Form of Participation Agreement


    

      
        	
                EXHIBIT
                  B

              
	
                TO

              
	
                NOTE
                  PURCHASE AGREEMENT

              


      

      


      
        	
                    CONFIDENTIAL:    
                  Subject
                  to Restrictions on Dissemination

                    Set
                  Forth in Section 7 of this
                  Agreement

              


      

      
 

    

    
      	 


    

    


     

    PARTICIPATION
      AGREEMENT [___]

     

    Dated
      as
      of [_____________]

     

    Among

     

    CONTINENTAL
      AIRLINES, INC.,

    Owner,

     

    and

     

    WILMINGTON
      TRUST COMPANY,

    Not
      in
      its individual capacity

    except
      as
      expressly provided herein,

    but
      solely as Mortgagee, Subordination Agent 

    under
      the
      Intercreditor Agreement and Pass Through Trustee

    under
      each of the Applicable Pass Through Trust Agreements

     

    ____________________________

     

    One
      Boeing 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

              	
                3

              
	
                 

                SECTION
                  3. [Intentionally omitted]

              	
                 

                3

              
	
                 

                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
                  Mortgagee

              	
                7

              
	
                4.3
                  Conditions Precedent to Obligations of
                  Owner

              	
                8

              
	
                4.4
                  Post-Registration Opinion

              	
                9

              
	
                 

                SECTION
                  5. REPRESENTATIONS AND WARRANTIES

              	
                 

                9

              
	
                5.1
                  Owner’s Representations and Warranties

              	
                9

              
	
                5.2
                  WTC’s Representations and Warranties

              	
                13

              
	
                 

                SECTION
                  6. COVENANTS, UNDERTAKINGS AND AGREEMENTS

              	
                 

                17

              
	
                6.1
                  Covenants of Owner

              	
                17

              
	
                6.2
                  Covenants of WTC

              	
                19

              
	
                6.3
                  Covenants of Note Holders

              	
                20

              
	
                6.4
                  Agreements

              	
                21

              
	
                 

                SECTION
                  7. CONFIDENTIALITY

              	
                 

                25

              
	
                 

                SECTION
                  8. INDEMNIFICATION AND EXPENSES

              	
                 

                26

              
	
                8.1
                  General Indemnity

              	
                26

              
	
                8.2
                  Expenses

              	
                32

              
	
                8.3
                  General Tax Indemnity

              	
                33

              
	
                8.4
                  Payments

              	
                43

              
	
                8.5
                  Interest

              	
                43

              
	
                8.6
                  Benefit of Indemnities

              	
                43

              
	
                 

                SECTION
                  9. ASSIGNMENT OR TRANSFER OF INTEREST

              	
                 

                44

              
	
                9.1
                  Note Holders

              	
                44

              
	
                9.2
                  Effect of Transfer

              	
                44

              
	
                 

                SECTION
                  10. SECTION 1110

              	
                 

                45

              


      

    

    


    
      
        
          
          

        

        
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                SECTION
                  11. CHANGE OF CITIZENSHIP

              	
                 

                45

              
	
                11.1
                  Generally

              	
                45

              
	
                11.2
                  Mortgagee

              	
                45

              
	
                 

                SECTION
                  12. MISCELLANEOUS

              	
                 

                45

              
	
                12.1
                  Amendments

              	
                45

              
	
                12.2
                  Severability

              	
                46

              
	
                12.3
                  Survival

              	
                46

              
	
                12.4
                  Reproduction of Documents

              	
                46

              
	
                12.5
                  Counterparts

              	
                47

              
	
                12.6
                  No Waiver

              	
                47

              
	
                12.7
                  Notices

              	
                47

              
	
                12.8
                  GOVERNING LAW; SUBMISSION TO JURISDICTION;
                  VENUE

              	
                48

              
	
                12.9
                  Third-Party Beneficiary

              	
                49

              
	
                12.10
                  Entire Agreement

              	
                49

              
	
                12.11
                  Further Assurances

              	
                49

              


      

    

     

    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 corporate counsel to Owner

            
	
              EXHIBIT
                C -

            	
              Opinion
                of special counsel to Mortgagee and to the Applicable Pass Through
                Trustees

            
	
              EXHIBIT
                D -

            	
              Opinion
                of special counsel in Oklahoma City,
                Oklahoma

            


    

    


    


    
      
        
          
          

        

        
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    PARTICIPATION
      AGREEMENT [___]

     

    PARTICIPATION
      AGREEMENT[____], dated as of [____________] (this “Agreement”), among
      (a) CONTINENTAL AIRLINES, 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
      Mortgagee (in its capacity as Mortgagee, “Mortgagee” 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. 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.

