	ARTICLE I	 	Definitions	7	 
	 	 	 	 	 
	Section 1.01	 	Definitions	7	 
	Section 1.02	 	Other Definitional Provisions	7	 
	 	 	 	 	 
	ARTICLE II	 	The Equipment Notes	8	 
	 	 	 	 	 
	Section 2.01	 	Form of Equipment Notes	8	 
	Section 2.02	 	Issuance and Terms of Equipment Notes	13	 
	Section 2.03	 	Method of Payment	14	 
	Section 2.04	 	Withholding Taxes	15	 
	Section 2.05	 	Application of Payments	16	 
	Section 2.06	 	Termination of Interest in Collateral	16	 
	Section 2.07	 	Registration, Transfer and Exchange of Equipment Notes	17	 
	Section 2.08	 	Mutilated, Destroyed, Lost or Stolen Equipment Notes	18	 
	Section 2.09	 	Payment of Expenses on Transfer; Cancellation	18	 
	Section 2.10	 	Mandatory Redemption of Equipment Notes	19	 
	Section 2.11	 	Voluntary Redemption of Equipment Notes	19	 
	Section 2.12	 	Redemptions; Notice of Redemptions; Repurchases	20	 
	Section 2.13	 	Subordination	21	 
	Section 2.14	 	Certain Payments	22	 
	Section 2.15	 	Repayment of Monies for Equipment Note Payments Held
    by Loan Trustee	24	 
	Section 2.16	 	Directions by Subordination Agent	24	 
	 	 	 	 	 
	ARTICLE III	 	Receipt, Distribution and
    Application of Income From the Collateral	25	 
	 	 	 	 	 
	Section 3.01	 	Basic Distributions	25	 
	Section 3.02	 	Event of Loss; Optional Redemption	26	 
	Section 3.03	 	Payments After Event of Default	27	 
	Section 3.04	 	Certain Payments	30	 
	Section 3.05	 	Payments to Company	31	 
	Section 3.06	 	Cooperation	31	 
	Section 3.07	 	Securities Account	32	 
	 	 	 	 	 
	ARTICLE IV	 	Events of Default; Remedies
    of Loan Trustee	33	 
	 	 	 	 	 
	Section 4.01	 	Events of Default	33	 
	Section 4.02	 	Remedies	34	 
	Section 4.03	 	Remedies Cumulative	38	 
	Section 4.04	 	Discontinuance of Proceedings	39	 
	Section 4.05	 	Waiver of Past Defaults	39	 
	Section 4.06	 	Noteholders May Not Bring Suit Except Under Certain
    Conditions	39	 
	Section 4.07	 	Appointment of a Receiver	40	 




 






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Table of Contents

(Continued)


Page


	ARTICLE V	 	Duties of Loan
    Trustee	40	 
	 	 	 	 	 
	Section 5.01	 	Notice of Event of Default	40	 
	Section 5.02	 	Action upon Instructions; Certain Rights and Limitations	41	 
	Section 5.03	 	Indemnification	41	 
	Section 5.04	 	No Duties Except as Specified in Indenture or Instructions	41	 
	Section 5.05	 	No Action Except under Indenture or Instructions	42	 
	Section 5.06	 	Investment of Amounts Held by Loan Trustee	42	 
	 	 	 	 	 
	ARTICLE VI	 	Loan Trustee	43	 
	 	 	 	 	 
	Section 6.01	 	Acceptance of Trusts and Duties	43	 
	Section 6.02	 	Absence of Certain Duties	43	 
	Section 6.03	 	No Representations or Warranties as to the Documents	43	 
	Section 6.04	 	No Segregation of Monies; No Interest	44	 
	Section 6.05	 	Reliance; Agents; Advice of Counsel	44	 
	Section 6.06	 	Instructions from Noteholders	45	 
	 	 	 	 	 
	ARTICLE VII	 	Operating Covenants of Company	45	 
	 	 	 	 	 
	Section 7.01	 	Liens	45	 
	Section 7.02	 	Possession, Operation and Use, Maintenance and Registration	46	 
	Section 7.03	 	Inspection; Financial Information	44	 
	Section 7.04	 	Replacement and Pooling of Parts; Alterations, Modifications
    and Additions; Substitution of Airframe and Engines	45	 
	Section 7.05	 	Loss, Destruction or Requisition	49	 
	Section 7.06	 	Insurance	65	 
	 	 	 	 	 
	ARTICLE VIII	 	Successor and Additional
    Trustees	73	 
	 	 	 	 	 
	Section 8.01	 	Resignation or Removal; Appointment of Successor	73	 
	Section 8.02	 	Appointment of Additional and Separate Trustees	75	 
	 	 	 	 	 
	ARTICLE IX	 	Amendments and Waivers	76	 
	 	 	 	 	 
	Section 9.01	 	Amendments to this Indenture without Consent of Holders	76	 
	Section 9.02	 	Amendments to this Indenture with Consent of Holders	77	 
	Section 9.03	 	Amendments, Waivers, Etc. of the Participation Agreement	79	 
	Section 9.04	 	Revocation and Effect of Consents	79	 
	Section 9.05	 	Notation on or Exchange of Equipment Notes	79	 
	Section 9.06	 	Trustee Protected	79	 
	Section 9.07	 	No Consent of Individual Indenture Indemnitees Required	79	 
	 	 	 	 	 
	ARTICLE X	 	Miscellaneous	80	 
	 	 	 	 	 
	Section 10.01	 	Termination of Indenture	80	 
	Section 10.02	 	No Legal Title to Collateral in Noteholders	80	 




 






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Page


	Section 10.03	 	Sale of Aircraft by Loan Trustee is Binding	80	 
	Section 10.04	 	Indenture for Benefit of Company, Loan Trustee and
    Noteholders	81	 
	Section 10.05	 	Notices	81	 
	Section 10.06	 	Severability	82	 
	Section 10.07	 	No Oral Modification or Continuing Waivers	82	 
	Section 10.08	 	Successors and Assigns	82	 
	Section 10.09	 	Headings	83	 
	Section 10.10	 	Normal Commercial Relations	83	 
	Section 10.11	 	Voting by Noteholders	83	 
	Section 10.12	 	Section 1110	83	 
	Section 10.13	 	Company’s Performance and Rights	83	 
	Section 10.14	 	Counterparts	83	 
	Section 10.15	 	Governing Law	84	 
	Section 10.16	 	Confidential Information	84	 
	Section 10.17	 	Submission to Jurisdiction	84	 



 


	Exhibit A	 	Form of Indenture Supplement
	Exhibit B	 	List of Permitted Countries
	Exhibit C  	 	Certain Terms
	 	 	 
	Schedule I	 	Description of Equipment Notes
	Schedule II	 	Pass Through Trust Agreement and Pass Through Trust
    Supplement
	 	 	 
	Annex A	 	Definitions      



 






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INDENTURE AND SECURITY AGREEMENT

(N126FE)


 


This INDENTURE AND
SECURITY AGREEMENT (N126FE), dated as of August 13, 2020, is made by and between FEDERAL EXPRESS CORPORATION, a Delaware
corporation (together with its successors and permitted assigns, “Company”), and WILMINGTON TRUST COMPANY,
a Delaware trust company, not in its individual capacity, except as expressly stated herein, but solely as Loan Trustee hereunder
(together with its permitted successors hereunder, “Loan Trustee”).


 


W I T N E S S E T H:


 


WHEREAS,
the parties desire by this Indenture (such term and other capitalized terms used herein without definition being defined as provided
in Article ‎I), among other things, to provide for (i) the issuance
by Company of the Equipment Notes specified on Schedule I hereto and one or more Additional Series and (ii) the
grant, bargain, sale, conveyance, transfer, mortgage, assignment, pledge and confirmation by Company to Loan Trustee, as part
of the Collateral hereunder, among other things, of a first priority security interest in, and mortgage lien on, all of Company’s
estate, right, title and interest in and to the Aircraft, as security for, among other things, Company’s obligations to
Loan Trustee, for the equal and proportionate benefit and security of Noteholders, Indenture Indemnitees and Related Indenture
Indemnitees, subject to ‎Section 2.13 and Article ‎III;


 


WHEREAS, all things
have been done to make the Equipment Notes of the Series listed on Schedule I hereto, when executed by Company and authenticated
and delivered by Loan Trustee hereunder, the valid, binding and enforceable obligations of Company; and


 


WHEREAS, all things
necessary to make this Indenture a legal, valid and binding obligation of Company for the uses and purposes herein set forth,
in accordance with its terms, have been done and performed and have occurred;


 






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GRANTING CLAUSE


 


NOW, THEREFORE, (x) to
secure the prompt and complete payment (whether at stated maturity, by acceleration or otherwise) of principal of, Make-Whole
Amount, if any, and interest on, the Equipment Notes and all other Secured Obligations payable by Company under the Operative
Documents and the performance and observance by Company of all the agreements and covenants to be performed or observed by Company
for the benefit of Noteholders and Indenture Indemnitees contained in the Operative Documents and (y) to secure the
Related Secured Obligations, and in consideration of the premises and of the covenants contained in the Operative Documents and
the Related Indentures, and for other good and valuable consideration given by Noteholders, Indenture Indemnitees and Related
Indenture Indemnitees to Company at or before the Closing Date, the receipt and adequacy of which is hereby acknowledged, Company
does hereby grant, bargain, sell, convey, transfer, mortgage, assign, pledge and confirm unto Loan Trustee and its successors
in trust and permitted assigns, for the security and benefit of Noteholders, each Indenture Indemnitee and each Related Indenture
Indemnitee, a first priority security interest in, and mortgage lien on, all estate, right, title and interest of Company in,
to and under, all and singular, the following described properties, rights, interests and privileges, whether now owned or hereafter
acquired (which, collectively, together with all property hereafter specifically subject to the Lien of this Indenture by the
terms hereof or any supplement hereto, are included within, and are referred to as, the “Collateral”):


 


(1)           the
Aircraft, including the Airframe and the Engines, whether or not any such Engine from time to time is installed on the Airframe
or any other airframe or any other aircraft, and any and all Parts relating thereto, and, to the extent provided herein, all substitutions
and replacements of, and additions, improvements, accessions and accumulations to, the Aircraft, including the Airframe, the Engines
and any and all Parts (in each case other than Excluded Equipment) relating thereto (such Airframe and Engines as more particularly
described in the Indenture Supplement executed and delivered with respect to the Aircraft on the Closing Date or with respect
to any substitutions or replacements therefor) and together with all logs, manuals, modification and maintenance records at any
time required to be maintained with respect to the Aircraft in accordance with the rules and regulations of the FAA if the
Aircraft is registered under the laws of the United States or the rules and regulations of the government of the country
of registry if the Aircraft is registered under the laws of a jurisdiction other than the United States;


 


(2)           the
Warranty Rights, together with all rights, powers, privileges, options and other benefits of Company under the same;


 


(3)           all
requisition proceeds with respect to the Aircraft or any Part thereof, and all insurance proceeds with respect to the Aircraft
or any Part thereof, but excluding all proceeds of, and rights under, any insurance maintained by Company and not required,
or in excess of that required, under ‎Section 7.06(c);


 


(4)           all
monies and securities held by Loan Trustee pursuant to paragraph (vii) of clause “third” of ‎Section 3.03,
all rents, revenues and other proceeds collected by Loan Trustee pursuant to ‎Section 4.02(a),
all monies and securities from time to time paid or deposited or required to be paid or deposited to or with Loan Trustee by or
for the account of Company pursuant to any term of any Operative Document and held or required to be held by Loan Trustee hereunder
or thereunder, including the Securities Account and all monies and securities deposited into the Securities Account; and


 


(5)           all
proceeds of the foregoing;


 


PROVIDED, HOWEVER,
that notwithstanding any of the foregoing provisions, so long as no Event of Default shall have occurred and be continuing, Company
or, if a lease to a Permitted Lessee is then in effect, such Permitted Lessee, shall have the right, to the exclusion of Loan
Trustee, (i) to quiet enjoyment of the Aircraft, the Airframe, the Parts and the Engines, and to possess, use, retain
and control the Aircraft, the Airframe, the Parts and the Engines and all revenues, income and profits derived therefrom and (ii) with
respect to the Warranty Rights, to exercise in Company’s name all rights and powers of Company under the Warranty Rights
and to retain any recovery or benefit resulting from the enforcement of any warranty or indemnity or other obligation under the
Warranty Rights; provided, further, that notwithstanding the occurrence and continuation of an Event of Default,
Loan Trustee shall not enter into any amendment or modification of the Purchase Agreement that would alter the rights, benefits
or obligations of Company thereunder;


 






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TO
HAVE AND TO HOLD such first priority security interest in, and mortgage lien on all and singular the aforesaid property unto Loan
Trustee, and its successors and permitted assigns, in trust for the equal and proportionate benefit and security of Noteholders, Indenture
Indemnitees and Related Indenture Indemnitees, except as otherwise provided in this Indenture, including ‎Section 2.13
and Article ‎III, without any priority of any one Equipment Note over any other,
or any Related Equipment Note over any other, by reason of priority of time of issue, sale, negotiation, date of maturity thereof
or otherwise for any reason whatsoever, and for the uses and purposes and in all cases and as to all property specified in paragraphs (1) through
(5) inclusive above, subject to the terms and provisions set forth in this Indenture.


 


It is expressly agreed
that notwithstanding anything herein to the contrary, Company shall remain liable under the Purchase Agreement to perform all
of its obligations thereunder, and, except to the extent expressly provided in any Operative Document, none of Loan Trustee, any
Noteholder, any other Indenture Indemnitee or any Related Indenture Indemnitee shall be required or obligated in any manner to
perform or fulfill any obligations of Company under or pursuant to any Operative Document, or have any obligation or liability
under the Purchase Agreement by reason of or arising out of the assignment hereunder, or to make any inquiry as to the nature
or sufficiency of any payment received by it, or present or file any claim or take any action to collect or enforce the payment
of any amount that may have been assigned to it or to which it may be entitled at any time or times.


 


Notwithstanding anything
herein to the contrary (but without in any way releasing Company from any of its duties or obligations under the Purchase Agreement),
Loan Trustee, Noteholders, other Indenture Indemnitees and Related Indenture Indemnitees confirm for the benefit of Manufacturer
that in exercising any rights under the Warranty Rights, or in making any claim with respect to the Aircraft or other goods and
services delivered or to be delivered pursuant to the Purchase Agreement, the terms and conditions of the Purchase Agreement relating
to the Warranty Rights, including, without limitation, the warranty disclaimer provisions for the benefit of Manufacturer, shall
apply to and be binding upon Loan Trustee, Noteholders, other Indenture Indemnitees and Related Indenture Indemnitees to the same
extent as Company. Company hereby directs Manufacturer, so long as an Event of Default shall have occurred and be continuing,
to pay all amounts, if any, payable to Company pursuant to the Warranty Rights directly to Loan Trustee to be held and applied
as provided herein. Nothing contained herein shall subject Manufacturer to any liability to which it would not otherwise be subject
under the Purchase Agreement or modify in any respect the contract rights of Manufacturer thereunder except as provided in the
Manufacturer’s Consent.


 


Subject to the terms
and conditions hereof, Company does hereby irrevocably constitute Loan Trustee the true and lawful attorney of Company (which
appointment is coupled with an interest) with full power (in the name of Company or otherwise) to ask for, require, demand and
receive any and all monies and claims for monies (in each case including insurance and requisition proceeds) due and to become
due to Company under or arising out of the Purchase Agreement (to the extent assigned hereby), and all other property which now
or hereafter constitutes part of the Collateral, to endorse any checks or other instruments or orders in connection therewith
and to file any claims or to take any action or to institute any proceedings which Loan Trustee may deem to be necessary or advisable
in the premises; provided that Loan Trustee shall not exercise any such rights except during the continuance of an Event
of Default. Company agrees that, promptly upon receipt thereof, to the extent required by the Operative Documents, it will transfer
to Loan Trustee any and all monies from time to time received by Company constituting part of the Collateral, for distribution
by Loan Trustee pursuant to this Indenture.


 






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Company does hereby
warrant and represent that it has not sold, assigned or pledged, and hereby covenants and agrees that it will not sell, assign
or pledge, so long as this Indenture shall remain in effect and the Lien hereof shall not have been released pursuant to the provisions
hereof, any of its estate, right, title or interest hereby assigned, to any Person other than Loan Trustee, except as otherwise
provided in or permitted by any Operative Document.


 


Company agrees that
at any time and from time to time, upon the written request of Loan Trustee, Company shall promptly and duly execute and deliver
or cause to be duly executed and delivered any and all such further instruments and documents as Loan Trustee may reasonably deem
necessary to perfect, preserve or protect the mortgage, security interests and assignments created or intended to be created hereby
or to obtain for Loan Trustee the full benefit of the assignment hereunder and of the rights and powers herein granted; provided
that any instrument or other document so executed by Company will not expand any obligations or limit any rights of Company
in respect of the transactions contemplated by the Operative Documents.


 


IT IS HEREBY COVENANTED
AND AGREED by and between the parties hereto as follows:


 


ARTICLE I


 


Definitions


 


Section 1.01     Definitions.
For all purposes of this Indenture, unless the context otherwise requires, capitalized terms used but not defined herein have
the respective meanings set forth or incorporated by reference in Annex A.


 


Section 1.02     Other
Definitional Provisions.


 


(a)            The
definitions stated herein and in Annex A apply equally to both the singular and the plural forms of the terms defined.


 


(b)            All
references in this Indenture to designated “Articles”, “Sections”, “Subsections”, “Schedules”,
“Exhibits”, “Annexes” and other subdivisions are to the designated Article, Section, Subsection, Schedule,
Exhibit, Annex or other subdivision of this Indenture, unless otherwise specifically stated.


 


(c)            The
words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Indenture
as a whole and not to any particular Article, Section, Subsection, Schedule, Exhibit, Annex or other subdivision.


 






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(d)            Unless
the context otherwise requires, whenever the words “including”, “include” or “includes” are
used herein, they shall be deemed to be followed by the phrase “without limitation”.


 


(e)            All
references in this Indenture to a “government” are to such government and any instrumentality or agency thereof.


 


(f)            All
references in this Indenture to a Person shall include successors and permitted assigns of such Person.


 


ARTICLE II


 


The Equipment Notes


 


Section 2.01     Form of
Equipment Notes. The Equipment Notes shall be substantially in the form set forth below:


 


THIS EQUIPMENT NOTE HAS NOT
BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR PURSUANT TO THE SECURITIES
LAWS OF ANY STATE OR OTHER JURISDICTION. ACCORDINGLY, THIS EQUIPMENT NOTE MAY NOT BE OFFERED FOR SALE OR SOLD UNLESS EITHER
REGISTERED UNDER THE ACT AND SUCH APPLICABLE STATE OR OTHER LAWS OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE.
IN ADDITION, THIS EQUIPMENT NOTE IS SUBJECT TO RESTRICTIONS ON TRANSFER PURSUANT TO THE PARTICIPATION AGREEMENT REFERRED TO HEREIN.


 


FEDERAL EXPRESS CORPORATION


 


SERIES 2020-1AA-N126FE


 


EQUIPMENT NOTE DUE FEBRUARY 20, 2034


 


ISSUED IN CONNECTION WITH THE BOEING MODEL
767-3S2F GENERIC MANUFACTURER AND MODEL BOEING MODEL 767-300F AIRCRAFT BEARING UNITED STATES REGISTRATION NUMBER N126FE


 


	No. __________	Date: ________
	 	 
	DEBT RATE	MATURITY DATE
	__________	_______________


 






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FEDERAL
EXPRESS CORPORATION (together with its successors and permitted assigns, “Company”) hereby promises to pay
to     , or the registered assignee thereof, the principal amount
of __________________________ Dollars ($___________) in installments on the Payment Dates set forth in Schedule I hereto, each
such installment to be in an amount computed by multiplying the original principal amount of this Equipment Note by the percentage
set forth in Schedule I hereto opposite the Payment Date on which such installment is due, and to pay interest in arrears on each
Payment Date at the Debt Rate shown above on the principal amount remaining unpaid from time to time (calculated on the basis
of a year of 360 days comprised of twelve 30-day months) from the date hereof, or from the most recent date to which interest
hereon has been paid or duly provided for, until paid in full. Notwithstanding the foregoing, the final payment made on this Equipment
Note shall be in an amount sufficient to discharge in full the unpaid principal amount and all accrued and unpaid interest on,
and any other amounts due under, this Equipment Note. Notwithstanding anything to the contrary contained herein, if any date on
which a payment under this Equipment Note becomes due and payable is not a Business Day, then such payment shall not be made on
such scheduled date but shall be made on the next succeeding Business Day with the same force and effect as if made on such scheduled
date, and if payment is made on such next succeeding Business Day, no interest shall accrue on the amount of such payment from
and after such scheduled date.


 


For purposes hereof,
the term “Indenture” means the Indenture and Security Agreement (N126FE), dated as of August 13, 2020, between
Company and Wilmington Trust Company, as Loan Trustee (“Loan Trustee”), as the same may be amended, supplemented
or otherwise modified from time to time in accordance with its terms. All capitalized terms used in this Equipment Note and not
defined herein, unless the context otherwise requires, shall have the respective meanings set forth or incorporated by reference,
and shall be construed and interpreted in the manner described, in the Indenture.


 


This Equipment Note
shall bear interest, payable on demand, at the Past Due Rate (and not the Debt Rate) (calculated on the basis of a year of 360
days comprised of twelve 30-day months) on any principal amount and (to the extent permitted by applicable law) Make-Whole Amount,
if any, interest, and any other amounts payable hereunder not paid when due for any period during which the same is overdue. Amounts
shall be overdue if not paid in the manner provided herein or in the Indenture when due (whether at stated maturity, by acceleration
or otherwise).


 


There
shall be maintained an Equipment Note Register for the purpose of registering transfers and exchanges of Equipment Notes at the
Corporate Trust Office of Loan Trustee, or at the office of any successor trustee, in the manner provided in ‎Section 2.07
of the Indenture.


 


The principal amount
and interest and other amounts due hereunder shall be payable in Dollars in immediately available funds at the Corporate Trust
Office of Loan Trustee, or as otherwise provided in the Indenture. Company shall not have any responsibility for the distribution
of any such payment to Noteholder of this Equipment Note. Each such payment shall be made on the date such payment is due and
without any presentment or surrender of this Equipment Note, except that in the case of any final payment with respect to this
Equipment Note, this Equipment Note shall be surrendered to Loan Trustee for cancellation.


 






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The holder hereof,
by its acceptance of this Equipment Note, agrees that, except as provided in the Indenture, including the subordination provisions
referred to below, each payment of an installment of principal amount, Make-Whole Amount, if any, and interest received by it
hereunder shall be applied: first, to the payment of accrued interest on this Equipment Note (as well as any interest on
(i) any overdue principal amount, and (ii) to the extent permitted by applicable law, any overdue Make-Whole
Amount, if any, any overdue interest and any other overdue amounts hereunder) to the date of such payment; second, to the
payment of Make-Whole Amount, if any, with respect to this Equipment Note; third, to the payment of the principal amount
of this Equipment Note (or portion thereof) then due hereunder, if any; and fourth, the balance, if any, remaining thereafter
to the payment of installments of the principal amount of this Equipment Note (or portion thereof) remaining unpaid in the inverse
order of their maturity.


 


This Equipment Note
is one of the Equipment Notes referred to in the Indenture which have been or are to be issued by Company pursuant to the terms
of the Indenture. The Collateral is held by Loan Trustee as security, in part, for the Equipment Notes. The provisions of this
Equipment Note are subject to the Indenture, the Related Indentures, the Participation Agreement, the other Operative Documents
and the Pass Through Documents. Reference is hereby made to the Indenture, the Related Indentures, the Participation Agreement,
the other Operative Documents and the Pass Through Documents for a complete statement of the rights and obligations of the holder
of, and the nature and extent of the security for, this Equipment Note (including as a “Related Equipment Note” under
each Related Indenture) and the rights and obligations of the holders of, and the nature and extent of the security for, any other
Equipment Notes executed and delivered under the Indenture, to all of which terms and conditions in the Indenture, the Related
Indentures, the Participation Agreement, the other Operative Documents and the Pass Through Documents each holder hereof agrees
by its acceptance of this Equipment Note.


 


As provided in the
Indenture and subject to certain limitations therein set forth, this Equipment Note is exchangeable for an equal aggregate principal
amount of Equipment Notes of the same Series of different authorized denominations, as requested by the holder surrendering
the same. Prior to the due presentment for registration of transfer of this Equipment Note, Company and Loan Trustee shall deem
and treat the Person in whose name this Equipment Note is registered on the Equipment Note Register as the absolute owner and
holder hereof for the purpose of receiving all amounts payable with respect to this Equipment Note and for all purposes, and neither
Company nor Loan Trustee shall be affected by notice to the contrary.


 


This
Equipment Note is subject to redemption as provided in Sections ‎2.10, ‎2.11
and ‎2.12 of the Indenture but not otherwise. In addition, this Equipment Note may be
accelerated as provided in ‎Section 4.02 of the Indenture.


 


This
Equipment Note is subject to certain restrictions set forth in Sections 4.01(a)(ii) and 4.01(a)(iii) of the Intercreditor
Agreement, as further specified in ‎Section 2.07 of the Indenture, to all of which
terms and conditions in the Intercreditor Agreement each holder hereof agrees by its acceptance of this Equipment Note.


 


The
holder hereof, by its acceptance of this Equipment Note, agrees that no payment or distribution shall be made on or in respect
of the Secured Obligations (as defined in the Indenture) or the Secured Obligations (as defined in any Related Indenture) owed
to such holder, including, without limitation, any payment or distribution of cash, property or securities after the occurrence
of any of the events referred to in ‎Section 4.01(f) of the Indenture or after
the commencement of any proceedings of the type referred to in Sections ‎4.01(g), ‎(h) or
‎(i) of the Indenture, except, in each case, as expressly provided in Article ‎III
of the Indenture or Article ‎III of the applicable Related Indenture, as appropriate.


 






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The indebtedness evidenced
by this Equipment Note is[,]1 [(i) 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
the Secured Obligations in respect of [Series AA Equipment Notes]2
[Series AA Equipment Notes and [     ]3]4,
and certain other Secured Obligations, and (ii)]5
to the extent and in the manner provided in each Related Indenture, subordinate and subject in right of payment to the prior payment
in full under such Related Indenture of the “Secured Obligations” in respect of the “Equipment Notes”
issued under such Related Indenture, and this Equipment Note is issued subject to such provisions. The Noteholder of this Equipment
Note, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs
Loan Trustee or the Related Loan Trustee under the applicable Related Indenture, as appropriate, on such Noteholder’s behalf
to take any action necessary or appropriate to effectuate the subordination as provided in the Indenture or the applicable Related
Indenture and (c) appoints Loan Trustee or the Related Loan Trustee under the applicable Related Indenture, as appropriate,
as such Noteholder’s attorney-in-fact for such purpose.


 


Without
limiting the foregoing, the holder hereof, by its acceptance of this Equipment Note, agrees that if such holder, in its capacity
as a Noteholder, receives any payment or distribution on any Secured Obligation in respect of this Equipment Note that it is not
entitled to receive under ‎Section 2.13 or Article ‎III
of the Indenture, it shall hold any amount so received in trust for Loan Trustee and forthwith turn over such amount to Loan Trustee
in the form received to be applied as provided in Article ‎III of the Indenture.


 


Unless the certificate
of authentication hereon has been executed by or on behalf of Loan Trustee by manual signature, this Equipment Note shall not
be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.


 


THIS EQUIPMENT NOTE
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE.


 





 



 


1        To be
inserted in the case of a Series AA Equipment Note.


 


2        To
be inserted in the case of the Series of Additional Series Equipment Notes ranked most senior in priority of payment among all
Series of Additional Series Equipment Notes.


 


3        To
insert each Series of Additional Series Equipment Notes that rank senior in priority of payment to the Series of Additional Series
Equipment Notes being issued.


 


4        To
be inserted in the case of each Series of Additional Series Equipment Notes other than the Series of Additional Series Equipment
Notes ranked most senior in priority of payment among all Series of Additional Series Equipment Notes.


 


5        To
be inserted in the case of an Additional Series Equipment Note.


 






    11


     


    

 


IN WITNESS WHEREOF,
Company has caused this Equipment Note to be executed in its corporate name by its officer thereunto duly authorized on the date
hereof.


 


	 	FEDERAL EXPRESS CORPORATION
	 	 
	 	 
	 	By:	 	 
	 	 	Name:	 
	 	 	Title:	 




 


LOAN TRUSTEE’S CERTIFICATE OF AUTHENTICATION


 


This is one of the
Equipment Notes referred to in the within-mentioned Indenture.


 


	 	Wilmington Trust Company,
	 	not in its individual capacity but solely as Loan Trustee
	 	 
	 	By:	 	 
	 	 	Authorized Signatory	 




 


SCHEDULE I


 


EQUIPMENT NOTE AMORTIZATION


 


	 

         

        Payment Date
	Percentage of Original

    Principal Amount

    to be Paid


 


[SEE “EQUIPMENT NOTES AMORTIZATION”
ON SCHEDULE I TO

INDENTURE]


 


* * *


 






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Section 2.02     Issuance
and Terms of Equipment Notes. The Equipment Notes shall be dated the date of issuance thereof, shall be issued in (a) separate
Series consisting of Series AA Equipment Notes and one or more Additional Series Equipment Notes (if issued) and
(b) the maturities and principal amounts and shall bear interest at the applicable Debt Rates specified in Schedule
I. On the Closing Date, each Series AA Equipment Note shall be issued to Subordination Agent on behalf of the Pass Through
Trustee for the Pass Through Trust created under the Pass Through Trust Agreement referred to in Schedule II. Subject to compliance
with the conditions set forth in Section 2.02 of the Participation Agreement and Section 8.01(c) or 8.01(d) of
the Intercreditor Agreement, as applicable, Company shall have the option after the Closing Date, at any time and from time to
time (i) to issue one or more Series of Additional Series Equipment Notes under this Indenture (including,
for the avoidance of doubt, multiple issuances at the same or different times resulting in more than one Series of Additional
Series Equipment Notes being outstanding at any time), (ii) to redeem all but not less than all of any Series of
Additional Series Equipment Notes pursuant to, and in accordance with, the provisions of ‎Section 2.11(b) and
to issue under this Indenture new Equipment Notes with the same Series designation as, but with terms that may be the same
as or different from those of, the redeemed Equipment Notes, and (iii) following the payment in full at maturity or
otherwise of all but not less than all of any Series of Additional Series Equipment Notes, to issue new Equipment Notes
with the same Series designation as, but with terms that may be the same as or different from those of, such Equipment Notes
that have been paid in full. If new Additional Series Equipment Notes of any Series or new Additional Series Equipment
Notes of any Series are issued after the Closing Date in accordance with the immediately preceding sentence, such Equipment
Notes shall be dated the date of original issuance thereof and shall have such maturities, principal amounts and interest rate
as specified in an amendment to this Indenture; provided, however, that any new Equipment Notes that are not fungible
for U.S. federal income tax purposes with existing Equipment Notes shall be issued with a separate CUSIP number. The Equipment
Notes shall be issued in registered form only. The Equipment Notes shall be issued in denominations of $1,000 and integral multiples
thereof, except that one Equipment Note of each Series may be in an amount that is not an integral multiple of $1,000. For
the avoidance of doubt, if Company shall issue new “Additional Series Equipment Notes” of any Series or
new “Additional Series Equipment Note” of any series, in each case under any Related Indenture, Company may,
but shall not be required to, issue, as the case may be, Additional Series Equipment Notes of the same Series or new
Additional Series Equipment Notes of the same Series, in each case under this Indenture.


 


Each
Equipment Note shall bear interest at the Debt Rate specified for the applicable Series (calculated on the basis of a year
of 360 days comprised of twelve 30-day months), payable in arrears on each Payment Date on the unpaid principal amount thereof
from time to time outstanding from the most recent Payment Date to which interest has been paid or duly provided for (or, if no
interest has been so paid or provided for, from the date of issuance of such Equipment Note) until such principal amount is paid
in full, as further provided in the form of Equipment Note set forth in ‎Section 2.01.
The principal amount of each Series AA Equipment Note shall be payable in installments or in a single payment on the Payment
Dates set forth in such Equipment Note, each such installment, if any, to be in an amount computed by multiplying the original
principal amount of such Equipment Note by the corresponding percentage set forth in Schedule I hereto applicable to such Series,
the applicable portion of which shall be attached as Schedule I to such Equipment Note, opposite the Payment Date on which such
installment is due. Each Additional Series Equipment Note, if issued, shall be payable in installments or in a single payment
as set forth in an amendment to this Indenture, and if payable in installments, such installments shall be calculated as set forth
in the preceding sentence. Notwithstanding the foregoing, the final payment made under each Equipment Note shall be in an amount
sufficient to discharge in full the unpaid principal amount and all accrued and unpaid interest on, and any other amounts due
under, such Equipment Note. Each Equipment Note shall bear interest, payable on demand, at the Past Due Rate (and not at the Debt
Rate) (calculated on the basis of a year of 360 days comprised of twelve 30-day months) on any principal amount and (to the extent
permitted by applicable law) Make-Whole Amount, if any, interest and any other amounts payable thereunder not paid when due for
any period during which the same is overdue, in each case for the period the same is overdue. Amounts shall be overdue under an
Equipment Note if not paid in the manner provided therein or in this Indenture when due (whether at stated maturity, by acceleration
or otherwise). Notwithstanding anything to the contrary contained herein, if any date on which a payment hereunder or under any
Equipment Note becomes due and payable is not a Business Day, then such payment shall not be made on such scheduled date but shall
be made on the next succeeding Business Day with the same force and effect as if made on such scheduled date, and if such payment
is made on such next succeeding Business Day, no interest shall accrue on the amount of such payment from and after such scheduled
date.


