exv4w10







Exhibit 4.10




Exhibit C to Note Purchase Agreement



 













INDENTURE AND SECURITY AGREEMENT




([Reg. No.])



Dated as of __________ ___, 20___1



between



AMERICAN AIRLINES, INC.,



and



U.S. BANK TRUST NATIONAL ASSOCIATION,



as Loan Trustee



__________________



*




One Boeing [Model]

(Generic Manufacturer and Model [Generic Manufacturer and Model]) Aircraft

U.S. Registration No. [Reg. No.]




 




 



			
	1	 	To insert the relevant Closing Date.






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Table of Contents




	 	 	 	 	 
	 	 	Page	 
	Article I	 	 	 	 
	 
	DEFINITIONS	 	 	 	 
	 
	Section 1.01. Definitions
	 	 	5	 
	Section 1.02. Other Definitional Provisions
	 	 	5	 
	 
	Article II	 	 	 	 
	 
	THE EQUIPMENT NOTES	 	 	 	 
	 
	Section 2.01. Form of Equipment Notes
	 	 	6	 
	Section 2.02. Issuance and Terms of Equipment Notes
	 	 	12	 
	Section 2.03. Method of Payment
	 	 	15	 
	Section 2.04. Withholding Taxes
	 	 	16	 
	Section 2.05. Application of Payments
	 	 	16	 
	Section 2.06. Termination of Interest in Collateral
	 	 	17	 
	Section 2.07. Registration, Transfer and Exchange of Equipment Notes
	 	 	17	 
	Section 2.08. Mutilated, Destroyed, Lost or Stolen Equipment Notes
	 	 	19	 
	Section 2.09. Payment of Expenses on Transfer; Cancellation
	 	 	19	 
	Section 2.10. Mandatory Redemption of Equipment Notes
	 	 	19	 
	Section 2.11. Voluntary Redemption of Equipment Notes
	 	 	20	 
	Section 2.12. Redemptions; Notice of Redemptions; Repurchases
	 	 	21	 
	Section 2.13. Subordination
	 	 	22	 
	Section 2.14. Certain Payments
	 	 	23	 
	Section 2.15. Repayment of Monies for Equipment Note Payments Held by the Loan Trustee
	 	 	25	 
	Section 2.16. Directions by the Subordination Agent
	 	 	26	 
	 
	Article III	 	 	 	 
	 
	RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME FROM THE COLLATERAL	 	 	 	 
	 
	Section 3.01. Basic Distributions
	 	 	26	 
	Section 3.02. Event of Loss; Mandatory Redemption; Voluntary Redemption
	 	 	27	 
	Section 3.03. Payments After Event of Default
	 	 	29	 
	Section 3.04. Certain Payments
	 	 	34	 
	Section 3.05. Payments to the Company
	 	 	35	 
	Section 3.06. Cooperation
	 	 	35	 
	Section 3.07. Securities Account
	 	 	35	 





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Table of Contents
(continued)




	 	 	 	 	 
	 	 	Page	 
	Article IV	 	 	 	 
	 
	EVENTS OF DEFAULT; REMEDIES OF LOAN TRUSTEE	 	 	 	 
	 
	Section 4.01. Events of Default
	 	 	36	 
	Section 4.02. Remedies
	 	 	38	 
	Section 4.03. Remedies Cumulative
	 	 	43	 
	Section 4.04. Discontinuance of Proceedings
	 	 	43	 
	Section 4.05. Waiver of Past Defaults
	 	 	43	 
	Section 4.06. Noteholders May Not Bring Suit Except Under Certain Conditions
	 	 	43	 
	Section 4.07. Appointment of a Receiver
	 	 	44	 
	 
	Article V	 	 	 	 
	 
	DUTIES OF THE LOAN TRUSTEE	 	 	 	 
	 
	Section 5.01. Notice of Event of Default
	 	 	45	 
	Section 5.02. Action upon Instructions; Certain Rights and Limitations
	 	 	45	 
	Section 5.03. Indemnification
	 	 	46	 
	Section 5.04. No Duties Except as Specified in Indenture or Instructions
	 	 	46	 
	Section 5.05. No Action Except under Indenture or Instructions
	 	 	46	 
	Section 5.06. Investment of Amounts Held by the Loan Trustee
	 	 	46	 
	 
	Article VI	 	 	 	 
	 
	THE LOAN TRUSTEE	 	 	 	 
	 
	Section 6.01. Acceptance of Trusts and Duties
	 	 	48	 
	Section 6.02. Absence of Certain Duties
	 	 	48	 
	Section 6.03. No Representations or Warranties as to the Documents
	 	 	48	 
	Section 6.04. No Segregation of Monies; No Interest
	 	 	49	 
	Section 6.05. Reliance; Agents; Advice of Counsel
	 	 	49	 
	Section 6.06. Instructions from Noteholders
	 	 	49	 
	 
	Article VII	 	 	 	 
	 
	OPERATING COVENANTS OF THE COMPANY	 	 	 	 
	 
	Section 7.01. Liens
	 	 	50	 
	Section 7.02. Possession, Operation and Use, Maintenance and Registration
	 	 	51	 
	Section 7.03. Inspection; Financial Information
	 	 	59	 





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Table of Contents
(continued)





	 	 	 	 	 
	 	 	Page	 
	Section 7.04. Replacement and Pooling of Parts; Alterations, Modifications and Additions; Airframe and Engine Substitutions
	 	 	60	 
	Section 7.05. Loss, Destruction or Requisition
	 	 	64	 
	Section 7.06. Insurance
	 	 	71	 
	 
	Article VIII	 	 	 	 
	 
	SUCCESSOR AND ADDITIONAL TRUSTEES	 	 	 	 
	 
	Section 8.01. Resignation or Removal; Appointment of Successor
	 	 	78	 
	Section 8.02. Appointment of Additional and Separate Trustees
	 	 	80	 
	 
	Article IX	 	 	 	 
	 
	AMENDMENTS AND WAIVERS	 	 	 	 
	 
	Section 9.01. Amendments to this Indenture without Consent of Holders
	 	 	82	 
	Section 9.02. Amendments to this Indenture with Consent of Holders
	 	 	83	 
	Section 9.03. Amendments, Waivers, Etc. of the Participation Agreement or Parent Guarantee
	 	 	85	 
	Section 9.04. Revocation and Effect of Consents
	 	 	85	 
	Section 9.05. Notation on or Exchange of Equipment Notes
	 	 	85	 
	Section 9.06. Trustee Protected
	 	 	86	 
	Section 9.07. No Consent of Individual Indenture Indemnitees Required
	 	 	86	 
	 
	Article X	 	 	 	 
	 
	MISCELLANEOUS	 	 	 	 
	 
	Section 10.01. Termination of Indenture
	 	 	86	 
	Section 10.02. No Legal Title to Collateral in the Noteholders
	 	 	87	 
	Section 10.03. Sale of Aircraft by Loan Trustee Is Binding
	 	 	87	 
	Section 10.04. Indenture for Benefit of Company, Noteholders, Loan
Trustee, Other Indenture Indemnitees and Related
Indenture Indemnitees
	 	 	87	 
	Section 10.05. Notices
	 	 	87	 
	Section 10.06. Severability
	 	 	88	 
	Section 10.07. No Oral Modification or Continuing Waivers
	 	 	89	 
	Section 10.08. Successors and Assigns
	 	 	89	 
	Section 10.09. Headings
	 	 	89	 
	Section 10.10. Normal Commercial Relations
	 	 	89	 
	Section 10.11. Voting by Noteholders
	 	 	89	 
	Section 10.12. Section 1110
	 	 	89	 





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Table of Contents
(continued)





	 	 	 	 	 
	 	 	Page	 
	Section 10.13. The Company’s Performance and Rights
	 	 	90	 
	Section 10.14. Counterparts
	 	 	90	 
	Section 10.15. Governing Law
	 	 	90	 
	Section 10.16. Confidential Information
	 	 	90	 
	Section 10.17. Submission to Jurisdiction
	 	 	91	 






	 	 	 	 	 

	Exhibit A

	 	—
	 	Form of Indenture Supplement
	Exhibit B

	 	—
	 	List of Permitted Countries
	Exhibit C

	 	—
	 	Aircraft Type Values for Section 7.06(b)
	Schedule I

	 	—
	 	Description of Equipment Notes
	Schedule II

	 	—
	 	Pass Through Trust Agreement and Pass Through Trust Supplements
	Annex A

	 	—
	 	Definitions







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INDENTURE AND SECURITY AGREEMENT

([Reg. No.])




     This INDENTURE AND SECURITY AGREEMENT ([Reg. No.]), dated as of _________ ___,
20__2, is made by and between AMERICAN AIRLINES, INC., a Delaware corporation (together
with its successors and permitted assigns, the “Company”), and U.S. BANK TRUST NATIONAL
ASSOCIATION, a national banking association, not in its individual capacity, except as expressly
stated herein, but solely as Loan Trustee hereunder (together with its permitted successors
hereunder, the “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 the Company of the Equipment Notes specified on Schedule I hereto
(as, in the case of any Series B Equipment Notes or any Additional Series Equipment Notes issued
after the Closing Date, such Schedule I may be amended in connection with such issuance) and
(ii) the assignment, mortgage and pledge by the Company to the Loan Trustee, as part of the
Collateral hereunder, among other things, of all of the Company’s estate, right, title and interest
in and to the Aircraft, as security for, among other things, the Company’s obligations to the Loan
Trustee, for the equal and proportionate benefit and security of the Noteholders, the Indenture
Indemnitees and the 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 (as, in the case of any Series B Equipment Notes or any Additional Series
Equipment Notes issued after the Closing Date, such Schedule I may be amended in connection with
such issuance), when executed by the Company and authenticated and delivered by the Loan Trustee
hereunder, the valid, binding and enforceable obligations of the Company; and



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



GRANTING CLAUSE





 




			
	2	 	To insert the relevant Closing Date.





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     NOW, THEREFORE, (x) to secure (i) the prompt and complete payment (whether at
stated maturity, by acceleration or otherwise) of principal of, interest on (including interest on
any overdue amounts), and Make-Whole Amount, if any, with respect to, and all other amounts due
under, the Equipment Notes, (ii) all other amounts payable by the Company under the
Operative Documents and (iii) the performance and observance by the Company of all the
agreements and covenants to be performed or observed by the Company for the benefit of the
Noteholders and the 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 the Noteholders, the Indenture Indemnitees and the Related Indenture
Indemnitees to the Company at or before the Closing Date, the receipt and adequacy of which are
hereby acknowledged, the Company does hereby grant, bargain, sell, convey, transfer, mortgage,
assign, pledge and confirm unto the Loan Trustee and its successors in trust and permitted assigns,
for the security and benefit of the Noteholders, the Indenture Indemnitees and the Related
Indenture Indemnitees, a first priority security interest in, and mortgage lien on, all estate,
right, title and interest of the 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 may from time to time be 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 any substitutions, replacements, additions, improvements,
accessions and accumulations that constitute items excluded from the definition of Parts by
clauses (b), (c) and (d) thereof) 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 flight records, logs, manuals, maintenance data and
inspection, modification and overhaul 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;



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




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




     (4) all moneys and securities held by the Loan Trustee pursuant to paragraph (ix) of
clause “third” of Section 3.03, all rents, revenues and other proceeds collected by the
Loan Trustee pursuant to Section 4.02(a), all moneys and securities from time to time paid
or deposited or required to be paid or deposited to or with the Loan Trustee by or for the
account of the Company pursuant to any term of any Operative Document and held or required
to be held by the 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, the Company shall have the right, to the
exclusion of the 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 the Company’s name all rights and powers of the
Buyer (as defined in the Purchase Agreement) 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, the Loan Trustee shall not enter into any amendment or
modification of the Purchase Agreement that would alter the rights, benefits or obligations of the
Company thereunder;



     TO HAVE AND TO HOLD all and singular the aforesaid property unto the Loan Trustee, and its
successors and permitted assigns, in trust for the equal and proportionate benefit and security of
the Noteholders, the Indenture Indemnitees and the 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,



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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, the 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 any Noteholder, the Loan
Trustee, any other Indenture Indemnitee or any Related Indenture Indemnitee shall be required or
obligated in any manner to perform or fulfill any obligations of the Company under or pursuant to
any Operative Document, or to 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 the Company
from any of its duties or obligations under the Purchase Agreement), the Noteholders, the Loan
Trustee, the other Indenture Indemnitees and the Related Indenture Indemnitees confirm for the
benefit of the 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 the Manufacturer, shall apply to and be binding upon the Noteholders, the Loan Trustee,
the other Indenture Indemnitees and the Related Indenture Indemnitees to the same extent as the
Company. The Company hereby directs the Manufacturer, so long as an Event of Default shall have
occurred and be continuing, to pay all amounts, if any, payable to the Company pursuant to the
Warranty Rights directly to the Loan Trustee to be held and applied as provided herein. Nothing
contained herein shall subject the 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 the
Manufacturer thereunder except as provided in the Manufacturer’s Consent.



     Subject to the terms and conditions hereof, the Company does hereby irrevocably constitute the
Loan Trustee the true and lawful attorney of the Company (which appointment is coupled with an
interest) with full power (in the name of the 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 the 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



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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 the Loan
Trustee may deem to be necessary or advisable in the premises; provided that the Loan
Trustee shall not exercise any such rights except during the continuance of an Event of Default.
The Company agrees that, promptly upon receipt thereof, to the extent required by the Operative
Documents, it will transfer to the Loan Trustee any and all monies from time to time received by
the Company constituting part of the Collateral, for distribution by the Loan Trustee pursuant to
this Indenture.




     The 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 the
Loan Trustee, except as otherwise provided in or permitted by any Operative Document.



     The Company agrees that at any time and from time to time, upon the written request of the
Loan Trustee, the 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 the 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 the 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 the Company will not expand any obligations or limit
any rights of the 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.



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[Reg. No.]




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     (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.



     (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 EXEMPTIONS FROM SUCH REGISTRATION REQUIREMENTS ARE AVAILABLE. IN
ADDITION, THIS EQUIPMENT NOTE IS SUBJECT TO RESTRICTIONS ON TRANSFER PURSUANT TO
THE PARTICIPATION AGREEMENT REFERRED TO HEREIN.



AMERICAN AIRLINES, INC.

SERIES 2011-2[___][REG.NO.] EQUIPMENT NOTE DUE _______ __, 20__

ISSUED IN CONNECTION WITH THE BOEING MODEL [MODEL]



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(GENERIC MODEL [GENERIC MODEL]) AIRCRAFT

BEARING UNITED STATES REGISTRATION NUMBER [REG. NO.]




	 	 	 	 	 

	No.____
	 	Date: [______,__]
	 	$________________
	DEBT RATE
	 	 	 	MATURITY DATE
	[____]%
	 	 	 	__________ ___, 20___






     AMERICAN AIRLINES, INC. (together with its successors and permitted assigns, the “Company”)
hereby promises to pay to ___________, or the registered assignee thereof, the principal amount of
________________ Dollars ($_________) [on __________]3 [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,]4 and to
pay, on each Payment Date, interest in arrears on the principal amount remaining unpaid from time
to time 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 at a rate per annum (calculated on the basis of a year of
360 days comprised of twelve 30-day months) equal to the Debt Rate shown above. [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.]5 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 ([Reg.
No.]), dated as of _________ ___, 20__, between the Company and U.S. Bank Trust National
Association, as Loan Trustee (the “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





 




			
	3	 	To be inserted in non-installment Equipment
Notes.
	 
	4	 	To be inserted in installment Equipment
Notes.
	 
	5	 	To be inserted in installment Equipment
Notes.





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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 shall be overdue, in each case for the period 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 the 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 the Loan Trustee, or as otherwise
provided in the Indenture. The Company shall not have any responsibility for the distribution of
any such payment to the 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 the Loan Trustee for cancellation.



     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, interest and Make-Whole Amount, if any, 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
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 the Company pursuant to the terms of the



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Indenture. The Collateral is held
by the 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, the
Company and the 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 the Company nor the Loan Trustee shall be affected by notice to the contrary.



     This Equipment Note is subject to redemption as provided in Section 2.10, Section 2.11 and
Section 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 Section 4.01(a)(ii) and
Section 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 Section 4.01(g), Section 4.01(h) or
Section 4.01(i) of the Indenture, except,



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in each case, as expressly provided in Article III of the
Indenture or Article III of the applicable Related Indenture, as appropriate.




     The indebtedness evidenced by this Equipment Note is[,]6 [(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 A Equipment
Notes]7[Series A Equipment Notes and Series B Equipment Notes]8, and certain
other Secured Obligations, and (ii)]9 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 the 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
or the applicable Related Indenture and (c) appoints the 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 Noteholder of this Equipment Note, by accepting the same,
agrees that if such Noteholder, in its capacity as a Noteholder, shall receive 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 the Loan Trustee and forthwith turn over such amount to the 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 the 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.





 




			
	6	 	To be inserted in the case of a Series A
Equipment Note.
	 
	7	 	To be inserted in the case of a Series B
Equipment Note.
	 
	8	 	To be inserted in the case of an Additional
Series Equipment Note.
	 
	9	 	To be inserted in the case of a Series B
Equipment Note or an Additional Series Equipment Note.





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     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.



