Document:

Exhibit 4.8 - Form of Lease Agreement

     

    
      
        
          	
                   

                  CONFIDENTIAL:
                    Annexes B, C and D and Schedules 1, 2, 3 and 4 of this Lease
                    Agreement are subject to Restrictions on Dissemination Set Forth
                    

                  in
                    Section 8 of the Participation Agreement (as defined
                    herein)

                   

                

        

      

    

    _____________________________________________________________

     

    LEASE
      AGREEMENT [TN]

     

    Dated
      as
      of [DD]

     

    Between

     

    WELLS
      FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,

     

    Not
      in
      its Individual Capacity, 

    except
      as
      expressly provided herein,

    but
      solely as Owner Trustee,

     

    Lessor

     

    and

     

    CONTINENTAL
      AIRLINES, INC.,

     

    Lessee

    _______________________________________________________

     

    One
      Embraer Model EMB-145 XR Aircraft

    Bearing
      United States Registration No. N[REG] and

    Bearing
      Manufacturer’s Serial No. [MSN] with two

    Allison
      AE3007A1E Engines

    Bearing
      Engine Manufacturer’s Serial Nos. CAE[E1] and CAE[E2]

    _____________________________________________________________

     

    The
      right, title and interest of Lessor in and to, among other things, this Lease
      Agreement has been assigned to and is subject to a security interest in favor
      of
      Wilmington Trust Company, a Delaware banking corporation, as Mortgagee, under
      the Trust Indenture and Mortgage [TN], dated as of [DD], for the benefit of
      the
      holders of the Equipment Notes referred to in such Trust Indenture, all to
      the
      extent provided in such Trust Indenture. This Lease Agreement has been executed
      in multiple counterparts; to the extent, if any, that this Lease Agreement
      constitutes chattel paper (as defined in the Uniform Commercial Code as in
      effect in any applicable jurisdiction), no security interest in Lessor’s right,
      title and interest in and to this Lease Agreement may be perfected through
      the
      delivery or possession of any counterpart of this Lease Agreement other than
      the
      counterpart of this Lease Agreement that contains the original receipt executed
      by Wilmington Trust Company, as Mortgagee.

     

    
      
        
          PAGE  1

        

      

      
        
        

        
          

        

      

      CONTENTS

    

    
      
        
          	
                   

                  SECTION
                    1. DEFINITIONS
                    AND CONSTRUCTION

                	
                   

                  
                    1

                  

                
	
                   

                  SECTION
                    2. DELIVERY
                    AND ACCEPTANCE

                	
                   

                  
                    1

                  

                
	
                  2.1 Delivery
                    and Lease of Aircraft

                	
                  1

                
	
                  2.2 Acceptance
                    by Lessee

                	
                  1

                
	
                   

                  SECTION
                    3. TERM
                    AND RENT

                	
                   

                  
                    2

                  

                
	
                  3.1 Term

                	
                  2

                
	
                  3.2 Rent

                	
                  2

                
	
                  3.3 Payments

                	
                  4

                
	
                   

                  SECTION
                    4. DISCLAIMER;
                    CERTAIN AGREEMENTS OF LESSOR; SECTION 1110 MATTERS

                	
                   

                  
                    4

                  

                
	
                  4.1 Disclaimer

                	
                  4

                
	
                  4.2 Certain
                    Agreements of Lessor

                	
                  5

                
	
                  4.3 Quiet
                    Enjoyment

                	
                  5

                
	
                  4.4 Investment
                    of Funds Held as Security

                	
                  5

                
	
                  4.5 Title
                    Transfers by Lessor

                	
                  6

                
	
                  4.6 Lessor’s
                    Interest in Certain Engines

                	
                  7

                
	
                  4.7 Lease
                    For U.S. Federal Income Tax Law Purposes; Section 1110 of Bankruptcy
                    Code

                	
                  7

                
	
                   

                  SECTION
                    5. RETURN
                    OF AIRCRAFT

                	
                   

                  
                    7

                  

                
	
                  5.1 Compliance
                    with Annex B

                	
                  7

                
	
                  5.2 Storage
                    and Related Matters

                	
                  7

                
	
                  5.3 Return
                    of Other Engines

                	
                  8

                
	
                   

                  SECTION
                    6. LIENS

                	
                   

                  
                    8

                  

                
	
                   

                  SECTION
                    7. REGISTRATION,
                    OPERATION, POSSESSION, SUBLEASING AND RECORDS

                	
                   

                  
                    9

                  

                
	
                  7.1 Registration
                    and Operation

                	
                  9

                
	
                  7.2 Possession

                	
                  10

                
	
                  7.3 Certain
                    Limitations on Subleasing or Other Relinquishment of
                    Possession

                	
                  14

                
	
                   

                  SECTION
                    8. MAINTENANCE;
                    REPLACEMENT AND POOLING OF PARTS; ALTERATIONS, MODIFICATIONS
                    AND
                    ADDITIONS; OTHER LESSEE COVENANTS

                	
                   

                  
                    14

                  

                
	
                  8.1 Maintenance;
                    Replacement and Pooling of Parts; Alterations, Modifications
                    and
                    Additions

                	
                  14

                
	
                  8.2 Information,
                    Certificates, Notices and Reports

                	
                  14

                
	
                   

                  SECTION
                    9. VOLUNTARY
                    TERMINATION UPON OBSOLESCENCE

                	
                   

                  
                    16

                  

                
	
                  9.1 Right
                    of Termination

                	
                  16

                

        

         

        
          
            
              PAGE
                 i

            

          

          
            
            

            
              

            

          

        

        
          
            	
                    9.2 Election
                      by Lessor to Sell

                  	
                    16

                  
	
                    9.3 Retention
                      of Aircraft by Lessor

                  	
                    18

                  
	
                     

                    SECTION
                      10. LOSS,
                      DESTRUCTION, REQUISITION, ETC.

                  	
                     

                    
                      19

                    

                  
	
                    10.1 Event
                      of Loss With Respect to Aircraft

                  	
                    19

                  
	
                    10.2 Event
                      of Loss With Respect to an Engine

                  	
                    21

                  
	
                    10.3 Conditions
                      to any Replacement

                  	
                    22

                  
	
                    10.4 Conveyance
                      to Lessee

                  	
                    24

                  
	
                    10.5 Application
                      of Payments

                  	
                    24

                  
	
                    10.6 Requisition
                      of Aircraft for Use

                  	
                    24

                  
	
                    10.7 Requisition
                      of an Engine for Use

                  	
                    25

                  
	
                    10.8 Application
                      of Payments

                  	
                    25

                  
	
                    10.9 Application
                      of Payments During Existence of a Lease Event of
                      Default

                  	
                    25

                  
	
                     

                    SECTION
                      11. INSURANCE

                  	
                     

                    
                      26

                    

                  
	
                    11.1 Lessee’s
                      Obligation to Insure

                  	
                    26

                  
	
                    11.2 Insurance
                      for Own Account

                  	
                    26

                  
	
                    11.3 Indemnification
                      by Government in Lieu of Insurance

                  	
                    26

                  
	
                    11.4 Application
                      of Insurance Proceeds

                  	
                    26

                  
	
                    11.5 Application
                      of Payments During Existence of Default

                  	
                    27

                  
	
                     

                    SECTION
                      12. INSPECTION

                  	
                     

                    
                      27

                    

                  
	
                     

                    SECTION
                      13. ASSIGNMENT;
                      MERGER; SUCCESSOR OWNER TRUSTEE

                  	
                     

                    
                      28

                    

                  
	
                    13.1 In
                      General

                  	
                    28

                  
	
                    13.2 Merger
                      of Lessee

                  	
                    28

                  
	
                    13.3 Assignment
                      Security for Lessor’s Obligations

                  	
                    29

                  
	
                    13.4 Successor
                      Owner Trustee

                  	
                    29

                  
	
                     

                    SECTION
                      14. LEASE
                      EVENTS OF DEFAULT

                  	
                     

                    
                      29

                    

                  
	
                    14.1 Payments

                  	
                    30

                  
	
                    14.2 Insurance

                  	
                    30

                  
	
                    14.3 Other
                      Covenants

                  	
                    30

                  
	
                    14.4 Representations
                      and Warranties

                  	
                    30

                  
	
                    14.5 Bankruptcy
                      and Insolvency

                  	
                    31

                  
	
                     

                    SECTION
                      15. REMEDIES
                      AND WAIVERS

                  	
                     

                    
                      31

                    

                  
	
                    15.1 Remedies

                  	
                    31

                  
	
                    15.2 Limitations
                      Under CRAF

                  	
                    34

                  
	
                    15.3 Right
                      to Perform for Lessee

                  	
                    34

                  
	
                    15.4 Determination
                      of Fair Market Sales Value

                  	
                    34

                  
	
                    15.5 Remedies
                      Cumulative

                  	
                    35

                  

          

           

          
            
              
                PAGE
                   ii

              

            

            
              
              

              
                

              

            

            
              
              

            

          

           

          
            	
                     

                    SECTION
                      16. LESSEE’S
                      OBLIGATIONS; NO SETOFF, COUNTERCLAIM, ETC.

                  	
                     

                    
                      35

                    

                  
	
                     

                    SECTION
                      17. RENEWAL
                      AND PURCHASE OPTIONS

                  	
                     

                    
                      36

                    

                  
	
                    17.1 Notices
                      Generally

                  	
                    36

                  
	
                    17.2 Renewal
                      Options

                  	
                    36

                  
	
                    17.3 Purchase
                      Option

                  	
                    37

                  
	
                    17.4 Appraisals

                  	
                    38

                  

          

        

        
          
          

          
            	
                     

                    SECTION
                      18. MISCELLANEOUS

                  	
                     

                    
                      39

                    

                  
	
                    18.1 Amendments

                  	
                    39

                  
	
                    18.2 Severability

                  	
                    39

                  
	
                    18.3 Third-Party
                      Beneficiary

                  	
                    40

                  
	
                    18.4 Reproduction
                      of Documents

                  	
                    40

                  
	
                    18.5 Counterparts

                  	
                    40

                  
	
                    18.6 Notices

                  	
                    40

                  
	
                    18.7 GOVERNING
                      LAW; SUBMISSION TO JURISDICTION; VENUE

                  	
                    41

                  
	
                    18.8 No
                      Waiver

                  	
                    42

                  
	
                    18.9 Entire
                      Agreement

                  	
                    42

                  

          

        

      

    

    
ANNEXES,
      EXHIBITS AND SCHEDULES

    ANNEX
      A Definitions

    ANNEX
      B Return Conditions

    ANNEX
      C Maintenance

    ANNEX
      D Insurance

    EXHIBIT
      A Form of Lease Supplement

    EXHIBIT
      B Form of Return Acceptance
      Supplement

    SCHEDULE
      1 Certain Terms

    SCHEDULE
      2 Basic Rent

    SCHEDULE
      3 Stipulated Loss Value

    SCHEDULE
      4 Termination Value

    SCHEDULE
      5 Permitted Countries

    SCHEDULE
      6 Placards

    

    

    

    
      
        
          
            PAGE
               iii

          

        

        
          
          

          
            

          

        

         

      

    

     

    LEASE
      AGREEMENT [TN]

     

    LEASE
      AGREEMENT [TN], dated as of [DD] (this “Agreement” or “Lease”), between (a)
      WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, a national banking
      association, not in its individual capacity, except as expressly provided
      herein, but solely as Owner Trustee (this and all other capitalized terms used
      but not defined herein shall have the respective meanings ascribed thereto
      in
      Section 1 below) (“Lessor” or “Owner Trustee”), and (b) CONTINENTAL
      AIRLINES, INC., a Delaware corporation (“Lessee”).

     

    RECITALS

     

    A. Lessor
      and Lessee are parties to the Participation Agreement, pursuant to which, among
      other things, Lessor and Lessee have agreed to enter into this
      Agreement.

     

    B. Pursuant
      to the Trust Agreement, Owner Participant has authorized Lessor to enter into
      this Agreement.

     

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

     

    SECTION
      1. DEFINITIONS
      AND
      CONSTRUCTION

     

    Capitalized
      terms used but not defined herein shall have the respective meanings set forth
      or incorporated by reference, and shall be construed and interpreted in the
      manner described, in Annex A.

     

    SECTION
      2. DELIVERY
      AND ACCEPTANCE

     

    2.1 Delivery
      and Lease of Aircraft

     

    Lessor
      hereby agrees (subject to the satisfaction or waiver of the conditions set
      forth
      in Section 5 of the Participation Agreement) to lease to Lessee for the
      Term and Lessee hereby agrees (subject to the satisfaction or waiver of the
      conditions set forth in Section 5 of the Participation Agreement) to lease
      from Lessor for the Term, the Aircraft, commencing immediately upon acquisition
      of the Aircraft by Lessor pursuant to the Participation Agreement.

     

    2.2 Acceptance
      by Lessee

     

    By
      executing and delivering Lease Supplement No. 1, Lessee confirms to Lessor
      that Lessee has duly and irrevocably accepted delivery of the Aircraft for
      all purposes of this Agreement.

    

    
      
        
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            1

        

        
          
          

          
            

          

        

        
          Table
            of Contents

        

      

    

    

    SECTION
      3. TERM
      AND RENT

     

    3.1 Term

     

    The
      Aircraft shall be leased hereunder for the Term, unless this Agreement or the
      leasing of the Aircraft is earlier terminated in accordance with any provision
      of this Agreement. Lessee shall have the option to renew the leasing of the
      Aircraft hereunder pursuant to, and subject to the terms and conditions of,
      Section 17, for the Renewal Lease Term.

     

    3.2 Rent

     

    3.2.1 Basic
      Rent

     

    (a) During
      the Base Lease Term, Lessee shall pay to Lessor, on each Payment Date, in the
      manner and in the funds of the type specified in Section 3.3, Basic Rent in
      the
      amount specified in the column with the heading “Total Basic Rent” in
      Schedule 2 for such Payment Date, which shall be rent paid in advance for
      the Payment Period ending on the next Payment Date (except that the first
      payment shall include rent in arrears since the Closing Date).

     

    (b) Notwithstanding
      anything to the contrary in any Operative Agreement, the amount of the payment
      of Basic Rent due and payable on each Payment Date shall be at least sufficient
      to pay in full, as of such Payment Date (assuming timely payment of the
      Equipment Notes prior to such Date), the aggregate principal amount of scheduled
      installments due on the Equipment Notes outstanding on such Payment Date,
      together with the accrued and unpaid interest thereon, due on such Payment
      Date
      in respect of the Equipment Notes; provided, however, that no installment of
      Basic Rent shall be increased to the extent such increase would be based upon
      (i) any attachment or diversion of Basic Rent on account of Lessor Liens
      attributable to Lessor or Owner Participant, (ii) any modification of the
      payment terms of the Equipment Notes, or (iii) the acceleration of any
      Equipment Note or Equipment Notes due solely to the occurrence of an Indenture
      Event of Default that does not constitute a Lease Event of Default.

     

    3.2.2 Supplemental
      Rent

     

    Lessee
      shall pay to Lessor, or to whomever shall be entitled thereto, any and all
      Supplemental Rent when and as the same shall become due and owing. Lessee will
      also pay to Lessor, or to whomever shall be entitled thereto as Supplemental
      Rent, to the extent permitted by applicable Law, interest at the Payment Due
      Rate on any part of any amount of Rent (including, without limitation,
      Supplemental Rent) not paid by 12:30 p.m., New York time, on the date when
      due (so long as, in the case of any Person not a party to the Participation
      Agreement, Lessee had received timely notice of the account to which such
      payment was required to be made), for the period from and including the date
      on
      which the same was due to, but excluding, the date of payment in full.

    

    
      
        
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            2

          
          

        

        
          
          

          
            

          

        

        
          Table
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    3.2.3 Adjustments
      to Stipulated Loss Values and Termination Values

     

    (a) In
      the
      event that Lessee is required to indemnify the Owner Participant under the
      Tax
      Indemnity Agreement, the Stipulated Loss Value percentages set forth in
      Schedule 3 and the Termination Value percentages set forth in
      Schedule 4 shall be recalculated (upwards or downwards) by Owner
      Participant, using the same methods and assumptions (except to the extent such
      assumptions shall be varied to take into account the Loss or Foreign Tax Credit
      Loss (as each such term is defined in the Tax Indemnity Agreement) that is
      the
      subject of such indemnification and any prior or contemporaneous Loss or Foreign
      Tax Credit Loss) used to calculate the Stipulated Loss Value percentages and
      the
      Termination Value percentages on the Closing Date, in order to maintain the
      Owner Participant’s Net Economic Return.

     

    (b) All
      adjustments pursuant to Section 3.2.3(a) shall be made as promptly as
      practicable after either Owner Participant or Lessee gives notice to the other
      that an event has occurred that requires an adjustment. Owner Participant and
      Lessee shall give prompt notice to the other of any event requiring an
      adjustment. Any recalculation of the percentages of Stipulated Loss Value and
      Termination Value shall be prepared by Owner Participant, subject to
      verification at the request of Lessee in accordance with Section 3.2.3(c),
      on
      the basis of the same methodology and assumptions used by Owner Participant
      in
      determining the percentages of Stipulated Loss Value and Termination Value
      as of
      the Closing Date, except as such assumptions have been modified to reflect
      the
      events giving rise to adjustments hereunder. Promptly after an adjustment is
      made hereunder, Owner Participant shall deliver to Lessee a description of
      such
      adjustment, setting forth in reasonable detail the calculation thereof. All
      adjustments required pursuant to Section 3.2.3(a) shall be set forth in a Lease
      Supplement or in an amendment to this Lease, and, promptly after execution
      thereof by Lessor and Lessee, Lessee shall give a copy thereof to
      Mortgagee.

     

    (c) If
      Lessee
      believes that any calculations by Owner Participant pursuant to
      Section 3.2.3(b) are in error, and if, after consultation, Lessee and Owner
      Participant are unable to agree on an adjustment, then a nationally recognized
      firm of accountants selected by Lessee and reasonably satisfactory to Owner
      Participant shall verify such calculations. Owner Participant will make
      available to such firm, but not, in any circumstances, to Lessee or any
      representative of Lessee, the methodology and assumptions referred to in
      Section 3.2.3(b) and any modifications thereto made to reflect the events
      giving rise to adjustments hereunder (subject to the execution by such firm
      of a
      confidentiality agreement, reasonably acceptable to Owner Participant,
      prohibiting disclosure of such methodology and assumptions to any third party).
      The determination by such firm of accountants shall be final absent manifest
      error. Lessee will pay the reasonable costs and expenses of such further
      verification by such accountants, provided that if it results in a decrease
      in
      the present value (discounted at the Debt Rate) of any Stipulated Loss Value
      or
      Termination Value by ten or more basis points from such Stipulated Loss Value
      or
      Termination Value as recalculated by the Owner Participant, then the Owner
      Participant will pay such costs and expenses.

    

    
      
        
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            3

          
          

        

        
          
          

          
            

          

        

        
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    3.3 Payments

     

    (a) Payments
      of Rent by Lessee shall be paid by wire transfer of immediately available
      Dollars, not later than 12:30 p.m., New York time, on the date when due, to
      the account of Lessor specified in Schedule 1 to the Participation Agreement
      or
      to such other account in the United States as directed by Lessor to Lessee
      in
      writing at least 10 Business Days prior to the date such payment of Rent is
      due
      or, in the case of any payment of Supplemental Rent expressly payable to a
      person other than Lessor, to the person that shall be entitled thereto to such
      account in the United States as such person may specify from time to time to
      Lessee at least 10 Business Days prior to the date such payment of Rent is
      due.

     

    (b) Except
      as
      otherwise expressly provided herein, whenever any payment of Rent shall be
      due
      on a day that is not a Business Day, such payment shall be made on the next
      day
      that is a Business Day, and, if such payment is made on such next Business
      Day,
      no interest shall accrue on the amount of such payment during such
      extension.

     

    (c) So
      long
      as Lessee has not received written notice from the Mortgagee that the Trust
      Indenture has been discharged, and notwithstanding Section 3.3(a), Lessor
      hereby irrevocably directs, and Lessee agrees, that all payments of Rent and
      all
      other amounts payable by Lessee hereunder, other than Excluded Payments, shall
      be paid directly to Mortgagee on behalf of Lessor by wire transfer of
      immediately available Dollars to the account of Mortgagee specified in Schedule
      1 to the Participation Agreement, or to such other account in the United States
      as Mortgagee may specify by written notice to Lessor and Lessee at least 10
      Business Days prior to the date such payment of Rent is due.

     

    (d) Excluded
      Payments shall be paid by wire transfer of immediately available Dollars to
      the
      account of the person specified in the Participation Agreement or, if not so
      specified, to such account in the United States as may be specified by such
      person by written notice to Lessor and Lessee from time to time at least 10
      Business Days prior to the date such payment is required to be
      made.

     

    (e) All
      computations of interest under this Agreement shall be made on the basis of
      a
      year of 360 days comprised of twelve 30-day months.

     

    SECTION
      4. DISCLAIMER;
      CERTAIN AGREEMENTS OF LESSOR; SECTION 1110 MATTERS

     

    4.1 Disclaimer

     

    LESSOR
      LEASES AND LESSEE TAKES THE AIRCRAFT “AS-IS, WHERE-IS.” LESSEE ACKNOWLEDGES AND
      AGREES THAT AS BETWEEN LESSEE AND EACH OF LESSOR, MORTGAGEE AND ANY PARTICIPANT
      (i) LESSEE HAS SELECTED THE AIRCRAFT AND MANUFACTURER THEREOF AND
      (ii) NONE OF LESSOR, MORTGAGEE AND ANY PARTICIPANT MAKES, HAS MADE OR SHALL
      BE DEEMED TO HAVE MADE, AND EACH WILL BE DEEMED TO HAVE EXPRESSLY DISCLAIMED,
      ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO:

     

    
      
        
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              (v)

            	
              THE
                AIRWORTHINESS, VALUE, CONDITION, DESIGN, OPERATION, ANY
                IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR USE OR FOR ANY
                PARTICULAR PURPOSE
                OF
                THE AIRFRAME, ANY ENGINE OR ANY PART
                THEREOF;

            

    

     

    
      	 	
              (w)

            	
              THE
                QUALITY OF THE MATERIAL OR WORKMANSHIP WITH RESPECT TO THE AIRFRAME,
                ANY
                ENGINE OR ANY PART THEREOF;

            

    

     

    
      	 	
              (x)

            	
              THE
                ABSENCE OF LATENT OR ANY OTHER DEFECT IN THE AIRFRAME, ANY ENGINE
                OR ANY
                PART THEREOF, WHETHER OR NOT
                DISCOVERABLE;

            

    

     

    
      	 	
              (y)

            	
              THE
                ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT
                OR THE
                LIKE; OR

            

    

     

    
      	 	
              (z)

            	
              THE
                ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT, OR ANY
                OTHER
                REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT
                TO
                THE AIRFRAME, ANY ENGINE OR ANY PART
                THEREOF.

