exv4w18






EXHIBIT B TO NOTE PURCHASE AGREEMENT






 








PARTICIPATION AGREEMENT [___]




Dated as of [_____________], 2011



Among



US AIRWAYS, INC.,

Owner,



and



WILMINGTON TRUST COMPANY,

Not in its individual capacity

except as expressly provided herein,

but solely as Indenture Trustee, Subordination Agent

under the Intercreditor Agreement and Pass Through Trustee

under each of the Applicable Pass Through Trust Agreements



 






[__] Airbus Model [_________] Aircraft

Bearing Manufacturer’s Serial No.[______]

and U.S. Registration No. N[_______]



 











 









 





CONTENTS




	 	 	 	 	 

	SECTION 1. DEFINITIONS AND CONSTRUCTION 
	 	 	2	 
	 
	 	 	 	 
	SECTION 2. SECURED LOANS; CLOSING 
	 	 	2	 
	2.1 Making of Loans and Issuance of Equipment Notes 
	 	 	2	 
	2.2 Closing 
	 	 	2	 
	 
	 	 	 	 
	SECTION 3. GUARANTEE 
	 	 	2	 
	 
	 	 	 	 
	SECTION 4. CONDITIONS PRECEDENT 
	 	 	3	 
	4.1 Conditions Precedent to the Obligations of the Pass
Through Trustees
	 	 	3	 
	4.2 Conditions Precedent to Obligations of Indenture Trustee 
	 	 	6	 
	4.3 Conditions Precedent to Obligations of Owner 
	 	 	7	 
	4.4 Post-Registration Opinion 
	 	 	8	 
	 
	 	 	 	 
	SECTION 5. REPRESENTATIONS AND WARRANTIES 
	 	 	8	 
	5.1 Owner’s Representations and Warranties 
	 	 	8	 
	5.2 WTC’s Representations and Warranties 
	 	 	11	 
	 
	 	 	 	 
	SECTION 6. COVENANTS, UNDERTAKINGS AND AGREEMENTS 
	 	 	14	 
	6.1 Covenants of Owner 
	 	 	14	 
	6.2 Covenants of WTC 
	 	 	15	 
	6.3 Covenants of Note Holders 
	 	 	16	 
	6.4 Agreements 
	 	 	17	 
	 
	 	 	 	 
	SECTION 7. CONFIDENTIALITY 
	 	 	20	 
	 
	 	 	 	 
	SECTION 8. INDEMNIFICATION AND EXPENSES 
	 	 	21	 
	8.1 General Indemnity 
	 	 	21	 
	8.2 Expenses 
	 	 	25	 
	8.3 General Tax Indemnity 
	 	 	26	 
	8.4 Payments 
	 	 	33	 
	8.5 Interest 
	 	 	33	 
	8.6 Benefit of Indemnities 
	 	 	33	 
	 
	 	 	 	 
	SECTION 9. ASSIGNMENT OR TRANSFER OF INTEREST 
	 	 	34	 
	9.1 Note Holders 
	 	 	34	 
	9.2 Effect of Transfer 
	 	 	34	 
	 
	 	 	 	 
	SECTION 10. SECTION 1110 
	 	 	34	 
	 
	 	 	 	 
	SECTION 11. CHANGE OF CITIZENSHIP 
	 	 	34	 
	 
	 	 	 	 
	11.1 Generally 
	 	 	34	 
	11.2 Indenture Trustee 
	 	 	35	 






PARTICIPATION AGREEMENT (2011-1)




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	SECTION 12. MISCELLANEOUS 
	 	 	35	 
	12.1 Amendments 
	 	 	35	 
	12.2 Severability 
	 	 	35	 
	12.3 Survival 
	 	 	35	 
	12.4 Reproduction of Documents 
	 	 	36	 
	12.5 Counterparts 
	 	 	36	 
	12.6 No Waiver 
	 	 	36	 
	12.7 Notices 
	 	 	36	 
	12.8 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE
	 	 	37	 
	12.9 Third-Party Beneficiary 
	 	 	38	 
	12.10 Entire Agreement 
	 	 	38	 
	12.11 Further Assurances 
	 	 	38	 
	 
	 	 	 	 
	SCHEDULES AND EXHIBITS
	 	 	 	 
	 
	 	 	 	 
	SCHEDULE 1 — Accounts; Addresses
	 	 	 	 
	SCHEDULE 2 — Commitments
	 	 	 	 
	SCHEDULE 3 — Certain Terms
	 	 	 	 
	SCHEDULE 4 — Permitted Countries
	 	 	 	 
	 
	 	 	 	 
	EXHIBIT A —  Opinion of special counsel to Owner
	 	 	 	 
	EXHIBIT B —  Opinion of regulatory counsel to Owner
	 	 	 	 
	EXHIBIT C-1 — Opinion of special counsel to Indenture Trustee
and to the Applicable Pass Through Trustees
	 	 	 	 
	EXHIBIT C-2 — Opinion of special counsel to Indenture Trustee
and to the Applicable Pass Through Trustees
	 	 	 	 
	EXHIBIT D —  Opinion of special counsel in Oklahoma City, Oklahoma
	 	 	 	 
	[EXHIBIT E —  Opinion of special French counsel]1
	 	 	 	 








 




			
	1	 	Insert for New Aircraft.





PARTICIPATION AGREEMENT (2011-1)




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PARTICIPATION AGREEMENT [___]




     PARTICIPATION AGREEMENT [____], dated as of [____________], 2011 (this “Agreement”), among (a)
US AIRWAYS, INC., a Delaware corporation (“Owner”), (b) WILMINGTON TRUST COMPANY, a Delaware
banking corporation, not in its individual capacity, except as expressly provided herein, but
solely as Indenture Trustee (in its capacity as Indenture Trustee, “Indenture Trustee” and in its
individual capacity, “WTC”), (c) WILMINGTON TRUST COMPANY, not in its individual capacity, except
as expressly provided herein, but solely as Pass Through Trustee under each of the Applicable Pass
Through Trust Agreements (each, an “Applicable Pass Through Trustee”) and (d) WILMINGTON TRUST
COMPANY, not in its individual capacity, except as expressly provided herein, but solely as
Subordination Agent under the Intercreditor Agreement (“Subordination Agent”).



RECITALS



     A. [The Aircraft is currently owned by Owner.]2 [Owner and Airframe Manufacturer
have entered into the Purchase Agreement, pursuant to which, among other things, Airframe
Manufacturer has agreed to manufacture and sell to Owner and Owner has agreed to purchase from
Airframe Manufacturer, certain aircraft, including the Aircraft.]3



     B. Pursuant to each of the Pass Through Trust Agreements, the Pass Through Trusts were created
and the Pass Through Certificates were issued and sold.



     C. Each Applicable Pass Through Trustee has agreed to use a portion of the proceeds from the
issuance and sale of the Pass Through Certificates issued by each Applicable Pass Through Trust to
purchase from Owner, on behalf of the related Applicable Pass Through Trust, the Equipment Note
bearing the same interest rate as the Pass Through Certificates issued by such Pass Through Trust.



     D. Owner and Indenture Trustee, concurrently with the execution and delivery hereof, have
entered into the Trust Indenture for the benefit of the Note Holders, pursuant to which, among
other things, Owner agrees (1) to issue Equipment Notes, in the amounts and otherwise as provided
in the Trust Indenture, and (2) to mortgage, pledge and assign to Indenture Trustee all of Owner’s
right, title and interest in the Collateral to secure the Secured Obligations, including, without
limitation, Owner’s obligations under the Equipment Notes.



     E. The parties hereto wish to set forth in this Agreement the terms and conditions upon and
subject to which the aforesaid transactions shall be effected.



     NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein
and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:





 




			
	2	 	Insert for Owned Aircraft.
	 
	3	 	Insert for New Aircraft.




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SECTION 1. DEFINITIONS AND CONSTRUCTION




     Capitalized terms used but not defined herein (including in the initial paragraph and Recitals
above) shall have the respective meanings set forth or incorporated by reference, and shall be
construed and interpreted in the manner described, in Annex A to the Trust Indenture.



SECTION 2. SECURED LOANS; CLOSING




     2.1 Making of Loans and Issuance of Equipment Notes



     Subject to the terms and conditions of this Agreement, on the date hereof or on such other
date agreed to by the parties hereto (the “Closing Date”):




	 	(a)	 	Each Applicable Pass Through Trustee listed on Schedule 2 shall make a secured
loan to the Owner in the amount in Dollars opposite such Trustee’s name on Schedule 2;
and
	 
	 	(b)	 	The Owner shall issue, pursuant to and in accordance with the provisions of
Article II of the Trust Indenture, to the Subordination Agent as the registered holder
on behalf of each such Applicable Pass Through Trustee, one or more Equipment Notes,
dated the Closing Date, of the Series set forth opposite such Trustee’s name on
Schedule 2, in an aggregate principal amount equal to the amount of the secured loan
made by each such Applicable Pass Through Trustee.





     In addition, the Owner shall have the option after the Closing Date to redeem and reissue
Series B Equipment Notes and to redeem and reissue Series C Equipment Notes, subject to the terms
of the Note Purchase Agreement and the Intercreditor Agreement. If Series B or Series C are so
reissued after the Closing Date, the Note Holder of such Equipment Notes shall be entitled to
execute a counterpart to this Agreement and become a party hereto.



2.2 Closing




     (a) The Closing of the transactions contemplated hereby shall take place at the offices of
[__], or at such other place as the parties shall agree.



     (b) All payments pursuant to this Section 2 shall be made in immediately available funds to
such accounts set forth in Schedule 1 hereto.



SECTION 3. GUARANTEE




     The payment obligations of the Owner hereunder, under the Trust Indenture and the Equipment
Notes issued thereunder will be guaranteed by US Airways Group, Inc. on and subject to to the terms
and conditions of the Guarantee heretofore delivered to the Pass Through Trustees, the
Subordination Agent and the Indenture Trustee.




PARTICIPATION AGREEMENT (2011-1)




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SECTION 4. CONDITIONS PRECEDENT




     4.1 Conditions Precedent to the Obligations of the Pass Through Trustees



     The obligation of each Applicable Pass Through Trustee listed on Schedule 2 to make the
secured loan described in Section 2.1(a) and to participate in the transactions contemplated by
this Agreement on the Closing Date is subject to the fulfillment, prior to or on the Closing Date,
of the following conditions precedent:




     4.1.1 Equipment Notes



     The Owner shall have tendered the Equipment Notes to be issued to such Applicable Pass Through
Trustees to the Indenture Trustee for authentication and the Indenture Trustee shall have
authenticated such Equipment Notes to be issued to such Applicable Pass Through Trustees and shall
have tendered the Equipment Notes to the Subordination Agent on behalf of such Pass Through
Trustee, against receipt of the loan proceeds, in accordance with Section 2.1.




     4.1.2 Delivery of Documents



     The Subordination Agent on behalf of each such Applicable Pass Through Trustee shall have
received executed counterparts or conformed copies of the following documents:




     (i) this Agreement;




     (ii) the Trust Indenture;




     (iii) the initial Trust Indenture Supplement;




     (iv) the broker’s report and insurance certificates required by Section 4.06 of the
Trust Indenture;




     (v) [the Consent and Agreement, the Engine Consent and Agreement and the French Pledge
Agreement;]4 [the Release;]5




     (vi) the Bills of Sale;




     (vii) (A) a copy of the Certificate of Incorporation and By-Laws of Owner and
resolutions of the board of directors of Owner and/or the executive committee thereof, in
each case certified as of the Closing Date, by the Secretary or an Assistant Secretary of
Owner, duly authorizing the execution, delivery and performance by Owner of the Operative
Agreements to which it is party required to be executed and delivered by
Owner on or prior to the Closing Date in accordance with the provisions hereof and thereof;
and (B) an incumbency certificate of Owner as to the person or persons authorized to execute
and deliver the Operative Agreements on behalf of Owner;





 




			
	4	 	Insert for New Aircraft.
	 
	5	 	Insert for Owned Aircraft.




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     (viii) an Officer’s Certificate of Owner, dated as of the Closing Date, stating that
its representations and warranties set forth in this Agreement are true and correct as of
the Closing Date (or, to the extent that any such representation and warranty expressly
relates to an earlier date, true and correct as of such earlier date);




     (ix) the Financing Statements;




     (x) the following opinions of counsel, in each case dated the Closing Date:




     (A) an opinion of Latham & Watkins LLP, special counsel to Owner, substantially
in the form of Exhibit A;




     (B) an opinion of Squire, Sanders & Dempsey, L.L.P., regulatory counsel to
Owner, substantially in the form of Exhibit B;




     (C) the opinions of Morris James LLP, special counsel to Indenture Trustee and
to the Applicable Pass Through Trustees, each substantially in the form of Exhibits
C-1 and C-2;




     (D) an opinion of Daugherty, Fowler, Peregrin, Haught & Jenson, special counsel
in Oklahoma City, Oklahoma, substantially in the form of Exhibit D;




     (E) [an opinion of special French counsel for the Owner, with respect to the
French Pledge Agreement, substantially in the form of Exhibit E;]6 and




     (xi) a copy of a current, valid Standard Certificate of Airworthiness for the Aircraft
duly issued by the FAA [, together with a copy of a duly executed application for
registration of the Aircraft with the FAA in the name of the Owner.]7




     4.1.3 Perfected Security Interest



     On the Closing Date, after giving effect to the filing of the FAA Filed Documents, the
Financing Statements and the registration of the International Interest (or Prospective
International Interest) of the Indenture Trustee in the Airframe and each Engine with the
International Registry, Indenture Trustee shall have received a duly perfected first priority
security interest in all of Owner’s right, title and interest in the Aircraft, subject only to
Permitted Liens.