 






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The Equipment Notes
shall be executed on behalf of Company by the manual or facsimile signature of one of its authorized officers. Equipment Notes
bearing the signatures of individuals who were at the time of execution the proper officers of Company shall bind Company, notwithstanding
that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Equipment
Notes or did not hold such offices at the respective dates of such Equipment Notes. No Equipment Note shall be secured by or entitled
to any benefit under this Indenture or be valid or obligatory for any purposes unless there appears on such Equipment Note a certificate
of authentication in the form provided herein executed by Loan Trustee by the manual signature of one of its authorized officers,
and such certificate upon any Equipment Notes shall be conclusive evidence, and the only evidence, that such Equipment Note has
been duly authenticated and delivered hereunder.


 


Section 2.03     Method
of Payment. The principal amount of, interest on, Make-Whole Amount, if any, and, except to the extent expressly provided
herein, all other amounts due under each Equipment Note or otherwise payable hereunder shall be payable by Company in Dollars
by wire transfer of immediately available funds not later than 10:00 a.m. (New York City time) on the due date of payment
to Loan Trustee at the Corporate Trust Office for distribution among Noteholders in the manner provided herein, and payment of
such amount by Company to Loan Trustee shall be deemed to satisfy Company’s obligation to make such payment. Company shall
not have any responsibility for the distribution of such payment to any Noteholder. Notwithstanding the foregoing or any provision
in any Equipment Note to the contrary, Loan Trustee will use reasonable efforts to pay or cause to be paid, if so directed in
writing by any Noteholder (with a copy to Company), all amounts paid by Company hereunder and under such Noteholder’s Equipment
Note or Equipment Notes to such Noteholder or a nominee therefor (including all amounts distributed pursuant to Article ‎III)
by transferring, or causing to be transferred, by wire transfer of immediately available funds in Dollars, prior to 12:00 noon
(New York City time) on the due date of payment, to an account maintained by such Noteholder with a bank located in the continental
United States the amount to be distributed to such Noteholder, for credit to the account of such Noteholder maintained at such
bank; provided that, in the event the Equipment Notes are not held by Subordination Agent on behalf of Pass Through Trustees,
Loan Trustee shall, unless instructed by Company to use another method, pay such amounts by check mailed to Noteholder’s
address as it appears on the Equipment Note Register. If, after its receipt of funds at the place and prior to the time specified
above in the immediately preceding sentence, Loan Trustee fails (other than as a result of a failure of Noteholder to provide
it with wire transfer instructions) to make any such payment required to be paid by wire transfer as provided in the immediately
preceding sentence on the Business Day it receives such funds, Loan Trustee, in its individual capacity and not as trustee, agrees
to compensate such Noteholders for loss of use of funds at the Federal Funds Rate until such payment is made and Loan Trustee
shall be entitled to any interest earned on such funds until such payment is made. Any payment made hereunder shall be made without
any presentment or surrender of any Equipment Note, except that, in the case of the final payment in respect of any Equipment
Note, such Equipment Note shall be surrendered to Loan Trustee for cancellation. Notwithstanding any other provision of this Indenture
to the contrary, Loan Trustee shall not be required to make, or cause to be made, wire transfers as aforesaid prior to the first
Business Day on which it is practicable for Loan Trustee to do so in view of the time of day when the funds to be so transferred
were received by it if such funds were received after 1:00 p.m. (New York City time) at the place of payment, in which case
Loan Trustee shall make such required payment on the next succeeding Business Day. So long as any signatory to the Participation
Agreement or nominee thereof shall be a registered Noteholder, all payments to it shall be made to the account of such Noteholder
specified in Schedule I to the Participation Agreement or otherwise in the manner provided in or pursuant to the Participation
Agreement unless it shall have specified some other account or manner of payment by notice to Loan Trustee consistent with this
‎Section 2.03.


 






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Section 2.04     Withholding
Taxes. Loan Trustee shall exclude and withhold at the appropriate rate from each payment of principal, interest, Make-Whole
Amount, if any, and other amounts due hereunder or under each Equipment Note (which exclusion and withholding shall constitute
payment of such amounts payable hereunder or in respect of such Equipment Notes, as applicable) any and all withholding Taxes
applicable thereto as required by applicable law. Loan Trustee agrees to act as such withholding agent and whenever any present
or future Taxes or similar charges are required to be withheld with respect to any amounts payable hereunder or in respect of
the Equipment Notes, to withhold such amounts (which withholding shall constitute payment of such amounts payable hereunder or
in respect of such Equipment Notes, as applicable) and timely pay the same to the appropriate authority in the name of and on
behalf of Noteholders, that it will file any necessary withholding Tax returns or statements when due, and that as promptly as
possible after the payment thereof it will deliver to each Noteholder (with a copy to Company) appropriate documentation showing
the payment thereof, together with such additional documentary evidence as any such Noteholder may reasonably request from time
to time. Loan Trustee agrees to file any other information reports it is required to file under United States law.


 






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Section 2.05     Application
of Payments. Subject always to ‎Section 2.13 and except as otherwise provided
in Article ‎III, in the case of each Equipment Note, each payment of an installment
of principal amount, Make-Whole Amount, if any, and interest paid thereon shall be applied:


 


first,
to the payment of accrued interest on such Equipment Note (as well as any interest on (i) any overdue principal amount,
and (ii) to the extent permitted by applicable law, any overdue Make-Whole Amount, if any, any overdue interest and
any other overdue amounts thereunder) to the date of such payment;


 


second,
to the payment of Make-Whole Amount, if any, with respect to such Equipment Note;


 


third,
to the payment of the principal amount of such Equipment Note (or portion thereof) then due thereunder, if any; and


 


fourth,
the balance, if any, remaining thereafter, to the payment of installments of the principal amount of such Equipment Note (or portion
thereof) remaining unpaid in the inverse order of their maturity.


 


Section 2.06     Termination
of Interest in Collateral. No Noteholder or Indenture Indemnitee shall, as such, have any further interest in, or other right
with respect to, the Collateral when and if the principal amount of, Make-Whole Amount, if any, and interest (including, to the
extent permitted by applicable law, post-petition interest and interest on any overdue amounts) on and all other amounts due under
all Equipment Notes held by such Noteholder and all other sums then due and payable to such Noteholder or Indenture Indemnitee,
as the case may be, hereunder (including, without limitation, under ‎Section 2.14)
and under the Participation Agreement by Company (the “Secured Obligations”) have been paid in full.


 


Subject
to ‎Section 10.01 hereof, no Related Indenture Indemnitee shall, as such, have any
further interest in, or other right with respect to, the Collateral when and if all Related Secured Obligations have been paid
in full.


 






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Section 2.07     Registration,
Transfer and Exchange of Equipment Notes. Loan Trustee shall keep a register or registers (the “Equipment Note Register”)
in which Loan Trustee shall provide for the registration of Equipment Notes, the registration of transfers of Equipment Notes
and a record of the dates and payments made with respect to the Equipment Notes. No such transfer shall be given effect unless
and until registration hereunder shall have occurred. The Equipment Note Register shall be kept at the Corporate Trust Office
of Loan Trustee. Loan Trustee is hereby appointed “Equipment Note Registrar” for the purpose of registering Equipment
Notes and transfers of Equipment Notes as herein provided. A holder of any Equipment Note intending to exchange or transfer such
Equipment Note shall surrender such Equipment Note to Loan Trustee at the Corporate Trust Office, together with a written request
from the registered holder thereof for the issuance of a new Equipment Note of the same Series, specifying, in the case of a surrender
for transfer, the name and address of the new holder or holders. Upon surrender for registration of transfer of any Equipment
Note and subject to satisfaction of ‎Section 2.09, Company shall execute, and Loan
Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Equipment Notes
of an equal aggregate principal amount and of the same Series. At the option of Noteholder, Equipment Notes may be exchanged for
other Equipment Notes of the same Series of any authorized denominations of an equal aggregate principal amount, upon surrender
of the Equipment Notes to be exchanged to Loan Trustee at the Corporate Trust Office. Whenever any Equipment Notes are so surrendered
for exchange, Company shall execute, and Loan Trustee shall authenticate and deliver, the Equipment Notes which Noteholder making
the exchange is entitled to receive. All Equipment Notes issued upon any registration of transfer or exchange of Equipment Notes
(whether under this ‎Section 2.07 or under ‎Section 2.08
or otherwise under this Indenture) shall be the valid obligations of Company evidencing the same respective obligations, and entitled
to the same security and benefits under this Indenture, as the Equipment Notes surrendered upon such registration of transfer
or exchange. Every Equipment Note presented or surrendered for registration of transfer shall (if so required by Company or Loan
Trustee) be duly endorsed or be accompanied by a written instrument of transfer in form satisfactory to Loan Trustee, duly executed
by Noteholder or such Noteholder’s attorney duly authorized in writing, and Company and Loan Trustee shall require evidence
satisfactory to Company as to the compliance of any such transfer with the Securities Act and the securities laws of any applicable
state or jurisdiction. Loan Trustee shall make a notation on each new Equipment Note of the amount of all payments of principal
amount previously made on the old Equipment Note or Equipment Notes with respect to which such new Equipment Note is issued and
the date to which interest on such old Equipment Note or Equipment Notes has been paid. Principal, interest and all other amounts
shall be deemed to have been paid on such new Equipment Note to the date on which such amounts have been paid on such old Equipment
Note. Company and Equipment Note Registrar shall not be required to exchange any surrendered Equipment Notes as provided above
(a) during the ten-day period preceding the due date of any payment on such Equipment Note or (b) that
has been called for redemption. Company and Loan Trustee shall in all cases deem and treat the Person in whose name any Equipment
Note has been issued and registered on the Equipment Note Register as the absolute owner and Noteholder of such Equipment Note
for the purpose of receiving payment of all amounts payable with respect to such Equipment Note and for all other purposes, and
neither Company nor Loan Trustee shall be affected by any notice to the contrary. Loan Trustee will promptly notify Company of
each registration of a transfer of an Equipment Note. Any such transferee of an Equipment Note, by its acceptance of an Equipment
Note, agrees to the provisions of this Indenture, the Related Indentures, the Participation Agreement, the other Operative Documents
and the Pass Through Documents applicable to Noteholders or, in the case of each Related Indenture, Related Noteholders, and,
without limiting the generality of the foregoing, any such transferee of an Equipment Note, by its acceptance of an Equipment
Note: (i) agrees to the applicable provisions of Sections 6.01, 7.10 and 7.11 of the Participation Agreement, and
shall be deemed to have represented, warranted and covenanted to the parties to the Participation Agreement as to the matters
represented, warranted and covenanted by Noteholders, including Pass Through Trustees, in the Participation Agreement and (ii) agrees
to the restrictions set forth in Sections 4.01(a)(ii) and 4.01(a)(iii) of the Intercreditor Agreement, and shall be
deemed to have covenanted to the parties to the Intercreditor Agreement not to give any direction to, or otherwise authorize,
Loan Trustee to take any action that would violate Section 4.01(a)(ii) or 4.01(a)(iii) of the Intercreditor Agreement.
Subject to compliance by Noteholder and any transferee of the requirements set forth in this ‎Section 2.07
and in ‎Section 2.09, Loan Trustee and Company shall use all reasonable efforts
to issue new Equipment Notes upon transfer or exchange within ten Business Days of the date an Equipment Note is surrendered for
transfer or exchange.


 






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Section 2.08     Mutilated,
Destroyed, Lost or Stolen Equipment Notes. If any Equipment Note becomes mutilated, destroyed, lost or stolen, Company shall,
upon the written request of the holder of such Equipment Note and subject to satisfaction of this ‎Section 2.08
and of ‎Section 2.09, execute and Loan Trustee shall authenticate and deliver in
replacement thereof a new Equipment Note of the same Series, payable in the same principal amount, dated the same date and captioned
as issued in connection with the Aircraft. If the Equipment Note being replaced has become mutilated, such Equipment Note shall
be surrendered to Loan Trustee, and a photocopy thereof shall be furnished to Company. If the Equipment Note being replaced has
been destroyed, lost or stolen, the holder of such Equipment Note shall furnish to Company and Loan Trustee such security or indemnity
as may be required by them to save Company and Loan Trustee harmless and evidence satisfactory to Company and Loan Trustee of
the destruction, loss or theft of such Equipment Note and of the ownership thereof.


 


Section 2.09     Payment
of Expenses on Transfer; Cancellation.


 


(a)            No
service charge shall be made to a Noteholder for any registration of transfer or exchange of Equipment Notes, but Loan Trustee,
as Equipment Note Registrar, may require payment of a sum sufficient to cover any Tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of Equipment Notes.


 






    18


     


    

 



 


(b)            Loan
Trustee shall cancel all Equipment Notes surrendered for replacement, redemption, transfer, exchange, payment or cancellation,
shall keep a copy of such canceled Equipment Notes, and shall send the original canceled Equipment Notes marked “canceled”
to Company.


 


Section 2.10     Mandatory
Redemption of Equipment Notes. Company shall redeem the Equipment Notes in whole in connection with an Event of Loss in respect
of the Airframe or the Airframe and the Engines installed thereon (unless Company has performed the option set forth in ‎Section 7.05(a)(i) with
respect thereto) on or before the Loss Payment Date at a redemption price equal to 100% of the unpaid principal amount thereof,
together with all accrued and unpaid interest thereon to (but excluding) the date of redemption and all other Secured Obligations
owed or then due and payable to Noteholders, but without any Make-Whole Amount.


 


Section 2.11     Voluntary
Redemption of Equipment Notes.


 


(a)            Except
as provided in ‎Section 2.11(b), all (but not less than all) of the Equipment Notes
may be redeemed by Company at any time upon at least 30 days’ revocable prior written notice to Loan Trustee and Noteholders,
and such Equipment Notes shall be redeemed in whole at a redemption price equal to 100% of the unpaid principal amount thereof,
together with accrued and unpaid interest thereon to (but excluding) the date of redemption and all other Secured Obligations
owed or then due and payable to Noteholders, plus Make-Whole Amount, if any; provided that no redemption shall be permitted
under this ‎Section 2.11(a) unless, simultaneously with such redemption, the
Related Equipment Notes shall also be redeemed.


 


(b)            All
of any Series of Additional Series Equipment Notes (or any combination of the foregoing) may be redeemed by Company
upon at least 15 days’ revocable prior written notice to Loan Trustee and Noteholders of each Series to be redeemed,
and such Series of Equipment Notes being redeemed pursuant to this ‎Section 2.11(b) shall
be redeemed in whole at a redemption price equal to 100% of the unpaid principal amount thereof, together with accrued and unpaid
interest thereon to (but excluding) the date of redemption and all other Secured Obligations owed or then due and payable to Noteholders
of such Series, plus Make-Whole Amount, if any; provided that:


 


(i)            no
redemption shall be permitted under this ‎Section 2.11(b) unless, simultaneously
with such redemption, the Related Additional Series Equipment Notes in respect of the Series of Additional Series Equipment
Notes being redeemed (in the case of redemption hereunder of any Series of Additional Series Equipment Notes), as the
case may be, shall also be redeemed; and


 


(ii)           if,
simultaneously with such redemption or at any time thereafter, new Additional Series Equipment Notes of the same Series designation
as the Series of Additional Series Equipment Notes being redeemed (in the case of redemption hereunder of a Series of
Additional Series Equipment Notes), in any such case, having terms that may be the same as or different from those of the
redeemed Equipment Notes, are being issued, such new Equipment Notes shall be issued in accordance with Section 2.02 of the
Participation Agreement and Section 8.01(c) of the Intercreditor Agreement.


 








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(c)            Notwithstanding
anything to the contrary in ‎Section 2.11(a) or ‎(b),
so long as Company or any of its Affiliates beneficially owns 100% of the Pass Through Certificates issued by any Pass Through
Trustee, the redemption price shall not include, and no Noteholder shall have any right to otherwise claim, any Make-Whole Amount
with respect to the Series of Equipment Notes issued to Subordination Agent for the benefit of such Pass Through Trustee.


 


Section 2.12     Redemptions;
Notice of Redemptions; Repurchases.


 


(a)            No
redemption of any Equipment Note may be made except to the extent and in the manner expressly permitted by this Indenture. Company
may at any time repurchase any of the Equipment Notes not held by Subordination Agent at any price and may hold or resell such
Equipment Notes or surrender such Equipment Notes to Loan Trustee for cancellation.


 


(b)            Notice
of redemption with respect to the Equipment Notes shall be given by Loan Trustee by first-class mail, postage prepaid, or by hand
delivery, mailed or delivered not less than 15 nor more than 60 days prior to the applicable redemption date, to each Noteholder
of such Equipment Notes to be redeemed, at such Noteholder’s address appearing in the Equipment Note Register; provided
that such notice shall be revocable by written notice from Company to Loan Trustee given no later than three days prior to
the redemption date. All notices of redemption shall state: (1) the redemption date, (2) the applicable
basis for determining the redemption price, (3) that on the redemption date, the redemption price will become due
and payable upon each such Equipment Note, and that, if any such Equipment Notes are then outstanding, interest on such Equipment
Notes shall cease to accrue on and after such redemption date and (4) the place or places where such Equipment Notes
are to be surrendered for payment of the redemption price.


 


(c)            On
or before the redemption date, Company (or any person on behalf of Company) shall, to the extent an amount equal to the redemption
price for the Equipment Notes to be redeemed on the redemption date shall not then be held by Loan Trustee, deposit or cause to
be deposited with Loan Trustee by 10:00 a.m. (New York City time) on the redemption date in immediately available funds the
redemption price of the Equipment Notes to be redeemed.


 


(d)            Notice
of redemption having been given as aforesaid (and not revoked as permitted by this ‎Section 2.12),
the Equipment Notes to be redeemed shall, on the redemption date, become due and payable at the Corporate Trust Office of Loan
Trustee, and from and after such redemption date (unless there is a default in the deposit of the redemption price pursuant to
‎Section 2.12(c)) any such Equipment Notes then outstanding shall cease to bear
interest. Upon surrender of any such Equipment Note for redemption in accordance with said notice, such Equipment Note shall be
redeemed at the redemption price.


 








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Section 2.13     Subordination.


 


(a)            The
indebtedness evidenced by the Series of Additional Series Equipment Notes ranked most senior in priority of payment
among all Series of Additional Series Equipment Notes, if issued, will be, to the extent and in the manner provided
in this Indenture (as this Indenture may be amended in connection with any such issuance of such most senior Series of Additional
Series Equipment Notes), subordinate and subject in right of payment to the prior payment in full of the Secured Obligations
in respect of the Series AA Equipment Notes, and any such most senior Series of Additional Series Equipment Notes,
if issued, shall be issued subject to such provisions. The indebtedness evidenced by any Additional Series Equipment Notes
(other than the Series of Additional Series Equipment Notes ranked most senior in priority of payment among all Series of
Additional Series Equipment Notes), if issued, will be, to the extent and in the manner provided in this Indenture (as this
Indenture may be amended in connection with any such issuance of such Additional Series Equipment Notes), subordinate and
subject in right of payment to the prior payment in full of the Secured Obligations in respect of the Series AA Equipment
Notes and each Series of Additional Series Equipment Notes that rank senior in priority of payment to such Additional
Series Equipment Notes, and any such Additional Series Equipment Notes, if issued, shall be issued subject to such provisions.
The indebtedness evidenced by the Series AA Equipment Notes is, and the indebtedness evidenced by any Additional Series Equipment
Notes, if issued, will be, to the extent and in the manner provided in each Related Indenture, subordinate and subject in right
of payment to the prior payment in full under such Related Indenture of the “Secured Obligations” in respect of the
“Equipment Notes” issued under such Related Indenture, and the Series AA Equipment Notes are, and any Series of
Additional Series Equipment Notes shall be, issued subject to such provisions. By acceptance of its Equipment Notes of any
Series, each Noteholder of such Series (i) agrees to and shall be bound by such provisions, (ii) authorizes
and directs Loan Trustee or the Related Loan Trustee under the applicable Related Indenture, as appropriate, on such Noteholder’s
behalf to take any action necessary or appropriate to effectuate the subordination as provided in this Indenture and the applicable
Related Indenture and (iii) appoints Loan Trustee or the Related Loan Trustee under the applicable Related Indenture,
as appropriate, as such Noteholder’s attorney-in-fact for such purpose.


 


(b)            Company,
Loan Trustee and, by acceptance of its Equipment Notes of any Series, each Noteholder of such Series, hereby agree that no payment
or distribution shall be made on or in respect of the Secured Obligations, or the “Secured Obligations” under any
Related Indenture, owed to such Noteholder of such Series, including any payment or distribution of cash, property or securities
after the occurrence of any of the events referred to in ‎Section 4.01(f) or
after the commencement of any proceedings of the type referred to in ‎Section 4.01(g),
‎(h) or ‎(i), except, in each case, as
expressly provided in Article ‎III of this Indenture or Article ‎III
of the applicable Related Indenture, as appropriate.


 








    21


     


    

 


(c)            By
the acceptance of its Equipment Notes of any Series, each Noteholder of such Series agrees that (i) if such Noteholder,
in its capacity as a Noteholder, receives any payment or distribution on any Secured Obligations in respect of such Series that
it is not entitled to receive under this ‎Section 2.13 or Article ‎III,
it will hold any amount so received in trust for Loan Trustee and forthwith turn over such amount to Loan Trustee in the form
received to be applied as provided in Article ‎III and (ii) if such
Noteholder, in its capacity as a “Noteholder” under any Related Indenture, receives any payment or distribution on
any “Secured Obligations” in respect of “Equipment Notes” of any “Series” issued under such
Related Indenture that it is not entitled to receive under ‎Section 2.13 or Article ‎III
of such Related Indenture, it will hold any amount so received in trust for the Related Loan Trustee under such Related Indenture
and forthwith turn over such amount to such Related Loan Trustee under such Related Indenture in the form received to be applied
as provided in Article ‎III of such Related Indenture.


 


Section 2.14     Certain
Payments. Company agrees to pay to Loan Trustee for distribution in accordance with ‎Section 3.04:


 


(a)          an
amount or amounts equal to the fees payable to the Liquidity Provider under Section 2.03 of the Liquidity Facility (or any
Replacement Liquidity Facility) and the Fee Letter (as defined in the Intercreditor Agreement) related thereto (or similar provisions
of any Replacement Liquidity Facility therefor and any related fee letter), multiplied by a fraction, the numerator of which is
the sum of the then outstanding aggregate principal amount of the Series AA Equipment Notes and the denominator of which
is the sum of the then outstanding aggregate principal amount of all “Series AA Equipment Notes” (each as defined
in the Intercreditor Agreement) with respect to all of the “Indentures” (as defined in the Intercreditor Agreement);


 


(b)          an
amount equal to interest on any Special Termination Advance (other than any Applied Special Termination Advance) payable under
Section 3.07 of the Liquidity Facility (or similar provisions of any Replacement Liquidity Facility therefor) minus Investment
Earnings from such Special Termination Advance multiplied by the fraction specified in the foregoing clause ‎(a);


 


(c)          an
amount equal to interest on any Downgrade Advance (other than any Applied Downgrade Advance) payable under Section 3.07 of
the Liquidity Facility (or similar provisions of any Replacement Liquidity Facility therefor) minus Investment Earnings from such
Downgrade Advance multiplied by the fraction specified in the foregoing clause ‎(a);


 






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(d)          an
amount equal to interest on any Non-Extension Advance (other than any Applied Non-Extension Advance) payable under Section 3.07
of the Liquidity Facility (or similar provisions of any Replacement Liquidity Facility therefor) minus Investment Earnings from
such Non-Extension Advance multiplied by the fraction specified in the foregoing clause ‎(a);


 


(e)          if
any payment default shall have occurred and be continuing with respect to interest on any “Series AA Equipment Notes”
(as defined in the Intercreditor Agreement), (x) the excess, if any, of (1) the amount equal to the sum
of interest on any Unpaid Advance (other than a Special Termination Advance), Applied Provider Advance or Applied Special Termination
Advance payable under Section 3.07 of the Liquidity Facility (or similar provisions of any Replacement Liquidity Facility
therefor) plus any other amounts payable in respect of such Unpaid Advance, Applied Provider Advance or Applied Special Termination
Advance under Section 3.01, 3.03 or 3.09 of the Liquidity Facility (or similar provisions of any Replacement Liquidity Facility
therefor) under which such Unpaid Advance, Applied Provider Advance or Applied Special Termination Advance was made over (2) the
sum of (A) Investment Earnings from any Final Advance plus (B) any amount of interest at the Past Due
Rate actually payable (whether or not in fact paid) by Company in respect of the overdue scheduled interest on the “Series AA
Equipment Notes” (as defined in the Intercreditor Agreement) in respect of which such Unpaid Advance, Applied Provider Advance
or Applied Special Termination Advance was made, multiplied by (y) a fraction, the numerator of which is the then
aggregate overdue amounts of interest on the then outstanding Series AA Equipment Notes (other than interest becoming due
and payable solely as a result of acceleration of any such Equipment Notes) and the denominator of which is the then aggregate
overdue amounts of interest on all then outstanding “Series AA Equipment Notes” (as defined in the Intercreditor
Agreement) with respect to all of the “Indentures” (as defined in the Intercreditor Agreement) (other than interest
becoming due and payable solely as a result of acceleration of any such “Equipment Notes”);


 


(f)           any
amounts owed to the Liquidity Provider by Subordination Agent as borrower under Sections 3.01 (other than in respect of an Unpaid
Advance, Applied Provider Advance or Applied Special Termination Advance), 3.03 (other than in respect of an Unpaid Advance, Applied
Provider Advance or Applied Special Termination Advance), 7.05 and 7.07 of the Liquidity Facility (or similar provisions of any
Replacement Liquidity Facility therefor) multiplied by the fraction specified in the foregoing clause ‎(a);
and


 


(g)          an
amount or amounts equal to the compensation, including reasonable expenses and disbursements actually incurred, payable to Subordination
Agent under Section 6.07 of the Intercreditor Agreement, multiplied by the fraction specified in the foregoing clause ‎(a) (but
in any event without duplication of any amount or amounts payable by Company in respect of such compensation under any other Operative
Document or Pass Through Document).


 








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For purposes of this
paragraph, the terms “Applied Downgrade Advance”, “Applied Non-Extension Advance”, “Applied Provider
Advance”, “Applied Special Termination Advance”, “Downgrade Advance”, “Final Advance”,
“Investment Earnings”, “Non-Extension Advance”, “Special Termination Advance” and “Unpaid
Advance” have the meanings specified in the Liquidity Facility (or any Replacement Liquidity Facility) or the Intercreditor
Agreement, as applicable.


 


Section 2.15     Repayment
of Monies for Equipment Note Payments Held by Loan Trustee. Any money or property held by Loan Trustee in trust for any payment
of the principal of, Make-Whole Amount, if any, or interest or any other amounts due on, any Equipment Note, including, without
limitation, any money or property deposited pursuant to ‎Section 2.12(c) or
‎10.01, and remaining unclaimed for a 730-day period (for purposes of calculating this
730-day period, all days on which the payment of such money or property shall not have been made because of operation of law shall
be excluded) after the due date for such payment (or such lesser time as Loan Trustee is satisfied, after 60 days’ notice
from Company, is one month prior to the escheat period provided under applicable state law) shall be paid to Company. Noteholders
of any outstanding Equipment Notes shall thereafter, as unsecured general creditors, look only to Company for payment thereof,
and all liability of Loan Trustee with respect to such trust money shall thereupon cease. Loan Trustee, before being required
to make any such repayment, may at the expense of Company cause to be mailed to each such Noteholder notice that such money or
property remains unclaimed. After a date specified in such notice, which may not be less than 30 days from the date of mailing,
any unclaimed balance of such money or property then remaining will be repaid to Company as provided herein.


 


Section 2.16     Directions
by Subordination Agent. So long as Subordination Agent is a Noteholder, notwithstanding anything contained herein or in any
other Operative Document to the contrary, in exercising its right to vote the Equipment Notes held by it, or in giving or taking
any direction, consent, request, demand, instruction, authorization, notice, waiver or other action provided by this Indenture
or in respect of the Equipment Notes to be given or taken by a Noteholder (each such vote or other action, a “Direction”)
in respect of such Equipment Notes, Subordination Agent may act in accordance with any votes, directions, consents, requests,
demands, instructions, authorizations, notices, waivers or other actions given or taken by any applicable Pass Through Trustee
or the Controlling Party pursuant to the Intercreditor Agreement, including without limitation pursuant to ‎Section 2.06,
Article ‎IV or ‎Section 8.01(b) thereof.
Subordination Agent shall be permitted (x) to give a Direction with respect to less than the entire principal amount
of any single Equipment Note held by it, and (y) to give different Directions with respect to different portions of
the principal amount of any single Equipment Note held by it. Any Direction given by Subordination Agent at any time with respect
to more than a majority in aggregate unpaid principal amount of all of the Equipment Notes issued and then outstanding hereunder
shall be deemed to have been given by a Majority in Interest of Noteholders.


 








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ARTICLE III


 


Receipt, Distribution and Application
of Income From the Collateral


 


Section 3.01     Basic
Distributions. Except as otherwise provided in Sections ‎3.02, ‎3.03
and ‎3.04, each periodic payment by Company of regularly scheduled installments of principal
or interest on the Equipment Notes received by Loan Trustee shall be promptly distributed in the following order of priority:


 


first,
so much of such payment as is required to pay in full the aggregate amount of the payment or payments of principal amount and
interest (as well as any interest on any overdue principal amount and, to the extent permitted by applicable law, on any overdue
interest and any other overdue amounts) then due under all Series AA Equipment Notes shall be distributed to Noteholders
of Series AA Equipment Notes ratably, without priority of one over the other, in the proportion that the amount of such payment
or payments then due under each Series AA Equipment Note bears to the aggregate amount of the payments then due under all
Series AA Equipment Notes;


 


second,;
after giving effect to clause “first” above (and except as otherwise provided in an amendment to this Indenture pursuant
to paragraph (xiii) or (xiv) of ‎Section 9.01) so much of such payment
remaining as is required to pay in full the aggregate amount of the payment or payments of principal amount and interest (as well
as any interest on any overdue principal amount and, to the extent permitted by applicable law, on any overdue interest and any
other overdue amounts) then due under all Additional Series Equipment Notes of a specified Series shall be distributed
to Noteholders of Additional Series Equipment Notes of such Series ratably, without priority of one over the other,
in the proportion that the amount of such payment or payments then due under each Additional Series Equipment Note of such
Series bears to the aggregate amount of the payments then due under all Additional Series Equipment Notes of such Series,
provided that this clause “third” shall apply to each Series of Additional Series Equipment Notes
in order of priority of payment; and


 


fourth ̧
the balance, if any, of such installment remaining thereafter shall be distributed to Company.


 






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Section 3.02     Event
of Loss; Optional Redemption.


 


Except
as otherwise provided in Sections ‎3.03 and ‎3.04
and subject to the following provisos, any payments received by Loan Trustee (i) with respect to the Airframe or the
Airframe and one or more Engines as the result of an Event of Loss pursuant to ‎Section 2.10
or (ii) pursuant to an optional redemption of the Equipment Notes pursuant to ‎Section 2.11
shall be applied to the redemption of the Equipment Notes and to all other Secured Obligations and Related Secured Obligations
then due by applying such payments in the following order of priority:


 


first,
so much of such payment as is required (i) to reimburse Loan Trustee and Noteholders for any reasonable costs or expenses
actually incurred in connection with such redemption for which they are entitled to reimbursement, or indemnity by Company, under
the Operative Documents and then (ii) to pay any other Secured Obligations then due to Loan Trustee, Noteholders and
other Indenture Indemnitees under this Indenture, the Participation Agreement or the Equipment Notes (other than amounts specified
in clauses “second” and “third” below);


 


second,
after giving effect to clause “first” above:


 


(i)            so
much of such payment remaining as is required to pay the amounts specified in paragraph (i) of clause “third”
of ‎Section 3.03 plus Make-Whole Amount, if any, then due and payable in respect
of the Series AA Equipment Notes;


 


(ii)           after
giving effect to paragraph (i) above (and except as otherwise provided in an amendment to this Indenture pursuant to paragraph
(xiii) or (xiv) of ‎Section 9.01), so much of such payment remaining as
is required to pay the amounts specified in paragraph (ii) of clause “third” of ‎Section 3.03
plus Make-Whole Amount, if any, then due and payable in respect of Additional Series Equipment Notes of a specified Series,
provided that this paragraph (ii) shall apply to each Series of Additional Series Equipment Notes in order
of priority of payment;


 


third,
after giving effect to clause “second” above, so much of such payment remaining as is required to pay the amounts
as provided in clause “third” of ‎Section 3.03 in respect of Related
Secured Obligations under each Defaulted Operative Indenture other than paragraph (vii) of clause “third” of
‎Section 3.03; and


 


fourth,
the balance, if any, of such payment, shall be distributed as provided in clause “fourth” of ‎Section 3.03;


 


provided
that any insurance, condemnation or similar proceeds resulting from an Event of Loss that are received by Loan Trustee shall
be held and distributed by Loan Trustee as provided in Sections ‎7.05(c) and ‎7.06(f),
and any such proceeds that are held by Loan Trustee shall be invested on behalf of the Company as provided in ‎Section 5.06;
and provided, further, that in the case of a redemption of Equipment Notes pursuant to ‎Section 2.11(b),
if a particular Series is not being redeemed pursuant thereto, no application of funds shall be made pursuant to the paragraphs
in clause “second” above that refer to such Series in connection with such redemption. No Make-Whole Amount shall
be due and payable on the Equipment Notes as a consequence of the redemption of the Equipment Notes as a result of an Event of
Loss with respect to the Airframe or the Airframe and one or more Engines.


 








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Section 3.03     Payments
After Event of Default.