            

    

     

    4.2 Certain
      Agreements of Lessor

     

    Unless
      a
      Lease Event of Default shall have occurred and be continuing, Lessor agrees
      to
      make available to Lessee such rights as Lessor may have under any warranty
      with
      respect to the Aircraft made, or made available, by Airframe Manufacturer or
      any
      of its subcontractors or suppliers, as the case may be, pursuant to and in
      accordance with the terms of the Purchase Agreement Assignment.

     

    4.3 Quiet
      Enjoyment

     

    So
      long
      as no Lease Event of Default shall have occurred and be continuing, Lessor
      shall
      not interfere with Lessee’s rights hereunder to continued possession, use and
      operation of, and quiet enjoyment of, the Aircraft during the Term. The
      foregoing, however, shall not be construed or deemed to modify or condition
      in
      any respect the obligations of the Lessee pursuant to Section 16, which
      obligations are absolute and unconditional.

     

    4.4 Investment
      of Funds Held as Security

     

    4.4.1 Investment

     

    Any
      moneys required to be paid to or retained by Lessor that are required to be
      paid
      to Lessee or applied as provided herein shall, until paid to Lessee as provided
      herein or applied as provided herein, be invested by Lessor from time to time
      as
      directed in writing by Lessee (or, if Lessee fails to so direct, by or as
      directed by Lessor in its sole discretion) and at the expense and risk of Lessee
      in Cash Equivalents so long as such Cash Equivalents specified by Lessee or
      Lessor, as the case may be, can be acquired by Lessor using its best efforts;
      provided, that so long as the Lien of the Trust Indenture shall not have been
      discharged, such moneys shall be invested and held by Mortgagee, as assignee
      of
      Lessor, in accordance with this Lease and 

    
      
        
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    upon
      discharge of such Lien, Mortgagee shall pay any such money held by it to Lessor
      to be held and invested in accordance with this Section.

     

    4.4.2 Payment
      of Gain or Loss

     

    Any
      net
      gain (including interest received) realized as the result of investments
      pursuant to Section 4.4.1 (net of any fees, commissions and other reasonable
      expenses, if any, incurred in connection with such investment) shall be held
      and
      applied in the same manner as the principal amount is to be held and applied
      hereunder. Lessee will promptly pay to Lessor, on demand, the amount of any
      loss
      realized as the result of any such investment (together with any fees,
      commissions and other reasonable expenses, if any, incurred in connection with
      such investment), such amount so paid to be held and applied by Lessor as
      contemplated in Section 4.4.1 above.

     

    4.4.3 Limitation
      of Liability

     

    All
      investments under this Section 4.4 shall be at the expense and risk of Lessee,
      and Lessor and Mortgagee shall not be liable for any loss resulting from any
      investment made under this Section 4.4 other than by reason of its willful
      misconduct or gross negligence. Any such investment may be sold (without regard
      to its maturity) by Lessor without instructions whenever such sale is necessary
      to make a distribution required by this Lease.

     

    4.5 Title
      Transfers by Lessor

     

    If
      Lessor
      shall be required to transfer title to the Aircraft, Airframe or any Engine
      to
      Lessee or any other person pursuant to this Lease, then (a) Lessor shall
      (1) transfer to Lessee or such other person, as the case may be, all of
      Lessor’s right, title and interest in and to the Aircraft, Airframe or such
      Engine, as the case may be, free and clear of all Lessor Liens but otherwise
      on
      an “as-is”, “where is” basis, (2) so long as the Lien of the Trust
      Indenture has not been discharged, comply with the Trust Indenture relating
      to
      the release of the Aircraft, Airframe or such Engine, (3) assign to Lessee
      or such other person, as the case may be, if and to the extent permitted under
      the Purchase Agreement, all warranties of Airframe Manufacturer with respect
      to
      the Aircraft, Airframe or such Engine, and (4) assign to Lessee or such
      other person, as the case may be, if and to the extent permitted, all claims,
      if
      any, for damage to the Aircraft, Airframe or such Engine, in each case free
      of
      Lessor Liens, and without recourse or warranty of any kind whatsoever (except
      as
      to the transfer described in clause (1) above and as to the absence of such
      Lessor Liens, as aforesaid), and (b) Lessor shall promptly deliver to
      Lessee or such other person, as the case may be, a bill of sale and agreements
      of assignment, evidencing such transfer and assignment, and such other
      instruments of transfer, all in form and substance reasonably satisfactory
      to
      Lessee (or such other person, as the case may be), as Lessee (or such other
      person, as the case may be) may reasonably request.

    
       

      4.6 Lessor’s
        Interest in Certain Engines

       

      Lessor
        hereby agrees for the benefit of each lessor, conditional seller, indenture
        trustee or secured party of any engine leased to, or purchased by, Lessee
        or any
        Permitted Sublessee subject to a lease, conditional sale, trust indenture
        or
        other security agreement that Lessor, its successors and assigns will not
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    seller,
      indenture trustee 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 indenture trustee or
      secured party.

     

    4.7 Lease
      For U.S. Federal Income Tax Law Purposes; Section 1110 of Bankruptcy
      Code

     

    (a) Lessee
      and Lessor agree that this Lease is, and shall be treated as, a lease for U.S.
      federal income tax purposes of the Aircraft, Airframe, Engines and
      Parts.

     

    (b) It
      is the
      intention of each of Lessee and Lessor that Lessor (and Mortgagee as assignee
      of
      Lessor under the Trust Indenture) shall be entitled to the benefits of Section
      1110 with respect to the right to take possession of the Aircraft, Airframe,
      Engines and Parts and to enforce any of its other rights or remedies as provided
      in this Lease.

     

    SECTION
      5. RETURN
      OF AIRCRAFT

     

    5.1 Compliance
      with Annex B

     

    Lessee
      shall comply with each of the provisions of Annex B hereto, which provisions
      are
      hereby incorporated by this reference as if set forth in full herein.

     

    5.2 Storage
      and Related Matters

     

    If
      Lessor
      gives written notice to Lessee not less than 60 days nor more than 120 days
      prior to the end of the Term requesting storage of the Aircraft upon its return
      hereunder, Lessee will provide Lessor, or cause Lessor to be provided, with
      outdoor parking facilities for the Aircraft for a period up to 30 days,
      commencing on the date of such return, and upon request of Lessor to Lessee
      made
      at least 10 days prior to the end of such initial 30 day period, for an
      additional 120 day period commencing upon expiration of such initial period,
      at
      such storage facility in the 48 contiguous states of the United States on
      Lessee’s route system for Similar Aircraft as Lessor may select as the site for
      such return of the Aircraft. Such storage shall be at Lessor’s risk, and Lessor
      shall pay all applicable storage fees, except that Lessee shall pay the parking
      fees for the initial 30 day storage period; provided
      that
      Lessee’s obligation to provide parking shall be subject to Lessor entering into
      an agreement prior to the commencement of the storage period with the storage
      facility providing, among other things, that Lessor shall bear all maintenance
      charges and other costs (other than parking fees for the initial 30 day period)
      incurred.
       

      5.3 Return
        of Other Engines

       

      In
        the
        event that any Engine owned by Lessor shall not be installed on the Airframe
        at
        the time of return hereunder, Lessee shall be required to return the Airframe
        hereunder with a Replacement Engine meeting the requirements of, and in
        accordance with, Section 10 hereof and Annex B hereto. Thereupon,
        Lessor will transfer to Lessee the Engine 

       

    

    
      
        
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    constituting
      part of such Aircraft but not installed on such Airframe at the time of the
      return of the Airframe.

     

    SECTION
      6. LIENS

     

    Lessee
      shall not, directly or indirectly, create, incur, assume or suffer to exist
      any
      Lien on or with respect to the Aircraft, the Airframe, any Engine or any Part,
      title to any of the foregoing or any interest of Lessee therein, or the Lessee’s
      rights in and to this Lease or any Permitted Sublease, except (a) the respective
      rights of Lessor, Mortgagee, the Participants or Lessee under the Operative
      Agreements, or of any Permitted Sublessee under any Permitted Sublease; (b)
      Lessor Liens with respect to any Participant, Lessor or Mortgagee; (c) the
      rights of others under agreements or arrangements to the extent permitted by
      the
      terms of Sections 7.2 and 7.3 or Annex C; (d) Liens for Taxes of Lessee
      (and its U.S. federal tax law consolidated group), or Liens for Taxes of any
      Tax
      Indemnitee (and its U.S. federal tax law consolidated group) for which Lessee
      is
      obligated to indemnify such Tax Indemnitee under any of the Lessee Operative
      Agreements, in any such case either not yet due or being contested in good
      faith
      by appropriate proceedings so long as such Liens and such proceedings do not
      involve any material danger of the sale, forfeiture or loss of the Aircraft,
      the
      Airframe, any Engine or any Part thereof; (e) materialmen’s, mechanics’,
      workers’, repairers’, employees’ or other like Liens arising in the ordinary
      course of business for amounts the payment of which is either not yet delinquent
      for more than 35 days or is being contested in good faith by appropriate
      proceedings, so long as such Liens and such proceedings do not involve any
      material danger of the sale, forfeiture or loss of the Aircraft, the Airframe,
      any Engine or any Part thereof; and (f) Liens arising out of any judgment or
      award against Lessee (or against any Permitted Sublessee), so long as such
      judgment shall, within 30 days after the entry thereof, have been discharged
      or
      vacated, or execution thereof stayed pending appeal or shall have been
      discharged, vacated or reversed within 30 days after the expiration of such
      stay, and so long as during any such 30-day period there is not, or any such
      judgment or award does not involve, any material risk of the sale, forfeiture
      or
      loss of the Aircraft, the Airframe or any Engine. Lessee shall promptly (and
      in
      any case, by the end of the Term), at its own expense, take (or cause to be
      taken) such action as may be necessary to duly discharge (by bonding or
      otherwise) any Lien not excepted above if the same shall at any time arise
      in
      respect of the Aircraft, the Airframe, any Engine or any Part during the
      Term.

    
       

      SECTION
        7. REGISTRATION,
        OPERATION, POSSESSION, SUBLEASING AND RECORDS

       

      7.1 Registration
        and Operation

       

      7.1.1 Registration
        and Recordation

       

      Subject
        to the compliance by Lessor and Owner Participant with their respective
        obligations under Section 13 of the Participation Agreement, Lessee shall
        cause
        the Aircraft to be, and at all times during the Term to remain, duly registered
        with the FAA under the Act or with such other country of registry as shall
        be
        permitted under Section 7.1.2 below, in the name of Lessor as owner and
        lessor (except to the extent that such registration under the Act cannot
        be
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    citizenship
      requirements for registration of the Aircraft under the Act). Lessor shall
      execute any and all such documents as Lessee (or any Permitted Sublessee) may
      reasonably request for the purpose of effecting and continuing such
      registration. Unless Mortgagee has given Lessee notice that the Trust Indenture
      has been discharged, Lessee shall also cause the Trust Indenture to be duly
      recorded and at all times maintained of record as a first-priority perfected
      mortgage (subject to Permitted Liens) on the Aircraft, the Airframe and each
      of
      the Engines (except to the extent that such perfection or priority cannot be
      maintained as a result of the failure by Lessor or Mortgagee to execute and
      deliver any necessary documents).

     

    7.1.2 Reregistration

     

    So
      long
      as no Lease Event of Default shall have occurred and be continuing, Lessee
      may,
      by written notice to Lessor, request to change the country of registration
      of
      the Aircraft. Any such change in registration shall be effected only in
      compliance with, and subject to all of the conditions set forth in,
      Section 7.6.11 of the Participation Agreement.

     

    7.1.3 Markings

     

    If
      permitted by applicable Law, on or reasonably promptly after the Closing, Lessee
      will cause to be affixed to, and maintained in, the cockpit of the Airframe
      and
      on each Engine, in each case, in a clearly visible location (it being understood
      that the location of such placards, as identified to the Owner Participant
      prior
      to the Closing, shall be deemed to be in compliance with this requirement),
      a
      placard of a reasonable size and shape bearing the legend, in English, set
      forth
      in Schedule 6. Such placards may be removed temporarily, if necessary, in
      the course of maintenance of the Airframe or Engines. If any such placard is
      damaged or becomes illegible, Lessee shall promptly replace it with a placard
      complying with the requirements of this Section 7.1.3.

     

    7.1.4 Compliance
      With Laws

     

    Lessee
      shall not, and shall not allow any other person to, operate, use, maintain,
      service, repair or overhaul the Aircraft (a) in violation of any Law binding
      on
      or applicable to the Aircraft,
      the Airframe or any Engine, or (b) in violation of any airworthiness
      certificate, license or registration of any Government Entity relating to Lessee
      or the Aircraft, the Airframe or any Engine, except (1) immaterial or
      non-recurring violations with respect to which corrective measures are taken
      promptly by Lessee or a Permitted Sublessee, as the case may be, upon discovery
      thereof, and (2) to the extent Lessee or any Permitted Sublessee is
      contesting the validity or application of any such Law or requirement relating
      to any such certificate, license or registration in good faith in any reasonable
      manner that does not involve a material danger of the sale, forfeiture or loss
      of the Aircraft, the Airframe, or any Engine, any risk of criminal liability
      or
      a greater than de minimis risk of material civil penalties being imposed against
      Lessor, Mortgagee or any Participant or impair the Lien of the Trust
      Indenture.
       

      7.1.5 Operation

       

      Lessee
        agrees not to operate, use or locate the Aircraft, the Airframe or any Engine,
        or allow the Aircraft, the Airframe or any Engine to be operated, used or
        located (a) in any area excluded from coverage by any insurance required by
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    the
      case
      of a requisition by the U.S. Government where Lessee obtains an indemnity in
      lieu of such insurance from the U.S. Government, or insurance from the U.S.
      Government, covering such area, in accordance with Section 11.3 or (b) in
      any recognized area of hostilities unless fully covered in accordance with
      Annex D by war-risk insurance as required by the terms of Section 11
      (including, without limitation, Section 11.3), unless in any case referred
      to in this Section 7.1.5 the Aircraft is only temporarily operated, used or
      located in such area as a result of an emergency, equipment malfunction,
      navigational error, hijacking, weather condition or other similar unforeseen
      circumstances, so long as Lessee diligently and in good faith proceeds to remove
      the Aircraft from such area.

     

    7.2 Possession

     

    Lessee
      will not, without the prior written consent of Lessor and Owner Participant
      (which consent shall not be unreasonably withheld), sublease or otherwise in
      any
      manner deliver, transfer or relinquish possession of the Aircraft, the Airframe
      or any Engine or install any Engine, or permit any Engine to be installed,
      on
      any airframe other than the Airframe; provided,
      however,
      subject
      to the provisions of Section 7.3, Lessee may, without such prior written
      consent:

     

    7.2.1 Interchange
      and Pooling

     

    Subject
      or permit any Permitted Sublessee to subject any Engine to normal interchange
      agreements or pooling agreements or arrangements, in each case customary in
      the
      commercial airline industry and entered into by Lessee or such Permitted
      Sublessee, as the case may be, in the ordinary course of business; provided,
      however,
      that if
      Lessor’s title to any such Engine is divested under any such agreement or
      arrangement, then such Engine shall be deemed to have suffered an Event of
      Loss
      as of the date of such divestiture, with the effect that Lessee shall be
      required to replace such Engine with a Replacement Engine meeting the
      requirements of, and in accordance with, Section 10.

    
       

      7.2.2 Testing
        and Service

       

      Deliver
        or permit any Permitted Sublessee to deliver possession of the Aircraft,
        Airframe, any Engine or any Part (i) to the manufacturer thereof or to any
        third-party maintenance provider, for testing, service, repair, maintenance
        or
        overhaul work on the Aircraft, Airframe, any Engine or any Part, or, to the
        extent required or permitted by the terms of Annex C, for alterations or
        modifications in or additions to the Aircraft, Airframe or any Engine or
        (ii) to any Person for the purpose of transport to a Person referred to in
        the preceding clause (i).

       

      7.2.3 Transfer
        to U.S. Government

       

      Transfer
        or permit any Permitted Sublessee to transfer possession of the Aircraft,
        Airframe or any Engine to the U.S. Government, in which event Lessee shall
        promptly notify Lessor and Mortgagee in writing of any such transfer of
        possession and, in the case of any transfer pursuant to CRAF, in such
        notification shall identify by name, address and telephone numbers the
        Contracting Office Representative or Representatives for the Military Airlift
        

    

    
      
        
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    Command
      of the United States Air Force to whom notices must be given and to whom
      requests or claims must be made to the extent applicable under
      CRAF.

     

    7.2.4 Installation
      of Engines on Owned Aircraft

     

    Install
      or permit any Permitted Sublessee to install an Engine on an airframe owned
      by
      Lessee or such Permitted Sublessee, as the case may be, free and clear of all
      Liens, except (a) Permitted Liens and those that do not apply to the
      Engines and (b) the rights of third parties under normal interchange or
      pooling agreements and arrangements of the type that would be permitted under
      Section 7.2.1.

     

    7.2.5 Installation
      of Engines on Other Airframes

     

    Install
      or permit any Permitted Sublessee to install an Engine on an airframe leased
      to
      Lessee or such Permitted Sublessee, or purchased by Lessee or such Permitted
      Sublessee subject to a mortgage, security agreement, conditional sale or other
      secured financing arrangement, but only if (a) such airframe is free and
      clear of all Liens, except (i) the rights of the parties to such lease, or
      any such secured financing arrangement, covering such airframe and
      (ii) Liens of the type permitted by clauses (a) and (b) of Section 7.2.4
      and (b) Lessee or Permitted Sublessee, as the case may be, shall have
      received from the lessor, mortgagee, secured party or conditional seller, in
      respect of such airframe, a written agreement (which may be a copy of the lease,
      mortgage, security agreement, conditional sale or other agreement covering
      such
      airframe), whereby such Person agrees that it will not acquire or claim any
      right, title or interest in, or Lien on, such Engine by reason of such Engine
      being installed on such airframe at any time while such Engine is subject to
      this Lease or is owned by Lessor.

    
       

      7.2.6 Installations
        of Engines on Financed Aircraft

       

      So
        long
        as no Payment Default, Bankruptcy Default or Lease Event of Default shall
        have
        occurred and be continuing, install or permit any Permitted Sublessee to
        install
        an Engine on an airframe owned by Lessee or such Permitted Sublessee, leased
        to
        Lessee or such Permitted Sublessee, or purchased by Lessee or such Permitted
        Sublessee subject to a conditional sale or other security agreement under
        circumstances where neither Section 7.2.4 or 7.2.5 is applicable;
provided,
        however,
        that
        any such installation shall be deemed an Event of Loss with respect to such
        Engine, and Lessee shall comply with Section 10.2 hereof in respect
        thereof.