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



	 	 	 	 	 
	 	AMERICAN AIRLINES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



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	 	LOAN TRUSTEE’S CERTIFICATE OF 

AUTHENTICATION

 	 




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



	 	 	 	 	 
	 	U.S. BANK TRUST NATIONAL ASSOCIATION,



not in its individual capacity but solely as 
Loan
Trustee

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



SCHEDULE I10




EQUIPMENT NOTE AMORTIZATION




	 	 	 

	 
	 	Percentage of Original
	 
	 	Principal Amount
	Payment Date
	 	to be Paid
	 
	 	 





[SEE “EQUIPMENT NOTES AMORTIZATION” ON SCHEDULE I TO



THIS INDENTURE]



* * *



     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 A Equipment Notes, Series B Equipment Notes (if issued) and Additional Series





 




			
	10	 	To be inserted in installment Equipment
Notes.





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Equipment
Notes (if issued) and (b) the maturities and principal amounts and shall bear
interest at the applicable Debt Rates specified in Schedule I hereto (as, in the case of any
Series B Equipment Notes or any Additional Series Equipment Notes issued after the Closing Date,
such Schedule I may be amended in connection with such issuance). On the Closing Date, each Series
A Equipment Note, Series B Equipment Note (if issued) and Additional Series Equipment Note (if
issued) shall be issued to the Subordination Agent on behalf of each of the Pass Through Trustees
of the Pass Through Trusts then in existence created under the Pass Through Trust Agreements
referred to in Schedule II. If no Series B Equipment Notes are issued on the Closing Date, then,
subject to compliance with the conditions set forth in Section 4(a)(v) of the Note Purchase
Agreement, Section 2.02 of the Participation Agreement and Section 8.01(d) of the Intercreditor
Agreement, the Company shall have the option to issue Series B Equipment Notes after the Closing
Date. In addition, if all of the Series B Equipment Notes (whether issued on or after the Closing
Date) shall have been redeemed pursuant to Section 2.11(b), the Company shall, subject to
compliance with the conditions set forth in Section 4(a)(v) of the Note Purchase Agreement, Section
2.02 of the Participation Agreement and Section 8.01(c) of the Intercreditor Agreement, have the
option to issue new Series B Equipment Notes with the same Series B designation as, but with terms
that may be the same as or different from those of, the redeemed Series B Equipment Notes. Any
Series B Equipment Notes issued after the Closing Date pursuant to any of the two immediately
preceding sentences shall have such maturities, principal amounts and interest rate as specified in
Schedule I hereto in respect of Series B Equipment Notes, as such Schedule I may be amended in
connection with any such issuance. One separate series of Additional Series Equipment Notes may be
issued concurrently with, or after, the initial issuance of any Series B Equipment Notes hereunder
and such series of Additional Series 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. Without limitation of the foregoing, if any Additional Series
Equipment Notes shall have been issued hereunder, new Additional Series Equipment Notes may be
issued pursuant to the provisions of Section 2.11(b). 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.




     Each Equipment Note shall bear interest at the Debt Rate specified for such 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



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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 A Equipment Note and, if issued, each Series B
Equipment Note and
Additional Series Equipment Note shall be payable in installments or in a single payment on
the Payment Dates set forth in Schedule I to 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 (as, in the case of any Series B Equipment
Notes or any Additional Series Equipment Notes issued after the Closing Date, such Schedule I may
be amended in connection with such issuance) 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. 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 shall be 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.




     The Equipment Notes shall be executed on behalf of the 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 the Company shall bind the 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 the Loan
Trustee by the manual signature of one of its authorized officers, and such



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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 the
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 the Loan Trustee at the Corporate Trust Office for
distribution among the Noteholders in the manner provided herein, and payment of such amount by the
Company to the Loan Trustee shall be deemed to satisfy the Company’s obligation to make such
payment. The 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,
the 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 the Company), all amounts paid by the 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 the Subordination Agent on behalf of the Pass Through
Trustees, the Loan Trustee shall, unless instructed by the Company to use another method, pay such
amounts by check mailed to the 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, the Loan Trustee shall fail (other than as a result of a failure of
the 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, the 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 the 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 the Loan Trustee for cancellation. Notwithstanding any
other provision of this Indenture to the contrary, the 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 the Loan Trustee to do so in view of the time of day when the funds to be so
transferred were



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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 the 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
the Loan Trustee consistent with this Section 2.03.




     Section 2.04. Withholding Taxes. The Loan Trustee shall exclude and withhold at the
appropriate rate from each payment of principal amount of, interest on, 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 law. The Loan Trustee
agrees to act as such withholding agent and, in connection therewith, 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
the 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 the Company) appropriate documentation showing the payment thereof, together with such
additional documentary evidence as any such Noteholder may reasonably request from time to time.
The Loan Trustee agrees to file any other information reports as it may be required to file under
United States law.



     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 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;



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     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 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 the 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.



     Section 2.07. Registration, Transfer and Exchange of Equipment Notes. The Loan
Trustee shall keep a register or registers (the “Equipment Note Register”) in which the
Loan Trustee shall provide for the registration of Equipment Notes and the registration of
transfers of 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 the Loan Trustee. The 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 the 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, the Company shall execute, and the 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 the
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 the Loan Trustee at the Corporate Trust Office. Whenever any



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Equipment
Notes are so surrendered for exchange, the Company shall execute, and the Loan Trustee shall
authenticate and deliver, the Equipment Notes which the 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 the 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 the Company or the Loan Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Loan
Trustee, duly executed by the Noteholder or such Noteholder’s attorney duly authorized in writing,
and the Company and the Loan Trustee shall require evidence satisfactory to it as to the compliance
of any such transfer with the Securities Act and the securities laws of any applicable state or
jurisdiction. The 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 shall have
been paid on such old Equipment Note. The Company 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.
The Company and the Loan Trustee shall in all cases deem and treat the Person in whose name any
Equipment Note shall have been issued and registered on the Equipment Note Register as the absolute
owner and the 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 the Company nor
the Loan Trustee shall be affected by any notice to the contrary. The Loan Trustee will promptly
notify the 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 the
Indenture, the Related Indentures, the Participation Agreement, the other Operative Documents and
the Pass Through Documents applicable to the 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 Section 6.01, Section 7.10 and Section 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 the Noteholders, including the
Pass Through Trustees, in the Participation Agreement and (ii) agrees to the restrictions
set forth in Section 4.01(a)(ii) and Section 4.01(a)(iii) of the Intercreditor




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Agreement, and shall
be deemed to have covenanted to the parties to the Intercreditor Agreement not to give any
direction to, or otherwise authorize, the Loan Trustee to take any action that would violate
Section 4.01(a)(ii) or Section 4.01(a)(iii) of the Intercreditor Agreement. Subject to compliance
by the Noteholder and its transferee (if any) of the requirements set forth in this Section 2.07
and in Section 2.09, the Loan Trustee and the 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.




     Section 2.08. Mutilated, Destroyed, Lost or Stolen Equipment Notes. If any Equipment
Note becomes mutilated, destroyed, lost or stolen, the 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 the 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 the Loan Trustee, and a photocopy
thereof shall be furnished to the Company. If the Equipment Note being replaced has been
destroyed, lost or stolen, the holder of such Equipment Note shall furnish to the Company and the
Loan Trustee such security or indemnity as may be required by them to save the Company and the Loan
Trustee harmless and evidence satisfactory to the Company and the 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
the 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.



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



     Section 2.10. Mandatory Redemption of Equipment Notes. The 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 the Company shall have 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



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excluding) the date of redemption, but without any Make-Whole
Amount, and all other Secured Obligations owed or then due and payable to the Noteholders.




     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 the Company
at any time upon at least 15 days’ revocable prior written notice to the Loan Trustee and the
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 the
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.



     (c) If issued, all of the Series B Equipment Notes or all of the Additional Series Equipment
Notes (or both) may be redeemed by the Company upon at least 15 days’ revocable prior written
notice to the Loan Trustee and the 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 the 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 Series B Equipment Notes (in the case of redemption
hereunder of Series B Equipment Notes) or the Related Additional Series Equipment Notes in
respect of the Additional Series Equipment Notes being redeemed (in the case of redemption
hereunder of any Additional Series Equipment Notes), as the case may be, shall also be
redeemed; and




     (ii) if, simultaneously with such redemption, new Series B Equipment Notes (in the
case of redemption hereunder of Series B Equipment Notes) or new Additional Series
Equipment Notes (in the case of redemption hereunder of Additional Series Equipment Notes),
which, in any such case, may have 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, Section 4(a)(v) of the Note
Purchase Agreement and Section 8.01(c) of the Intercreditor Agreement.



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     (b) Notwithstanding anything to the contrary in Section 2.11(a) or (b), so long as the 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 the
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. The Company may at any time repurchase any of the Equipment Notes not held by the
Subordination Agent at any price and may hold or
resell such Equipment Notes or surrender such Equipment Notes to the Loan Trustee for
cancellation.



     (b) Notice of redemption with respect to the Equipment Notes shall be given by the Loan
Trustee by first-class mail, postage prepaid, mailed 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 the Company to the Loan Trustee given no later
than three days prior to the redemption date. All such 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, the Company (or any person on behalf of the 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 in the Collateral, deposit or cause to be deposited
with the Loan Trustee by 11:00 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 the Loan Trustee, and from and after such redemption date
(unless there shall be 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



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Note for redemption in accordance with said notice, such Equipment Note shall be
redeemed at the redemption price.




     Section 2.13. Subordination. (a) The indebtedness evidenced by the Series B
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 the issuance of such Series B Equipment Notes),
subordinate and subject in right of payment to the prior payment in full of the Secured Obligations
in respect of the Series A Equipment Notes, and the Series B Equipment Notes, if issued, shall be
issued subject to such provisions. The indebtedness evidenced by the 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 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 A Equipment Notes and the Series B Equipment Notes, and
any Additional Series Equipment Notes, if issued, shall be issued subject to such provisions. The
indebtedness evidenced by the Series A Equipment Notes is, and the indebtedness evidenced by the
Series B Equipment Notes, if issued, and the 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 A Equipment Notes are, and the Series B Equipment Notes and the 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 the Loan Trustee or the Related Loan Trustee under the
applicable Related Indenture, as applicable, on such Noteholder’s behalf to take such action as may
be necessary or appropriate to effectuate the subordination as provided in this Indenture and the
applicable Related Indenture, and (iii) appoints the Loan Trustee or the Related Loan
Trustee under the applicable Related Indenture, as applicable, as such Noteholder’s
attorney-in-fact for such purpose.



     (b) The Company, the 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), Section 4.01(h) or
Section 4.01(i), except, in each case, as expressly provided in Article III of this Indenture or
Article III of the applicable Related Indenture, as appropriate.



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     (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, shall receive 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 hereof, it will hold any amount so
received in trust for the Loan Trustee and forthwith turn over such amount to the Loan Trustee in
the form received to be applied as provided in Article III hereof, 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.11 The Company agrees to pay to the Loan
Trustee for distribution in accordance with Section 3.04:




     (a) an amount or amounts equal to the fees payable to the Class A Liquidity Provider
under Section 2.03 of the Class A 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 shall be the sum of the then outstanding aggregate principal amount of
the Series A Equipment Notes and the denominator of which shall be the sum of the then
outstanding aggregate principal amount of all “Series A Equipment Notes” (as defined in the
Note Purchase Agreement) with respect to all of the “Indentures” (as defined in the Note
Purchase 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 Class A 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);





 




			
	11	 	To be revised to reflect any Class B
Liquidity Facility or any liquidity facility for the Additional Series Pass
Through Certificates.





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     (c) an amount equal to interest on any Downgrade Advance (other than any Applied
Downgrade Advance) payable under Section 3.07 of the Class A 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);




     (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 Class A 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 A Equipment Notes” (as defined in the Note Purchase 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 Class A 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, Section 3.03 or Section 3.09 of the
Class A 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 Investment Earnings from any Final
Advance plus any amount of interest at the Past Due Rate actually payable (whether or not
in fact paid) by the Company in respect of the overdue scheduled interest on the “Series A
Equipment Notes” (as defined in the Note Purchase 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 shall be the then aggregate
overdue amounts of interest on the Series A 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 shall be the then aggregate overdue amounts of interest on all “Series
A Equipment Notes” (as defined in the Note Purchase Agreement) with respect to all of the
“Indentures” (as defined in the Note Purchase 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 Class A Liquidity Provider by the Subordination Agent as
borrower under Section 3.01 (other than in respect of an Unpaid Advance, Applied Provider
Advance or Applied Special Termination



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Advance), Section 3.03 (other than in respect of an
Unpaid Advance, Applied Provider Advance or Applied Special Termination Advance), Section
7.05 and Section 7.07 of the Class A 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 the 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 the Company
in respect of such compensation under any other Operative Document or Pass Through
Document).



     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” shall have the meanings specified in the Class A Liquidity Facility or the
Intercreditor Agreement, as applicable.



     Section 2.15. Repayment of Monies for Equipment Note Payments Held by the Loan
Trustee. Any money held by the 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 deposited pursuant to Section 2.12(c) or Section 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 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 the Loan Trustee shall be satisfied,
after 60 days’ notice from the Company, is one month prior to the escheat period provided under
applicable state law) shall be paid to the Company. The Noteholders of any outstanding Equipment
Notes shall thereafter, as unsecured general creditors, look only to the Company for payment
thereof, and all liability of the Loan Trustee with respect to such trust money shall thereupon
cease; provided that the Loan Trustee, before being required to make any such repayment,
may at the expense of the Company cause to be mailed to each such Noteholder notice that such money
remains unclaimed and that, after a date specified in such notice which shall not be less than 30
days from the date of mailing, any unclaimed balance of such money then remaining will be repaid to
the Company as provided herein.



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     Section 2.16. Directions by the Subordination Agent. So long as the 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,
the 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. The
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 the 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.



ARTICLE III



RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME

FROM THE COLLATERAL



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




     first, so much of such payment as shall be 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 A Equipment Notes
shall be distributed to the Noteholders of Series A 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 A Equipment Note bears to the aggregate amount of the
payments then due under all Series A Equipment Notes;




     second, after giving effect to clause “first” above (if any Series B Equipment Notes
shall have been issued hereunder and except as this clause



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“second” may be modified
pursuant to clause (xv) of Section 9.01 in connection with the original issuance or
subsequent redemption and issuance from time to time of Series B Equipment Notes), so much
of such payment remaining as shall be 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 B Equipment Notes shall
be distributed to the Noteholders of Series B 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 B Equipment Note bears to the aggregate
amount of the payments then due under all Series B Equipment Notes;




     third, after giving effect to clause “second” above (if any Additional Series
Equipment Notes shall have been issued hereunder and except as this clause “third” may be
modified pursuant to clause (xv) of Section 9.01 in connection with the original issuance
or subsequent redemption and issuance from time to time of Additional Series Equipment
Notes), 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 shall be distributed to the Noteholders of Additional Series 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 Additional Series Equipment Note bears to the
aggregate amount of the payments then due under all Additional Series Equipment Notes; and




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



     Section 3.02. Event of Loss; Mandatory Redemption; Voluntary Redemption. Except as
otherwise provided in Section 3.03 and Section 3.04 and subject to the following proviso, any
payments (including insurance and requisition proceeds) received by the Loan Trustee as the result
of (a) an Event of Loss with respect to the Airframe or the Airframe and one or more
Engines installed thereon (including amounts paid by the Company pursuant to Section 2.10) or
(b) a voluntary redemption of Equipment Notes pursuant to Section 2.11 shall be applied to
redemption of Equipment Notes pursuant to Section 2.10 or Section 2.11, as applicable, and to
payment of all other Secured Obligations and Related Secured Obligations then due by applying such
payments in the following order of priority:



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     first, so much of such payments as shall be required (i) to reimburse the Loan
Trustee and the Noteholders for any reasonable costs or expenses actually incurred in
connection with such redemption for which they are entitled to reimbursement, or indemnity
by the Company, under the Operative Documents; and then (ii) to pay all other
Secured Obligations then due to the Noteholders, the Loan Trustee and the 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 payments remaining as shall be required to pay the amounts
specified in subclause (i) of clause “third” of Section 3.03 plus Make-Whole
Amount, if any, then due and payable in respect of the Series A Equipment Notes;




     (ii) after giving effect to subclause (i) above (if any Series B Equipment
Notes shall have been issued hereunder and except as this subclause (ii) may be
modified pursuant to clause (xv) of Section 9.01 in connection with the original
issuance or subsequent redemption and issuance from time to time of Series B
Equipment Notes) , so much of such payments remaining as shall be required to pay
the amounts specified in subclause (ii) of clause “third” of Section 3.03 plus
Make-Whole Amount, if any, then due and payable in respect of the Series B
Equipment Notes; and




     (iii) after giving effect to subclause (ii) above (if any Additional Series
Equipment Notes shall have been issued hereunder and except as this subclause (iii)
may be modified pursuant to clause (xv) of Section 9.01 in connection with the
original issuance or subsequent redemption and issuance from time to time of
Additional Series Equipment Notes), so much of such payments remaining as shall be
required to pay the amounts specified in subclause (iii) of clause “third” of
Section 3.03 plus Make-Whole Amount, if any, then due and payable in respect of the
Additional Series Equipment Notes;




     third, after giving effect to clause “second” above, so much of such payments
remaining as shall be 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 subclause (ix) of clause “third” of Section 3.03; and



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


provided that (i) in the case an Event of Loss with respect to the Airframe or the
Airframe and one or more Engines installed thereon, (x) any payments, including any
insurance, condemnation, requisition or similar proceeds, resulting from such Event of Loss that
are received by the Loan Trustee shall be held or disbursed by the Loan Trustee as provided by
Section 7.05(c) and Section 7.06(d) (provided that any such proceeds that are held by the
Loan Trustee shall be invested as provided in Section 5.06); and (y) no Make-Whole Amount
shall be payable on the Equipment Notes in connection with their redemption as a result of such
Event of Loss; and (ii) 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.