 


Except
as otherwise provided in ‎Section 3.04, all payments received and amounts held or
realized by Loan Trustee (including any amounts realized by Loan Trustee from the exercise of any remedies pursuant to Article ‎IV)
after both an Event of Default shall have occurred and be continuing and the Equipment Notes shall have become due and payable
pursuant to ‎Section 4.02(a), as well as all payments or amounts then held by Loan
Trustee as part of the Collateral, shall be promptly distributed by Loan Trustee in the following order of priority:


 


first,
so much of such payments or amounts as is required to (i) reimburse Loan Trustee or WTC, to the extent Loan Trustee
or WTC is entitled to be reimbursed or indemnified under the Operative Documents, for any Tax, expense or other loss (including,
without limitation, all amounts to be expended at the expense of, or charged upon the tolls, rents, revenues, issues, products
and profits of, the property included in the Collateral pursuant to ‎Section 4.02(a))
actually incurred by Loan Trustee or WTC (to the extent not previously reimbursed), the expenses of any sale, taking or other
proceeding, reasonable attorneys’ fees and expenses, court costs, and any other expenditures actually incurred or expenditures
or advances made by Loan Trustee, WTC or Noteholders in the protection, exercise or enforcement of any right, power or remedy
or any damages sustained by Loan Trustee, WTC or any Noteholder, liquidated or otherwise, upon such Event of Default shall be
applied by Loan Trustee as between itself, WTC and Noteholders in reimbursement of such expenses and any other expenses for which
Loan Trustee, WTC or Noteholders are entitled to reimbursement under any Operative Document and (ii) pay all Secured
Obligations payable to other Indenture Indemnitees hereunder and under the Participation Agreement or the Equipment Notes (other
than amounts specified in clauses “second” and “third” below); and in case the aggregate amount so to
be distributed shall be insufficient to pay as aforesaid in clauses (i) and (ii), then ratably, without priority of one over
the other, in proportion to the amounts owed each hereunder;


 


second,
after giving effect to clause “first” above, so much of such payments or amounts remaining as is required to reimburse
the then existing or prior Noteholders for payments made pursuant to ‎Section 5.03
(to the extent not previously reimbursed) shall be distributed to such then existing or prior Noteholders ratably, without priority
of one over the other, in accordance with the amount of the payment or payments made by each such then existing or prior Noteholder
pursuant to ‎Section 5.03;


 








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third,
after giving effect to clause “second” above:


 


(i)            so
much of such payments or amounts remaining as is required to pay in full the aggregate unpaid principal amount of all Series AA
Equipment Notes, and the accrued but unpaid interest and other amounts due thereon and all other Secured Obligations in respect
of the Series AA Equipment Notes to the date of distribution, shall be distributed to Noteholders of Series AA Equipment
Notes, and in case the aggregate amount so to be distributed shall be insufficient to pay in full as aforesaid, then ratably,
without priority of one over the other, in the proportion that (x) the aggregate unpaid principal amount of all Series AA
Equipment Notes held by each holder thereof plus the accrued but unpaid interest and other amounts due in respect thereof hereunder
or thereunder to the date of distribution bears to (y) the aggregate unpaid principal amount of all Series AA
Equipment Notes held by all holders thereof plus the accrued but unpaid interest and other amounts due thereon to the date of
distribution;


 


(ii)           after
giving effect to paragraph (i) above (and except as otherwise provided in an amendment to this Indenture pursuant to paragraph
(xiii) or (xiv) of ‎Section 9.01), so much of such payments or amounts
remaining as is required to pay in full the aggregate unpaid principal amount of all Additional Series Equipment Notes of
a specified Series, and the accrued but unpaid interest and other amounts due thereon and all other Secured Obligations in respect
of the Additional Series Equipment Notes of such Series to the date of distribution, shall be distributed to Noteholders
of Additional Series Equipment Notes of such Series, and in case the aggregate amount so to be distributed shall be insufficient
to pay in full as aforesaid, then ratably, without priority of one over the other, in the proportion that (x) the
aggregate unpaid principal amount of all Additional Series Equipment Notes of such Series held by each holder thereof
plus the accrued but unpaid interest and other amounts due in respect thereof hereunder or thereunder to the date of distribution
bears to (y) the aggregate unpaid principal amount of all Additional Series Equipment Notes of such Series held
by all holders thereof plus the accrued but unpaid interest and other amounts due thereon to the date of distribution, provided
that this paragraph (ii) shall apply to each Series of Additional Series Equipment Notes in order of priority
of payment;


 






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(iii)          after
giving effect to paragraph (ii) above, so much of such payments or amounts remaining as is required to pay in full the amounts
then due and covered by clause “first” of ‎Section 3.03 of each Defaulted
Operative Indenture shall be distributed to the Related Loan Trustee under each respective Defaulted Operative Indenture, and
in case the aggregate amount so to be distributed shall be insufficient to pay in full as aforesaid, then ratably, without priority
of one over the other, in accordance with the priorities and prorations in such clause “first”;


 


(iv)          after
giving effect to paragraph (iii) above, so much of such payments or amounts remaining as is required to pay in full the amounts
then due and covered by clause “second” of ‎Section 3.03 of each Defaulted
Operative Indenture shall be distributed to the Related Loan Trustee under each respective Defaulted Operative Indenture, and
in case the aggregate amount so to be distributed shall be insufficient to pay in full as aforesaid, then ratably, without priority
of one over the other, in accordance with the priorities and prorations in such clause “second”;


 


(v)           after
giving effect to paragraph (iv) above, so much of such payments or amounts remaining as is required to pay in full the aggregate
amount of the payment or payments of principal amount and interest (as well as any interest on any overdue principal amount and,
to the extent permitted by applicable law, on any overdue interest and any other overdue amounts) then due under all Related Series AA
Equipment Notes, if any, issued under any Defaulted Operative Indenture shall be distributed to the Related Loan Trustee under
each respective Defaulted Operative Indenture under which any Related Series AA Equipment Notes are outstanding, and in case
the aggregate amount so to be distributed shall be insufficient to pay in full as aforesaid, then ratably, without priority of
one over the other, in the proportion that (x) the amount of such payment or payments then due under all Related Series AA
Equipment Notes issued under each Defaulted Operative Indenture bears to (y) the aggregate amount of the payments
then due under all Related Series AA Equipment Notes issued under all Defaulted Operative Indentures;


 


(vi)          after
giving effect to paragraph (v) above (and except as otherwise provided in amendments to the applicable Related Indentures
pursuant to paragraph (xiii) or (xiv) of ‎Section 9.01 thereof), so much
of such payments or amounts remaining as is required to pay in full the aggregate amount of the payment or payments of principal
amount and interest (as well as any interest on any overdue principal amount and, to the extent permitted by applicable law, on
any overdue interest and any other overdue amounts) then due under all Related Additional Series Equipment Notes of a specified
Series, if any, issued under any Defaulted Operative Indenture shall be distributed to the Related Loan Trustee under each respective
Defaulted Operative Indenture under which any Related Additional Series Equipment Notes of such Series are outstanding,
and in case the aggregate amount so to be distributed shall be insufficient to pay in full as aforesaid, then ratably, without
priority of one over the other, in the proportion that (x) the amount of such payment or payments then due under all
Related Additional Series Equipment Notes of such Series issued under each Defaulted Operative Indenture bears to (y) the
aggregate amount of the payments then due under all Related Additional Series Equipment Notes of such Series issued
under all Defaulted Operative Indentures, provided that this paragraph (vi) shall apply to each Series of Additional
Series Equipment Notes in order of priority of payment; and


 






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(vii)         after
giving effect to paragraph (vi) above, if any Related Equipment Note is outstanding, any of such payments or amounts remaining
and any invested Permitted Investments shall be held by Loan Trustee in an Eligible Account in accordance with the provisions
of ‎Section 3.07 (and invested as provided in ‎Section 5.06)
as additional security for the Related Secured Obligations, and such amounts (and any investment earnings thereon) shall be distributed
from time to time in accordance with the foregoing provisions of this clause “third” as and to the extent any such
Related Secured Obligation shall at any time and from time to time become due and remain unpaid after the giving of any required
notice and the expiration of any applicable grace period; and, upon the payment in full of all such Related Secured Obligations
the balance, if any, of any such remaining amounts and investment earnings thereon shall be applied as provided in clause “fourth”
of this ‎Section 3.03; and


 


fourth,
the balance, if any, of such payments or amounts remaining thereafter shall be distributed to Company.


 


No Make-Whole Amount
shall be payable on the Equipment Notes as a consequence of or in connection with an Event of Default or the acceleration of the
Equipment Notes.


 


Section 3.04     Certain
Payments.


 


(a)            Any
payments received by Loan Trustee for which provision as to the application thereof is made in this Indenture other than in this
Article ‎III shall be applied as provided in those provisions. Without limiting
the foregoing, any payments received by Loan Trustee which are payable to Company pursuant to any of the provisions of this Indenture
other than those set forth in this Article ‎III (including Sections ‎5.06,
‎7.05 and ‎7.06) shall be so paid to Company.
Any payments received by Loan Trustee for which no provision as to the application thereof is made in this Indenture and for which
such provision is made in any other Operative Document shall be applied forthwith to the purpose for which such payment was made
in accordance with the terms of such other Operative Document.


 








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(b)            Notwithstanding
anything to the contrary contained in this Article ‎III, Loan Trustee will distribute
promptly upon receipt any indemnity payment received by it from Company pursuant to Section 4.02 of the Participation Agreement
payable to (i) WTC and Loan Trustee, (ii) Subordination Agent, (iii) any separate or additional
trustee appointed pursuant to ‎Section 8.02, (iv) Pass Through Trustees,
(v) the Liquidity Provider or (vi) any other Indenture Indemnitee, in each case, directly to the Person
entitled thereto. Any payment received by Loan Trustee from Company under ‎Section 2.14
shall be distributed to Subordination Agent to be distributed in accordance with Section 2.04(c) of the Intercreditor
Agreement.


 


(c)            Any
payments received by Loan Trustee not constituting part of the Collateral or otherwise for which no provision as to the application
thereof is made in any Operative Document shall be distributed by Loan Trustee to Company. Further, and except as otherwise provided
in Sections ‎3.02 and ‎3.03, all payments received
and amounts realized by Loan Trustee with respect to the Aircraft, to the extent received or realized at any time after payment
in full of all Secured Obligations, as well as any amounts remaining as part of the Collateral after the occurrence of such payment
in full, shall be distributed by Loan Trustee to Company.


 


Section 3.05     Payments
to Company. Any amounts distributed hereunder by Loan Trustee to Company shall be paid to Company (within the time limits
contemplated by ‎Section 2.03) by wire transfer of funds of the type received by
Loan Trustee at such office and to such account or accounts of such entity or entities as shall be designated by notice from Company
to Loan Trustee from time to time.


 


Section 3.06     Cooperation.
Prior to making any distribution under this Article ‎III, Loan Trustee shall consult
with Related Loan Trustees to determine amounts payable with respect to the Related Secured Obligations. Loan Trustee shall cooperate
with Related Loan Trustees and shall provide such information as shall be reasonably requested by each Related Loan Trustee to
enable such Related Loan Trustee to determine amounts distributable under Article ‎III
of its Related Indenture.


 






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Section 3.07     Securities
Account. In furtherance of the provisions of ‎Section 3.03, WTC agrees to act
as an Eligible Institution under this Indenture in accordance with the provisions of this Indenture (in such capacity, the “Securities
Intermediary”). Except in its capacity as Loan Trustee, Wilmington Trust Company waives any claim or lien against any
Eligible Account it may have, by operation of law or otherwise, for any amount owed to it by Company. The Securities Intermediary
hereby agrees that, notwithstanding anything to the contrary in this Indenture, (i) any amounts to be held by Loan
Trustee pursuant to paragraph (vii) of clause “third” of ‎Section 3.03
and any investment earnings thereon or other Permitted Investments in which such amounts are invested will be credited to an Eligible
Account (the “Securities Account”) for which it is a “securities intermediary” (as defined in Section 8-102(a)(14)
of the NY UCC) and Loan Trustee is the “entitlement holder” (as defined in Section 8-102(a)(7) of the NY
UCC) of the “security entitlement” (as defined in Section 8-102(a)(17) of the NY UCC) with respect to each “financial
asset” (as defined in Section 8-102(a)(9) of the NY UCC) credited to such Eligible Account, (ii) all
such amounts, Permitted Investments and all other property acquired with cash credited to the Securities Account will be credited
to the Securities Account, (iii) all items of property (whether cash, investment property, Permitted Investments,
other investments, securities, instruments or other property) credited to the Securities Account will be treated as a “financial
asset” under Article 8 of the NY UCC, (iv) its “securities intermediary’s jurisdiction”
(as defined in Section 8-110(e) of the NY UCC) with respect to the Securities Account is the State of New York, and
(v) all securities, instruments and other property in order or registered form and credited to the Securities Account
shall be payable to or to the order of, or registered in the name of, the Securities Intermediary or shall be indorsed to the
Securities Intermediary or in blank, and in no case whatsoever shall any financial asset credited to the Securities Account be
registered in the name of Company, payable to or to the order of Company or specially indorsed to Company except to the extent
the foregoing have been specially endorsed by Company to the Securities Intermediary or in blank. Loan Trustee agrees that it
will hold (and will indicate clearly in its books and records that it holds) its “security entitlements” to the “financial
assets” credited to the Securities Account in trust for the benefit of Noteholders, each Indenture Indemnitee and each Related
Indenture Indemnitee as set forth in this Indenture. Company acknowledges that, by reason of Loan Trustee being the “entitlement
holder” in respect of the Securities Account as provided above, Loan Trustee shall have the sole right and discretion, subject
only to the terms of this Indenture, to give all “entitlement orders” (as defined in Section 8-102(a)(8) of
the NY UCC) with respect to the Securities Account and any and all financial assets and other property credited thereto to the
exclusion of Company. If any Person asserts any Lien (including, without limitation, any writ, garnishment, judgment, warrant
of attachment, execution or similar process) against the Securities Account or any financial asset carried therein, the Securities
Intermediary will promptly notify Loan Trustee and Company thereof.


 






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ARTICLE IV


 


Events of Default; Remedies of Loan
Trustee


 


Section 4.01     Events
of Default. Each of the following events constitutes an “Event of Default” whether such event is voluntary or
involuntary or comes about or is effected by operation of law or pursuant to or in compliance with any judgment, decree or order
of any court or any order, rule or regulation of any administrative or governmental body and each such Event of Default is
deemed to exist and continue so long as, but only as long as, it has not been remedied or explicitly waived:


 


(a)          Company
fails to make any payment of principal amount of, Make-Whole Amount, if any, or interest on, any Equipment Note within 15 days
after such payment is due;


 


(b)          Company
fails to make payment when the same is due of any amount (other than amounts referred to in ‎Section 4.01(a))
due hereunder, under any Equipment Note or under any other Operative Document, and such failure continues unremedied for 30 days
after the receipt by Company of written notice thereof from Loan Trustee or any Noteholder;


 


(c)          Company
fails to carry and maintain (or cause to be maintained) insurance or indemnity on or with respect to the Aircraft in accordance
with the provisions of ‎Section 7.06; provided that no such failure to carry
and maintain insurance shall constitute an Event of Default until the earlier of (i) the date such failure has continued
unremedied for a period of 30 days after receipt by Loan Trustee of the notice of cancellation referred to in ‎Section 7.06
or (ii) the date such insurance is not in effect as to Loan Trustee;


 


(d)          Company
fails to perform or observe in any material respect any other covenant, condition or agreement to be performed or observed by
it under any Operative Document, and such failure continues unremedied for a period of 60 days after receipt by Company of written
notice thereof from Loan Trustee or any Noteholder; provided that, if such failure is capable of being remedied, no such
failure shall constitute an Event of Default for a period of one year after such notice is received by Company so long as Company
is diligently proceeding to remedy such failure;


 


(e)          any
representation or warranty made by Company in any Operative Document was incorrect in any material respect at the time made, and
such incorrectness continues to be material to the transactions contemplated hereby and continues unremedied for a period of 60
days after receipt by Company of written notice thereof from Loan Trustee; provided that, if such incorrectness is capable
of being remedied, no such incorrectness shall constitute an Event of Default for a period of one year after such notice is received
by Company so long as Company is diligently proceeding to remedy such incorrectness;


 


(f)           Company
consents to the appointment of or the taking of possession by a receiver, trustee or liquidator in respect of a substantial part
of its property, admits in writing its inability to pay its debts generally as they come due or makes a general assignment for
the benefit of its creditors;


 






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(g)          Company
or Parent files a voluntary petition in bankruptcy or a voluntary petition or an answer seeking reorganization, liquidation or
other relief as a debtor in a case under any bankruptcy laws or insolvency laws (as in effect at such time) or an answer admitting
the material allegations of a petition filed against Company or Parent as a debtor in any such case, or Company or Parent as a
debtor seeks relief by voluntary petition, answer or consent under the provisions of any other bankruptcy or other similar law
providing for the reorganization or winding-up of corporations (as in effect at such time), or Company or Parent seeks an agreement,
composition, extension or adjustment with its creditors under such laws;




 


(h)          an
order, judgment or decree is entered by any court of competent jurisdiction appointing, without the consent of Company or Parent,
as applicable, a receiver, trustee or liquidator of Company or Parent or sequestering any substantial part of Company or Parent’s
property, or granting any other relief in respect of Company or Parent as a debtor under any bankruptcy laws or insolvency laws
(as in effect at such time), and any such order, judgment or decree of appointment or sequestration remains in force undismissed,
unstayed or unvacated for a period of 90 days after the date of entry thereof;


 


(i)           a
petition against Company or Parent as a debtor in a case under the federal bankruptcy laws or other insolvency laws (as in effect
at such time) is filed and not withdrawn or dismissed within 90 days thereafter, or if, under the provisions of any law providing
for reorganization or winding-up of corporations that may apply to Company or Parent, any court of competent jurisdiction assumes
jurisdiction, custody or control of Company or Parent or of any substantial part of Company or Parent’s property and such
jurisdiction, custody or control remains in force unrelinquished, unstayed or unterminated for a period of 90 days; or


 


(j)           an
“Event of Default” (as defined in any Related Indenture) shall have occurred and be continuing;


 


provided
that notwithstanding anything to the contrary contained in this ‎Section 4.01,
any failure of Company to perform or observe any covenant, condition or agreement shall not constitute an Event of Default if
such failure arises by reason of an event referred to in the definition of “Event of Loss” so long as Company
is continuing to comply with all of the terms of ‎Section 7.05.


 


Section 4.02     Remedies.


 


(a)            If
an Event of Default has occurred and is continuing and so long as the same shall continue unremedied, then and in every such case
Loan Trustee may, and upon the written instructions of a Majority in Interest of Noteholders, Loan Trustee shall (subject to ‎Section 5.03),
do one or more of the following to the extent permitted by, and subject to compliance with the requirements of, applicable law
then in effect (provided that during any period the Airframe or any Engine is subject to the CRAF Program and is in possession
of or being operated under the direction of the United States government or an agency or instrumentality of the United States,
Loan Trustee shall not, on account of any Event of Default, be entitled to exercise or pursue any of the powers, rights or remedies
described in this ‎Section 4.02 in such manner as to limit Company’s control
under this Indenture (or any Permitted Lessee’s control under any Lease) of the Airframe or such Engine, unless at least
60 days’ (or such other period as may then be applicable under the CRAF Program of the United States government) prior written
notice of default hereunder has been given by Loan Trustee by registered or certified mail to Company (and any such Permitted
Lessee) with a copy addressed to the Contracting Office Representative or other appropriate person for the Air Mobility Command
of the United States Air Force under any contract with Company (or such Permitted Lessee) relating to the Aircraft):


 








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(i)           declare
by written notice to Company all the Equipment Notes to be due and payable, whereupon the aggregate unpaid principal amount of
all Equipment Notes then outstanding, together with accrued but unpaid interest thereon, and other amounts due thereunder (but
without Make-Whole Amount), shall immediately become due and payable without presentment, demand, protest or other notice, all
of which are hereby waived; provided that if an Event of Default referred to in ‎Section 4.01(f),
‎(g), ‎(h) or ‎(i) has
occurred and is continuing, then and in every such case the unpaid principal amount of the Equipment Notes then outstanding, together
with accrued but unpaid interest thereon, and all other amounts due thereunder (but without Make-Whole Amount) shall immediately
and without further act become due and payable without presentment, demand, protest or notice, all of which are hereby waived;
and, following such declaration or deemed declaration:


 


(ii)          subject
to Section 4.02(e), (A) cause Company, upon the demand by notice of Loan Trustee, at Company’s expense,
to deliver promptly, and Company shall deliver promptly, all or such part of the Airframe or any Engine as Loan Trustee so demands
to Loan Trustee or its order, or, if Company has failed to so deliver the Airframe or any Engine after such demand, Loan Trustee,
at its option, may enter upon the premises where all or any part of the Airframe or any Engine are located and take immediate
possession of and remove the same together with any engine which is not an Engine but which is installed on the Airframe, subject
to all of the rights of the owner, lessor, lienor or secured party of such engine; provided that the Airframe with an engine
(which is not an Engine) installed thereon may be flown or returned only to a location within the continental United States, and
such engine shall be held at the expense of Company for the account of any such owner, lessor, lienor, secured party or, if such
engine is owned by Company, may at the option of Company with the consent of Loan Trustee (which will not be unreasonably withheld)
or at the option of Loan Trustee with the consent of Company (which will not be unreasonably withheld), be exchanged with Company
for an Engine in accordance with the provisions of ‎Section 7.05(b); (B) sell
all or any part of the Airframe and any Engine at public or private sale, whether or not Loan Trustee at the time has possession
thereof, as Loan Trustee may determine, or otherwise dispose of, hold, use, operate, lease to others or keep idle all or any part
of the Airframe or such Engine as Loan Trustee, in its sole discretion, determines, all free and clear of any rights or claims
of Company, and the proceeds of such sale or disposition shall be applied as set forth in ‎Section 3.03;
or (C) exercise any other remedy of a secured party under the NY UCC (whether or not in effect in the jurisdiction
in which enforcement is sought); provided that, notwithstanding anything to the contrary set forth herein or in any other
Operative Document, (i) as permitted by Article 15 of the Cape Town Convention, the provisions of Chapter III
of the Cape Town Convention are hereby excluded and made inapplicable to this Indenture and the other Operative Documents, except
for those provisions of such Chapter III that cannot be derogated from; and (ii) as permitted by Article IV(3) of
the Aircraft Protocol, the provisions of Chapter II of the Aircraft Protocol are hereby excluded and made inapplicable to this
Indenture and the other Operative Documents, except for (x) Article XVI of the Aircraft Protocol and (y) those
provisions of such Chapter II that cannot be derogated from. In furtherance of the foregoing, the parties hereto agree that the
exercise of remedies hereunder and the other Operative Documents is subject to other applicable law, including without limitation,
the NY UCC and the Bankruptcy Code, and that nothing herein derogates from the rights of Company or Loan Trustee under or pursuant
to such other applicable law, including without limitation, the NY UCC or the Bankruptcy Code.


 








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Upon
every such taking of possession of Collateral under this ‎Section 4.02, Loan Trustee
may, from time to time, at the expense of the Collateral, make all such expenditures for maintenance, insurance, repairs, alterations,
additions and improvements to and of the Collateral as it deems necessary to cause the Collateral to be in such condition as required
by the provisions of this Indenture. In each such case, Loan Trustee may maintain, use, operate, store, insure, lease, control,
manage or dispose of the Collateral and may exercise all rights and powers of Company relating to the Collateral as Loan Trustee
reasonably deems best, including the right to enter into any and all such agreements with respect to the maintenance, use, operation,
storage, insurance, leasing, control, management or disposition of the Collateral or any part thereof as Loan Trustee may reasonably
determine; and Loan Trustee shall be entitled to collect and receive directly all tolls, rents, revenues, issues, income, products
and profits of the Collateral and every part thereof without prejudice, however, to the rights of Loan Trustee under any provision
of this Indenture to collect and receive all cash held by, or required to be deposited with Loan Trustee hereunder. Such tolls,
rents, revenues, issues, income, products and profits shall be applied to pay the expenses of the use, operation, storage, insurance,
leasing, control, management or disposition of the Collateral, and of all maintenance, repairs, replacements, alterations, additions
and improvements, and to make all payments that Loan Trustee is required or elects to make, if any, for Taxes, insurance or other
proper charges assessed against or otherwise imposed upon the Collateral or any part thereof, and all other payments which Loan
Trustee is required or expressly authorized to make under any provision of this Indenture, as well as just and reasonable compensation
for the services of Loan Trustee, and shall otherwise be applied in accordance with Article ‎III.
If an Event of Default has occurred and is continuing and the Equipment Notes either have been accelerated pursuant to this ‎Section 4.02
or have become due at maturity and Loan Trustee is entitled to exercise rights hereunder, at the request of Loan Trustee, Company
shall promptly execute and deliver to Loan Trustee such instruments of title and other documents as Loan Trustee reasonably deems
necessary or advisable to enable Loan Trustee or an agent or representative designated by Loan Trustee, at such time or times
and place or places as Loan Trustee specifies, to obtain possession of all or any part of the Collateral to which Loan Trustee
at the time is entitled hereunder. If Company for any reason fails to execute and deliver such instruments and documents after
such request by Loan Trustee, Loan Trustee may seek a judgment conferring on Loan Trustee the right to immediate possession and
requiring Company to execute and deliver such instruments and documents to Loan Trustee, to the entry of which judgment Company
hereby specifically consents to the fullest extent it may lawfully do so. All actual and reasonable expenses of obtaining such
judgment or of pursuing, searching for and taking such property shall, until paid, be secured by the Lien of this Indenture.


 








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(b)            Loan
Trustee shall give Company at least 30 days’ prior written notice of any public sale or of the date on or after which any
private sale will be held, which notice Company hereby agrees to the extent permitted by applicable law is reasonable notice.
Any Noteholder or Noteholders shall be entitled to bid for and become the purchaser of any Collateral offered for sale pursuant
to this ‎Section 4.02 and to credit against the purchase price bid at such sale
by such Noteholders all or any part of the unpaid amounts owing to such Noteholders under the Operative Documents and secured
by the Lien of this Indenture (but only to the extent that such purchase price would have been paid to such Noteholders pursuant
to Article ‎III if such purchase price were paid in cash and the foregoing provision
of this ‎Section 4.02(b) were not given effect). Loan Trustee may exercise
such right without possession or production of the Equipment Notes or proof of ownership thereof, and as a representative of Noteholders
may exercise such right without notice to Noteholders as party to any suit or proceeding relating to the foreclosure of any Collateral.
Company may also bid for and become the purchaser of any Collateral offered for sale pursuant to this ‎Section 4.02.


 


(c)            To
the extent permitted by applicable law, while an Event of Default has occurred and is continuing, Company irrevocably appoints
Loan Trustee the true and lawful attorney-in-fact of Company (which appointment is coupled with an interest) in its name and stead
and on its behalf, for the purpose of effectuating any sale, assignment, transfer or delivery for the enforcement of the Lien
of this Indenture, whether pursuant to foreclosure or power of sale, or otherwise, to execute and deliver all such bills of sale,
assignments and other instruments as may be necessary or appropriate, with full power of substitution, Company hereby ratifying
and confirming all that such attorney or any substitute does by virtue hereof in accordance with applicable law; provided
that if so requested by Loan Trustee or any purchaser, Company shall ratify and confirm any such sale, assignment or transfer
of delivery, by executing and delivering to Loan Trustee or such purchaser all bills of sale, assignments, releases and other
proper instruments to effect such ratification and confirmation as may reasonably be designated in any such request.


 








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(d)            At
any time after Loan Trustee has declared the unpaid principal amount of all Equipment Notes then outstanding to be due and payable,
or all Equipment Notes shall have become due and payable as provided in the proviso to ‎Section 4.02(a)(i),
and, in either case, prior to the sale of any part of the Collateral pursuant to this Article ‎IV,
a Majority in Interest of Noteholders, by written notice to Company and Loan Trustee, may rescind and annul such declaration,
whether made by Loan Trustee on its own accord or as directed or deemed declaration, and its consequences if: (i) there
has been paid to or deposited with Loan Trustee an amount sufficient to pay all overdue installments of principal amount of, and
interest on, the Equipment Notes, and all other amounts owing under the Operative Documents, that have become due otherwise than
by such declaration of acceleration and (ii) all other Events of Default, other than nonpayment of principal amount
or interest on the Equipment Notes that have become due solely because of such acceleration, have been either cured or waived;
provided that no such rescission or annulment shall extend to or affect any subsequent default or Event of Default or impair
any right consequent thereon.


 


(e)            Notwithstanding
anything contained herein, (i) so long as Pass Through Trustee under any Pass Through Trust Agreement or Subordination
Agent on its behalf is a Noteholder, Loan Trustee will not be authorized or empowered to acquire title to any Collateral or take
any action with respect to any Collateral so acquired by it if such acquisition or action would cause any Pass Through Trust to
fail to qualify as a “grantor trust” for U.S. federal income tax purposes, and (ii) Loan Trustee will
not take any action that would violate Section 4.01(a)(ii) or 4.01(a)(iii) of the Intercreditor Agreement.


 


Section 4.03     Remedies
Cumulative. To the extent permitted under applicable law, each and every right, power and remedy specifically given to Loan
Trustee herein or otherwise in this Indenture shall be cumulative and shall be in addition to every other right, power and remedy
specifically given herein or now or hereafter existing at law, in equity or by statute, and each and every right, power and remedy
whether specifically given herein or otherwise existing may be exercised from time to time and as often and in such order as may
be deemed expedient by Loan Trustee, 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 Loan Trustee in the exercise of any right, remedy or power or in the pursuance of any remedy shall, to the extent permitted
by applicable law, impair any such right, power or remedy or be construed to be a waiver of any default on the part of Company
or to be an acquiescence therein.


 








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Section 4.04     Discontinuance
of Proceedings. In case Loan Trustee has instituted any proceedings to enforce any right, power or remedy under this Indenture
by foreclosure, entry or otherwise, and such proceedings have been discontinued or abandoned for any reason or have been determined
adversely to Loan Trustee, then and in every such case Company and Loan Trustee shall, subject to any determination in such proceedings,
be restored to their former positions and rights hereunder with respect to the Collateral, and all rights, remedies and powers
of Loan Trustee shall continue as if no such proceedings had been undertaken (but otherwise without prejudice).


 


Section 4.05     Waiver
of Past Defaults. Subject to ‎Section 5.03, upon written instruction from a
Majority in Interest of Noteholders, Loan Trustee shall waive any past default hereunder and its consequences, and upon any such
waiver such default shall cease to exist and any Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture and the other Operative Documents, but no such waiver shall extend to any subsequent or other default
or impair any right consequent thereon; provided that in the absence of written instructions from each of the affected
Noteholders, Loan Trustee shall not waive any default (i) in the payment of the principal amount, Make-Whole Amount,
if any, or interest due under any Equipment Note then outstanding (other than with the consent of the holder thereof), or (ii) in
respect of a covenant or provision hereof which, under Article ‎IX, cannot be modified
or amended without the consent of each such affected Noteholder.


 


Section 4.06     Noteholders
May Not Bring Suit Except Under Certain Conditions. A Noteholder of any Series shall not have the right to institute
any suit, action or proceeding at law or in equity or otherwise with respect to this Indenture or the Equipment Notes or otherwise,
or for the appointment of a receiver or for the enforcement of any other remedy under this Indenture or the Equipment Notes or
otherwise, unless:


 


(1)          such
Noteholder previously shall have given written notice to Loan Trustee of a continuing Event of Default;


 


(2)          a
Majority in Interest of Noteholders shall have requested Loan Trustee in writing to institute such action, suit or proceeding
and shall have offered to Loan Trustee indemnity as provided in ‎Section 5.03;


 


(3)          Loan
Trustee shall have refused or neglected to institute any such action, suit or proceeding for 60 days after receipt of such notice,
request and offer of indemnity; and


 






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(4)            no
direction inconsistent with such written request shall have been given to Loan Trustee during such 60-day period by a Majority
in Interest of Noteholders.


 


Except to the extent
provided in the Intercreditor Agreement or herein, it is understood and intended that no one or more of Noteholders of any Series shall
have any right in any manner whatsoever hereunder or under the Equipment Notes of such Series to (i) surrender,
impair, waive, affect, disturb or prejudice any Collateral, or the Lien of this Indenture on any Collateral, or the rights of
Noteholders of such Series, (ii) obtain or seek to obtain priority over or preference with respect to any other such
Noteholder of such Series or (iii) enforce any right under this Indenture or the Equipment Notes of such Series,
except in the manner provided in this Indenture and for the equal, ratable and common benefit of all Noteholders of such Series subject
to the provisions of this Indenture.


 


Section 4.07            Appointment
of a Receiver. To the extent permitted by applicable law, if an Event of Default shall have occurred and be continuing, and
the Equipment Notes either shall have been accelerated pursuant to ‎Section 4.02
or have become due at maturity, Loan Trustee shall, as a matter of right, be entitled to the appointment of a receiver (who may
be Loan Trustee or any successor or nominee thereof) for all or any part of the Collateral, whether such receivership be incidental
to a proposed sale of the Collateral or the taking of possession thereof or otherwise, and, to the extent permitted by applicable
law, Company hereby consents to the appointment of such a receiver and will not oppose any such appointment. Any receiver appointed
for all or any part of the Collateral shall be entitled to exercise all the rights and powers of Loan Trustee with respect to
the Collateral.