       

      7.2.7 Subleasing

       

      With
        respect to the Aircraft, Airframe or any Engine, so long as no Payment Default,
        Bankruptcy Default or Lease Event of Default has occurred and is continuing,
        enter into a sublease with any Permitted Air Carrier, but only if:

       

      (a) Lessee
        shall provide written notice to Lessor of Lessee’s intent to enter into a
        Permitted Sublease (except if the Permitted Sublessee is Express) and of
        any
        permitted sub-sublease, such notice in the event of a sublease to a U.S.
        Air
        Carrier to be given promptly after entering into any such sublease or, in
        the
        case of a sublease to any other Permitted Air Carrier, 20 days in advance
        of
        entering into such sublease;

    

    

    
      
        
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    (b) At
      the
      time that Lessee enters into such Permitted Sublease or a sublessee enters
      into
      a permitted sub-sublease, such Permitted Sublessee shall not be subject to
      any
      bankruptcy, insolvency, liquidation, reorganization, dissolution or similar
      proceeding, shall not be seeking any reorganization or any readjustment of
      its
      debts and shall not be, or shall not have substantially all of its property,
      in
      the possession of any liquidator, trustee, receiver or similar person and,
      if
      such Permitted Sublessee is a Permitted Foreign Air Carrier, the United States
      then maintains normal diplomatic relations with the country in which such
      Permitted Sublessee has its principal executive offices;

     

    (c) Any
      such
      Permitted Sublease (including any permitted sub-sublease) (i) shall
      include provisions for the maintenance, operation, possession, inspection and
      insurance of the Aircraft that are the same in all material respects as the
      applicable provisions of this Lease, (ii) shall provide that, except if Express
      or any subsidiary of Lessee is the Permitted Sublessee, such Permitted Sublessee
      may not further sublease or transfer its interests (except transfers of the
      type
      permitted in Sections 7.2.1 through 7.2.6, inclusive) in the Aircraft, Airframe
      or Engines, (iii) shall not extend beyond the end of the Term and (iv) shall
      be
      expressly subject and subordinate to all the terms of this Agreement and to
      the
      rights, powers and remedies of Lessor hereunder;

     

    (d) In
      connection with a sublease (including any permitted sub-sublease) to a Permitted
      Foreign Air Carrier, Lessee shall have furnished Lessor and Mortgagee an opinion
      of counsel, reasonably satisfactory to Lessor and Mortgagee, in the country
      of
      domicile of such Permitted Foreign Air Carrier, that (i) the terms of such
      sublease are the legal, valid and binding obligations
      of the parties thereto enforceable under the Laws of such jurisdiction, (ii)
      it
      is not necessary for Owner Participant, Lessor or Mortgagee to register or
      qualify to do business in such jurisdiction, if not already so registered or
      qualified, as a result, in whole or in part, of the proposed sublease, (iii)
      Lessor’s title to, and Mortgagee’s Lien in respect of, the Aircraft, Airframe
      and Engines will be recognized in such jurisdiction, (iv) the Laws of such
      jurisdiction of domicile require fair compensation by the government of such
      jurisdiction, payable in a currency freely convertible into Dollars, for the
      loss of title to the Aircraft, Airframe or Engines in the event of the
      requisition by such government of such title (unless Lessee shall provide
      insurance in the amounts required with respect to hull insurance under Section
      11 covering the requisition of title to the Aircraft, Airframe or Engines by
      the
      government of such jurisdiction so long as the Aircraft, Airframe or Engines
      are
      subject to such sublease), (v) the agreement of such Permitted Foreign Air
      Carrier that its rights under the sublease are subject and subordinate to all
      the terms of this Lease is enforceable against such Permitted Foreign Air
      Carrier under applicable Law, and (vi) there is no tort liability of the owner
      or Lessor of an aircraft not in possession thereof under the Laws of such
      country (it being agreed that, in the event such latter opinion cannot be given
      in a form satisfactory to the Owner Participant and Mortgagee, such opinion
      shall be waived if insurance reasonably satisfactory to the Owner Participant
      and Mortgagee is provided to cover such risk);
       

      (e) No
        such
        sublease shall be made to a “tax exempt entity” as defined in
        Section 168(h)(2) of the Code (including any Permitted Foreign Air Carrier)
        prior to the close of the Tax Attribute Period, unless Lessee prepays on
        a
        lump-sum basis any liability due under the Tax Indemnity Agreement as a result
        of such sublease based upon the assumption that such sublease were to continue
        for the remainder of the term of such sublease, provided,
        that

    

    
      
        
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    notwithstanding
      the foregoing, such sublease may be made without requiring such prepayment
      during the taxable year in which the seventh anniversary of the Closing Date
      occurs so long as the Aircraft is not “used predominantly outside the United
      States” within the meaning of Section 168(g) of the Code during such taxable
      year;

     

    (f) Lessee
      shall furnish to Lessor and Mortgagee evidence reasonably satisfactory to Lessor
      and Mortgagee that the insurance required by Section 11 remains in effect at
      the
      time such sublease (including any permitted sub-sublease) is entered
      into;

     

    (g) All
      necessary documents shall have been duly filed, registered or recorded in such
      public offices as may be required fully to preserve the title of Lessor, and
      the
      first priority perfected security interest (subject to Permitted Liens) of
      Mortgagee, in the Aircraft, Airframe and Engines;

     

    (h) Except
      for the initial sublease to Express, Lessee shall reimburse Lessor and Mortgagee
      for all of its reasonable out-of-pocket fees and expenses, including, without
      limitation, reasonable fees and disbursements of counsel, incurred by Lessor
      and
      Mortgagee in connection with any such sublease; and

     

    (i) For
      all
      purposes of this Section 7.2.7, the term “sublease” shall be deemed to include
      interchange agreements with respect to the Aircraft or Airframe.

     

    
      7.3 Certain
        Limitations on Subleasing or Other Relinquishment of
        Possession

       

      Notwithstanding
        anything to the contrary in Section 7.2:

       

      (a) The
        rights of any person that receives possession of the Aircraft in accordance
        with
        Section 7.2 shall be subject and subordinate to all the terms of this
        Lease, and to Lessor’s rights, powers and remedies hereunder, including, without
        limitation (i) Lessor’s right to repossess the Aircraft pursuant to
        Section 15, (ii) Lessor’s right to terminate and avoid such sublease,
        delivery, transfer or relinquishment of possession upon the occurrence of
        a
        Lease Event of Default and (iii) the right to require such person to
        forthwith deliver the Aircraft, the Airframe and Engines subject to such
        transfer upon the occurrence of a Lease Event of Default;

       

      (b) Lessee
        shall remain primarily liable hereunder for the performance of all the terms
        of
        this Lease to the same extent as if such transfer had not occurred, and no
        transfer of possession of the Aircraft, the Airframe, any Engine or any Part
        shall in any way discharge or diminish any of Lessee’s obligations to Lessor
        hereunder or under any Operative Agreement;

       

      (c) Lessee
        shall ensure that no sublease, delivery, transfer or relinquishment permitted
        under Section 7.2 shall affect the United States registration of the
        Aircraft, unless also made in accordance with the provisions of
        Section 7.1.2;

       

      (d) Any
        event
        that constitutes or would, with the passage of time, constitute an Event
        of Loss
        under paragraph (c), (d), or (e) of the definition of such term (as set forth
        in
        Annex A) shall not be deemed to violate the provisions of Section 7.2;
        and

    

    

    
      
        
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    (e) Any
      Wet
      Lease shall not constitute a delivery, transfer or relinquishment of possession
      for purposes of Section 7.2 and shall not be prohibited by the terms
      hereof.

     

    SECTION
      8. MAINTENANCE;
      REPLACEMENT AND POOLING OF PARTS; ALTERATIONS, MODIFICATIONS AND ADDITIONS;
      OTHER LESSEE COVENANTS

     

    8.1 Maintenance;
      Replacement and Pooling of Parts; Alterations, Modifications and
      Additions

     

    At
      all
      times during the Term, Lessee shall comply with, or cause to be complied with,
      each of the provisions of Annex C, which provisions are hereby incorporated
      by this reference as if set forth in full herein.

     

    8.2 Information,
      Certificates, Notices and Reports

     

    8.2.1 Financial
      Information

     

    Lessee
      will furnish to Lessor and Mortgagee:

    
       

      (a) Within
        90
        days after the end of each of the first three fiscal quarters in each fiscal
        year of Lessee, a consolidated balance sheet of Lessee as of the end of such
        quarter and related statements of income and cash flows for the period
        commencing at the end of the previous fiscal year and ending with the end
        of
        such quarter, setting forth in each case in comparative form the corresponding
        figures for the corresponding period in the preceding fiscal year, prepared
        in
        accordance with GAAP; provided that
        so long
        as Lessee is subject to the reporting requirements of the Securities Exchange
        Act of 1934, a copy of Lessee’s report on Form 10-Q for such fiscal quarter
        (excluding exhibits) or an e-mail notice that such report has been filed
        with
        the SEC and providing a website address at which such report may be accessed
        will satisfy this paragraph (a).

       

      (b) Within
        120 days after the end of each fiscal year of Lessee, a consolidated balance
        sheet of Lessee as of the end of such fiscal year and related statements
        of
        income and cash flows of Lessee for such fiscal year, in comparative form
        with
        the preceding fiscal year, prepared in accordance with GAAP, together with
        a
        report of Lessee’s independent certified public accountants with respect to
        their audit of such financial statements; provided that
        so long
        as Lessee is subject to the reporting requirements of the Securities Exchange
        Act of 1934, a copy of Lessee’s report on Form 10-K for such fiscal year
        (excluding exhibits) or an e-mail notice that such report has been filed
        with
        the SEC and providing a website address at which such report may be accessed
        will satisfy this paragraph (b).

       

      8.2.2 Annual
        Certificate

       

      Within
        120 days after the close of each fiscal year of Lessee, Lessee shall deliver
        to
        Lessor and Mortgagee an Officer’s Certificate of Lessee (which, in lieu of
        delivery pursuant to Section 18.6, may be delivered by e-mail and, in such
        case, need not include a manual signature of a required officer but instead
        shall set forth a typed signature of such officer) to the effect that such
        officer is familiar with or has reviewed or caused to be reviewed the relevant
        terms of this 

    

    

    
      
        
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    Lease
      and
      the other Lessee Operative Agreements and that such officer does not have
      knowledge of the existence as at the date of such certificate of any Lease
      Event
      of Default or if there is knowledge of a Lease Event of Default, the steps
      that
      are being taken with respect thereto.

     

    8.2.3 Information
      for Filings

     

    Lessee
      shall promptly furnish to Owner Participant, Mortgagee or Lessor such
      information (other than with respect to the citizenship of Owner Participant
      and
      Lessor) within Lessee’s or any Permitted Sublessee’s possession, or reasonably
      available to or obtainable by Lessee or such Permitted Sublessee, as may be
      required to enable Lessor timely to file any reports required to be filed by
      it
      as lessor under the Lease, to enable Mortgagee timely to file any reports
      required to be filed by it as Mortgagee under the Trust Indenture or to enable
      Owner Participant to timely file any reports required to be filed by it, as
      the
      beneficiary of the Trust Estate, in any such case, with any Government Entity
      because of, or in connection with, the interest of Owner Participant, Mortgagee
      or Lessor in the Aircraft, Airframe or Engines, this Lease or any other part
      of
      the Trust Estate; provided, however, that with respect to any such information
      which Lessee reasonably deems commercially sensitive or confidential, Owner
      Participant, Mortgagee or Lessor, as the case may be, shall afford Lessee a
      reasonable opportunity to seek from any such Government Entity a waiver of
      the
      obligation of Owner Participant, Mortgagee or Lessor to file any such
      information, or shall consent to the filing of such information directly by
      Lessee in lieu of filing by Owner Participant, Mortgagee or Lessor, and if
      any
      such waiver or consent is evidenced to the reasonable satisfaction of Owner
      Participant, Mortgagee or Lessor, as the case may be, then Lessee shall not
      be
      required to furnish such information to Owner Participant, Mortgagee or
      Lessor.
       

      SECTION
        9. VOLUNTARY
        TERMINATION UPON OBSOLESCENCE

       

      9.1 Right
        of Termination

       

      (a) Unless
        a
        Lease Event of Default, Payment Default or Bankruptcy Default shall have
        occurred and be continuing, Lessee shall have the right at its option to
        terminate this Lease during the Base Lease Term, effective only on a Termination
        Date occurring after the end of the Tax Attribute Period, if:

       

      (i) Lessee
        makes a good faith determination that the Aircraft either has become
        economically obsolete or is surplus to Lessee’s requirements and the Chief
        Financial Officer or Treasurer of Lessee so certifies in writing to Lessor;
        and

       

      (ii) written
        notice of Lessee’s exercise of its option to terminate this Agreement shall be
        given to Lessor not less than 90 days prior to the proposed Termination Date
        specified in such notice.

       

      (b) Lessor
        shall notify Lessee and Mortgagee of Lessor’s intention to sell or retain the
        Aircraft, as provided in this Section 9, no later than 45 days after Lessee
        gives Lessor written notice pursuant to Section 9.1(a)(ii). Any failure by
        Lessor to give such notice of its election shall be deemed to be an election
        to
        sell the Aircraft, as provided in this Section 9.

    

    

    
      
        
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    (c) Any
      termination pursuant to this Section 9 shall become effective on the date
      of the sale, if any, pursuant to Section 9.2 or upon the
      date
      of termination and payment
      by Lessee and Lessor in accordance with Section 9.3 if Lessor elects to
      retain the Aircraft.

     

    9.2 Election
      by Lessor to Sell

     

    9.2.1 Bids;
      Closing of Sale

     

    Unless
      Lessor has given Lessee notice of Lessor’s election to retain the Aircraft,
      Lessee, as agent for Lessor, shall, until the date ten Business Days prior
      to
      the proposed Termination Date, use commercially reasonable efforts to obtain
      bids for a cash purchase of the Aircraft and Lessor may, if it desires to do
      so,
      also seek to obtain such bids. In the event Lessee receives any bid, Lessee
      shall promptly, and in any event at least ten Business Days prior to the
      proposed date of sale, certify to Lessor in writing the amount and terms of
      such
      bid, the proposed date of such sale and the name and address of the person
      (who
      shall not be Lessee or any Affiliate of Lessee or any person with whom Lessee
      or
      any such Affiliate has an arrangement for the
      future use of the Aircraft by Lessee or any such Affiliate) submitting such
      bid.
      In the event Lessor receives any bid on or prior to the date ten Business Days
      prior to the proposed Termination Date, Lessor shall, at least ten Business
      Days
      prior to the proposed date of sale, certify to Lessee in writing the amount
      and
      terms of such bid, the proposed date of such sale and the name and address
      of
      the person submitting such bid. 
       

      9.2.2 Closing
        of Sale

       

      (a) On
        the
        proposed Termination Date (i) Lessee shall deliver the Airframe and Engines
        or engines constituting part of the Aircraft to the bidder, if any, which
        shall
        have submitted the highest cash bid (net of applicable brokerage commissions)
        on
        or before the date ten Business Days prior to such Termination Date, in the
        same
        manner as if delivery were made to Lessor pursuant to Section 5 and
        Annex B and in full compliance with the terms thereof, and shall duly
        transfer to Lessor title to any such engines not owned by Lessor, all in
        accordance with the terms of Section 5 and Annex B, and
        (ii) Lessor shall simultaneously therewith transfer the Airframe and
        Engines or engines to such bidder, in the manner described in Section 4.5,
        against cash paid to Lessor in the amount of such highest bid (net of applicable
        brokerage commissions and all reasonable out-of-pocket fees and expenses
        incurred by Lessor, Mortgagee and Owner Participant in connection with such
        sale
        and the related termination of this Lease (collectively, the “Expenses of Sale”)
        and in the manner and in funds of the type specified in
        Section 3.3.

       

      (b) All
        proceeds of any sale described in Section 9.2.2(a), net of Expenses of
        Sale, shall be paid to and retained by Lessor and, on such Termination Date,
        and
        as a condition precedent to such sale and the delivery of the Aircraft and
        Engines or engines to such bidder, Lessee shall pay to Lessor, in the manner
        and
        in funds of the type specified in Section 3.3: 

       

      (i) all
        unpaid Basic Rent due at any time prior to such Termination Date, but excluding
        Basic Rent due on such Termination Date; plus

       

      (ii) an
        amount
        equal to the excess, if any, of the Termination Value for the Aircraft, computed
        as of such Termination Date, over the proceeds of such sale, net of Expenses
        of
        Sale; plus

       

    

    
      
        
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    (iii) as
      provided in Section 3.2.2, interest on the amounts specified in the foregoing
      clause (i) at the Payment Due Rate from and including the date on which any
      such
      amount was due to the date of payment of such amount in full.

     

    As
      a
      further condition precedent to such sale and delivery, Lessee shall pay all
      Supplemental Rent due by Lessee to Lessor, Mortgagee or the Participants under
      this Lease (including, without limitation, (A) Supplemental Rent in respect
      of Make-Whole Amount, if any, payable pursuant to Section 2.10(b) of the Trust
      Indenture in connection with a prepayment of the Equipment Notes upon such
      sale,
      (B) all interest charges provided for hereunder or under any other Lessee
      Operative Agreement with respect to the late payment of any amounts so payable,
      (C) the Expenses of Sale).

    
       

      (c) Upon
        and
        subject to any such sale and receipt of proceeds by Lessor, and full and
        final
        payment of all amounts described in Section 9.2.2(b), and compliance by
        Lessee with all the other provisions of this Section 9.2,

       

      (i) Lessor
        will transfer to Lessee, in accordance with Section 4.5, any Engines
        constituting part of the Aircraft but which were not then installed on the
        Airframe and sold therewith; and

       

      (ii) the
        obligation of Lessee to pay Basic Rent, on or after the Payment Date with
        reference to which Termination Value is computed, shall cease, and the Term
        for
        the Aircraft shall end effective as of the date of such sale.

       

      (d) A
        sale of
        the Aircraft pursuant to this Section 9.2.2 shall take place only on a
        Termination Date. Subject to Section 9.3, if no sale shall have occurred
        on or
        as of the proposed Termination Date, this Agreement shall continue in full
        force
        and effect, and all of Lessee’s obligations shall continue, including, without
        limitation, its obligation to pay Rent, in each case, as if the notice under
        Section 9.1 shall not have been given and, subject to Section 9.2.3,
        Lessee may give another notice pursuant to Section 9.1.

       

      9.2.3 Withdrawal
        of Notice of Termination

       

      (a) Lessee
        may withdraw any notice given pursuant to Section 9.1 at any time on or
        before the date 20 days prior to the proposed Termination Date, whereupon
        this
        Agreement shall continue in full force and effect and all of Lessee’s
        obligations shall continue, including, without limitation, its obligation
        to pay
        Rent, in each case, as if the notice under Section 9.1 shall not have been
        given and Lessee may give another notice pursuant to Section 9.1;
provided
        that
        Lessee shall not be entitled to give more than three notices pursuant to
        Section 9.1.

       

      (b) Lessee
        shall pay all reasonable out-of-pocket fees and expenses of Lessor, Mortgagee
        and Owner Participant in connection with any notice of termination withdrawn
        by
        Lessee or in connection with any notice of termination pursuant to which
        a sale
        of the Aircraft fails to occur.

    

    

    
      
        
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    9.3 Retention
      of Aircraft by Lessor

     

    (a) If
      Lessor
      shall elect to retain the Aircraft in accordance with Section 9.1, on the
      proposed Termination Date:

     

    (i) Lessor
      shall pay, or cause to be paid, in the manner and in funds of the type specified
      in Section 3.3, to the Mortgagee an amount sufficient to prepay all
      outstanding Equipment Notes pursuant to Section 2.10(b) of the Trust
      Indenture;

     

    (ii) subject
      to receipt by Mortgagee of the funds described in paragraph (i) above, Lessee
      shall deliver the Airframe and Engines or engines constituting part of the
      Aircraft to Lessor pursuant to Section 5 and Annex B and in full compliance
      with the terms
      thereof, and shall duly transfer to Lessor title to any such engines not owned
      by Lessor, all in accordance with the terms of Section 5 and Annex
      B;
       

      (iii) Lessee
        shall pay to Lessor, in the manner and in funds of the type specified in
        Section 3.3:

       

      
         

        
          	 	
                  (1)

                	
                  
                    all
                      unpaid Basic Rent due at any time prior to such Termination
                      Date, but
                      excluding Basic Rent due on such Termination
                      date;
                      plus

                  

                   

                

        

        
           

          
            	 	
                    (2)

                  	
                    
                      as
                        provided in Section 3.2.2, interest on the amounts specified
                        in the
                        foregoing clause (1) at the Payment Due Rate from
                        and
                        including the date on which any such amount was due to the
                        date of payment
                        of such amount in full; and

                    

                  

          

          
             

            (iv) Lessee
              shall also pay all Supplemental Rent due and payable by Lessee to Lessor,
              Mortgagee or the Participants under this Lease (including without limitation
              (A) Supplemental Rent in respect of Make-Whole Amount, if any, payable
              pursuant to Section 2.10(b) of the Trust Indenture in connection with
              a
              prepayment of the Equipment Notes, (B) all interest charges provided for
              hereunder or under any other Lessee Operative Agreement with respect
              to the late
              payment of any amounts so payable, and (C) the reasonable out-of-pocket
              fees and
              expenses incurred by Lessor and Owner Participant in connection with
              such
              termination and sale).

          

        

      

    

    
       

      (b) Upon
        full
        and final payment to Lessor, Mortgagee and the Participants of the amounts
        described in Section 9.3(a), and ompliance by Lessee with all the other
        applicable provisions of this Section 9.3, 

       

      (i) Lessor
        will transfer to Lessee, in accordance with Section 4.5, any Engines
        constituting part of the Aircraft but which were not then installed on the
        Airframe and returned therewith; and

       

      (ii) The
        obligation of Lessee to pay Basic Rent otherwise due on or after the Termination
        Date shall cease, and the Term for the Aircraft shall end effective as of
        such
        Termination Date.

    

    

    
      
        
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    SECTION
      10. LOSS,
      DESTRUCTION, REQUISITION, ETC.

     

    10.1 Event
      of Loss With Respect to Aircraft

     

    10.1.1 Notice
      and Election

     

    (a) Upon
      the
      occurrence of an Event of Loss with respect to the Airframe, and any Engine
      or
      Engines installed thereon at the time of such Event of Loss, Lessee shall
      promptly (and in any event within 10 Business Days after such occurrence) give
      Lessor and Mortgagee written notice of such Event of Loss. Within 45 days after
      such occurrence, Lessee shall give Lessor and Mortgagee written notice of
      Lessee’s election to make payment in respect of such Event
      of
      Loss, as provided in Section 10.1.2, or to replace the Airframe, and any such
      Engines, as provided in Section 10.1.3.
       

      (b) Any
        failure by Lessee to give such notice of its election shall be deemed to
        be an
        election of the option set forth in Section 10.1.2. In addition, Lessee shall
        not be entitled to elect the option set forth in Section 10.1.3 if, at the
        time
        Lessor receives such notice from Lessee, there shall have occurred and be
        continuing a Payment Default, a Bankruptcy Default or a Lease Event of
        Default.

       

      (c) For
        purposes of Section 10.1.2, an Event of Loss with respect to the Airframe
        shall
        be deemed to constitute an Event of Loss with respect to the Aircraft. For
        purposes of Section 10.1.3, any Engine not actually suffering an Event of
        Loss
        shall not be required to be replaced.