     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 the Loan Trustee (including any
amounts realized by the 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 the Loan Trustee as part of the Collateral, shall be promptly distributed by the Loan
Trustee in the following order of priority:




     first, so much of such payments or amounts as shall be required to (i)
reimburse the Loan Trustee or U.S. Bank, to the extent the Loan Trustee or U.S. Bank 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
the Loan Trustee or U.S. Bank (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 the Loan
Trustee, U.S. Bank or the Noteholders in the protection, exercise or enforcement of any
right, power or remedy or any damages sustained by the Loan Trustee, U.S. Bank or any
Noteholder, liquidated or otherwise, upon such Event of Default shall be applied by the
Loan Trustee as between itself, U.S. Bank and the Noteholders in reimbursement of such
expenses and any other expenses for which the Loan Trustee, U.S. Bank or the Noteholders
are entitled to reimbursement under any Operative Document, and (ii) pay all
Secured Obligations then due to the other



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Indenture Indemnitees under this Indenture, 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 shall be 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;




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




     (i) so much of such payments or amounts remaining as shall be required to pay
in full the aggregate unpaid principal amount of all Series A Equipment Notes, and
the accrued but unpaid interest and other amounts due thereon and all other Secured
Obligations in respect of the Series A Equipment Notes to the date of distribution,
shall be distributed to the Noteholders of Series A 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 A 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 A
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 subclause (i) above (if any Series B Equipment
Notes shall have been issued hereunder and except as this subclause (ii) may be
modified pursuant to clause (xv) of Section 9.01 in connection with the original
issuance or subsequent redemption and issuance from time to time of Series B
Equipment Notes), so much of such payments or amounts remaining as shall be
required to pay in full the aggregate unpaid principal amount of all Series B
Equipment Notes, and the accrued but unpaid interest and other amounts due thereon
and all other Secured Obligations in respect of the Series B Equipment Notes to the
date of distribution, shall be distributed to the Noteholders of Series B



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 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 B 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 B Equipment Notes held by all holders thereof plus the accrued but
unpaid interest and other amounts due thereon to the date of distribution;




     (iii) after giving effect to subclause (ii) above (if any Additional Series
Equipment Notes shall have been issued hereunder and except as this subclause (iii)
may be modified pursuant to clause (xv) of Section 9.01 in connection with the
original issuance or subsequent redemption and issuance from time to time of
Additional Series Equipment Notes), so much of such payments or amounts remaining
as shall be required to pay in full the aggregate unpaid principal amount of all Additional Series
Equipment Notes, and the accrued but unpaid interest and other amounts due thereon
and all other Secured Obligations in respect of the Additional Series Equipment
Notes to the date of distribution, shall be distributed to the Noteholders of
Additional Series 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 Additional Series 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 Additional Series
Equipment Notes held by all holders thereof plus the accrued but unpaid interest
and other amounts due thereon to the date of distribution;




     (iv) after giving effect to subclause (iii) above, so much of such payments or
amounts remaining as shall be 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”;



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     (v) after giving effect to subclause (iv) above, so much of such payments or
amounts remaining as shall be 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”;




     (vi) after giving effect to subclause (v) above, so much of such payments or
amounts remaining as shall be 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 A
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 A 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 A Equipment Notes issued under each
Defaulted Operative Indenture bears to (y) the aggregate amount of the
payments then due under all Related Series A Equipment Notes issued under all
Defaulted Operative Indentures;




     (vii) after giving effect to subclause (vi) above (if any Related Series B
Equipment Notes shall have been issued under any Related Indenture and except as
this subclause (vii) may be modified pursuant to clause (xv) of Section 9.01 in
connection with the original issuance or subsequent redemption and issuance from
time to time of Related Series B Equipment Notes), so much of such payments or
amounts remaining as shall be 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 B
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 B Equipment Notes are outstanding, and in
case the aggregate amount so to be distributed shall be insufficient to pay in full
as aforesaid,



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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 B Equipment Notes issued under each Defaulted Operative
Indenture bears to (y) the aggregate amount of the payments then due under
all Related Series B Equipment Notes issued under all Defaulted Operative
Indentures;




     (viii) after giving effect to subclause (vii) above (if any Related Additional
Series Equipment Notes shall have been issued under any Related Indenture and
except as this subclause (viii) may be modified pursuant to clause (xv) of Section
9.01 in connection with the original issuance or subsequent redemption and issuance
from time to time of Related Additional Series Equipment Notes), so much of such
payments or amounts remaining as shall be 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, 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 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 issued under each Defaulted Operative Indenture bears to
(y) the aggregate amount of the payments then due under all Related
Additional Series Equipment Notes issued under all Defaulted Operative Indentures;
and




     (ix) after giving effect to subclause (viii) 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,



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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 the 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 the 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 the Loan Trustee which are payable to the Company pursuant to any of the provisions of
this Indenture other than those set forth in this Article III (including Section 5.06, Section 7.05
and Section 7.06 hereof) shall be so paid to the Company. Any payments received by the 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.



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



     (c) Any payments received by the 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 the Loan Trustee to the Company. Further, and except as otherwise provided
in Section 3.02 and Section 3.03, all payments received and amounts realized by the 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 the Loan Trustee to the Company.



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



     Section 3.06. Cooperation. Prior to making any distribution under this Article III,
the Loan Trustee shall consult with the Related Loan Trustees to determine amounts payable with
respect to the Related Secured Obligations. The Loan Trustee shall cooperate with the 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.



     Section 3.07. Securities Account. In furtherance of the provisions of Section 3.03,
U.S. Bank 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, U.S. Bank 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 the Company. The
Securities Intermediary hereby agrees that, notwithstanding anything to the contrary in this
Indenture, (i) any amounts to be held by the Loan Trustee pursuant to subclause (ix) 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 the 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 the Company, payable to or to the order of the
Company or specially indorsed to the Company except to the extent the foregoing have been specially
indorsed by the Company to the Securities Intermediary or in blank. The Loan Trustee



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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 the Noteholders, each Indenture Indemnitee and each Related Indenture Indemnitee as set forth in
this Indenture. The Company acknowledges that, by reason of the Loan Trustee being the
“entitlement holder” in respect of the Securities Account as provided above, the 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 the 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, U.S. Bank will promptly notify the Loan Trustee and
the Company thereof.




ARTICLE IV



EVENTS OF DEFAULT; REMEDIES OF LOAN TRUSTEE



     Section 4.01. Events of Default. Each of the following events shall constitute an
“Event of Default” whether such event shall be voluntary or involuntary or shall come about
or be 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 shall be deemed to exist and continue so long as, but only as long as,
it shall not have been remedied or explicitly waived:




     (a) the Company shall fail to make any payment within 15 days after the same shall
have become due of principal amount of, interest on, or Make-Whole Amount, if any, with
respect to, any Equipment Note;




     (b) the Company shall fail to make payment when the same shall become 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 shall continue
unremedied for 30 days after the receipt by the Company of written notice thereof from the
Loan Trustee or any Noteholder;




     (c) the Company shall fail 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 shall
have continued unremedied for a period of 30



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days after receipt by the Loan Trustee of the
notice of cancellation or lapse referred to in Section 7.06 or (ii) the date such
insurance is not in effect as to the Loan Trustee;




     (d) the Company shall fail to perform or observe any other covenant, condition or
agreement to be performed or observed by it under any Operative Document, and such failure
shall continue unremedied for a period of 60 days after receipt by the Company of written
notice thereof from the 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 the Company so long as the
Company is diligently proceeding to remedy such failure;




     (e) any representation or warranty made by the Company in any Operative Document shall
prove to have been incorrect in any material respect at the time made, and such
incorrectness shall continue to be material to the transactions contemplated hereby and
shall continue unremedied for a period of 60 days after receipt by the Company of written
notice thereof from the Loan Trustee or any Noteholder; 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 the Company so long as
the Company is diligently proceeding to remedy such incorrectness;




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




     (g) the Company shall file 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 the Company as a debtor in
any such case, or the Company shall seek relief as a debtor, 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 the
Company shall seek an agreement, composition, extension or adjustment with its creditors
under such laws;




     (h) an order, judgment or decree shall be entered by any court of competent
jurisdiction appointing, without the consent of the Company, a



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receiver, trustee or
liquidator of the Company or sequestering any substantial part of its property, or granting
any other relief in respect of the Company 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 shall remain in force undismissed, unstayed or unvacated for a
period of 90 days after the date of entry thereof;




     (i) a petition against the Company 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 the Company, any court of
competent jurisdiction assumes jurisdiction, custody or control of the Company or of any
substantial part of its property and such jurisdiction, custody or control shall remain 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 the 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 the Company is continuing to comply with all of the terms
of Section 7.05.




     Section 4.02. Remedies. (a) If an Event of Default shall have occurred and be
continuing and so long as the same shall continue unremedied, then and in every such case the Loan
Trustee may, and upon the written instructions of a Majority in Interest of Noteholders, the Loan
Trustee shall, 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, the 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 the Company’s control under this
Indenture (or any Permitted Lessee’s control under any Lease) of the Airframe, any Engines
installed thereon or any such Engine, unless at least 60 days’ (or such lesser period as may then
be applicable under the CRAF Program of the United States government) prior written notice of
default hereunder shall have been given by the Loan Trustee by registered or certified mail to the
Company (and any such Permitted Lessee) with a copy addressed to the Contracting Office



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Representative or other appropriate person for the Air Mobility Command of the United States Air
Force under any contract with the Company or such Permitted Lessee relating to the Aircraft):





     (i) declare by written notice to the 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 all other amounts due
thereunder (but for the avoidance of doubt, 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), Section 4.01(g), Section 4.01(h) or Section 4.01(i) shall have occurred and be
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 for the avoidance of doubt, 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) (A) cause the Company, upon the written demand of the Loan Trustee, at
the Company’s expense, to deliver promptly, and the Company shall deliver promptly, all or
such part of the Airframe or any Engine as the Loan Trustee may so demand to the Loan
Trustee or its order, or, if the Company shall have failed to so deliver the Airframe or
any Engine after such demand, the 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 the Company for
the account of any such owner, lessor, lienor, secured party or, if
such engine is owned by the Company, may at the option of the Company with the consent
of the Loan Trustee (which will not be unreasonably withheld) or at the option of the Loan
Trustee with the consent of the Company (which will not be unreasonably withheld), be
exchanged with the 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 the Loan Trustee shall at the time have possession thereof, as
the 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 the Loan Trustee, in
its sole



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discretion, determines, all free and clear of any rights or claims of the 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 Uniform Commercial
Code of the State of New York (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 the Company or the Loan Trustee under or
pursuant to such other applicable law, including without limitation, the NY UCC or the
Bankruptcy Code.



     Upon every such taking of possession of Collateral under this Section 4.02, the 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, the Loan Trustee may maintain, use, operate, store, insure,
lease, control, manage or dispose of the Collateral and may exercise all rights and powers of the
Company relating to the Collateral as the 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 the
Loan Trustee may reasonably determine; and the 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 the Loan Trustee under any provision of this Indenture to collect and receive all
cash held by, or required to be deposited with, the 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
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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 the 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 the
Loan Trustee, and shall otherwise be applied in accordance with Article III.




     If an Event of Default shall have occurred and be continuing and the Equipment Notes shall
either have been accelerated pursuant to this Section 4.02 or have become due at maturity and the
Loan Trustee shall be entitled to exercise rights hereunder, at the request of the Loan Trustee,
the Company shall promptly execute and deliver to the Loan Trustee such instruments of title and
other documents as the Loan Trustee reasonably deems necessary or advisable to enable the Loan
Trustee or an agent or representative designated by the Loan Trustee, at such time or times and
place or places as the Loan Trustee may specify, to obtain possession of all or any part of the
Collateral to which the Loan Trustee shall at the time be entitled hereunder. If the Company shall
for any reason fail to execute and deliver such instruments and documents after such request by the
Loan Trustee, the Loan Trustee may seek a judgment conferring on the Loan Trustee the right to
immediate possession and requiring the Company to execute and deliver such instruments and
documents to the Loan Trustee, to the entry of which judgment the 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.



     (b) The Loan Trustee shall give the 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 the
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).
The Loan Trustee may exercise such right without possession or production of the Equipment Notes
or proof of ownership thereof, and as a representative of the Noteholders may exercise such right
without notice to the Noteholders as party to any suit or proceeding relating to the foreclosure of
any Collateral. The Company shall also
be entitled to bid for and become the purchaser of any Collateral offered for sale pursuant to
this Section 4.02.



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     (c) To the extent permitted by applicable law, the Company irrevocably appoints, while an
Event of Default has occurred and is continuing, the Loan Trustee the true and lawful
attorney-in-fact of the 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, the Company hereby
ratifying and confirming all that such attorney or any substitute shall do by virtue hereof in
accordance with applicable law; provided that if so requested by the Loan Trustee or any
purchaser, the Company shall ratify and confirm any such sale, assignment, transfer or delivery, by
executing and delivering to the 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.



     (d) At any time after the 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 the Company and the Loan Trustee, may rescind and annul such
declaration, whether made by the 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 the
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 the Pass Through Trustee
under any Pass Through Trust Agreement or the Subordination Agent on its behalf is a Noteholder,
the 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 federal income tax purposes, and
(ii) the Loan Trustee will not take any action that would
violate
Section 4.01(a)(ii) or
Section 4.01(a)(iii) of the Intercreditor Agreement.



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     Section 4.03. Remedies Cumulative. To the extent permitted under applicable law,
each and every right, power and remedy specifically given to the 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 the
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 the 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 the
Company or to be an acquiescence therein.



     Section 4.04. Discontinuance of Proceedings. In case the Loan Trustee shall have
instituted any proceedings to enforce any right, power or remedy under this Indenture by
foreclosure, entry or otherwise, and such proceedings shall have been discontinued or abandoned for
any reason or shall have been determined adversely to the Loan Trustee, then and in every such case
the Company and the 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 the Loan Trustee shall continue as if no such proceedings had been
undertaken (but otherwise without prejudice).



     Section 4.05. Waiver of Past Defaults. Upon written instruction from a Majority in
Interest of Noteholders, the 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, the 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 for the



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appointment of a receiver or
for the enforcement of any other remedy under this Indenture, unless:





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




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




     (3) the 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




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



     Except to the extent provided in the Intercreditor Agreement or in any Indenture Supplement,
it is understood and intended that no one or more of the Noteholders of any Series shall have any
right in any manner whatsoever hereunder or under the Indenture Supplement or under the Equipment
Notes of such Series to (i) surrender, impair, waive, affect, disturb or prejudice any
Collateral, or the Lien of the Indenture on any Collateral, or the rights of the 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,
except in the manner provided in this Indenture and for the equal, ratable and common benefit of
all the 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, the Loan Trustee
shall, as a matter of right, be entitled to the appointment of a receiver (who may be the 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, the 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
the Loan Trustee with respect to the Collateral.



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ARTICLE V




DUTIES OF THE LOAN TRUSTEE



     Section 5.01. Notice of Event of Default. If the Loan Trustee shall have knowledge
of an Event of Default or of a default arising from a failure by the Company to pay when due any
payment of principal amount, interest, or Make-Whole Amount, if any, due and payable under any
Equipment Note, the Loan Trustee shall promptly give notice thereof to the Company, each Liquidity
Provider and each Noteholder by telegram, cable, facsimile or telephone (to be promptly confirmed
in writing). Subject to the terms of Section 4.02, Section 4.05, Section 5.02 and Section 5.03,
the 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 the Loan Trustee shall be instructed in writing by a Majority in Interest of
Noteholders. Subject to the provisions of Section 5.03, if the Loan Trustee shall not have
received instructions as above provided within 20 Business Days after giving notice of such default
or Event of Default to the Noteholders, the 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 shall reasonably
determine to be advisable and in the best interests of the Noteholders, but shall be under no duty
to take or refrain from taking any action. The 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. The Loan Trustee may not sell the Airframe or any Engine without the
consent of a Majority in Interest of Noteholders.



     For all purposes of this Indenture, in the absence of actual knowledge, the Loan Trustee shall
not be deemed to have knowledge of a default or an Event of Default unless notified in writing by
the Company or one or more Noteholders; and “actual knowledge” (as used in the foregoing clause) of
the Loan Trustee shall mean actual knowledge of an officer in the Corporate Trust Office of the
Loan Trustee; provided that the Loan Trustee shall be deemed to have actual knowledge of
(i) the failure of the Company to pay any principal amount of, or interest on, the
Equipment Notes directly to the Loan Trustee when the same shall become due or (ii) the
failure of the Company to maintain insurance as required under Section 7.06 if the 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, the Loan Trustee shall promptly (i) give such notice,
direction, consent, waiver or approval or exercise such right, remedy or power hereunder



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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.




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



     Section 5.03. Indemnification. The 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 Section 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. The Loan Trustee shall not be required to take any action under Section 5.01
(other than the first sentence thereof) or Section 5.02 or Article IV, nor shall any other
provision of any Operative Document be deemed to impose a duty on the Loan Trustee to take any
action, if the Loan Trustee shall have been advised by outside counsel that such action is contrary
to the terms hereof or is otherwise contrary to law.



     Section 5.04. No Duties Except as Specified in Indenture or Instructions. The 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 Section 5.02;
and no implied duties or obligations shall be read into this Indenture against the Loan Trustee.