     

    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
      Mortgagee, 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 Mortgagee 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.

    


    
      
        
          
          

        

        
          
          

          
            

          

        

        
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    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:

     

    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 or Series C Equipment Notes and to issue from time to time
      Additional Series Equipment Notes, subject to the terms of the Note Purchase
      Agreement and the Intercreditor Agreement. If Series B, Series C or Additional
      Series Equipment Notes are so reissued or issued after the Closing Date, the
      Note Holder of such Equipment Notes 

    


    
      
        
          
          

        

        
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    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 Hughes Hubbard & Reed LLP, One Battery Park Plaza, New York, New
      York 10004, 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. [Intentionally
      omitted]

     

    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 Mortgagee for authentication and the Mortgagee 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;

    


    
      
        
          
          

        

        
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    (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 and the Engine Consent and Agreement;

     

    (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;

     

    (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 Hughes Hubbard & Reed LLP, special counsel to Owner,
      substantially in the form of Exhibit A;

     

    (B) an
      opinion of Owner’s Legal Department, substantially in the form of
      Exhibit B;

     

    (C) an
      opinion of Richards, Layton & Finger, special counsel to Mortgagee and to
      the Applicable Pass Through Trustees, substantially in the form of
      Exhibit C;

    


    
      
        
          
          

        

        
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    (D) an
      opinion of Lytle Soulé & Curlee, special counsel in Oklahoma City, Oklahoma,
      substantially in the form of Exhibit D; 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.

     

    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 Mortgagee in the Airframe and each
      Engine with the International Registry, Mortgagee 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 Mortgagee to execute, deliver and perform the
      Operative 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.

    


    
      
        
          
          

        

        
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    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) to the Aircraft, free and clear of all Liens, except Permitted
      Liens.

     

    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

     

    Mortgagee
      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.

     

    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 the International Interest (or Prospective
      International Interest) of the Mortgagee therein 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 and (c) each
      Financing Statement shall have been duly filed (or shall be in 

    


    
      
        
          
          

        

        
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    the
      process of being so duly filed) in the appropriate jurisdiction.

     

    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 Mortgagee

     

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

     

    4.2.1 Documents

     

    Executed
      originals of the agreements, instruments, certificates or documents described
      in
      Section 4.1.2 shall have been received by Mortgagee, 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
      Mortgagee.

    


    
      
        
          
          

        

        
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    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 Mortgagee.

     

    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 Mortgagee,
      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);

    


    
      
        
          
          

        

        
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    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.

     

    4.4 Post-Registration
      Opinion

     

    Promptly
      upon the registration of the Aircraft and the recordation of the FAA Filed
      Documents pursuant to the Act, Owner will cause Lytle Soulé & Curlee,
      special counsel in Oklahoma City, Oklahoma, to deliver to Owner, each Pass
      Through Trustee and Mortgagee a favorable opinion or opinions addressed to
      each
      of them with respect to such registration and 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
      Mortgagee 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
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    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, 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
      the filing of (x) the FAA Filed Documents and the Financing Statements (and
      continuation statements periodically), (y) 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 and
      (z) 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
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    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 other 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 on with the International Registry,
      (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 respect thereof under Article 9 of the UCC) is necessary
      in order to establish and perfect Mortgagee’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.

    


    
      
        
          
          

        

        
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    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.

     

    5.1.12 Section
      1110

     

    Mortgagee
      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

       

    

    
      
        
          
          

        

        
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    The
      Owner
      is a Transactional User Entity; 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 constitutes a “contract of sale” (as defined in the
      Cape Town Treaty), and the 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 Mortgagee,
      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 Mortgagee,
      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 

    


    
      
        
          
          

        

        
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    Mortgagee,
      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 Mortgagee,
      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 Mortgagee,
      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 Mortgagee, 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
      Mortgagee, a Pass Through Trustee or Subordination Agent, is a party or by
      which
      WTC, in its individual capacity or as Mortgagee, 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 Mortgagee,
      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 Mortgagee, 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 Mortgagee, 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


    


    
      
        
          
          

        

        
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    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
      Mortgagee, a Pass Through Trustee or Subordination Agent, as the case may be,
      and are enforceable against WTC, in its individual capacity or as Mortgagee,
      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.