       

      10.1.2 Payment
        of Loss and Termination of Lease

       

      (a) If
        Lessee
        elects, in accordance with Section 10.1.1, to make payment in respect of
        any
        such Event of Loss, then Lessee shall pay, in the manner and in funds of
        the
        type specified in Section 3.3, the following amounts:

       

      (i) on
        the
        Stipulated Loss Value Date next following the earlier of (x) the 120th day
        following the date of the occurrence of such Event of Loss, and (y) the
        twentieth day following the receipt of insurance proceeds with respect to
        such
        occurrence (but in any event not earlier than the date of Lessee’s election
        under Section 10.1.1 to make payment under this Section 10.1.2), Lessee shall
        pay to Lessor:

       

      
        	 	
                (1)

              	
                all
                  unpaid Basic Rent or Renewal Rent, as the case may be, due at any
                  time
                  prior to such Stipulated Loss Value Date;
                  plus

              

      

       

      
        	 	
                (2)

              	
                the
                  Stipulated Loss Value of the Aircraft computed as of such Stipulated
                  Loss
                  Value Date; plus

              

      

       

      
        	 	
                (3)

              	
                as
                  provided in Section 3.2.2, interest on the amount specified in
                  the
                  foregoing clause (1) at the Payment Due Rate from and including
                  the date
                  on which any such amount was due to the date of payment of such
                  amount in
                  full;

              

      

    

    

    
      
        
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    provided,
      that if
      such Stipulated Loss Value Date is a Payment Date, Lessee shall not be obligated
      to pay the Basic Rent or Renewal Rent otherwise required to be paid on such
      date; and

     

    (ii) on
      or
      before the date required for payment of the amounts specified in paragraph
      (i)
      above, Lessee shall also pay to Lessor, Mortgagee and the Participants all
      other
      amounts due and payable by Lessee to Lessor, Mortgagee and the Participants
      under this Lease, the Participation Agreement or any other Lessee Operative
      Agreement.

    
       

      (b) Upon
        payment in full of all amounts described in the foregoing paragraph
        (a),(i) the obligation of Lessee to pay Basic Rent or Renewal Rent
        hereunder with respect to the Aircraft shall terminate, (ii) the Term for
        the Aircraft shall end and (iii) Lessor will transfer the Aircraft to
        Lessee, as-is and where-is, and subject to any insurer’s salvage rights, but
        otherwise in the manner described in Section 4.5.

       

      10.1.3 Replacement
        of Airframe and Engines

       

      (a) If
        Lessee
        elects, in accordance with Section 10.1.1, to replace the Airframe, and any
        Engine actually suffering the Event of Loss, then Lessee shall, as promptly
        as
        possible and in any event within 120 days after the occurrence of such Event
        of
        Loss, convey or cause to be conveyed to Lessor, in compliance with Section
        10.3
        and as replacement for the Airframe, and any such Engine, title to a Replacement
        Airframe (which shall comply with paragraph (b) below), and for each such
        Engine
        a Replacement Engine, in each case free and clear of all Liens other than
        Permitted Liens. If Lessee makes such election, but for any reason fails
        or is
        unable to effect such replacement within such time period and in compliance
        with
        the requirements set forth in Section 10.3, then Lessee shall be deemed to
        have
        initially made the election set forth in Section 10.1.2 with the effect that
        Lessee shall immediately pay, in the manner and in funds of the type specified
        in Section 3.3, the amounts required under, and in accordance with, Section
        10.1.2.

       

      (b) Any
        such
        Replacement Airframe shall be an airframe that is the same model as the Airframe
        to be replaced thereby, or an improved model, and that has a value, utility
        and
        remaining useful life (without regard to hours or cycles remaining until
        the
        next regular maintenance check), at least equal to the Airframe to be replaced
        thereby (assuming that such Airframe had been maintained in accordance with
        the
        Lease). Any such Replacement Engine shall meet the requirements of, and be
        conveyed by Lessee to Lessor in accordance with, Section 10.2 (other than
        the
        notice requirement set forth in Section 10.2.1).

       

      10.2 Event
        of Loss With Respect to an Engine

       

      10.2.1 Notice

       

      Upon
        the
        occurrence of an Event of Loss with respect to an Engine under circumstances
        in
        which an Event of Loss with respect to the Airframe has not occurred, Lessee
        shall promptly (and in any event within 10 Business Days after such occurrence)
        give Lessor written notice of such Event of Loss. 

    

    

    
      
        
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    10.2.2 Replacement
      of Engine

     

    Lessee
      shall, promptly and in any event within 90 days after the occurrence of such
      Event of Loss, convey or cause to be conveyed to Lessor, in compliance with
      Section 10.3 and as replacement for the Engine with respect to which any Event
      of Loss occurred, title to a Replacement Engine free and clear of all Liens
      other than Permitted Liens. Such Replacement Engine shall be an engine
      manufactured by Engine Manufacturer that is the same model as the Engine
      to
      be replaced thereby, or an improved model, and that is suitable for installation
      and use on the Airframe, and that has a value, utility and remaining useful
      life
      (without regard to hours and cycles remaining until overhaul) at least equal
      to
      the Engine to be replaced thereby (assuming that such Engine had been maintained
      in accordance with the Lease).
       

      10.2.3 Engine
        Exchange

       

      Unless
        a
        Payment Default, Bankruptcy Default or Lease Event of Default shall have
        occurred and be continuing, upon not less than five (5) Business Days’ prior
        written notice to Lessor, Lessee may replace any Engine leased hereunder
        with
        another engine (the “Exchanged Engine”) meeting the requirements of Section
        10.2.2. Such Exchanged Engine shall be deemed to be a “Replacement Engine” and
        Lessor and Lessee shall comply with the provisions of Section 10.3 with regard
        to the Exchanged Engine and the Engine so replaced.

       

      10.3 Conditions
        to any Replacement

       

      10.3.1 Documents

       

      Prior
        to
        or at the time of conveyance of title to any Replacement Airframe or Replacement
        Engine to Lessor, Lessee shall take each of the following actions:

       

      (a) furnish
        Lessor with a full warranty bill of sale duly conveying to Lessor such
        Replacement Airframe or Replacement Engine, in form and substance reasonably
        satisfactory to Lessor and cause such Replacement Airframe to be duly registered
        in the name of Lessor pursuant to the Act;

       

      (b) cause
        (i)
        a Lease Supplement subjecting such Replacement Airframe or Replacement Engine
        to
        this Lease, duly executed by Lessee, to be delivered to Lessor for execution
        and, upon such execution, to be filed for recordation with the FAA pursuant
        to
        the Act, (ii) a Trust Indenture Supplement, subjecting such Replacement
        Airframe or Replacement Engine to the Trust Indenture, to be delivered to
        Lessor
        for execution and, upon execution, to be filed for recordation with the FAA
        pursuant to the Act and (iii) such Financing Statements and other filings,
        as Lessor or Mortgagee may reasonably request, duly executed by Lessee and,
        to
        the extent applicable, Lessor and Mortgagee (and Lessor and Mortgagee shall
        execute and deliver the same), to be filed in such locations as any such
        party
        may reasonably request;

       

      (c) furnish
        such evidence of compliance with the insurance provisions of Section 11 with
        respect to such Replacement Airframe or Replacement Engine as Lessor may
        reasonably request;

    

    

    
      
        
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    (d) furnish
      an opinion or opinions of Lessee’s counsel (which may be Lessee’s legal
      department) reasonably satisfactory to Lessor and Mortgagee and addressed to
      Lessor and Mortgagee to the effect that (i) such full warranty bill of sale
      referred to in Section 10.3.1(a) constitutes an effective instrument for the
      conveyance of title to the Replacement Airframe or Replacement Engine and (ii)
      in the case of a Replacement Airframe, Lessor and Mortgagee, as assignee of
      Lessor, will be entitled to the benefits of Section 1110 with respect to the
      Replacement Airframe, provided that such opinion referred to in this clause
      (ii)
      need not be delivered
      to the extent that immediately prior to such replacement the benefits of Section
      1110 were not, solely by reason of a change in law or court interpretation
      thereof, available to Lessor or Mortgagee, as assignee of Lessor;
       

      (e) furnish
        an opinion of Lessee’s aviation law counsel reasonably satisfactory to Lessor
        and Mortgagee and addressed to Lessor and Mortgagee as to the due registration
        of any such Replacement Airframe, the ownership of title to such Replacement
        Airframe by Owner Trustee and the absence of Liens of record with respect
        to
        such Replacement Airframe (other than Permitted Liens) and the due filing
        for
        recordation of each Lease Supplement and Trust Indenture Supplement with
        respect
        to such Replacement Airframe or Replacement Engine under the Act;

       

      (f) with
        respect to the replacement of the Airframe, and any Engine installed thereon
        at
        the time of the subject Event of Loss, if requested by Lessor and at Lessee’s
        expense, furnish a certified report of a qualified independent aircraft
        appraiser, reasonably satisfactory to Lessor, certifying that such Replacement
        Airframe and any such Replacement Engine complies with the value, utility
        and
        remaining useful life requirements set forth in Section 10.1.3(b);
        and

       

      (g) furnish
        a
        certificate of a qualified aircraft engineer (who may be an employee of Lessee)
        certifying that such Replacement Engine complies with the value, utility
        and
        remaining useful life requirements set forth in Section 10.2.2.

       

      Lessor
        and Lessee understand and agree that if at the time of any replacement of
        the
        Airframe or any Engine, as contemplated in this Section 10, the Airframe
        was
        registered in a jurisdiction other than the United States, then the requirements
        set forth above in this Section 10.3.1 relating to compliance with the
        requirements of the Act or the FAA, shall be deemed to refer to the comparable
        applicable Law of, and the Aviation Authority of, such other
        jurisdiction.

       

      10.3.2 Other
        Obligations

       

      (a) Lessor
        and Lessee agree that, upon any Replacement Airframe becoming the Airframe
        hereunder, and upon any Replacement Engine becoming an Engine hereunder,
        this
        Lease shall continue to be, and shall be treated as, a lease for U.S. federal
        income tax purposes of, among other things, such Replacement Airframe and
        such
        Replacement Engine. Without limiting the foregoing, Lessee and Lessor intend
        that Lessor shall, in all events, be entitled to the benefits of
        Section 1110 with respect to any Replacement Airframe or Replacement Engine
        and Lessee and Lessor shall cooperate and take such action as the other may
        reasonably request so as to ensure that Lessor shall be entitled to such
        benefits.

    

    

    
      
        
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      (b) No
        Event
        of Loss with respect to an Engine, or with respect to an Airframe, shall
        result
        in, or otherwise allow or permit (other than as provided in Section 10.1.2(b)),
        any reduction, deferral, discharge or other change in the timing or amount
        of
        any Rent payable by Lessee hereunder, and (subject to such Section 10.1.2(b))
        Lessee shall pay all such Rent and other amounts as though such Event of
        Loss
        had not occurred.

    

    
       

      10.4 Conveyance
        to Lessee

       

      Upon
        compliance by Lessee with the applicable terms of Sections 10.1.3, 10.2 and
        10.3.1, Lessor will transfer to Lessee the Airframe or Engine, as the case
        may
        be, with respect to which such Event of Loss occurred, in accordance with
        Section 4.5.

       

      10.5 Application
        of Payments

       

      Any
        amounts, other than insurance proceeds in respect of damage or loss not
        constituting an Event of Loss (the application of which is provided for in
        Section 11), received at any time by Lessor, Lessee or any Permitted
        Sublessee from any Government Entity or any other Person in respect of any
        Event
        of Loss will be applied as follows:

       

      10.5.1 Replacement
        of Airframe and Engines

       

      If
        such
        amounts are received with respect to the Airframe, and any Engine installed
        thereon at the time of such Event of Loss, upon compliance by Lessee with
        the
        applicable terms of Section 10.1.3 with respect to the Event of Loss for
        which
        such amounts are received, such amounts shall be paid over to, or retained
        by,
        Lessee.

       

      10.5.2 Loss
        of Engine

       

      If
        such
        amounts are received with respect to an Engine (other than an Engine installed
        on the Airframe at the time such Airframe suffers an Event of Loss), upon
        compliance by Lessee with the applicable terms of Section 10.2.2 with respect
        to
        the Event of Loss for which such amounts are received, such amounts shall
        be
        paid over to, or retained by, Lessee.

       

      10.5.3 Payment
        of Loss

       

      If
        such
        amounts are received, in whole or in part, with respect to the Airframe,
        and
        Lessee makes, has made or is deemed to have made the election set forth in
        Section 10.1.2, such amounts shall be applied as follows:

       

      (a) first,
        if the
        sum described in Section 10.1.2 has not then been paid in full by Lessee,
        such amounts shall be paid to Lessor (or to Mortgagee so long as Mortgagee
        has
        not given notice to Lessee that the Lien of the Trust Indenture has been
        duly
        discharged, except with respect to Excluded Payments) to the extent necessary
        to
        pay in full such sum;

       

      (b) second,
        the
        remainder, if any, shall be paid to Lessee.

       

    

    
      
        
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    10.6 Requisition
      of Aircraft for Use

     

    If
      any
      Government Entity shall requisition for use the Airframe and the Engines or
      engines installed thereon, and if the same does not constitute an Event of
      Loss,
      Lessee shall promptly notify Lessor and Mortgagee of such requisition and all
      of
      Lessee’s obligations under this
      Agreement shall continue to the same extent as if such requisition had not
      occurred; provided,
      however,
      that if
      the Airframe and Engines or engines installed thereon are not returned to Lessor
      by Lessee at the end of the Term, unless Lessor shall have elected, upon notice
      given not less than 30 days nor more than 120 days before the end of the Term,
      not to treat such event as constituting an Event of Loss with respect to the
      Aircraft, Lessee shall be obligated to pay the Stipulated Loss Value and all
      other amounts payable pursuant to Section 10.1.2 with respect to the
      Aircraft. If Lessor shall have elected not to treat such event as an Event
      of
      Loss, Lessee shall be obligated to return the Airframe and Engines or engines
      to
      Lessor pursuant to, and in all other respects to comply with the provisions
      of,
      Section 5 promptly upon their return by such Government Entity, and Lessee
      shall pay to Lessor upon such return an amount equal to the average daily Basic
      Rent payable by Lessee during the Term for each day after the end of the Term
      to
      but excluding the day of such return, up to a maximum of 30 days.

       

      10.7 Requisition
        of an Engine for Use

       

      If
        any
        Government Entity shall requisition for use any Engine but not the Airframe,
        Lessee will replace such Engine by complying with the applicable terms of
        Sections 10.2 and 10.3 to the same extent as if an Event of Loss had
        occurred with respect to such Engine, and any payments received by Lessor
        or
        Lessee from such Government Entity with respect to such requisition shall
        be
        paid or retained in accordance with Section 10.5.2.

       

      10.8 Application
        of Payments

       

      All
        payments received by Lessor or Lessee, or any Permitted Sublessee, from any
        Government Entity for the use of the Airframe and Engines or engines installed
        thereon during the Term shall be paid over to, or retained by, Lessee and
        all
        payments received by Lessor or Lessee from any Government Entity for the
        use of
        the Airframe and Engines or engines installed thereon after the Term shall
        be
        paid over to, or retained by, Lessor; provided that, if such requisition
        constitutes an Event of Loss, then all such payments shall be paid over to
        Lessor (or to Mortgagee so long as Mortgagee has not given notice to Lessee
        that
        the Trust Indenture has been duly discharged), and held as provided in Section
        10.5.

       

      10.9 Application
        of Payments During Existence of a Lease Event of
        Default

       

      Any
        amount described in this Section 10 that is payable or creditable to, or
        retainable by, Lessee shall not be paid or credited to, or retained by, Lessee
        if at the time such payment, credit or retention would otherwise occur a
        Lease
        Event of Default, Payment Default or Bankruptcy Default shall have occurred
        and
        be continuing, but shall instead be held by or paid over to Lessor (or to
        Mortgagee so long as Mortgagee has not given notice to Lessee that the Trust
        Indenture has been duly discharged) as security for the obligations of Lessee
        under this Lease and the other Lessee Operative Agreements and shall be invested
        pursuant to Section 4.4 hereof unless and until Lessor shall have demanded
        liquidated damages pursuant to Section 

    

    

    
      
        
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    15.1.3
      or
      15.1.4 and such amount is applied, at the option of Lessor, or upon the written
      request of Lessee to Lessor, from time to time during the continuance of a
      Lease
      Event of Default, to Lessee’s obligations under this Lease as and when due, it
      being understood that any such application shall be made to such obligations
      of
      Lessee as Lessor may determine in its sole discretion.
      At such time as there shall not be continuing any Lease Event of Default,
      Payment Default or Bankruptcy Default, such amount shall be paid to Lessee
      to
      the extent not previously applied in accordance with this
      Section 10.9.
       

      SECTION
        11. INSURANCE

       

      11.1 Lessee’s
        Obligation to Insure

       

      Lessee
        shall comply with, or cause to be complied with, each of the provisions of
        Annex D, which provisions are hereby incorporated by this reference as if
        set forth in full herein.

       

      11.2 Insurance
        for Own Account

       

      Nothing
        in Section 11 shall limit or prohibit (a) Lessee from maintaining the policies
        of insurance required under Annex D with higher limits than those specified
        in
        Annex D, or (b) Lessor, Mortgagee or Owner Participant from obtaining insurance
        for its own account (and any proceeds payable under such separate insurance
        shall be payable as provided in the policy relating thereto); provided,
        however,
        that no
        insurance may be obtained or maintained that would limit or otherwise adversely
        affect the coverage of any insurance required to be obtained or maintained
        by
        Lessee pursuant to this Section 11 and Annex D.

       

      11.3 Indemnification
        by Government in Lieu of Insurance

       

      Lessor
        agrees to accept, in lieu of insurance against any risk with respect to the
        Aircraft described in Annex D, indemnification from, or insurance provided
        by,
        the U.S. Government, or upon the written consent of Lessor and Mortgagee,
        other
        Government Entity, against such risk in an amount that, when added to the
        amount
        of insurance (including permitted self-insurance), if any, against such risk
        that Lessee (or any Permitted Sublessee) may continue to maintain, in accordance
        with this Section 11, during the period of such requisition or transfer,
        shall be at least equal to the amount of insurance against such risk otherwise
        required by this Section 11.

       

      11.4 Application
        of Insurance Proceeds

       

      As
        between Lessor and Lessee, all insurance proceeds received as a result of
        the
        occurrence of an Event of Loss with respect to the Aircraft or any Engine
        under
        policies required to be maintained by Lessee pursuant to this Section 11
        will be applied in accordance with Section 10.5. All proceeds of insurance
        required to be maintained by Lessee, in accordance with Section 11 and
        Section B of Annex D, in respect of any property damage or loss not
        constituting an Event of Loss with respect to the Aircraft, Airframe or any
        Engine will be applied in payment (or to reimburse Lessee) for repairs or
        for
        replacement property, and any balance remaining after such repairs or
        replacement with respect to such damage or loss shall be paid over to, or
        retained by, Lessee.

    

    

    
      
        
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    11.5 Application
      of Payments During Existence of Default

     

    Any
      amount described in this Section 11 that is payable or creditable to, or
      retainable by, Lessee shall not be paid or credited to, or retained by, Lessee
      if at the time such payment, credit or retention would otherwise occur a Lease
      Event of Default shall have occurred and be continuing, but shall instead be
      held by or paid over to Lessor (or to Mortgagee so long as Mortgagee has not
      given notice to Lessee that the Trust Indenture has been duly discharged) as
      security for the obligations of Lessee under this Lease and shall be invested
      pursuant to Section 4.4 hereof unless and until Lessor shall have demanded
      liquidated damages pursuant to Section 15.1.3 or 15.1.4 and such amount is
      applied, at the option of Lessor, or upon the written request of Lessee to
      Lessor, from time to time during the continuance of a Lease Event of Default,
      to
      Lessee’s obligations under this Lease and the other Lessee Operative Agreements
      as and when due, it being understood that any such application shall be made
      to
      such obligations of Lessee as Lessor may determine in its sole discretion.
      At
      such time as there shall not be continuing any Lease Event of Default, such
      amount shall be paid to Lessee to the extent not previously applied in
      accordance with this Section 11.5.

     

    SECTION
      12. INSPECTION

     

    (a) Lessor,
      Mortgagee or their respective authorized representatives (the “Inspecting
      Parties”) may, upon reasonable notice to Lessee, inspect the Aircraft, Airframe
      and Engines (including, without limitation, the Aircraft Documents) and Lessee
      shall cooperate, and shall cause any Permitted Sublessee to cooperate, with
      the
      Inspecting Parties in connection with any such inspection (including, without
      limitation, permitting any such Inspecting Party to make copies of such Aircraft
      Documents not reasonably deemed confidential by Lessee or such Permitted
      Sublessee).

     

    (b) Except
      during the continuance of any Lease Event of Default while the Section 1110
      Period shall not be in effect, any inspection of the Aircraft hereunder shall
      be
      limited to a visual, walk-around inspection and shall not include the opening
      of
      any panels, bays or other components of the Aircraft, Airframe or Engines.
      Any
      inspection permitted hereunder, including any inspection conducted during the
      continuance of a Lease Event of Default, shall be conducted in a manner which
      does not interfere with Lessee’s or a Permitted Sublessee’s operation, use and
      maintenance of such Aircraft, which determination of interference shall be
      made
      by Lessee in its reasonable sole discretion.

     

    (c) With
      respect to such rights of inspection, neither Lessor nor Mortgagee shall have
      any duty or liability to make, or any duty or liability by reason of not making,
      any such visit, inspection or survey.

     

    (d) Each
      Inspecting Party shall bear its own expenses in connection with any such
      inspection (including the cost of any copies made in accordance with Section
      12(a)); provided,
      that if
      a Lease Event of Default shall have occurred and be continuing, Lessee shall
      bear all such reasonable expenses, except, in the case of a Chapter 11
      reorganization, during the Section 1110 Period.

    

    
      
        
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    (e) If
      requested by Lessor or Mortgagee, Lessee shall promptly advise, or shall cause
      any Permitted Sublessee to advise, Lessor of the date upon which the Aircraft,
      Airframe or any Engine undergoes its next scheduled maintenance visit or next
      major check, and with respect to any Engine, the next off-the-wing maintenance,
      and shall advise Lessor of the name and location of the relevant maintenance
      performer. An Inspecting Party shall have the opportunity to attend such
      scheduled maintenance visit or major check, subject to the other provisions
      of
      this Section 12.