     Section 5.05. No Action Except under Indenture or Instructions. The Loan Trustee
agrees that it 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, the Loan Trustee pursuant to this Indenture and in
accordance with the express terms hereof.



     Section 5.06. Investment of Amounts Held by the Loan Trustee. Any monies (including
for the purpose of this Section 5.06 any amounts held by the Loan Trustee pursuant to Section 3.02,
Section 3.03 or Section 3.07 or pursuant to any provision of any



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other Operative Document providing
for amounts to be held by the Loan Trustee which are not distributed pursuant to the other
provisions of Article III, or any cash received by the Loan Trustee pursuant to Section 7.05(c) or
Section 7.06(d) 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 such
Permitted Investments) held by the Loan Trustee hereunder as part of the Collateral, until
paid out by the Loan Trustee as herein provided, (i) subject to clause (ii) below and
Section 3.07, may be carried by the 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 the Loan Trustee shall not have any
liability for interest upon any such monies except as otherwise agreed in writing with the 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 the 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 the Loan Trustee in trust as part of the Collateral until so sold;
provided that the Company shall upon demand pay to the 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, the Company shall be
entitled to receive from the Loan Trustee, and the Loan Trustee shall promptly pay to the Company,
any profit, income, interest, dividend or gain realized upon maturity, sale or other disposition of
any Permitted Investment. All Permitted Investments held by the 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 the 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 the Company. In addition, subject to Section 3.03, if any moneys
or investments are held by the 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 moneys and investments shall be paid to the Company. The Loan
Trustee shall not be responsible for any losses on any investments or sales of Permitted
Investments made pursuant to the




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procedure specified in this Section 5.06 other than by reason of
its willful misconduct or negligence.




ARTICLE VI




THE LOAN TRUSTEE



     Section 6.01. Acceptance of Trusts and Duties. U.S. Bank 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 hereof. U.S. Bank
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 U.S. Bank in the Participation Agreement or expressly made hereunder and (d) as
otherwise expressly provided in the Operative Documents.



     For the avoidance of doubt, the 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 Section 5.01, Section 5.02 or Section 6.06, and except as
provided in, and without limiting the generality of, Section 5.02, Section 5.03 and Section 5.04,
the 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 the Company shall be in default with respect
thereto, (c) to confirm, verify or inquire into the failure to receive any financial
statements of the Company or (d) to inspect the Aircraft at any time or ascertain or
inquire as to the performance or observance of any of the 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, the Loan Trustee shall not be deemed to have
made any representation or warranty as to the validity, legality, enforceability or sufficiency of
any Operative Document or any other document or instrument, or as to the correctness of any
statement (other than a statement by the Loan Trustee) contained herein or therein, except that the
Loan Trustee hereby represents and warrants that each of said specified documents to which it is a
party has been or will be



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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.




     Section 6.04. No Segregation of Monies; No Interest. Subject to Section 5.06 and
except as provided in Section 3.07, all moneys received by the 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 law, and neither the Loan Trustee nor any agent of the Loan Trustee shall
be under any liability for interest on any moneys received by it hereunder; provided that
any payments received, or applied hereunder, by the Loan Trustee shall be accounted for by the 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. The 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. The
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, the Loan Trustee may for all purposes
hereof rely on a certificate, signed by a duly authorized officer of the Company, as to such fact
or matter, and such certificate shall constitute full protection to the 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, the 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, the Loan Trustee shall obtain the Company’s
consent (such consent not to be unreasonably withheld). The 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 the Loan Trustee shall have exercised reasonable care
and judgment in selecting such Persons).



     Section 6.06. Instructions from Noteholders. In the administration of the trusts
created hereunder, the Loan Trustee shall have the right to seek instructions from a



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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 the Loan
Trustee’s duties or obligations hereunder be unclear, and the Loan Trustee shall incur no liability
in refraining from acting until it receives such instructions. The Loan Trustee shall be fully
protected for acting in accordance with any instructions received under this Section 6.06.




ARTICLE VII




OPERATING COVENANTS OF THE COMPANY



     Section 7.01. Liens. The 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 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 the Loan Trustee’s interest
therein or impair the Lien of this Indenture;




     (e) materialmen’s, mechanics’, workers’, landlords’, repairmen’s, 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
the Loan Trustee’s interest therein or impair the Lien of this Indenture;




     (f) Liens arising out of any judgment or award, so long as such judgment or award
shall, within 60 days after the entry thereof, have been discharged, vacated or reversed,
or execution thereof stayed pending appeal or



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other judicial review or shall have been
discharged, vacated or reversed within 60 days after the expiration of such stay, and so
long as during any such 60 day period there is not, or any such judgment or award does not
involve, (x) any material risk of the sale, forfeiture or loss of the Aircraft, the
Airframe or any Engine or the interest of the Loan Trustee therein or (y) any
impairment of the Lien of the Indenture;




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




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




     (i) Liens approved in writing by the 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”. The
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. The Company shall not, without the prior written consent of the Loan
Trustee, lease or otherwise in any manner deliver, transfer or relinquish possession of the
Aircraft, 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, so long as the Company shall comply
with the provisions of Section 7.06, the Company may without the prior written consent of the Loan
Trustee:




     (i) subject the Airframe to interchange agreements or subject such Engine to
interchange or pooling agreements or arrangements, in each case customary in the airline
industry and entered into by the Company 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 the Company’s title to any such
Engine shall be divested under any such agreement or arrangement, such divestiture shall be
deemed to be an Event of Loss with respect to such Engine, and the Company shall comply
with Section 7.05(b) in respect thereof;



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     (ii) deliver possession of the Airframe or such Engine to any Person for testing,
service, repair, reconditioning, restoration, storage, maintenance, overhaul work 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;




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




     (iv) subject the Airframe or such Engine to the CRAF Program or transfer possession of
the Airframe or such 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 the Company (A) shall promptly notify the Loan
Trustee upon transferring possession of the Airframe or such Engine pursuant to this clause
(iv) and (B) in the case of a transfer of possession pursuant to the CRAF Program,
shall notify the 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 the 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 agreements or pooling or similar arrangements that would be permitted under
clause (i) above;




     (vi) install an Engine on an airframe leased, purchased or owned by the Company (or
any Permitted Lessee) subject to a lease, conditional sale and/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 any conditional sale or 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)
the Company shall have obtained from the lessor, conditional vendor or secured party of
such airframe a written agreement (which may be the lease, conditional sale or other
security agreement covering such airframe), in form and substance satisfactory to the Loan
Trustee (it being understood that an agreement from such lessor, conditional vendor or
secured party substantially in the form of



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the penultimate paragraph of this Section
7.02(a) shall be deemed to be satisfactory to the 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 such 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 the installation thereof on such airframe;




     (vii) install an Engine on an airframe owned by the Company (or any Permitted Lessee),
leased to the Company (or any Permitted Lessee) or purchased by the 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 the Company shall comply with
Section 7.05(b) in respect thereof, if such installation shall adversely affect the Loan
Trustee’s security interest in such Engine, the 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 the Company with Section 7.05(b);




     (viii) lease such Engine 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 (49
U.S.C. §§41101-41112) or successor provision that gives like authority, or to any
manufacturer of airframes or engines (or an Affiliate thereof acting under an unconditional
guarantee of such manufacturer), so long as such manufacturer and, if applicable, such
Affiliate is domiciled in the United States); provided that no Event of Default
shall exist at the time any such lease is entered into; and




     (ix) lease such Engine 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) any foreign manufacturer of airframes or engines
(or a foreign Affiliate of a United States or foreign manufacturer of airframes or engines
acting under an unconditional guarantee of such manufacturer), so long as such foreign
manufacturer or (if applicable) foreign Affiliate is domiciled in a country indicated with
an asterisk on Exhibit B hereto, or (C) any foreign air carrier consented to in
writing by the Loan Trustee with the consent of a Majority in Interest of Noteholders;
provided that (x) in the case of a lease to, or guarantee by, any entity
pursuant to this Section 7.02(a)(ix), (1) other



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than a foreign carrier principally
based in Taiwan, the United States maintains diplomatic relations with the country in which
such entity is based and domiciled at the time such lease is entered into, (2) no
Event of Default exists at the time such lease is entered into and (3) such entity
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, and (y) in the
case of a lease to any foreign manufacturer or foreign Affiliate under clause (B) above,
the re-registration conditions set forth in Section 7.02(e) shall be satisfied
notwithstanding anything to the contrary in such clause (B);


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 the Loan Trustee’s rights to repossess pursuant to Section 4.02
and to avoid such lease upon such repossession, and
the 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 Section 7.02(b) and Section 7.02(c) or (y) permit any
action not permitted to be taken by the Company with respect to the Aircraft hereunder. The
Company shall promptly notify the Loan Trustee and the Rating Agencies of the existence of any such
lease with a term in excess of one year.




     The Loan Trustee, and each Noteholder by acceptance of an Equipment Note, and each Related
Noteholder by acceptance of a Related Equipment Note, agrees, for the benefit of the Company (and
any Permitted Lessee) and for the benefit of the lessor, conditional vendor or secured party of any
airframe or engine leased to the Company (or any Permitted Lessee) or leased to or purchased or
owned by the Company (or any Permitted Lessee) subject to a conditional sale or other security
agreement, that the Loan Trustee and the Noteholders will not acquire or claim, as against the
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 the Company (or any Permitted
Lessee) or the lessor under such lease or subject to a security interest in favor of the 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



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subject to
such lease or conditional sale or other security agreement or (B) any airframe owned by the
Company (or any Permitted Lessee) or the lessor under such lease or subject to a security interest
in favor of the 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.




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



     (b) Operation and Use. The Company agrees that the Aircraft will not be maintained,
used, serviced, repaired, overhauled 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 to the extent the Company 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 the 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 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). The 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 the 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)
governmental indemnification complying with Section 7.06(a) and Section 7.06(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 unforeseen
circumstances and the Company is using its good faith efforts to remove the Aircraft from such area
as promptly as practicable.



     (c) Maintenance. The Company shall maintain, service, repair and overhaul the
Aircraft (or cause the same to be done) (i) so as to keep the Aircraft in as good operating
condition as on the Closing Date, ordinary wear and tear excepted, 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 during temporary periods of



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storage, during maintenance or
modification permitted hereunder, or during periods of grounding by applicable governmental
authorities) 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
the Company or, in the case of a lease permitted pursuant to Section 7.02(a), the applicable
Permitted Lessee uses with respect to similar aircraft operated by the Company or such Permitted
Lessee, as the case may be, in similar circumstances (in any case, without limitation of the
Company’s obligations under the preceding clause (i)). In any case the Aircraft will be maintained
in accordance with a maintenance program for Boeing [737-800]12 [757-200]13
[777-200ER]14 aircraft approved by the FAA or, if the Aircraft is not registered in the
United States, (i) the EASA or the JAA, (ii) the central aviation authority of
Australia, Canada, Japan or New Zealand, or (iii) the central aviation authority of any
country with aircraft maintenance standards that are substantially similar to those of the United
States or any
of the foregoing authorities or countries. The 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. The 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 (if not prevented by applicable law or regulations or
by any government) on each Engine, a nameplate bearing the inscription “MORTGAGED TO U.S. BANK
TRUST NATIONAL ASSOCIATION, AS LOAN TRUSTEE” (such nameplate to be replaced, if necessary, with a
nameplate reflecting the name of any successor Loan Trustee). If any such nameplate is damaged
beyond repair or becomes illegible, the Company shall promptly replace it with a nameplate
complying with the requirements of this Section.



     (e) Registration. The Company shall cause the Aircraft to remain duly registered,
under the laws of the United States, in the name of the Company except as otherwise required by the
Transportation Code; provided that the Loan Trustee shall, at the Company’s expense,
execute and deliver all such documents as the Company may





 




			
	12	 	To be inserted for 737-823 aircraft.
	 
	13	 	To be inserted for 757-223 aircraft
	 
	14	 	To be inserted for 777-223ER aircraft





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reasonably request for the purpose of
continuing such registration. Notwithstanding the preceding sentence, the 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 the Company or
of any nominee of the 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 the 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, the Loan Trustee shall
have received at the time of such registration an opinion of counsel to the Company to the effect
that (A) this Indenture and the Loan Trustee’s right to repossession thereunder 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) the Loan Trustee shall have received a certificate from a Responsible
Officer of the 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 the Loan
Trustee subsequent to the effective date of such change in registration), (C) the
obligations of the 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) and (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 (ii) if such jurisdiction is at the time of registration not listed on Exhibit B, the
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 the 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 bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally,
and to general principles of equity, 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) that it is
not necessary for the Loan Trustee to register or qualify to do business in such jurisdiction,
(C) that there is no tort liability of the lender of an aircraft not in possession thereof
under the laws of such jurisdiction other




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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 the Loan Trustee is provided, at
the Company’s expense, to cover such risk) and (D) (unless the 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) that 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. The Loan
Trustee will cooperate with the 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;




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




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



     The Company shall (i) take such actions as may be required to be taken by the 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 the Company’s obligations under this Indenture with respect to the registration
of any such International Interest. The Loan Trustee shall take all actions necessary with respect
to the International Registry to consent to the Company’s initiation of any registrations required
under this Indenture to enable the Company to complete such registrations, including, without
limitation, appointing Daugherty, Fowler, Peregrin, Haught & Jenson, a Professional Corporation, as



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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.




     Section 7.03. Inspection; Financial Information. (a) Inspection. At all
reasonable times, but upon at least 15 Business Days’ prior written notice to the Company, the Loan
Trustee or its authorized representative may, subject to the other conditions of this Section
7.03(a), inspect the Aircraft and may inspect the books and records of the Company required to be
maintained by the FAA or the government of another jurisdiction in which the Aircraft is then
registered relating to the maintenance of the Aircraft; provided that (i) the Loan
Trustee or its representative shall be fully insured at no cost to the Company in a manner
satisfactory to the Company with respect to any risks incurred in connection with any such
inspection or shall provide to the Company a written release satisfactory to the Company with
respect to such risks, (ii) any such inspection shall be 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 the Company’s express consent, which
consent the 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, the Company and the Company 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 the 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 the Loan
Trustee (or its representative), as the case may be, making such inspection. Except during the
continuance of an Event of Default, all inspections by the 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 calendar year.



     (b) Financial Information. So long as any of the Secured Obligations remain unpaid,
the Company agrees to furnish to the Loan Trustee and each Liquidity Provider: (i) within
60 days after the end of each of the first three quarterly periods in each fiscal year of the
Company, either (x) a consolidated balance sheet of the 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 the Company on Form 10-Q in
respect of such period in the form filed with the Securities and Exchange Commission; (ii)
within 120 days after the close of each fiscal year of the Company, either (x) a
consolidated balance sheet of the Company and its consolidated



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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 the Company on Form 10-K in
respect of such year in the form filed with the Securities and Exchange Commission and
(iii) within 60 days of the filing thereof, a copy of any Current Report on Form 8-K filed
by the Company with the Securities and Exchange Commission. The items required to be furnished
pursuant to clauses (i), (ii) and (iii) above shall be deemed to have been furnished on the date on
which such item is posted on the SEC’s website at www.sec.gov, and such posting shall be deemed to
satisfy the requirements of clauses (i), (ii) and (iii).




     Section 7.04. Replacement and Pooling of Parts; Alterations, Modifications and Additions;
Airframe and Engine Substitutions. (a) Replacement of Parts. The Company, at its own
expense, shall promptly replace all Parts that may from time to time be incorporated or installed
in or attached to the Airframe or any Engine and that may from time to time become worn out, lost,
stolen, destroyed, seized, confiscated, damaged beyond repair or rendered permanently unfit for use
for any reason whatsoever, 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, the Company, at its own
expense, may remove 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 the Company, except as
otherwise provided in Section 7.04(c), at its own expense, 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 have a value and utility at least equal to the Parts replaced, assuming such replaced
Parts were in the condition and repair required to be maintained by the terms hereof. Except as
otherwise provided in Section 7.04(c), all Parts at any time removed from the Airframe or any
Engine shall remain subject to the Lien of this Indenture no matter where located until such time
as such Parts shall be replaced by parts that have been incorporated or installed in or attached to
the Airframe or such Engine and that meet 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 the 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 the Company from time to time, the Loan Trustee shall
execute and deliver to the



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Company an appropriate instrument 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 the Company or a Person permitted to be in possession of the
Aircraft to a pooling arrangement customary in the airline industry entered into in the ordinary
course of the 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 the Company, at its expense, as promptly thereafter as practicable, either (i) causes
title to such replacement Part to vest in the Company free and clear of all Liens (except Permitted
Liens), or (ii) replaces 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).



     (c) Alterations, Modifications and Additions. The Company will make such alterations
and modifications in and additions to the Airframe and the Engines as may be 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 may then be registered; provided that the Company may,
in good faith, contest the validity or application of any such requirement in any manner that does
not involve any material risk of sale, loss or forfeiture of the Aircraft and does not adversely
affect the Loan Trustee’s interest in the Collateral. In addition, the Company, 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 the Company may
deem 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 shall have been removed that the
Company 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 be free and clear of any Liens, other
than Permitted Liens, and shall, without further act, be subject to the Lien of this Indenture.
Notwithstanding the foregoing, the Company may, at any time, remove any Part from the Airframe or
any Engine if such Part: (i) is in



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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 the 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) or Section
7.02(d) 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 the Company 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 the Loan
Trustee and the Lien of this Indenture and shall no longer be deemed a Part hereunder. Upon
request of the Company from time to time, the Loan Trustee shall execute and deliver to the Company
an appropriate instrument confirming the release of any such removed Part from the Lien of this
Indenture.