     4.1.4 Violation of Law



     No change shall have occurred after the date of this Agreement in any applicable Law that
makes it a violation of Law for (a) Owner, any Applicable Pass Through Trustee, Subordination Agent
or Indenture Trustee to execute, deliver and perform the Operative





 




			
	6	 	Insert for New Aircraft.
	 
	7	 	Insert for New Aircraft.





PARTICIPATION AGREEMENT (2011-1)




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Agreements to which any of them is a party or (b) any Applicable Pass Through Trustee to make the
loan contemplated by Section 2.1, to acquire an Equipment Note or to realize the benefits of the
security afforded by the Trust Indenture.





     4.1.5 Representations, Warranties and Covenants



     The representations and warranties of each other party to this Agreement made, in each case,
in this Agreement and in any other Operative Agreement to which it is a party, shall be true and
accurate in all material respects as of the Closing Date (unless any such representation and
warranty shall have been made with reference to a specified date, in which case such representation
and warranty shall be true and accurate as of such specified date) and each other party to this
Agreement shall have performed and observed, in all material respects, all of its covenants,
obligations and agreements in this Agreement and in any other Operative Agreement to which it is a
party to be observed or performed by it as of the Closing Date.




     4.1.6 No Event of Default



     On the Closing Date, no event shall have occurred and be continuing, or would result from the
mortgage of the Aircraft, which constitutes a Default or an Event of Default.




     4.1.7 No Event of Loss



     No Event of Loss with respect to the Airframe or any Engine shall have occurred and no
circumstance, condition, act or event that, with the giving of notice or lapse of time or both,
would give rise to or constitute an Event of Loss with respect to the Airframe or any Engine shall
have occurred.




     4.1.8 Title



     Owner shall have good title [(subject to filing and recordation of the FAA Bill of Sale with
the FAA)]8 to the Aircraft, free and clear of all Liens, except Permitted Liens [and
subject to filing and recordation of the Release with the FAA]9.




     4.1.9 Certification



     The Aircraft shall have been duly certificated by the FAA as to type and airworthiness in
accordance with the terms of the Purchase Agreement.




     4.1.10 Section 1110



     Indenture Trustee shall be entitled to the benefits of Section 1110 (as currently in effect)
with respect to the right to take possession of the Airframe and Engines and to enforce any of its
other rights or remedies as provided in the Trust Indenture in the event of a case under
Chapter 11 of the Bankruptcy Code in which Owner is a debtor.





 




			
	8	 	Insert for New Aircraft.
	 
	9	 	Insert for Owned Aircraft.




PARTICIPATION AGREEMENT (2011-1)





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     4.1.11 Filing



     On the Closing Date (a) the FAA Filed Documents shall have been duly filed for recordation (or
shall be in the process of being so duly filed for recordation) with the FAA in accordance with the
Act, (b) [the sale of the Airframe and Engines to the Owner and]10 the International
Interest (or Prospective International Interest) of the Indenture Trustee in the Airframe and
Engines granted (or to be granted) under the Trust Indenture shall have been registered with the
International Registry and there shall exist no registered International Interest with respect to
the Airframe or either Engine on the International Registry with a priority over the International
Interest of the Indenture Trustee therein, (c) each Financing Statement shall have been duly filed
(or shall be in the process of being so duly filed) in the appropriate jurisdiction and (d) the
Subordination Agent, on behalf of each Applicable Pass Through Trustee, shall have received a
printout of the “priority search certificate” from the International Registry relating to the
Airframe and each Engine showing no International Interest with a priority over the International
Interest of the Indenture Trustee therein.




     4.1.12 No Proceedings



     No action or proceeding shall have been instituted, nor shall any action be threatened in
writing, before any Government Entity, nor shall any order, judgment or decree have been issued or
proposed to be issued by any Government Entity, to set aside, restrain, enjoin or prevent the
completion and consummation of this Agreement or any other Operative Agreement or the transactions
contemplated hereby or thereby.




     4.1.13 Governmental Action



     All appropriate action required to have been taken prior to the Closing Date by the FAA, or
any governmental or political agency, subdivision or instrumentality of the United States, in
connection with the transactions contemplated by this Agreement shall have been taken, and all
orders, permits, waivers, authorizations, exemptions and approvals of such entities required to be
in effect on the Closing Date in connection with the transactions contemplated by this Agreement
shall have been issued.




     4.1.14 Note Purchase Agreement



     The conditions precedent to the obligations of the Applicable Pass Through Trustees and the
other requirements relating to the Aircraft and the Equipment Notes set forth in the Note Purchase
Agreement shall have been satisfied.



     4.2 Conditions Precedent to Obligations of Indenture Trustee



     The obligation of Indenture Trustee to authenticate the Equipment Notes on the Closing Date is
subject to the satisfaction or waiver by Indenture Trustee, on or prior to the Closing Date, of the
conditions precedent set forth below in this Section 4.2.





 




			
	10	 	Insert for New Aircraft.





PARTICIPATION AGREEMENT (2011-1)




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     4.2.1 Documents



     Executed originals of the agreements, instruments, certificates or documents described in
Section 4.1.2 shall have been received by Indenture Trustee, except as specifically provided
therein, unless the failure to receive any such agreement, instrument, certificate or document is
the result of any action or inaction by Indenture Trustee.




     4.2.2 Other Conditions Precedent



     Each of the conditions set forth in Sections 4.1.4, 4.1.5, 4.1.6 and 4.1.10 shall have been
satisfied unless the failure of any such condition to be satisfied is the result of any action or
inaction by Indenture Trustee.



     4.3 Conditions Precedent to Obligations of Owner



     The obligation of Owner to participate in the transaction contemplated hereby on the Closing
Date is subject to the satisfaction or waiver by Owner, on or prior to the Closing Date, of the
conditions precedent set forth below in this Section 4.3.




     4.3.1 Documents



     Executed originals of the agreements, instruments, certificates or documents described in
Section 4.1.2 shall have been received by Owner, except as specifically provided therein, and shall
be satisfactory to Owner, unless the failure to receive any such agreement, instrument, certificate
or document is the result of any action or inaction by Owner. In addition, the Owner shall have
received the following:




     (i) (A) an incumbency certificate of WTC as to the person or persons authorized to
execute and deliver the Operative Agreements on behalf of WTC and (B) a copy of the
Certificate of Incorporation and By-Laws and general authorizing resolution of the board of
directors (or executive committee) or other satisfactory evidence of authorization of WTC,
certified as of the Closing Date by the Secretary or Assistant or Attesting Secretary of
WTC, which authorize the execution, delivery and performance by WTC of the Operative
Agreements to which it is a party; and




     (ii) an Officer’s Certificate of WTC, dated as of the Closing Date, stating that its
representations and warranties in its individual capacity or as Indenture Trustee, an
Applicable Pass Through Trustee or Subordination Agent, as the case may be, set forth in
this Agreement are true and correct as of the Closing Date (or, to the extent that any such
representation and warranty expressly relates to an earlier date, true and correct as of
such earlier date).




     4.3.2 Other Conditions Precedent



     Each of the conditions set forth in Sections 4.1.4, 4.1.5, 4.1.6, 4.1.7, 4.1.8, 4.1.9, 4.1.10,
4.1.11, 4.1.12 and 4.1.13 shall have been satisfied or waived by Owner, unless the failure of any
such condition to be satisfied is the result of any action or inaction by Owner.



PARTICIPATION AGREEMENT (2011-1)




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     4.4 Post-Registration Opinion



     Promptly upon [the registration of the Aircraft and]11 the recordation of the FAA
Filed Documents pursuant to the Act, Owner will cause Daugherty, Fowler, Peregrin, Haught & Jenson,
special counsel in Oklahoma City, Oklahoma, to deliver to Owner, each Pass Through Trustee and
Indenture Trustee a favorable opinion or opinions addressed to each of them with respect to such
[registration and]12 recordation.



SECTION 5. REPRESENTATIONS AND WARRANTIES




     5.1 Owner’s Representations and Warranties



     Owner represents and warrants to each Pass Through Trustee, Subordination Agent and Indenture
Trustee that:




     5.1.1 Organization; Qualification



     Owner is a corporation duly incorporated, validly existing and in good standing under the Laws
of the State of Delaware and has the corporate power and authority to conduct the business in which
it is currently engaged and to own or hold under lease its properties and to enter into and perform
its obligations under the Operative Agreements to which it is party. Owner is duly qualified to do
business as a foreign corporation in good standing in each jurisdiction in which the nature and
extent of the business conducted by it, or the ownership of its properties, requires such
qualification, except where the failure to be so qualified would not give rise to a Material
Adverse Change to Owner.




     5.1.2 Corporate Authorization



     Owner has taken, or caused to be taken, all necessary corporate action (including, without
limitation, the obtaining of any consent or approval of stockholders required by its Certificate of
Incorporation or By-Laws) to authorize the execution and delivery of each of the Operative
Agreements to which it is party, and the performance of its obligations thereunder.




     5.1.3 No Violation



     The execution and delivery by Owner of the Operative Agreements to which it is party, the
performance by Owner of its obligations thereunder and the consummation by Owner on the Closing
Date of the transactions contemplated thereby, do not and will not (a) violate any provision of the
Certificate of Incorporation or By-Laws of Owner, (b) violate any Law applicable to or binding on
Owner or (c) violate or constitute any default under (other than any violation or default that
would not result in a Material Adverse Change to Owner), or result in the creation of any Lien
(other than as permitted under the Trust Indenture) upon the Aircraft under, any indenture,
mortgage, chattel mortgage, deed of trust, conditional sales contract, lease,





 




			
	11	 	Insert for New Aircraft.
	 
	12	 	Insert for New Aircraft.




PARTICIPATION AGREEMENT (2011-1)






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loan or other
material agreement, instrument or document to which Owner is a party or by which Owner or any of
its properties is bound.





     5.1.4 Approvals



     The execution and delivery by Owner of the Operative Agreements to which Owner is a party, the
performance by Owner of its obligations thereunder and the consummation by Owner on the Closing
Date of the transactions contemplated thereby do not and will not require the consent or approval
of, or the giving of notice to, or the registration with, or the recording or filing of any
documents with, or the taking of any other action in respect of, (a) any trustee or other holder of
any Debt of Owner and (b) any Government Entity, other than (x) the filings, registrations and
recordations referred to in Section 5.1.6 and (y) filings, recordings, notices or other ministerial
actions pursuant to any routine recording, contractual or regulatory requirements applicable to it.




     5.1.5 Valid and Binding Agreements



     The Operative Agreements to which Owner is a party have been duly authorized, executed and
delivered by Owner and, assuming the due authorization, execution and delivery thereof by the other
party or parties thereto, constitute the legal, valid and binding obligations of Owner and are
enforceable against Owner in accordance with the respective terms thereof, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium
and other similar Laws affecting the rights of creditors generally and general principles of
equity, whether considered in a proceeding at law or in equity.




     5.1.6 Registration and Recordation



     Except for [(a) the registration of the Aircraft with the FAA pursuant to the Act in the name
of Owner, (b) the filing with the FAA of the AC Forms 8050-135 with respect to the sale of the
Airframe and Engines to Owner and the International Interests (or Prospective International
Interests) granted under the Trust Indenture thereon and the filing with the FAA for recordation
(and recordation) of the FAA Filed Documents, (c) the registration of the International Interest
(or Prospective International Interest) in, and the sale to the Owner of, the Airframe and Engines
with the International Registry,]13 [(a) the filing with the FAA of the AC Forms
8050-135 with respect to the International Interests (or Prospective International Interests)
granted under the Trust Indenture on the Airframe and Engines, (b) the filing with the FAA for
recordation (and recordation) of the FAA Filed Documents, (c) the discharge of any International
Interest with the International Registry in the Airframe or Engines granted to secure the Existing
Financing and the registration with the International Registry of the International Interest (or
Prospective International Interest) in the Airframe and Engines,]14 (d) the filing of
the Financing Statements (and continuation statements relating thereto at periodic intervals), and
(e) the affixation of the nameplates referred to in Section 4.02(f) of the Trust Indenture, no
further action, including any filing or recording of any document (including any financing
statement in





 




			
	13	 	Insert for New Aircraft.
	 
	14	 	Insert for Owned Aircraft.




PARTICIPATION AGREEMENT (2011-1)





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respect thereof under Article 9 of the UCC) is necessary in order to establish and
perfect Indenture Trustee’s security interest in the Aircraft as against Owner and any other
Person, in each case, in any applicable jurisdictions in the United States.





     5.1.7 Owner’s Location



     The Owner’s location (as such term is used in Section 9-307 of the UCC) is Delaware. The full
and correct legal name and mailing address of Owner are correctly set forth in Schedule 1 hereto in
the column “Address for Notices”.




     5.1.8 No Event of Loss



     No Event of Loss has occurred with respect to the Airframe or any Engine, and, to the Actual
Knowledge of Owner, no circumstance, condition, act or event has occurred that, with the giving of
notice or lapse of time or both gives rise to or constitutes an Event of Loss with respect to the
Airframe or any Engine.