 


ARTICLE V


 


Duties of Loan Trustee


 


Section 5.01            Notice
of Event of Default. If Loan Trustee has actual knowledge of an Event of Default or of a default arising from a failure by
Company to pay when due any payment of principal amount, interest on, or Make-Whole Amount, if any, due and payable under any
Equipment Note, Loan Trustee shall promptly give notice thereof to Company, the Liquidity Provider and each Noteholder. Subject
to the terms of Sections ‎4.02, ‎4.05, ‎5.02
and ‎5.03, Loan Trustee shall take such action, or refrain from taking such action, with
respect to such default or Event of Default (including with respect to the exercise of any rights or remedies hereunder) as Loan
Trustee is instructed in writing by a Majority in Interest of Noteholders. Subject to the provisions of ‎Section 5.03,
if Loan Trustee does not receive instructions as above provided within 20 Business Days after giving notice of such default or
Event of Default to Noteholders, Loan Trustee may, subject to instructions thereafter received pursuant to the preceding provisions
of this ‎Section 5.01, take such action, or refrain from taking such action with
respect to such default or Event of Default as it reasonably determines to be advisable in the best interests of Noteholders,
but shall be under no duty to take or refrain from taking any action. In acting pursuant to the immediately preceding sentence,
Loan Trustee shall use the same degree of care and skill in connection therewith as a prudent person would use under the circumstances
in the conduct of his or her own affairs. Loan Trustee may not sell the Airframe or any Engine without the consent of a Majority
in Interest of Noteholders.


 






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For
all purposes of this Indenture, in the absence of actual knowledge, Loan Trustee shall not be deemed to have knowledge of a default
or an Event of Default unless notified in writing by Company or one or more Noteholders; and “actual knowledge” (as
used in the foregoing clause) of Loan Trustee shall mean actual knowledge of a Trust Officer of Loan Trustee; provided
that Loan Trustee is deemed to have actual knowledge of (i) the failure of Company to pay any principal amount of,
or interest on, the Equipment Notes directly to Loan Trustee when the same shall become due or (ii) the failure of
Company to maintain insurance as required under ‎Section 7.06 if Loan Trustee receives
written notice thereof from an insurer or insurance broker.


 


Section 5.02            Action
upon Instructions; Certain Rights and Limitations. Subject to the terms of Article ‎IV
and this Article ‎V, upon the written instructions at any time of a Majority in
Interest of Noteholders, Loan Trustee shall promptly (i) give such notice, direction, consent, waiver or approval
or exercise such right, remedy or power hereunder in respect of all or any part of the Collateral or (ii) take such
other action permitted hereunder, in each case, as is specified in such instructions.


 


Loan
Trustee will cooperate with Company in connection with the recording, filing, re-recording and refiling of this Indenture and
any supplements to it and any financing statements or other documents as is necessary to maintain the perfection hereof or otherwise
protect the security interests created hereby. Loan Trustee shall furnish to Company upon request such information and copies
of such documents as Loan Trustee may have and as are necessary for Company to perform its duties under Article ‎II.


 


Section 5.03            Indemnification.
Loan Trustee shall not be required to take any action or refrain from taking any action under ‎Section 5.01
(other than the first sentence thereof) or ‎5.02 or Article ‎IV
unless it shall have received indemnification against any risks incurred in connection therewith in form and substance reasonably
satisfactory to it, including, without limitation, adequate advances against costs that may be actually incurred by it in connection
therewith. Loan Trustee shall not be required to take any action under ‎Section 5.01
(other than the first sentence thereof) or ‎5.02 or Article ‎IV,
nor shall any other provision of any Operative Document be deemed to impose a duty on Loan Trustee to take any action, if Loan
Trustee shall have been advised by outside counsel that such action is contrary to the terms hereof or is otherwise contrary to
applicable law.


 


Section 5.04            No
Duties Except as Specified in Indenture or Instructions. Loan Trustee shall not have any duty or obligation to manage, control,
lease, use, sell, operate, store, dispose of or otherwise deal with the Aircraft or any other part of the Collateral, or to otherwise
take or refrain from taking any action under, or in connection with, this Indenture, except as expressly provided by the terms
of this Indenture or the Participation Agreement or as expressly provided in written instructions received pursuant to the terms
of ‎Section 5.01 or ‎5.02; and no implied
duties or obligations shall be read into this Indenture against Loan Trustee.


 






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Section 5.05            No
Action Except under Indenture or Instructions. Loan Trustee will not manage, control, use, sell, lease, operate, store, dispose
of or otherwise deal with the Aircraft or any other part of the Collateral except in accordance with the powers granted to, or
the authority conferred upon, Loan Trustee pursuant to this Indenture and in accordance with the express terms hereof.


 


Section 5.06            Investment
of Amounts Held by Loan Trustee. Any monies (including for the purpose of this ‎Section 5.06
any amounts held by Loan Trustee pursuant to ‎Section 3.02, ‎3.03
or ‎3.07 or pursuant to any provision of any other Operative Document providing for amounts
to be held by Loan Trustee which are not distributed pursuant to the other provisions of Article ‎III,
or any cash received by Loan Trustee pursuant to ‎Section 7.05(c) or ‎7.06(f) or
otherwise, or Permitted Investments purchased by the use of such cash pursuant to this ‎Section 5.06
or any cash constituting the proceeds of the maturity, sale or other disposition of any Permitted Investments) held by Loan Trustee
hereunder as part of the Collateral, until paid out by Loan Trustee as herein provided, (i) subject to clause (ii) below
and ‎Section 3.07, may be carried by Loan Trustee on deposit with itself or on deposit
to its account with any bank, trust company or national banking association incorporated or doing business under the laws of the
United States or one of the states thereof having combined capital and surplus and retained earnings of at least $100,000,000,
and Loan Trustee shall not have any liability for interest upon any such monies except as otherwise agreed in writing with Company,
or (ii) at any time and from time to time, so long as no Event of Default shall have occurred and be continuing, at
the request of Company, shall be invested and reinvested in Permitted Investments as specified in such request (if such investments
are reasonably available for purchase) and sold, in any case at such prices, including accrued interest or its equivalent, as
are set forth in such request, and, as provided in ‎Section 3.07, such Permitted
Investments shall be held by Loan Trustee in trust as part of the Collateral until so sold; provided that Company shall
upon demand pay to Loan Trustee the amount of any loss realized upon maturity, sale or other disposition of any such Permitted
Investment and, so long as no Event of Default or Payment Default shall have occurred and be continuing, Company shall be entitled
to receive from Loan Trustee, and Loan Trustee shall promptly pay to Company, any profit, income, interest, dividend or gain realized
upon maturity, sale or other disposition of any Permitted Investment. All Permitted Investments held by Loan Trustee pursuant
to this ‎Section 5.06 shall be held pursuant to ‎Section 3.07.
If an Event of Default or Payment Default shall have occurred and be continuing, any net income, profit, interest, dividend or
gain realized upon maturity, sale or other disposition of any Permitted Investment shall be held as part of the Collateral and
shall be applied by Loan Trustee at the same time, on the same conditions and in the same manner as the amounts in respect of
which such income, profit, interest, dividend or gain was realized are required to be distributed in accordance with the provisions
hereof pursuant to which such amounts were required to be held. Subject to ‎Section 3.03,
at such time as there shall not be continuing any such Event of Default or Payment Default, such income, profit, interest, dividend
or gain shall be paid to Company. In addition, subject to ‎Section 3.03, if any monies or investments are held by Loan
Trustee solely because an Event of Default or Payment Default has occurred and is continuing, at such time as there shall not
be continuing any such Event of Default or Payment Default, such monies and investments shall be paid to Company. Loan Trustee
shall not be responsible for any losses on any investments or sales of Permitted Investments made pursuant to the procedure specified
in this ‎Section 5.06 other than by reason of its willful misconduct or negligence.


 








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ARTICLE VI


 


Loan Trustee


 


Section 6.01            Acceptance
of Trusts and Duties. Wilmington Trust Company accepts the trusts and duties hereby created and applicable to it and agrees
to perform such duties, but only upon the terms of this Indenture and agrees to receive, handle and disburse all monies received
by it as Loan Trustee constituting part of the Collateral in accordance with the terms of this Indenture. Wilmington Trust Company
shall have no liability hereunder except (a) for its own willful misconduct or negligence, (b) as provided
in the fourth sentence of ‎Section 2.03 and the last sentence of ‎Section 5.06,
(c) for liabilities that may result from the inaccuracy of any representation or warranty of Wilmington Trust Company
in the Participation Agreement or expressly made hereunder and (d) as otherwise expressly provided in the Operative
Documents.


 


For
the avoidance of doubt, Loan Trustee shall also be accountable in its capacity as Securities Intermediary with respect to the
Security Account, as set forth in ‎Section 3.07.


 


Section 6.02            Absence
of Certain Duties. Except in accordance with written instructions furnished pursuant to Sections ‎5.01,
‎5.02 or ‎6.06, and except as provided in, and
without limiting the generality of, Sections ‎5.02, ‎5.03
and ‎5.04, Loan Trustee shall have no duty (a) to see to any registration
of the Aircraft or any recording or filing of this Indenture or any other document, or to see to the maintenance of any such registration,
recording or filing, (b) to see to any insurance on the Aircraft or to effect or maintain any such insurance, whether
or not Company is in default with respect thereto, (c) to confirm, verify or inquire into the failure to receive any
financial statements of Company or (d) to inspect the Aircraft at any time or ascertain or inquire as to the performance
or observance of any of Company’s covenants hereunder with respect to the Aircraft.


 


Section 6.03            No
Representations or Warranties as to the Documents. Except as provided in Article V of the Participation Agreement, Loan
Trustee shall not be deemed to have made any representation or warranty as to the validity, legality or enforceability of any
Operative Document or any other document or instrument, or as to the correctness of any statement (other than a statement by Loan
Trustee) contained herein or therein, except that Loan Trustee hereby represents and warrants that each of said specified documents
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.


 






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Section 6.04            No
Segregation of Monies; No Interest. Subject to ‎Section 5.06 and except as provided
in ‎Section 3.07, all monies received by Loan Trustee shall, until used or applied
as herein provided, be held in trust for the purposes for which they were received, but need not be segregated from other funds
except to the extent required by mandatory provisions of applicable law, and neither Loan Trustee nor any agent of Loan Trustee
shall be under any liability for interest on any monies received by it hereunder; provided that any payments received,
or applied hereunder, by Loan Trustee shall be accounted for by Loan Trustee so that any portion thereof paid or applied pursuant
hereto shall be identifiable as to the source thereof.


 


Section 6.05            Reliance;
Agents; Advice of Counsel. Loan Trustee shall not incur any liability to anyone in acting upon any signature, instrument,
notice, resolution, request, consent, order, certificate, report, opinion, bond or other document or paper reasonably believed
by it to be genuine and reasonably believed by it to be signed by the proper party or parties. Loan Trustee may accept a copy
of a resolution of the Board of Directors of any party to the Participation Agreement, certified by the Secretary or an Assistant
Secretary of such party 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, Loan Trustee may and shall for all purposes hereof rely on a certificate, signed by a duly authorized officer
of Company, as to such fact or matter, and such certificate shall constitute full protection to Loan Trustee for any action taken
or omitted to be taken by it in good faith in reliance thereon. In the administration of the trusts hereunder, Loan Trustee may
(a) execute any of the trusts or powers hereof and perform its powers and duties hereunder directly or through agents
(including paying agents or registrars) or attorneys, and (b) at the expense of the Collateral, consult with counsel,
accountants and other skilled Persons to be selected and retained by it; provided that, prior to retaining agents (including
paying agents or registrars), counsel, accountants or other skilled Persons, so long as no Event of Default exists, Loan Trustee
shall obtain Company’s consent (such consent not to be unreasonably withheld). Loan Trustee shall not be liable for anything
done, suffered or omitted in good faith by it in accordance with the advice or opinion of any such counsel, accountants or other
skilled Persons acting within such counsel’s, accountants’ or Person’s area of competence (so long as Loan Trustee
shall have exercised reasonable care and judgment in selecting such Persons).


 






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Section 6.06            Instructions
from Noteholders. In the administration of the trusts created hereunder, Loan Trustee shall have the right to seek instructions
from a Majority in Interest of Noteholders should any provision of this Indenture appear to conflict with any other provision
herein or any other Operative Document or Pass Through Document or should Loan Trustee’s duties or obligations hereunder
be unclear, and Loan Trustee shall incur no liability in refraining from acting until it receives such instructions. Loan Trustee
shall be fully protected for acting in accordance with any instructions received under this ‎Section 6.06.


 


ARTICLE VII


 


Operating Covenants of Company


 


Section 7.01            Liens.
Company will not directly or indirectly create, incur, assume or suffer to exist any Lien on or with respect to the Aircraft,
its title thereto or any of its interest therein, except:


 


(a)            the
respective rights of Loan Trustee and Company as provided in the Operative Documents, the Lien of this Indenture, the rights of
any Permitted Lessee under a Lease permitted hereunder and the rights of any Person existing pursuant to the Operative Documents
or the Pass Through Documents;


 


(b)            the
rights of others under agreements or arrangements to the extent expressly permitted by this Indenture;


 


(c)            Loan
Trustee Liens, Noteholder Liens and Other Party Liens;


 


(d)            Liens
for Taxes either not yet overdue or being contested in good faith by appropriate proceedings so long as such proceedings do not
involve any material risk of the sale, forfeiture or loss of the Airframe or any Engine or Loan Trustee’s interest therein
or impair the Lien of this Indenture;


 


(e)            materialmen’s,
mechanics’, workers’, repairmen’s, hangerkeeper’s, landlords’, employees’ or other like Liens
arising in the ordinary course of business (including those arising under maintenance agreements entered into in the ordinary
course of business) securing obligations that either are not yet overdue for a period of more than 60 days or are being contested
in good faith by appropriate proceedings so long as such proceedings do not involve any material risk of the sale, forfeiture
or loss of the Airframe or any Engine or Loan Trustee’s interest therein or materially impair the Lien of this Indenture;


 


(f)            Liens
arising out of any judgment or award, so long as such judgment or award is, within 60 days after the entry thereof, discharged,
vacated or reversed, or execution thereof stayed pending appeal or other judicial review or is discharged, vacated or reversed
within 60 days after the expiration of such stay;


 






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(g)            any
other Lien with respect to which Company or any Permitted Lessee provides a bond, cash collateral or other security adequate in
the reasonable opinion of Loan Trustee;


 


(h)            salvage
or similar rights of insurers under insurance policies maintained by Company or any Permitted Lessee; and


 


(i)            Liens
approved in writing by Loan Trustee with the consent of a Majority in Interest of Noteholders.


 


Liens
described in clauses ‎(a) through ‎(i) above
are referred to herein as “Permitted Liens”. Company shall promptly, at its own expense, take (or cause to
be taken) such action as may be necessary duly to discharge (by bonding or otherwise) any Lien other than a Permitted Lien arising
at any time with respect to the Aircraft, its title thereto or any of its interest therein.


 


Section 7.02            Possession,
Operation and Use, Maintenance and Registration.


 


(a)            Possession.
Without the prior written consent of Loan Trustee, Company shall not lease or otherwise in any manner deliver, transfer or relinquish
possession of the Airframe or any Engine or install any Engine, or permit any Engine to be installed, on any airframe other than
the Airframe; provided that Company (or, except with respect to clauses ‎(viii) and
‎(ix) below, any Permitted Lessee) may without the prior written consent of Loan
Trustee:


 


(i)            subject
the Airframe to interchange agreements or subject any Engine to interchange, pooling, borrowing or other similar agreements or
arrangements, in each case entered into by Company (or any Permitted Lessee) in the ordinary course of its business; provided
that (A) no such agreement or arrangement contemplates or requires the transfer of title to the Airframe and (B) if
Company’s title to any such Engine is divested under any such agreement or arrangement, such divestiture shall be deemed
to be an Event of Loss with respect to such Engine, and Company shall (or shall cause any Permitted Lessee to) comply with ‎Section 7.05(b) in
respect thereof;


 


(ii)           deliver
possession of the Airframe or any Engine to (x) any Person for testing, service, repair, restoration, storage, maintenance
or other similar purposes or for alterations, modifications or additions to the Airframe or such Engine to the extent required
or permitted by the terms hereof or (y) to any Person for purposes of transport to a Person referred to in the preceding
clause (x);


 


(iii)          transfer
or permit the transfer of possession of the Airframe or any Engine to any Government pursuant to a lease, contract or other instrument;


 






    	 	46	 



     


    

 


(iv)          subject
the Airframe or any Engine to the CRAF Program or transfer possession of the Airframe or any Engine to the United States government
in accordance with applicable laws, rulings, regulations or orders (including, without limitation, any transfer of possession
pursuant to the CRAF Program); provided that Company (or any Permitted Lessee) (A) shall promptly notify Loan
Trustee upon transferring possession of the Airframe or any Engine pursuant to this clause ‎(iv) and
(B) in the case of a transfer of possession pursuant to the CRAF Program, shall notify Loan Trustee of the name and
address of the responsible Contracting Office Representative for the Air Mobility Command of the United States Air Force or other
appropriate Person to whom notices must be given and to whom requests or claims must be made to the extent applicable under the
CRAF Program;


 


(v)          install
an Engine on an airframe owned by Company (or any Permitted Lessee) free and clear of all Liens, except (A) Permitted
Liens and Liens that apply only to the engines (other than Engines), appliances, parts, instruments, appurtenances, accessories,
furnishings and other equipment (other than Parts) installed on such airframe (but not to the airframe as an entirety) and (B) the
rights of third parties under interchange, pooling, borrowing or other similar agreements or arrangements that would be permitted
under clause ‎(i) above;


 


(vi)          install
an Engine on an airframe leased to Company (or any Permitted Lessee) or purchased or owned by Company (or any Permitted Lessee)
subject to a lease, conditional sale or other security agreement; provided that: (A) such airframe is free
and clear of all Liens except (1) the rights of the parties to the lease or conditional sale or other security agreement
covering such airframe, or their successors and assigns, and (2) Liens of the type permitted by clause ‎(v) of
this ‎Section 7.02(a); and (B) either: (1) Company has obtained
from the lessor, conditional vendor or secured party of such airframe a written agreement (which may be a copy of the lease, conditional
sale or other security agreement covering such airframe), in form reasonably satisfactory to Loan Trustee (an agreement from such
lessor, conditional vendor or secured party substantially in the form of the penultimate paragraph of this ‎Section 7.02(a) being
deemed to be satisfactory to Loan Trustee), whereby such lessor, conditional vendor or secured party expressly agrees that neither
it nor its successors or assigns will acquire or claim any right, title or interest in any Engine by reason of such Engine being
installed on such airframe at any time while such Engine is subject to the Lien of this Indenture, or (2) such lease,
conditional sale or other security agreement provides that such Engine shall not become subject to the Lien of such lease, conditional
sale or other security agreement at any time while such Engine is subject to the Lien of this Indenture, notwithstanding its installation
on such airframe;


 






    	 	47	 



     


    

 


(vii)         install
an Engine on an airframe owned by Company (or any Permitted Lessee), leased to Company (or any Permitted Lessee) or purchased
by Company (or any Permitted Lessee) subject to a conditional sale or other security agreement under circumstances where neither
clause ‎(v) nor clause ‎(vi) of
this ‎Section 7.02(a) is applicable; provided that such installation
shall be deemed an Event of Loss with respect to such Engine, and Company shall comply with ‎Section 7.05(b) in
respect thereof, if such installation adversely affects Loan Trustee’s security interest in such Engine, Loan Trustee not
intending hereby to waive any right or interest it may have to or in such Engine under applicable law until compliance by Company
with ‎Section 7.05(b);


 


(viii)        lease
any Engine, the Airframe or the Airframe and Engines to any United States air carrier as to which there is in force a certificate
issued pursuant to the Transportation Code or successor provision that gives like authority; provided that no Event of
Default exists at the time such lease is entered into; and


 


(ix)          lease
any Engine, the Airframe or the Airframe and Engines to (A) any foreign air carrier that is at the inception of the
lease based in and a domiciliary of a country listed in Exhibit B hereto, (B) the manufacturer of the Airframe
or any Engine (either directly or through an affiliate) or (C) any foreign air carrier consented to in writing by
Loan Trustee with the consent of a Majority in Interest of Noteholders; provided that (w) no Event of Default
exists at the time such lease is entered into, (x) in the case of a lease to any foreign air carrier (other than a
foreign air carrier principally based in Taiwan), the United States maintains normal diplomatic relations with the country in
which such foreign air carrier is based at the time such lease is entered into and in the case of a lease to a foreign air carrier
principally based in Taiwan, the United States maintains diplomatic relations with Taiwan at least as good as those on the Closing
Date, (y) in the case of a lease to any foreign air carrier, Company furnishes Loan Trustee with a certificate from
a Responsible Officer of Company certifying that there exist no possessory rights in favor of such lessee under the laws of such
lessee’s country which would, upon bankruptcy or insolvency of or other default by Company, and assuming at such time such
lessee is not insolvent or bankrupt, prevent the taking of possession of any such Engine or the Airframe and any such Engine by
Loan Trustee in accordance with and when permitted by the terms of ‎Section 4.02
upon the exercise by Loan Trustee of its remedies under ‎Section 4.02, and (z) in
the case of any lease to a foreign air carrier, such carrier is not then subject to any bankruptcy, insolvency, liquidation, reorganization,
dissolution or similar proceeding and shall not have substantially all of its property in the possession of any liquidator, trustee,
receiver or similar person;


 






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provided
that the rights of any lessee or other transferee who receives possession of the Aircraft, the Airframe or any Engine by reason
of a transfer permitted by this ‎Section 7.02(a) (other than the transfer of
an Engine which is deemed an Event of Loss) shall be subject and subordinate to, and any permitted lease shall be made expressly
subject and subordinate to, all the terms of this Indenture, including Loan Trustee’s rights to repossess pursuant to ‎Section 4.02
and to avoid such lease upon such repossession, and Company shall remain primarily liable hereunder for the performance and observance
of all of the terms and conditions of this Indenture to the same extent as if such lease or transfer had not occurred, any such
lease shall include appropriate provisions for the maintenance and insurance of the Aircraft, the Airframe or such Engine, and
no lease or transfer of possession otherwise in compliance with this Section shall (x) result in any registration
or re-registration of the Aircraft except to the extent permitted in ‎Section 7.02(e) or
the maintenance, operation or use thereof that does not comply with Sections ‎7.02(b) and
‎(c) or (y) permit any action not permitted to be taken by Company with
respect to the Aircraft hereunder. Company shall promptly notify Loan Trustee and the Rating Agencies of the existence of any
such lease with a term in excess of one year.


 


Loan Trustee, each
Noteholder by acceptance of an Equipment Note, and each Related Noteholder by acceptance of a Related Equipment Note agrees, for
the benefit of Company (and any Permitted Lessee) and for the benefit of the lessor, conditional vendor or secured party of any
airframe or engine leased to Company (or any Permitted Lessee) or leased to or purchased or owned by Company (or any Permitted
Lessee) subject to a conditional sale or other security agreement, that Loan Trustee, Noteholders and Related Noteholders will
not acquire or claim, as against Company (or any Permitted Lessee) or such lessor, conditional vendor or secured party, any right,
title or interest in: (A) any engine or engines owned by Company (or any Permitted Lessee) or by the lessor under
such lease or subject to a security interest in favor of the conditional vendor or secured party under any conditional sale or
other security agreement as the result of such engine or engines being installed on the Airframe at any time while such engine
or engines are subject to such lease or conditional sale or other security agreement, or (B) any airframe owned by
Company (or any Permitted Lessee) or by the lessor under such lease or subject to a security interest in favor of the conditional
vendor or secured party under any conditional sale or other security agreement as the result of any Engine being installed on
such airframe at any time while such airframe is subject to such lease or conditional sale or other security agreement.


 


Loan
Trustee acknowledges that any “wet lease” or other similar arrangement under which Company (or any Permitted Lessee)
maintains operational control of the Aircraft does not constitute a delivery, transfer or relinquishment of possession for purposes
of this ‎Section 7.02(a).


 






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(b)            Operation
and Use. Company agrees that the Aircraft will not be used or operated in violation of any law, rule or regulation of
any government of any country having jurisdiction over the Aircraft or in violation of any airworthiness certificate, license
or registration relating to the Aircraft issued by any such government, except (i) immaterial or non-recurring violations
with respect to which corrective measures are taken promptly by Company or a Permitted Lessee, as the case may be, upon discovery
thereof or (ii) to the extent Company (or, if a Lease is then in effect, any Permitted Lessee) is contesting in good
faith the validity or application of any such law, rule or regulation or airworthiness certificate, license or registration
in any manner that does not involve any material risk of sale, forfeiture or loss of the Aircraft or impair the Lien of this Indenture;
provided that Company shall not be in default under, or required to take any action set forth in, this sentence if it is
not possible for it (or any Permitted Lessee) to comply with the laws of a jurisdiction other than the United States (or other
than any jurisdiction in which the Aircraft is then registered) because of a conflict with the applicable laws of the United States
(or such jurisdiction in which the Aircraft is then registered). Company shall also have the right to operate the Aircraft without
having on board the original registration certificate or airworthiness certificate in the event that either or both such certificates
disappear from the Aircraft, but only to the extent permitted by Exemption No. 5318 of the regulations of the FAA or other
similar exemption. Company will not operate the Aircraft, or permit the Aircraft to be operated or located, (i) in
any area excluded from coverage by any insurance required by the terms of ‎Section 7.06
or (ii) in any war zone or recognized or, in Company’s judgment, threatened areas of hostilities unless covered
by war risk insurance in accordance with ‎Section 7.06, unless in the case of either
clause (i) or (ii), (x) government indemnification complying with Sections ‎7.06(a) and
‎(b) has been provided or (y) the Aircraft is only temporarily located
in such area as a result of an isolated occurrence or isolated series of occurrences attributable to a hijacking, medical emergency,
equipment malfunction, weather conditions, navigational error or other similar circumstances or any other circumstances beyond
the reasonable control of Company (or any Permitted Lessee) and Company (or any Permitted Lessee) is using its good faith efforts
to remove the Aircraft from such area as promptly as practicable.


 






    	 	50	 



     


    

 


(c)            Maintenance.
Company shall maintain, service, repair and overhaul the Aircraft (or cause the same to be done) (i) so as to keep
the Aircraft in good operating condition and in such condition as may be necessary to enable the airworthiness certification of
the Aircraft to be maintained in good standing at all times (other than (v) during temporary periods of storage, during
maintenance, testing or modification permitted hereunder, (w) during periods of grounding by applicable governmental
authorities, (x) during periods when the FAA or such other aviation authority has revoked or suspended the airworthiness
certificates for aircraft of the same manufacturer and model as the Aircraft, (y) with respect to minor or non-recurring
violations with respect to which corrective measures are taken promptly upon discovery thereof and (z) to the extent
Company or any Permitted Lessee is promptly contesting in good faith the validity or application of any law or requirement relating
to any such certification in any manner which does not create a material risk of sale, loss or forfeiture of the Aircraft, the
Airframe or any Engine or the interest of Loan Trustee therein or any material risk of criminal liability or material civil penalty
against Loan Trustee) under the Transportation Code, during such periods in which the Aircraft is registered under the laws of
the United States, or, if the Aircraft is registered under the laws of any other jurisdiction, the applicable laws of such jurisdiction
and (ii) using the same standards as Company (or a Permitted Lessee, if a Lease is in effect) uses with respect to
similar aircraft operated by Company (or such Permitted Lessee) in similar circumstances (it being understood that the obligations
pursuant to this clause (ii) do not limit Company’s obligations under the preceding clause (i)). In any case, the Aircraft
will be maintained in accordance with the maintenance standards required by the FAA (while operated under an FAA-approved maintenance
program) or, while operated under the maintenance program of another jurisdiction, standards substantially equivalent to those
required by the central aviation authority of Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy,
Japan, the Netherlands, New Zealand, Norway, Spain, Sweden, Switzerland or the United Kingdom. Company shall maintain or cause
to be maintained all records, logs and other documents required to be maintained in respect of the Aircraft by appropriate authorities
in the jurisdiction in which the Aircraft is registered.


 


(d)            Identification
of Loan Trustee’s Interest. If not prevented by applicable law or regulations or by any government, Company agrees to
affix as promptly as practicable after the Closing Date and thereafter to maintain in the cockpit of the Aircraft, in a clearly
visible location, and on each Engine, a nameplate bearing the inscription “MORTGAGED TO WILMINGTON TRUST COMPANY, AS LOAN
TRUSTEE” (such nameplate to be replaced, if necessary, with a nameplate reflecting the name of any successor Loan Trustee).
Such placards may be removed temporarily, if necessary, in the course of maintenance of the Airframe or Engines.


 






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(e)            Registration.
Company shall cause the Aircraft to remain duly registered, under the laws of the United States, in the name of Company except
as otherwise required by the Transportation Code; provided that Loan Trustee shall, at Company’s expense, execute
and deliver all such documents as Company may reasonably request for the purpose of continuing such registration. Notwithstanding
the preceding sentence, Company, at its own expense, may cause or allow the Aircraft to be duly registered under the laws of any
foreign jurisdiction in which a Permitted Lessee could be principally based, in the name of Company or of any nominee of Company,
or, if required by applicable law, in the name of any other Person (and, following any such foreign registration, may cause the
Aircraft to be re-registered under the laws of the United States); provided that in the case of jurisdictions other than
those approved by Loan Trustee with the consent of a Majority in Interest of Noteholders (i) if such jurisdiction
is at the time of registration listed on Exhibit B, Loan Trustee shall have received at the time of such registration an
opinion of counsel to Company to the effect that (A) this Indenture and Loan Trustee’s right to repossession
hereunder is valid and enforceable under the laws of such country, (B) after giving effect to such change in registration,
the Lien of this Indenture shall continue as a valid Lien and shall be duly perfected in the new jurisdiction of registration
and that all filing, recording or other action necessary to perfect and protect the Lien of this Indenture has been accomplished
(or if such opinion cannot be given at such time, (x) the opinion shall detail what filing, recording or other action
is necessary and (y) Loan Trustee shall have received a certificate from a Responsible Officer of Company that all
possible preparations to accomplish such filing, recording and other action shall have been done, and such filing, recording and
other action shall be accomplished and a supplemental opinion to that effect shall be promptly delivered to Loan Trustee subsequent
to the effective date of such change in registration), (C) the obligations of Company under this Indenture shall remain
valid, binding and (subject to customary bankruptcy and equitable remedies exceptions and to other exceptions customary in foreign
opinions generally) enforceable under the laws of such jurisdiction (or the laws of the jurisdiction to which the laws of such
jurisdiction would refer as the applicable governing law), (D) all approvals or consents of any government in such
jurisdiction having jurisdiction required for such change in registration shall have been duly obtained and shall be in full force
and effect and (E) (unless Company shall have agreed to provide insurance covering the risk of requisition of use
or title of the Aircraft by the government of such jurisdiction so long as the Aircraft is registered under the laws of such jurisdiction)
the laws of such jurisdiction require fair compensation by the government of such jurisdiction payable in currency freely convertible
into Dollars for the loss of use or title of the Aircraft in the event of requisition by such government of such use or title,
and (ii) if such jurisdiction is at the time of registration not listed on Exhibit B, Loan Trustee shall have
received (in addition to the opinions set forth in clause (i) above) at the time of such registration an opinion of
counsel to Company to the effect that (A) the terms of this Indenture are legal, valid, binding and enforceable in
such jurisdiction (subject to exceptions customary in such jurisdiction; provided that, subject to exceptions relating
to bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and exceptions
relating to general principles of equity, such counsel shall opine that any applicable laws limiting the remedies provided in
‎Section 4.02 do not in the opinion of such counsel make the remedies provided in
‎Section 4.02 inadequate for the practical realization of the rights and benefits
provided thereby), (B) it is not necessary for Loan Trustee to register or qualify to do business in such jurisdiction
and (C) there is no tort liability of the lender of an aircraft not in possession thereof under the laws of such jurisdiction
other than tort liability that might have been imposed on such lender under the laws of the United States or any state thereof
(it being understood that such opinion shall be waived if insurance reasonably satisfactory to Loan Trustee is provided, at Company’s
expense, to cover such risk). Loan Trustee will cooperate with Company in effecting such foreign registration. Notwithstanding
the foregoing, prior to any such change in the country of registry of the Aircraft, the following conditions shall be met (or
waived as provided in Section 6.01(b) of the Participation Agreement):


 


(i)            no
Event of Default shall have occurred and be continuing at the effective date of the change in registration; provided that
it shall not be necessary to comply with this condition if the change in registration results in the registration of the Aircraft
under the laws of the United States or if a Majority in Interest of Noteholders consents to such change in registration;


 






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(ii)           Loan
Trustee shall have received evidence of compliance with the insurance provisions contained herein after giving effect to such
change in registration;


 


(iii)          other
than in the case of a change in registration to Taiwan, the proposed change in registration is made to a country with which the
United States then maintains normal diplomatic relations, and in the case of a change in registration to Taiwan, the United States
maintains diplomatic relations with Taiwan at least as good as those on the Closing Date; and


 


(iv)          Company
shall have paid or made provision reasonably satisfactory to Loan Trustee for the payment of all reasonable expenses (including
reasonable attorneys’ fees) of Loan Trustee and Noteholders in connection with such change in registration.


 


Company shall (i) from
time to time, take such actions as may be required to be taken by Company so that any International Interest arising in relation
to this Indenture, the Aircraft, any Replacement Aircraft, any Engine or Replacement Engine may be duly registered (and any such
registration may be assigned, amended, extended or discharged) at the International Registry, and (ii) obtain from
the International Registry all approvals as may be required duly and timely to perform Company’s obligations under this
Indenture with respect to the registration of any such International Interest. Loan Trustee shall take all actions necessary with
respect to the International Registry to consent to Company’s initiation of any registrations required under this Indenture
to enable Company to complete such registrations, including, without limitation, appointing Crowe & Dunlevy, a Professional
Corporation (or another qualified FAA counsel), as its “professional user entity” (as defined in the Cape Town Treaty)
to consent to any registrations on the International Registry with respect to the Airframe or any Engine.


 






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Section 7.03            Inspection;
Financial Information.