     

    SECTION
      13. ASSIGNMENT;
      MERGER; SUCCESSOR OWNER TRUSTEE

     

    13.1 In
      General

     

    This
      Lease and the other Lessee Operative Agreements shall be binding upon and inure
      to the benefit of Lessor and Lessee and their respective successors and
      permitted assigns. Except as otherwise expressly permitted by the terms of
      the
      Lease or any other Lessee Operative Agreement, Lessee will not, without the
      prior written consent of Lessor and Mortgagee, assign any of its rights under
      this Lease. Except as otherwise provided herein (including, without limitation,
      under the provisions of Section 15 hereof) or in the Trust Indenture, Lessor
      and
      Mortgagee may not assign or convey any of its right, title and interest in
      and
      to this Lease or the Aircraft without the prior written consent of Lessee,
      such
      consent not to be unreasonably withheld.

     

    13.2 Merger
      of Lessee

     

    13.2.1 In
      General

     

    Lessee
      shall not consolidate with or merge into any other person under circumstances
      in
      which Lessee is not the surviving corporation, or convey, transfer or lease
      in
      one or more transactions all or substantially all of its assets to any other
      person, unless:

     

    (a) such
      person is organized, existing and in good standing under the Laws of the United
      States, any State of the United States or the District Columbia and, upon
      consummation of such transaction, such person will be a U.S. Air
      Carrier;

     

    (b) such
      person executes and delivers to Lessor and Mortgagee a duly authorized, legal,
      valid, binding and enforceable agreement, reasonably satisfactory in form and
      substance to Lessor and Mortgagee, containing an effective assumption by such
      person of the due and punctual performance and observance of each covenant,
      agreement and condition in the Lessee Operative Agreements to be performed
      or
      observed by Lessee;

     

    (c) such
      person makes such filings and recordings with the FAA pursuant to the Act as
      shall be necessary to evidence such consolidation or merger; and 

     

    (d) immediately
      after giving effect to such consolidation or merger no Lease Event of Default
      shall have occurred and be continuing.

    

    
      
        
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    13.2.2 Effect
      of Merger

     

    Upon
      any
      such consolidation or merger of Lessee with or into, or the conveyance, transfer
      or lease by Lessee of all or substantially all of its assets to, any Person
      in
      accordance with this Section 13.2, such Person will succeed to, and be
      substituted for, and may exercise every right and power of, Lessee under the
      Lessee Operative Agreements with the same effect as if such person had been
      named as “Lessee” therein. No such consolidation or merger, or conveyance,
      transfer or lease, shall have the effect of releasing Lessee or such Person
      from
      any of the obligations, liabilities, covenants or undertakings of Lessee under
      the Lease. 

     

    13.3 Assignment
      Security for Lessor’s Obligations

     

    In
      order
      to secure the indebtedness evidenced by the Equipment Notes, Lessor has agreed
      in the Trust Indenture, among other things, to assign to Mortgagee this Lease
      and to mortgage the Aircraft, Airframe and Engines in favor of Mortgagee,
      subject to the reservations and conditions therein set forth. Lessee hereby
      accepts and consents to the assignment of all Lessor’s right, title and interest
      in and to this Lease pursuant to the terms of the Trust Indenture. In accordance
      with Section 3.3(c), Lessee agrees to pay directly to Mortgagee (or, after
      receipt by Lessee of notice from Mortgagee of the discharge of the Trust
      Indenture, to Lessor), all amounts of Rent (other than Excluded Payments) due
      or
      to become due hereunder and assigned to Mortgagee and Lessee agrees that
      Mortgagee’s right to such payments hereunder shall be absolute and unconditional
      and shall not be affected by any circumstance, including, without limitation,
      the circumstances set forth in Section 16 hereof. Notwithstanding the foregoing
      assignment of this Lease, the obligations of Lessee to Lessor to perform the
      terms and conditions of this Lease shall remain in full force and effect.

     

    13.4 Successor
      Owner Trustee

     

    Lessee
      agrees that in the case of the appointment of any successor Owner Trustee
      pursuant to the terms of the Participation Agreement and the Trust Agreement,
      such successor Owner Trustee shall, upon written notice by such successor Owner
      Trustee to Lessee, succeed to all the rights, powers and title of Lessor
      hereunder and shall be deemed to be Lessor and the owner of the Aircraft and
      the
      other assets of the Trust Estate for all purposes hereof without the necessity
      of any consent or approval by Lessee and without in any way altering the terms
      of this Lease or Lessee’s obligations hereunder. An appointment and designation
      of a successor Owner Trustee shall not exhaust the right to appoint and
      designate further successor or additional Owner Trustees pursuant to the
      Participation Agreement and the Trust Agreement, and such right may be exercised
      repeatedly as long as this Lease shall be in effect.

     

    SECTION
      14. LEASE
      EVENTS OF DEFAULT

     

    The
      occurrence of any one or more of the following circumstances, conditions, acts
      or events, for any reason whatsoever and whether any such circumstance,
      condition, act or event shall be voluntary or involuntary or come about or
      be
      effected by operation of Law or pursuant to or in compliance with any judgment,
      decree, order, rule or regulation of any Government Entity, shall constitute
      a
      Lease Event of Default so long as it shall not have been remedied:

    

    
      
        
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    14.1 Payments

     

    Lessee
      shall fail to pay any amount of Basic Rent, Renewal Rent, Stipulated Loss Value
      or Termination Value within five (5) Business Days after the same shall have
      become due; or Lessee shall fail to pay any Supplemental Rent (other than
      Stipulated Loss Value or Termination Value) when due and such failure shall
      continue for a period in excess of ten (10) Business Days from and after the
      date of any written notice to Lessee from Lessor, Mortgagee or Owner Participant
      of the failure to make such payment when due; provided that any such failure
      to
      pay any Excluded Payment shall not constitute a Lease Event of Default until
      written notice is given by the Owner Participant to Lessee and Mortgagee that
      such failure constitutes a Lease Event of Default and such failure shall have
      continued for a period in excess of ten (10) Business Days after such
      notice.

     

    14.2 Insurance

     

    Lessee
      shall fail to carry and maintain, or cause to be carried and maintained,
      insurance on and in respect of the Aircraft, Airframe and Engines in accordance
      with the provisions of Section 11.

     

    14.3 Other
      Covenants

     

    Lessee
      shall fail to observe or perform (or cause to be observed and performed) in
      any
      material respect any other covenant, agreement or obligation set forth herein
      or
      in any other Lessee Operative Agreement (other than the covenants, agreements
      and obligations set forth in the Tax Indemnity Agreement), and such failure
      shall continue unremedied for a period of 30 days from and after the date of
      written notice thereof to Lessee from Lessor, Owner Participant or Mortgagee,
      unless such failure is capable of being corrected and Lessee shall be diligently
      proceeding to correct such failure, in which case there shall be no Lease Event
      of Default unless and until such failure shall continue unremedied for a period
      of 90 days after receipt of such notice.

     

    14.4 Representations
      and Warranties

     

    Any
      representation or warranty made by Lessee herein, in the Participation Agreement
      or in any other Lessee Operative Agreement (other than the representations
      and
      warranties of Lessee in the Tax Indemnity Agreement) (a) shall prove to
      have been untrue or inaccurate in any material respect as of the date made,
      (b) such untrue or inaccurate representation or warranty is material at the
      time in question, (c) and the same shall remain uncured (to the extent of
      the adverse impact of such incorrectness on the interest of the Participants
      or
      Lessor) for a period in excess of 30 days from and after the date of written
      notice thereof from Lessor, Owner Participant or Mortgagee to Lessee (except
      that this clause (c) shall be inapplicable in the case of Section 6.1.7 of
      the
      Participation Agreement).

    
       

      14.5 Bankruptcy
        and Insolvency

       

      (a) Lessee
        shall consent to the appointment of or the taking of possession by a receiver,
        trustee or liquidator of itself or of substantially all of its property,
        or
        Lessee shall admit in writing its inability to pay its debts generally as
        they
        come due, or does not pay its debts

    

    

    
      
        
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    generally
      as they become due or shall make a general assignment for the benefit of
      creditors, or Lessee shall file a voluntary petition in bankruptcy or a
      voluntary petition or an answer seeking reorganization, liquidation or other
      relief in a case under any bankruptcy Laws or other insolvency Laws (as in
      effect at such time), or Lessee shall seek relief by voluntary petition, answer
      or consent, under the provisions of any other bankruptcy or other similar Law
      providing for the reorganization or winding-up of corporations (as in effect
      at
      such time) or Lessee’s board of directors shall adopt a resolution authorizing
      any of the foregoing; or

     

    (b) an
      order,
      judgment or decree shall be entered by any court of competent jurisdiction
      appointing, without the consent of Lessee, a receiver, trustee or liquidator
      of
      Lessee or of substantially all of its property, or substantially all of the
      property of Lessee shall be sequestered, and any such order, judgment or decree
      of appointment or sequestration shall remain in force undismissed, unstayed
      and
      unvacated for a period of 90 days after the date of entry thereof;
      or

     

    (c) a
      petition against Lessee in a case under any bankruptcy Laws or other insolvency
      Laws (as in effect at such time) is filed and not withdrawn or dismissed within
      90 days thereafter, or if, under the provisions of any Law providing for
      reorganization or winding-up of corporations which may apply to Lessee, any
      court of competent jurisdiction assumes jurisdiction, custody or control of
      Lessee or of substantially all of its property and such jurisdiction, custody
      or
      control remains in force unrelinquished, unstayed and unterminated for a period
      of 90 days.

     

    SECTION
      15. REMEDIES
      AND WAIVERS

     

    15.1 Remedies

     

    If
      any
      Lease Event of Default shall occur and be continuing, Lessor may, at its option
      and at any time and from time to time, exercise any one or more of the following
      remedies as Lessor in its sole discretion shall elect:

     

    15.1.1 Return
      and Repossession

     

    Lessor
      may cause Lessee, upon giving written notice to Lessee, to return promptly,
      and
      Lessee shall return promptly, the Airframe and Engines as Lessor may so demand,
      to Lessor or its order in the manner and condition required by, and otherwise
      in
      accordance with, all the provisions of Section 5 as if the Airframe or
      Engine were being returned at the end of the Base Lease Term or any Renewal
      Lease Term or Lessor, at its option, may enter upon the premises where the
      Airframe or any Engine, or any Part thereof, are located and take immediate
      possession of and remove the same by summary proceedings or otherwise, all
      without liability accruing
      to Lessor for or by reason of such entry or taking of possession, whether for
      the restoration of damage to property caused by such taking or otherwise, and
      Lessee expressly waives any right it may have to a hearing prior to repossession
      of the Aircraft.
       

      15.1.2 Sale
        and Use

       

      Lessor
        may sell the Airframe and/or any Engine at public or private sale, at such
        times
        and places, and to such Persons (including Lessor, Mortgagee or any
        Participant), as 

    

    

    
      
        
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    Lessor
      may determine; or Lessor may otherwise dispose of, hold, use, operate, lease
      to
      others or keep idle the Airframe and/or any Engine, as Lessor, in its sole
      discretion, may determine, all free and clear of any rights of Lessee and
      without any duty to account to Lessee with respect to such action or inaction
      or
      for any proceeds with respect thereto, except as hereinafter set forth in this
      Section 15, and except to the extent that such proceeds would constitute,
      under applicable Law, a mitigation of Lessor’s damages suffered or incurred as a
      result of the subject Lease Event of Default. Lessor shall give Lessee at least
      15 days prior written notice of the date fixed for any public sale of the
      Airframe and/or any Engine or of the date on or after which will occur the
      execution of any contract providing for any private sale.

     

    15.1.3 Certain
      Liquidated Damages

     

    Whether
      or not Lessor shall have exercised, or shall thereafter at any time exercise,
      any of its rights under Section 15.1.1 or 15.1.2 with respect to the
      Airframe and/or any Engine, or any Part thereof, Lessor, by written notice
      to
      Lessee specifying a payment date (which shall be the Stipulated Loss Value
      Date
      next occurring not less than 10 days after the date of such notice), may demand
      Lessee to pay to Lessor, and Lessee shall pay to Lessor, on the payment date
      so
      specified and in the manner and in funds of the type specified in Section 3.3,
      as liquidated damages for loss of a bargain and not as a penalty (in lieu of
      the
      Basic Rent or Renewal Rent, as the case may be, for the Aircraft in respect
      of
      all periods commencing on or after the date specified for payment in such
      notice), the following amounts:

     

    (a) all
      unpaid Basic Rent or Renewal Rent, as the case may be, due at any time prior
      to
      the Stipulated Loss Value Date specified in such notice, but excluding Basic
      Rent or Renewal Rent due on such Stipulated Loss Value Date; plus 

     

    (b) an
      amount
      equal to the excess, if any, of the Stipulated Loss Value for the Aircraft,
      computed as of the Stipulated Loss Value Date specified in such notice, over
      the
      Fair Market Sales Value of the Aircraft, as of the Stipulated Loss Value Date
      specified in such notice; plus

     

    (c) interest
      on the amounts specified in the foregoing clause (a) at the Payment Due Rate
      from and including the date on which any such amount was due to the date of
      payment of such amount; plus

     

    (d) interest
      on the amount specified in the foregoing clause (b) at the Payment Due Rate
      from
      and including the Stipulated Loss Value Date specified in such notice to the
      date of payment of such amount.

    
       

      15.1.4 Liquidated
        Damages Upon Sale

       

      If
        Lessor, pursuant to Section 15.1.2 or applicable Law, shall have sold the
        Aircraft, Lessor, in lieu of exercising its rights under Section 15.1.3
        with respect to the Aircraft, may, if Lessor shall so elect, upon giving
        written
        notice to Lessee, demand Lessee to pay Lessor, and Lessee shall pay to Lessor,
        on the date of such sale and in the manner and in funds of the type specified
        in
        Section 3.3, as liquidated damages for loss of a bargain and not as a penalty
        (in lieu of the Basic Rent or Renewal Rent, as the case may be, for the Aircraft
        in respect of all periods commencing on or after the date of such sale),
        the
        following amounts:

    

    

    
      
        
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    (a) all
      unpaid Basic Rent or Renewal Rent, as the case may be, due at any time prior
      to
      the Stipulated Loss Value Date on or immediately preceding the date of such
      sale, but excluding Basic Rent or Renewal Rent due on such Stipulated Loss
      Value
      Date; plus

     

    (b) an
      amount
      equal to the excess, if any, of (i) the Stipulated Loss Value of the Aircraft,
      computed as of the Stipulated Loss Value Date used in the foregoing clause
      (a)
      for the computation of unpaid Rent, over (ii) the proceeds of such sale,
      minus all reasonable costs of Lessor in connection with the sale;
      plus

     

    (c) if
      the
      date of such sale is not a Stipulated Loss Value Date, an amount equal to
      interest on the outstanding principal amount of the Equipment Notes at the
      rate
      per annum borne thereby from and including the Stipulated Loss Value Date used
      in the foregoing clause (a) for the computation of unpaid Rent to the date
      of
      such sale; plus

     

    (d) interest
      on the amounts specified in the foregoing clause (a) at the Payment Due Rate
      from and including the date on which any such amount was due to the date of
      payment of such amount; plus

     

    (e) interest
      on the sum of the amounts specified in the foregoing clause (b) at the Payment
      Due Rate from and including the date of such sale to the date of payment of
      such
      amounts.

     

    15.1.5 Rescission

     

    Lessor
      may (i) at its option, rescind or terminate this Lease as to the Aircraft,
      Airframe or any Engine, or any Part thereof, or (ii) exercise any other right
      or
      remedy that may be available to it under applicable Law or proceed by
      appropriate court action to enforce the terms hereof or to recover damages
      for
      the breach hereof, including without limitation Lessee’s agreement to lease the
      Aircraft for the Term and to pay Rent.

     

    15.1.6 Other
      Remedies

     

    In
      addition to the foregoing remedies (but without duplication of amounts otherwise
      paid under this Section 15), Lessee shall be liable for any and all unpaid
      Rent due hereunder before, during or after (except as otherwise provided herein)
      the exercise of any of the foregoing
      remedies and for all reasonable attorneys’ fees and other costs and expenses of
      Lessor, including, without limitation, interest on overdue Rent at the rate
      as
      herein provided, incurred by reason of the occurrence of any Lease Event of
      Default or the exercise of Lessor’s remedies with respect thereto, including all
      reasonable costs and expenses of Lessor incurred in connection with the return
      of the Airframe or any Engine, in accordance with the terms of Section 5 or
      in placing the Airframe or any Engine, in the condition and airworthiness
      required by Section 5.
       

      15.2 Limitations
        Under CRAF

       

      Notwithstanding
        the provisions of Section 15.1, during any period that the Aircraft, Airframe
        or
        any Engine is subject to CRAF in accordance with the provisions of
        Section 7.2.3 and in the possession of the U.S. Government, Lessor shall
        not, as a result of any Lease Event of Default, exercise its remedies hereunder
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    control
      under this Lease (or any Permitted Sublessee’s control under any Permitted
      Sublease) of the Aircraft, Airframe or such Engine, unless at least 30 days’ (or
      such other period as may then be applicable under CRAF) written notice of
      default hereunder shall have been given by Lessor or Mortgagee by registered
      or
      certified mail to Lessee (and any Permitted Sublessee) with a copy to the
      Contracting Officer Representative or Representatives for the Military Airlift
      Command of the United States Air Force to whom notices must be given under
      the
      contract governing Lessee’s (or any Permitted Sublessee’s) participation in CRAF
      with respect to the Aircraft, Airframe or any Engine.

     

    15.3 Right
      to Perform for Lessee

     

    If
      Lessee
      (i) fails to make any payment of Rent required to be made by it hereunder or
      (ii) fails to perform or comply with any of its agreements contained herein
      and
      such failure continues for a period of thirty days after written notice thereof
      is given by Lessor, Mortgagee or Owner Participant to Lessee, Lessor may (but
      shall not be obligated to) make such payment or perform or comply with such
      agreement, and the amount of such payment and the amount of the expenses of
      Lessor or Mortgagee incurred in connection with such payment or the performance
      of or compliance with such agreement, as the case may be, together with interest
      thereon at the Payment Due Rate, shall be deemed Supplemental Rent, payable
      by
      Lessee upon demand by Lessor or Mortgagee, whichever is entitled thereto. No
      such payment, performance or compliance shall be deemed to cure any Lease
      Default or Lease Event of Default or otherwise relieve Lessee of its obligations
      with respect thereto.

     

    15.4 Determination
      of Fair Market Sales Value

     

    For
      the
      purpose of this Section 15, the “Fair Market Sales Value” of the Aircraft
      shall be determined on an “as is, where is” basis and shall take into account
      customary brokerage and other out-of-pocket fees and expenses which typically
      would be incurred in connection with a sale of the Aircraft. Any such
      determination shall be made by an Appraiser selected by Lessor and the costs
      and
      expenses associated therewith shall be borne by Lessee, unless Lessor does
      not
      obtain possession of the Aircraft, Airframe and Engines pursuant to this
      Section 15, in which case
      an
      Appraiser shall not be appointed and Fair Market Sales Value for purposes of
      this Section 15 shall be zero.
       

      15.5 Remedies
        Cumulative

       

      Nothing
        contained in this Lease shall be construed to limit in any way any right,
        power,
        remedy or privilege of Lessor hereunder or under any other Operative Agreement
        or now or hereafter existing at law or in equity. Each and every right, power,
        remedy and privilege hereby given to, or retained by, Lessor in this Lease
        shall
        be in addition to and not in limitation of every other right, power, remedy
        and
        privilege given under the Operative Agreements or now or hereafter existing
        at
        law or in equity. Each and every right, power, remedy and privilege of Lessor
        under this Lease and any other Operative Agreement may be exercised from
        time to
        time or simultaneously and as often and in such order as may be deemed expedient
        by Lessor. All such rights, powers, remedies and privileges shall be cumulative
        and not mutually exclusive, and the exercise of one shall not be deemed a
        waiver
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    hereby
      waives to the extent permitted by applicable Law any right which it may have
      to
      require Lessor to choose or elect remedies.

     

    SECTION
      16. LESSEE’S
      OBLIGATIONS; NO SETOFF, COUNTERCLAIM, ETC.

     

    (a) Lessee’s
      obligation to pay Rent hereunder shall be absolute and unconditional, and shall
      not be affected by any event or circumstance, including, without limitation:
      (i) any setoff, counterclaim, recoupment, defense or other right that
      Lessee may have against Lessor, Mortgagee, any Participant, any Note Holder,
      or
      any other Person for any reason whatsoever; (ii) any defect in the title,
      airworthiness, condition, design, operation or fitness for use of, or any damage
      to or loss or destruction of, the Aircraft, Airframe or any Engine, or any
      interruption or cessation in the use or possession thereof by Lessee for any
      reason whatsoever; (iii) any insolvency, bankruptcy, reorganization or
      similar proceedings by or against Lessee or any other Person; or (iv) any
      other circumstance, happening or event whatsoever, whether or not similar to
      any
      of the foregoing.

     

    (b) If
      for
      any reason whatsoever this Lease shall be terminated in whole or in part by
      operation of Law or otherwise except as specifically provided herein, Lessee
      nonetheless agrees to pay an amount equal to each Rent payment at the time
      such
      payment would have become due and payable in accordance with the terms hereof
      had this Agreement not been terminated in whole or in part. Lessee hereby
      waives, to the extent permitted by applicable Law, any and all rights that
      it
      may now have or that at any time hereafter may be conferred upon it, by statute
      or otherwise, to terminate, cancel, quit or surrender this Agreement, except
      in
      accordance with the express terms hereof.

     

    (c) Nothing
      set forth in this Section 16 shall be construed to prohibit Lessee from
      separately pursuing any claim that it may have from time to time against Lessor
      or any other Person with respect to any matter (other than the absolute and
      unconditional nature of Lessee’s obligations hereunder to pay Rent, and other
      than the matters specified in paragraphs (a) and (b) above). Without limiting
      the foregoing, nothing in this Section 16 shall be construed as a waiver by
      Lessee, or otherwise limit Lessee in pursuing any claim by Lessee, of any breach
      by
      Lessor, Owner Participant or any other Person of any covenant or obligation
      contained in any Operative Agreement.
       