     5.1.9 Compliance With Laws



     (a) Owner is a Citizen of the United States and a U.S. Air Carrier.



     (b) Owner holds all licenses, permits and franchises from the appropriate Government Entities
necessary to authorize Owner to lawfully engage in air transportation and to carry on scheduled
commercial passenger service as currently conducted, except where the failure to so hold any such
license, permit or franchise would not give rise to a Material Adverse Change to Owner.



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




     5.1.10 Securities Laws



     Neither Owner nor any person authorized to act on its behalf has directly or indirectly
offered any beneficial interest or Security relating to the ownership of the Aircraft, or any of
the Equipment Notes or any other interest in or security under the Trust Indenture, for sale to, or
solicited any offer to acquire any such interest or security from, or has sold any such
interest or security to, any person in violation of the Securities Act.




     5.1.11 Broker’s Fees



     No Person acting on behalf of Owner is or will be entitled to any broker’s fee, commission or
finder’s fee in connection with the Transactions, other than the fees and expenses payable by Owner
in connection with the sale of the Pass Through Certificates.



PARTICIPATION AGREEMENT (2011-1)




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     5.1.12 Section 1110



     Indenture Trustee is entitled to the benefits of Section 1110 (as currently in effect) with
respect to the right to take possession of the Airframe and Engines and to enforce any of its other
rights or remedies as provided in the Trust Indenture in the event of a case under Chapter 11 of
the Bankruptcy Code in which Owner is a debtor.




     5.1.13 Cape Town



     The Owner is a Transacting User Entity (as defined in the regulations of the International
Registry); is “situated”, for the purposes of the Cape Town Treaty, in the United States; and has
the power to “dispose” (as such term is used in the Cape Town Treaty) of the Airframe and each
Engine. The [Bills of Sale for the Airframe and Engines constitute a “contract of sale” (as
defined in the Cape Town Treaty), and the]15 Trust Indenture, as supplemented by the
Trust Indenture Supplement in which such Airframe and Engines are listed, creates an International
Interest in such Airframe and Engines. The Airframe and each Engine are “aircraft objects” (as
defined in the Cape Town Treaty); and the United States is a Contracting State under the Cape Town
Treaty.



     5.2 WTC’s Representations and Warranties



     WTC represents and warrants (with respect to Section 5.2.10, solely in its capacity as
Subordination Agent) to Owner that:




     5.2.1 Organization, Etc.



     WTC is a Delaware banking corporation duly organized, validly existing and in good standing
under the Laws of the State of Delaware, holding a valid certificate to do business as a Delaware
banking corporation with banking authority to execute and deliver, and perform its obligations
under, the Applicable Pass Through Trustee Agreements and the Operative Agreements to which it is a
party.




     5.2.2 Corporate Authorization



     WTC has taken, or caused to be taken, all necessary corporate action (including, without
limitation, the obtaining of any consent or approval of stockholders required by Law or by its
Certificate of Incorporation or By-Laws) to authorize the execution and delivery by WTC, in its
individual capacity or as Indenture Trustee, a Pass Through Trustee or Subordination Agent, as the
case may be, of the Pass Through Trustee Agreements and the Operative Agreements to which it is a
party and the performance of its obligations thereunder.




     5.2.3 No Violation



     The execution and delivery by WTC, in its individual capacity or as Indenture Trustee, a Pass
Through Trustee or Subordination Agent, as the case may be, of the Pass Through Trustee





 




			
	15	 	Insert for New Aircraft.






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Agreements
and the Operative Agreements to which it is a party, the performance by WTC, in its individual
capacity or as Indenture Trustee, a Pass Through Trustee or Subordination Agent, as the case may
be, of its obligations thereunder and the consummation on the Closing Date of the transactions
contemplated thereby, do not and will not (a) violate any provision of the Certificate of
Incorporation or By-Laws of WTC, (b) violate any Law applicable to or binding on WTC, in its
individual capacity or (except in the case of any Law relating to any Plan) as Indenture Trustee, a
Pass Through Trustee or Subordination Agent, or (c) violate or constitute any default under (other
than any violation or default that would not result in a Material Adverse Change to WTC, in its
individual capacity or Indenture Trustee, a Pass Through Trustee or Subordination Agent), or result
in the creation of any Lien (other than the Lien of the Trust Indenture) upon any property of WTC,
in its individual capacity or as Indenture Trustee, a Pass Through Trustee or Subordination Agent,
or any of WTC’s subsidiaries under, any indenture, mortgage, chattel mortgage, deed of trust,
conditional sales contract, lease, loan or other agreement, instrument or document to which WTC, in
its individual capacity or as Indenture Trustee, a Pass Through Trustee or Subordination Agent, is
a party or by which WTC, in its individual capacity or as Indenture Trustee, a Pass Through Trustee
or Subordination Agent, or any of their respective properties is bound.





     5.2.4 Approvals



     The execution and delivery by WTC, in its individual capacity or as Indenture Trustee, a Pass
Through Trustee or Subordination Agent, as the case may be, of the Pass Through Trustee Agreements
and the Operative Agreements to which it is a party, the performance by WTC, in its individual
capacity or as Indenture Trustee, a Pass Through Trustee or Subordination Agent, as the case may
be, of its obligations thereunder and the consummation on the Closing Date by WTC, in its
individual capacity or as Indenture Trustee, a Pass Through Trustee or Subordination Agent, as the
case may be, of the transactions contemplated thereby do not and will not require the consent,
approval or authorization of, or the giving of notice to, or the registration with, or the
recording or filing of any documents with, or the taking of any other action in respect of, (a) any
trustee or other holder of any Debt of WTC or (b) any Government Entity, other than the filing of
the FAA Filed Documents and the Financing Statements.




     5.2.5 Valid and Binding Agreements



     The Pass Through Trustee Agreements and the Operative Agreements to which it is a party have
been duly authorized, executed and delivered by WTC and, assuming the due authorization, execution
and delivery by the other party or parties thereto, constitute the legal, valid and binding
obligations of WTC, in its individual capacity or as Indenture Trustee, a Pass Through Trustee or
Subordination Agent, as the case may be, and are enforceable against WTC, in its individual
capacity or as Indenture Trustee, a Pass Through Trustee or Subordination Agent, as the case may
be, in accordance with the respective terms thereof, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, receivership, moratorium or other similar Laws affecting
the rights of creditors generally and general principles of equity, whether considered in a
proceeding at law or in equity.



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     5.2.6 Citizenship



     WTC is a Citizen of the United States.




     5.2.7 No Liens



     On the Closing Date, there are no Liens attributable to WTC in respect of all or any part of
the Collateral.




     5.2.8 Litigation



     There are no pending or, to the Actual Knowledge of WTC, threatened actions or proceedings
against WTC, in its individual capacity or as Indenture Trustee, a Pass Through Trustee or
Subordination Agent, before any court, administrative agency or tribunal which, if determined
adversely to WTC, in its individual capacity or as Indenture Trustee, a Pass Through Trustee or
Subordination Agent, as the case may be, would materially adversely affect the ability of WTC, in
its individual capacity or as Indenture Trustee, a Pass Through Trustee or Subordination Agent, as
the case may be, to perform its obligations under any of the Indenture Trustee Agreements, the Pass
Through Trustee Agreements or the Subordination Agent Agreements.




     5.2.9 Securities Laws



     Neither WTC nor any person authorized to act on its behalf has directly or indirectly offered
any beneficial interest or Security relating to the ownership of the Aircraft or any interest in
the Collateral or any of the Equipment Notes or any other interest in or security under the
Collateral for sale to, or solicited any offer to acquire any such interest or security from, or
has sold any such interest or security to, any Person other than the Subordination Agent and the
Pass Through Trustees, except for the offering and sale of the Pass Through Certificates.




     5.2.10 Investment



     The Equipment Notes to be acquired by the Subordination Agent are being acquired by it for the
account of the Applicable Pass Through Trustees, for investment and not with a view to
any resale or distribution thereof, except that, subject to the restrictions on transfer set
forth in Section 9, the disposition by it of its Equipment Notes shall at all times be within its
control.




     5.2.11 Taxes



     There are no Taxes payable by any Applicable Pass Through Trustee or WTC, as the case may be,
imposed by the State of Delaware or any political subdivision or taxing authority thereof in
connection with the execution, delivery and performance by such Pass Through Trustee or WTC, as the
case may be, of this Agreement or any of the Pass Through Trustee Agreements (other than franchise
or other taxes based on or measured by any fees or compensation received by any such Pass Through
Trustee or WTC, as the case may be, for services rendered in connection with the transactions
contemplated by any of the Pass Through Trust Agreements), and there are no Taxes payable by any
Applicable Pass Through Trustee or WTC, as the case may be, imposed by the State of Delaware or any
political subdivision thereof in connection with



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the acquisition, possession or ownership by any
such Pass Through Trustee of any of the Equipment Notes (other than franchise or other taxes based
on or measured by any fees or compensation received by any such Pass Through Trustee or WTC, as the
case may be, for services rendered in connection with the transactions contemplated by any of the
Pass Through Trust Agreements), and, assuming that the trusts created by the Pass Through Trust
Agreements will not be taxable as corporations, but, rather, each will be characterized as a
grantor trust under subpart E, Part I of Subchapter J of the Code or as a partnership under
Subchapter K of the Code, such trusts will not be subject to any Taxes imposed by the State of
Delaware or any political subdivision thereof.





     5.2.12 Broker’s Fees



     No Person acting on behalf of WTC, in its individual capacity or as Indenture Trustee, any
Applicable Pass Through Trustee or Subordination Agent, is or will be entitled to any broker’s fee,
commission or finder’s fee in connection with the Transactions.



SECTION 6. COVENANTS, UNDERTAKINGS AND AGREEMENTS




     6.1 Covenants of Owner



     Owner covenants and agrees, at its own cost and expense, with Note Holder and Indenture
Trustee as follows:




     6.1.1 Corporate Existence; U.S. Air Carrier



     Owner shall at all times maintain its corporate existence, except as permitted by Section 4.07
of the Trust Indenture, and shall at all times remain a U.S. Air Carrier.




     6.1.2 Notice of Change of Location



     Owner will give Indenture Trustee timely written notice (but in any event within 30 days prior
to the expiration of the period of time specified under applicable Law to prevent lapse of
perfection) of any change in its location (as such term is used in Section 9-307 of the UCC)
or legal name and will promptly take any action required by Section 6.1.3(c) as a result of such
relocation.




     6.1.3 Certain Assurances



     (a) Owner shall duly execute, acknowledge and deliver, or shall cause to be executed,
acknowledged and delivered, all such further agreements, instruments, certificates or documents,
and shall do and cause to be done such further acts and things, in any case, as Indenture Trustee
shall reasonably request for accomplishing the purposes of this Agreement and the other Operative
Agreements, provided that any instrument or other document so executed by Owner
will not expand any obligations or limit any rights of Owner in respect of the transactions
contemplated by any Operative Agreement.



     (b) Owner shall promptly take such action with respect to the recording, filing, re-recording
and refiling of the Trust Indenture and any supplements thereto, including, without



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limitation, the
initial Trust Indenture Supplement, as shall be necessary to continue the perfection and priority
of the Lien created by the Trust Indenture.



     (c) Owner, at its sole cost and expense, will cause the FAA Filed Documents, the Financing
Statements and all continuation statements (and any amendments necessitated by any combination,
consolidation or merger of the Owner, or any relocation of its chief executive office) in respect
of the Financing Statements to be prepared and, subject only to the execution and delivery thereof
by Indenture Trustee, duly and timely filed and recorded, or filed for recordation, to the extent
permitted under the Act (with respect to the FAA Filed Documents) or the UCC or similar law of any
other applicable jurisdiction (with respect to such other documents). Indenture Trustee, and not
Owner, shall be responsible for any amendments to the foregoing documents and filings, recordings
and registrations thereof necessitated in any such case by any combination, consolidation or merger
of Indenture Trustee or change in the Indenture Trustee’s name, status, jurisdiction of
organization or address.



     (d) If the Aircraft has been registered in a country other than the United States pursuant to
Section 4.02(e) of the Trust Indenture, Owner will furnish to Indenture Trustee annually after such
registration, commencing with the calendar year after such registration is effected, an opinion of
special counsel reasonably satisfactory to Indenture Trustee stating that, in the opinion of such
counsel, either that (i) such action has been taken with respect to the recording, filing,
rerecording and refiling of the Operative Agreements and any supplements and amendments thereto as
is necessary to establish, perfect and protect the Lien created by the Trust Indenture, reciting
the details of such actions, or (ii) no such action is necessary to maintain the perfection of such
Lien.




     6.1.4 Securities Laws



     Neither Owner nor any person authorized to act on its behalf will directly or indirectly offer
any beneficial interest or Security relating to the ownership of the Aircraft or any interest in
any of the Equipment Notes or any other interest in or security under the Trust Indenture, for sale
to, or solicit any offer to acquire any such interest or security from, or sell any such interest
or
security to, any person in violation of the Securities Act or applicable state or foreign
securities Laws.