     (d) Substitution of Engines. The Company shall have the right at its option at any
time, on at least 30 days’ prior written notice to the Loan Trustee, to substitute a Replacement
Engine for any Engine. In such event, and prior to the date of such substitution, the Company
shall replace such Engine hereunder 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. The Company shall have the right at its option at any
time, on at least 10 Business Days’ prior written notice to the 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 the 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 the 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 the Company to the applicable
Appraiser with respect to the Substitute Airframe and such



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Airframe as of the same date within the
60-day period prior to the substitution for both the Substitute Airframe and such Airframe.




     Prior to or at the time of any substitution under this Section 7.04(e), the Company will
(A) cause an Indenture Supplement covering such Substitute Airframe to be delivered to the
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 the 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 the 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, the 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 the
Loan Trustee’s interest therein in the United States, or in any other jurisdiction in which the
Aircraft may then be registered, (D) furnish the Loan Trustee with an opinion of the
Company’s counsel (which may be the Company’s General Counsel or such other internal counsel of the
Company as shall be reasonably satisfactory to the Loan Trustee) addressed to the 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 the Loan Trustee with evidence of compliance with the insurance provisions of Section 7.06
with respect to such Substitute Airframe, (F) furnish the Loan Trustee with a copy of the
original bill of sale respecting such Substitute Airframe and (G) furnish the Loan Trustee
with an opinion of the Company’s counsel (which may be the Company’s General Counsel or such other
internal counsel of the Company as shall be reasonably satisfactory to the Loan Trustee) to the
effect that the 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 the 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 the Company’s counsel 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.



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     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), the Company will cause to be
delivered to the Loan Trustee a favorable opinion of the Company’s counsel (which may be the
Company’s General Counsel or such other internal counsel to the Company as shall be reasonably
satisfactory to the Loan Trustee) addressed to the 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
Substitute Airframe to the 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
Aircraft granted to the 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,
the Loan Trustee shall (x) execute and deliver to the 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 the Loan Trustee to cancel or release any International Interest of the Loan Trustee
registered with the International Registry in relation to such replaced Airframe and (y)
provide a notice to the Noteholders setting forth (1) the date of the substitution which
shall be the date of filing of the Indenture Supplement described in clause (A) of the second
preceding paragraph, (2) the model of the Substitute Airframe, (3) the manufacturer
serial numbers of the Substitute Airframe and Airframe replaced by the Substitute Airframe, and
(4) the registration numbers of the Replacement Aircraft of which the Substitute Airframe
is a part and the Aircraft of which the Airframe replaced by the Substitute Airframe is part.



     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, the Company shall as promptly as practicable (and, in any
event, within 15 days after such occurrence) give the Loan Trustee written notice of such Event of
Loss, and, within 90 days after such Event of Loss, the Company shall give the Loan Trustee written
notice of its election to perform one of the following options (it being agreed that if the Company
shall not have given



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such notice of election within such 90-day period, the Company shall be deemed
to have
elected to perform the option set forth in the following clause (ii)). The Company may elect
either to:





     (i) on or before the Loss Payment Date (as defined below), substitute, 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 the Company free and clear of
all Liens (other than Permitted Liens); provided that if the Company shall not
perform its obligation to effect such substitution under this clause (i) on or prior to the
Loss Payment Date, then the Company shall on the Loss Payment Date redeem the Equipment
Notes in full in accordance with Section 2.10; or




     (ii) on or before the Loss Payment Date, redeem the Equipment Notes in full in
accordance with Section 2.10. The Company shall give the 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.



     If the Company elects to substitute a Replacement Airframe (or a Replacement Airframe and one
or more Replacement Engines, as the case may be) the 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 the 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 may then be registered, (B) cause the sale
of such Replacement Airframe and Replacement Engines, if any, to the 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 the 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, the 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



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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 the Loan Trustee’s interest therein in the United States, or in any other
jurisdiction in which the Aircraft may then be registered, (D) furnish the Loan Trustee
with an opinion of the Company’s counsel (which may be the Company’s General Counsel or such other
internal counsel of the Company as shall be reasonably satisfactory to the Loan Trustee) addressed
to the 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 the 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 (without regard to hours or
cycles) at least equal to 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 the 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 the Loan Trustee with a copy of the original bill
of sale respecting such Replacement Airframe and a copy of the original bill of sale or, if the
bill of sale is unavailable, other evidence of ownership reasonably satisfactory to the Loan
Trustee (which may be a copy of an invoice or purchase order) respecting such Replacement Engines,
if any, and (H) furnish the Loan Trustee with an opinion of the Company’s counsel (which
may be the Company’s General Counsel or such other internal counsel of the Company as shall be
reasonably satisfactory to the Loan Trustee) to the effect that the 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
the 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 the Company’s counsel 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 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 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),
the Company will cause to be delivered to the Loan Trustee a favorable opinion of the



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Company’s
counsel (which may be the Company’s General Counsel or such other internal counsel to
the Company as shall be reasonably satisfactory to the Loan Trustee) addressed to the 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
the 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 the 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 second preceding paragraph, the Loan Trustee shall (x) execute and deliver to the
Company an appropriate instrument 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 the
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 the Loan
Trustee to cancel or release any International Interest of the 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, and (y) provide a notice to the Noteholders setting forth
(1) the date of the replacement which shall be the date of filing of the Indenture
Supplement described in clause (A) of the second preceding paragraph, (2) the model of the
Replacement Airframe, (3) the manufacturer serial numbers of the Replacement Airframe and
Airframe replaced by the Replacement Airframe, and (4) the registration numbers of the
Replacement Aircraft of which the Replacement Airframe is part and the Aircraft of which the
Airframe replaced by the Replacement Airframe is part.



     In the event that, after an Event of Loss, the Company performs the option set forth in clause
(ii) of the first paragraph of this Section 7.05(a), the Loan Trustee shall execute and deliver to
the Company an appropriate instrument 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



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Indenture and assigning to the 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 the Loan Trustee to cancel or release any International Interest of the
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.




     (b) Event of Loss with Respect to an Engine. Upon 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, the Company shall give the Loan Trustee prompt written notice thereof
within 15 days after the Company has determined that an Event of Loss has occurred with respect to
such Engine 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), the Company will
(i) cause an Indenture Supplement covering such Replacement Engine to be delivered to the
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 be
registered, (ii) furnish the Loan Trustee with a copy of the original bill of sale or, if
the bill of sale is unavailable, other evidence of ownership reasonably satisfactory to the Loan
Trustee (which may be a copy of an invoice or purchase order) respecting such Replacement Engine,
(iii) cause the sale of such Replacement Engine to the 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 the Loan Trustee with respect to such Replacement Engine, to be registered
on the International Registry as a sale or an International Interest; provided that if the
seller of such Replacement Engine is not situated in a country that has ratified the Cape Town
Convention, the 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 the Loan Trustee’s interest
therein in the United States, or in such other jurisdiction in which the Engine may then be
registered, (v) furnish the Loan Trustee with an opinion of the Company’s counsel (which
may be the Company’s General Counsel or such other internal counsel to the Company as shall be
reasonably satisfactory to the Loan Trustee) addressed to the Loan Trustee to the effect that, upon
such replacement, the Replacement Engine will be subject to the Lien of this Indenture,
(vi) furnish the Loan Trustee with a certificate of an aircraft engineer or appraiser (who
may be an employee of the Company) certifying that such Replacement Engine has a value and utility
(without regard to hours



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or cycles) at least equal to 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 the 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), the Company will cause to be delivered to the Loan Trustee an opinion of
counsel to the Company (which may be the Company’s General Counsel or such other internal counsel
of the Company as shall be reasonably satisfactory to the Loan Trustee) addressed to the 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 the 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 this paragraph, the Loan Trustee shall execute and deliver to the Company an
appropriate instrument 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 the 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 the Loan Trustee to cancel or release any
International Interest of the Loan Trustee registered with the International Registry in relation
to the Engines with respect to which such Event of Loss occurred.




     (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 the Company or by the 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:



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




     (ii) if such payments are received with respect to the Airframe or the Airframe and
the 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 the Loan
Trustee for costs and expenses that shall not exceed the amounts required to be paid by the
Company to the Noteholders pursuant to Section 2.10 hereof shall be applied in reduction of
the Company’s obligation to pay such amounts, if not already paid by the Company, or, if
already paid by the Company, shall be applied to reimburse the 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, the Company; and




     (iii) if such payments are received with respect to an Engine with regard to which an
Event of Loss has occurred as contemplated by Section 7.05(b), so much of such payments
remaining after reimbursement of the Loan Trustee for costs and expenses shall be paid over
to, or retained by, the Company; provided that the Company shall have fully
performed the terms of 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 by any government, including, without
limitation, pursuant to the CRAF Program, of the Airframe and the Engines or engines installed on
the Airframe that does not constitute an Event of Loss, the Company shall promptly notify the Loan
Trustee and all of the 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 had not
occurred; provided that, notwithstanding the foregoing, the Company’s obligations other
than payment obligations shall only continue to the extent feasible. All payments received by the
Company or the Loan Trustee from such government for such use of the Airframe and Engines or
engines shall be paid over to, or retained by, the Company.



     (e) Requisition for Use by the Government of an Engine Not Installed on the Airframe.
In the event of the requisition for use by any government of any Engine not then installed on the
Airframe, the 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



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respect to such Engine. Upon such
replacement, any payments received by the Company or the Loan Trustee from such government with
respect to such requisition shall be paid over to, or retained by, the 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 the Company shall not be paid to or retained
by the Company if at the time of such payment or retention an
Event of Default or Payment Default shall have occurred and be continuing, but shall be held
by or paid over to the Loan Trustee as security for the obligations of the Company under this
Indenture and the Participation Agreement. Subject to Section 3.03, at such time as there shall
not be continuing any such Event of Default or Payment Default, such amount shall be paid to the
Company.



     Section 7.06. Insurance.



     (a) Aircraft Liability Insurance.




     (i) Except as provided in clause (ii) of this subsection (a), and subject to the
rights of the Company to establish and maintain self-insurance in the manner and to the
extent specified in Section 7.06(c), the Company will carry, or cause to be carried, at no
expense to the Loan Trustee, aircraft liability insurance (including, but not limited to,
bodily injury, personal injury and property damage liability, exclusive of manufacturer’s
product liability insurance) and contractual liability insurance with respect to the
Aircraft (A) in amounts that are not less than the aircraft liability insurance
applicable to similar aircraft and engines in the Company’s fleet on which the Company
carries insurance (or, in the case of a lease to a Permitted Lessee, in such Permitted
Lessee’s fleet on which such Permitted Lessee carries insurance); provided that
such liability insurance (including self-insurance specified in Section 7.06(c)) shall not
be less than the amount certified in the insurance report delivered to the Loan Trustee and
each Liquidity Provider on the Closing Date, (B) of the type usually carried by
corporations engaged in the same or similar business, similarly situated with the Company
or such Permitted Lessee, as the case may be, and owning or operating similar aircraft and
engines and covering risks of the kind customarily insured against by the Company or such
Permitted Lessee, as the case may be, and (C) that is maintained in effect with
insurers of recognized responsibility; provided that the Company will carry, or
cause to be carried, at no expense to the Loan Trustee, aircraft liability war risk and
allied perils insurance if and to the extent the same is maintained by the Company or such
Permitted Lessee, as the case may be, with respect to other aircraft operated by the
Company or such Permitted Lessee, as the case may be, on the same or similar routes. Any
policies



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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 (A) name
the Loan Trustee, the Subordination Agent, each Pass Through Trustee and each Liquidity
Provider as their Interests (as defined below in this Section 7.06) may appear, as
additional insureds (the “Specified Persons”), (B) subject to the
conditions of clause (C) below, provide that, in respect of the interests of the Specified
Persons in such policies, the insurance shall not be invalidated by any
action or inaction of the Company (or any Permitted Lessee) and shall insure the
Specified Persons’ Interests as they appear, regardless of any breach or violation of any
warranty, declaration or condition contained in such policies by the Company (or any
Permitted Lessee), (C) provide that, except to the extent not provided for by the
war risk and allied perils insurance provider, if such insurance is canceled for any reason
whatever, or if any change is made in the policy that materially reduces the amount of
insurance or the coverage certified in the insurance report delivered on the Closing Date
to the Loan Trustee and each Liquidity Provider, or if such insurance is allowed to lapse
for nonpayment of premium, such cancellation, change or lapse shall not be effective as to
any Specified Person for 30 days (seven days, or such other period as is customarily
available in the industry, in the case of any war risk or allied perils coverage) after
receipt by such Specified Person of written notice from such insurers of such cancellation,
change or lapse, (D) provide that the Specified Persons shall have no obligation or
liability for premiums, commissions, assessments or calls in connection with such
insurance, (E) provide that the insurers shall waive any rights of (1)
set-off, counterclaim or any other deduction, whether by attachment or otherwise, in
respect of any liability of the Specified Persons to the extent of any moneys due to the
Specified Persons and (2) subrogation against the Specified Persons to the extent
that the Company has waived its rights by its agreements to indemnify the Specified Persons
pursuant to the Operative Documents, (F) be primary without right of contribution
from any other insurance that may be carried by each Specified Person with respect to its
Interests as such in the Aircraft and (G) 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) and in Section 7.06(b) with respect to any Person means the interests of
such Person in the transactions contemplated by the Operative Documents. In the case of a
lease or contract with any government in respect of the Aircraft or any Engine, or in the
case of any requisition for use of the Aircraft or any Engine by any government, a valid
agreement by such government to indemnify the Company, or an insurance policy issued by
such government, against any of the risks that the Company is required hereunder to insure
against shall be considered adequate insurance for



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purposes of this Section 7.06(a) to the
extent of the risks (and in the amounts) that are the subject of such indemnification or
insurance. To the extent that the war risk and allied perils insurance provider does not
provide for provision of direct notice to each Specified Person of cancellation, change or
lapse in the insurance required hereunder, the Company hereby agrees that upon receipt of
notice of any thereof from such insurance provider it shall give each Specified Person
immediate notice of each cancellation or lapse of, or material change to, such
insurance.




     (ii) During any period that the Airframe or an Engine, as the case may be, is on the
ground and not in operation, the Company may carry or cause to be carried as to such
non-operating 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(c), 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 airline liability
insurance from time to time applicable to airframes or engines owned or leased by the
Company (or, in the case of a lease to a Permitted Lessee, such Permitted Lessee) of the
same type as such non-operating Airframe or Engine and that are on the ground and not in
operation and (B) the scope of the risks covered and the type of insurance shall be
the same as from time to time shall be applicable to airframes or engines owned or leased
by the Company (or such Permitted Lessee) of the same type as such non-operating Airframe
or Engine and that are on the ground and not in operation.



     (b) Insurance Against Loss or Damage to Aircraft.




     (i) Except as provided in clause (ii) of this subsection (b), and subject to the
rights of the Company to establish and maintain self-insurance in the manner and to the
extent specified in Section 7.06(c), the Company shall maintain, or cause to be maintained,
in effect with insurers of recognized responsibility, at no expense to the 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, without limitation, war
risk and allied perils insurance if and to the extent the same is maintained by the Company
(or, in the case of a lease to a Permitted Lessee, such Permitted Lessee) with respect to
other aircraft operated by the Company or such Permitted Lessee, as the case may be, on the
same or similar routes) that is of the type usually carried by corporations engaged in the
same or similar business and similarly situated with the Company or such Permitted Lessee,
as the case may be; 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




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aggregate outstanding principal amount
of the Equipment Notes from time to time and (B) such insurance need not cover an
Engine while attached to an airframe not owned, leased or operated by the Company, provided
that such Engine is covered by a separate policy of insurance. Any policies carried in
accordance with this Section 7.06(b) and any policies taken out in substitution or
replacement for any such policies shall (A) provide that (I) 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 the Loan Trustee (as provided for in this
sentence) during the period commencing on the day following the date of such payment to the
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 (II) any insurance proceeds in excess of the amount
set forth on Exhibit C up to the amount of the Loan Amount for any loss or damage to the
Aircraft (or Engines) not constituting an Event of Loss with respect to the Aircraft, shall
be paid to the Loan Trustee as long as this Indenture shall not have been discharged, and
that all other amounts shall be payable to the Company, unless the insurer shall have
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 the amount of the Loan Amount shall
be payable to the Loan Trustee, (B) subject to the conditions of clause (C) below,
provide that, in respect of the interests of the Specified Persons in such policies, the
insurance shall not be invalidated by any action or inaction of the Company (or any
Permitted Lessee) and shall insure the Specified Persons’ Interests as they appear,
regardless of any breach or violation of any warranty, declaration or condition contained
in such policies by the Company (or any Permitted Lessee), (C) provide that, except
to the extent not provided by the war risk and allied perils insurance provider, if such
insurance is canceled for any reason whatsoever, or if any change is made in the policy
that materially reduces the amount of insurance or the coverage certified in the insurance
report delivered on the Closing Date to the Loan Trustee and each Liquidity Provider, or if
such insurance is allowed to lapse for nonpayment of premium, such cancellation, change or
lapse shall not be effective as to the Specified Persons for 30 days (seven days, or such
other period as is customarily available in the industry, in the case of war risk or allied
perils coverage) after receipt by the Specified Persons of written notice from such
insurers of such cancellation, change or lapse, (D) provide that the Specified
Persons shall have no obligation or liability for premiums, commissions, assessments or
calls in connection with such insurance, (E) provide that the



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insurers shall waive
rights of (1) set-off, counterclaim or any other deduction, whether by attachment
or otherwise, in respect of any liability of the Specified Persons to the extent of any
moneys due to the Specified Persons and (2) subrogation against the Specified
Persons to the extent the Company has waived its rights by its agreement to indemnify the
Specified Persons pursuant to the Operative Documents, and (F) be primary without
right of contribution from any
other insurance that may be carried by any Specified Person with respect to its
Interests as such in the Aircraft. In the case of a lease or contract with any government
in respect of the Aircraft or any Engine, or in the case of any requisition for use of the
Aircraft or any Engine by any government, a valid agreement by such government to indemnify
the Company, or an insurance policy issued by such government, against any risks which the
Company is required hereunder to insure against shall be considered adequate insurance for
purposes of this Section 7.06(b) to the extent of the risks (and in the amounts) that are
the subject of such indemnification or insurance. To the extent that the war risk and
allied perils insurance provider does not provide for provision of direct notice to each
Specified Person of cancellation, change or lapse in the insurance required hereunder, the
Company hereby agrees that upon receipt of notice of any thereof from such insurance
provider it shall give each Specified Person immediate notice of each cancellation or lapse
of, or material change to, such insurance.