 


(a)            Inspection.
At all reasonable times, but upon at least 15 Business Days’ prior written notice to Company, Loan Trustee or its authorized
representatives may, subject to the other conditions of this ‎Section 7.03(a), inspect
the Aircraft and may inspect the books and records of Company relating to the maintenance of the Aircraft required to be maintained
by the FAA or the government of another jurisdiction in which the Aircraft is then registered; provided that (i) Loan
Trustee or its representatives, as the case may be, shall be fully insured at no cost to Company or any Permitted Lessee in a
manner satisfactory to Company and such Permitted Lessee with respect to any risks incurred in connection with any such inspection
or shall provide to Company and such Permitted Lessee a written release satisfactory to Company and such Permitted Lessee with
respect to such risks, (ii) any such inspection shall be during Company’s or Permitted Lessee’s, as the
case may be, normal business hours and subject to the safety, security and workplace rules applicable at the location where
such inspection is conducted and any applicable governmental rules or regulations, (iii) any such inspection
of the Aircraft shall be a visual, walk-around inspection of the interior and exterior of the Aircraft and shall not include opening
any panels, bays or the like without Company’s express consent, which consent Company may in its sole discretion withhold,
and (iv) no exercise of such inspection right shall interfere with the use, operation or maintenance of the Aircraft
by, or the business of, Company or any Permitted Lessee and Company and any Permitted Lessee shall not be required to undertake
or incur any additional liabilities in connection therewith. All information obtained in connection with any such inspection of
the Aircraft and of such books and records shall be Confidential Information and shall be treated by Loan Trustee and its representatives
in accordance with the provisions of ‎Section 10.16. Any inspection pursuant to
this ‎Section 7.03(a) shall be at the sole risk (including, without limitation,
any risk of personal injury or death) and expense of Loan Trustee (or its representatives) making such inspection. Except during
the continuance of an Event of Default, all inspections by Loan Trustee and its representatives provided for under this ‎Section 7.03(a) shall
be limited to one inspection of any kind contemplated by this ‎Section 7.03(a) during
any consecutive twelve month period.


 


(b)            Financial
Information. So long as any of the Secured Obligations remain unpaid, Company agrees to furnish to Loan Trustee: (i) within
60 days after the end of each of the first three quarterly periods in each fiscal year of Company or FedEx Corporation, as applicable,
either (x) a consolidated balance sheet of Company and its consolidated subsidiaries prepared by it as of the close
of such period, together with the related consolidated statements of income for such period or (y) a report of FedEx
Corporation on Form 10-Q in respect of such period in the form filed with the Securities and Exchange Commission and (ii) within
120 days after the close of each fiscal year of Company or FedEx Corporation, as applicable, either (x) a consolidated
balance sheet of Company and its consolidated subsidiaries as of the close of such fiscal year, together with the related consolidated
statements of income for such fiscal year, certified by independent public accountants, or (y) a report of FedEx Corporation
on Form 10-K in respect of such year in the form filed with the Securities and Exchange Commission. The items required to
be furnished pursuant to clause (i) and clause (ii) above shall be deemed to have been furnished on the date on which
such item is posted on the Securities and Exchange Commission’s website at www.sec.gov, and such posting shall be deemed
to satisfy the requirements of clause (i) and clause (ii); provided that Company will deliver a paper copy of any
item referred to in clause (i) and clause (ii) above if Loan Trustee so requests.


 






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Section 7.04            Replacement
and Pooling of Parts; Alterations, Modifications and Additions; Substitution of Airframe and Engines.


 


(a)            Replacement
of Parts. Company shall (or shall cause a Permitted Lessee to) promptly replace or cause to be replaced all Parts incorporated
or installed in or attached to the Airframe or any Engine and that become worn out, lost, stolen, destroyed, seized, confiscated,
damaged beyond repair or rendered permanently unfit for use for any reason, except as otherwise provided in ‎Section 7.04(c) or
if the Airframe or an Engine to which a Part relates has suffered an Event of Loss. In addition, Company (or any Permitted
Lessee) may remove (or cause to be removed) in the ordinary course of maintenance, service, repair, overhaul or testing, any Parts,
whether or not worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or rendered permanently unfit for
use; provided that Company (or any Permitted Lessee), except as otherwise provided in ‎Section 7.04(c),
will replace such Parts as promptly as practicable. All replacement Parts shall be free and clear of all Liens (except for Permitted
Liens and except in the case of replacement property temporarily installed on an emergency basis) and shall be in the condition
and repair required to be maintained by the terms hereof. Except as otherwise provided in ‎Section 7.04(c),
any Part removed from the Airframe or any Engine shall remain subject to the Lien of this Indenture no matter where located
until it is replaced by a part incorporated or installed in or attached to the Airframe or such Engine that meets the requirements
for replacement Parts specified above. Immediately upon any replacement Part becoming incorporated or installed in or attached
to the Airframe or any Engine as above provided (except in the case of replacement property temporarily installed on an emergency
basis), without further act, (i) the replaced Part shall thereupon be free and clear of all rights of Loan Trustee
and of the Lien of this Indenture and shall no longer be deemed a Part hereunder, and (ii) such replacement Part shall
become subject to the Lien of this Indenture and be deemed a Part of the Airframe or such Engine for all purposes to the
same extent as the Parts originally incorporated or installed in or attached to the Airframe or such Engine. Upon request of Company
from time to time, Loan Trustee shall execute and deliver to Company instruments reasonably requested by Company confirming the
release of any such replaced Part from the Lien of this Indenture.


 


(b)            Pooling
of Parts. Any Part removed from the Airframe or any Engine as provided in ‎Section 7.04(a) may
be subjected by Company or a Person permitted to be in possession of the Airframe or such Engine to a pooling arrangement entered
into in the ordinary course of Company’s or such Person’s business; provided that the part replacing such removed
Part shall be incorporated or installed in or attached to the Airframe or such Engine in accordance with ‎Section 7.04(a) as
promptly as practicable after the removal of such removed Part. In addition, any replacement Part when incorporated or installed
in or attached to the Airframe or any Engine may be owned by any third party subject to such a pooling arrangement; provided
that Company, at its expense, as promptly thereafter as practicable either (i) causes title to such replacement
Part to vest in Company free and clear of all Liens (except Permitted Liens), or (ii) replaces (or causes to
be replaced) such replacement Part by incorporating or installing in or attaching to the Airframe or such Engine a further
replacement Part in the manner contemplated by ‎Section 7.04(a).


 






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(c)            Alterations,
Modifications and Additions. Company will, or will cause a Permitted Lessee to, make (or cause to be made) such alterations
and modifications in and additions to the Airframe and the Engines as are required from time to time to meet the applicable requirements
of the FAA or any applicable government of any other jurisdiction in which the Aircraft is then registered; except for (i) immaterial
and non-recurring violations with respect to which corrective measures are being taken promptly by Company (or, if a Lease is
then in effect, any Permitted Lessee) upon discovery thereof and (ii) any law, rule, regulation or order the validity or
application of which is being contested in good faith by Company (or, if a Lease is then in effect, any Permitted Lessee) in any
manner which does not involve any material risk of sale, loss or forfeiture of the Aircraft and does not materially adversely
affect Loan Trustee’s interest in the Aircraft. In addition, Company (or any Permitted Lessee), at its own expense, may
from time to time add further parts or accessories and make or cause to be made such alterations and modifications in and additions
to the Airframe or any Engine as Company (or any Permitted Lessee) deems desirable in the proper conduct of its business, including,
without limitation, removal (without replacement) of Parts; provided that no such alteration, modification or addition
shall materially diminish the value or utility of the Airframe or such Engine below its value or utility immediately prior to
such alteration, modification or addition, assuming that the Airframe or such Engine was then in the condition required to be
maintained by the terms of this Indenture, except that the value (but not the utility) of the Airframe or any Engine may be reduced
by the value of any such Parts that are removed that Company (or such Permitted Lessee) deems obsolete or no longer suitable or
appropriate for use on the Airframe or any Engine. All Parts incorporated or installed in or attached or added to the Airframe
or any Engine as the result of such alteration, modification or addition shall, without further act, be subject to the Lien of
this Indenture. Notwithstanding the foregoing, Company (or any Permitted Lessee) may, at any time, remove any Part from the
Airframe or any Engine if such Part: (i) is in addition to, and not in replacement of or substitution for, any Part originally
incorporated or installed in or attached to the Airframe or such Engine at the time of delivery thereof to Company or any Part in
replacement of, or substitution for, any such Part, (ii) is not required to be incorporated or installed in or attached
or added to the Airframe or such Engine pursuant to the first sentence of this ‎Section 7.04(c) and
(iii) can be removed from the Airframe or such Engine without materially diminishing the value or utility required
to be maintained by the terms of this Indenture that the Airframe or such Engine would have had had such Part never been
installed on the Airframe or such Engine. Upon the removal by Company (or any Permitted Lessee) of any Part as permitted
by this ‎Section 7.04(c), such removed Part shall, without further act, be
free and clear of all rights and interests of Loan Trustee and the Lien of this Indenture and shall no longer be deemed a Part hereunder.
Upon request of Company from time to time, Loan Trustee shall execute and deliver to Company instruments reasonably requested
by Company confirming the release of any such removed Part from the Lien of this Indenture. Loan Trustee and each Noteholder
by acceptance of and Equipment Note acknowledges that it has no interest in the Excluded Equipment. Notwithstanding the provisions
of this ‎Section 7.04(c) or any other term or condition of this Indenture,
Company (or any Permitted Lessee) may from time to time install on, and remove from, the Aircraft equipment that is owned by,
leased to or conditionally sold to Company (or any Permitted Lessee) (and title to such equipment shall remain vested in Company,
such Permitted Lessee, or the lessor or the conditional vendor thereof) if (1) such equipment is Excluded Equipment
and (2) the location affected by any such removal, if damaged, is repaired prior to return, in a workmanlike manner,
to a condition suitable for use in the Company’s business; provided that all costs of installation, removal and replacement
shall be the responsibility of Company.


 






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(d)            Substitution
of Engines. Company shall have the right at its option at any time and from time to time, on at least 30 days’ prior
written notice to Loan Trustee, to substitute a Replacement Engine for any Engine. In such event, and prior to the date of such
substitution, Company shall replace such Engine by complying with the terms of ‎Section 7.05(b) to
the same extent as if an Event of Loss had occurred with respect to such Engine.


 


(e)            Substitution
of Airframe. Company shall have the right at its option at any time and from time to time, on at least ten Business Days’
prior written notice to Loan Trustee, to substitute a Substitute Airframe, free and clear of all Liens (other than Permitted Liens),
for the Airframe so long as (i) no Event of Default shall have occurred and be continuing at the time of substitution,
(ii) the Substitute Airframe has a date of manufacture no earlier than one year prior to the date of manufacture of
the Airframe subject to the Lien of this Indenture on the Closing Date (each such date of manufacture, in each case, to be deemed
to be the date of original delivery of the applicable airframe to a customer by the Manufacturer) and (iii) the Substitute
Airframe has a MCMV (as defined below) at least equal to the MCMV of the Airframe being replaced by the Substitute Airframe (assuming
that the Airframe had been maintained in accordance with this Indenture), in each case as determined by a desktop appraisal dated
as of a date within the 60-day period prior to the substitution performed by an Appraiser selected by Company. “MCMV”
is the “current market value” (as defined by the International Society of Transport Aircraft Trading or any successor
organization) adjusted for the maintenance status of the Substitute Airframe and the Airframe being replaced by the Substitute
Airframe, as applicable, such maintenance status to be based upon maintenance data provided by Company to the applicable Appraiser
with respect to the Substitute Airframe and such Airframe as of the same date within the 60-day period prior to the substitution
for both the Substitute Airframe and such Airframe.


 






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Prior
to or at the time of any substitution under this ‎Section 7.04(e), Company will
(A) cause an Indenture Supplement covering such Substitute Airframe to be delivered to Loan Trustee for execution
and, upon such execution, to be filed for recordation pursuant to the Transportation Code or the applicable laws of any other
jurisdiction in which the Aircraft may then be registered, (B) cause the sale of such Substitute Airframe to Company
(if occurring after February 28, 2006 and if the seller of such Substitute Airframe is “situated in” a country
that has ratified the Cape Town Convention) and the International Interest created pursuant to the Indenture Supplement in favor
of Loan Trustee with respect to such Substitute Airframe to be registered on the International Registry as a sale or an International
Interest, respectively; provided that if the seller of such Substitute Airframe is not situated in a country that has ratified
the Cape Town Convention, Company will use its reasonable efforts to cause the seller to register the contract of sale on the
International Registry, (C) cause a financing statement or statements with respect to such Substitute Airframe or
other requisite documents or instruments to be filed in such place or places as necessary in order to perfect Loan Trustee’s
interest therein in the United States, or in any other jurisdiction in which the Aircraft may then be registered, (D) furnish
Loan Trustee with an opinion of counsel to Company (which may be internal counsel of Company) addressed to Loan Trustee to the
effect that upon such substitution, such Substitute Airframe will be subject to the Lien of this Indenture and addressing the
matters set forth in clauses (A), (B) and (C), (E) furnish Loan Trustee with evidence of compliance with the
insurance provisions of ‎Section 7.06 with respect to such Substitute Airframe,
(F) furnish Loan Trustee with a copy of the original bill of sale in respect of such Substitute Airframe, and (G) furnish
Loan Trustee with an opinion of counsel to Company (which may be internal counsel of Company) in form reasonably satisfactory
to Loan Trustee to the effect that Loan Trustee will be entitled to the benefits of Section 1110 with respect to the Substitute
Airframe; provided that (i) such opinion need not be delivered to the extent that the benefits of Section 1110
were not, by reason of a change in law or governmental or judicial interpretation thereof, available to Loan Trustee with respect
to the Aircraft immediately prior to such substitution and (ii) such opinion may contain qualifications and assumptions of
the tenor contained in the opinion of counsel to Company delivered pursuant to Section 3.01 of the Participation Agreement
on the Closing Date and such other qualifications and assumptions as shall at the time be customary in opinions rendered in comparable
circumstances.


 


In
the case of the Substitute Airframe subjected to the Lien of this Indenture under this ‎Section 7.04(e),
promptly upon the recordation of the Indenture Supplement covering such Substitute Airframe pursuant to the Transportation Code
(or pursuant to the applicable law of such other jurisdiction in which such Substitute Airframe is registered), Company will cause
to be delivered to Loan Trustee a favorable opinion of aviation law counsel to Company (which may be internal counsel of Company)
addressed to Loan Trustee as to the due registration of the aircraft to which the Substitute Airframe is part and the due recordation
of such Indenture Supplement or such other requisite documents or instruments, the registration with the International Registry
of the sale of such Substitute Airframe to Company (if occurring after February 28, 2006 and if the seller of such Substitute
Airframe is “situated in” a country that has ratified the Cape Town Convention) and of the International Interests
created pursuant to the Indenture Supplement with respect to such Substitute Airframe and the validity and perfection of the security
interest in the Substitute Airframe granted to Loan Trustee under this Indenture.


 


For all purposes hereof,
upon the attachment of the Lien of this Indenture thereto, the Substitute Airframe shall become part of the Collateral and shall
be deemed an “Airframe” as defined herein. Upon compliance with clauses (A) through (G) of the second preceding
paragraph, Loan Trustee shall execute and deliver to Company an appropriate instrument releasing the replaced Airframe, all proceeds
(including, without limitation, insurance proceeds, if any), the Warranty Rights in respect of such replaced Airframe and all
rights relating to the foregoing, from the Lien of this Indenture, and will take such actions as may be required to be taken by
Loan Trustee to cancel or release any International Interest of Loan Trustee registered with the International Registry in relation
to such replaced Airframe.


 






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Section 7.05            Loss,
Destruction or Requisition.


 


(a)            Event
of Loss with Respect to the Airframe. Upon the occurrence of an Event of Loss with respect to the Airframe or the Airframe
and the Engines then installed thereon, Company shall as soon as practicable (and, in any event, within 30 days after an Event
of Loss has occurred) notify Loan Trustee of such Event of Loss, and, within 90 days after such Event of Loss, Company shall give
Loan Trustee written notice of its election to perform one of the following options (it being agreed that if Company has not given
such notice of election within such 90-day period, Company shall be deemed to have elected to perform the option set forth in
the following clause (ii)). Company may elect either to:


 


(i)            substitute,
on or before the Loss Payment Date (as defined below), as replacement for the Airframe or Airframe and Engines with respect to
which an Event of Loss has occurred, a Replacement Airframe (together with a number of Replacement Engines equal to the number
of Engines, if any, with respect to which the Event of Loss occurred), such Replacement Airframe and Replacement Engines to be
owned by Company free and clear of all Liens (other than Permitted Liens); provided that if Company has not performed such
obligation on or prior to the Loss Payment Date, then Company shall on the Loss Payment Date redeem the Equipment Notes in full
in accordance with ‎Section 2.10; or


 


(ii)           redeem,
on or before the Loss Payment Date, the Equipment Notes in full in accordance with ‎Section 2.10.
Company shall give Loan Trustee 20 days’ prior written notice if it elects to redeem the Equipment Notes on any day prior
to the Loss Payment Date.


 


The “Loss
Payment Date” with respect to an Event of Loss means the Business Day next succeeding the 120th day following the date
of occurrence of such Event of Loss.


 






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If
Company elects to substitute a Replacement Airframe (or a Replacement Airframe and one or more Replacement Engines, as the case
may be) Company shall, at its sole expense, not later than the Loss Payment Date, (A) cause an Indenture Supplement
for such Replacement Airframe and Replacement Engines, if any, to be delivered to Loan Trustee for execution and, upon such execution,
to be filed for recordation pursuant to the Transportation Code or the applicable laws of such other jurisdiction in which the
Aircraft is then registered, (B) cause the sale of such Replacement Airframe and Replacement Engines, if any, to Company
(if occurring after February 28, 2006 and if the seller of such Replacement Airframe and Replacement Engines, if any, is
“situated in” a country that has ratified the Cape Town Convention) and the International Interest created pursuant
to the Indenture Supplement in favor of Loan Trustee with respect to such Replacement Airframe and Replacement Engines, if any,
each to be registered on the International Registry as a sale or an International Interest, respectively; provided that
if the seller of such Replacement Airframe and Replacement Engines, if any, is not situated in a country that has ratified the
Cape Town Convention, Company will use its reasonable efforts to cause the seller to register the contract of sale on the International
Registry, (C) cause a financing statement or statements with respect to the Replacement Airframe and Replacement Engines,
if any, or other requisite documents or instruments to be filed in such place or places as necessary in order to perfect Loan
Trustee’s interest therein in the United States, or in any other jurisdiction in which the Aircraft is then registered,
(D) furnish Loan Trustee with an opinion of Company’s counsel (which may be internal counsel of Company) addressed
to Loan Trustee to the effect that upon such replacement, such Replacement Airframe and Replacement Engines, if any, will be subject
to the Lien of this Indenture and addressing the matters set forth in clauses (A), (B) and (C), (E) furnish Loan
Trustee with a certificate of an independent aircraft engineer or appraiser, certifying that the Replacement Airframe and Replacement
Engines, if any, have a value and utility at least equal to (but in any event without regard to component modification status
or the number of hours or cycles, in either case since new, since any particular overhaul or maintenance visit or remaining until
any particular overhaul or maintenance visit) the Airframe and Engines, if any, so replaced, assuming the Airframe and such Engines
were in the condition and repair required by the terms hereof immediately prior to the occurrence of such Event of Loss, (F) furnish
Loan Trustee with evidence of compliance with the insurance provisions of ‎Section 7.06
with respect to such Replacement Airframe and Replacement Engines, if any, (G) furnish Loan Trustee with a copy of
the original bill of sale in respect of such Replacement Airframe and a copy of the original bill of sale or, if the bill of sale
is unavailable, other evidence of ownership in form reasonably satisfactory to Loan Trustee (which may be a copy of an invoice
or purchase order) in respect of such Replacement Engines, if any, and (H) furnish Loan Trustee with an opinion of
Company’s counsel (which may be internal counsel of Company) in form reasonably satisfactory to Loan Trustee to the effect
that Loan Trustee will be entitled to the benefits of Section 1110 with respect to the Replacement Airframe; provided
that (i) such opinion need not be delivered to the extent that the benefits of Section 1110 were not, by
reason of a change in law or governmental or judicial interpretation thereof, available to Loan Trustee with respect to the Aircraft
immediately prior to such substitution and (ii) such opinion may contain qualifications and assumptions of the tenor
contained in the Section 1110 opinion of Company’s counsel delivered pursuant to Section 3.01 of the Participation
Agreement on the Closing Date and such other qualifications and assumptions as are at the time customary in opinions rendered
in comparable circumstances.


 






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In
the case of each Replacement Airframe or Replacement Airframe and one or more Replacement Engines subjected to the Lien of this
Indenture under this ‎Section 7.05(a), promptly upon the recordation of the Indenture
Supplement covering any such Replacement Airframe and Replacement Engines, if any, pursuant to the Transportation Code (or pursuant
to the applicable law of such other jurisdiction in which such Replacement Airframe and Replacement Engines, if any, are registered),
Company will cause to be delivered to Loan Trustee a favorable opinion of FAA counsel selected by Company if at the time of the
Event of Loss the Aircraft was registered under the laws of the United States (or, if at the time of the Event of Loss the Aircraft
was registered under the laws of another jurisdiction, counsel qualified to opine on matters of registration in such jurisdiction
selected by Company, which counsel shall be reasonably satisfactory to Loan Trustee) addressed to Loan Trustee as to the due registration
of such Replacement Aircraft and the due recordation of such Indenture Supplement or such other requisite documents or instruments,
the registration with the International Registry of the sale of such Replacement Airframe and Replacement Engines, if any, to
Company (if occurring after February 28, 2006 and if the seller of such Replacement Airframe and Replacement Engines, if
any, is “situated in” a country that has ratified the Cape Town Convention) and of the International Interests created
pursuant to the Indenture Supplement with respect to such Replacement Airframe and Replacement Engines, if any, and the validity
and perfection of the security interest in the Replacement Aircraft granted to Loan Trustee under this Indenture.


 


For
all purposes hereof, upon the attachment of the Lien of this Indenture thereto, the Replacement Aircraft and Replacement Engines,
if any, shall become part of the Collateral, the Replacement Airframe shall be deemed an “Airframe” as defined
herein, and each such Replacement Engine shall be deemed an “Engine” as defined herein. Upon compliance with
clauses (A) through (H) of the third paragraph of this ‎Section 7.05(a),
Loan Trustee shall execute and deliver to Company instruments reasonably requested by Company releasing such replaced Airframe
and Engines (if any) installed thereon at the time such Event of Loss occurred, all proceeds (including, without limitation, insurance
proceeds), the Warranty Rights in respect of such replaced Airframe and Engines (if any) and all rights relating to the foregoing,
from the Lien of this Indenture and assigning to Company all claims against third Persons for damage to or loss of the Airframe
and Engines arising from the Event of Loss, and will take such actions as may be required to be taken by Loan Trustee to cancel
or release any International Interest of Loan Trustee registered with the International Registry in relation to the replaced Airframe
and replaced Engines, if any.


 


If,
after an Event of Loss, Company performs the option set forth in clause (ii) of the first paragraph of this ‎Section 7.05(a),
Loan Trustee shall execute and deliver to Company instruments reasonably requested by Company releasing the Aircraft, all proceeds
(including, without limitation, insurance proceeds), the Warranty Rights in respect of the Aircraft and all rights relating to
the foregoing from the Lien of this Indenture and assigning to Company all claims against third Persons for damage to or loss
of the Aircraft arising from the Event of Loss, and will take such actions as may be required to be taken by Loan Trustee to cancel
or release any International Interest of Loan Trustee registered with the International Registry in relation to the Airframe and
Engines, if any, with respect to which such Event of Loss occurred.


 








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(b)            Event
of Loss with Respect to an Engine. As soon as practicable following the occurrence of an Event of Loss with respect to an
Engine under circumstances in which there has not occurred an Event of Loss with respect to the Airframe, Company shall give Loan
Trustee prompt written notice thereof and shall, within 120 days after the occurrence of such Event of Loss, cause to be subjected
to the Lien of this Indenture, as replacement for the Engine with respect to which such Event of Loss occurred, a Replacement
Engine free and clear of all Liens (other than Permitted Liens).


 


Prior
to or at the time of any replacement under this ‎Section 7.05(b), Company will (i) cause
an Indenture Supplement covering such Replacement Engine to be delivered to Loan Trustee for execution and, upon such execution,
to be filed for recordation pursuant to the Transportation Code or the applicable laws of any other jurisdiction in which the
Aircraft is then registered, (ii) furnish Loan Trustee with a copy of the original bill of sale or, if the bill of
sale is unavailable, other evidence of ownership in form reasonably satisfactory to Loan Trustee (which may be a copy of an invoice
or purchase order) in respect of such Replacement Engine, which in the case of any such conveyance to which the Cape Town Convention
is applicable shall be in such form as will qualify as “contract of sale” pursuant to Article V of the Aircraft
Protocol, and all documents required under the Operative Documents to establish, continue, confirm, register and/or perfect the
interests of Loan Trustee in such Replacement Engine, (iii) cause the sale of such Replacement Engine to Company (if
occurring after February 28, 2006 and if the seller of such Replacement Engine is “situated in” a country that
has ratified the Cape Town Convention) and the International Interest created pursuant to the Indenture Supplement in favor of
Loan Trustee with respect to such Replacement Engine, each to be registered on the International Registry as a sale or an International
Interest, respectively; provided that if the seller of such Replacement Engine is not situated in a country that has ratified
the Cape Town Convention, Company will use its reasonable efforts to cause the seller to register the contract of sale on the
International Registry, (iv) cause a financing statement or statements with respect to such Replacement Engine or
other requisite documents or instruments to be filed in such place or places as necessary in order to perfect Loan Trustee’s
interest therein in the United States, or in such other jurisdiction in which the Engine is then registered, (v) furnish
Loan Trustee with an opinion of Company’s counsel (which may be internal counsel of Company) addressed to Loan Trustee to
the effect that, upon such replacement, the Replacement Engine will be subject to the Lien of this Indenture, (vi) furnish
Loan Trustee with a certificate of an aircraft engineer or appraiser (who may be an employee of Company) certifying that such
Replacement Engine has a value and utility at least equal to (but in any event without regard to component modification status
or the number of hours or cycles, in either case since new, since any particular overhaul or maintenance visit or remaining until
any particular overhaul or maintenance visit) the Engine so replaced assuming such Engine was in the condition and repair required
by the terms hereof immediately prior to the occurrence of such Event of Loss and (vii) furnish Loan Trustee with
evidence of compliance with the insurance provisions of ‎Section 7.06 with respect
to such Replacement Engine. In the case of each Replacement Engine subjected to the Lien of this Indenture under this ‎Section 7.05(b),
promptly upon the recordation of the Indenture Supplement covering such Replacement Engine pursuant to the Transportation Code
(or pursuant to the applicable law of such other jurisdiction in which the Aircraft is registered), Company will cause to be delivered
to Loan Trustee an opinion of FAA counsel selected by Company if at the time of the Event of Loss the Aircraft was registered
under the laws of the United States (or, if at the time of the Event of Loss the Aircraft was registered under the laws of another
jurisdiction, counsel qualified to opine on matters of registration in such jurisdiction selected by Company, which counsel shall
be reasonably satisfactory to Loan Trustee) addressed to Loan Trustee as to the due recordation of such Indenture Supplement or
such other requisite documents or instruments, the registration with the International Registry of the sale of such Replacement
Engine to Company (if occurring after February 28, 2006 and if the seller of such Replacement Engine is “situated in”
a country that has ratified the Cape Town Convention) and of the International Interest created pursuant to the Indenture Supplement
with respect to such Replacement Engine and the validity and perfection of the security interest in the Replacement Engine granted
to Loan Trustee under this Indenture. For all purposes hereof, upon the attachment of the Lien of this Indenture thereto, the
Replacement Engine shall become part of the Collateral and shall be deemed an “Engine” as defined herein. Upon
compliance with clauses (i) through (vii) of the first sentence of this paragraph, Loan Trustee shall execute and
deliver to Company instruments reasonably requested by Company releasing such replaced Engine, any proceeds (including, without
limitation, insurance proceeds), the Warranty Rights in respect of such replaced Engine and all rights relating to any of the
foregoing from the Lien of this Indenture and assigning to Company all claims against third Persons for damage to or loss of such
Engine arising from the Event of Loss, and will take such actions as may be required to be taken by Loan Trustee to cancel or
release any International Interest of Loan Trustee registered with the International Registry in relation to the Engines with
respect to which such Event of Loss occurred.


 








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(c)            Application
of Payments for Event of Loss from Requisition of Title or Use. Any payments other than insurance proceeds (the application
of which is provided for in ‎Section 7.06) received at any time by Company or by
Loan Trustee from any government or other Person with respect to an Event of Loss to the Airframe or any Engine, will be applied
as follows:


 


(i)            if
such payments are received with respect to the Airframe or the Airframe and any Engines installed on the Airframe that has been
or is being replaced by Company pursuant to ‎Section 7.05(a), such payments shall
be paid over to, or retained by, Loan Trustee and upon completion of such replacement shall be paid over to, or retained by, Company;


 






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(ii)           if
such payments are received with respect to the Airframe or the Airframe and any Engines installed on the Airframe that has not
been and will not be replaced pursuant to ‎Section 7.05(a), so much of such payments
remaining after reimbursement of Loan Trustee for its actual and reasonable out-of-pocket costs and expenses that shall not exceed
the amounts required to be paid by Company to Noteholders pursuant to ‎Section 2.10
shall be applied in reduction of Company’s obligation to pay such amounts, if not already paid by Company, or, if already
paid by Company, shall be applied to reimburse Company for its payment of such amount and the balance, if any, of such payment
remaining thereafter will be paid over to, or retained by, Company; and


 


(iii)          if
such payments are received with respect to an Engine with regard to which an Event of Loss has occurred, so much of such payments
remaining after reimbursement of Loan Trustee for its actual and reasonable out-of-pocket costs and expenses shall be paid over
to, or retained by, Company; provided that Company has fully performed its obligations under ‎Section 7.05(b) with
respect to the Event of Loss for which such payments are made.


 


(d)            Requisition
for Use by the Government of the Airframe and the Engines Installed Thereon. In the event of the requisition for use or hire
by any government (it being acknowledged that the use of the Airframe or any Engine pursuant to the CRAF Program does not constitute
such a requisition or hire) of the Airframe and the Engines or engines installed on the Airframe that does not constitute an Event
of Loss, all of Company’s rights and obligations under this Indenture with respect to the Airframe and such Engines shall
continue to the same extent as if such requisition or hire had not occurred; provided that, notwithstanding the foregoing,
Company’s obligations other than payment obligations shall only continue to the extent feasible. All payments received by
Company or Loan Trustee from such government for such requisition of the Airframe and Engines or engines shall be paid over to,
or retained by, Company.


 


(e)            Requisition
for Use by the Government of an Engine not Installed on the Airframe. If any government requisitions the use or hire (it being
acknowledged that the use of the Airframe or any Engine pursuant to the CRAF Program does not constitute such a requisition),
for a period in excess of sixty (60) days, of any Engine not then installed on the Airframe, Company will replace such Engine
by complying with the terms of ‎Section 7.05(b) to the same extent as if an
Event of Loss had occurred with respect to such Engine on the sixty-first day after such requisition. Upon such replacement, any
payments received by Company or Loan Trustee from such government with respect to such requisition shall be paid over to, or retained
by, Company.


 


(f)            Application
of Payments During Existence of Event of Default. Any amount referred to in ‎Section 7.05
that is payable to or retainable by Company shall not be paid to or retained by Company if at the time of such payment or retention
an Event of Default or Payment Default has occurred and is continuing, but shall be held by or paid over to Loan Trustee as security
for the obligations of Company under this Indenture and the Participation Agreement. When any such Event of Default or Payment
Default ceases, such amount shall be paid to Company.


 






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Section 7.06            Insurance.


 


(a)            Aircraft
Liability Insurance.


 


(i)            Except
as provided in clause ‎(ii) of this ‎Section 7.06(a),
and subject to the rights of Company to establish and maintain self-insurance in the manner and to the extent specified in ‎Section 7.06(d),
Company will carry, or cause to be carried, at no expense to Loan Trustee, aircraft liability insurance (including, but not limited
to, contractual, bodily injury, personal injury, property damage, and products liability (exclusive of manufacturer’s product
liability insurance and war risk, hijacking and allied perils insurance)) with respect to the Aircraft that is of the type as
from time to time applicable to aircraft operated by Company (or, if a Lease in respect of the Aircraft is then in effect, by
Permitted Lessee) of the same type as the Aircraft (A) in amounts that are not less than the aircraft liability insurance
applicable to similar aircraft and engines in Company’s (or Permitted Lessee’s) fleet on which Company (or Permitted
Lessee) carries insurance and operated by Company (or Permitted Lessee) on the same or similar routes as operated by the Aircraft;
provided that such liability insurance shall not be less than the amount (the “Minimum Insurance Amount”)
certified in the insurance report delivered to Loan Trustee and the Liquidity Provider on the Closing Date, and (B) that
is maintained in effect with insurers of recognized responsibility. Any policies of insurance carried in accordance with this
‎Section 7.06(a) and any policies taken out in substitution or replacement
for any of such policies shall: (1) name Loan Trustee, Subordination Agent, each Pass Through Trustee and the Liquidity
Provider as their Interests (defined below in this ‎Section 7.06) may appear, as
additional insureds (the “Additional Insureds”), (2) subject to the conditions of clause (3) below,
provide that, in respect of the interest of each Additional Insured in such policies, the insurance shall not be invalidated by
any action or inaction of Company, any Permitted Lessee, or any other insured (other than such Additional Insured) and shall insure
each Additional Insured’s Interests as they appear, regardless of any breach or violation of any warranty, declaration or
condition contained in such policies by Company, any Permitted Lessee or any other insured (other than such Additional Insured),
(3) provide that, if such insurance is canceled for any reason, or if any change is made in the insurance that materially
reduces the amount of insurance or the coverage certified in the insurance report delivered on the Closing Date to Loan Trustee
and the Liquidity Provider, or if such insurance is canceled for nonpayment of premium, such cancellation or change shall not
be effective as to any Additional Insured for 30 days after issuance to such Additional Insured of written notice from or on behalf
of such insurers of such cancellation or change, (4) provide that the Additional Insureds shall have no obligation
or liability for premiums, commissions, assessments or calls in connection with such insurance, (5) provide that the
insurers shall waive any rights of (x) set-off, counterclaim or any other deduction, whether by attachment or otherwise,
in respect of any liability of the Additional Insureds to the extent of any monies due to the Additional Insureds and (y) subrogation
against the Additional Insureds to the extent that Company has waived its rights by its agreements to indemnify the Additional
Insureds pursuant to the Operative Documents, (6) be primary without right of contribution from any other insurance
carried by any Additional Insured with respect to its Interests as such in the Aircraft and (7) expressly provide
that all of the provisions thereof, except the limits of liability, shall operate in the same manner as if there were a separate
policy covering each insured. “Interests” as used in this ‎Section 7.06(a),
in ‎Section 7.06(b), and in ‎Section 7.06(c) with
respect to any Person means the interests of such Person in the transactions contemplated by the Operative Documents.