     6.1.5. Notice of Lease



     Owner shall give to Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services
LLC business, a copy of any notice regarding a lease of the Aircraft required to be given to the
Indenture Trustee pursuant to clause (w) of the first sentence of the penultimate paragraph of
Section 4.02(b) of the Mortgage, at the time such notice is given to Indenture Trustee, if at such
time Standard & Poor’s is then rating the Pass Through Certificates.



     6.2 Covenants of WTC



     WTC in its individual capacity or as Indenture Trustee, each Applicable Pass Through Trustee
or Subordination Agent, as the case may be, covenants and agrees with Owner as follows:



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     6.2.1 Liens



     WTC (a) will not directly or indirectly create, incur, assume or suffer to exist any Lien
attributable to it on or with respect to all or any part of the Collateral or the Aircraft, (b)
will, at its own cost and expense, promptly take such action as may be necessary to discharge any
Lien attributable to WTC on all or any part of the Collateral or the Aircraft and (c) will
personally hold harmless and indemnify Owner, each Note Holder, each of their respective
Affiliates, successors and permitted assigns, and the Collateral from and against (i) any and all
Expenses, (ii) any reduction in the amount payable out of the Collateral, and (iii) any
interference with the possession, operation or other use of all or any part of the Aircraft,
imposed on, incurred by or asserted against any of the foregoing as a consequence of any such Lien.




     6.2.2 Securities Act



     WTC in its individual capacity or as Indenture Trustee, an Applicable Pass Through Trustee or
Subordination Agent, will not offer any beneficial interest or Security relating to the ownership
of the Aircraft or any interest in the Collateral, or any of the Equipment Notes or any other
interest in or security under the Trust Indenture for sale to, or solicit any offer to acquire any
such interest or security from, or sell any such interest or security to, any Person in violation
of the Securities Act or applicable state or foreign securities Laws, provided that the foregoing
shall not be deemed to impose on WTC any responsibility with respect to any such offer, sale or
solicitation by any other party hereto.




     6.2.3 Performance of Agreements



     WTC, in its individual capacity and as Indenture Trustee, an Applicable Pass Through Trustee
or Subordination Agent, as the case may be, shall perform its obligations under the Pass Through
Trustee Agreements and the Operative Agreements in accordance with the terms thereof.




     6.2.4 Withholding Taxes



     WTC shall indemnify (on an after-tax basis) and hold harmless Owner against any United States
withholding taxes (and related interest, penalties and additions to tax) as a result of the failure
by WTC to withhold on payments to any Note Holder if such Note Holder failed to provide to
Indenture Trustee necessary certificates or forms to substantiate the right to exemption from such
withholding tax.



     6.3 Covenants of Note Holders



     Each Note Holder (including Subordination Agent) as to itself only covenants and agrees with
Owner and Indenture Trustee as follows:




     6.3.1 Withholding Taxes



     Such Note Holder (if it is a Non-U.S. Person) agrees to indemnify (on an after-tax basis) and
hold harmless Owner and Indenture Trustee against any United States withholding taxes (and related
interest, penalties and additions to tax) as a result of the inaccuracy or invalidity of



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any
certificate or form provided by such Note Holder to Indenture Trustee in connection with such
withholding taxes. Any amount payable hereunder shall be paid within 30 days after receipt by a
Note Holder of a written demand therefor.




     6.3.2 Transfer; Compliance



     (a) Such Note Holder will (i) not transfer any Equipment Note or interest therein in violation
of the Securities Act or applicable state or foreign securities Law; provided, that the
foregoing provisions of this section shall not be deemed to impose on such Note Holder any
responsibility with respect to any such offer, sale or solicitation by any other party hereto, and
(ii) perform and comply with the obligations specified to be imposed on it (as a Note Holder) under
each of the Trust Indenture and the form of Equipment Note set forth in the Trust Indenture.



     (b) Except for the transfer of the interests of each Applicable Pass Through Trustee in the
Equipment Notes to the trustee of the Related Trust (as defined in each Applicable Pass Through
Trust Agreement) in accordance with the related Applicable Pass Through Trust Agreement, each Note
Holder will not sell, assign, convey, exchange or otherwise transfer any Equipment Note or any
interest in, or represented by, any Equipment Note (it being understood that this provision is not
applicable to the Pass Through Certificates) unless the proposed transferee thereof first provides
Owner with both of the following:




     (i) a written representation and covenant that either (a) no portion of the funds it
uses to purchase, acquire and hold such Equipment Note or interest directly or indirectly
constitutes, or may be deemed under the Code or ERISA or any rulings, regulations or court
decisions thereunder to constitute, the assets of any Plan or (b) the transfer, and
subsequent holding, of such Equipment Note or interest shall not involve or give rise to a
transaction that constitutes a prohibited transaction within the meaning of Section 406 of
ERISA or Section 4975(c)(1) of the Code involving Owner, a Pass
Through Trustee, the Subordination Agent or the proposed transferee (other than a
transaction that is exempted from the prohibitions of such sections by applicable provisions
of ERISA or the Code or administrative exemptions or regulations issued thereunder); and




     (ii) a written covenant that it will not transfer any Equipment Note or any interest
in, or represented by, any Equipment Note unless the subsequent transferee also makes the
representation described in clause (i) above and agrees to comply with this clause (ii).



     6.4 Agreements




     6.4.1 Quiet Enjoyment



     Each Applicable Pass Through Trustee, Subordination Agent, each Note Holder and Indenture
Trustee each agrees as to itself with Owner that, so long as no Event of Default shall have
occurred and be continuing, such Person shall not (and shall not permit any Affiliate or other
Person claiming by, through or under it to) interfere with Owner’s rights in accordance with the
Indenture to the quiet enjoyment, possession and use of the Aircraft.



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     6.4.2 Consents



     Each Pass Through Trustee, Subordination Agent and Indenture Trustee each covenants and
agrees, for the benefit of Owner, that it shall not unreasonably withhold its consent to any
consent or approval requested of it under the terms of any of the Operative Agreements which by its
terms is not to be unreasonably withheld.




     6.4.3 Insurance



     Each Pass Through Trustee, Subordination Agent, Indenture Trustee and each Note Holder each
agrees not to obtain or maintain insurance for its own account as permitted by Section 4.06 of the
Trust Indenture if such insurance would limit or otherwise adversely affect the coverage of any
insurance required to be obtained or maintained by Owner pursuant to Section 4.06 of the Trust
Indenture.




     6.4.4 Extent of Interest of Note Holders



     A Note Holder shall not, as such, have any further interest in, or other right with respect
to, the Collateral when and if the principal and Make-Whole Amount, if any, of and interest on the
Equipment Note held by such Holder, and all other sums, then due and payable to such Holder
hereunder and under any other Operative Agreement, shall have been paid in full. The preceding
sentence shall not limit the rights of the Related Note Holders with respect to Related Secured
Obligations under the Trust Indenture, provided that a Related Note Holder shall not, as
such, have any further interest in, or other right with respect to, the Collateral when and if the
Related Secured Obligations attributable to the Related Equipment Note held by such Holder shall
have been paid in full.




     6.4.5 Foreign Registration



     Each Note Holder and Indenture Trustee hereby agree, for the benefit of Owner but subject to
the provisions of Section 4.02(b) of the Trust Indenture:



     (a) that Owner shall be entitled to register the Aircraft or cause the Aircraft to be
registered in a country other than the United States subject to compliance with the following:




     (i) each of the following requirements is satisfied:




	 	(A)	 	no Special Default or Event of Default shall have occurred and
be continuing at the time of such registration;
	 
	 	(B)	 	such proposed change of registration is made in connection with
a Permitted Lease to a Permitted Air Carrier; and
	 
	 	(C)	 	such country is a country with which the United States then
maintains normal diplomatic relations or, if such country is Taiwan, the United
States then maintains diplomatic relations at least as good as those in effect
on the Closing Date; and





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     (ii) the Indenture Trustee shall have received an opinion of counsel (subject to
customary exceptions) reasonably satisfactory to the Indenture Trustee addressed to
Indenture Trustee to the effect that:




     (A) such country would recognize the Owner’s ownership interest in the
Aircraft;




     (B) after giving effect to such change in registration, the Lien of the Trust
Indenture on the Owner’s right, title and interest in and to the Aircraft shall
continue as a valid and duly perfected first priority security interest and
International Interest and all filing, recording or other action necessary to
protect the same shall have been accomplished (or, if such opinion cannot be given
at the time of such proposed change in registration because such change in
registration is not yet effective, (1) the opinion shall detail what filing,
recording or other action is necessary and (2) the Indenture Trustee shall have
received a certificate from Owner 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 delivered to the Indenture Trustee on or prior to the effective date of
such change in registration);




     (C) unless Owner or the Permitted Air Carrier shall have agreed to provide
insurance covering the risk of requisition of use of the Aircraft by the government
of such country (so long as the Aircraft is registered under the laws of such
country), the laws of such country require fair compensation by the government of
such country payable in currency freely convertible into Dollars and freely
removable from such country (without license or permit, unless Owner
prior to such proposed reregistration has obtained such license or permit) for
the taking or requisition by such government of such use; and




     (D) it is not necessary, solely as a consequence of such change in registration
and without giving effect to any other activity of the Indenture Trustee (or any
Affiliate of the Indenture Trustee), for the Indenture Trustee to qualify to do
business in such jurisdiction as a result of such reregistration in order to
exercise any rights or remedies with respect to the Aircraft.



     (b) In addition, as a condition precedent to any change in registration Owner shall have given
to Indenture Trustee assurances reasonably satisfactory to Indenture Trustee:




	 	(i)	 	to the effect that the provisions of Section 4.06 of the Trust
Indenture have been complied with after giving effect to such change of
registration;
	 
	 	(ii)	 	of the payment by Owner of all reasonable out-of-pocket
expenses of each Note Holder and Indenture Trustee in connection with such
change of registry, including, without limitation (1) the reasonable fees and
disbursements of counsel to Indenture Trustee, (2) any filing or recording






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	 	 	 	fees, Taxes or similar payments incurred in connection with the change of
registration of the Aircraft and the creation and perfection of the security
interest therein in favor of Indenture Trustee for the benefit of Note Holders,
and (3) all costs and expenses incurred in connection with any filings
necessary to continue in the United States the perfection of the security
interest in the Aircraft in favor of Indenture Trustee for the benefit of Note
Holders; and
	 
	 	(iii)	 	to the effect that the tax and other indemnities in favor of
each person named as an indemnitee under any other Operative Agreement afford
each such person substantially the same protection as provided prior to such
change of registration (or Owner shall have agreed upon additional indemnities
that, together with such original indemnities, in the reasonable judgment of
Indenture Trustee, afford such protection).






     6.4.6 Interest in Certain Engines



     Each Note Holder and Indenture Trustee agree, for the benefit of each of the lessor,
conditional seller, mortgagee or secured party of any airframe or engine leased to, or purchased
by, Owner or any Permitted Lessee subject to a lease, conditional sale, trust indenture or other
security agreement that it will not acquire or claim, as against such lessor, conditional seller,
mortgagee or secured party, any right, title or interest in any engine as the result of such engine
being installed on the Airframe at any time while such engine is subject to such lease, conditional
sale, trust indenture or other security agreement and owned by such lessor or conditional seller or
subject to a trust indenture or security interest in favor of such mortgagee or secured party.



SECTION 7. CONFIDENTIALITY




     Owner, Note Holders and Indenture Trustee shall keep the Participation Agreement and Annex B
to the Trust Indenture confidential and shall not disclose, or cause to be disclosed, the same to
any Person, except (A) to prospective and permitted transferees of Owner’s, a Note Holder’s, the
Liquidity Provider’s, Indenture Trustee’s or other Indenture Indemnitee’s interest or their
respective counsel or special counsel, independent insurance brokers, auditors, or other agents who
agree to hold such information confidential, (B) to Owner’s, a Note Holder’s, the Liquidity
Provider’s, a Pass Through Trustee’s, Indenture Trustee’s or other Indenture Indemnitee’s counsel
or special counsel, independent insurance brokers, auditors, or other agents, Affiliates or
investors who agree to hold such information confidential, (C) as may be required by any statute,
court or administrative order or decree, legal process or governmental ruling or regulation,
including those of any applicable insurance regulatory bodies (including, without limitation, the
National Association of Insurance Commissioners), federal or state banking examiners, Internal
Revenue Service auditors or any stock exchange, (D) with respect to a Note Holder or any Pass
Through Trustee, to a nationally recognized rating agency for the purpose of obtaining a rating on
the Equipment Notes or the Pass Through Certificates or to support an NAIC rating for the Equipment
Notes or (E) such other Persons as are reasonably deemed necessary by the disclosing party in order
to protect the interests of such party or for the purposes of enforcing such documents by such
party; provided, that any and all disclosures permitted by




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clauses (C), (D), or (E) above
shall be made only to the extent necessary to meet the specific requirements or needs of the
Persons making such disclosures.