     (ii) During any period that the Airframe or an Engine is on the ground and not in
operation, the Company may carry or cause to be carried as to such non-operating 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(c), 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 applicable to airframes or engines
owned or leased by the Company (or, if a lease is then in effect, by the Permitted Lessee)
of the same type as such non-operating Airframe or Engine and that are on the ground and
not in operation; provided that, subject to self-insurance to the extent permitted
by Section 7.06(c), the Company (or such Permitted Lessee) shall maintain insurance against
risk of loss or damage to such non-operating Airframe in an amount at least equal to 110%
of the aggregate outstanding principal amount of the Equipment Notes during such period
that such Airframe is on the ground and not in operation.



     (c) Self-Insurance. The 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 Section 7.06(a) or Section 7.06(b), insuring for a
maximum amount that is less than the amounts set forth in Section 7.06(a) and Section 7.06(b)), the
risks required to be insured against pursuant to



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Section 7.06(a) and Section 7.06(b), but in no
case shall the self-insurance with respect to all of the aircraft and engines in the Company’s
fleet (including, without limitation, the Aircraft) exceed for any 12-month policy year 1% of the
average aggregate insurable value (for the preceding policy year) of all aircraft (including,
without limitation, the Aircraft) on which the Company carries insurance, unless an insurance
broker of national standing shall certify that the standard among all other major United States
airlines is a
higher level of self-insurance, in which case the Company may self-insure the Aircraft to such
higher level. In addition to the foregoing right to self-insure, the Company may self-insure to
the extent of (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 or hull liability insurers.




     (d) Application of Insurance Payments. All losses will be adjusted by the Company
with the insurers. As between the Loan Trustee and the Company it is agreed that all insurance
payments received under policies required to be maintained by the Company hereunder, exclusive of
any payments received in excess of the Loan Amount, as the result of the occurrence of an Event of
Loss with respect to the Airframe or an 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 the Company
pursuant to Section 7.05(a), such payments shall be paid over to, or retained by, the Loan
Trustee and upon completion of such replacement shall be paid over to, or retained by, the
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
the Loan Trustee for its costs and expenses as shall not exceed the amounts required to be
paid by the Company pursuant to Section 2.10 hereof shall be applied (A) in
reduction of the Company’s obligation to pay such amounts, if not already paid by the
Company, or, if already paid by the Company, shall be applied to reimburse the Company for
its payment of such amounts and (B) the balance, if any, of such payment remaining
thereafter will be paid over to, or retained by, the Company or its designee; and




     (iii) if such payments are received with respect to an Engine with regard to which an
Event of Loss contemplated by Section 7.05(b) has occurred, so much of such payments
remaining after reimbursement of the Loan Trustee for



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its costs and expenses shall be paid
over to, or retained by, the Company or its designee; provided that the Company
shall have 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, (x) the insurance payment of any property damage or loss with respect
to property other than the Airframe or any Engine received under policies maintained by the
Company, and (y) the insurance payment for any loss or damage to the Aircraft in excess of
the Loan Amount, shall be paid to the Company or its designee.



     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 the Company) for repairs or for replacement property in accordance with the terms of
Section 7.02 and Section 7.04, and any balance remaining after compliance with such Sections with
respect to such loss or damage shall be paid to the Company or its designee. Any amount referred
to in the preceding sentence or in clause (i) or (iii) of the second preceding paragraph that is
payable to the Company or its designee shall not be paid to the Company (or, if it has been
previously paid directly to the Company, shall not be retained by the Company) if at the time of
such payment an Event of Default or Payment Default shall have occurred and be continuing, but
shall be paid to and, subject to Section 5.06, held by the Loan Trustee as security for the
obligations of the Company under this Indenture and the Participation Agreement, and at such time
as there shall not be continuing any such Event of Default or Payment Default, such amount shall be
paid to the Company or its designee.



     (e) Reports, Etc. On or before the Closing Date and annually upon renewal of the
Company’s insurance coverage, the Company will furnish to the Loan Trustee and each Liquidity
Provider a report signed by a firm of independent aircraft insurance brokers appointed by the
Company (which firm may be in the regular employ of the 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; provided that all information contained in such report
shall be Confidential Information and shall be treated by the Loan Trustee, each Liquidity Provider
and each of their affiliates and officers, directors, agents and employees in accordance with the
provisions of Section 10.16. The Company will cause such firm to agree to advise the Loan Trustee
and each Liquidity Provider in writing of any act or omission on the part of the Company of which
such firm has knowledge that might invalidate or render unenforceable, in whole or in part, any
insurance on the Aircraft. The Company will also cause such firm to advise the Loan Trustee and
each Liquidity Provider in writing as promptly as practicable after such firm acquires knowledge
that an interruption of any insurance



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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.




     (f) Salvage Rights. All salvage rights to the Airframe and each Engine shall remain
with the Company’s insurers at all times, and any insurance policies of the Loan
Trustee insuring the Airframe or any Engine shall provide for a release to the Company of any
and all salvage rights in and to the Airframe or any Engine.



     (g) Right to Pay Premium. In the event of cancellation of any insurance required to
be maintained hereunder due to the nonpayment of premiums, the Loan Trustee shall have the option,
in its sole discretion, to pay any such premium in respect to the Aircraft that is due in respect
of the coverage pursuant to this Indenture and to maintain such coverage, as the Loan Trustee may
require, until the scheduled expiry date of such insurance and, in such event, the Company shall,
upon demand, reimburse the Loan Trustee for amounts so paid by it.



     (h) Insurance for Own Account. Nothing in this Section 7.06 shall limit or prohibit
(i) the Company from maintaining the policies of insurance required pursuant to this
Section 7.06 with higher limits than those specified herein or (ii) the Loan Trustee or the
Company from obtaining insurance for its own account, and at its sole expense, with respect to the
Airframe or any Engine (and any proceeds payable under such insurance shall be payable as provided
in the insurance policy relating thereto); provided that no such insurance may be obtained
which 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 by the Company (or any Permitted Lessee) with respect to the Aircraft or
any other aircraft in the Company’s (or such Permitted Lessee’s) fleet.



ARTICLE VIII




SUCCESSOR AND ADDITIONAL TRUSTEES



     Section 8.01. Resignation or Removal; Appointment of Successor. (a) The resignation
or removal of the 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. The 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 the Company and each Noteholder. In
addition, either the 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 the
Company so long



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as no Event of Default or Payment Default shall have occurred and be continuing),
may at any time remove the Loan Trustee without cause by an instrument in writing delivered to the
Loan Trustee and each Noteholder, and, in case of a removal by a Majority in Interest of
Noteholders, to the Company. In the case of the resignation or removal of the Loan Trustee, the
Company shall promptly appoint a successor Loan Trustee. If a
successor Loan Trustee shall not have been appointed within 60 days after such notice of
resignation or removal, the Loan Trustee, the 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 shall have been 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 the Company an instrument accepting such appointment and assuming the
obligations of the 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 hereunder in the trust
hereunder applicable to it with like effect as if originally named the 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 hereunder.



     (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 the Loan Trustee hereunder 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



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time the Loan Trustee
shall cease to be eligible in accordance with the provisions of this Section 8.01(c), the Loan
Trustee shall resign immediately in the manner and with the effect specified in Section 8.01(a).




     (d) Any corporation, bank, trust company or other financial institution into which the Loan
Trustee may be merged or converted or with which it may be consolidated, or any corporation, bank,
trust company or other financial institution resulting from any merger, conversion or consolidation
to which the Loan Trustee shall be a party, or any corporation, bank, trust company or other
financial institution to which substantially all the corporate trust business of the 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.



     Section 8.02. Appointment of Additional and Separate Trustees. (a) Whenever
(i) the Loan Trustee shall deem it necessary or desirable in order to conform to any law of
any jurisdiction in which all or any part of the Collateral shall be 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) the Loan Trustee
shall be advised by counsel satisfactory to it that it is necessary or prudent in the interests of
the Noteholders (and the Loan Trustee shall so advise the Company) or (iii) the Loan
Trustee shall have been requested to do so by a Majority in Interest of Noteholders, then in any
such case, the Loan Trustee and, upon the written request of the Loan Trustee, the Company, shall
execute and deliver an indenture supplemental hereto and such other instruments as may from time to
time be 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 the Loan
Trustee, either to act jointly with the 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 may be provided in such supplemental indenture or other instruments as the Loan
Trustee or a Majority in Interest of Noteholders may deem 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 the Company’s consent. If the Company shall not have taken any
action requested of it under this Section 8.02(a) that is required by its terms within 15 days of a
written request from the Loan Trustee to do so, or if an Event of Default shall have occurred and
be continuing, the Loan Trustee may act under the foregoing provisions of this Section 8.02(a)
without the concurrence of the Company, and, to the extent permitted by applicable law, the Company
hereby irrevocably appoints (which appointment is coupled with an interest) the Loan Trustee as its
agent and



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attorney-in-fact to act for it under the foregoing provisions of this Section 8.02(a).
The 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) shall become incapable of
acting, resign or be removed, all the assets, property, rights, powers, trusts, duties and
obligations of such additional or separate trustee shall revert to the 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 the 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 the Loan
Trustee shall be promptly paid over by it to the Loan Trustee. All other rights, powers, duties
and obligations conferred or imposed upon any additional or separate trustee shall be exercised or
performed by the 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 the
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
the 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 the
Loan Trustee shall be liable for the consequences of its lack of reasonable care in selecting, and
the 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 Article IV, Article V, Article VI, Article VIII, Article IX and Article X hereof insofar
as they apply to the 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 the Loan Trustee hereunder.



     (c) If at any time the Loan Trustee shall deem it no longer necessary or desirable or in the
event that the Loan Trustee shall have been requested to do so in writing by a Majority in Interest
of Noteholders, the Loan Trustee and, upon the written request of the Loan Trustee, the 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. The Loan Trustee may act on
behalf of the Company under this Section 8.02(c) when and to the extent it could so act under



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Section 8.02(a) hereof. In any case, the 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, the Company may and the Loan Trustee shall, at the Company’s request, enter
into one or more agreements supplemental hereto and to 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 the Company and
the assumption by any such successor of the covenants of the 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 hereof; (v) to convey, transfer, assign, mortgage or pledge any property to or with
the 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 the 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 the Company for the benefit of the Noteholders,
the Indenture Indemnitees or the Related Indenture Indemnitees or to surrender any rights or power
herein conferred upon the Company; (ix) to add to the rights of the Noteholders, the
Indenture Indemnitees or the Related Indenture Indemnitees; (x) to include on the Equipment
Notes any legend as may be required by law or as may otherwise be 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 a



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Liquidity Provider with a Replacement Liquidity Provider and the replacement of a
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 Liquidity Facilities for a single Pass Through
Trust; (xiii) to give effect to the replacement of the Depositary with a Replacement
Depositary (as defined in the Note Purchase Agreement) and the replacement of a Deposit Agreement
with a Replacement Deposit Agreement (as defined in the Note Purchase Agreement); (xiv) to
evidence the succession of a new escrow agent or a new paying agent under an Escrow Agreement
pursuant thereto or the removal of the escrow agent or the paying agent thereunder; and
(xv) to provide for the issuance or successive redemption and issuance from time to time of
Series B Equipment Notes (and Related Series B Equipment Notes) or the issuance or successive
redemption and issuance from time to time of one series of Additional Series Equipment Notes (and
Related Additional Series Equipment Notes) and for the issuance of pass through certificates by any
pass through trust that acquires any such Series B Equipment Notes (and Related Series B Equipment
Notes) or Additional Series Equipment Notes (and 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) and to provide for any credit support for any pass
through certificates relating to any such Series B Equipment Notes (and Related Series B Equipment
Notes) or Additional Series Equipment Notes (and 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 such Series B Equipment Notes or Additional Series
Equipment Notes, as the case may be, are issued in accordance with Section 4(a)(v) of the Note
Purchase Agreement, Section 2.02 of the Participation Agreement and Section 8.01(c) or 8.01(d) of
the Intercreditor Agreement, as applicable.




     Section 9.02. Amendments to this Indenture with Consent of Holders. (a) With the
written consent of a Majority in Interest of Noteholders, the Company may, and the 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 the
Company, the Loan Trustee and of the



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Noteholders under this Indenture; provided that
without the consent of each Noteholder affected thereby, an amendment under this Section 9.02 may
not:





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




     (2) change the date on which any principal amount of, interest on, or Make-Whole
Amount, if any, with respect to, 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 the Company nor the 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 any Liquidity Provider without the
consent of such Liquidity Provider that is subject to such reduction, modification or amendment.



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



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     (c) Promptly after the execution by the Company and the Loan Trustee of any supplemental
agreement pursuant to the provisions of this Section 9.02, the Loan Trustee
shall transmit by first-class mail 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 the 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.



     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 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 the Loan Trustee, any Noteholder, any other Indenture Indemnitee or any Related Indenture
Indemnitee, the Participation Agreement and/or the Parent Guarantee 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 the Noteholders, (iii) to make any other change, or
reflect any other matter, of the kind referred to in clauses (i) through (xv) of Section 9.01 or
(iv) in the case of the Parent Guarantee, to add the Company’s payment obligations under
Series B Equipment Notes (and Related Series B Equipment Notes), if any, or Additional Series
Equipment Notes (and Related Additional Series Equipment Notes), if any, to the “Obligations” under
the Parent Guarantee. Notwithstanding the foregoing, without the consent of any Liquidity
Provider, the Company shall not enter into any amendment, waiver or modification of or supplement
or consent to the Participation Agreement which shall reduce, modify or amend any indemnities in
favor of such 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 the 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. The Loan Trustee may place
an appropriate notation about an amendment or waiver on any Equipment Note thereafter executed.
The Loan Trustee in exchange for such Equipment Notes may execute new Equipment Notes that reflect
the amendment or waiver.



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     Section 9.06. Trustee Protected. If, in the reasonable opinion of the institution
acting as the Loan Trustee hereunder, any document required to be executed by it pursuant to the
terms of Section 9.01 or Section 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 (ix) of the definition of “Indenture Indemnitees”.



ARTICLE X




MISCELLANEOUS



     Section 10.01. Termination of Indenture. Subject to Section 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 due under all Equipment Notes and provided that (i) there shall then
be (x) no other Secured Obligations due to the Noteholders, the Loan Trustee and the other
Indenture Indemnitees hereunder, under the Participation Agreement or any other Operative Document,
and (y) no Related Secured Obligations due under any Related Indenture or any other
“Operative Document” (as defined in any Related Indenture) and (ii) in the case of any
redemption of all of the Equipment Notes pursuant to
Section 2.11(a), the provisions of the
foregoing clause (i) shall apply and no Related Indenture Bankruptcy Default or Related Indenture
Event of Default shall have occurred and be continuing, the Company shall direct the Loan Trustee
to execute and deliver to or as directed in writing by the Company an appropriate instrument
releasing the Aircraft and the Engines and (subject to paragraph (ix) of clause “third” of Section
3.03, if applicable) all other Collateral from the Lien of this Indenture and the 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 the Loan Trustee of all property constituting
part of the Collateral and the final distribution by the 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.



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     Section 10.02. No Legal Title to Collateral in the 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 the Loan Trustee
made pursuant to the terms of this Indenture shall bind the Noteholders and the Company and shall
be effective to transfer or convey all right, title and interest of the Loan Trustee, the 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 the Loan Trustee or the Noteholders.



     Section 10.04. Indenture for Benefit of Company, Noteholders, Loan Trustee, Other
Indenture Indemnitees and Related Indenture Indemnitees. Nothing in this Indenture, whether
express or implied, shall be construed to give any Person other than the Company, the Noteholders,
the Loan Trustee, the other Indenture Indemnitees, the Related Loan Trustees and the 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 or waivers
required or permitted under the terms and provisions of this Indenture shall be in English and in
writing, and given by United States registered or certified mail, return receipt requested,
overnight courier service or facsimile, and any such notice shall be effective when received (or,
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) and addressed as follows:



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     if to the Company, addressed to:


American Airlines, Inc.

4333 Amon Carter Boulevard

Mail Drop 5662

Fort Worth, Texas 76155

Reference: American Airlines 2011-2 EETC

Attention: Treasurer

Telephone: (817) 963-1234

Facsimile: (817) 967-4318




     if to the Loan Trustee, addressed to:


U.S. Bank Trust National Association

One Federal Street, 3rd Floor

Boston, Massachusetts 02110

Attention: Corporate Trust Services

Reference: American Airlines 2011-2 EETC

Telephone: (617) 603-6553

Facsimile: (617) 603-6683;




     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 the 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 the Company and the 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.