      SECTION
        17. RENEWAL
        AND PURCHASE OPTIONS

       

      17.1 Notices
        Generally

       

      (a) At
        least
        225 days but not more than 375 days prior to the Scheduled Expiration Date
        or,
        if a Renewal Lease Term is then in effect, prior to the Scheduled Renewal
        Term
        Expiration Date of such Renewal Lease Term, Lessee may provide notice to
        Lessor
        that Lessee may exercise either the option to extend the leasing of the Aircraft
        for a Renewal Lease Term pursuant to Section 17.2 or the option to purchase
        the Aircraft on the Scheduled Expiration Date or Scheduled Renewal Term
        Expiration Date of such Renewal Lease Term, as the case may be, pursuant
        to
        Section 17.3 (a “Preliminary Notice”).

    

    

    
      
        
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      (b) If
        any
        such Preliminary Notice is given by Lessee, then Lessee may provide a further
        notice specifying which option it intends to elect,
        with respect to the relevant period, pursuant to Section 17.2.1 or 17.3.1,
        as
        the case may be. 

    

     

    17.2 Renewal
      Options

     

    17.2.1 Renewal
      Notice

     

    (a) If
      Lessee
      has given a Preliminary Notice, as specified in Section 17.1, and subject
      to the terms and conditions of this Section 17.2, Lessee may exercise its
      option to extend the leasing of the Aircraft hereunder on two occasions, in
      each
      case until the next Scheduled Renewal Term Expiration Date, on the same terms,
      provisions and conditions (except as contemplated by this Section 17) set
      forth herein and in the other Lessee Operative Agreements with respect to the
      Base Lease Term, by delivery of a notice (a “Renewal Notice”) to Lessor not less
      than 180 days but not more than 375 days prior to (i) if the Base Lease
      Term is then in effect, the Scheduled Expiration Date, or (ii) if a Renewal
      Lease Term is then in effect, the Scheduled Renewal Term Expiration Date for
      such Renewal Lease Term.

     

    (b) Notwithstanding
      anything to the contrary in this Agreement or any other Operative
      Agreement:

     

    (i) No
      Preliminary Notice or Renewal Notice shall be binding on Lessor or oblige Lessor
      to extend the leasing of the Aircraft hereunder for a Renewal Lease Term if
      any
      Payment Default, Bankruptcy Default or Lease Event of Default shall have
      occurred and be continuing on and as of the date that such Renewal Lease Term
      would otherwise commence.

     

    (ii) Any
      Renewal Notice shall be revocable by Lessee until 10 Business Days after the
      Renewal Rent is determined in accordance with Sections 17.2.2 and unless revoked
      by written notice by Lessee to Lessor shall thereafter become irrevocable and
      shall constitute an unconditional obligation of Lessee to extend the leasing
      of
      the Aircraft hereunder for the Renewal Lease Term to which such Renewal Notice
      relates.

    
       

      (iii) Lessee
        shall not be entitled to give any Renewal Notice if it has (x) not
        delivered a Preliminary Notice or (y) delivered a Purchase Notice to
        Lessor.

       

      17.2.2 Renewal
        Rent

       

      (a) During
        the Renewal Lease Term, Lessee shall pay to Lessor on each Payment Date,
        in the
        manner and in the funds of the type specified in Section 3.3, Renewal Rent
        in
        advance.

       

      (b) The
        Renewal Rent payable by Lessee on each Payment Date during any Renewal Lease
        Term shall be the Fair Market Rental Value of the Aircraft for such Renewal
        Lease Term. Any such Fair Market Rental Value shall be determined not more
        than
        10 Business Days after Lessee gives a Preliminary Notice by mutual agreement
        of
        Lessor and Lessee or, if they shall be unable to agree, by an appraisal in
        accordance with Section 17.4.

    

    

    
      
        
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    17.2.3 Stipulated
      Loss and Termination Values

     

    (a) For
      any
      Renewal Lease Term, Stipulated Loss Value dates and Termination Value dates
      shall be extended throughout such Renewal Lease Term on the same days and for
      the same months as during the Base Lease Term.

     

    (b) Stipulated
      Loss Value and Termination Value amounts that are payable during any such
      Renewal Lease Term shall be determined at the same time that the Renewal Rent
      for such Renewal Lease Term is determined under Section 17.2.2. Stipulated
      Loss Values and Termination Values for any such Renewal Lease Term shall,
      commencing on the first day of such Renewal Lease Term, be equal to the Fair
      Market Sales Value of the Aircraft, computed as of the first day of such Renewal
      Lease Term, and shall decline ratably on a monthly basis to the Fair Market
      Sales Value of the Aircraft as of the last day of such Renewal Lease Term,
      but
      shall be adjusted to credit Lessee for any Renewal Rent paid in advance
      attributable to any subsequent period.

     

    (c) Any
      Fair
      Market Sales Value of the Aircraft, for purposes of calculating Stipulated
      Loss
      Value and Termination Value amounts applicable during any such Renewal Lease
      Term, shall be determined by mutual agreement of Lessor and Lessee or, if they
      shall be unable to agree, by an appraisal in accordance with
      Section 17.4.

     

    17.3 Purchase
      Option

     

    17.3.1 Purchase
      Notice

     

    (a) Subject
      to Section 17.1 and the terms and conditions of this Section 17.3,
      Lessee may elect to purchase the Aircraft, on any Purchase Date, at a purchase
      price equal to the lesser of (i) the Purchase Price Cap (as defined in
      Schedule 1 to the Lease) and (ii) the Fair Market Sales Value of the
      Aircraft computed as of the Purchase Date.

    
       

      (b) Lessee
        may exercise such option to purchase the Aircraft, by delivery of a notice
        (a
“Purchase Notice”) to Lessor not less than 180 and not more than 375 days prior
        to the Purchase Date specified in such Purchase Notice.

       

      (c) Notwithstanding
        anything to the contrary in this Agreement or any other Operative
        Agreement:

       

      (i) Any
        Purchase Notice (whether delivered or deemed to have been delivered) shall
        be
        revocable until 10 Business Days after the determination of the Fair Market
        Sales Value in accordance with Section 17.3.2 and unless revoked by written
        notice by Lessee to Lessor shall thereafter become irrevocable and shall
        constitute an unconditional obligation of Lessee to purchase the Aircraft
        under
        this Section 17.3.

       

      (ii) No
        Preliminary Notice or Purchase Notice shall be binding on Lessor or oblige
        Lessor to sell the Aircraft hereunder if any Payment Default, Bankruptcy
        Default
        or Lease Event of Default shall have occurred and be continuing on and as
        of
        such Purchase Date.

    

    

    
      
        
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    (iii) Lessee
      shall not be entitled to give any Purchase Notice in respect of any Purchase
      Date if it has (x) not delivered a Preliminary Notice or (y) delivered
      a Renewal Notice for a Renewal Lease Term that would commence immediately
      following such Purchase Date.

     

    17.3.2 Determination
      of Fair Market Sales Value

     

    The
      Fair
      Market Sales Value of the Aircraft shall be determined not more than 10 Business
      Days after Lessee gives a Preliminary Notice by mutual agreement of Lessor
      and
      Lessee or, if they shall be unable to agree, by an appraisal in accordance
      with
      Section 17.4.

     

    17.3.3 Title

     

    Upon
      full
      and final payment by Lessee of (a) the applicable purchase price of the
      Aircraft, (b) all unpaid Rent due and payable through and including the
      Purchase Date and (c) all other amounts due and payable by Lessee under
      this Agreement, Lessor will transfer to Lessee title to the Aircraft in
      accordance with Section 4.5.

     

    17.4 Appraisals

     

    Whenever
      Fair Market Rental Value or Fair Market Sales Value of the Aircraft is required
      to be determined by an appraisal under this Section 17, Lessee and Lessor
      shall appoint a mutually satisfactory Appraiser to conduct such appraisal.
      If
      Lessee and Lessor fail to agree upon a satisfactory Appraiser then each shall
      promptly appoint a separate Appraiser and such Appraisers shall jointly
      determine such amount. If either Lessee or Lessor fails to so appoint an
      Appraiser, the determination of the single Appraiser appointed shall be final.
      If two Appraisers are appointed and within 7 days after the appointment of
      the
      latter of such two Appraisers, they cannot agree upon such amount, such two
      Appraisers shall, within 8 days after such latter appointment, appoint a third
      Appraiser and such amount shall be determined by such three Appraisers, who
      shall make their separate appraisals within 7 days following the appointment
      of
      the third Appraiser, and any determination so made shall be conclusive and
      binding upon Lessor and Lessee. If no such third Appraiser is appointed within
      such 8-day period, either Lessor or Lessee may apply to the American Arbitration
      Association to make such appointment, and both parties shall be bound by such
      appointment. The foregoing appraisal procedure shall in any event be completed
      no less than 190 days before the end of the Base Lease Term or the current
      Renewal Lease Term, as the case may be. If three Appraisers are appointed and
      the difference between the determination which is farther from the middle
      determination and the middle determination is more than 125% of the difference
      between the middle determination and the third determination, then such farther
      determination shall be excluded, the remaining two determinations shall be
      averaged and such average shall be final and binding upon Lessor and Lessee.
      Otherwise, the average of all three determinations shall be final and binding
      upon Lessor and Lessee. The fees and expenses of all such Appraisers and such
      appraisal procedure shall be borne equally by Lessee and Lessor, provided
      that if
      Lessee elects not to renew this Lease or purchase the Aircraft following the
      conclusion of such appraisal, Lessee shall pay all expenses of such
      appraisal.

    

    
      
        
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    SECTION
      18. MISCELLANEOUS

     

    18.1 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 Lessor and Lessee with the written consent of the
      Mortgagee if required by the Trust Indenture. Each such amendment, supplement,
      waiver, modification, discharge, termination or variance shall be effective
      only
      in the specific instance and for the specific purpose for which it is given.
      No
      provision of this Agreement shall be varied or contradicted by oral
      communication, course of dealing or performance or other manner not set forth
      in
      an agreement, document or instrument in writing and signed by Lessor and
      Lessee.

     

    18.2 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.

    
       

      18.3 Third-Party
        Beneficiary

       

      This
        Agreement is not intended to, and shall not, provide any person not a party
        hereto (other than Mortgagee, the Participants, the Indenture Indemnitees
        and
        the Persons referred to in Section 4.6, with respect to matters expressly
        for their benefit in this Lease) with any rights of any nature whatsoever
        against either of the parties hereto, and no person not a party hereto (other
        than Mortgagee, the Participants, the Indenture Indemnitees and the Persons
        referred to in Section 4.6, with respect to matters expressly for their
        benefit in this Lease) shall have any right, power or privilege in respect
        of,
        or have any benefit or interest arising out of, this Agreement.

       

      18.4 Reproduction
        of Documents

       

      This
        Agreement, all annexes, 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 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 

    

    

    
      
        
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    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.

     

    18.5 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.

     

    18.6 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 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 to the Participation Agreement, or to such other address or
      number as either party hereto may hereafter specify by notice to the other
      party
      hereto. Each such notice, request, demand, authorization,
      direction, consent, 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.
       

      18.7 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

    

    

    
      
        
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    COPIES
      THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, AT THE ADDRESS SET
      FORTH PURSUANT TO SECTION 18.6. EACH PARTY HERETO HEREBY AGREES THAT
      SERVICE UPON IT, OR ANY OF ITS AGENTS, IN EACH CASE IN ACCORDANCE WITH THIS
      SECTION 18.7(c), SHALL CONSTITUTE VALID AND EFFECTIVE PERSONAL SERVICE UPON
      SUCH
      PARTY, AND EACH PARTY HERETO HEREBY AGREES THAT THE FAILURE OF ANY OF ITS AGENTS
      TO GIVE ANY NOTICE OF SUCH SERVICE TO ANY SUCH PARTY SHALL NOT IMPAIR OR AFFECT
      IN ANY WAY THE VALIDITY OF SUCH SERVICE ON SUCH PARTY OR ANY JUDGMENT RENDERED
      IN ANY ACTION OR PROCEEDING BASED THEREON.

     

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

     

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

      18.8 No
        Waiver

       

      No
        failure on the part of Lessor to exercise, and no delay by Lessor in exercising,
        any of its 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 Lessor or the
        exercise of any other right, power, remedy or privilege by Lessor. No notice
        to
        or demand on Lessee in any case shall, unless otherwise required under this
        Agreement, entitle Lessee to any other or further notice or demand in similar
        or
        other circumstances or constitute a waiver of the rights of Lessor to any
        other
        further action in any circumstances without notice or demand.

       

      18.9 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, between the parties hereto with respect
        to
        such subject matter are hereby superseded in their entireties.

      

      [This
        space intentionally left blank.]

    

    

    
      
        
          PAGE
            40

          
          

        

        
          
          

          
            

          

        

        
          Table
            of Contents

        

      

    

     

    IN
      WITNESS WHEREOF, Lessor and Lessee have each caused this Lease Agreement to
      be
      duly executed as of the day and year first above written.

     

    

    WELLS
      FARGO BANK NORTHWEST, 
NATIONAL ASSOCIATION, not in its 
individual
      capacity, except as expressly provided 
herein, but solely as Owner Trustee
      under the 
Trust Agreement, as Lessor

     

    By            

    Name:

    Title:

     

    
 

    CONTINENTAL
      AIRLINES, INC.,

    as
      Lessee

     

    
      By            

      Name:

      Title:

    

    Receipt
      of this original counterpart of the foregoing Lease Agreement is hereby
      acknowledged on this ____ day of _________, _______.

    WILMINGTON
      TRUST COMPANY,

    as
      Mortgagee

    

    

    

    
      By            

      Name:

      Title:

    

    
 

    
      
        
          PAGE
            41

          
          

        

        
          
          

          
            

          

        

        
          Table
            of Contents

        

      

    

     

    IN
      WITNESS WHEREOF, Lessor and Lessee have each caused this Lease Agreement to
      be
      duly executed as of the day and year first above written.

     

     

    WELLS
      FARGO BANK NORTHWEST, 

    NATIONAL
      ASSOCIATION, not in its 

    individual
      capacity, except as expressly provided 

    herein,
      but solely as Owner Trustee under the 

    Trust
      Agreement, as Lessor

    

    By                                                                                             
       

    Name:

    Title:

    

    CONTINENTAL
      AIRLINES, INC.,

    as
      Lessee

    

     

    By                                                                                            
       

    Name:

    Title:

    

    

    

    
      
        
          
            PAGE
              42

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
            ANNEX
              A - DEFINITIONS

            LEASE
              AGREEMENT [TN] 

          

        

      

    

     

     

    
      ANNEX
        A

       

      DEFINITIONS

       

      [SEE
        PARTICIPATION AGREEMENT ANNEX A]

      
 

      

      
        
          
            
              PAGE
                1

            

            
            

          

          
            
            

            
              

            

          

          
            
            

            
              ANNEX
                B - RETURN CONDITIONS
LEASE
                AGREEMENT [TN]

            

          

        

      

      ANNEX
        B

       

      RETURN
        CONDITIONS

       

      [OMITTED
        AS CONTAINING CONFIDENTIAL FINANCIAL INFORMATION]

      

      

      
        
          
            
              PAGE
                1

            

            
            

          

          
            
            

            
              

            

          

          
            
            

            
              ANNEX
                C - MAINTENANCE

              LEASE
                AGREEMENT
                [TN]

            

          

        

      

       

      ANNEX
        C

       

      MAINTENANCE

       

      [OMITTED
        AS CONTAINING CONFIDENTIAL FINANCIAL INFORMATION]

      

      

      
        
          
            
              PAGE
                1

            

            
            

          

          
            
            

            
              

            

          

          
            
            

            
              ANNEX
                D - INSURANCE

              LEASE
                AGREEMENT [TN]

            

          

        

      

       

      ANNEX
        D

       

      INSURANCE

       

      [OMITTED
        AS CONTAINING CONFIDENTIAL FINANCIAL INFORMATION]

       

      
 

       

      
        
          PAGE
            1

        

        
          
          

          
            

          

        

        
          
            EXHIBIT
              A - LEASE SUPPLEMENT

            LEASE
              AGREEMENT [TN]

          

        

      

       

    

     

    LEASE
      SUPPLEMENT NO.__

     

    LEASE
      SUPPLEMENT No. __, dated ________, 200_, between WELLS FARGO BANK NORTHWEST,
      NATIONAL ASSOCIATION, a national banking association, not in its individual
      capacity, but solely as Owner Trustee under the [Amended and
      Restated]1
      Trust
      Agreement [TN], dated as of [DD], with the Owner Participant named therein
      (such
      Owner Trustee, in its capacity as such Owner Trustee being herein called
“Lessor”), and CONTINENTAL AIRLINES, INC., a Delaware corporation, as Lessee
      (“Lessee”).

     

    Lessor
      and Lessee have heretofore entered into that certain Lease Agreement [TN],
      dated
      as of [DD], relating to one Embraer Model EMB-145 XR aircraft (herein called
      the
“Lease” and the defined terms therein being hereinafter used with the same
      meanings). The Lease provides for the execution and delivery of this Lease
      Supplement for the purpose of leasing the Airframe and Engines under the Lease
      as and when delivered by Lessor to Lessee in accordance with the terms
      thereof.

     

    The
      Lease
      relates to the Airframe and Engines described below, and a counterpart of the
      Lease to which this Lease Supplement is attached and of which this Lease
      Supplement is a part, is being filed for recordation on the date hereof with
      the
      Federal Aviation Administration as one document.

     

    NOW,
      THEREFORE, in consideration of the premises and other good and sufficient
      consideration, Lessor and Lessee hereby agree as follows:

     

    1. Lessee
      has been duly authorized by Lessor to accept, and does hereby irrevocably accept
      on behalf of Lessor delivery of the Aircraft under, and for all purposes of,
      the
      Aircraft Bill of Sale, the Participation Agreement and the Purchase Agreement
      Assignment.

     

    2. Lessor
      hereby delivers and leases to Lessee under the Lease and Lessee hereby accepts
      and leases from Lessor under the Lease the following described Embraer EMB-145
      XR aircraft (the “Aircraft”), which Aircraft as of the date hereof consists of
      the following components:

     

    (i) Airframe:
      U.S. Registration No. ___________; manufacturer’s serial no. ___________;
      and

     

    (ii) Engines:
      two (2) Allison AE3007A1E engines bearing, respectively, manufacturer’s serial
      nos. ___________ and ____________(each of which engines has 750 or more rated
      takeoff horsepower or the equivalent of such horsepower).

     

    3. The
      Closing Date for the Aircraft is the date of this Lease Supplement set forth
      in
      the opening paragraph hereof. 

     

    ___________________________

     1. Delete
      for New Aircraft.

    
      
        
          PAGE 
            1

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    4. Lessee
      hereby confirms to Lessor that Lessee has duly and irrevocably accepted the
      Aircraft under and for all purposes hereof, of the Lease and of the other Lessee
      Operative Agreements.

     

    5. All
      of
      the terms and provisions of this Lease Supplement are hereby incorporated by
      reference in the Lease to the same extent as if fully set forth
      therein.

     

    6. This
      Lease Supplement may be executed by the parties hereto in separate counterparts,
      each of which when so executed and delivered shall be an original, but all
      such
      counterparts shall together constitute but one and the same
      instrument.

     

    7. To
      the
      extent, if any, that this Lease Supplement constitutes chattel paper (as such
      term is defined in the Uniform Commercial Code as in effect in any applicable
      jurisdiction), no security interest in this Lease Supplement may be created
      through the transfer or possession of any counterpart other than the original
      executed counterpart, which shall be identified as the counterpart containing
      the receipt therefor executed by the Mortgagee on the signature page
      thereof.

     

    [This
      space intentionally left blank.]

    

    
      
        
          PAGE 
            2

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    IN
      WITNESS WHEREOF, Lessor and Lessee have each caused this Lease Supplement to
      be
      duly executed as of the day and year first above written.

     

    

    WELLS
      FARGO BANK NORTHWEST, 

    NATIONAL
      ASSOCIATION, not in its 

    individual
      capacity, except as
      expressly

    provided
      herein, but
      solely as Owner 

    Trustee
      under
      the
      Trust Agreement, as 

    Lessor

    

    By 
                                                                                                         

    Name:

    Title:

     

    CONTINENTAL
      AIRLINES, INC.,

    as
      Lessee

     

    By 
                                                                                                       

    Name:

    Title:

    

    
      
        
          PAGE
            3 

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
      IN
        WITNESS WHEREOF, Lessor and Lessee have each caused this Return Acceptance
        Supplement to be duly executed as of the day and year first above
        written.

    

     

    

    WELLS
      FARGO BANK NORTHWEST, 

    NATIONAL
      ASSOCIATION, not in its 

    individual
      capacity, except as expressly 

    provided
      herein, but solely as Owner 

    Trustee
      under
      the
      Trust Agreement, as 

    Lessor

    

     

    

    By                                                                                                
      

    Name:

    Title:

    

    CONTINENTAL
      AIRLINES, INC.,

    as
      Lessee

    

    

    

    By                                                                                                 

    Name:

    Title:

     

    Receipt
      of this original counterpart of the foregoing Lease Supplement is hereby
      acknowledged on this ____ day of _________, __________.

     

    WILMINGTON
      TRUST COMPANY,

    as
      Mortgagee

     

    

     

    

     

    By                                                                                          
       

    Name:

    Title:

     

    
      
        
          
            PAGE
              4 

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
            EXHIBIT
              B - RETURN ACCEPTANCE
              SUPPLEMENT

            LEASE
              AGREEMENT [TN] 

          

        

      

    

     

    RETURN
      ACCEPTANCE SUPPLEMENT

     

    RETURN
      ACCEPTANCE SUPPLEMENT dated ________, between WELLS FARGO BANK NORTHWEST,
      NATIONAL ASSOCIATION, a national banking association, not in its individual
      capacity, but solely as Owner Trustee under the [Amended and
      Restated]2
      Trust
      Agreement [TN], dated as of [DD], with the Owner Participant named therein
      (such
      Owner Trustee, in its capacity as such Owner Trustee being herein called
“Lessor”), and CONTINENTAL AIRLINES, INC., a Delaware corporation, as Lessee
      (“Lessee”).