SECTION 8. INDEMNIFICATION AND EXPENSES




     8.1 General Indemnity




     8.1.1 Indemnity



     Whether or not any of the transactions contemplated hereby are consummated, Owner shall
indemnify, protect, defend and hold harmless each Indemnitee from, against and in respect of, and
shall pay on a net after-tax basis, any and all Expenses of any kind or nature whatsoever that may
be imposed on, incurred by or asserted against any Indemnitee, relating to, resulting from, or
arising out of or in connection with, any one or more of the following:



     (a) The Operative Agreements, the Pass Through Agreements, or the enforcement of any of the
terms of any of the Operative Agreements or the Pass Through Agreements;



     (b) The Aircraft, the Airframe, any Engine or any Part, including, without limitation, with
respect thereto, (i) the manufacture, design, purchase, acceptance, nonacceptance or rejection,
ownership, registration, reregistration, deregistration, delivery, nondelivery, lease, sublease,
assignment, possession, use or non-use, operation, maintenance, testing, repair, overhaul,
condition, alteration, modification, addition, improvement, storage, airworthiness, replacement,
repair, sale, substitution, return, abandonment, redelivery or other disposition of the Aircraft,
any Engine or any Part, (ii) any claim or penalty arising out of violations of applicable
Laws by Owner (or any Permitted Lessee), (iii) tort liability, whether or not arising out of
the negligence of any Indemnitee (whether active, passive or imputed), (iv) death or property
damage of passengers, shippers or others, (v) environmental control, noise or pollution and (vi)
any Liens in respect of the Aircraft, any Engine or any Part;



     (c) The offer, sale, or delivery of any Equipment Notes, Pass Through Certificates or any
interest therein or represented thereby; and



     (d) Any breach of or failure to perform or observe, or any other noncompliance with, any
covenant or agreement or other obligation to be performed by Owner under any Operative Agreement to
which it is party or any Pass Through Agreement or the falsity of any representation or warranty of
Owner in any Operative Agreement to which it is party or any Pass Through Agreement.




     8.1.2 Exceptions



     Notwithstanding anything contained in Section 8.1.1, Owner shall not be required to indemnify,
protect, defend and hold harmless any Indemnitee pursuant to Section 8.1.1 in respect of any
Expense of such Indemnitee:



     (a) For any Taxes or a loss of Tax benefit, whether or not Owner is required to indemnify
therefor pursuant to Section 8.3;



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     (b) Except to the extent attributable to acts or events occurring prior thereto, acts or
events (other than acts or events related to the performance by Owner of its obligations pursuant
to the terms of the Operative Agreements) that occur after the Trust Indenture is required to be
terminated in accordance with Section 11.01 of the Trust Indenture; provided, that nothing
in this clause (b) shall be deemed to exclude or limit any claim that any Indemnitee may have under
applicable Law by reason of an Event of Default or for damages from Owner for breach of Owner’s
covenants contained in the Operative Agreements or to release Owner from any of its obligations
under the Operative Agreements that expressly provide for performance after termination of the
Trust Indenture;



     (c) To the extent attributable to any Transfer (voluntary or involuntary) by or on behalf of
such Indemnitee of any Equipment Note or interest therein, except for out-of-pocket costs and
expenses incurred as a result of any such Transfer pursuant to the exercise of remedies under any
Operative Agreement;



     (d) To the extent attributable to the gross negligence or willful misconduct of such
Indemnitee or any related Indemnitee (as defined below) (other than gross negligence or willful
misconduct imputed to such person by reason of its interest in the Aircraft or any Operative
Agreement);



     (e) To the extent attributable to the incorrectness or breach of any representation or
warranty of such Indemnitee or any related Indemnitee contained in or made pursuant to any
Operative Agreement or any Pass Through Agreement;



     (f) To the extent attributable to the failure by such Indemnitee or any related Indemnitee to
perform or observe any agreement, covenant or condition on its part to be performed or observed in
any Operative Agreement or any Pass Through Agreement;



     (g) To the extent attributable to the offer or sale by such Indemnitee or any related
Indemnitee of any interest in the Aircraft, the Equipment Notes, the Pass Through Certificates, or
any similar interest, in violation of the Securities Act or other applicable federal, state or
foreign securities Laws (other than any thereof caused by acts or omissions of Owner);



     (h) (i) With respect to any Indemnitee (other than Indenture Trustee), to the extent
attributable to the failure of the Indenture Trustee to distribute funds received and distributable
by it in accordance with the Trust Indenture, (ii) with respect to any Indemnitee (other than the
Subordination Agent), to the extent attributable to the failure of the Subordination Agent to
distribute funds received and distributable by it in accordance with the Intercreditor Agreement,
(iii) with respect to any Indemnitee (other than the Pass Through Trustees), to the extent
attributable to the failure of a Pass Through Trustee to distribute funds received and
distributable by it in accordance with the Pass Through Trust Agreements, (iv) with respect to any
Indemnitee (other than the Escrow Agent), to the extent attributable to the failure of the Escrow
Agent to pay funds received and payable by it in accordance with any Escrow Agreement, (v) with
respect to any Indemnitee (other than the Paying Agent), to the extent attributable to the failure
of the Paying Agent to distribute funds received and distributable by it in accordance with any
Escrow Agreement, (vi) to the extent attributable to the failure of the Depositary to pay funds
payable by it in accordance with any Deposit Agreement, (vii) with respect to Indenture Trustee, to
the



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extent attributable to the negligence or willful misconduct of Indenture Trustee in the
distribution of funds received and distributable by it in accordance with the Trust Indenture,
(viii) with respect to the Subordination Agent, to the extent attributable to the negligence or
willful misconduct of the Subordination Agent in the distribution of funds received and
distributable by it in accordance with the Intercreditor Agreement, (ix) with respect to the Pass
Through Trustees, to the extent attributable to the negligence or willful misconduct of a Pass
Through Trustee in the distribution of funds received and distributable by it in accordance with
the Pass Through Trust Agreements, (x) with respect to the Escrow Agent, to the extent attributable
to the negligence or willful misconduct of the Escrow Agent in the payment of funds received and
payable by it in accordance with any Escrow Agreement and (xi) with respect to the Paying Agent, to
the extent attributable to the negligence or willful misconduct of the Paying Agent in the
distribution of funds received and distributable by it in accordance with any Escrow Agreement;



     (i) Other than during the continuation of an Event of Default, to the extent attributable to
the authorization or giving or withholding of any future amendments, supplements, waivers or
consents with respect to any Operative Agreement or Pass Through Agreement other than such as have
been requested by Owner or as are required by or made pursuant to the terms of the Operative
Agreements or Pass Through Agreements (unless such requirement results from the actions of an
Indemnitee not required by or made pursuant to the Operative Agreements or the Pass Through
Agreements);



     (j) To the extent attributable to any amount which any Indemnitee expressly agrees to pay or
such Indemnitee expressly agrees shall not be paid by or be reimbursed by Owner;



     (k) To the extent that it is an ordinary and usual operating or overhead expense;



     (l) For any Lien attributable to such Indemnitee or any related Indemnitee;



     (m) If another provision of an Operative Agreement or a Pass Through Agreement specifies the
extent of Owner’s responsibility or obligation with respect to such Expense, to the extent arising
from other than failure of Owner to comply with such specified responsibility or obligation; or



     (n) To the extent incurred by or asserted against an Indemnitee as a result of any “prohibited
transaction”, within the meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code.



     For purposes of this Section 8.1, a Person shall be considered a “related” Indemnitee with
respect to an Indemnitee if such Person is an Affiliate or employer of such Indemnitee, a director,
officer, employee, agent, or servant of such Indemnitee or any such Affiliate or a successor or
permitted assignee of any of the foregoing.




     8.1.3 Separate Agreement



     This Agreement constitutes a separate agreement with respect to each Indemnitee and is
enforceable directly by each such Indemnitee.



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     8.1.4 Notice



     If a claim for any Expense that an Indemnitee shall be indemnified against under this Section
8.1 is made, such Indemnitee shall give prompt written notice thereof to Owner. Notwithstanding
the foregoing, the failure of any Indemnitee to notify Owner as provided in this Section 8.1.4, or
in Section 8.1.5, shall not release Owner from any of its obligations to indemnify such Indemnitee
hereunder, except to the extent that such failure results in an additional Expense to Owner (in
which event Owner shall not be responsible for such additional expense) or materially impairs
Owner’s ability to contest such claim.




     8.1.5 Notice of Proceedings; Defense of Claims; Limitations



     (a) In case any action, suit or proceeding shall be brought against any Indemnitee for which
Owner is responsible under this Section 8.1, such Indemnitee shall notify Owner of the commencement
thereof and Owner may, at its expense, participate in and to the extent that it shall wish (subject
to the provisions of the following paragraph), assume and control the defense thereof and, subject
to Section 8.1.5(c), settle or compromise the same.



     (b) Owner or its insurer(s) shall have the right, at its or their expense, to investigate or,
if Owner or its insurer(s) shall agree not to dispute liability to the Indemnitee giving notice of
such action, suit or proceeding under this Section 8.1.5 for indemnification hereunder or under any
insurance policies pursuant to which coverage is sought, control the defense of, any action, suit
or proceeding, relating to any Expense for which indemnification is sought pursuant to this Section
8.1, and each Indemnitee shall cooperate with Owner or its insurer(s) with respect thereto;
provided, that Owner shall not be entitled to control the defense of any such action, suit,
proceeding or compromise any such Expense during the continuance of any Event of Default. In
connection with any such action, suit or proceeding being controlled by Owner, such Indemnitee
shall have the right to participate therein, at its sole cost and expense, with counsel reasonably
satisfactory to Owner; provided, that such Indemnitee’s participation does not, in the
reasonable opinion of the independent counsel appointed by the Owner or its insurers to conduct
such proceedings, interfere with the defense of such case.



     (c) In no event shall any Indemnitee enter into a settlement or other compromise with respect
to any Expense without the prior written consent of Owner, which consent shall not be unreasonably
withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such
Expense under this Section 8.1.



     (d) In the case of any Expense indemnified by the Owner hereunder which is covered by a policy
of insurance maintained by Owner pursuant to Section 4.06 of the Indenture, at Owner’s expense,
each Indemnitee agrees to cooperate with the insurers in the exercise of their rights to
investigate, defend or compromise such Expense as may be required to retain the benefits of such
insurance with respect to such Expense.



     (e) If an Indemnitee is not a party to this Agreement, Owner may require such Indemnitee to
agree in writing to the terms of this Section 8 and Section 12.8 prior to making any payment to
such Indemnitee under this Section 8.



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     (f) Nothing contained in this Section 8.1.5 shall be deemed to require an Indemnitee to
contest any Expense or to assume responsibility for or control of any judicial proceeding with
respect thereto.




     8.1.6 Information



     Owner will provide the relevant Indemnitee with such information not within the control of
such Indemnitee, as is in Owner’s control or is reasonably available to Owner, which such
Indemnitee may reasonably request and will otherwise cooperate with such Indemnitee so as to enable
such Indemnitee to fulfill its obligations under Section 8.1.5. The Indemnitee shall supply Owner
with such information not within the control of Owner, as is in such Indemnitee’s control or is
reasonably available to such Indemnitee, which Owner may reasonably request to control or
participate in any proceeding to the extent permitted by Section 8.1.5.




     8.1.7 Effect of Other Indemnities; Subrogation; Further
Assurances



     Upon the payment in full by Owner of any indemnity provided for under this Agreement, Owner,
without any further action and to the full extent permitted by Law, will be subrogated to all
rights and remedies of the person indemnified (other than in connection with any indemnity claim
such Indemnitee may have under Section 6.03 or 8.01 of the Trust Indenture) in respect of the
matter as to which such indemnity was paid. Each Indemnitee will give such further assurances or
agreements and cooperate with Owner to permit Owner to pursue such claims, if any, to the extent
reasonably requested by Owner and at Owner’s expense.




     8.1.8 Refunds



     If an Indemnitee receives any refund, in whole or in part, with respect to any Expense paid by
Owner hereunder, it will promptly pay the amount refunded (but not an amount in excess of the
amount Owner or any of its insurers has paid in respect of such Expense) over to Owner unless an
Event of Default shall have occurred and be continuing, in which case such amounts shall be paid
over to Indenture Trustee to hold as security for Owner’s obligations under the Operative
Agreements or, if requested by Owner, applied to satisfy such obligations.



     8.2 Expenses




     8.2.1 Invoices and Payment



     The Indenture Trustee, the Applicable Pass Through Trustees and the Subordination Agent shall
promptly submit to Owner for its prompt approval (which shall not be unreasonably withheld) copies
of invoices in reasonable detail of the Transaction Expenses for which it is responsible for
providing information as they are received (but in no event later than the 90th day after the
Closing Date). If so submitted and approved, the Owner agrees promptly, but in any event no later
than the 105th day after the Closing Date, to pay Transaction Expenses.



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     8.2.2 Payment of Other Expenses



     Owner shall pay (i) the ongoing fees and expenses of Indenture Trustee, and (ii) all
reasonable out-of-pocket costs and expenses (including the reasonable fees and disbursements of
counsel) incurred by Indenture Trustee or any Note Holder attributable to any waiver, amendment or
modification of any Operative Agreement to the extent requested by Owner.