 








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(ii)           During
any period that the Airframe or an Engine, as the case may be, is on the ground and not being flown, Company may carry or cause
to be carried as to such non-flown Airframe or Engine, in lieu of the insurance required by clause ‎(i) above,
and subject to self-insurance to the extent permitted by ‎Section 7.06(d) below,
insurance otherwise conforming with the provisions of said clause ‎(i) except
that: (A) the amounts of coverage shall not be required to exceed the amounts of aircraft liability insurance from
time to time applicable to airframes or engines owned or leased by Company (or, if a Lease is then in effect, by the Permitted
Lessee) of the same type as such non-flown Airframe or Engine and that are on the ground and not being flown and (B) the
scope of the risks covered and the type of insurance shall be the same as from time to time are applicable to airframes or engines
owned or leased by Company (or, if a Lease is then in effect, by the Permitted Lessee) of the same type as such non-flown Airframe
or Engine and that are on the ground and not being flown.


 






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(b)            War
Risk, Hijacking and Allied Perils Liability Insurance. If the Aircraft, the Airframe or any Engine is being operated in any
war zone or area of recognized or, in Company’s (or Permitted Lessee’s) judgment, threatened hostilities, then Company
shall maintain or cause to be maintained war risk, hijacking and allied perils liability insurance (x) in an amount
that is not less than the aircraft liability insurance applicable to similar aircraft and engines in Company’s fleet on
which Company carries insurance and operated by Company (or, if a Lease is then in effect, in the Permitted Lessee’s fleet
on which such Permitted Lessee carries insurance and operated by such Permitted Lessee) on the same or similar routes as the Aircraft,
the Airframe or such Engine; provided that such liability insurance shall not be less than the Minimum Insurance Amount,
(y) that is maintained in effect with insurers of recognized responsibility, and (z) which shall cover
the perils set forth in the insurance policies maintained in connection with the CRAF Program (as such insurance policies maintained
in connection with the CRAF Program may be amended from time to time). Except with respect to any war risk, hijacking or allied
perils liability insurance maintained on any aircraft operated by Company in connection with the CRAF Program (or, if a Lease
is then in effect, by the Permitted Lessee), if war risk, hijacking or allied perils liability insurance is maintained by Company
(or if a Lease is then in effect, by the Permitted Lessee) with respect to any aircraft owned or operated by Company (or such
Permitted Lessee, as the case may be) of the same or similar type operated by Company (or such Permitted Lessee, as the case may
be) on the same or similar routes as operated by the Aircraft, the Airframe or an Engine, then Company shall maintain or cause
to be maintained with respect to the Aircraft war risk, hijacking and allied perils liability insurance in scope and coverage
no less comprehensive, in an amount not less than the insurance maintained by Company (or such Permitted Lessee, as the case may
be) with respect to such other aircraft, and with insurers of recognized responsibility. Any policies of insurance carried in
accordance with this ‎Section 7.06(b) and any policies taken out in substitution
or replacement for any of such policies shall: (1) name Loan Trustee, Subordination Agent, each Pass Through Trustee
and the Liquidity Provider as their Interests may appear, as Additional Insureds, (2) subject to the conditions of
clause (3) below (other than the exception set forth therein), provide that, in respect of the interest of each Additional
Insured in such policies, the insurance shall not be invalidated by any action or inaction of Company, any Permitted Lessee, or
any other insured (other than such Additional Insured) and shall insure each Additional Insured’s Interests as they appear,
regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Company, any Permitted
Lessee, or any other insured (other than such Additional Insured), (3) provide that, except to the extent not provided
for by Company’s war risk, hijacking, and allied perils insurance provider, if such insurance is canceled for any reason,
or if any change is made in the insurance that materially reduces the amount of insurance or the coverage certified in the insurance
report delivered on or prior to the Closing Date to Loan Trustee and the Liquidity Provider, or if such insurance is canceled
for nonpayment of premium, such cancellation or change shall not be effective as to any Additional Insured for seven days (or
such other period as is then generally available in the industry) after issuance to such Additional Insured of written notice
from or on behalf of such insurers of such cancellation or change, (4) provide that the Additional Insureds shall
have no obligation or liability for premiums, commissions, assessments or calls in connection with such insurance, (5) provide
that the insurers shall waive any rights of (x) set-off, counterclaim or any other deduction, whether by attachment
or otherwise, in respect of any liability of the Additional Insureds to the extent of any monies due to the Additional Insureds
and (y) subrogation against the Additional Insureds to the extent that Company has waived its rights by its agreements
to indemnify the Additional Insureds pursuant to the Operative Documents, (6) be primary without right of contribution
from any other insurance carried by any Additional Insured with respect to its Interests as such in the Aircraft and (7) expressly
provide that all of the provisions thereof, except the limits of liability, shall operate in the same manner as if there were
a separate policy covering each insured. To the extent that Company’s war risk, hijacking and allied perils insurance provider
does not provide for provision of direct notice to Additional Insureds of cancellation or change in the insurance required hereunder,
Company hereby agrees that, upon receipt of notice of any thereof from such insurance provider, it shall give the Additional Insureds
immediate notice of each cancellation or change to such insurance.


 








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(c)            Insurance
Against Loss or Damage to Aircraft.


 


(i)            Except
as provided in clause ‎(ii) of this ‎Section 7.06(c),
and subject to the rights of Company to establish and maintain self-insurance in the manner and to the extent specified in ‎Section 7.06(d) below,
Company shall maintain, or cause to be maintained, in effect with insurers of recognized responsibility, at no expense to Loan
Trustee, all-risk aircraft hull insurance covering the Aircraft and all-risk coverage with respect to any Engines or Parts while
removed from the Aircraft (including, but not limited to, war risk, hijacking and allied perils insurance, if and to the extent
the same is maintained by Company (or, if a Lease is then in effect, by the Permitted Lessee) with respect to other similar aircraft
operated by Company or such Permitted Lessee, as the case may be, on the same or similar routes) that is of the type as from time
to time applicable to aircraft operated by Company (or, if a Lease is then in effect, by the Permitted Lessee) of the same type
as the Aircraft; provided that (A) such insurance (including the permitted self-insurance) shall at all times
while the Aircraft is subject to this Indenture be for an amount not less than 110% of the aggregate principal amount of the Equipment
Notes outstanding from time to time, (B) such insurance need not cover an Engine while attached to an airframe not
owned, leased or operated by Company, and (C) such insurance covering Engines and Parts removed from an Airframe or
an airframe or (in the case of Parts) an Engine need be obtained only to the extent available at reasonable cost (as reasonably
determined by Company (or Permitted Lessee)). Any policies carried in accordance with this ‎Section 7.06(c) and
any policies taken out in substitution or replacement for any such policies shall: (1) provide that any insurance
proceeds up to an amount equal to the outstanding principal amount of the Equipment Notes, together with accrued but unpaid interest
thereon, plus an amount equal to the interest that would accrue on the outstanding principal amount of the Equipment Notes at
the Debt Rate in effect on the date of payment of such insurance proceeds to Loan Trustee (as provided for in this sentence) during
the period commencing on the day following the date of such payment to Loan Trustee and ending on the Loss Payment Date (the sum
of such three amounts being the “Loan Amount”), payable for any loss or damage constituting an Event of Loss
with respect to the Aircraft and any insurance proceeds in excess of the Insurance Threshold up to an amount equal to the Loan
Amount for any loss or damage to the Aircraft (or Engines) not constituting an Event of Loss with respect to the Aircraft (or
Engines), shall be paid to Loan Trustee as long as this Indenture has not been discharged, and that all other amounts shall be
paid to Company or its designee, unless the insurer has received notice that an Event of Default exists, in which case all insurance
proceeds for any loss or damage to the Aircraft (or Engines) up to an amount equal to the Loan Amount shall be payable to Loan
Trustee, (2) subject to the conditions of clause (3) below (other than the exception set forth therein),
provide that, in respect of the interest of each Additional Insured in such policies, the insurance shall not be invalidated by
any action or inaction of Company, any Permitted Lessee, or any other insured (other than such Additional Insured) and shall insure
each Additional Insured’s Interests as they appear, regardless of any breach or violation of any warranty, declaration or
condition contained in such policies by Company, any Permitted Lessee or any other insured (other than such Additional Insured),
(3) provide that, except to the extent not provided for by Company’s (or any Permitted Lessee’s) hull
war risk, hijacking, and allied perils insurance provider, if such insurance is canceled for any reason, or if any change is made
in the insurance that materially reduces the coverage (not including the amount) certified in the insurance report delivered on
the Closing Date to Loan Trustee, and the Liquidity Provider, or if such insurance is canceled for nonpayment of premium, such
cancellation or change shall not be effective as to the Additional Insureds for 30 days (seven days, or such other period as is
then customary in the industry, in the case of war risk, hijacking, or allied perils coverage) after issuance to the Additional
Insureds of written notice from or on behalf of such insurers of such cancellation or change, (4) provide that the
Additional Insureds shall have no obligation or liability for premiums, commissions, assessments or calls in connection with such
insurance, (5) provide that the insurers shall waive rights of (x) setoff, counterclaim or any other deduction,
whether by attachment or otherwise, in respect of any liability of the Additional Insureds to the extent of any monies due to
the Additional Insureds and (y) subrogation against the Additional Insureds to the extent Company has waived its rights
by its agreement to indemnify the Additional Insureds pursuant to the Operative Documents and (6) include a 50/50 provisional
claims settlement clause in the event that separate policies are maintained with respect to all-risk aircraft hull insurance and
war risk, hijacking and allied perils hull insurance. To the extent that Company’s war risk, hijacking, and allied perils
insurance provider does not provide for provision of direct notice to Additional Insureds of cancellation or change in the insurance
required hereunder, Company hereby agrees that upon receipt of notice of any thereof from such insurance provider it shall give
the Additional Insureds immediate notice of each cancellation or change to such insurance.


 








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(ii)           During
any period that the Airframe or an Engine, as the case may be, is on the ground and not being flown, Company (or Permitted Lessee)
may carry or cause to be carried as to such non-flown Airframe or Engine, in lieu of the insurance required by clause ‎(i) above,
and subject to self-insurance to the extent permitted by ‎Section 7.06(d) below,
insurance otherwise conforming with the provisions of said clause ‎(i) except
that the scope of the risks covered and the type of insurance shall be the same as from time to time are applicable to airframes
and engines owned or leased by Company (or, if a Lease is then in effect, by the Permitted Lessee) of the same type as such non-flown
Airframe or Engine and that are on the ground and not being flown; provided that, subject to self-insurance to the extent
permitted by ‎Section 7.06(d) below, Company shall maintain or cause to be
maintained insurance against risk of loss or damage to such non-flown Airframe or Engine in an amount at least equal to 110% of
the aggregate outstanding principal amount of the Equipment Notes for the Aircraft or, with respect to a non-flown Engine, the
replacement value of such Engine.


 








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(d)            Self-Insurance.
Company may from time to time self-insure, by way of deductible, self-insured retention, premium adjustment or franchise or otherwise
(including, with respect to insurance maintained pursuant to Sections ‎7.06(a), ‎(b) or
‎(c), insuring for a maximum amount that is less than the amounts set forth in Sections
‎7.06(a), ‎(b) and ‎(c) above),
the risks required to be insured against pursuant to Sections ‎7.06(a), ‎(b) and
‎(c) above, but in no case shall the self-insurance with respect to all of the aircraft
and engines in the combined fleet of Company and its Affiliates (including, without limitation, the Aircraft) exceed for any 12-month
policy year 1.0% of the average aggregate insurable value (during the preceding policy year) of all aircraft (including, without
limitation, the Aircraft) on which Company and its Affiliates carry insurance, unless an insurance broker of national standing
certifies that the standard among other major United States express transportation companies is a higher level of self-insurance,
in which case Company may self-insure the Aircraft to such higher level; provided that (1) any deductible per
occurrence that, in the case of the Aircraft, is not in excess of the amount customarily allowed as a deductible in the industry
or is required to facilitate claims handling or (2) any applicable mandatory minimum per aircraft (or if applicable
per annum or other period) hull or liability insurance deductibles imposed by the aircraft hull or liability insurers shall be
permitted in addition to the above-mentioned self-insurance.


 


(e)            Indemnification
by United States Government in Lieu of Insurance. Notwithstanding any provision of this ‎Section 7.06
requiring insurance, in lieu of insurance against any risk with respect to the Aircraft, indemnification from, or insurance provided
by, the United States government, or any agency or instrumentality thereof, against such risk in an amount which, when added to
the amount of insurance maintained against such risk by Company (or, if a Lease is then in effect, by the Permitted Lessee), shall
be at least equal to the amount of insurance against such risk otherwise required by this ‎Section 7.06
(taking into account self-insurance permitted by ‎Section 7.06(d)) shall be considered
adequate insurance for purposes of this ‎Section 7.06.


 


(f)            Application
of Insurance Payments. All losses will be adjusted by Company with the insurers. As between Loan Trustee and Company it is
agreed that all insurance payments received under policies required to be maintained by Company hereunder, exclusive of any payments
received in excess of the Loan Amount for the Aircraft from such policies, as the result of the occurrence of an Event of Loss
with respect to the Airframe or an Engine will be applied as follows:


 








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(i)            if
such payments are received with respect to the Airframe or the Airframe and any Engines installed on the Airframe that has been
or is being replaced by Company pursuant to ‎Section 7.05(a), such payments shall
be paid over to, or retained by, Loan Trustee and upon completion of such replacement shall be paid over to, or retained by, Company;


 


(ii)           if
such payments are received with respect to the Airframe or the Airframe and any Engines installed on the Airframe that has not
been and will not be replaced as contemplated by ‎Section 7.05(a), so much of such
payments remaining after reimbursement of Loan Trustee for its actual and reasonable out-of-pocket costs and expenses, as do not
exceed the amounts required to be paid by Company pursuant to ‎Section 2.10 shall
be applied in reduction of Company’s obligation to pay such amounts, if not already paid by Company, or, if already paid
by Company, shall be applied to reimburse Company for its payment of such amounts, and the balance, if any, of such payment remaining
thereafter will be paid over to, or retained by, Company; and


 


(iii)          if
such payments are received with respect to an Engine, so much of such payments remaining after reimbursement of Loan Trustee for
its actual and reasonable out-of-pocket costs and expenses shall be paid over to, or retained by, Company; provided that
Company has fully performed its obligations under ‎Section 7.05(b) with respect
to the Event of Loss for which such payments are made.


 


In all events, the
insurance payment of any property damage or loss received under policies maintained by Company in excess of the Loan Amount for
the Aircraft shall be paid to Company.


 


The
insurance payments for any loss or damage to the Airframe or an Engine not constituting an Event of Loss with respect to the Airframe
or such Engine will be applied in payment (or to reimburse Company) for repairs or for replacement property in accordance with
the terms of Sections ‎7.02 and ‎7.04, and any
balance remaining after compliance with such Sections with respect to such loss or damage shall be paid to Company. Any amount
referred to in the preceding sentence or in clause ‎(i) or ‎(ii) of
the first paragraph of this ‎Section 7.06(f) that is payable to Company shall
not be paid to Company (or, if it has been previously paid directly to Company, shall not be retained by Company) if at the time
of such payment an Event of Default or Payment Default has occurred and is continuing, but shall be paid to and held by Loan Trustee
as security for the obligations of Company under this Indenture and the other Operative Documents and shall be invested pursuant
to ‎Section 5.06 unless and until such amount is applied, at the option of Loan
Trustee, to Company’s obligations under this Indenture and the other Operative Documents as and when due, it being understood
that any such application shall be made to such obligations of Company as Loan Trustee may determine in its sole discretion. Loan
Trustee shall give Company prompt written notice of any such application, but the failure to so notify Company shall not in any
way affect the rights of Loan Trustee hereunder. At such time as there shall be continuing no Event of Default or Payment Default,
such amount shall be paid to Company to the extent not previously applied in accordance with this ‎Section 7.06(f).


 








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(g)            Reports,
Etc. On or before the Closing Date and annually following renewal of Company’s insurance coverage, Company will furnish
to Loan Trustee and the Liquidity Provider current certificates of insurance and a report signed by a firm of independent aircraft
insurance brokers appointed by Company (which brokers may be in the regular employ of Company), stating the opinion of such firm
that the commercial hull and liability insurance then carried and maintained on the Aircraft complies with the terms hereof. All
information contained in such report shall be Confidential Information and shall be treated by Loan Trustee and the Liquidity
Provider and each of their Affiliates and their respective officers, directors, agents and employees in accordance with the provisions
of ‎Section 10.16. Company will use commercially reasonable efforts to cause such
firm to notify Loan Trustee and the Liquidity Provider of any act or omission on the part of Company of which such firm has knowledge
that might invalidate or render unenforceable, in whole or in part, any insurance on the Aircraft. Company will use commercially
reasonable efforts to cause such firm to notify Loan Trustee and the Liquidity Provider as promptly as practicable after such
firm acquires knowledge that a cancellation of any insurance carried and maintained on the Aircraft pursuant to this ‎Section 7.06
will occur. Such information may only be provided to other Persons in accordance with ‎Section 10.16.


 


In the event that
Company shall fail to maintain or to cause to be maintained insurance as herein provided, Loan Trustee may at its option obtain
such insurance (giving Company prompt written notice thereof, but the failure to so notify Company shall not in any way affect
the rights of Loan Trustee hereunder) and, in such event, Company shall, upon demand, reimburse Loan Trustee for the cost to Loan
Trustee of such insurance, together with interest thereon at the Past Due Rate for the period commencing with the date such cost
was paid to the date of reimbursement; provided, however, that no exercise by Loan Trustee of said option shall
affect the provisions of this Indenture, including the provisions that failure by Company to maintain the prescribed insurance
shall constitute an Event of Default.


 


(h)            Salvage
Rights; Other. All salvage rights to the Airframe and each Engine shall remain with Company’s insurers at all times,
and any insurance policies of Loan Trustee insuring the Airframe or any Engine shall provide for a release to Company of any and
all salvage rights in and to the Airframe or any Engine except if such insurance policies of Loan Trustee are obtained pursuant
to the last paragraph of ‎Section 7.06(g). Neither Loan Trustee nor any Noteholder
may, directly or indirectly, obtain insurance for its own account with respect to the Airframe or any Engine if such insurance
would limit or otherwise adversely affect the coverage or amounts payable under, or increase the premiums for, any insurance required
to be maintained pursuant to this ‎Section 7.06 or any other insurance maintained
with respect to the Aircraft or any other aircraft in Company’s (or Permitted Lessee’s) fleet.


 








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ARTICLE VIII


 


Successor and Additional Trustees


 


Section 8.01            Resignation
or Removal; Appointment of Successor.


 


(a)            The
resignation or removal of Loan Trustee and the appointment of a successor Loan Trustee shall become effective only upon the successor
Loan Trustee’s acceptance of appointment as provided in this ‎Section 8.01.
Loan Trustee or any successor thereto must resign if at any time it ceases to be eligible in accordance with the provisions of
‎Section 8.01(c) and may resign at any time without cause by giving at least
60 days’ prior written notice to Company and each Noteholder. In addition, either Company (so long as no Event of Default
or Payment Default shall have occurred and be continuing) or a Majority in Interest of Noteholders (but only with the consent
of Company so long as no Event of Default or Payment Default shall have occurred and be continuing), may at any time remove Loan
Trustee without cause by an instrument in writing delivered to Loan Trustee and each Noteholder, and, in case of a removal by
a Majority in Interest of Noteholders, to Company. In the case of the resignation or removal of Loan Trustee, Company shall promptly
appoint a successor Loan Trustee. If a successor Loan Trustee has not been appointed within 60 days after such notice of resignation
or removal, Loan Trustee, Company or any Noteholder may apply to any court of competent jurisdiction to appoint a successor Loan
Trustee to act until such time, if any, as a successor is appointed as above provided. The successor Loan Trustee so appointed
by such court shall immediately and without further act be superseded by any successor Loan Trustee appointed as above provided.


 


(b)            Any
successor Loan Trustee, however appointed, shall execute and deliver to the predecessor Loan Trustee and Company an instrument
accepting such appointment and assuming the obligations of Loan Trustee arising from and after the time of such appointment, and
thereupon such successor Loan Trustee, without further act, shall become vested with all the estates, properties, rights, powers
and duties of the predecessor Loan Trustee in the trust hereunder applicable to it with like effect as if originally named Loan
Trustee herein; but nevertheless upon the written request of such successor Loan Trustee, such predecessor Loan Trustee shall
execute and deliver an instrument transferring to such successor Loan Trustee all the estates, properties, rights and powers of
such predecessor Loan Trustee, and such predecessor Loan Trustee shall duly assign, transfer, deliver and pay over to such successor
Loan Trustee all monies or other property and all other books and records, or true, correct and complete copies thereof, then
held by such predecessor Loan Trustee.


 








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(c)            This
Indenture shall at all times have a Loan Trustee, however appointed, that is a Citizen of the United States (without the use of
a voting trust) and a bank or trust company having a combined capital and surplus of at least $100,000,000 (or a combined capital
and surplus in excess of $5,000,000 and the obligations of which, whether now in existence or hereafter incurred, are fully and
unconditionally guaranteed by a corporation organized and doing business under the laws of the United States or any state or territory
thereof or the District of Columbia and having a combined capital and surplus of at least $100,000,000) or a corporation with
a net worth of at least $100,000,000, if there be such an institution willing, able and legally qualified to perform the duties
of Loan Trustee upon reasonable or customary terms. If such bank, trust company or 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 8.01(c) the combined
capital and surplus of such bank, trust company or 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 Loan Trustee ceases to be eligible in accordance with
the provisions of this ‎Section 8.01(c), Loan Trustee shall resign immediately in
the manner and with the effect specified in ‎Section 8.01(a).


 


(d)            Any
bank, trust company or corporation into which Loan Trustee may be merged or converted or with which it may be consolidated, or
any bank, trust company or corporation resulting from any merger, conversion or consolidation to which Loan Trustee is a party,
or any bank, trust company or corporation to which substantially all the corporate trust business of Loan Trustee may be transferred,
shall, subject to the terms of ‎Section 8.01(c), be a successor Loan Trustee under
this Indenture without further act.


 






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Section 8.02            Appointment
of Additional and Separate Trustees.


 


(a)            Whenever
(i) Company or Loan Trustee deems it necessary or desirable in order to conform to any law of any jurisdiction in
which all or any part of the Collateral is situated or to make any claim or bring any suit with respect to or in connection with
the Collateral, any Operative Document or any of the transactions contemplated by the Operative Documents, (ii) Loan
Trustee shall be advised by counsel satisfactory to it that it is necessary or prudent in the interests of Noteholders (and Loan
Trustee shall so advise Company) or (iii) Loan Trustee has been requested to do so by a Majority in Interest of Noteholders,
then in any such case, Loan Trustee and, upon the written request of Loan Trustee, Company, shall execute and deliver an indenture
supplemental hereto and such other, instruments as from time to time are necessary or advisable either (1) to constitute
one or more banks or trust companies or corporations meeting the requirements of ‎Section 8.01(c) and
approved by Loan Trustee, either to act jointly with Loan Trustee as additional trustee or trustees of all or any part of the
Collateral or to act as separate trustee or trustees of all or any part of the Collateral, in each case with such rights, powers,
duties and obligations consistent with this Indenture as is provided in such supplemental indenture or other instruments as Loan
Trustee or a Majority in Interest of Noteholders deems necessary or advisable, or (2) to clarify, add to or subtract
from the rights, powers, duties and obligations theretofore granted any such additional or separate trustee, subject in each case
to the remaining provisions of this ‎Section 8.02. If no Event of Default has occurred
and is continuing, no additional or supplemental trustee shall be appointed without Company’s consent. If an Event of Default
shall have occurred and be continuing, Loan Trustee may act under the foregoing provisions of this ‎Section 8.02(a) without
the concurrence of Company, and, to the extent permitted by applicable law, Company hereby irrevocably appoints (which appointment
is coupled with an interest) Loan Trustee as its agent and attorney-in-fact to act for it under the foregoing provisions of this
‎Section 8.02(a). Loan Trustee may, in such capacity, execute, deliver and perform
any such supplemental indenture, or any such instrument, as may be required for the appointment of any such additional or separate
trustee or for the clarification of, addition to or subtraction from the rights, powers, duties or obligations theretofore granted
to any such additional or separate trustee, subject in each case to the remaining provisions of this ‎Section 8.02.
In case any additional or separate trustee appointed under this ‎Section 8.02(a) becomes
incapable of acting, resigns or is removed, all the assets, property, rights, powers, trusts, duties and obligations of such additional
or separate trustee shall revert to Loan Trustee until a successor additional or separate trustee is appointed as provided in
this ‎Section 8.02(a).


 


(b)            No
additional or separate trustee shall be entitled to exercise any of the rights, powers, duties and obligations conferred upon
Loan Trustee in respect of the custody, investment and payment of monies and all monies received by any such additional or separate
trustee from or constituting part of the Collateral or otherwise payable under any Operative Documents to Loan Trustee shall be
promptly paid over by it to Loan Trustee. All other rights, powers, duties and obligations conferred or imposed upon any additional
or separate trustee shall be exercised or performed by Loan Trustee and such additional or separate trustee jointly except to
the extent that applicable law of any jurisdiction in which any particular act is to be performed renders Loan Trustee incompetent
or unqualified to perform such act, in which event such rights, powers, duties and obligations (including the holding of title
to all or part of the Collateral in any such jurisdiction) shall be exercised and performed by such additional or separate trustee.
No additional or separate trustee shall take any discretionary action except on the instructions of Loan Trustee or a Majority
in Interest of Noteholders. No trustee hereunder shall be personally liable by reason of any act or omission of any other trustee
hereunder, except that Loan Trustee shall be liable for the consequences of its lack of reasonable care in selecting, and Loan
Trustee’s own actions in acting with, any additional or separate trustee. Each additional or separate trustee appointed
pursuant to this ‎Section 8.02 shall be subject to, and shall have the benefit of
Articles ‎IV, ‎V, ‎VI,
‎VIII, ‎IX and ‎X
insofar as they apply to Loan Trustee. The powers of any additional or separate trustee appointed pursuant to this ‎Section 8.02
shall not in any case exceed those of Loan Trustee.


 






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(c)            If
at any time Loan Trustee deems it no longer necessary or desirable or in the event that Loan Trustee has been requested to do
so in writing by a Majority in Interest of Noteholders, Loan Trustee and, upon the written request of Loan Trustee, Company, shall
execute and deliver an indenture supplemental hereto and all other instruments and agreements necessary or proper to remove any
additional or separate trustee. Loan Trustee may act on behalf of Company under this ‎Section 8.02(c) when
and to the extent it could so act under ‎Section 8.02(a). In any case, Company may
remove an additional or separate trustee in the manner set forth in ‎Section 8.01.


 


ARTICLE IX


 


Amendments and Waivers


 


Section 9.01            Amendments
to this Indenture without Consent of Holders. At any time after the date hereof, Company may and Loan Trustee shall, at Company’s
request, enter into one or more agreements supplemental hereto and amend the Equipment Notes without notice to or consent of any
Noteholder, Indenture Indemnitee or Related Indenture Indemnitee for any of the following purposes: (i) to evidence
the succession of another Person to Company and the assumption by any such successor of the covenants of Company contained in
any Operative Documents pursuant to Section 6.02(e) of the Participation Agreement; (ii) to cure any defect
or inconsistency herein or in the Equipment Notes, or to make any change not inconsistent with the provisions hereof (provided
that such change does not adversely affect the interests of any Noteholder, any Indenture Indemnitee or any Related Indenture
Indemnitee in its capacity solely as Noteholder, Indenture Indemnitee or Related Indenture Indemnitee, as the case may be);
(iii) to cure any ambiguity or correct any mistake; (iv) to evidence the succession of a new trustee hereunder
pursuant hereto or the removal of the trustee hereunder or to provide for or facilitate the appointment of an additional or separate
trustee pursuant to ‎Section 8.02; (v) to convey, transfer, assign,
mortgage or pledge any property to or with Loan Trustee; (vi) to make any other provisions or amendments with respect
to matters or questions arising hereunder or under the Equipment Notes, or to amend, modify or supplement any provision hereof
or thereof, so long as such action shall not adversely affect the interests of any Noteholder, any Indenture Indemnitee or any
Related Indenture Indemnitee in its capacity solely as Noteholder, Indenture Indemnitee or Related Indenture Indemnitee,
as the case may be; (vii) to correct, supplement or amplify the description of any property at any time subject to
the Lien of this Indenture, or better to assure, convey and confirm unto Loan Trustee any property subject or required to be subject
to the Lien of this Indenture or to subject to the Lien of this Indenture the Airframe or Engines or any Substitute Airframe,
Replacement Airframe or Replacement Engine; (viii) to add to the covenants of Company for the benefit of Noteholders, Indenture
Indemnitees or Related Indenture Indemnitees or to surrender any rights or power herein conferred upon Company; (ix) to
add to the rights of Noteholders, Indenture Indemnitees or Related Indenture Indemnitees; (x) to include on the
Equipment Notes any legend as may be required by law or as otherwise necessary or advisable; (xi) to comply with any
applicable requirements of the Trust Indenture Act, or any other requirements of applicable law or of any regulatory body; (xii) to
give effect to the replacement of the Liquidity Provider with a Replacement Liquidity Provider and the replacement of the Liquidity
Facility with a Replacement Liquidity Facility therefor, and, if a Replacement Liquidity Facility is to be comprised of more than
one instrument as contemplated by the definition of the term “Replacement Liquidity Facility” in the Intercreditor
Agreement, to incorporate appropriate mechanics for multiple instruments for such Replacement Liquidity Facility for a single
Pass Through Trust (including, without limitation, amendments to ‎Section 2.14 with
respect to the Replacement Liquidity Provider of such Replacement Liquidity Facility); (xiii) to provide for the original
issuance of Additional Series Equipment Notes of one or more Series (and Related Additional Series Equipment Notes
relating thereto) pursuant to clause (i) of the third sentence of ‎Section 2.02
or the issuance of new Additional Series Equipment Notes of any one or more Series (and new Related Additional Series Equipment
Notes relating thereto) pursuant to clause (ii) or (iii), as the case may be, of the third sentence of ‎Section 2.02,
and for the issuance of pass through certificates by any pass through trust that acquires any such Additional Series Equipment
Notes (and Related Additional Series Equipment Notes), or new Additional Series Equipment Notes (and new Related Additional
Series Equipment Notes) and to make changes relating to any of the foregoing (including, without limitation, to provide for
any prefunding mechanism in connection therewith or to provide for the priority in payment among different Series of Additional
Series Equipment Notes) and to provide for any credit support for any pass through certificates relating to any such Additional
Series Equipment Notes (and Related Additional Series Equipment Notes), new Additional Series Equipment Notes (and
new Related Additional Series Equipment Notes) (including, without limitation, to secure claims for fees, interest, expenses,
reimbursement of advances and other obligations arising from such credit support (including, without limitation, to specify such
credit support as a “Liquidity Facility” and the provider of any such credit support as a “Liquidity Provider”
and, if such Liquidity Facility is to be comprised of more than one instrument, to incorporate appropriate mechanics for multiple
Liquidity Facilities for a single Pass Through Trust)); provided that any such Additional Series Equipment Notes or
new Additional Series Equipment Notes, as the case may be, are issued in accordance with Section 2.02 of the Participation
Agreement and Section 8.01(c) or 8.01(d) of the Intercreditor Agreement, as applicable; and (xiv) to
provide for the issuance of “Additional Series Equipment Notes” of one or more series new “Additional Series Equipment
Notes” in each case under any or all Related Indentures and other matters incidental or relating thereto.


 








    	 	76	 



     


    

 


Section 9.02            Amendments
to this Indenture with Consent of Holders.


 


(a)            With
the written consent of a Majority in Interest of Noteholders, Company may, and Loan Trustee shall, subject to ‎Section 9.06,
at any time and from time to time, enter into such supplemental agreements to add any provisions to or to change or eliminate
any provisions of this Indenture or of any such supplemental agreements or to modify in any manner the rights and obligations
of Company, Loan Trustee and Noteholders under this Indenture; provided that, without the consent of each Noteholder affected
thereby, an amendment under this ‎Section 9.02 may not:


 








    	 	77	 



     


    

 


(1)            reduce
the principal amount of, Make-Whole Amount, if any, or interest on, any Equipment Note;


 


(2)            change
the date on which any principal amount of, Make-Whole Amount, if any, or interest on any Equipment Note, is due or payable;


 


(3)            create
any Lien with respect to the Collateral prior to or pari passu with the Lien thereon under this Indenture except such as
are permitted by this Indenture, or deprive any Noteholder of the benefit of the Lien on the Collateral created by this Indenture,
except as provided in connection with the exercise of remedies under Article ‎IV;
provided that, without the consent of each holder of an affected Related Equipment Note then outstanding, no such amendment,
waiver or modification of terms of, or consent under, any thereof shall modify ‎Section 3.03
or this clause (3) or deprive any Related Noteholder of the benefit of the Lien of this Indenture on the Collateral, except
as provided in connection with the exercise of remedies under Article ‎IV;


 


(4)            reduce
the percentage of the outstanding principal amount of the Equipment Notes the consent of whose holders is required for any such
supplemental agreement, or the consent of whose holders is required for any waiver of compliance with certain provisions of this
Indenture or of certain defaults hereunder or their consequences provided for in this Indenture; or


 


(5)            make
any change in ‎Section 4.05 or this ‎Section 9.02,
except to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of each Noteholder
affected thereby.