     

    Lessor
      and Lessee have heretofore entered into that certain Lease Agreement [TN],
      dated
      as of [DD], relating to one Embraer Model EMB-145 XR aircraft (herein called
      the
“Lease” and the defined terms therein being hereinafter used with the same
      meanings). The Lease relates to the Airframe and Engines described
      below.

     

    NOW,
      THEREFORE, in consideration of the premises and other good and sufficient
      consideration, Lessor and Lessee hereby agree as follows:

     

    1. This
      Return Acceptance Supplement is executed by Lessor and Lessee to confirm that
      on
      the date hereof the following described Airframe and Engines were returned
      by
      Lessee to Lessor:

     

    (i) Airframe:
      U.S. Registration No. ______________; manufacturer’s serial no.
      __________________; and

     

    (ii) Engines:
      two (2) Allison AE3007A1E engines bearing, respectively, manufacturer’s serial
      nos. ____________________________ and _________________________.

     

    2. This
      Return Acceptance Supplement is intended to be delivered in
      _____________________.

     

    3. Lessor
      and Lessee agree that the return of the Aircraft is in compliance with Section
      5
      and Annex B of the Lease, except as set forth below:

     

    4. Lessor
      and Lessee agree that the Lease is terminated, except for the provisions thereof
      that expressly survive termination.

     

    __________________________________

     

    2 . Delete
      for New Aircraft.

     

     

    

    
      
        
          PAGE 
            1

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    IN
      WITNESS WHEREOF, Lessor and Lessee have each caused this Return Acceptance
      Supplement to be duly executed as of the day and year first above
      written.

     

    

    WELLS
      FARGO BANK NORTHWEST,

    NATIONAL
      ASSOCIATION, not in its 

    individual
      capacity, except as expressly 

    provided
      herein, but solely as Owner 

    Trustee
      under
      the
      Trust Agreement, as 

    Lessor

    

    

    By 
                                                                                      

    Name:

    Title:

     

    
 

    CONTINENTAL
      AIRLINES, INC.,

    as
      Lessee

    

    

    

    By                                                                                  

    Name:

    Title:

    
 

    
      
        
          
            PAGE 2

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
            SCHEDULE
              1 - CERTAIN TERMS

            LEASE
              AGREEMENT [TN]     

          

        

      

    

     

    CERTAIN
      TERMS

     

    [OMITTED
      AS CONTAINING CONFIDENTIAL FINANCIAL INFORMATION]

    
 

    

    

    
      
        
          
            PAGE
              1

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
            SCHEDULE
              2 - BASIC RENT

            LEASE
              AGREEMENT [TN]

          

        

      

    

    

     

    BASIC
      RENT

    

     

    
      [OMITTED
        AS CONTAINING CONFIDENTIAL FINANCIAL INFORMATION]

    

     

    
 

    

    

    

    
      
        
          
            PAGE
              1

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
            SCHEDULE
              3 - STIPULATED LOSS
              VALUE

            LEASE
              AGREEMENT [TN]          

          

        

      

    

     

    STIPULATED
      LOSS VALUE

     

     

    [OMITTED
      AS CONTAINING CONFIDENTIAL FINANCIAL INFORMATION]

    

    
      
        
          
            PAGE
              1

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
            SCHEDULE
              4 - TERMINATION VALUE

            LEASE
              AGREEMENT [TN]

          

        

      

    

     

    TERMINATION
      VALUE

     

    
[OMITTED
      AS CONTAINING CONFIDENTIAL FINANCIAL INFORMATION]

    

    

    
      
        
          
            PAGE
              1

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
            SCHEDULE
              5 - PERMITTED COUNTRIES

            LEASE
              AGREEMENT [TN]

          

        

      

    

     

    PERMITTED
      COUNTRIES

     

     

    
      
        	
                Argentina

                Australia

                Austria

                Bahamas

                Belgium

                Brazil

                Canada

                Chile

                Denmark

                Ecuador

                Egypt

                Finland

                France

                Germany

                Greece

                Hungary

                Iceland

                India

                Indonesia

                Ireland

                Italy

                Japan

              	
                Luxembourg

                Malaysia

                Malta

                Mexico

                Netherlands

                New
                  Zealand

                Norway

                Philippines

                Portugal

                Republic
                  of China (Taiwain)

                Singapore

                South
                  Africa

                South
                  Korea

                Spain

                Sweden

                Switzerland

                Thailand

                Tobago

                Trinidad

                United
                  Kingdom

                Venezuela

              

      

    

    
      
        
          
             

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
            SCHEDULE
              6 - PLACARDS
LEASE AGREEMENT
              [TN]

          

        

      

    

    
 

     

    PLACARDS

    

    Leased
      from

    

    Wells
      Fargo Bank Northwest, National Association,

    not
      in
      its individual capacity but solely as

    Owner
      Trustee, Owner and Lessor

    and

    Mortgaged
      to

    Wilmington
      Trust Company,

    not
      in
      its individual capacity but solely as MortgageeExhibit 4.9 - Form of Indenture

    
      FINAL

       

      

      
        
          

        

      

       

      TRUST
        INDENTURE AND MORTGAGE [TN]

       

      Dated
        as of [DD]

       

      Between

       

      WELLS
        FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,

      not
        in its individual capacity,

      except
        as expressly stated herein,

      but
        solely as Owner Trustee,

       

      Owner
        Trustee

       

      and

       

      WILMINGTON
        TRUST COMPANY,

      not
        in its individual capacity,

      except
        as expressly stated herein,

      but
        solely as Mortgagee,

       

      Mortgagee

       

       

       

      
        

      

       

      
 

       

      EQUIPMENT
        NOTES COVERING

      ONE
        EMBRAER EMB-145 XR AIRCRAFT

      BEARING
        U.S. REGISTRATION MARK N[REG]

      LEASED
        BY CONTINENTAL AIRLINES, INC.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

                                            TABLE
        OF CONTENTS

      
        Page

        
          	
                   

                  GRANTING
                    CLAUSE

                	
                  1

                
	
                   

                  ARTICLE
                    I

                   

                  DEFINITIONS

                	 
	
                   

                  ARTICLE
                    II

                   

                  THE
                    EQUIPMENT NOTES

                	 
	
                   

                  SECTION
                    2.01.  Form of
                    Equipment Notes

                	
                  7

                
	
                   

                  SECTION
                    2.02.  Issuance and
                    Terms of Equipment Notes

                	
                  11

                
	
                   

                  SECTION
                    2.03.  Payments from
                    Trust Indenture Estate Only

                	
                  13

                
	
                   

                  SECTION
                    2.04.  Method of
                    Payment

                	
                  14

                
	
                   

                  SECTION
                    2.05.  Application of
                    Payments

                	
                  16

                
	
                   

                  SECTION
                    2.06.  Termination of
                    Interest in Trust Indenture Estate

                	
                  17

                
	
                   

                  SECTION
                    2.07.  Registration
                    Transfer and Exchange of Equipment Notes

                	
                  17

                
	
                   

                  SECTION
                    2.08.  Mutilated,
                    Destroyed, Lost or Stolen Equipment Notes

                	
                  18

                
	
                   

                  SECTION
                    2.09.  Payment of
                    Expenses on Transfer; Cancellation

                	
                  19

                
	
                   

                  SECTION
                    2.10.  Mandatory
                    Redemptions of Equipment Notes

                	
                  19

                
	
                   

                  SECTION
                    2.11.  [Reserved]

                	
                  19

                
	
                   

                  SECTION
                    2.12.  Redemptions;
                    Notice of Redemption

                	
                  19

                
	
                   

                  SECTION
                    2.13.  Option to
                    Purchase Equipment Notes

                	
                  20

                
	
                   

                  SECTION
                    2.14.  Priority of
                    Distributions

                	
                  21

                
	
                   

                  ARTICLE
                    III

                   

                  RECEIPT,
                    DISTRIBUTION AND APPLICATION
                    OF INCOME FROM THE TRUST INDENTURE ESTATE

                	 
	
                   

                  SECTION
                    3.01.  Basic Rent
                    Distribution

                	
                  21

                
	
                   

                  SECTION
                    3.02.  Event of Loss;
                    Replacement; Voluntary Termination; Optional Redemption

                	
                  22

                
	
                   

                  SECTION
                    3.03.  Payments After
                    Event of Default

                	
                  23

                
	
                   

                  SECTION
                    3.04.  Certain
                    Payments

                	
                  24

                
	
                   

                  SECTION
                    3.05.  Other
                    Payments

                	
                  24

                
	
                   

                  SECTION
                    3.06.  Payments to
                    Owner Trustee

                	
                  25

                

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        TABLE
          OF CONTENTS

        (Continued)

        Page

         

        
          	
                  ARTICLE
                    IV 

                   

                  COVENANTS
                    OF OWNER TRUSTEE; EVENTS OF
                    DEFAULT; REMEDIES OF MORTGAGEE

                	 
	
                   

                  SECTION
                    4.01.  Covenants of
                    Owner Trustee

                	
                  25

                
	
                   

                  SECTION
                    4.02.  Event of
                    Default

                	
                  26

                
	
                   

                  SECTION
                    4.03.  Certain
                    Rights

                	
                  28

                
	
                   

                  SECTION
                    4.04.  Remedies

                	
                  30

                
	
                   

                  SECTION
                    4.05.  Return of
                    Aircraft, Etc.

                	
                  32

                
	
                   

                  SECTION
                    4.06.  Remedies
                    Cumulative

                	
                  33

                
	
                   

                  SECTION
                    4.07.  Discontinuance
                    of Proceedings

                	
                  34

                
	
                   

                  SECTION
                    4.08.  Waiver of Past
                    Defaults

                	
                  34

                
	
                   

                  SECTION
                    4.09.   Appointment
                    of Receiver

                	
                  34

                
	
                   

                  SECTION
                    4.10.  Mortgagee
                    Authorized to Execute Bills of Sale, Etc.

                	
                  34

                
	
                   

                  SECTION
                    4.11.  Rights of Note
                    Holders to Receive Payment

                	
                  35

                
	
                   

                  ARTICLE
                    V 

                   

                  DUTIES
                    OF THE MORTGAGEE

                	 
	
                   

                  SECTION
                    5.01.  Notice of
                    Event of Default

                	
                  35

                
	
                   

                  SECTION
                    5.02.  Action upon
                    Instructions; Certain Rights and Limitations

                	
                  35

                
	
                   

                  SECTION
                    5.03.  Indemnification

                	
                  38

                
	
                   

                  SECTION
                    5.04.  No Duties
                    Except as Specified in Trust Indenture or Instruction

                	
                  39

                
	
                   

                  SECTION
                    5.05.  No Action
                    Except Under Lease, Trust Indenture or Instructions

                	
                  39

                
	
                   

                  SECTION
                    5.06.  Replacement
                    Airframes and Replacement Engines

                	
                  39

                
	
                   

                  SECTION
                    5.07.  Indenture
                    Supplements for Replacements

                	
                  39

                
	
                   

                  SECTION
                    5.08.  Effect of
                    Replacement

                	
                  40

                
	
                   

                  SECTION
                    5.09.  Investment of
                    Amounts Held by Mortgagee

                	
                  40

                
	
                   

                  ARTICLE
                    VI 

                   

                  THE
                    OWNER TRUSTEE AND THE
                    MORTGAGEE

                	 
	
                   

                  SECTION
                    6.01.  Acceptance of
                    Trusts and Duties

                	
                  40

                
	
                   

                  SECTION
                    6.02.  Absence of
                    Duties

                	
                  41

                
	
                   

                  SECTION
                    6.03.  No
                    Representations or Warranties as to Aircraft or Documents

                	
                  41

                

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        TABLE
          OF CONTENTS

        (Continued)

        Page

         

        
          	
                   

                  SECTION
                    6.04.  No Segregation
                    of Monies; No Interest

                	
                  42

                
	
                   

                  SECTION
                    6.05.  Reliance;
                    Agreements; Advice of Counsel

                	
                  42

                
	
                   

                  SECTION
                    6.06.  Capacity in
                    Which Acting

                	
                  43

                
	
                   

                  SECTION
                    6.07.  Compensation

                	
                  43

                
	
                   

                  SECTION
                    6.08.  Instructions
                    from Note Holders

                	
                  43

                
	
                   

                  ARTICLE
                    VII 

                   

                  INDEMNIFICATION
                    OF MORTGAGEE BY OWNER
                    TRUSTEE

                	 
	
                   

                  SECTION
                    7.01.  Scope of
                    Indemnification

                	
                  43

                
	
                   

                  ARTICLE
                    VIII 

                   

                  SUCCESSOR
                    AND SEPARATE
                    TRUSTEES

                	 
	
                   

                  SECTION
                    8.01.  Notice of
                    Successor Owner Trustee

                	
                  44

                
	
                   

                  SECTION
                    8.02.  Resignation of
                    Mortgagee; Appointment of Successor

                	
                  44

                
	
                   

                  SECTION
                    8.03.  Appointment of
                    Additional and Separate Trustees

                	
                  46

                
	
                   

                  ARTICLE
                    IX 

                   

                  SUPPLEMENTS
                    AND AMENDMENTS TO TRUST
                    INDENTURE AND OTHER DOCUMENTS

                	 
	
                   

                  SECTION
                    9.01.  Instructions
                    of Majority; Limitations

                	
                  47

                
	
                   

                  SECTION
                    9.02.  Trustees
                    Protected

                	
                  49

                
	
                   

                  SECTION
                    9.03.  Documents
                    Mailed to Note Holders

                	
                  49

                
	
                   

                  SECTION
                    9.04.  No Request
                    Necessary for Lease Supplement or Trust Indenture Supplement

                	
                  50

                
	
                   

                  ARTICLE
                    X 

                   

                  MISCELLANEOUS

                	 
	
                   

                  SECTION
                    10.01.  Termination
                    of Trust Indenture

                	
                  50

                
	
                   

                  SECTION
                    10.02.  No Legal
                    Title to Trust Indenture Estate in Note Holders

                	
                  50

                
	
                   

                  SECTION
                    10.03.  Sale of
                    Aircraft by Mortgagee Is Binding

                	
                  51

                
	
                   

                  SECTION
                    10.04.  Trust
                    Indenture for Benefit of Owner Trustee, Mortgagee, Owner Participant,
                    Note
                    Holders and the Other Indenture Indemnitees

                	
                  51

                
	
                   

                  SECTION
                    10.05.  Notices

                	
                  51

                
	
                   

                  SECTION
                    10.06.  Severability

                	
                  51

                

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        TABLE
          OF CONTENTS

        (Continued)

        Page

        
          	
                   

                  SECTION
                    10.07.  No Oral
                    Modification or Continuing Waivers

                	
                  52

                
	
                   

                  SECTION
                    10.08.  Successors
                    and Assigns

                	
                  52

                
	
                   

                  SECTION
                    10.09.  Headings

                	
                  52

                
	
                   

                  SECTION
                    10.10.  Normal
                    Commercial Relations

                	
                  52

                
	
                   

                  SECTION
                    10.11.  Governing
                    Law; Counterpart Form

                	
                  52

                
	
                   

                  SECTION
                    10.12.  Voting by
                    Note Holders

                	
                  53

                
	
                   

                  SECTION
                    10.13.  Bankruptcy

                	
                  53

                

        

         

        EXHIBIT
          A            Form of
          Trust Indenture and Mortgage Supplement

         

        SCHEDULE
          I         Equipment Notes Amortization
          and Interest Rates

      

       

      
        
          
            

          

          
          

        

        
          iv

          
            

          

        

        
          TABLE
            OF
            CONTENTS

          
            

          

        

      

      TRUST
        INDENTURE AND MORTGAGE [TN]

       

      TRUST
        INDENTURE AND MORTGAGE [TN], dated as of [DD] (“Trust
        Indenture”), between WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, a
        national banking association, not in its individual capacity, except as
        expressly stated herein, but solely as Owner Trustee under the Trust Agreement
        referred to below (together with its successors under the Trust Agreement,
        the
“Owner Trustee”), and WILMINGTON TRUST COMPANY, a Delaware banking corporation,
        not in its individual capacity, except as expressly stated herein, but solely
        as
        Mortgagee hereunder (together with its successors hereunder, the
“Mortgagee”).

       

      W
        I T N E S S E T H

       

      WHEREAS,
        all capitalized terms used herein shall have the respective
        meanings set forth or referred to in Article I hereof;

       

      WHEREAS,
        the Owner Participant and the Owner Trustee in its
        individual capacity have entered into the Trust Agreement whereby, among
        other
        things, (i) the Owner Trustee has established a certain trust for the use
        and
        benefit of the Owner Participant subject, however, to the Trust Indenture
        Estate
        created pursuant hereto for the use and benefit of, and with the priority
        of
        payment to, the holders of Equipment Notes issued hereunder, and (ii) the
        Owner
        Trustee has been authorized and directed to execute and deliver this Trust
        Indenture;

       

      WHEREAS,
        the parties hereto desire by this Trust Indenture, among
        other things, (i) to provide for the issuance by the Owner Trustee of the
        Equipment Notes and (ii) to provide for the assignment, mortgage and pledge
        by the Owner Trustee to the Mortgagee, as part of the Trust Indenture Estate
        hereunder, among other things, of all of the Owner Trustee’s right, title and
        interest in and to the Aircraft and, except as hereinafter expressly provided,
        all of the Owner Trustee’s right, title and interest in, to and under the Lease
        and the Participation Agreement and all payments and other amounts received
        hereunder or thereunder in accordance with the terms hereof or thereof, as
        security for, among other things, the Owner Trustee’s and the Lessee’s
        obligations to the Note Holders and the Indenture Indemnitees;

       

      WHEREAS,
        all things have been done to make the Equipment Notes, when
        executed by the Owner Trustee and authenticated and delivered by the Mortgagee
        hereunder, the valid, binding and enforceable obligations of the Owner Trustee;
        and

       

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

       

      GRANTING
        CLAUSE

       

      NOW,
        THEREFORE, THIS TRUST INDENTURE AND MORTGAGE WITNESSETH, that,
        to secure the prompt payment of the Original Amount of, interest on, Make-Whole
        Amount, if any, and all other amounts due with respect to, all Equipment
        Notes
        from time to time outstanding hereunder according to their tenor and effect
        and
        to secure the 

      
        
          
          

        

        
          
          

          
            

          

        

        
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      performance
        and observance by the Owner Trustee of all the
        agreements, covenants and provisions contained herein and in the Participation
        Agreement and the Equipment Notes, for the benefit of the Note Holders, the
        Loan
        Participant and each of the Indenture Indemnitees and the prompt payment
        of all
        amounts from time to time owing hereunder, under the Participation Agreement
        and
        the Lease to the Loan Participant, the Note Holders or any Indenture Indemnitee
        by the Owner Trustee or the Lessee and for the uses and purposes and subject
        to
        the terms and provisions hereof, and in consideration of the premises and
        of the
        covenants herein contained, and of the acceptance of the Equipment Notes
        by the
        holders thereof, and for other good and valuable consideration the receipt
        and
        adequacy whereof are hereby acknowledged, the Owner Trustee has granted,
        bargained, sold, assigned, transferred, conveyed, mortgaged, pledged and
        confirmed, and does hereby grant, bargain, sell, assign, transfer, convey,
        mortgage, pledge and confirm, unto the Mortgagee, its successors in trust
        and
        assigns, for the security and benefit of the Loan Participant, the Note Holders
        and each of the Indenture Indemnitees, a first priority security interest
        in and
        mortgage lien on all right, title and interest of the Owner Trustee in, to
        and
        under the following described property, rights and privileges, whether now
        or
        hereafter acquired, other than Excluded Payments (which, collectively, excluding
        Excluded Payments but including all property hereafter specifically subject
        to
        the Lien of this Trust Indenture by the terms hereof or any supplement hereto,
        are included within, and are referred to as, the “Trust Indenture Estate”), to
        wit:

       

      (1) The
        Airframe which is one EMBRAER EMB-145 XR aircraft with
        the FAA Registration number of N[REG] and the manufacturer’s serial number of
        [MSN] and two Engines, with the manufacturer's serial numbers of CAE[E1]
        and
        CAE[E2], each of which is an Allison engine and is of 750 or more rated takeoff
        horsepower or the equivalent of such horsepower (such Airframe and Engines
        more
        particularly described in the Trust Indenture Supplement executed and delivered
        as provided herein) as the same is now and will hereafter be constituted,
        whether now owned by the Owner Trustee or hereafter acquired, leased or intended
        to be leased under the Lease, and in the case of such Engines, whether or
        not
        any such Engine shall be installed in or attached to the Airframe or any
        other
        airframe, together with (a) all Parts of whatever nature, which are from
        time to
        time included within the definitions of “Airframe” or “Engines”, whether now
        owned or hereafter acquired, including all substitutions, renewals and
        replacements of and additions, improvements, accessions and accumulations
        to the
        Airframe and Engines (other than additions, improvements, accessions and
        accumulations which constitute appliances, parts, instruments, appurtenances,
        accessories, furnishings or other equipment excluded from the definition
        of
        Parts) and (b) all Aircraft Documents;

       

      (2) All
        right, title, interest, claims and demands of the Owner
        Trustee, as Lessor, in, to and under the Lease, together with all rights,
        powers, privileges, options and other benefits of the Owner Trustee as lessor
        under the Lease, including the immediate and continuing right to receive
        and
        collect all Rent, income, revenues, issues, profits, insurance proceeds,
        condemnation awards and other payments, tenders and security now or hereafter
        payable to or receivable by the Lessor under the Lease pursuant thereto,
        and,
        subject to Section 5.02 hereof, the right to make all waivers and agreements,
        to
        give and receive copies of all notices and other instruments or communications,
        to accept surrender or redelivery of the Aircraft or any part thereof, as
        well
        as all the rights, powers and remedies on the part of the Owner Trustee as
        Lessor under the Lease, to take such action upon the occurrence of a Lease
        Event
        of Default thereunder, including the commencement, conduct and consummation
        of
        legal, administrative or other 

      
        
          
          

        

        
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      proceedings,
        as shall be permitted by the Lease or by Law, and to do
        any and all other things whatsoever which the Owner Trustee or any lessor
        is or
        may be entitled to do under or in respect of the Lease and any right to
        restitution from the Lessee or any other Person in respect of any determination
        of invalidity of the Lease;

       

      (3) All
        right, title, interest, claims and demands of the Owner
        Trustee in, to and under:

       

      (a) the
        Purchase Agreement;

       

      (b) the
        Purchase Agreement Assignment, with the Consent and
        Agreement attached thereto;

       

      (c) the
        Bills of Sale; and

       

      (d) any
        and all other contracts, agreements and instruments
        relating to the Airframe and Engines or any rights or interests therein to
        which
        the Owner Trustee is now or may hereafter be a party;

       

      together
        with all rights, powers, privileges, licenses, easements,
        options and other benefits of the Owner Trustee under each contract, agreement
        and instrument referred to in this clause (3), including the right to
        receive and collect all payments to the Owner Trustee thereunder now or
        hereafter payable to or receivable by the Owner Trustee pursuant thereto
        and,
        subject to Section 5.02 hereof, the right to make all waivers and agreements,
        to
        give and receive notices and other instruments or communications, or to take
        any
        other action under or in respect of any thereof or to take such action upon
        the
        occurrence of a default thereunder, including the commencement, conduct and
        consummation of legal, administrative or other proceedings, as shall be
        permitted thereby or by Law, and to do any and all other things which the
        Owner
        Trustee is or may be entitled to do thereunder and any right to restitution
        from
        the Lessee, the Owner Participant or any other Person in respect of any
        determination of invalidity of any thereof;

       

      (4) All
        rents, issues, profits, revenues and other income of the
        property subjected or required to be subjected to the Lien of this Trust
        Indenture, including all payments or proceeds payable to the Owner Trustee
        after
        termination of the Lease with respect to the Aircraft as the result of the
        sale,
        lease or other disposition thereof, and all estate, right, title and interest
        of
        every nature whatsoever of the Owner Trustee in and to the same;

       

      (5) Without
        limiting the generality of the foregoing, all
        insurance and requisition proceeds with respect to the Aircraft or any part
        thereof, including the insurance required under Section 11 of the Lease;

       

      (6) Without
        limiting the generality of the foregoing, all rights
        of the Owner Trustee to amounts paid or payable by Lessee to the Owner Trustee
        under the Participation Agreement and all rights of the Owner Trustee to
        enforce
        payments of any such amounts thereunder;

       

      (7) Without
        limiting the generality of the foregoing, all monies
        and securities from time to time deposited or required to be deposited with
        the
        Mortgagee pursuant to any 

      
        
          
          

        

        
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      terms
        of this Trust Indenture or the Lease or required hereby or by
        the Lease to be held by the Mortgagee hereunder as security for the obligations
        of the Lessee under the Lease or of the Owner Trustee hereunder; and

       

      (8) All
        proceeds of the foregoing; 

       

      excluding,
        however, in all events from each of foregoing clauses (1)
        through (8) inclusive all Excluded Payments and the right to specifically
        enforce the same or to sue for damages for the breach thereof as provided
        in
        Section 5.02 hereof.