     8.3 General Tax Indemnity




     8.3.1 General



     Except as provided in Section 8.3.2, Owner agrees that each payment paid by Owner under the
Equipment Notes, and any other payment or indemnity paid by Owner to a Tax Indemnitee under any
Operative Agreement, shall be free of all withholdings or deductions with respect to Taxes of any
nature (other than U.S. federal, state or local withholding taxes on, based on or measured by gross
or net income), and in the event that Owner shall be required by applicable law to make any such
withholding or deduction for any such payment (x) Owner shall make all such withholdings or
deductions, (y) the amount payable by Owner shall be increased so that after making all required
withholdings or deductions such Tax Indemnitee receives the same amount that it would have received
had no such withholdings or deductions been made, and (z) Owner shall pay the full amount withheld
or deducted to the relevant Taxing Authority in accordance with applicable law. Except as provided
in Section 8.3.2 and whether or not any of the transactions contemplated hereby are consummated,
Owner shall pay, indemnify, protect, defend and hold each Tax Indemnitee harmless from all Taxes
imposed by any Taxing Authority that may from time to time be imposed on or asserted against any
Tax Indemnitee or the Aircraft, the Airframe, any Engine or any Part or any interest in any of the
foregoing (whether or not indemnified against by any other Person), upon or with respect to the
Operative Agreements or the transactions or payments contemplated thereby, including but not
limited to any Tax imposed
upon or with respect to (x) the Aircraft, the Airframe, any Engine, any Part, any Operative
Agreement (including without limitation any Equipment Notes) or any data or any other thing
delivered or to be delivered under an Operative Agreement, (y) the purchase, manufacture,
acceptance, rejection, sale, transfer of title, return, ownership, mortgaging, delivery, transport,
charter, rental, lease, re-lease, sublease, assignment, possession, repossession, presence, use,
condition, storage, preparation, maintenance, modification, alteration, improvement, operation,
registration, transfer or change of registration, reregistration, repair, replacement, overhaul,
location, control, the imposition of any Lien, financing, refinancing requested by the Owner,
abandonment or other disposition of the Aircraft, the Airframe, any Engine, any Part, any data or
any other thing delivered or to be delivered under an Operative Agreement or (z) interest, fees or
any other income, proceeds, receipts or earnings, whether actual or deemed, arising upon, in
connection with, or in respect of, any of the Operative Agreements (including the property or
income or other proceeds with respect to property held as part of the Collateral) or the
transactions contemplated thereby.




     8.3.2 Certain Exceptions



     The provisions of Section 8.3.1 shall not apply to, and Owner shall have no liability
hereunder for, Taxes:




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     (a) imposed on a Tax Indemnitee by the federal government of the United States or any
Taxing Authority or governmental subdivision of the United States or therein (including any state
or local Taxing Authority) (i) on, based on, or measured by, gross or net income or gross or net
receipts, including capital gains taxes, excess profits taxes, minimum taxes from tax preferences,
alternative minimum taxes, branch profits taxes, accumulated earnings taxes, personal holding
company taxes, succession taxes and estate taxes, and any withholding taxes on, based on or
measured by gross or net income or receipts or (ii) on, or with respect to, or measured by, capital
or net worth or in the nature of a franchise tax or a tax for the privilege of doing business
(other than, in the case of clause (i) or (ii), sales, use, license or property Taxes);



     (b) imposed on a Tax Indemnitee by any Taxing Authority or governmental subdivision thereof or
therein outside of the United States (including any Taxing Authority in or of a territory,
possession or commonwealth of the United States) (i) on, based on, or measured by, gross or net
income or gross or net receipts, including capital gains taxes, excess profits taxes, minimum taxes
from tax preferences, alternative minimum taxes, branch profits taxes, accumulated earnings taxes,
personal holding company taxes, succession taxes and estate taxes, and any withholding taxes on,
based on or measured by gross or net income or receipts or (ii) on, or with respect to, or measured
by, capital or net worth or in the nature of a franchise tax or a tax for the privilege of doing
business (other than, in the case of clause (i) or (ii), (A) sales, use, license or property Taxes,
or (B) any Taxes imposed by any Taxing Authority (other than a Taxing Authority within whose
jurisdiction such Tax Indemnitee is incorporated or organized or maintains its principal place of
business) if such Tax Indemnitee would not have been subject to Taxes of such type by such
jurisdiction but for (I) the location, use or operation of the Aircraft, the Airframe, any Engine
or any Part thereof by an Owner Person within the jurisdiction of the Taxing Authority imposing
such Tax, or (II) the activities of any Owner Person in such jurisdiction, including, but not
limited to, use of any other aircraft by Owner in such jurisdiction, (III) the status of any Owner
Person as a foreign entity or as an entity owned in whole or in part by foreign persons, (IV) Owner
having made (or having been deemed to have made) payments to such Tax Indemnitee from the relevant
jurisdiction or (V) in the case of the Pass Through Trustees, the Note Holders or any related Tax
Indemnitee, the Owner being incorporated or organized or maintaining a place of business or
conducting activities in such jurisdiction);



     (c) on, or with respect to, or measured by, any trustee fees, commissions or compensation
received by the Pass Through Trustee, Subordination Agent or Indenture Trustee;



     (d) that are being contested as provided in Section 8.3.4 hereof;



     (e) imposed on any Tax Indemnitee to the extent that such Taxes result from the gross
negligence or willful misconduct of such Tax Indemnitee or any Affiliate thereof;



     (f) imposed on or with respect to a Tax Indemnitee (including the transferee in those cases in
which the Tax on transfer is imposed on, or is collected from, the transferee) as a result of a
transfer or other disposition (including a deemed transfer or disposition) by such Tax Indemnitee
or a related Tax Indemnitee of any interest in the Aircraft, the Airframe, any Engine or any Part,
any interest arising under the Operative Agreements or any Equipment Note or as a result of a
transfer or disposition (including a deemed transfer or disposition) of any interest in a
Tax Indemnitee (other than (A) a substitution or replacement of the Aircraft, the Airframe,
any



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Engine or any Part by an Owner Person that is treated for Tax purposes as a transfer or
disposition, or (B) a transfer pursuant to an exercise of remedies upon an Event of Default that
shall have occurred and have been continuing);




     (g) Taxes in excess of those that would have been imposed had there not been a transfer or
other disposition by or to such Tax Indemnitee or a related Tax Indemnitee described in paragraph
(f) above;



     (h) consisting of any interest, penalties or additions to tax imposed on a Tax Indemnitee as a
result of (in whole or in part) failure of such Tax Indemnitee or a related Tax Indemnitee to file
any return properly and timely, unless such failure shall be caused by the failure of Owner to
fulfill its obligations, if any, under Section 8.3.6 with respect to such return;



     (i) resulting from, or that would not have been imposed but for, any Liens arising as a result
of claims against, or acts or omissions of, or otherwise attributable to such Tax Indemnitee or a
related Tax Indemnitee that the Owner is not obligated to discharge under the Operative Agreements;



     (j) imposed on any Tax Indemnitee as a result of the breach by such Tax Indemnitee or a
related Tax Indemnitee of any covenant of such Tax Indemnitee or any Affiliate thereof contained in
any Operative Agreement or the inaccuracy of any representation or warranty by such Tax Indemnitee
or any Affiliate thereof in any Operative Agreement;



     (k) in the nature of an intangible or similar Tax (i) upon or with respect to the value or
principal amount of the interest of any Note Holder in any Equipment Note or the loan evidenced
thereby but only if such Taxes are in the nature of franchise Taxes or result from the Tax
Indemnitee doing business in the taxing jurisdiction and are imposed because of the place of
incorporation or the activities unrelated to the transactions contemplated by the Operative
Agreements in the taxing jurisdiction of such Tax Indemnitee;



     (l) imposed on a Tax Indemnitee by a Taxing Authority of a jurisdiction outside the United
States to the extent that such Taxes would not have been imposed but for a connection between the
Tax Indemnitee or a related Tax Indemnitee and such jurisdiction imposing such Tax unrelated to the
transactions contemplated by the Operative Agreements; or



     (m) Taxes relating to ERISA or Section 4975 of the Code.



     For purposes hereof, a Tax Indemnitee and any other Tax Indemnitees that are successors,
assigns, agents, servants or Affiliates of such Tax Indemnitee shall be related Tax Indemnitees.




8.3.3 Payment



     (a) Owner’s indemnity obligation to a Tax Indemnitee under this Section 8.3 shall equal the
amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts
payable under this Section 8.3 and any tax benefits actually recognized by such Tax Indemnitee as a
result of the indemnifiable Tax (including, without limitation, any benefits
recognized as a result of an indemnifiable Tax being utilized by such Tax Indemnitee as a
credit



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against Taxes not indemnifiable under this Section 8.3), shall equal the amount of the Tax
indemnifiable under this Section 8.3.




     (b) At Owner’s request, the computation of the amount of any indemnity payment owed by Owner
or any amount owed by a Tax Indemnitee to Owner pursuant to this Section 8.3 shall be verified and
certified by an independent public accounting firm selected by such Tax Indemnitee and reasonably
satisfactory to Owner. Such verification shall be binding. The costs of such verification
(including the fee of such public accounting firm) shall be borne by Owner unless such verification
shall result in an adjustment in Owner’s favor of 5% or more of the net present value of the
payment as computed by such Tax Indemnitee, in which case the costs shall be paid by such Tax
Indemnitee.



     (c) Each Tax Indemnitee shall provide Owner with such certifications, information and
documentation as shall be in such Tax Indemnitee’s possession and as shall be reasonably requested
by Owner to minimize any indemnity payment pursuant to this Section 8.3; provided, that
notwithstanding anything to the contrary contained herein, no Tax Indemnitee shall be required to
provide Owner with any Tax returns.



     (d) Each Tax Indemnitee shall promptly forward to Owner any written notice, bill or advice
received by it from any Taxing Authority concerning any Tax for which it seeks indemnification
under this Section 8.3. Owner shall pay any amount for which it is liable pursuant to this Section
8.3 directly to the appropriate Taxing Authority if legally permissible or upon demand of a Tax
Indemnitee, to such Tax Indemnitee within 30 days of such demand (or, if a contest occurs in
accordance with Section 8.3.4, within 30 days after a Final Determination (as defined below)), but
in no event more than one Business Day prior to the date the Tax to which such amount payable
hereunder relates is due. If requested by a Tax Indemnitee in writing, Owner shall furnish to the
appropriate Tax Indemnitee the original or a certified copy of a receipt for Owner’s payment of any
Tax paid by Owner or such other evidence of payment of such Tax as is acceptable to such Tax
Indemnitee. Owner shall also furnish promptly upon written request such data as any Tax Indemnitee
may reasonably require to enable such Tax Indemnitee to comply with the requirements of any taxing
jurisdiction unless such data is not reasonably available to Owner or, unless such data is
specifically requested by a Taxing Authority, is not customarily furnished by domestic air carriers
under similar circumstances. For purposes of this Section 8.3, a “Final Determination” shall mean
(i) a decision, judgment, decree or other order by any court of competent jurisdiction that occurs
pursuant to the provisions of Section 8.3.4, which decision, judgment, decree or other order has
become final and unappealable, (ii) a closing agreement or settlement agreement entered into in
accordance with Section 8.3.4 that has become binding and is not subject to further review or
appeal (absent fraud, misrepresentation, etc.), or (iii) the termination of administrative
proceedings and the expiration of the time for instituting a claim in a court proceeding.



     (e) If any Tax Indemnitee shall actually realize a tax savings by reason of any Tax paid or
indemnified by Owner pursuant to this Section 8.3 (whether such tax savings shall be by means of a
foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not
otherwise taken into account in computing such payment or indemnity such Tax Indemnitee shall pay
to Owner an amount equal to the lesser of (i) the amount of such tax
savings, plus any additional tax savings recognized as the result of any payment made pursuant



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to this sentence, when, as, if, and to the extent, realized or (ii) the amount of all payments
pursuant to this Section 8.3 by Owner to such Tax Indemnitee (less any payments previously made by
such Tax Indemnitee to Owner pursuant to this Section 8.3.3 (e)) (and the excess, if any, of the
amount described in clause (i) over the amount described in clause (ii) shall be carried forward
and applied to reduce pro tanto any subsequent obligations of Owner to make payments to such Tax
Indemnitee pursuant to this Section 8.3); provided, that such Tax Indemnitee shall not be required
to make any payment pursuant to this sentence so long as a Lease Event of Default of a monetary
nature has occurred and is continuing. If a tax benefit is later disallowed or denied, the
disallowance or denial shall be treated as a Tax indemnifiable under Section 8.3.1 without regard
to the provisions of Section 8.3.2 (other than Section 8.3.2 (f)). Each such Tax Indemnitee shall
in good faith use reasonable efforts in filing its tax returns and in dealing with Taxing
Authorities to seek and claim any such tax benefit.





8.3.4 Contest



     (a) If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner
could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination
that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee
shall promptly give Owner notice in writing of such claim (provided, that failure to so notify
Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify
effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action
with respect to such claim without the prior written consent of Owner for 30 days following the
receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax
Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such
30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax
Indemnitee shall take no action for as long as it is legally able to do so (it being understood
that a Tax Indemnitee shall be entitled to pay the Tax claimed and sue for a refund prior to the
end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial
penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not
materially prejudice the right to contest or (B) the failure to so pay would result in criminal
penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so
paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In
addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such
information confidential other than to the extent necessary in order to contest the claim) furnish
Owner with copies of any requests for information from any Taxing Authority relating to such Taxes
with respect to which Owner may be required to indemnify hereunder. If requested by Owner in
writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense
of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’
and accountants’ fees and disbursements), in good faith contest (or, if permitted by applicable
law, allow Owner to contest) through appropriate administrative and judicial proceedings the
validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying
the same except under protest if protest is necessary and proper or (III) if the payment is made,
using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or
judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse
administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue
any appeals to the United States Supreme Court. If
and to the extent the Tax Indemnitee is able to separate the contested issue or issues from
other



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issues arising in the same administrative or judicial proceeding that are unrelated to the
transactions contemplated by the Operative Agreements without, in the good faith judgment of such
Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to
control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense)
with such information or data that is in such Tax Indemnitee’s control or possession that is
reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax
Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of
contesting such claim and shall keep Owner reasonably informed regarding the progress of such
contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section
8.3.4 (including, without limitation, any action regarding any appeal of an adverse determination
with respect to any claim) or settle or compromise any claim without the prior written consent of
the Owner (except as contemplated by Section 8.3.4(b) or (c)).