     

    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 Mortgagee, 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
      Mortgagee, 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 Mortgagee, a Pass Through Trustee or Subordination Agent, as the case
      may
      be, to perform its obligations under any of the Mortgagee 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 

    


    
      
        
          
          

        

        
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    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 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 Mortgagee, any
      Applicable Pass Through Trustee or 

    


    
      
        
          
          

        

        
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    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
      Mortgagee 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 Mortgagee 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 Mortgagee 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 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
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    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 Mortgagee, 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). Mortgagee, 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 Mortgagee or change in the Mortgagee’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 Mortgagee
      annually after such registration, commencing with the calendar year after such
      registration is effected, an opinion of special counsel reasonably satisfactory
      to Mortgagee 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 division of McGraw-Hill
      Companies, Inc., a copy of any notice regarding a lease of the Aircraft required
      to be given to the Mortgagee pursuant to clause (w) of the first sentence
      of the penultimate paragraph of Section 4.02(b) of the Mortgage, at the


    


    
      
        
          
          

        

        
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    time
      such
      notice is given to Mortgagee, 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 Mortgagee, each Applicable Pass Through Trustee
      or
      Subordination Agent, as the case may be, covenants and agrees with Owner as
      follows:

     

    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 Mortgagee, 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 Mortgagee, 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.

    


    
      
        
          
          

        

        
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    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 Mortgagee 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 Mortgagee 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 Mortgagee against any United States withholding
      taxes (and related interest, penalties and additions to tax) as a result of
      the
      inaccuracy or invalidity of any certificate or form provided by such Note Holder
      to Mortgagee 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,
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    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
      Mortgagee 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.

     

    6.4.2 Consents

     

    Each
      Pass
      Through Trustee, Subordination Agent and Mortgagee 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.

    


    
      
        
          
          

        

        
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    6.4.3 Insurance

     

    Each
      Pass
      Through Trustee, Subordination Agent, Mortgagee and each Note Holder 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 Mortgagee 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 

            


    

    


    
      
        
          
          

        

        
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    or,
      if
      Taiwan, the United States then maintains diplomatic relations at least as good
      as those in effect on the Closing Date;

     

    (ii)
      the
      Mortgagee shall have received an opinion of counsel (subject to customary
      exceptions) reasonably satisfactory to the Mortgagee addressed to Mortgagee
      as
      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 Mortgagee 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 Mortgagee 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 

    


    
      
        
          
          

        

        
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    effect
      to
      any other activity of the Mortgagee (or any Affiliate of the Mortgagee), for
      the
      Mortgagee 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 Mortgagee assurances reasonably satisfactory to
      Mortgagee:

     

    (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 Mortgagee in connection with such change of registry, including, without
      limitation (1) the reasonable fees and disbursements of counsel to
      Mortgagee, (2) any filing or recording 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 Mortgagee
      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 Mortgagee 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
      Mortgagee, afford such protection).

     

    6.4.6 Interest
      in Certain Engines

     

    Each
      Note
      Holder and Mortgagee 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 

    


    
      
        
          
          

        

        
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    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 Mortgagee 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, Mortgagee’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, Mortgagee’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 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.

    


    
      
        
          
          

        

        
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    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.

    


    
      
        
          
          

        

        
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    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;

     

    (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) [Intentionally
      Omitted]

     

    (e) 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);

     

    (f) [Intentionally
      Omitted]

     

    (g) 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; 

     

    (h) To
      the
      extent attributable to the failure by such Indemnitee or any related Indemnitee
      to perform or observe any 

    


    
      
        
          
          

        

        
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    agreement,
      covenant or condition on its part to be performed or observed in any Operative
      Agreement or any Pass Through Agreement; 

     

    (i) 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); 

     

    (j) (i) With
      respect to any Indemnitee (other than Mortgagee), to the extent attributable
      to
      the failure of the Mortgagee 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 Mortgagee, to the extent attributable to the negligence or willful
      misconduct of Mortgagee 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
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    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;

     

    (k) 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); 

     

    (l) 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;

     

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

     

    (n) [Intentionally
      Omitted]

     

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

     

    (p) 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

     

    (q) 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.

    


    
      
        
          
          

        

        
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    8.1.3 Separate
      Agreement

     

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

     

    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;


    


    
      
        
          
          

        

        
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    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.

     

    (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.

    


    
      
        
          
          

        

        
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    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
      with respect to any of such Indemnitee’s insurance policies or 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 Mortgagee
      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
      Mortgagee, 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.
      