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     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 the Company and the 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.



     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, the 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
the 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 the 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 the 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
the Loan Trustee, on behalf of the Noteholders, to all of the benefits of Section 1110 with respect
to the Aircraft.



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     Section 10.13. The Company’s Performance and Rights. Any obligation imposed on the
Company herein shall require only that the 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 the Company and, to the extent of such performance, discharge such obligation by the
Company. Except as otherwise expressly provided herein, any right granted to the Company in this
Indenture shall grant the 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 the 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.



     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 the Loan Trustee or their respective representatives
pursuant to Section 7.03(a); (c) each certification furnished to the Loan Trustee or any
Liquidity Provider pursuant to Section 7.06(a) and Section 7.06(b); (d) all information
contained in each report furnished to the Loan Trustee or any Liquidity Provider pursuant to
Section 7.06(e); (e) all information regarding the Warranty Rights; and (f) all
other information designated by the Company as non-public information. All Confidential
Information shall be held confidential by the Loan Trustee, each Liquidity Provider and each
Noteholder and each affiliate, agent,



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officer, director, or
employee of any thereof and shall not be furnished or disclosed by any of them to anyone other
than (i) the 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.]




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     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.



	 	 	 	 	 
	 	AMERICAN AIRLINES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	U.S. BANK TRUST NATIONAL ASSOCIATION, not in its

individual capacity, except as expressly provided

herein, but solely as Loan Trustee

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



Signature Page




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EXHIBIT A to

INDENTURE AND SECURITY AGREEMENT




FORM OF INDENTURE SUPPLEMENT




INDENTURE SUPPLEMENT ([Reg. No.]) NO.




     INDENTURE SUPPLEMENT ([Reg. No.]) NO. __ , dated _____________, ____ (“Indenture
Supplement”), between AMERICAN AIRLINES, INC. (the “Company”) and U.S. BANK TRUST
NATIONAL ASSOCIATION, 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 ([Reg. No.]), dated as of _________ ___, 20__
(the “Indenture”; capitalized terms used herein without definition shall have the meanings
specified therefor in Annex A to the Indenture), between the Company and U.S. Bank Trust National
Association, not in its individual capacity, except as expressly provided therein, but solely as
Loan Trustee (the “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 the 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;]15



     [WHEREAS, the Company has, as provided in the Indenture, heretofore executed and delivered to
the 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	 	Conveyance No.]16
	 
	 	 	 	 
	 
	 	 	 	 





     NOW, THEREFORE, (x) to secure (i) the prompt and complete payment (whether at
stated maturity, by acceleration or otherwise) of principal of, interest on (including interest on
any overdue amounts), and Make-Whole Amount, if any, with





 




			
	15	 	Use for Indenture Supplement No. 1 only.
	 
	16	 	Use for all Indenture Supplements other than
Indenture Supplement No. 1.





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respect to, and all other amounts due under, the Equipment Notes, (ii) all other
amounts payable by the Company under the Operative Documents and (iii) the performance and
observance by the Company of all the agreements and covenants to be performed or observed by the
Company for the benefit of the Noteholders and the 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 the Noteholders, the Indenture Indemnitees and
the Related Indenture Indemnitees to the Company at or before the Closing Date, the receipt and
adequacy of which is hereby acknowledged, the Company does hereby grant, bargain, sell, convey,
transfer, mortgage, assign, pledge and confirm unto the Loan Trustee and its successors in trust
and permitted assigns, for the security and benefit of the Noteholders, the Indenture Indemnitees
and the Related Indenture Indemnitees, a first priority security interest in, and mortgage lien on,
all estate, right, title and interest of the Company in, to and under the Aircraft, including the
Airframe and Engines described in Annex A attached hereto, whether or not any such Engine may from
time to time be 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 any
substitutions, replacements, additions, improvements, accessions and accumulations that constitute
items excluded from the definition of Parts by clauses (b), (c) and (d) thereof) relating thereto;




     TO HAVE AND TO HOLD all and singular the aforesaid property unto the Loan Trustee, and its
successors and permitted assigns, in trust for the equal and proportionate benefit and security of
the Noteholders, the Indenture Indemnitees and the 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.]




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[Reg. No.]




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     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.



	 	 	 	 	 
	 	AMERICAN AIRLINES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	U.S. BANK TRUST NATIONAL ASSOCIATION, not in its

individual capacity, except as expressly provided

in the Indenture, but solely as Loan Trustee

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 


Signature Page



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Annex A to

Indenture Supplement No.                     




DESCRIPTION OF AIRFRAME AND ENGINES




AIRFRAME



	 	 	 	 	 	 	 	 	 
	 	 	 	 	Generic	 	FAA	 	 
	 	 	 	 	Manufacturer	 	Registration	 	Manufacturer’s
	Manufacturer	 	Model	 	and Model	 	No.	 	Serial No.
	Boeing

	 	 	 	BOEING	 	 	 	 






ENGINES




	 	 	 	 	 	 	 
	 	 	 	 	Generic	 	 
	 	 	 	 	Manufacturer and	 	Manufacturer’s
	Manufacturer	 	Model	 	Model	 	Serial Nos.
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 




Each Engine has 550 or more rated takeoff 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.




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EXHIBIT B to

INDENTURE AND SECURITY AGREEMENT




LIST OF PERMITTED COUNTRIES




	 	 	 

	Australia*

	 	Jordan
	Austria*

	 	Kuwait
	Bahamas

	 	Liechtenstein*
	Barbados

	 	Luxembourg*
	Belgium

	 	Malaysia
	Bermuda Islands

	 	Mexico
	Brazil

	 	Monaco*
	British Virgin Islands

	 	the Netherlands*
	Canada*

	 	Netherlands Antilles
	Cayman Islands

	 	New Zealand*
	Chile

	 	Norway*
	Czech Republic

	 	Peoples’ Republic of China
	Denmark*

	 	Poland
	Ecuador

	 	Portugal
	Egypt

	 	Republic of China (Taiwan)
	Finland*

	 	Russia
	France*

	 	Singapore
	Germany*

	 	South Africa
	Greece

	 	South Korea
	Hong Kong

	 	Spain
	Hungary

	 	Sweden*
	Iceland*

	 	Switzerland*
	India

	 	Thailand
	Ireland*

	 	Trinidad and Tobago
	Italy

	 	United Kingdom*
	Jamaica

	 	Venezuela
	Japan*
	 	 








 




			
	*	 	Country of domicile for a manufacturer (or its Affiliate) referred to in Section 7.02(a)(viii).





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EXHIBIT C to

INDENTURE AND SECURITY AGREEMENT




AIRCRAFT TYPE VALUES FOR SECTION 7.06(b)




[$6,000,000]17



[$12,000,000]18





 




			
	17	 	To be inserted for 737-823 or 757-223
aircraft.
	 
	18	 	To be inserted for 777-223ER aircraft.





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SCHEDULE I to

INDENTURE AND SECURITY AGREEMENT




DESCRIPTION OF EQUIPMENT NOTES19




	 	 	 	 	 	 	 	 	 
	 	 	Original Principal Amount20	 	 	Maturity Date21	 
	Series A
	 	 	[$___________]	 	 	 	[________]	 
	Equipment Notes:
	 	 	 	 	 	 	 	 






CERTAIN DEFINED TERMS



	 	 	 	 	 
	Defined Term	 	Definition	 
	Debt Rate for Series A Equipment Notes
	 	8.625% per annum.
	Make-Whole Spread for Series A
	 	0.50%.	 	 
	Equipment Notes
	 	 	 	 








 




			
	19	 	If any Series B Equipment Notes or Additional
Series Equipment Notes are being issued on the Closing Date, this Schedule I
should be revised to include the relevant information for such Series.
	 
	20	 	To insert the amount set forth for Series A
Equipment Notes in the line captioned “At Issuance” in the “Equipment Note
Ending Balance” column for Series A Equipment Notes relating to the relevant
aircraft in Appendix V to the Prospectus Supplement, dated September 27, 2011,
relating to American Airlines Pass Through Certificate, Series 2011-2A.
	 
	21	 	To insert the date set forth for Series A
Equipment Notes corresponding to the last payment date set forth in the
“Equipment Note Ending Balance” column for Series A Equipment Notes relating to
the relevant aircraft in Appendix V to the Prospectus Supplement, dated
September 27, 2011, relating to American Airlines Pass Through Certificate,
Series 2011-2A.





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SCHEDULE I to

INDENTURE AND SECURITY AGREEMENT




EQUIPMENT NOTES AMORTIZATION22




SERIES A EQUIPMENT NOTES23

Boeing [Model]

[Reg. No.]



	 	 	 	 	 
	 	 	 	 	Percentage of
	 	 	 	 	Original Principal Amount
	Payment Date	 	to be Paid







 




			
	22	 	If any Series B Equipment Notes or Additional
Series Equipment Notes are being issued on the Closing Date, this Schedule I
should be revised to include the relevant information for such Series.
	 
	23	 	For each Aircraft (as defined in the Note
Purchase Agreement), to be completed based on the amortization schedule in
Schedule III to the Note Purchase Agreement.





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SCHEDULE I to

INDENTURE AND SECURITY AGREEMENT




DESCRIPTION OF EQUIPMENT NOTES




     The information set forth below this text in this Schedule has been intentionally omitted from
the FAA filing copy as the parties hereto deem it to contain confidential information.24





 




			
	24	 	This page to be included only in the FAA
filing package in the place of the completed Schedule I.





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SCHEDULE II to

INDENTURE AND SECURITY AGREEMENT




PASS THROUGH TRUST AGREEMENT AND

PASS THROUGH TRUST SUPPLEMENTS 25




     Pass Through Trust Agreement, dated as of March 21, 2002, between American Airlines, Inc. and
U.S. Bank Trust National Association (as successor to State Street Bank and Trust Company of
Connecticut, National Association), as trustee, as supplemented by Trust Supplement No. 2011-2A,
dated as of the Issuance Date.





 




			
	25	 	If any Series B Equipment Notes or
Additional Series Equipment Notes are being issued on the Closing Date, this
Schedule II should be revised to include the relevant information for the
applicable Trust Supplement.





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[Reg. No.]

ANNEX A to

Participation Agreement and

Indenture and Security Agreement




DEFINITIONS




     “Additional Series” or “Additional Series Equipment Notes” means Equipment
Notes issued under the Indenture and designated as one series (and only one outstanding series at
any time) (other than “Series A” or “Series B”) thereunder, if any, 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, if
any, issued by any Additional Series Pass Through Trust (including, without limitation, any
“Refinancing Certificates” (as such term is defined in the Intercreditor Agreement”) ) issued by a
“Refinancing Trust” described in clause (ii) of the definition of “Additional Series Pass Through
Trust”).



     “Additional Series Pass Through Trust” means (i) initially, a grantor trust,
if any, created pursuant to the applicable Pass Through Trust Agreement to facilitate the issuance
and sale of pass through certificates in connection with the initial issuance of any Additional
Series Equipment Notes and (ii) any “Refinancing Trust” (as such term is defined in the
Intercreditor Agreement) created in connection with any subsequent redemption of such Additional
Series Equipment Notes and issuance of new 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, in its capacity as pass through trustee thereunder.



     “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



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[Reg. No.]




 









 







of the management and policies of such Person whether through the ownership of voting
securities or by contract or otherwise. In no event shall U.S. Bank be deemed to be an Affiliate
of the Loan Trustee or vice versa.




     “After-Tax Basis” means that indemnity and compensation payments required to be made
on such basis will be supplemented by the Person paying the base amount by that amount which, when
added to such base amount, and after deduction of all Federal, state, local and foreign Taxes
required to be paid by or on behalf of the payee with respect of the receipt or realization of the
base amount and any such supplemental amounts, and after consideration of any current tax savings
of such payee resulting by way of any deduction, credit or other tax benefit actually and currently
realized that is attributable to such base amount or Tax, shall net such payee the full amount of
such base amount.



     “Agreement” and “Participation Agreement” mean that certain Participation
Agreement ([Reg. No.]), dated on or before the Closing Date, among the Company, U.S. Bank, the Pass
Through Trustee under each Pass Through Trust Agreement in effect as of the date of execution and
delivery of such Participation Agreement, the Subordination Agent and the 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 may from time to time be installed on such Airframe or
installed on any other airframe or on any other aircraft. The term “Aircraft” shall include
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 [Model] (generic model [Generic Model])
aircraft further described in Annex A to the Indenture Supplement originally executed and delivered
under the Indenture (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) items



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installed or incorporated in or attached to such aircraft from time to time that are excluded
from the definition of Parts by clauses (b), (c) and (d) thereof) and (b) any and all
related Parts. The term “Airframe” shall include any Substitute Airframe or Replacement
Airframe that may from time to time be substituted for the Airframe pursuant to Section 7.04 or
Section 7.05, respectively, of the Indenture. At such time as a Substitute Airframe or Replacement
Airframe shall be so substituted and the Airframe for which such substitution is made shall be
released from the Lien of the Indenture, such replaced Airframe shall cease to be an Airframe under
the Indenture.




     “Appraiser” means any of Aircraft Information Services, Inc., BK Associates, Inc. or
Morten Beyer & Agnew, Inc. or any successor of any of the foregoing Persons (or, if any such Person
no longer provides appraisals of commercial aircraft, another nationally recognized independent
appraiser of commercial aircraft selected by the Company).



     “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 March 21, 2002, between the Company and U.S. Bank (as successor in interest to State
Street Bank and Trust Company of Connecticut, National Association), 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, Fort Worth, Texas,
Boston, Massachusetts, Wilmington, Delaware or, if different from the foregoing, the city and state
in which the Loan Trustee, any Pass Through Trustee or the 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).



     “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



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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.




     “Certificated Air Carrier” means an air carrier holding an air carrier operating
certificate issued by the Secretary of Transportation pursuant to Chapter 447 of Title 49 of the
United States Code for aircraft capable of carrying ten or more individuals or 6,000 pounds or more
of cargo or that otherwise is certified or registered to the extent required to fall within the
purview of Section 1110.



     “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 A Certificates” means Pass Through Certificates issued by the Class A Pass
Through Trust.



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



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



     “Class A Pass Through Trust” means the American Airlines Pass Through Trust 2011-2A
created pursuant to the Basic Pass Through Trust Agreement, as supplemented by Trust Supplement No.
2011-2A, dated as of the Issuance Date, among the Company, the Parent and U.S. Bank, as Class A
Trustee.



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



     “Class B Certificates” means Pass Through Certificates, if any, issued by any Class B
Pass Through Trust (including, without limitation, any “Refinancing Certificates” (as such term is
defined in the Intercreditor Agreement) issued by a “Refinancing Trust” described in clause (ii) of
the definition of “Class B Pass Through Trust”).



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



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



     “Class B Pass Through Trust” means (i) initially, a grantor trust, if any, created
pursuant to the applicable Pass Through Trust Agreement to facilitate the issuance and sale of pass
through certificates in connection with the initial issuance of any Series B Equipment Notes and
(ii) any “Refinancing Trust” (as such term is defined in the Intercreditor Agreement) created in
connection with any subsequent redemption of such Series B Equipment Notes and issuance of new
Series B Equipment Notes.



     “Class B Pass Through Trust Agreement” means a Trust Supplement entered into in
connection with the creation of a Class B 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.



     “Class B Trustee” means, with respect to any Class B Pass Through Trust, the trustee
under the Class B Pass Through Trust Agreement for such Class B Pass Through Trust, in its capacity
as pass through trustee thereunder.



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



     “Closing Date” means the date of the closing of the transaction contemplated by the
Operative Documents.



     “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.



     “Company” means American Airlines, Inc., 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 the Company (or any Permitted Lessee) for a period in excess of 180
consecutive days, but shall exclude requisition for use not involving requisition of title.



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     “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, with respect to any Series of Equipment Notes, (i) the rate
per annum specified for the applicable Series as such in Schedule I to the Indenture (as, in the
case of any Series B Equipment Notes or any Additional Series Equipment Notes issued after the
Closing Date, such Schedule I may be amended in connection with such issuance), 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 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 the 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 the Company is a debtor, if and so long as the trustee or the debtor
agrees to perform and performs all obligations of the 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 Indentures 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.



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     “Department of Transportation” means the United States Department of Transportation
and any agency or instrumentality of the United States government succeeding to its functions.



     “Deposit Agreement” means each of (i) subject to Section 5(f) of the Note
Purchase Agreement, the Deposit Agreement (Class A), dated as of the Issuance Date, between the
Escrow Agent and the Depositary, which relates to the Class A Pass Through Trust, (ii) a
deposit agreement between the Escrow Agent and the Depositary that has been, or may in the future
be, entered into with respect to the Class B Pass Through Trust, if any, and to which the Company
shall have consented and (iii) a deposit agreement between the Escrow Agent and the
Depositary that has been, or may in the future be, entered into with respect to the Additional
Series Pass Through Trust, if any, and to which the Company shall have consented; provided
that, for purposes of any obligation of Company, no amendment, modification or supplement to, or
substitution or replacement of, any Deposit Agreement shall be effective unless consented to by the
Company.



     “Depositary” means, subject to Section 5(f) of the Note Purchase Agreement, The Bank
of New York Mellon, a New York banking corporation, as Depositary under each Deposit Agreement.



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



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



     “EASA” means the European Aviation Safety Agency of the European Union and any
successor agency.