 


Notwithstanding
the foregoing, neither Company nor Loan Trustee shall enter into any amendment, waiver or modification of, or supplement
or consent to, this Indenture or any other Operative Document other than the Participation Agreement (which is addressed in ‎Section 9.03)
which shall reduce, modify or amend any indemnities in favor of the Liquidity Provider without the consent of the Liquidity Provider.


 


(b)            It
is not necessary under this ‎Section 9.02 for Noteholders to consent to the particular
form of any proposed supplemental agreement, but it is sufficient if they consent to the substance thereof.


 


(c)            Promptly
after the execution by Company and Loan Trustee of any supplemental agreement pursuant to the provisions of this ‎Section 9.02,
Loan Trustee shall transmit by first-class mail or by hand delivery a notice, setting forth in general terms the substance of
such supplemental agreement, to all Noteholders, as the names and addresses of such Noteholders appear on the Equipment Note Register.
Any failure of Loan Trustee to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity
of any such supplemental agreement.


 








    	 	78	 



     


    

 


Section 9.03            Amendments,
Waivers, Etc. of the Participation Agreement or Parent Guarantee. Without the consent of a Majority in Interest of Noteholders,
the respective parties to the Participation Agreement or Parent Guarantee, as applicable, may not modify, amend or supplement
such agreement, or give any consent, waiver, authorization or approval thereunder, for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions thereof or of modifying in any manner the rights of the respective
parties thereunder; provided that, without the consent of Loan Trustee, any Noteholder, any other Indenture Indemnitee
or any Related Indenture Indemnitee, the Participation Agreement or Parent Guarantee, as applicable, may be modified, amended
or supplemented in order (i) to cure any defect or inconsistency therein or to cure any ambiguity or correct any mistake,
(ii) to amend, modify or supplement any provision thereof or make any other provision with respect to matters or questions
arising thereunder or under this Indenture (provided that the making of any such other provision shall not materially adversely
affect the interests of Noteholders) or (iii) to make any other change, or reflect any other matter, of the kind referred
to in clauses (i) through (xiv) of ‎Section 9.01. Notwithstanding
the foregoing, without the consent of the Liquidity Provider, Company shall not enter into any amendment, waiver or modification
of or supplement or consent to the Participation Agreement or Parent Guarantee, as applicable, which shall reduce, modify or amend
any indemnities in favor of the Liquidity Provider contained therein.


 


Section 9.04            Revocation
and Effect of Consents. Until an amendment or waiver becomes effective, a consent to it by a Noteholder is a continuing consent
by Noteholder and every subsequent Noteholder, even if notation of the consent is not made on any Equipment Note.


 


Section 9.05            Notation
on or Exchange of Equipment Notes. Loan Trustee may place an appropriate notation about an amendment or waiver on any Equipment
Note thereafter executed. Loan Trustee in exchange for such Equipment Notes may execute new Equipment Notes that reflect the amendment
or waiver.


 


Section 9.06            Trustee
Protected. If, in the reasonable opinion of the institution acting as Loan Trustee, any document required to be executed by
it pursuant to the terms of Section ‎9.01 or ‎9.02
adversely affects any right, duty, immunity or indemnity with respect to such institution under this Indenture, such institution
may in its discretion decline to execute such document.


 


Section 9.07            No
Consent of Individual Indenture Indemnitees Required. Notwithstanding anything in this Indenture or any other Operative Document
to the contrary, when any provision hereof or thereof would otherwise require a consent of an Indenture Indemnitee, such provision
shall always be construed to require only the consent of an Indenture Indemnitee other than any Indenture Indemnitee covered by
clause (vii) of the definition of “Indenture Indemnitees”.


 








    	 	79	 



     


    

 



 


ARTICLE X


 


Miscellaneous


 


Section 10.01   Termination
of Indenture. Subject to Sections ‎7.04 and ‎7.05,
upon (or at any time after) payment in full of the principal amount of, Make-Whole Amount, if any, and interest on and all other
amounts then due under all Equipment Notes and provided that there shall then be (x) no other Secured Obligations
due and unpaid to Noteholders, Loan Trustee and other Indenture Indemnitees hereunder, under the Participation Agreement or any
other Operative Document, and (y) no Related Secured Obligations due and unpaid under any Related Indenture or any
other “Operative Document” (as defined in any Related Indenture), Company shall direct Loan Trustee to execute and
deliver to or as directed in writing by Company an appropriate instrument releasing the Aircraft and the Engines and (subject
to paragraph (vii) of clause “third” of ‎Section 3.03, if applicable)
all other Collateral from the Lien of this Indenture and Loan Trustee shall execute and deliver such instrument as aforesaid;
provided that this Indenture and the trusts created hereby shall earlier terminate and this Indenture shall be of no further
force or effect upon any sale or other final disposition by Loan Trustee of all property constituting part of the Collateral and
the final distribution by Loan Trustee of all monies or other property or proceeds constituting part of the Collateral in accordance
with the terms hereof. Except as aforesaid otherwise provided, this Indenture and the trusts created hereby shall continue in
full force and effect in accordance with the terms hereof.


 


Section 10.02   No
Legal Title to Collateral in Noteholders. No holder of an Equipment Note or a Related Equipment Note shall have legal title
to any part of the Collateral. No transfer, by operation of law or otherwise, of any Equipment Note, Related Equipment Note or
other right, title and interest of any Noteholder or Related Noteholder in and to the Collateral or hereunder shall operate to
terminate this Indenture or entitle such holder or any successor or transferee of such holder to an accounting or to the transfer
to it of any legal title to any part of the Collateral.


 


Section 10.03   Sale
of Aircraft by Loan Trustee is Binding. Any sale or other conveyance of the Aircraft, the Airframe, any Engine or any interest
therein by Loan Trustee made pursuant to the terms of this Indenture shall bind Noteholders and Company and shall be effective
to transfer or convey all right, title and interest of Loan Trustee, Company and such Noteholders in and to such Aircraft, Airframe,
Engine or interest therein. No purchaser or other grantee shall be required to inquire as to the authorization, necessity, expediency
or regularity of such sale or conveyance or as to the application of any sale or other proceeds with respect thereto by Loan Trustee
or Noteholders.


 






    80


     


    

 


Section 10.04   Indenture
for Benefit of Company, Loan Trustee and Noteholders. Nothing in this Indenture, whether express or implied, shall be construed
to give any Person other than Company, Noteholders, Loan Trustee, other Indenture Indemnitees, Related Loan Trustees and Related
Indenture Indemnitees any legal or equitable right, remedy or claim under or in respect of this Indenture, except that the Persons
referred to in the second to last full paragraph of ‎Section 7.02(a) shall
be third party beneficiaries of such paragraph.


 


Section 10.05   Notices.
Unless otherwise expressly specified or permitted by the terms hereof, all notices, requests, demands, authorizations, directions,
consents, waivers or documents required or permitted under the terms and provisions of this Indenture shall be in English and
in writing, and any such notice may be given by United States mail, courier service, facsimile, and any such notice shall be effective
when delivered (or, if mailed, three Business Days after deposit, postage prepaid, in the first class U.S. mail and, if delivered
by facsimile, upon completion of transmission and confirmation by the sender (by a telephone call to a representative of the recipient
or by machine confirmation) that such transmission was received) addressed as follows:


 


if to Company, addressed
to:


 


Federal Express Corporation


3610 Hacks Cross Road


Memphis, TN 38125


Attn: General Counsel


 


With copies to:


 


FedEx Corporation


942 S. Shady Grove Road


Memphis, TN 38120


Attn: Treasurer


 


With a separate FedEx Corporation copy
to: Corporate Vice President, Securities & Corporate Law


 


if to Loan Trustee, addressed to:


 


Wilmington Trust Company

1100 North Market Square

Wilmington, DE 19890-1605


	Attention:       	Global Capital Market Services
	Ref:	FedEx 2020-1AA EETC
	Telephone:	[     ]
	Telecopy:	[     ]




 






    81


     


    

 


if
to any Noteholder, addressed to such Noteholder at its address set forth in the Equipment Note Register maintained pursuant to
‎Section 2.07;


 


if to any Indenture
Indemnitee other than Loan Trustee, addressed to the address of such party (if any) set forth in Section 7.01 of the Participation
Agreement or to such other address as such Indenture Indemnitee shall have furnished by notice to Company and Loan Trustee; and


 


if to any Related
Indenture Indemnitee, addressed to such Related Indenture Indemnitee at its address set forth in the Equipment Note Register (defined
in the applicable Related Indenture) maintained pursuant to Section 2.07 of the applicable Related Indenture.


 


Any
party, by notice to the other parties hereto, may designate different addresses for subsequent notices or communications. Whenever
the words “notice” or “notify” or similar words are used herein, they mean the provision of formal notice
as set forth in this ‎Section 10.05.


 


Section 10.06   Severability.
To the extent permitted by applicable law, any provision of this Indenture that is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction.


 


Section 10.07   No
Oral Modification or Continuing Waivers. No terms or provisions of this Indenture or of the Equipment Notes may be changed,
waived, discharged or terminated orally, but only by an instrument in writing signed by Company and Loan Trustee, in compliance
with Article ‎IX. Any waiver of the terms hereof or of any Equipment Note shall
be effective only in the specific instance and for the specific purpose given.


 


Section 10.08   Successors
and Assigns. All covenants and agreements contained herein shall bind and inure to the benefit of, and be enforceable by,
each of the parties hereto and the successors and permitted assigns of each, all as herein provided. Any request, notice, direction,
consent, waiver or other instrument or action by any Noteholder shall bind the successors and permitted assigns of such Noteholder.
Each Noteholder by its acceptance of an Equipment Note agrees to be bound by (i) this Indenture and all provisions
of the Participation Agreement, the other Operative Documents and the Pass Through Documents applicable to a Noteholder and (ii) all
provisions of each Related Indenture applicable to a Related Noteholder to the extent such Noteholder is such Related Noteholder.


 






    82


     


    

 


Section 10.09   Headings.
The headings of the various Articles and Sections herein and in the Table of Contents hereto are for convenience of reference
only and shall not define or limit any of the terms or provisions hereof.


 


Section 10.10   Normal
Commercial Relations. Anything contained in this Indenture to the contrary notwithstanding, Loan Trustee, any Noteholder or
any other party to any of the Operative Documents or the Pass Through Documents or any of their affiliates may conduct any banking
or other financial transactions, and have banking or other commercial relationships, with Company, fully to the same extent as
if this Indenture were not in effect, including without limitation the making of loans or other extensions of credit to Company
for any purpose whatsoever, whether related to any of the transactions contemplated hereby or otherwise.


 


Section 10.11   Voting
by Noteholders. All votes of Noteholders shall be governed by a vote of a Majority in Interest of Noteholders, except as otherwise
provided herein.


 


Section 10.12   Section 1110.
It is the intention of the parties hereto that the security interest created hereby, to the fullest extent available under applicable
law, entitles Loan Trustee, on behalf of Noteholders, to all of the benefits of Section 1110 with respect to the Aircraft.


 


Section 10.13   Company’s
Performance and Rights. Any obligation imposed on Company herein shall require only that Company perform or cause to be performed
such obligation, even if stated as a direct obligation, and the performance of any such obligation by any permitted assignee,
lessee or transferee under an assignment, lease or transfer agreement then in effect and in accordance with the provisions of
the Operative Documents shall constitute performance by Company and, to the extent of such performance, discharge such obligation
by Company. Except as otherwise expressly provided herein, any right granted to Company in this Indenture shall grant Company
the right to permit such right to be exercised by any such assignee, lessee or transferee, and, in the case of a lessee, as if
the terms hereof were applicable to such lessee were such lessee Company hereunder. The inclusion of specific references to obligations
or rights of any such assignee, lessee or transferee in certain provisions of this Indenture shall not in any way prevent or diminish
the application of the provisions of the two sentences immediately preceding with respect to obligations or rights in respect
of which specific reference to any such assignee, lessee or transferee has not been made in this Indenture.


 


Section 10.14   Counterparts.
This Indenture may be executed in any number of counterparts (and each of the parties hereto shall not be required to execute
the same counterpart). Each counterpart of this Indenture including a signature page or pages executed by each of the
parties hereto shall be an original counterpart of this Indenture, but all of such counterparts together shall constitute one
instrument.


 






    83


     


    

 


Section 10.15   Governing
Law. THIS INDENTURE HAS BEEN DELIVERED IN THE STATE OF NEW YORK AND THIS INDENTURE, ANY INDENTURE SUPPLEMENT AND THE EQUIPMENT
NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE.


 


Section 10.16   Confidential
Information. The term “Confidential Information” means: (a) the existence and terms of any
lease of the Airframe or Engines pursuant to ‎Section 7.02(a) and the identity
of the Permitted Lessee thereunder; (b) all information obtained in connection with any inspection conducted by Loan
Trustee or its authorized representatives pursuant to ‎Section 7.03(a); (c) each
certification furnished to Loan Trustee or the Liquidity Provider pursuant to Sections ‎7.06(a) and
‎7.06(b); (d) all information contained in each report furnished to Loan
Trustee or the Liquidity Provider pursuant to ‎Section 7.06(g); and (e) all
information regarding the Warranty Rights; and (f) all information designated by Company as non-public information.
All Confidential Information shall be held confidential by Loan Trustee, the Liquidity Provider and each Noteholder and each affiliate,
agent, officer, director, or employee of any thereof and shall not be furnished or disclosed by any of them to anyone other than
(i) Loan Trustee or any Noteholder and (ii) their respective bank examiners, auditors, accountants, agents
and legal counsel, and except as may be required by an order of any court or administrative agency or by any statute, rule, regulation
or order of any governmental authority.


 


Section 10.17   Submission
to Jurisdiction. Each of the parties hereto, and by acceptance of Equipment Notes, each Noteholder, to the extent it may do
so under applicable law, for purposes hereof and of all other Operative Documents hereby (a) irrevocably submits itself
to the non-exclusive jurisdiction of the courts of the State of New York sitting in the City of New York and to the non-exclusive
jurisdiction of the United States District Court for the Southern District of New York, for the purposes of any suit, action or
other proceeding arising out of this Indenture, the subject matter hereof or any of the transactions contemplated hereby brought
by any party or parties hereto or thereto, or their successors or permitted assigns and (b) waives, and agrees not
to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, that the suit, action or proceeding
is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Indenture or the
Equipment Notes or the subject matter hereof or any of the transactions contemplated hereby may not be enforced in or by such
courts.


 


[Signature Pages Follow.]


 






    84


     


    

 


IN WITNESS WHEREOF,
the parties hereto have caused this Indenture to be duly executed by their respective officers thereof duly authorized, as of
the date first above written.


 


	 	FEDERAL EXPRESS CORPORATION
	 	 
	 	By:	/s/ Elise L. Jordan
	 	 	Name: Elise L. Jordan
	 	 	Title: Executive VP and CFO
	 	 
	 	WILMINGTON TRUST COMPANY, not in its individual capacity,
    except as expressly provided herein, but solely as Loan Trustee
	 	 
	 	By:	/s/ Adam R. Vogelsong
	 	 	Name: Adam R. Vogelsong
	 	 	Title: Vice President




 


Signature Page


 








    


     


    

 


Exhibit A

to Indenture and Security Agreement

(N126FE)


 


FORM OF INDENTURE SUPPLEMENT


 


INDENTURE SUPPLEMENT NO. _____


 


INDENTURE SUPPLEMENT
NO. ____, dated _______________ ____, 20__ (“Indenture Supplement”), between FEDERAL EXPRESS CORPORATION
(“Company”) and WILMINGTON TRUST COMPANY, not in its individual capacity but solely as Loan Trustee under the
Indenture (each as hereinafter defined).


 


W I T N E S S E T H:


 


WHEREAS, the Indenture
and Security Agreement (N126FE), dated as of August 13, 2020 (the “Indenture”; capitalized terms used
herein without definition shall have the meanings specified therefor in Annex A to the Indenture), between Company and Wilmington
Trust Company, not in its individual capacity, except as expressly provided therein, but solely as Loan Trustee (“Loan
Trustee”), provides for the execution and delivery of supplements thereto substantially in the form hereof which shall
particularly describe the Aircraft, and shall specifically grant a security interest in the Aircraft to Loan Trustee; and


 


[WHEREAS, the Indenture
relates to the Airframe and Engines described in Annex A attached hereto and made a part hereof, and a counterpart of the Indenture
is attached to and made a part of this Indenture Supplement;]6


 


[WHEREAS, Company
has, as provided in the Indenture, heretofore executed and delivered to Loan Trustee Indenture Supplement(s) for the purpose
of specifically subjecting to the Lien of the Indenture certain airframes and/or engines therein described, which Indenture Supplement(s) is/are
dated and has/have been duly recorded with the FAA as set forth below, to wit:


 


Date     Recordation
Date     FAA Document Number]7


 


NOW, THEREFORE, (x) to
secure the prompt and complete payment (whether at stated maturity, by acceleration or otherwise) of principal of, Make-Whole
Amount, if any, and interest on, the Equipment Notes and all other Secured Obligations payable by Company under the Operative
Documents and the performance and observance by Company of all the agreements and covenants to be performed or observed by Company
for the benefit of Noteholders and Indenture Indemnitees contained in the Operative Documents and (y) to secure the
Related Secured Obligations, and in consideration of the premises and of the covenants contained in the Operative Documents and
the Related Indentures, and for other good and valuable consideration given by Noteholders, Indenture Indemnitees and Related
Indenture Indemnitees to Company at or before the Closing Date, the receipt and adequacy of which is hereby acknowledged, Company
does hereby grant, bargain, sell, convey, transfer, mortgage, assign, pledge and confirm unto Loan Trustee and its successors
in trust and permitted assigns, for the security and benefit of Noteholders, each Indenture Indemnitee and each Related Indenture
Indemnitee, a first priority security interest in, and mortgage lien on, all estate, right, title and interest of Company in,
to and under the Aircraft, including the Airframe and Engines described in Annex A attached hereto, whether or not any such Engine
from time to time is installed on the Airframe or any other airframe or any other aircraft, and any and all Parts relating thereto,
and, to the extent provided in the Indenture, all substitutions and replacements of, and additions, improvements, accessions and
accumulations to, the Aircraft, including the Airframe, the Engines and any and all Parts (in each case other than Excluded Equipment)
relating thereto;


 





 



6 Use for Indenture Supplement No. 1 only.


7 Use for all Indenture Supplements other than Indenture
Supplement No. 1.


 








    A-1


     


    

 


To
have and to hold such first priority security interest in, and mortgage lien on all and singular the aforesaid property unto Loan
Trustee, and its successors and permitted assigns, in trust for the equal and proportionate benefit and security of Noteholders, Indenture
Indemnitees and Related Indenture Indemnitees, except as otherwise provided in the Indenture, including ‎‎Section 2.13
and Article ‎‎III of the Indenture, without any priority of any one Equipment
Note over any other, or any Related Equipment Note over any other by reason of priority of time of issue, sale, negotiation, date
of maturity thereof or otherwise for any reason whatsoever, and for the uses and purposes and subject to the terms and provisions
set forth in the Indenture.


 


This Indenture Supplement
shall be construed as supplemental to the Indenture and shall form a part thereof, and the Indenture is hereby incorporated by
reference herein and is hereby ratified, approved and confirmed.


 


THIS INDENTURE SUPPLEMENT
HAS BEEN DELIVERED IN THE STATE OF NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF
NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.


 


[Signature Pages Follow.]


 






    A-2


     


    

 


IN WITNESS WHEREOF,
the undersigned have caused this Indenture Supplement No. _____ to be duly executed by their respective duly authorized officers,
on the date first above written.


 


	 	FEDERAL EXPRESS CORPORATION
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:
	 	 
	 	WILMINGTON TRUST COMPANY, not in its individual
    capacity, except as expressly provided herein, but solely as Loan Trustee
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:




 


Signature Page


 








    


     


    

 


Annex A

to Indenture Supplement No. ___

(N126FE)


 


DESCRIPTION OF AIRFRAME AND ENGINES


 


AIRFRAME


 


	Manufacturer	Model	Generic
    

    Manufacturer

    Model	FAA
    

    Registration No.	Manufacturer’s
    

    Serial No.
	 

        The Boeing Company
	 

        767-3S2F

         
	 

        Boeing 767-300F
	N126FE	42718


 


ENGINES


 


	Manufacturer	Model	Generic
    

    Manufacturer

    Model	Manufacturer’s
    Serial

    Nos.
	 

        General Electric

         
	 

        CF6-80C2B6F
	 

        CF6-80C2
	 

        707327

        707328



 


Each Engine has 550
or more rated take-off horsepower or the equivalent of such horsepower and is a jet propulsion aircraft engine having at least
1750 pounds of thrust or the equivalent of such thrust.


 






    


     


    

 


Exhibit B

to Indenture and Security Agreement

(N126FE)


 


LIST OF PERMITTED
COUNTRIES


 


	Argentina	Guatemala	Norway
	 	 	 
	Australia	Hong Kong	Panama
	 	 	 
	Austria	Hungary	Peoples’ Republic of China
	 	 	 
	Bahamas	Iceland	Philippines
	 	 	 
	Barbados	India	Poland
	 	 	 
	Belgium	Indonesia	Portugal
	 	 	 
	Bermuda Islands	Ireland	Republic of China (Taiwan)
	 	 	 
	Bolivia	Italy	Russia
	 	 	 
	Brazil	Jamaica	Singapore
	 	 	 
	British Virgin Islands	Japan	South Africa
	 	 	 
	Canada	Jordan	South Korea
	 	 	 
	Cayman Islands	Kuwait	Spain
	 	 	 
	Chile	Liechtenstein	Sweden
	 	 	 
	Colombia	Luxembourg	Switzerland
	 	 	 
	Czech Republic	Malaysia	Thailand
	 	 	 
	Denmark	Malta	Trinidad and Tobago
	 	 	 
	Ecuador	Mexico	Turkey
	 	 	 
	Egypt	Monaco	United Kingdom
	 	 	 
	Finland	Morocco	Uruguay
	 	 	 
	France	Netherlands Antilles	Venezuela
	 	 	 
	Germany	Netherlands, the	 
	 	 	 
	Greece	New Zealand	 



 






    B-1


     


    

 


Exhibit C

to Indenture and

Security Agreement


(N126FE)


 


CERTAIN TERMS


 


	Insurance Threshold:	$15,000,000




 








    C-1


     


    

 


Schedule I

to Indenture and

Security Agreement


 


DESCRIPTION
OF EQUIPMENT NOTES


 


	 	Original Principal 

    Amount	Maturity Date	 
	Series AA

    Equipment Notes:	 

        $32,875,000.00
	February 20, 2034	 


 


CERTAIN DEFINED TERMS


 


	Defined Term	 	Definition
	 	 	 
	Debt Rate for Series AA Equipment
    Notes	 	1.875% per annum
	Make-Whole Spread for Series AA Equipment Notes	 	0.002%




 








    I-1


     


    

 


Schedule I

to Indenture and

Security Agreement


(Cont’d)


 


EQUIPMENT NOTES
AMORTIZATION


 


SERIES AA EQUIPMENT NOTES


Boeing model 767-3S2F


N126FE


 


	N126FE	 	 	 
	Date	 	Scheduled Payments

    of Principal	 	Equipment Note

    Ending Balance	 
	At Issuance	 	$	0.00	 	$	32,875,000.00	 
	February 20, 2021	 	 	878,956.16	 	 	31,996,043.84	 
	August 20, 2021	 	 	878,956.16	 	 	31,117,087.68	 
	February 20, 2022	 	 	878,956.16	 	 	30,238,131.52	 
	August 20, 2022	 	 	878,956.16	 	 	29,359,175.36	 
	February 20, 2023	 	 	878,956.16	 	 	28,480,219.20	 
	August 20, 2023	 	 	878,956.16	 	 	27,601,263.04	 
	February 20, 2024	 	 	878,956.16	 	 	26,722,306.88	 
	August 20, 2024	 	 	878,956.16	 	 	25,843,350.72	 
	February 20, 2025	 	 	878,956.16	 	 	24,964,394.56	 
	August 20, 2025	 	 	878,956.16	 	 	24,085,438.40	 
	February 20, 2026	 	 	878,956.16	 	 	23,206,482.24	 
	August 20, 2026	 	 	878,956.16	 	 	22,327,526.08	 
	February 20, 2027	 	 	878,956.16	 	 	21,448,569.92	 
	August 20, 2027	 	 	878,956.16	 	 	20,569,613.76	 
	February 20, 2028	 	 	878,956.16	 	 	19,690,657.60	 
	August 20, 2028	 	 	878,956.16	 	 	18,811,701.44	 
	February 20, 2029	 	 	878,956.16	 	 	17,932,745.28	 
	August 20, 2029	 	 	878,956.16	 	 	17,053,789.12	 
	February 20, 2030	 	 	878,956.16	 	 	16,174,832.96	 
	August 20, 2030	 	 	878,956.16	 	 	15,295,876.80	 
	February 20, 2031	 	 	878,956.16	 	 	14,416,920.64	 
	August 20, 2031	 	 	878,956.16	 	 	13,537,964.48	 
	February 20, 2032	 	 	878,956.16	 	 	12,659,008.32	 
	August 20, 2032	 	 	878,956.16	 	 	11,780,052.16	 
	February 20, 2033	 	 	878,956.16	 	 	10,901,096.00	 
	August 20, 2033	 	 	878,956.16	 	 	10,022,139.84	 
	February 20, 2034	 	 	10,022,139.84	 	 	—	 


 



    


     


    

 


Schedule I

to Indenture and

Security Agreement


(Cont’d)




 


EQUIPMENT NOTES AMORTIZATION8


 


The portion of this Schedule appearing below this text is intentionally
deleted from the FAA filing counterpart because the parties hereto deem it to contain confidential information.


 





 



8 This page to be included only in the FAA filing
package in the place of the completed amortization schedule.


 




     


     


    

 


Schedule II

to Indenture and

Security Agreement


 


PASS THROUGH
TRUST AGREEMENT AND


 


PASS THROUGH TRUST SUPPLEMENT


 


Pass Through Trust
Agreement, dated as of the Issuance Date, between Federal Express Corporation and Wilmington Trust Company, as trustee.


 






    II-1


     


    

 



 


Annex A

to Indenture and

Security Agreement


 


DEFINITIONS

(N126FE)


 


“Additional
Insureds” has the meaning specified in ‎Section 7.06(a) of the Indenture.


 


“Additional
Series” or “Additional Series Equipment Notes” means Equipment Notes issued under the Indenture
and designated as a Series (other than “Series AA”) thereunder in the principal amounts and maturities and
bearing interest as specified in Schedule I to the Indenture amended at the time of original issuance of such Additional Series under
the heading for such Series.


 


“Additional
Series Pass Through Certificates” means the pass through certificates issued by any Additional Series Pass
Through Trust.


 


“Additional
Series Pass Through Trust” means a grantor trust created to facilitate the issuance and sale of pass through certificates
in connection with the issuance of any Additional Series Equipment Notes.


 


“Additional
Series Pass Through Trust Agreement” means a Trust Supplement entered into in connection with the creation of an
Additional Series Pass Through Trust, together with the Basic Pass Through Trust Agreement, as the same may be amended, supplemented
or otherwise modified from time to time in accordance with its terms.


 


“Additional
Series Pass Through Trustee” means, with respect to any Additional Series Pass Through Trust, the trustee
under the Additional Series Pass Through Trust Agreement for such Additional Series Pass Through Trust.


 


“Affiliate”
means with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with
such Person. For the purposes of this definition, “control” (including “controlled by” and “under
common control with”) shall mean the power, directly or indirectly, to direct or cause the direction of the management and
policies of such Person whether through the ownership of voting securities or by contract or otherwise. In no event shall WTC
be deemed to be an Affiliate of Loan Trustee or vice versa.


 


“Agreement”
and “Participation Agreement” mean that certain Participation Agreement (N126FE), dated on or before the Closing
Date, among Company, WTC, Pass Through Trustee under the Pass Through Trust Agreement, Subordination Agent and Loan Trustee, as
the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms.


 






    


     


    

 


“Aircraft”
means the Airframe (or any Substitute Airframe or Replacement Airframe substituted therefor pursuant to ‎Section 7.04
or ‎Section 7.05, respectively, of the Indenture) together with the two Engines
described in the Indenture Supplement originally executed and delivered under the Indenture (or any Replacement Engine that may
from time to time be substituted for any of such Engines pursuant to ‎Section 7.04
or ‎Section 7.05 of the Indenture), whether or not any of such initial or substituted
Engines is from time to time installed on such Airframe or installed on any other airframe or on any other aircraft. The term
“Aircraft” includes any Replacement Aircraft.


 


“Aircraft
Protocol” means 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 November 16, 2001, at a diplomatic conference in Cape Town,
South Africa, and all amendments, supplements, and revisions thereto (and from and after the effective date of the Cape Town Treaty
in the relevant country, means when referring to the Aircraft Protocol with respect to that country, the Aircraft Protocol as
in effect in such country, unless otherwise indicated).


 


“Airframe”
means (a) the Boeing 767-3S2F generic manufacturer and model Boeing 767-300F aircraft (except (i) the Engines or engines
from time to time installed thereon and any and all Parts related to such Engine or engines and (ii) Excluded Equipment)
specified on Annex A to the Indenture Supplement originally executed and delivered under the Indenture and (b) any and
all related Parts. The term “Airframe” includes any Substitute Airframe or Replacement Airframe that is substituted
for the Airframe pursuant to ‎Section 7.04 or ‎Section 7.05, respectively, of the Indenture. At such time as any
Substitute Airframe or Replacement Airframe is so substituted and the Airframe for which such substitution is made is released
from the Lien of the Indenture, such replaced Airframe shall cease to be an Airframe under the Indenture.


 


“Appraisers”
has the meaning set forth in the Intercreditor Agreement.


 


“Bankruptcy
Code” means the United States Bankruptcy Code, 11 United States Code §§101 et seq., as amended from time to
time, or any successor statutes thereto.


 


“Basic Pass
Through Trust Agreement” means that certain Pass Through Trust Agreement, dated as of August 13, 2020, between
Company and WTC, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms
(but does not include any Trust Supplement).


 


“Business
Day” means any day other than a Saturday, a Sunday or a day on which commercial banks are required or authorized to
close in New York, New York, Memphis, Tennessee or, if different from the foregoing, the city and state in which Loan Trustee,
any Pass Through Trustee or Subordination Agent maintains its Corporate Trust Office or receives and disburses funds.


 


“Cape Town
Convention” means the official English language text of the Convention on International Interests in Mobile Equipment,
adopted on November 16, 2001, at a diplomatic conference in Cape Town, South Africa, and all amendments, supplements, and
revisions thereto (and from and after the effective date of the Cape Town Treaty in the relevant country, means when referring
to the Cape Town Convention with respect to that country, the Cape Town Convention as in effect in such country, unless otherwise
indicated).


 






    2


     


    

 


“Cape Town
Treaty” means, collectively, the official English language text of (a) the Convention on International Interests
in Mobile Equipment, and (b) the Protocol to the Convention on International Interests in Mobile Equipment on Matters
Specific to Aircraft Equipment, in each case adopted on November 16, 2001, at a diplomatic conference in Cape Town, South
Africa, and from and after the effective date of the Cape Town Treaty in the relevant country, means when referring to the Cape
Town Treaty with respect to that country, the Cape Town Treaty as in effect in such country, unless otherwise indicated, and (c) all
rules and regulations adopted pursuant thereto and, in the case of each of the foregoing described in clauses (a) through
(c), all amendments, supplements, and revisions thereto.


 


“Class AA
Pass Through Trust” means the FedEx Pass Through Trust 2020-1AA created pursuant to the Basic Pass Through Trust Agreement,
as supplemented by Trust Supplement No. 2020-1AA, dated as of the Issuance Date, between Company and Wilmington Trust Company,
as Class AA Trustee.


 


“Class AA
Trustee” means the trustee for the Class AA Pass Through Trust.


 


“Citizen
of the United States” has the meaning specified for such term in Section 40102(a)(15) of Title 49 of the United
States Code or any similar legislation of the United States enacted in substitution or replacement therefor.


 


“Claim”
has the meaning specified in Section 4.02(a) of the Participation Agreement.


 


“Class AA
Liquidity Facility” has the meaning set forth in the Intercreditor Agreement.


 


“Class AA
Liquidity Provider” has the meaning set forth in the Intercreditor Agreement.


 


“Closing”
has the meaning specified in Section 2.03 of the Participation Agreement.


 


“Closing
Date” means the Issuance Date.


 


“Code”
means the Internal Revenue Code of 1986, as amended from time to time.


 


“Collateral”
has the meaning specified in the granting clause of the Indenture.


 






    3


     


    

 


“Company”
means Federal Express Corporation, and its successors and permitted assigns.


 


“Compulsory
Acquisition” means requisition of title or other compulsory acquisition, capture, seizure, deprivation, confiscation
or detention for any reason of the Aircraft, the Airframe or any Engine by any government that results in the loss of title or
use of the Aircraft, the Airframe or any Engine by Company (or any Permitted Lessee) for a period in excess of 180 consecutive
days, but shall exclude requisition for use or hire not involving requisition of title.


 


“Confidential
Information” has the meaning specified in ‎Section 10.16 of the Indenture.


 


“Controlling
Party” has the meaning specified in Section 2.06 of the Intercreditor Agreement.