     

    8.2.2 Payment
      of Other Expenses

     

    Owner
      shall pay (i) the ongoing fees and expenses of Mortgagee, and (ii) all
      reasonable out-of-pocket costs and expenses (including the reasonable fees
      and
      disbursements of counsel) incurred by Mortgagee or any Note Holder attributable
      

    


    
      
        
          
          

        

        
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    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
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    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:

     

    (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 

    


    
      
        
          
          

        

        
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    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
      Mortgagee;

     

    (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 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 

    


    
      
        
          
          

        

        
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    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
      

    


    
      
        
          
          

        

        
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    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 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 

    


    
      
        
          
          

        

        
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    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
      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 

    


    
      
        
          
          

        

        
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    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 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 

    


    
      
        
          
          

        

        
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    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 

    


    
      
        
          
          

        

        
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    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.

     

    (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
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    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.

     

    8.3.7 Forms

     

    Each
      Tax
      Indemnitee agrees to furnish from time to time to Owner or Mortgagee or to
      such
      other person as Owner or Mortgagee may designate, at Owner’s or Mortgagee’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.

    


    
      
        
          
          

        

        
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    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, 

    


    
      
        
          
          

        

        
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    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 2.07 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
      2.07
      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.

    


    
      
        
          
          

        

        
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    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 Mortgagee that Mortgagee
      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
      Mortgagee agrees that it will, immediately upon obtaining knowledge of any
      facts
      that would cast doubt 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 Mortgagee

     

    Upon
      WTC
      giving any notice in accordance with Section 11.1, Mortgagee 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 Mortgagee’s citizenship could have
      any adverse effect on Owner, or any Note Holder), subject to Section 9.02
      of the Trust Indenture, resign as Mortgagee 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 

    


    
      
        
          
          

        

        
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    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.

     

    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.

    


    
      
        
          
          

        

        
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    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,
      

    


    
      
        
          
          

        

        
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    waiver
      or
      other communication shall 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 LAWS 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 

    


    
      
        
          
          

        

        
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    ANY
      JURISDICTION BASED UPON OR ARISING OUT OF OR RELATING TO THIS
      AGREEMENT.

     

    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]

    


    


    
      
        
          
          

        

        
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    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.

     

    
      	 	CONTINENTAL
              AIRLINES, INC.,
	 	 	
              Owner 

            
	 	 	 
	 	 	 
	 	
              By

            	 
	 	 	
              Name:

            	 
	 	 	
              Title:

            	 


    

     

    
      
        	 	WILMINGTON
                TRUST COMPANY,
	 	 	
                
                  
                    not
                      in its individual capacity, except as expressly provided herein,
                      but
                      solely as Mortgagee

                  

                

              
	 	 	 
	 	 	 
	 	
                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 Continental Airlines Pass Through Trust,
                      2007-1A-0

                  

                

              
	 	 	 
	 	 	 
	 	
                By

              	 
	 	 	
                Name:

              	 
	 	 	
                Title:

              	 


      

       

    

    
 

    
      
        
          
          

        

        
          SIGNATURE
            PAGE

          
            

          

        

        
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        	 	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 Continental Airlines Pass Through Trust,
                      2007-1B-0

                  

                

              
	 	 	 
	 	 	 
	 	
                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 Continental Airlines Pass Through Trust,
                            2007-1C-0

                        

                      

                    

                  
	 	 	 
	 	 	 
	 	
                    By

                  	 
	 	 	
                    Name:

                  	 
	 	 	
                    Title:

                  	 




        

      

    

     

    
      
        
          
          

        

        
          SIGNATURE
            PAGE

          
            

          

        

        
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          	 	WILMINGTON
                  TRUST COMPANY,
	 	 	
                  
                    
                      not
                        in its individual capacity, except as expressly provided
                        herein, but
                        solely as Subordination Agent

                    

                  

                
	 	 	 
	 	 	 
	 	
                  By

                	 
	 	 	
                  Name:

                	 
	 	 	
                  Title:

                	 


        

      

    

     

    
 

    
      
        
          
          

        

        
          SIGNATURE
            PAGE

          
            

          

        

        
          BACK

        

      

    

    

      


      
        	 	
                SCHEDULE
                  1

                TO

                PARTICIPATION
                  AGREEMENT [___]

              


      

      


       

    

    ACCOUNTS;
      ADDRESSES

    


    

      

        
          	 	
                  Account
                    for Payments

                	
                  Address
                    for Notices

                
	
                   

                  Continental
                    Airlines, Inc.

                	
                   

                  JPMorgan
                    Chase Bank

                  New
                    York, New York 10081

                  Account
                    No.: 910-2-499291

                  ABA#:
                    021-000021 

                  Attention: Alice
                    Free

                  Voice: 318-362-8612

                  Facsimile:
                    318-362-8613

                  Reference:
                    Continental [___]

                	
                   

                  Continental
                    Airlines, Inc.