     (b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue
any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay
such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in
connection with contesting such Taxes, including, without limitation, all reasonable out of pocket
costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such
contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the
extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto
that are required to be paid prior to the commencement of such contest on an interest-free
after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any
net realized tax benefits resulting from such advance including any tax benefits resulting from
making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to
be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless
Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner
reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to
notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Lease Event of
Default shall have occurred and be continuing unless Owner has provided security for its
obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such
contest, the amount of the Tax being contested, plus any interest and penalties and an amount
estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any
judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim
hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination
articulates conclusions of law and fact that demonstrate that Owner has no liability for the
contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release,
waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section
8.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee
with respect to such claim (and all directly related claims and claims based on the outcome of such
claim) shall terminate, subject to Section 8.3.4(c), and subject to Section 8.3.4(c), such Tax
Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with
respect to such claim, plus interest at the rate that would have been payable by the relevant
Taxing Authority with respect to a refund of such Tax.



PARTICIPATION AGREEMENT (2011-1)




31









 








     (c) Notwithstanding anything contained in this Section 8.3, a Tax Indemnitee will not be
required to contest the imposition of any Tax and shall be permitted to settle or compromise any
claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under
this Section 8.3 with respect to such Tax (and any directly related claim and any claim the outcome
of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount
previously paid or advanced by Owner pursuant to this Section 8.3 with respect to such Tax, plus
interest at the rate that would have been payable by the relevant Taxing Authority with respect to
a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any
relevant Taxing Authority with respect to the imposition of such Tax.




8.3.5 Refund



     If any Tax Indemnitee shall receive a refund of, or be entitled to a credit against other
liability for, all or any part of any Taxes paid, reimbursed or advanced by Owner, such Tax
Indemnitee shall pay to Owner within 30 days of such receipt an amount equal to the lesser of (a)
the amount of such refund or credit plus any net tax benefit (taking into account any Taxes
incurred by such Tax Indemnitee by reason of the receipt of such refund or realization of such
credit) actually realized by such Tax Indemnitee as a result of any payment by such Tax Indemnitee
made pursuant to this sentence (including this clause (a)) and (b) such tax payment, reimbursement
or advance by Owner to such Tax Indemnitee theretofore made pursuant to this Section 8.3 (and the
excess, if any, of the amount described in clause (a) over the amount described in clause (b) shall
be carried forward and applied to reduce pro tanto any subsequent obligation of Owner to make
payments to such Tax Indemnitee pursuant to this Section 8.3). If, in addition to such refund or
credit, such Tax Indemnitee shall receive (or be credited with) an amount representing interest on
the amount of such refund or credit, such Tax Indemnitee shall pay to Owner within 30 days of such
receipt or realization of such credit that proportion of such interest that shall be fairly
attributable to Taxes paid, reimbursed or advanced by Owner prior to the receipt of such refund or
realization of such credit.




8.3.6 Tax Filing



     If any report, return or statement is required to be filed with respect to any Tax which is
subject to indemnification under this Section 8.3, Owner shall timely file the same (except for any
such report, return or statement which a Tax Indemnitee has timely notified the Owner in writing
that such Tax Indemnitee intends to file, or for which such Tax Indemnitee is required by law to
file, in its own name); provided, that the relevant Tax Indemnitee shall furnish Owner with any
information in such Tax Indemnitee’s possession or control that is reasonably necessary to file any
such return, report or statement and is reasonably requested in writing by Owner (it being
understood that the Tax Indemnitee shall not be required to furnish copies of its actual tax
returns, although it may be required to furnish relevant information contained therein). Owner
shall either file such report, return or statement and send a copy of such report, return or
statement to such Tax Indemnitee, or, where Owner is not permitted to file such report, return or
statement, it shall notify such Tax Indemnitee of such requirement and prepare and deliver such
report, return or statement to such Tax Indemnitee in a manner satisfactory to such Tax Indemnitee
within a reasonable time prior to the time such report, return or statement is to be filed.



PARTICIPATION AGREEMENT (2011-1)






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8.3.7 Forms



     Each Tax Indemnitee agrees to furnish from time to time to Owner or Indenture Trustee or to
such other person as Owner or Indenture Trustee may designate, at Owner’s or Indenture Trustee’s
request, such duly executed and properly completed forms as may be necessary or appropriate in
order to claim any reduction of or exemption from any withholding or other Tax imposed by any
Taxing Authority, if (x) such reduction or exemption is available to such Tax Indemnitee and (y)
Owner has provided such Tax Indemnitee with any information necessary to complete such form not
otherwise reasonably available to such Tax Indemnitee.




8.3.8 Non-Parties



     If a Tax Indemnitee is not a party to this Agreement, Owner may require the Tax Indemnitee to
agree in writing, in a form reasonably acceptable to Owner, to the terms of this Section 8.3 and
Section 15.8 prior to making any payment to such Tax Indemnitee under this Section 8.3.




8.3.9 Subrogation



     Upon payment of any Tax by Owner pursuant to this Section 8.3 to or on behalf of a Tax
Indemnitee, Owner, without any further action, shall be subrogated to any claims that such Tax
Indemnitee may have relating thereto. Such Tax Indemnitee shall cooperate with Owner (to the
extent such cooperation does not result in any unreimbursed cost, expense or liability to such Tax
Indemnitee) to permit Owner to pursue such claims.



     8.4 Payments



     Any payments made pursuant to Section 8.1 or 8.3 shall be due on the 60th day after demand
therefor and shall be made directly to the relevant Indemnitee or Tax Indemnitee or to Owner, in
immediately available funds at such bank or to such account as specified by such Indemnitee or Tax
Indemnitee or Owner, as the case may be, in written directives to the payor, or, if no such
direction shall have been given, by check of the payor payable to the order of, and mailed to, such
Indemnitee or Tax Indemnitee or Owner, as the case may be, by certified mail, postage prepaid, at
its address as set forth in this Agreement.



     8.5 Interest



     If any amount, payable by Owner, any Indemnitee or any Tax Indemnitee under Section 8.1 or 8.3
is not paid when due, the person obligated to make such payment shall pay on demand, to the extent
permitted by Law, to the person entitled thereto, interest on any such amount for the period from
and including the due date for such amount to but excluding the date the same is paid, at the
Payment Due Rate. Such interest shall be paid in the same manner as the unpaid amount in respect
of which such interest is due.



     8.6 Benefit of Indemnities



     The obligations of Owner in respect of all indemnities, obligations, adjustments and payments
in Section 8.1 or 8.3 are expressly made for the benefit of, and shall be enforceable by,



PARTICIPATION AGREEMENT (2011-1)






33









 







the Indemnitee or Tax Indemnitee entitled thereto, notwithstanding any provision of the Trust
Indenture.




SECTION 9. ASSIGNMENT OR TRANSFER OF INTEREST




     9.1 Note Holders



     Subject to Section 6.3.2 hereof and Section 2.06 of the Trust Indenture, any Note Holder may,
at any time and from time to time, Transfer or grant participations in all or any portion of the
Equipment Notes and/or all or any portion of its beneficial interest in its Equipment Notes to any
person (it being understood that the sale or issuance of Pass Through Certificates by a Pass
Through Trustee shall not be considered a Transfer or participation); provided, that any
participant in any such participations shall not have any direct rights under the Operative
Agreements or any Lien on all or any part of the Aircraft or the Collateral and Owner shall not
have any increased liability or obligations as a result of any such participation. In the case of
any such Transfer, the Transferee, by acceptance of Equipment Notes in connection with such
Transfer, shall be deemed to be bound by (i) all of the covenants of Note Holders contained in the
Operative Agreements and (ii) certain terms of the Intercreditor Agreement as specified in such
Equipment Notes and/or Section 2.06 of the Trust Indenture.



     9.2 Effect of Transfer



     Upon any Transfer in accordance with Section 9.1 (other than any Transfer by any Note Holder,
to the extent it only grants participations in Equipment Notes or in its beneficial interest
therein), Transferee shall be deemed a “Note Holder,” for all purposes of this Agreement and the
other Operative Agreements, and the transferring Note Holder shall be released from all of its
liabilities and obligations under this Agreement and any other Operative Agreements to the extent
such liabilities and obligations arise after such Transfer and, in each case, to the extent such
liabilities and obligations are assumed by the Transferee; provided, that such transferring
Note Holder (and its respective Affiliates, successors, assigns, agents, servants, representatives,
directors and officers) will continue to have the benefit of any rights or indemnities under any
Operative Agreement vested or relating to circumstances, conditions, acts or events prior to such
Transfer.



SECTION 10. SECTION 1110




     It is the intention of each of the Owner, the Note Holders (such intention being evidenced by
each of their acceptance of an Equipment Note), and Indenture Trustee that Indenture Trustee shall
be entitled to the benefits of Section 1110 in the event of a case under Chapter 11 of the
Bankruptcy Code in which Owner is a debtor.



SECTION 11. CHANGE OF CITIZENSHIP




     11.1 Generally



     Without prejudice to the representations, warranties or covenants regarding the status of any
party hereto as a Citizen of the United States, each of Owner, WTC and Indenture Trustee agrees
that it will, immediately upon obtaining knowledge of any facts that would cast doubt



PARTICIPATION AGREEMENT (2011-1)





34









 







upon its
continuing status as a Citizen of the United States and promptly upon public disclosure of
negotiations in respect of any transaction which would or might adversely affect such status,
notify in writing all parties hereto of all relevant matters in connection therewith.




     11.2 Indenture Trustee



     Upon WTC giving any notice in accordance with Section 11.1, Indenture Trustee shall (if and so
long as such citizenship is necessary under the Act as in effect at such time or, if it is not
necessary, if and so long as Indenture Trustee’s citizenship could have any adverse effect on
Owner, or any Note Holder), subject to Section 9.02 of the Trust Indenture, resign as Indenture
Trustee promptly upon its ceasing to be such a citizen.



SECTION 12. MISCELLANEOUS




     12.1 Amendments



     No provision of this Agreement may be amended, supplemented, waived, modified, discharged,
terminated or otherwise varied orally, but only by an instrument in writing that specifically
identifies the provision of this Agreement that it purports to amend, supplement, waive, modify,
discharge, terminate or otherwise vary and is signed by the party against which the enforcement of
the amendment, supplement, waiver, modification, discharge, termination or variance is sought.
Each such amendment, supplement, waiver, modification, discharge, termination or variance shall be
effective only in the specific instance and for the specific purpose for which it is given. No
provision of this Agreement shall be varied or contradicted by oral communication, course of
dealing or performance or other manner not set forth in an agreement, document or instrument in
writing and signed by the party against which enforcement of the same is sought.



     12.2 Severability



     If any provision hereof shall be held invalid, illegal or unenforceable in any respect in any
jurisdiction, then, to the extent permitted by Law, (a) all other provisions hereof shall remain in
full force and effect in such jurisdiction and (b) such invalidity, illegality or unenforceability
shall not affect the validity, legality or enforceability of such provision in any other
jurisdiction. If, however, any Law pursuant to which such provisions are held invalid, illegal or
unenforceable may be waived, such Law is hereby waived by the parties hereto to the full extent
permitted, to the end that this Agreement shall be deemed to be a valid and binding agreement in
all respects, enforceable in accordance with its terms.



     12.3 Survival



     The indemnities set forth herein shall survive the delivery or return of the Aircraft, the
Transfer of any interest by any Note Holder of its Equipment Note and the expiration or other
termination of this Agreement or any other Operative Agreement.



PARTICIPATION AGREEMENT (2011-1)





35









 








     12.4 Reproduction of Documents



     This Agreement, all schedules and exhibits hereto and all agreements, instruments and
documents relating hereto, including, without limitation, (a) consents, waivers and modifications
that may hereafter be executed and (b) financial statements, certificates and other information
previously or hereafter furnished to any party hereto, may be reproduced by such party by any
photographic, photostatic, microfilm, micro-card, miniature photographic or other similar process,
and such party may destroy any original documents so reproduced. Any such reproduction shall be as
admissible in evidence as the original itself in any judicial or administrative proceeding (whether
or not the original is in existence and whether or not such reproduction was made by such party in
the regular course of business) and any enlargement, facsimile or further reproduction of such
reproduction likewise is admissible in evidence.



     12.5 Counterparts



     This Agreement and any amendments, waivers, consents or supplements hereto may be executed in
any number of counterparts (or upon separate signature pages bound together into one or more
counterparts), each of which when so executed shall be deemed to be an original, and all of which
counterparts, taken together, shall constitute one and the same instrument.