 


“Corporate
Trust Office” has the meaning specified in Section 1.01 of the Intercreditor Agreement.


 


“CRAF Program”
means the Civil Reserve Air Fleet Program authorized under 10 U.S.C. Section 9511 et seq. or any similar or substitute program
under the laws of the United States.


 


“Debt Rate”
means (i) with respect to any Series of Equipment Notes, the rate per annum specified for the applicable Series as such
in Schedule I to the Indenture (as amended, in the case of any Series of Additional Series Equipment Notes, or new Additional
Series Equipment Notes of any Series issued pursuant to ‎Section 2.02 of the Indenture, at the time of issuance of such Series),
and (ii) for any other purpose, with respect to any period, the weighted average interest rate per annum during such period
borne by the outstanding Equipment Notes, excluding in each case any interest payable at the Past Due Rate.


 


“Defaulted
Operative Indenture” means any Operative Indenture (the terms “Event of Default”, “Equipment Notes”
and “Payment Default” used in this definition have the meanings specified therefor in such Operative Indenture) with
respect to which (i) a Payment Default has occurred and is continuing or an Event of Default described in Section 4.01(a) of
such Operative Indenture has occurred and is continuing or (ii) an Event of Default other than an Event of Default
described in Section 4.01(a) of such Operative Indenture has occurred and is continuing and, in any such case, either
(x) the Equipment Notes issued thereunder have been accelerated and such acceleration has not been rescinded and annulled
in accordance therewith or (y) the loan trustee under such Operative Indenture has given Company a notice of its intention
to exercise one or more of the remedies specified in Section 4.02(a) of such Operative Indenture; provided that
in the event of a bankruptcy proceeding under the Bankruptcy Code under which Company is a debtor, if and so long as the trustee
or the debtor agrees to perform and performs all obligations of Company under such Operative Indenture and the Equipment Notes
issued thereunder in accordance with Section 1110(a)(2) of the Bankruptcy Code and cures defaults under such Operative
Indenture and Equipment Notes to the extent required by Section 1110(a)(2) of the Bankruptcy Code, such Operative Indenture
shall not be a Defaulted Operative Indenture.


 






    4


     


    

 


“Direction”
has the meaning specified in ‎Section 2.16 of the Indenture.


 


“Dollars”
and “$” mean the lawful currency of the United States.


 


“Eligible
Account” means an account established by and with an Eligible Institution at the request of Loan Trustee, which institution
agrees, for all purposes of the NY UCC including Article 8 thereof, that (a) such account shall be a “securities
account” (as defined in Section 8-501(a) of the NY UCC), (b) such institution is a “securities
intermediary” (as defined in Section 8-102(a)(14) of the NY UCC), (c) all property (other than cash) credited
to such account shall be treated as a “financial asset” (as defined in Section 8-102(a)(9) of the NY UCC),
(d) Loan Trustee shall be the “entitlement holder” (as defined in Section 8-102(a)(7) of the
NY UCC) in respect of such account, (e) it will comply with all entitlement orders issued by Loan Trustee to the exclusion
of Company, (f) it will waive or subordinate in favor of Loan Trustee all claims (including, without limitation, claims by
way of security interest, lien or right of set-off or right of recoupment), and (g) the “securities intermediary jurisdiction”
(under Section 8-110(e) of the NY UCC) shall be the State of New York.


 


“Eligible
Institution” means the corporate trust department of (a) WTC or any other Person that becomes a successor
Loan Trustee under the Indenture, in each case, acting solely in its capacity as a “securities intermediary” (as defined
in Section 8- 102(a)(14) of the NY UCC), or (b) a depository institution organized under the laws of the United
States of America or any one of the states thereof or the District of Columbia (or any U.S. branch of a foreign bank), which has
a Long-Term Rating (or, in each case, if a Long-Term Rating is not available, its Short-Term Rating equivalent) from Moody’s
of at least A3 or its equivalent and S&P of at least A- or its equivalent.


 


“Engine”
means (a) each of the two CF6-80C2B6F engines (generic manufacturer and model CF6-80C2) listed by manufacturer’s
serial number and further described on Annex A to the Indenture Supplement originally executed and delivered under the Indenture,
whether or not from time to time installed on the Airframe or installed on any other airframe or on any other aircraft and (b) any
Replacement Engine substituted for an Engine pursuant to ‎Section 7.04 or ‎7.05
of the Indenture; together in each case with any and all related Parts but excluding Excluded Equipment. At such time as a Replacement
Engine is so substituted and the Engine for which substitution is made is released from the Lien of the Indenture, such replaced
Engine shall cease to be an Engine under the Indenture.


 






    5


     


    

 


“Equipment
Note” means and includes any equipment notes issued under the Indenture in the form specified in ‎Section 2.01
thereof (as such form may be varied pursuant to the terms of the Indenture) and any Equipment Note issued in exchange therefor
or replacement thereof pursuant to ‎Section 2.07 or ‎2.08
of the Indenture.


 


“Equipment
Note Register” has the meaning specified in ‎Section 2.07 of the Indenture.


 


“Equipment
Note Registrar” has the meaning specified in ‎Section 2.07 of the Indenture.


 


“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA as in effect at the date of the Participation Agreement and any
subsequent provisions of ERISA amendatory thereof, supplemental thereto or substituted therefor.


 


“Event
of Default” has the meaning specified in ‎Section 4.01 of the Indenture.


 


“Event of
Loss” means, with respect to the Aircraft, Airframe or any Engine, any of the following events with respect to such
property:


 


(a)            the
loss of such property or of the use thereof due to destruction, damage beyond repair or rendition of such property permanently
unfit for normal use for any reason whatsoever;


 


(b)            any
damage to such property which results in an insurance settlement with respect to such property on the basis of a total loss, a
compromised total loss or a constructive total loss;


 


(c)            the
theft, hijacking or disappearance of such property for a period in excess of 180 consecutive days;


 


(d)            the
requisition for use or hire of such property by any government (other than a requisition for use or hire by a Government or the
government of the country of registry of the Aircraft) that results in the loss of possession of such property by Company (or
any Permitted Lessee) for a period in excess of 12 consecutive months;


 


(e)            the
operation or location of the Aircraft, while under requisition for use by any government, in any area excluded from coverage by
any insurance policy in effect with respect to the Aircraft required by the terms of ‎Section 7.06
of the Indenture, unless Company shall have obtained indemnity or insurance in lieu thereof from such government;


 


(f)            any
Compulsory Acquisition;


 






    6


     


    

 


(g)            as
a result of any law, rule, regulation, order or other action by the FAA or other government of the country of registry, the use
of the Aircraft or Airframe in the normal business of air transportation is prohibited by virtue of a condition affecting all
aircraft of the same type for a period of 18 consecutive months, unless Company is diligently carrying forward all steps that
are necessary or desirable to permit the normal use of the Aircraft or Airframe or, in any event, if such use is prohibited for
a period of three consecutive years; and


 


(h)            with
respect to an Engine only, any divestiture of title to or interest in an Engine or any event with respect to an Engine that is
deemed to be an Event of Loss with respect to such Engine pursuant to ‎Section 7.02(a)(vii) of
the Indenture.


 


An
Event of Loss with respect to the Aircraft shall be deemed to have occurred if an Event of Loss occurs with respect to the Airframe
unless Company elects to substitute a Replacement Airframe pursuant to‎Section 7.05(a)(i) of
the Indenture.


 


“Excluded
Equipment” means (i) defibrillators, enhanced emergency medical kits and other medical equipment, (ii)
any items, equipment or systems leased by Company or any Permitted Lessee (other than items, equipment, or systems that are leased
from Company pursuant to the applicable Lease) or owned by Company or any Permitted Lessee subject to a conditional sales agreement
or a security interest (other than the security interest granted under the Indenture) and (iii) cargo containers.


 


“FAA”
means the United States Federal Aviation Administration and any agency or instrumentality of the United States government succeeding
to its functions.


 


“FAA Bill
of Sale” means the bill of sale for the Aircraft on AC Form 8050-2 (or such other form as may be approved by the
FAA) executed by Manufacturer or an affiliate of Manufacturer in favor of Company and recorded with the FAA.


 


“Federal
Funds Rate” means a fluctuating interest rate per annum in effect from time to time, which rate per annum shall at all
times be equal to 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 for such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or if such rate is not so published for any day that is a Business Day,
the average of the quotations for such day for such transactions received by WTC from three Federal funds brokers of recognized
standing selected by it.


 


“Government”
means the government of any of Canada, France, Germany, Japan, The Netherlands, Sweden, Switzerland, the United Kingdom or the
United States and any instrumentality or agency thereof.


 






    7


     


    

 


“Indemnitee”
has the meaning specified in Section 4.02(b) of the Participation Agreement.


 


“Indenture”
means that certain Indenture and Security Agreement (N126FE)], dated as of the Closing Date, between Company and Loan Trustee,
as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms, including supplementation
by an Indenture Supplement pursuant to the Indenture.


 


“Indenture
Indemnitee” means (i) Loan Trustee, (ii) WTC, (iii) each separate or successor or additional trustee
appointed pursuant to ‎Section 8.02 of the Indenture, (iv) so long as it holds any Equipment Notes as agent and trustee
of any Pass Through Trustee, Subordination Agent, (v) the Liquidity Provider, (vi) so long as it is the holder of
any Equipment Notes, each Pass Through Trustee, and (vii) any of their respective successors and permitted assigns in such
capacities, directors, officers, employees, agents and servants. No holder of a Pass Through Certificate in its capacity as such
shall be an Indenture Indemnitee.


 


“Indenture
Supplement” means a supplement to the Indenture, substantially in the form of Exhibit A to the Indenture, which
particularly describes the Aircraft, and any Substitute Airframe, Replacement Airframe and/or Replacement Engine, included in
the property subject to the Lien of the Indenture.


 


“Insurance
Threshold” is the amount set forth as the Insurance Threshold in Exhibit C to the Indenture.


 


“Intercreditor
Agreement” means that certain Intercreditor Agreement, dated as of the Issuance Date, among the Pass Through Trustee,
the Liquidity Provider and Subordination Agent, as the same may be amended, supplemented or otherwise modified from time to time
in accordance with its terms; provided that, for purposes of any obligations of Company, no amendment, modification or
supplement to, or substitution or replacement of, such Intercreditor Agreement shall be effective unless consented to by Company.


 


“Interests”
has the meaning specified in ‎Section 7.06(a) of the Indenture.


 


“International
Interest” has the meaning ascribed to the defined term “international interest” under the Cape Town Treaty.


 


“International
Registry” means the international registry established pursuant to the Cape Town Treaty.


 


“Issuance
Date” means August 13, 2020.


 


“Lease”
means any lease permitted by the terms of ‎Section 7.02(a) of the Indenture.


 






    8


     


    

 


“Lien”
means any mortgage, pledge, lien, encumbrance, lease, sublease, sub- sublease or security interest.


 


“Liquidity
Facility” means, collectively, the Class AA Liquidity Facility.


 


“Liquidity
Provider” means, collectively, Class AA Liquidity Provider.


 


“Loan
Amount” has the meaning specified in ‎Section 7.06(c) of the Indenture.


 


“Loan Trustee”
has the meaning specified in the introductory paragraph of the Indenture.


 


“Loan
Trustee Liens” means any Lien attributable to WTC or Loan Trustee with respect to the Aircraft, any interest therein
or any other portion of the Collateral arising as a result of (i) claims against WTC or Loan Trustee not related to its interest
in the Aircraft or the administration of the Collateral pursuant to the Indenture, (ii) acts of WTC or Loan Trustee
not permitted by, or the failure of WTC or Loan Trustee to take any action required by, the Operative Documents or the Pass Through
Documents, (iii) claims against WTC or Loan Trustee relating to Taxes or Claims that are excluded from the indemnification
provided by Section 4.02 of the Participation Agreement pursuant to said ‎Section 4.02
or (iv) claims against WTC or Loan Trustee arising out of the transfer by any such party of all or any portion of
its interest in the Aircraft, the Collateral, the Operative Documents or the Pass Through Documents, except while an Event of
Default is continuing and prior to the time that Loan Trustee has received all amounts due to it pursuant to the Indenture.


 


“Long-Term
Rating” has the meaning specified in the Intercreditor Agreement.


 


“Loss
Payment Date” has the meaning specified in ‎Section 7.05(a) of the
Indenture.


 


“Majority
in Interest of Noteholders” means, as of a particular date of determination and subject to ‎Section 2.16
of the Indenture, the holders of at least a majority in aggregate unpaid principal amount of all Equipment Notes outstanding as
of such date (excluding any Equipment Notes actually known by Loan Trustee to be held by Company or any Affiliate thereof, it
being understood that a Pass Through Trustee shall be considered an Affiliate of Company as long as more than 50% in the aggregate
face amount of Pass Through Certificates issued by the corresponding Pass Through Trust are held and able to be voted by Company
or an Affiliate of Company or a Pass Through Trustee is otherwise under the control of Company or such Affiliate of Company (unless
all Equipment Notes then outstanding are held by Company or any Affiliate thereof, including Pass Through Trustees which are considered
Affiliates of Company pursuant hereto)); provided that for the purposes of directing any action or casting any vote or
giving any consent, waiver or instruction hereunder, any Noteholder of an Equipment Note or Equipment Notes may allocate, in such
Noteholder’s sole discretion, any fractional portion of the principal amount of such Equipment Note or Equipment Notes in
favor of or in opposition to any such action, vote, consent, waiver or instruction.


 








    9


     


    

 


“Make-Whole
Amount” means, with respect to any Equipment Note, the amount (as determined by an independent investment banker selected
by Company (and, following the occurrence and during the continuance of an Event of Default, reasonably acceptable to Loan Trustee)),
if any, by which (i) the present value of the remaining scheduled payments of principal and interest from the redemption
date to maturity of such Equipment Note computed by discounting each such payment on a semiannual basis from its respective Payment
Date (assuming a 360-day year of twelve 30 day months) using a discount rate equal to the Treasury Yield plus the Make-Whole Spread
exceeds (ii) the outstanding principal amount of such Equipment Note plus accrued but unpaid interest thereon to the
date of redemption. For purposes of determining the Make-Whole Amount, “Treasury Yield” means, at the date
of determination, the interest rate (expressed as a semiannual equivalent and as a decimal rounded to the number of decimal places
as appears in the Debt Rate of such Equipment Note and, in the case of United States Treasury bills, converted to a bond equivalent
yield) determined to be the per annum rate equal to the semiannual yield to maturity for United States Treasury securities maturing
on the Average Life Date and trading in the public securities market either as determined by interpolation between the most recent
weekly average constant maturity, non-inflation-indexed series 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 and (B) the other maturing as close as possible to, but later than, the Average Life Date, in each case
as reported in the most recent H.15 Page or, if a weekly average constant maturity, non-inflation indexed series yield to
maturity for United States Treasury securities maturing on the Average Life Date is reported in the most recent H.15 Page, such
weekly average yield to maturity as reported in such H.15 Page. “H.15 Page” means the H.15 Page published
by the Board of Governors of the Federal Reserve System on its website (or successor publication of such information by such Board
of Governors). The date of determination of a Make-Whole Amount shall be the third Business Day prior to the applicable redemption
date and the “most recent H.15 Page” means the H.15 Page published prior to the close of business on the
third Business Day prior to the applicable redemption date. “Average Life Date” means, for each Equipment Note
to be redeemed, the date which follows the redemption date by a period equal to the Remaining Weighted Average Life at the redemption
date of such Equipment Note. “Remaining Weighted Average Life” of an Equipment Note, at the redemption date
of such Equipment Note, means the number of days equal to the quotient obtained by dividing: (i) the sum of the products
obtained by multiplying (A) the amount of each then remaining installment of principal, including the payment due
on the maturity date of such Equipment Note, by (B) the number of days from and including the redemption date to but
excluding the scheduled Payment Date of such principal installment by (ii) the then unpaid principal amount of such
Equipment Note. Loan Trustee shall have no obligation to calculate, or verify the calculation of, the Make- Whole Amount.


 






    10


     


    

 


“Make-Whole
Spread” means, with respect to any Series of Equipment Notes, the percentage specified for the applicable Series as
such in Schedule I to the Indenture (as amended, in the case of any Additional Series, or new Additional Series issued pursuant
to ‎Section 2.02 of the Indenture, at the time of issuance of such Series).


 


“Manufacturer”
means The Boeing Company, a Delaware corporation, and its successors and assigns.


 


“Manufacturer’s
Consent” means the Manufacturer’s Consent and Agreement to Assignment of Warranties, dated as of the Closing Date,
substantially in the form of Exhibit D to the Participation Agreement.


 


“MCMV”
has the meaning in the case of the Airframe and any Substitute Airframe, specified in ‎Section 7.04(e) of
the Indenture.


 


“Minimum
Insurance Amount” has the meaning specified in ‎Section 7.06(a) of
the Indenture.


 


“Moody’s”
means Moody’s Investors Service, Inc.


 


“Noteholder”
means any Person in whose name an Equipment Note is registered on the Equipment Note Register (including, for so long as it is
the registered holder of any Equipment Notes, Subordination Agent on behalf of Pass Through Trustees pursuant to the provisions
of the Intercreditor Agreement).


 


“Noteholder
Liens” means any Lien attributable to any Noteholder on or against the Aircraft, any interest therein or any other portion
of the Collateral, arising out of any claim against such Noteholder that is not related to the Operative Documents or Pass Through
Documents, or out of any act or omission of such Noteholder that is not related to the transactions contemplated by, or that constitutes
a breach by such Noteholder of its obligations under, the Operative Documents or the Pass Through Documents.


 


“NY UCC”
means the UCC as in effect in the State of New York.


 


“Operative
Documents” means, collectively, the Participation Agreement, the Indenture, each Indenture Supplement, the Manufacturer’s
Consent and the Equipment Notes.


 


“Operative
Indentures” means, as of any date, each “Indenture” (as such term is defined in the Intercreditor Agreement),
dated as of the date of the Indenture, including the Indenture, but only if as of such date all “Equipment Notes”
(as defined in each such “Indenture”) are held by “Subordination Agent” under the “Intercreditor
Agreement”, as such terms are defined in each such “Indenture”.


 






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“Other Party
Liens” means any Lien attributable to any Pass Through Trustee (other than in its capacity as Noteholder), Subordination
Agent (other than in its capacity as Noteholder) or the Liquidity Provider on or against the Aircraft, any interest therein, or
any other portion of the Collateral arising out of any claim against such party that is not related to the Operative Documents
or Pass Through Documents, or out of any act or omission of such party that is not related to the transactions contemplated by,
or that constitutes a breach by such party of its obligations under, the Operative Documents or the Pass Through Documents.


 


“Parent”
means FedEx Corporation, a Delaware corporation (as defined in the Intercreditor Agreement).


 


“Parent Guarantee”
means the guarantee, dated as of the Closing Date, provided by Parent for the benefit of the Trustee, the Subordination Agent
and the Loan Trustee (each as defined in the Intercreditor Agreement), as the same may be amended, supplemented or otherwise modified
from time to time in accordance with its terms.


 


“Participation
Agreement” has the meaning set forth under the definition of “Agreement”.


 


“Parts”
means any and all appliances, parts, instruments, appurtenances, accessories, furnishings and other equipment of whatever nature
(other than (a) complete Engines or engines and (b) Excluded Equipment), so long as the same are incorporated
or installed in or attached to the Airframe or any Engine or so long as the same are subject to the Lien of the Indenture in accordance
with the terms of Section 7.04 thereof after removal from the Airframe or any Engine.


 


“Pass Through
Certificates” means the pass through certificates issued by any Pass Through Trust (and any other pass through certificates
for which such pass through certificates may be exchanged).


 


“Pass Through
Documents” means the Pass Through Trust Agreement, the Intercreditor Agreement and the Liquidity Facility.


 


“Pass Through
Trust” means the grantor trust that has been created pursuant to the Pass Through Trust Agreement to facilitate certain
of the transactions contemplated by the Operative Documents.


 


“Pass Through
Trust Agreement” means the Trust Supplement relating to the Class AA Pass Through Trust, together with the Basic
Pass Through Trust Agreement, as the same may be amended, supplemented or otherwise modified from time to time in accordance with
its terms.


 






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“Pass Through
Trustee” means the trustee under the Pass Through Trust Agreement, together with any successor in interest and any successor
or other trustee appointed as provided in the Pass Through Trust Agreement.


 


“Past Due Rate” means
the lesser of (a) with respect to (i) any payment made to a Noteholder under any Series of Equipment Notes, the
Debt Rate then applicable to such Series plus 1% and (ii) any other payment made under any Operative Document to any other
Person, the Debt Rate plus 1% (computed on the basis of a year of 360 days comprised of twelve 30-day months) and (b) the
maximum rate permitted by applicable law.


 


“Payment
Date” means, for any Equipment Note, each February 20 and August 20, commencing with February 20, 2021.


 


“Payment
Default” means the occurrence of an event that would give rise to an Event of Default under ‎Section 4.01(a) of
the Indenture upon the giving of notice or the passing of time or both.


 






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“Permitted
Investments” means each of (a) direct obligations of the United States and agencies thereof; (b) obligations
fully guaranteed by the United States; (c) certificates of deposit issued by, or bankers’ acceptances of, or time
deposits with, any bank, trust company or national banking association incorporated or doing business under the laws of the United
States or one of the states thereof having combined capital and surplus and retained earnings of at least $100,000,000 and having
a Long-Term Rating (or its Short- Term Rating equivalent) from either Moody’s of at least Aa3 (or its equivalent) or S&P
of at least AA- (or its equivalent) (or, if neither such organization then rates such institutions, an equivalent long-term rating
or short-term rating from any nationally recognized rating organization in the United States); (d) commercial paper of
any holding company of a bank, trust company or national banking association described in clause (c); (e) commercial paper
of companies having a Short-Term Rating assigned to such commercial paper by either Moody’s or S&P (or, if neither such
organization then rates such commercial paper, by any nationally recognized rating organization in the United States) equal to
the highest rating assigned by such organization; (f) Dollar-denominated certificates of deposit issued by, or time deposits
with, the European subsidiaries of (i) any bank, trust company or national banking association described in clause (c), or (ii)
any other bank or financial institution described in clause (g), (h) or (j) below; (g) United States-issued Yankee certificates
of deposit issued by, or bankers’ acceptances of, or commercial paper issued by, any bank having combined capital and surplus
and retained earnings of at least $100,000,000 and headquartered in Canada, Japan, the United Kingdom, France, Germany, Switzerland
or The Netherlands and having a Long-Term Rating (or its Short-Term Rating equivalent) from either Moody’s of at least Aa3
(or its equivalent) or S&P of at least AA- (or its equivalent) (or, if neither such organization then rates such institutions,
an equivalent long-term rating or short-term rating from any nationally recognized rating organization in the United States);
(h) Dollar-denominated time deposits with any Canadian bank having a combined capital and surplus and retained earnings
of at least $100,000,000 and having a Long-Term Rating (or its Short- Term Rating equivalent) from either Moody’s of at
least Aa3 (or its equivalent) or S&P of at least AA- (or its equivalent) (or, if neither such organization then rates such
institutions, an equivalent long-term rating or short-term rating from any nationally recognized rating organization in the United
States); (i) Canadian Treasury Bills fully hedged to Dollars; (j) repurchase agreements with any financial institution having
combined capital and surplus and retained earnings of at least $100,000,000 collateralized by transfer of possession of any of
the obligations described in clauses (a) through (i) above; (k) bonds, notes or other obligations of any state of the United
States, or any political subdivision of any state, or any agencies or other instrumentalities of any such state, including, but
not limited to, industrial development bonds, pollution control revenue bonds, public power bonds, housing bonds, other revenue
bonds or any general obligation bonds, that, at the time of their purchase, such obligations have a Long-Term Rating (or its Short-Term
Rating equivalent) from either Moody’s of at least Aa3 (or its equivalent) or S&P of at least AA- (or its equivalent)
(or, if neither such organization then rates such obligations, an equivalent long-term rating or short-term rating from any nationally
recognized rating organization in the United States); (1) bonds or other debt instruments of any company, if such bonds
or other debt instruments, at the time of their purchase, have a Long-Term Rating (or its Short-Term Rating equivalent) from either
Moody’s of at least Aa3 (or its equivalent) or S&P of at least AA- (or its equivalent) (or, if neither such organization
then rates such obligations, an equivalent long-term rating or short-term rating from any nationally recognized rating organization
in the United States); (m) mortgage backed securities (i) guaranteed by the Federal National Mortgage Association, the
Federal Home Loan Mortgage Corporation or the Government National Mortgage Association or having a Long-Term Rating (or its Short-Term
Rating equivalent) from either Moody’s of at least Aa3 (or its equivalent) or S&P of at least AA- (or its equivalent)
(or, if neither such organization then rates such securities, an equivalent long-term rating or short-term rating from any nationally
recognized rating organization in the United States) or, if unrated, deemed to be of a comparable quality by Loan Trustee and
(ii) having an average life not to exceed one year as determined by standard industry pricing practices presently in effect;
(n) asset-backed securities having a Long-Term Rating (or its Short-Term Rating equivalent) from either Moody’s of
at least Aa3 (or its equivalent) or S&P of at least AA- (or its equivalent) (or, if neither such organization then rates such
securities, an equivalent long-term rating or short-term rating from any nationally recognized rating organization in the United
States) or, if unrated, deemed to be of a comparable quality by Loan Trustee; and (o) such other investments approved in
writing by Loan Trustee; provided that the instruments described in the foregoing clauses shall have a maturity no later
than the earlier of (i) 365 days following the date of their purchase and (ii) the date when such investments may be required
for distribution. The bank acting as Pass Through Trustee or Loan Trustee is hereby authorized, in making or disposing of any
investment described herein, to deal with itself (in its individual capacity) or with any one or more of its affiliates, whether
it or such affiliate is acting as an agent of Pass Through Trustee or Loan Trustee or for any third person or dealing as principal
for its own account.


 






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“Permitted
Lessee” means any Person to whom Company is permitted to lease the Airframe or any Engine pursuant to ‎Section 7.02(a) of
the Indenture and is a party to a Lease.


 


“Permitted
Lien” has the meaning specified in ‎Section 7.01 of the Indenture.


 


“Person”
means any person, including any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock
company, trust, trustee, unincorporated organization or government or any agency or political subdivision thereof.


 


“Product
Assurance Document” means the Product Assurance Document attached as Exhibit C to the Aircraft General Terms Agreement
AGTA-FED, dated as of November 7, 2006.


 


“Purchase
Agreement” means Purchase Agreement No. 3712, dated as of December 14, 2011, which incorporates by reference
the Aircraft General Terms Agreement AGTA-FED, dated as of November 7, 2006, between Manufacturer and Company, as the same
may be amended, supplemented or otherwise modified from time to time in accordance with its terms.


 


“Rating Agencies”
has the meaning specified in the Intercreditor Agreement.


 


“Related
Additional Series Equipment Note” means, with respect to any particular Series of Additional Series Equipment
Notes and as of any date, an “Additional Series Equipment Note”, as defined in each Related Indenture, having
the same designation (i.e., “Series B”, “Series C” or the like) as such Series of
Additional Series Equipment Notes, but only if as of such date it is held by “Subordination Agent” under the
“Intercreditor Agreement”, as such terms are defined in such Related Indenture.


 


“Related
Equipment Note” means, as of any date, an “Equipment Note” as defined in each Related Indenture, but only
if as of such date it is held by “Subordination Agent” under the “Intercreditor Agreement”, as such terms
are defined in such Related Indenture.


 


“Related
Indenture” means each Operative Indenture (other than the Indenture).


 


“Related
Indenture Indemnitee” means each Related Noteholder. “Related Loan Trustee” means “Loan Trustee”
as defined in each Related Indenture.


 


“Related
Make-Whole Amount” means the “Make-Whole Amount”, as defined in each Related Indenture.


 


“Related
Noteholder” means a registered holder of a Related Equipment Note.


 






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“Related
Secured Obligations” means, as of any date, the outstanding principal amount of the Related Equipment Notes issued under
each Related Indenture, the accrued and unpaid interest (including, to the extent permitted by applicable law, post-petition interest
and interest on any overdue amounts) due thereon in accordance with such Related Indenture as of such date, the Related Make-Whole
Amount, if any, with respect thereto due thereon in accordance with such Related Indenture as of such date, and any other amounts
payable as of such date under the “Operative Documents” (as defined in each Related Indenture).


 


“Related
Series AA Equipment Note” means, as of any date, a “Series AA Equipment Note”, as defined in each
Related Indenture, but only if as of such date it is held by “Subordination Agent” under the “Intercreditor
Agreement”, as such terms are defined in such Related Indenture.


 


“Replacement
Aircraft” means the Aircraft of which a Replacement Airframe is part.


 


“Replacement
Airframe” means a Boeing 767-3S2F aircraft or a comparable or improved model of Manufacturer (except (a) Engines
or engines from time to time installed thereon and any and all Parts related to such Engine or engines and (b) Excluded
Equipment), that shall have been made subject to the Lien of the Indenture pursuant to ‎Section 7.05
thereof, together with all Parts relating to such aircraft.


 


“Replacement
Engine” means a CF6-80C2B6F engine (or an engine of the same or another manufacturer of a comparable or an improved
model and suitable for installation and use on the Airframe with the other Engine (or any other Replacement Engine being substituted
simultaneously therewith)) that is made subject to the Lien of the Indenture pursuant to ‎Section 7.04
or ‎Section 7.05 thereof, together with all Parts relating to such engine.


 


“Replacement
Liquidity Facility” has the meaning set forth in the Intercreditor Agreement.


 


“Replacement
Liquidity Provider” has the meaning set forth in the Intercreditor Agreement.


 


“Responsible
Officer” means, with respect to Company, its Chief Executive Officer, Chairman of the Board, its President, its Chief
Operating Officer, any Executive Vice President, any Senior Vice President, the Chief Financial Officer, any Vice President, the
Treasurer, the Assistant Treasurer, the Controller, the Assistant Secretary or the Secretary.


 


“S&P”
means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business.


 


“Section 1110”
means Section 1110 of the Bankruptcy Code.


 






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“Secured
Obligations” has the meaning specified in ‎Section 2.06 of the Indenture.


 


“Securities
Account” has the meaning specified in ‎Section 3.07 of the Indenture.


 


“Securities
Act” means the Securities Act of 1933, as amended from time to time.


 


“Securities
and Exchange Commission” means the United States Securities and Exchange Commission and any agency or instrumentality
of the United States government succeeding to its functions.


 


“Securities
Intermediary” has the meaning specified in ‎Section 3.07 of the Indenture.


 


“Series”
means any series of Equipment Notes, including the Series AA Equipment Notes, or if issued, any Additional Series Equipment
Notes.


 


“Series AA”
or “Series AA Equipment Notes” means Equipment Notes issued and designated as “Series AA Equipment
Notes” under the Indenture, in the original principal amount and maturities as specified in Schedule I to the Indenture
under the heading “Series AA Equipment Notes” and bearing interest at the Debt Rate for Series AA Equipment
Notes specified in Schedule I to the Indenture.


 


“Short-Term
Rating” has the meaning specified in the Intercreditor Agreement.


 


“Subordination
Agent” has the meaning specified in the introductory paragraph of the Participation Agreement.


 


“Substitute
Aircraft” means an airframe of a different model of the same or different manufacturer as the Airframe, together with
two engines suitable for installation and use on such airframe.


 


“Substitute
Airframe” means a Boeing 767-3S2F aircraft or a comparable or improved model of Manufacturer (except (a) Engines
or engines from time to time installed thereon and any and all Parts related to such Engine or engines and (b) Excluded
Equipment), that shall have been made subject to the Lien of the Indenture pursuant to ‎Section 7.04
thereof, together with all Parts relating to such aircraft.


 


“Tax”
and “Taxes” mean all governmental fees (including, without limitation, license, filing and registration fees)
and all taxes (including, without limitation, franchise, excise, stamp, value added, income, gross receipts, sales, use and property
taxes), withholdings, assessments, levies, imposts, duties or charges, of any nature whatsoever, together with any related penalties,
fines, additions to tax or interest thereon imposed, withheld, levied or assessed by any country, taxing authority or governmental
subdivision thereof or therein or by any international authority, including any taxes imposed on any Person as a result of such
Person being required to collect and pay over withholding taxes.


 






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“Transportation
Code” means that portion of Title 49 of the United States Code comprising those provisions formerly referred to as the
Federal Aviation Act of 1958, as amended, or any subsequent legislation that amends, supplements or supersedes such provisions.


 


“Trust Indenture
Act” means the Trust Indenture Act of 1939, as amended from time to time.


 


“Trust Officer”
means any officer within the Corporate Trust Office of Loan Trustee, including any vice president, assistant vice president, assistant
secretary, assistant treasurer or any other officer of Loan Trustee who shall have direct responsibility for the administration
of the Indenture, or any other officer of Loan Trustee to whom such matter is referred because of his or her knowledge of and
familiarity with the particular subject.


 


“Trust Supplement”
means that agreement supplemental to the Basic Pass Through Trust Agreement referred to in Schedule II to the Participation Agreement.


 


“UCC”
means the Uniform Commercial Code as in effect in any applicable jurisdiction.


 


“United States”
means the United States of America.


 


“WTC”
has the meaning specified in the introductory paragraph of the Participation Agreement.


 


“Warranty
Rights” means all right and interest of Company in, to and under Parts 1, 2, 3, 4, and 6 of the Product Assurance Document
attached as Exhibit C to the Aircraft General Terms Agreement AGTA-FED, dated as of November 7, 2006, but only to the
extent the same relate to continuing rights of Company in respect of any warranty or indemnity, express or implied, pursuant to
the Product Assurance Document with respect to the Airframe, it being understood that the Warranty Rights exclude any and all
other right, title and interest of Company in, to and under the Purchase Agreement and that the Warranty Rights and the grant
of a security interest therein are subject to the terms of the Manufacturer’s Consent.


 








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