     “Eligible Account” means an account established by and with an Eligible Institution at
the request of the 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) the 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 the Loan Trustee to the exclusion of the Company, (f) it will
waive or subordinate in favor of the 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.



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     “Eligible Institution” means the corporate trust department of (a) U.S. Bank
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 United States branch
of a foreign bank), which has a Long-Term Rating of at least A3 (or its equivalent) from Moody’s
and A (or its equivalent) from S&P.



     “Engine” means (a) each of the two [Engine Manufacturer and Model] engines
(generic manufacturer and model [Generic Manufacturer and Model]) listed by manufacturer’s serial
number and further described in 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
that may from time to time be 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 items installed or
incorporated in or attached to any such engine from time to time that are excluded from the
definition of Parts. At such time as a Replacement Engine shall be so substituted and the Engine
for which substitution is made shall be released from the Lien of the Indenture, such replaced
Engine shall cease to be an Engine under the Indenture.



     “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.



     “Escrow Agent” means U.S. Bank National Association, a national banking association,
as escrow agent under each Escrow Agreement, or any successor agent thereto.



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     “Escrow Agreement” means each of (i) the Escrow and Paying Agent Agreement
(Class A), dated as of the Issuance Date, among the Escrow Agent, the Paying Agent, the
Underwriters and the Class A Trustee, which relates to the Class A Pass Through Trust, (ii)
an escrow and paying agent agreement among the Escrow Agent, the Paying Agent, the Class B Trustee
and any other party that may be specified therein that has been, or may in the future be, entered
into with respect to the Class B Pass Through Trust, if any, and to which the Company shall have
consented and (iii) an escrow and paying agent agreement among the Escrow Agent, the Paying
Agent, the Additional Series Pass Through Trustee and any other party that may be specified therein
that has been, or may in the future be, entered into with respect to the Additional Series Pass
Through Trust, if any, and to which the Company shall have consented; provided that, for
purposes of any obligation of the Company, no amendment, modification or supplement to, or
substitution or replacement of, any Escrow Agreement shall be effective unless consented to by the
Company.



     “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 of such property by any government (other than a requisition for
use by a Government or the government of the country of registry of the Aircraft) that shall have
resulted in the loss of possession of such property by the 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 the Company shall have
obtained indemnity or insurance in lieu thereof from such government;



     (f) any Compulsory Acquisition;



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     (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 shall have been prohibited by virtue of a condition affecting all aircraft of
the same type for a period of 18 consecutive months, unless the Company shall be 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 shall have been 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) or Section 7.05(e) 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 the Company elects to substitute a Replacement
Airframe pursuant to Section 7.05(a)(i) of the Indenture.



     “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,
executed by the Manufacturer in favor of the Company and recorded
with the FAA]26 [,
collectively, (a) the bill of sale for the Aircraft on AC Form 8050-2, executed by the
Manufacturer in favor of Boeing Sales Corporation and recorded with the FAA and (b) the
bill of sale for the Aircraft on AC Form 8050-2, executed by Boeing Sales Corporation in favor of
the Company and recorded with the FAA]27 [, collectively, (a) the bill of sale
for the Aircraft on AC Form 8050-2, executed by the Manufacturer in favor of Boeing Domestic Sales
Corporation and recorded with the FAA and (b) the bill of sale for the Aircraft on AC Form
8050-2, executed by Boeing Domestic Sales Corporation in favor of the Company and recorded with the
FAA]28.



     “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





 




			
	26	 	To be inserted for all Boeing 737-823
aircraft other than the aircraft with Registration Number N966AN.
	 
	27	 	To be inserted for all Boeing 757-223
aircraft and all 777-223ER aircraft.
	 
	28	 	To be inserted for the Boeing 737-823
aircraft with Registration Number N966AN.





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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 U.S. Bank 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.



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



     “Indenture” means that certain Indenture and Security Agreement ([Reg. No.]), dated as
of the Closing Date, between the Company and the 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) the Loan Trustee, (ii) U.S. Bank,
(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, the Subordination Agent, (v) each Liquidity Provider, (vi) so
long as it is the holder of any Equipment Notes, each Pass Through Trustee, (vii) the
Paying Agent, (viii) the Escrow Agent, and (ix) 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 shall particularly describe the Aircraft, and any Substitute
Airframe, Replacement Airframe and/or Replacement Engine included in the property subject to the
Lien of the Indenture.



     “Intercreditor Agreement” means that certain Intercreditor Agreement, dated as of the
Issuance Date, among the Class A Trustee, the Class A Liquidity Provider and the 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 the Company,
no amendment, modification or supplement to, or substitution or replacement of, such Intercreditor
Agreement shall be effective unless consented to by the Company.



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



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     “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 October 4, 2011.



     “JAA” means the Joint Aviation Authorities and any successor authority.



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



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



     “Liquidity Facilities” means, collectively, the Class A Liquidity Facility and, if
provided, the Class B Liquidity Facility.



     “Liquidity Providers” means, collectively, the Class A Liquidity Provider and, if any
Class B Liquidity Facility shall have been provided, the Class B Liquidity Provider.



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



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



     “Loan Trustee Liens” means any Lien attributable to U.S. Bank or the 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 U.S. Bank or the Loan Trustee not related to its interest in
the Aircraft or the administration of the Collateral pursuant to the Indenture, (ii) acts
of U.S. Bank or the Loan Trustee not permitted by, or the failure of U.S. Bank or the Loan Trustee
to take any action required by, the Operative Documents or the Pass Through Documents,
(iii) claims against U.S. Bank or the 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 U.S. Bank or the 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 the Loan Trustee has received all amounts due to it
pursuant to the Indenture.



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



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     “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 held by the Company or any Affiliate thereof, it being understood that a Pass Through Trustee
shall be considered an Affiliate of the 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 by the
Company or an Affiliate of the Company or a Pass Through Trustee is otherwise under the control of
the Company or such Affiliate of the Company (unless all Equipment Notes then outstanding are held
by the Company or any Affiliate thereof, including the Pass Through Trustees which are considered
Affiliates of the 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.



     “Make—Whole Amount” means, with respect to any Equipment Note, the amount (as
determined by an independent investment banker selected by the Company (and, following the
occurrence and during the continuance of an Event of Default, reasonably acceptable to the 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(519) or, if a weekly average constant maturity,
non-inflation-indexed series yield to



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maturity for United States Treasury securities maturing on the Average Life Date is reported
in the most recent H.15(519), such weekly average yield to maturity as reported in such H.15(519).
“H.15(519)” means the weekly statistical release designated as such, or any successor
publication, published by the Board of Governors of the Federal Reserve System. 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(519)” means the latest H.15(519) 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.




     “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, in the
case of any Series B Equipment Notes or any Additional Series Equipment Notes issued after the
Closing Date, such Schedule I may be amended in connection with such issuance).



     “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 specified in Section 7.04(e) 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, the Subordination Agent on behalf of the 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



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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.




     “Note Purchase Agreement” means the Note Purchase Agreement, dated as of the Issuance
Date, among the Company, the Subordination Agent, the Escrow Agent, the Paying Agent, and the Class
A Trustee providing for, among other things, the issuance and sale of certain equipment notes, as
the same may be amended, supplemented or otherwise modified from time to time in accordance with
its terms.



     “NY UCC” means 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 Note Purchase Agreement), including the Indenture, whether or not any other
“Indenture” shall have been entered into before or after the date of the Indenture, but only if as
of such date all “Equipment Notes” (as defined in each such “Indenture”) are held by the
“Subordination Agent” under the “Intercreditor Agreement”, as such terms are defined in each such
“Indenture”.



     “Other Party Liens” means any Lien attributable to any Pass Through Trustee (other
than in its capacity as Noteholder), the Subordination Agent (other than in its capacity as
Noteholder) or any 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 the 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 AMR Corporation, a Delaware corporation, together with any successor in
interest pursuant to Section 5.02 of the Pass Through Trust Agreement pursuant to which the Class A
Certificates were issued.



     “Parent Guarantee” means the Guarantee, dated as of the Issuance Date, from the Parent
to U.S. Bank Trust National Association, in its individual capacity and as Class A Trustee,
Subordination Agent and Loan Trustee, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.



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     “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, (b) any items leased by the Company or any Permitted Lessee, (c) cargo
containers and (d) components or systems installed on or affixed to the Airframe that are
used to provide individual telecommunications or electronic entertainment to passengers aboard the
Aircraft) so long as the same shall be incorporated or installed in or attached to the Airframe or
any Engine or so long as the same shall be subject to the Lien of the Indenture in accordance with
the terms of Section 7.04 thereof after removal from the Airframe or any such 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 each Pass Through Trust Agreement, the Note Purchase
Agreement, each Escrow Agreement, each Deposit Agreement, the Intercreditor Agreement and each
Liquidity Facility.



     “Pass Through Trust” means each of the separate grantor trusts that have been or will
be created pursuant to the Pass Through Trust Agreements to facilitate certain of the transactions
contemplated by the Operative Documents.



     “Pass Through Trust Agreement” means each of the separate Trust Supplements relating
to the Pass Through Trusts, together in each case 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.



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



     “Paying Agent” means U.S. Bank, as paying agent under each Escrow Agreement, or any
successor agent thereto.



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     “Payment Date” means, for any Equipment Note, each April 15 and October 15, commencing
with April 15, 2012.



     “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.



     “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 of A, its equivalent or
better by Moody’s or S&P (or, if neither such organization then rates such institutions, by 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
either of the two highest ratings 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 of A, its equivalent or better by
Moody’s or S&P (or, if neither such organization then rates such institutions, by 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 of A, its equivalent or better by Moody’s or S&P (or, if
neither such organization then rates such institutions, by 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



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[Reg. No.]




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obligations have a Long-Term Rating of A, its equivalent or better by Moody’s or S&P (or, if
neither such organization then rates such obligations, by 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 of A,
its equivalent or better by Moody’s or S&P (or, if neither such organization then rates such
obligations, by 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 of AAA, its equivalent or better issued by Moody’s or S&P (or, if neither such
organization then rates such obligations, by any nationally recognized rating organization in the
United States) or, if unrated, deemed to be of a comparable quality by the 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 of A, its equivalent or better issued by Moody’s or S&P (or, if neither such organization
then rates such obligations, by any nationally recognized rating organization in the United States)
or, if unrated, deemed to be of a comparable quality by the Loan Trustee; and (o) such
other investments approved in writing by the Loan Trustee; provided that the instruments
described in the foregoing clauses shall have a maturity no later than the earliest date when such
investments may be required for distribution. The bank acting as the Pass Through Trustee or the
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 the Pass Through Trustee or the Loan Trustee or for any
third person or dealing as principal for its own account.




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



     “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.



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



     “Purchase Agreement” means the Purchase Agreement as described in Schedule I to the
Participation Agreement.



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[Reg. No.]





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     “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 C” or the
like) as such Additional Series Equipment Notes, but only if as of such date it is held by the
“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 the “Subordination Agent” under the
“Intercreditor Agreement”, as such terms are defined in such Related Indenture.



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



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



     “Related Indenture Bankruptcy Default” means any “Event of Default” under Section
4.01(f), (g), (h) or (i) of any Related Indenture, determined without giving effect to any
applicable grace period.



     “Related Indenture Event of Default” means any “Event of Default” under any Related
Indenture.



     “Related Indenture Indemnitee” means each Related Noteholder.



     “Related Loan Trustee” means the “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.



     “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



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other amounts payable as of such date under the “Operative Documents” (as defined in each
Related Indenture).




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



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



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





     “Replacement
Airframe” means a Boeing [737-800]29 [757-200]30
[777-200ER]31 aircraft or a comparable or improved model of the 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) items installed or incorporated in or attached to such
airframe from time to time that are excluded from the definition of Parts by clauses (b), (c) and
(d) thereof), 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 [Engine Manufacturer and Model] 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 shall have been 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, but
excluding items installed or incorporated in or attached to any such engine from time to time that
are excluded from the definition of Parts.



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





 




			
	29	 	To be inserted for Boeing 737-823 aircraft.
	 
	30	 	To be inserted for Boeing 757-223 aircraft.
	 
	31	 	To be inserted for Boeing 777-223ER aircraft.





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



     “Responsible Officer” means, with respect to the Company, its Chairman of the Board,
its President, any Senior Vice President, the Chief Financial Officer, any Vice President, the
Treasurer, the Secretary or any other management employee (a) whose power to take the
action in question has been authorized, directly or indirectly, by the Board of Directors of the
Company, (b) working directly under the supervision of its Chairman of the Board, its
President, any Senior Vice President, the Chief Financial Officer, any Vice President, the
Treasurer or the Secretary and (c) whose responsibilities include the administration of the
transactions and agreements contemplated by the Participation Agreement and the Indenture.



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



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



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



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



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



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



     “Series B” or “Series B Equipment Notes” means Equipment Notes, if any, issued
and designated as “Series B Equipment Notes” under the Indenture, in the original principal amount
and maturities as specified in Schedule I to the Indenture under the



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heading “Series B Equipment Notes” (as such Schedule I may be amended in connection with the
issuance of such Equipment Notes if issued after the Closing Date) and bearing interest at the Debt
Rate for Series B Equipment Notes specified in Schedule I to the Indenture (as such Schedule I may
be amended in connection with the issuance of such Equipment Notes if issued after the Closing
Date).




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



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



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



     “Substitute
Airframe” means a Boeing [737-800 aircraft]32 [757-200 aircraft
approved for Extended-range Twin-engine
Operations]33 [777-200ER aircraft]34
(except (a) Engines or engines from time to time installed thereon and any and all Parts
related to such Engine or engines and (b) items installed or incorporated in or attached to
such airframe from time to time that are excluded from the definition of Parts by clauses (b), (c)
and (d) thereof), 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.



     “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.





 




			
	32	 	To be inserted for Boeing 737-823 aircraft.
	 
	33	 	To be inserted for Boeing 757-223 aircraft.
	 
	34	 	To be inserted for Boeing 777-223ER aircraft.





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



     “Trust Supplements” means (i) those agreements supplemental to the Basic Pass
Through Trust Agreement referred to in Schedule III to the Participation Agreement as of the
Closing Date, (ii) in the case of any Class B Certificates, if issued, whether in
connection with the initial issuance of any Series B Equipment Notes or in connection with any
subsequent redemption of any Series B Equipment Notes, an agreement supplemental to the Basic Pass
Through Trust Agreement pursuant to which (a) a separate trust is created for the benefit
of the holders of such Class B Certificates, (b) the issuance of such Class B Certificates
representing fractional undivided interests in the Class B Pass Trough Trust is authorized and
(c) the terms of such Class B Certificates are established and (iii) in the case of
any Additional Series Pass Through Certificates, if issued, whether in connection with the initial
issuance of any Additional Series Equipment Notes or in connection with any subsequent redemption
of any Additional Series Equipment Notes, an agreement supplemental to the Basic Pass Through Trust
Agreement pursuant to which (a) a separate trust is created for the benefit of the holders
of such Additional Series Pass Through Certificates, (b) the issuance of such Additional
Series Pass Through Certificates representing fractional undivided interests in the Additional
Series Pass Trough Trust is authorized and (c) the terms of such Additional Series Pass
Through Certificates are established.



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



     “Underwriter” means each of the underwriters identified as such in the Underwriting
Agreement.



     “Underwriting Agreement” means that certain Underwriting Agreement, dated as of
September 27, 2011, among the Company, the Parent and the underwriters named therein, as the same
may be amended, supplemented or otherwise modified from time to time in accordance with its terms.



     “United States” means the United States of America.



     “U.S. Bank” has the meaning specified in the introductory paragraph to the
Participation Agreement.



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(American Airlines 2011-2 Aircraft EETC)

[Reg. No.]





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     “Warranty
Bill of Sale”35 means [the warranty (as to title) bill of sale
covering the Aircraft, executed by the Manufacturer in favor of the Company and specifically
referring to each Engine, as well as the Airframe, constituting a part of the Aircraft]
36 [, collectively, (a) the warranty (as to title) bill of sale covering the
Aircraft, executed by the Manufacturer in favor of Boeing Sales Corporation and specifically
referring to each Engine, as well as the Airframe, constituting a part of the Aircraft and
(b) the warranty (as to title) bill of sale covering the Aircraft, executed by Boeing Sales
Corporation in favor of the Company and specifically referring to each Engine, as well as the
Airframe, constituting a part of the Aircraft]37 [, collectively, (a) the
warranty (as to title) bill of sale covering the Aircraft, executed by the Manufacturer in favor of
Boeing Domestic Sales Corporation and specifically referring to each Engine, as well as the
Airframe, constituting a part of the Aircraft and (b) the warranty (as to title) bill of
sale covering the Aircraft, executed by Boeing Domestic Sales Corporation in favor of the Company
and specifically referring to each Engine, as well as the Airframe, constituting a part of the
Aircraft]38.



     “Warranty Rights” means the Warranty Rights as described in Schedule I to the
Participation Agreement.





 




			
	35	 	To be updated, as necessary, in the event
that one or more of the Engines are not the engines referred to in such bill of
sale.
	 
	36	 	To be inserted for all Boeing 737-823
aircraft other than the aircraft with Registration Number N966AN.
	 
	37	 	To be inserted for all Boeing 757-223
aircraft and all Boeing 777-223ER aircraft.
	 
	38	 	To be inserted for the Boeing 737-823
aircraft with Registration Number N966AN.





Indenture and Security Agreement

(American Airlines 2011-2 Aircraft EETC)

[Reg. No.]





A-24