     12.6 No Waiver



     No failure on the part of any party hereto to exercise, and no delay by any party hereto in
exercising, any of its respective rights, powers, remedies or privileges under this Agreement or
provided at Law, in equity or otherwise shall impair, prejudice or constitute a waiver of any such
right, power, remedy or privilege or be construed as a waiver of any breach hereof or default
hereunder or as an acquiescence therein nor shall any single or partial exercise of any such right,
power, remedy or privilege preclude any other or further exercise thereof by it or the exercise of
any other right, power, remedy or privilege by it. No notice to or demand on any party hereto in
any case shall, unless otherwise required under this Agreement, entitle such party to any other or
further notice or demand in similar or other circumstances or constitute a waiver of the rights of
any party hereto to any other or further action in any circumstances without notice or demand.



     12.7 Notices



     Unless otherwise expressly permitted by the terms hereof, all notices, requests, demands,
authorizations, directions, consents, waivers and other communications required or permitted to be
made, given, furnished or filed hereunder shall be in writing (it being understood that the
specification of a writing in certain instances and not in others does not imply an intention that
a writing is not required as to the latter), shall refer specifically to this Agreement or other
applicable Operative Agreement, and shall be personally delivered, sent by facsimile or
telecommunication transmission (which in either case provides written confirmation to the
sender of its delivery), sent by registered mail or certified mail, return receipt requested,
postage prepaid, or sent by overnight courier service, in each case to the respective address, or
facsimile number set forth for such party in Schedule 1, or to such other address, facsimile or
other number as each party hereto may hereafter specify by notice to the other parties hereto.
Each such notice, request, demand, authorization, direction, consent, waiver or other communication
shall



PARTICIPATION AGREEMENT (2011-1)






36









 







be effective when received or, if made, given, furnished or filed (a) by facsimile or
telecommunication transmission, when confirmed, or (b) by registered or certified mail, three
Business Days after being deposited, properly addressed, with the U.S. Postal Service.




     12.8 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE



     (a) THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE. THIS AGREEMENT IS BEING DELIVERED
IN THE STATE OF NEW YORK.



     (b) EACH PARTY HERETO HEREBY IRREVOCABLY AGREES, ACCEPTS AND SUBMITS ITSELF TO THE
NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN THE CITY AND COUNTY OF NEW
YORK AND OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, IN CONNECTION WITH ANY LEGAL
ACTION, SUIT OR PROCEEDING WITH RESPECT TO ANY MATTER RELATING TO OR ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT.



     (c) EACH PARTY HERETO HEREBY IRREVOCABLY CONSENTS AND AGREES TO THE SERVICE OF ANY AND ALL
LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH SUIT,
ACTION OR PROCEEDING MAY BE MADE BY MAILING COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, AT THE ADDRESS SET FORTH PURSUANT TO SECTION 12.7. EACH PARTY HERETO HEREBY AGREES THAT
SERVICE UPON IT, OR ANY OF ITS AGENTS, IN EACH CASE IN ACCORDANCE WITH THIS SECTION 12.8(c), SHALL
CONSTITUTE VALID AND EFFECTIVE PERSONAL SERVICE UPON SUCH PARTY, AND EACH PARTY HERETO HEREBY
AGREES THAT THE FAILURE OF ANY OF ITS AGENTS TO GIVE ANY NOTICE OF SUCH SERVICE TO ANY SUCH PARTY
SHALL NOT IMPAIR OR AFFECT IN ANY WAY THE VALIDITY OF SUCH SERVICE ON SUCH PARTY OR ANY JUDGMENT
RENDERED IN ANY ACTION OR PROCEEDING BASED THEREON.



     (d) EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE, IN ANY LEGAL ACTION OR
PROCEEDING BROUGHT HEREUNDER IN ANY OF THE ABOVE-NAMED COURTS, THAT SUCH ACTION OR PROCEEDING IS
BROUGHT IN AN
INCONVENIENT FORUM, THAT VENUE FOR THE ACTION OR PROCEEDING IS IMPROPER OR THAT THIS AGREEMENT
OR ANY OTHER OPERATIVE AGREEMENT MAY NOT BE ENFORCED IN OR BY SUCH COURTS.



     (e) EACH PARTY HERETO HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION IN ANY COURT IN ANY JURISDICTION BASED UPON OR ARISING OUT OF OR RELATING TO THIS
AGREEMENT.



PARTICIPATION AGREEMENT (2011-1)





37









 








     12.9 Third-Party Beneficiary



     This Agreement is not intended to, and shall not, provide any person not a party hereto (other
than the Indenture Indemnitees (including the Related Note Holders), each of which is an intended
third party beneficiary with respect to the provisions of Section 8.1 (and, in the case of the Tax
Indemnitees, Section 8.3) and the persons referred to in Section 6.4.6, which are intended third
party beneficiaries with respect to such Section) with any rights of any nature whatsoever against
any of the parties hereto and no person not a party hereto (other than the Indenture Indemnitees
(including the Related Note Holders), with respect to the provisions of Section 8.1 (and, in the
case of the Tax Indemnitees, Section 8.3), and the persons referred to in Section 6.4.6 with
respect to the provisions of such Section) shall have any right, power or privilege in respect of
any party hereto, or have any benefit or interest, arising out of this Agreement.



     12.10 Entire Agreement



     This Agreement, together with the other Operative Agreements, on and as of the date hereof,
constitutes the entire agreement of the parties hereto with respect to the subject matter hereof,
and all prior or contemporaneous understandings or agreements, whether written or oral, among any
of the parties hereto with respect to such subject matter are hereby superseded in their
entireties.



     12.11 Further Assurances



     Each party hereto shall execute, acknowledge and deliver or shall cause to be executed,
acknowledged and delivered, all such further agreements, instruments, certificates or documents,
and shall do and cause to be done such further acts and things, in any case, as any other party
hereto shall reasonably request in connection with the administration of, or to carry out more
effectually the purposes of, or to better assure and confirm into such other party the rights and
benefits to be provided under this Agreement and the other Operative Agreements.



[This space intentionally left blank]




PARTICIPATION AGREEMENT (2011-1)






38









 








     IN WITNESS WHEREOF, each of the parties has caused this Participation Agreement to be duly
executed and delivered as of the day and year first above written.



	 	 	 	 	 	 	 

	 	 	US AIRWAYS, INC.,

      Owner	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	 
 

Name:
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	WILMINGTON TRUST COMPANY,	 	 
	 

	 	 	 	not in its individual capacity, except as

expressly provided herein, but solely as Indenture

Trustee	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	 
 

Name:
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	WILMINGTON TRUST COMPANY,	 	 
	 

	 	 	 	not in its individual capacity, except as

expressly provided herein, but solely as Pass

Through Trustee under the Pass Through Trust

Agreement for the US Airways Pass Through Trust,

2011-1A-O	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 






			
	 	 	 
	PARTICIPATION AGREEMENT (2011-1)
	 	SIGNATURE PAGE






 









 






	 	 	 	 	 	 	 

	 	 	WILMINGTON TRUST COMPANY,	 	 
	 

	 	 	 	not in its individual capacity, except as

expressly provided herein, but solely as Pass

Through Trustee under the Pass Through Trust

Agreement for the US Airways Pass Through Trust,

2011-1B-O	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	 
 

Name:
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	WILMINGTON TRUST COMPANY,	 	 
	 

	 	 	 	not in its individual capacity, except as

expressly provided herein, but solely as Pass

Through Trustee under the Pass Through Trust

Agreement for the US Airways Pass Through Trust,

2011-1C-O	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	 
 

Name:
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	WILMINGTON TRUST COMPANY,	 	 
	 

	 	 	 	not in its individual capacity, except as

expressly provided herein, but solely as

Subordination Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	 
 

Name:
	 	 
	 

	 	 	 	Title:	 	 






			
	 	 	 
	PARTICIPATION AGREEMENT (2011-1)
	 	SIGNATURE PAGE






 









 









					
	 	 	 	 	SCHEDULE 1 — ACCOUNTS;
	 	 	 	 	ADDRESSES
	 	 	 	 	PARTICIPATION AGREEMENT [  ]





ACCOUNTS; ADDRESSES




	 	 	 	 	 
	 	 	Account for Payments	 	Address for Notices
	US Airways, Inc.

	 	US Airways, Inc.

JP Morgan Chase- New York, NY

Account No.: 708038021

ABA#: 021-000-021

Attention: Simon Little

Voice: 480-693-2822

Facsimile: 480-693-8953

Reference: US Airways 2011-1 EETC
	 	US Airways, Inc.

111 West Rio Salado Parkway 

Tempe, Arizona 85281

Attention: Vice President and Treasurer

Facsimile: (480) 693-5886


with
a copy to: Deputy General Counsel

Facsimile: (480) 693-5932

	 
	 	 	 	 
	Wilmington Trust Company, Indenture 

Trustee

	 	Wilmington Trust Company

Wilmington, Delaware 19890

Account No.: [___]

ABA#: 031100092

Attention: Corporate Trust Administration

Reference: US Airways 2011-1
	 	Wilmington Trust Company

1100 North Market Street

Wilmington, Delaware 19890-1605

Attention: Corporate Trust

Administration

Facsimile: (302) 636-4140
	 
	 	 	 	 
	Wilmington Trust Company, as 

Subordination Agent

	 	Wilmington Trust Company

Wilmington, Delaware 19890

Account No.: [___]

ABA#: 031100092

Attention: Corporate Trust Administration

Reference: US Airways 2011-1
	 	Wilmington Trust Company 

1100 North Market Street

Wilmington, Delaware 19890-1605

Attention: Corporate Trust

Administration

Facsimile: (302) 636-4140
	 
	 	 	 	 
	Wilmington Trust Company, as Pass 

Through Trustee for the 2011-1A Pass 

Through Trust

	 	Wilmington Trust Company

Wilmington, Delaware 19890

Account No.: [___]

ABA#: 031100092

Attention: Corporate Trust Administration

Reference: US Airways 2011-1
	 	Wilmington Trust Company 

1100 North Market Street

Wilmington, Delaware 19890-1605

Attention: Corporate Trust

Administration

Facsimile: (302) 636-4140
	 
	 	 	 	 
	Wilmington Trust Company, as Pass 

Through Trustee for the 2011-1B Pass 

Through Trust

	 	Wilmington Trust Company

Wilmington, Delaware 19890

Account No.: [___]

ABA#: 031100092

Attention: Corporate Trust Administration

Reference: US Airways 2011-1
	 	Wilmington Trust Company

1100 North Market Street

Wilmington, Delaware 19890-1605

Attention: Corporate Trust

Administration

Facsimile: (302) 636-4140






SCHEDULE 1 TO PARTICIPATION AGREEMENT (2011-1)




1









 











					
	 	 	 	 	SCHEDULE 2 — COMMITMENTS
	 	 	 	 	PARTICIPATION AGREEMENT [  ]









	 	 	 	 	 
	 	 	Account for Payments	 	Address for Notices
	Wilmington Trust Company, as Pass 

Through Trustee for the 2011-1C Pass 

Through Trust

	 	Wilmington Trust Company

Wilmington, Delaware 19890

Account No.: [___]

ABA#: 031100092

Attention: Corporate Trust Administration

Reference: US Airways 2011-1
	 	Wilmington Trust Company

1100 North Market Street

Wilmington, Delaware 19890-1605

Attention: Corporate Trust

Administration

Facsimile: (302) 636-4140






COMMITMENTS




	 	 	 	 	 
	 	 	Series of	 	Dollar Amount
	Pass Through Trustee	 	Equipment Notes	 	of Loan
	2011-1A

	 	Series A	 	 
	2011-1B

	 	Series B	 	 
	2011-1C

	 	Series C	 	 






SCHEDULE 2 TO PARTICIPATION AGREEMENT (2011-1)








1









 











					
	 	 	 	 	SCHEDULE 3 — CERTAIN TERMS
	 	 	 	 	PARTICIPATION AGREEMENT [  ]








CERTAIN TERMS




	 	 	 	 	 
	Defined Term	 	Definition	 
	Minimum Liability Insurance Amount
	 	$	500,000,000	 
	 
	Threshold Amount
	 	$	5,000,000	 






SCHEDULE 3 TO PARTICIPATION AGREEMENT (2011-1)






1









 








PERMITTED COUNTRIES




	 	 	 

	Argentina

	 	Luxembourg
	Australia

	 	Malaysia
	Austria

	 	Malta
	Bahamas

	 	Mexico
	Belgium

	 	Morocco
	Bolivia

	 	Netherlands
	Brazil

	 	Netherlands Antilles
	Canada

	 	New Zealand
	Chile

	 	Norway
	Colombia

	 	Panama
	Czech Republic

	 	People’s Republic of China
	Denmark

	 	Peru
	Egypt

	 	Philippines
	Ecuador

	 	Poland
	Finland

	 	Portugal
	France

	 	Republic of China (Taiwan)
	Germany

	 	Russia
	Greece

	 	Singapore
	Guatemala

	 	South Africa
	Hungary

	 	South Korea
	Iceland

	 	Spain
	India

	 	Sweden
	Indonesia

	 	Switzerland
	Ireland

	 	Thailand
	Italy

	 	Trinidad and Tobago
	Jamaica

	 	Turkey
	Japan

	 	United Kingdom
	Jordan

	 	Uruguay
	Kuwait

	 	Venezuela






SCHEDULE 4 TO PARTICIPATION AGREEMENT (2011-1)





1