                  1600
                    Smith Street

                  Dept.
                    HQS-FN

                  Houston,
                    Texas 77002

                  Attention:
                    Treasurer

                  Facsimile:
                    (713) 324-2447

                
	
                   

                  Wilmington
                    Trust Company, Mortgagee

                	
                   

                  JPMorgan
                    Chase Bank

                  New
                    York, New York 10081

                  Account
                    No.: [___]

                  ABA#:
                    021-000021

                  Attention:
                    Corporate Trust

                  Administration

                  Reference:
                    Continental [___]

                	
                   

                  Wilmington
                    Trust Company

                  Rodney
                    Square North

                  1100
                    North Market Street

                  Wilmington,
                    Delaware 19890

                  Attention:
                    Corporate Trust 

                  Administration

                  Facsimile:
                    (302) 636-4140

                
	
                   

                  Wilmington
                    Trust Company, as Subordination Agent

                	
                   

                  JPMorgan
                    Chase Bank

                  New
                    York, New York 10081 

                  Account
                    No.: [___]

                  ABA#:
                    021-000021

                  Attention:
                    Corporate Trust

                  Administration

                  Reference:
                    Continental [__]

                	
                   

                  Wilmington
                    Trust Company

                  Rodney
                    Square North

                  1100
                    North Market Street

                  Wilmington,
                    Delaware 19890 

                  Attention:
                    Corporate Trust 

                  Administration

                  Facsimile:
                    (302) 636-4140

                
	
                   

                  Wilmington
                    Trust Company, as Pass Through Trustee for the 2007-1A Pass Through
                    Trust

                	
                   

                  JPMorgan
                    Chase Bank

                  New
                    York, New York 10081

                  Account
                    No.: [___]

                  ABA#:
                    021-000021

                  Attention:
                    Corporate Trust

                  Administration

                   Reference:
                    Continental [__]

                	
                   

                  Wilmington
                    Trust Company

                  Rodney
                    Square North

                  1100
                    North Market Street

                  Wilmington,
                    Delaware 19890

                  Attention:
                    Corporate Trust

                   Administration

                  Facsimile:
                    (302) 636-4140

                
	
                   

                  Wilmington
                    Trust Company, as Pass Through Trustee for the 2007-1B Pass Through
                    Trust

                	
                   

                  JPMorgan
                    Chase Bank

                  New
                    York, New York 10081

                  Account
                    No.: [___]

                  ABA#:
                    021-000021

                  Attention:
                    Corporate Trust

                   Administration

                  Reference:  Continental
                    [__]

                	
                   

                  Wilmington
                    Trust Company

                  Rodney
                    Square North

                  1100
                    North Market Street

                  Wilmington,
                    Delaware 19890

                  Attention:
                    Corporate Trust

                   Administration

                  Facsimile:
                    (302) 636-4140

                


        

      

    

    


    
      
        
          
          

        

        
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                Account
                  for Payments

              	
                Address
                  for Notices

              
	
                 

                Wilmington
                  Trust Company, as Pass Through Trustee for the 2007-1C Pass Through
                  Trust

              	
                 

                JPMorgan
                  Chase Bank

                New
                  York, New York 10081

                Account
                  No.: [___]

                ABA#:
                  021-000021

                Attention:
                  Corporate Trust

                 Administration

                Reference:  Continental
                  [__]

              	
                 

                Wilmington
                  Trust Company

                Rodney
                  Square North

                1100
                  North Market Street

                Wilmington,
                  Delaware 19890

                Attention:
                  Corporate Trust

                 Administration

                Facsimile:
                  (302) 636-4140

              


      

    

    


    


    
      
        
          
          

        

        
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                SCHEDULE
                  2

                TO

                PARTICIPATION
                  AGREEMENT [___]

              


      

      


       



     

    COMMITMENTS

    


    
      	
               

              Pass
                Through

              Trustee

            	 	
              
              

              Series
                of

              Equipment
                Notes

            	 	
              
              

              Dollar
                Amount

              of
                Loan

            
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 


    

    


    


    
      
        
          
          

        

        
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              SCHEDULE
                3 - CERTAIN TERMS

              PARTICIPATION
                AGREEMENT [___]

            


    

    


    


     

    CERTAIN
      TERMS

     

    [OMITTED
      AS CONTAINING CONFIDENTIAL FINANCIAL INFORMATION]


    


    
      
        
          
          

        

        
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                SCHEDULE
                  4 - PERMITTED COUNTRIES

                PARTICIPATION
                  AGREEMENT [___]

              


      

       

    

     

    PERMITTED
      COUNTRIES

    


    


    
      
        
          
          

        

        
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              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