       

      Concurrently
        with the delivery of this Trust Indenture, the Owner
        Trustee will deliver to the Mortgagee the original executed counterpart of
        the
        Lease and the Lease Supplement No. 1 (to each of which a chattel paper receipt
        is attached), and executed copies of the Participation Agreement and the
        Purchase Agreement (to the extent assigned by the Purchase Agreement
        Assignment), the Purchase Agreement Assignment, with the Consent and Agreement
        attached thereto.

       

      TO
        HAVE AND TO HOLD all and singular the aforesaid property unto the
        Mortgagee, and its successors and assigns, in trust for the equal and
        proportionate benefit and security of the Loan Participant, the Note Holders
        and
        the Indenture Indemnitees, except as provided in Section 2.14 and Article
        III
        hereof without any preference, distinction or priority of any one Equipment
        Note
        over any other by reason of priority of time of issue, sale, negotiation,
        date
        of maturity thereof or otherwise for any reason whatsoever, and for the uses
        and
        purposes and in all cases and as to all property specified in paragraphs
        (1)
        through (8) inclusive above, subject to the terms and provisions set forth
        in
        this Trust Indenture.

       

      It
        is expressly agreed that anything herein contained to the contrary
        notwithstanding, the Owner Trustee shall remain liable under the Indenture
        Agreements, to perform all of the obligations assumed by it thereunder, except
        to the extent prohibited or excluded from doing so pursuant to the terms
        and
        provisions thereof, and the Mortgagee, the Loan Participant, the Note Holders
        and the Indenture Indemnitees shall have no obligation or liability under
        the
        Indenture Agreements, by reason of or arising out of the assignment hereunder,
        nor shall the Mortgagee, the Loan Participant, the Note Holders or the Indenture
        Indemnitees be required or obligated in any manner to perform or fulfill
        any
        obligations of the Owner Trustee under or pursuant to the Indenture Agreements,
        or, except as herein expressly provided, to make any payment, or to make
        any
        inquiry as to the nature or sufficiency of any payment received by it, or
        present or file any claim, or take any action to collect or enforce the payment
        of any amounts which may have been assigned to it or to which it may be entitled
        at any time or times.

       

      The
        Owner Trustee does hereby constitute the Mortgagee the true and
        lawful attorney of the Owner Trustee, irrevocably, granted for good and valuable
        consideration and coupled with an interest and with full power of substitution,
        and with full power (in the name of the Owner Trustee or otherwise) to ask
        for,
        require, demand, receive, compound and give acquittance for any and all monies
        and claims for monies (in each case including insurance and requisition proceeds
        but in all cases excluding Excluded Payments) due and to become due under
        or
        arising out of the Indenture Agreements, and all other property which now
        or
        hereafter 

      
        
          
          

        

        
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      constitutes
        part of the Trust Indenture Estate, to endorse any checks
        or other instruments or orders in connection therewith and to file any claims
        or
        to take any action or to institute any proceedings which the Mortgagee may
        deem
        to be necessary or advisable in the premises. Without limiting the generality
        of
        the foregoing, but subject to the rights of the Owner Trustee and the Owner
        Participant under Sections 2.13, 4.03 and 4.04(a) hereof, during the continuance
        of any Event of Default under this Trust Indenture, the Mortgagee shall have
        the
        right under such power of attorney to accept any offer in connection with
        the
        exercise of remedies as set forth herein of any purchaser to purchase the
        Airframe and Engines and upon such purchase to execute and deliver in the
        name
        of and on behalf of the Owner Trustee an appropriate bill of sale and other
        instruments of transfer relating to the Airframe and Engines, when purchased
        by
        such purchaser, and to perform all other necessary or appropriate acts with
        respect to any such purchase, and in its discretion to file any claim or
        take
        any other action or proceedings, either in its own name or in the name of
        the
        Owner Trustee or otherwise, which the Mortgagee may deem necessary or
        appropriate to protect and preserve the right, title and interest of the
        Mortgagee in and to such Rents and other sums and the security intended to
        be
        afforded hereby; provided, however, that no action of the
        Mortgagee pursuant to this paragraph shall increase the obligations or
        liabilities of the Owner Trustee to any Person beyond those obligations and
        liabilities specifically set forth in this Trust Indenture and in the other
        Operative Agreements. Under the Lease, Lessee is directed, so long as this
        Trust
        Indenture shall not have been fully discharged, to make all payments of Rent
        (other than Excluded Payments) and all other amounts which are required to
        be
        paid to or deposited with the Owner Trustee pursuant to the Lease (other
        than
        Excluded Payments) directly to, or as directed by, the Mortgagee at such
        address
        or addresses as the Mortgagee shall specify, for application as provided
        in this
        Trust Indenture. The Owner Trustee agrees that promptly upon receipt thereof,
        it
        will transfer to the Mortgagee any and all monies from time to time received
        by
        it constituting part of the Trust Indenture Estate, for distribution by the
        Mortgagee pursuant to this Trust Indenture, except that the Owner Trustee
        shall
        accept for distribution pursuant to the Trust Agreement any amounts distributed
        to it by the Mortgagee under this Trust Indenture.

       

      The
        Owner Trustee agrees that at any time and from time to time, upon
        the written request of the Mortgagee, the Owner Trustee will promptly and
        duly
        execute and deliver or cause to be duly executed and delivered any and all
        such
        further instruments and documents as the Mortgagee may reasonably deem necessary
        or desirable to perfect, preserve or protect the mortgage, security interests
        and assignments created or intended to be created hereby or to obtain for
        the
        Mortgagee the full benefits of the assignment hereunder and of the rights
        and
        powers herein granted.

       

      The
        Owner Trustee does hereby warrant and represent that it has not
        assigned or pledged, and hereby covenants and agrees that it will not assign
        or
        pledge, so long as the assignment hereunder shall remain in effect, and the
        Lien
        hereof shall not have been released pursuant to Section 10.01 hereof, any
        of its
        right, title or interest hereby assigned, to anyone other than the Mortgagee,
        and that it will not, except as otherwise provided in this Trust Indenture
        and
        except with respect to Excluded Payments to which it is entitled, (i) accept
        any
        payment from Lessee under any Indenture Agreement, (ii) enter into any agreement
        amending or supplementing any Indenture Agreement, (iii) execute any waiver
        or
        modification of, or consent under, the terms of, or exercise any rights,
        powers
        or privileges under, any Indenture Agreement, (iv) settle or compromise any
        claim arising under any Indenture Agreement or (v) submit or 

      
        
          
          

        

        
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      consent
        to the submission of any dispute, difference or other matter
        arising under or in respect of any Indenture Agreement to arbitration
        thereunder.

       

      The
        Owner Trustee does hereby agree that it will not without the
        written consent of the Mortgagee:

       

      (a) receive
        or collect or agree to the receipt or collection of
        any payment (other than Excluded Payments) of Rent, including Basic Rent,
        Stipulated Loss Value, Termination Value or any other payment to be made
        pursuant to Section 9 or 10 of the Lease prior to the date for the payment
        thereof provided for by the Lease or assign, transfer or hypothecate (other
        than
        to the Mortgagee hereunder) any payment of Rent, including Basic Rent,
        Stipulated Loss Value, Termination Value or any other payment to be made
        pursuant to Section 9 or 10 of the Lease, then due or to accrue in the future
        under the Lease in respect of the Airframe and Engines; or

       

      (b) except
        as contemplated by the Trust Agreement in connection
        with the appointment of a successor owner trustee, sell, mortgage, transfer,
        assign or hypothecate (other than to the Mortgagee hereunder) its interest
        in
        the Airframe and Engines or any part thereof or in any amount to be received
        by
        it from the use or disposition of the Airframe and Engines, other than amounts
        distributed to it pursuant to Article III hereof.

       

      It
        is hereby further agreed that any and all property described or
        referred to in the granting clauses hereof which is hereafter acquired by
        the
        Owner Trustee shall ipso facto, and without any other conveyance,
        assignment or act on the part of the Owner Trustee or the Mortgagee, become
        and
        be subject to the Lien herein granted as fully and completely as though
        specifically described herein, but nothing contained in this paragraph shall
        be
        deemed to modify or change the obligations of the Owner Trustee contained
        in the
        foregoing paragraphs.

       

      The
        Owner Trustee does hereby ratify and confirm the Lease and does
        hereby agree that it will not violate any covenant or agreement made by it
        therein, herein or in any other Owner Trustee Agreement.

       

      Notwithstanding
        the Granting Clause or any of the preceding
        paragraphs, all Excluded Payments are hereby excluded from the foregoing
        sale,
        transfer, assignment, grant, pledge and security interest. Further, nothing
        in
        the Granting Clause or the preceding paragraphs shall impair any of the rights
        of the Owner Trustee or the Owner Participant under Section 2.13, 4.03, 4.04,
        4.08, 5.02 or 5.03 hereof.

       

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

      
        
          
          

        

        
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      ARTICLE
        I

       

      DEFINITIONS

       

      Capitalized
        terms used but not defined herein shall have the
        respective meanings set forth or incorporated by reference, and shall be
        construed in the manner described, in Annex A to the Lease.

       

      ARTICLE
        II

       

      THE
        EQUIPMENT NOTES

       

      SECTION
        2.01. Form of
        Equipment Notes.

       

      The
        Equipment Notes shall be substantially in the form set forth
        below:

       

      THIS
        EQUIPMENT NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE
        SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR PURSUANT TO THE SECURITIES
        LAWS OF ANY STATE. ACCORDINGLY, THIS EQUIPMENT NOTE MAY NOT BE SOLD UNLESS
        EITHER REGISTERED UNDER THE ACT AND SUCH APPLICABLE STATE LAWS OR AN EXEMPTION
        FROM SUCH REGISTRATIONS IS AVAILABLE.

       

      WELLS
        FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,

       

      AS
        OWNER TRUSTEE UNDER [AMENDED AND RESTATED]1 TRUST
        AGREEMENT [TN]

       

      DATED
        AS OF [DDC].

       

      LIMITED
        RECOURSE EQUIPMENT NOTE DUE [____] ISSUED IN CONNECTION
        WITH THE EMBRAER MODEL EMB-145 XR AIRCRAFT BEARING UNITED STATES REGISTRATION
        NUMBER N[REG].

      

      
        	
                 

                No.
                  ____

              	 	
                 

                Date:
                  [__________, ____]

              
	 	
                 

                $_______________________

              	 
	
                 

                INTEREST
                  RATE

              	 	
                 

                MATURITY
                  DATE

              
	
                 

                [___________]

              	 	
                 

                [____________]

              

      

       

      WELLS
        FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its
        individual capacity but solely as Owner Trustee (herein in such capacity
        called
        the “Owner 

       

      ___________________________

       

      1. Delete
        for New Aircraft.

      
        
          
          

        

        
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      Trustee”)
        under that certain [Amended and Restated]2 Trust
        Agreement [TN], dated as of [DD], between the Owner Participant named therein
        and Wells Fargo Bank Northwest, National Association (herein as such Trust
        Agreement may be supplemented or amended from time to time called the “Trust
        Agreement”), hereby promises to pay to WILMINGTON TRUST COMPANY, or the
        registered assignee thereof, the principal sum of $____________ (the “Original
        Amount”), together with interest on the amount of the Original Amount remaining
        unpaid from time to time (calculated on the basis of a year of 360 days
        comprised of twelve 30-day months) from the date hereof until paid in full
        at a
        rate per annum equal to the Debt Rate. The Original Amount of this Equipment
        Note shall be payable in installments on the dates set forth in Schedule
        I
        hereto equal to the corresponding percentage of the Original Amount of this
        Equipment Note set forth in Schedule I hereto. Accrued but unpaid interest
        shall
        be due and payable in monthly installments commencing on [__________, 200_],
        and
        thereafter on the first day of each month, to and including [_______________].
        Notwithstanding the foregoing, the final payment made on this Equipment Note
        shall be in an amount sufficient to discharge in full the unpaid Original
        Amount
        and all accrued and unpaid interest on, and any other amounts due under,
        this
        Equipment Note. Notwithstanding anything to the contrary contained herein,
        if
        any date on which a payment under this Equipment Note becomes due and payable
        is
        not a Business Day, then such payment shall not be made on such scheduled
        date
        but shall be made on the next succeeding Business Day and if such payment
        is
        made on such next succeeding Business Day, no interest shall accrue on the
        amount of such payment during such extension.

       

      For
        purposes hereof, the term “Trust Indenture” means the Trust
        Indenture and Mortgage [TN], dated as of [DD], between the Owner Trustee
        and
        Wilmington Trust Company (the “Mortgagee”), as the same may be amended or
        supplemented from time to time. All other capitalized terms used in this
        Equipment Note and not defined herein shall have the respective meanings
        assigned in the Trust Indenture.

       

      This
        Equipment Note shall bear interest, payable on demand, at the
        Payment Due Rate (calculated on the basis of a year of 360 days comprised
        of
        twelve 30-day months) on any overdue Original Amount, any overdue Make-Whole
        Amount, if any, and (to the extent permitted by applicable Law) any overdue
        interest and any other amounts payable hereunder which are overdue, in each
        case
        for the period the same is overdue. Amounts shall be overdue if not paid
        when
        due (whether at stated maturity, by acceleration or otherwise).

       

      All
        payments of Original Amount, interest, Make-Whole Amount, if any,
        and other amounts, if any, to be made by the Owner Trustee hereunder and
        under
        the Trust Indenture or the Participation Agreement shall be payable only
        from
        the income and proceeds from the Trust Estate to the extent included in the
        Trust Indenture Estate and only to the extent that the Owner Trustee shall
        have
        sufficient income or proceeds from the Trust Estate to the extent included
        in
        the Trust Indenture Estate to enable the Mortgagee to make such payments
        in
        accordance with the terms of Section 2.03 and Article III of the Trust
        Indenture, and each holder hereof, by its acceptance of this Equipment Note,
        agrees that it will look solely to the income and proceeds from the Trust
        Indenture Estate to the extent available for distribution to the holder hereof
        as above provided and that none of the Owner Participant, the Owner Trustee
        and
        the 

       

      ___________________________

       

      2. Delete
        for New Aircraft.

      
        
          
          

        

        
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      Mortgagee
        is personally liable or liable in any manner extending to
        any assets other than the Trust Indenture Estate to the holder hereof for
        any
        amounts payable or any liability under this Equipment Note or, except as
        provided in the Trust Indenture or in the Participation Agreement, for any
        liability under the Trust Indenture or the Participation Agreement;
provided, however, that nothing herein contained shall limit,
        restrict or impair the right of the Mortgagee, subject always to the terms
        and
        provisions of the Trust Indenture, to accelerate the maturity of this Equipment
        Note upon occurrence of an Event of Default under the Trust Indenture in
        accordance with Section 4.04(b) of the Trust Indenture, to bring suit and
        obtain
        a judgment against the Owner Trustee on this Equipment Note for purposes
        of
        realizing upon the Trust Indenture Estate and to exercise all rights and
        remedies provided under the Trust Indenture or otherwise realize upon the
        Trust
        Indenture Estate as provided under the Trust Indenture.

       

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

       

      The
        Original Amount and interest and other amounts due hereunder
        shall be payable in Dollars in immediately available funds at the Corporate
        Trust Office of the Mortgagee, or as otherwise provided in the Trust Indenture.
        Each such payment shall be made on the date such payment is due and without
        any
        presentment or surrender of this Equipment Note, except that in the case
        of any
        final payment with respect to this Equipment Note, the Equipment Note shall
        be
        surrendered promptly thereafter to the Mortgagee for cancellation.

       

      The
        holder hereof, by its acceptance of this Equipment Note, agrees
        that, except as provided in the Trust Indenture, each payment of the Original
        Amount, Make-Whole Amount, if any, and interest received by it hereunder
        shall
        be applied, first, to the payment of accrued interest on this Equipment
        Note (as well as any interest on any overdue Original Amount, any overdue
        Make-Whole Amount, if any, or, to the extent permitted by Law, any overdue
        interest and other amounts hereunder) to the date of such payment,
second, to the payment of the Original Amount of this Equipment Note then
        due, third, to the payment of Make-Whole Amount, if any, and any other
        amount due hereunder or under the Trust Indenture, and fourth, the
        balance, if any, remaining thereafter, to the payment of installments of
        the
        Original Amount of this Equipment Note remaining unpaid in the inverse order
        of
        their maturity.

       

      This
        Equipment Note is one of the Equipment Notes referred to in the
        Trust Indenture which have been or are to be issued by the Owner Trustee
        pursuant to the terms of the Trust Indenture. The Trust Indenture Estate
        is held
        by the Mortgagee as security, in part, for the Equipment Notes. The provisions
        of this Equipment Note are subject to the Trust Indenture. Reference is hereby
        made to the Trust Indenture for a complete statement of the rights and
        obligations of the holder of, and the nature and extent of the security for,
        this Equipment Note and the rights and obligations of the holders of, and
        the
        nature and extent of the security for, any other Equipment Notes executed
        and
        delivered under the Trust Indenture, as well as for a statement of the terms
        and
        conditions of the Trust created by the Trust Indenture, to all of which terms
        and conditions in the Trust Indenture each holder hereof agrees by its
        acceptance of this Equipment Note.

      
        
          
          

        

        
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      As
        provided in the Trust Indenture and subject to certain limitations
        therein set forth, this Equipment Note is exchangeable for a like aggregate
        Original Amount of Equipment Notes of different authorized denominations,
        as
        requested by the holder surrendering the same.

       

      Prior
        to due presentment for registration of transfer of this
        Equipment Note, the Owner Trustee and the Mortgagee shall treat the person
        in
        whose name this Equipment Note is registered as the owner hereof for all
        purposes, whether or not this Equipment Note be overdue, and neither the
        Owner
        Trustee nor the Mortgagee shall be affected by notice to the contrary.

       

      This
        Equipment Note is subject to redemption as provided in Sections
        2.10 and 2.12 of the Trust Indenture but not otherwise. This Equipment Note
        is
        also subject to exchange and to purchase by the Owner Participant or the
        Owner
        Trustee as provided in Section 2.13 of the Trust Indenture but not otherwise.
        In
        addition, this Equipment Note may be accelerated as provided in Section 4.04
        of
        the Trust Indenture.

       

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

       

      THIS
        EQUIPMENT NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
        WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.

       

      *
        * *

       

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

       

      WELLS
        FARGO BANK NORTHWEST, 

      NATIONAL
        ASSOCIATION, not in its individual 

      capacity
        but solely as Owner Trustee

       

      By:_____________________________________

           
Name:

           
Title:

       

      MORTGAGEE’S
        CERTIFICATE OF AUTHENTICATION

       

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

       

      WILMINGTON
        TRUST COMPANY, as Mortgagee

       

      By:_____________________________________

           
Name:

           
Title:

      
        
          
          

        

        
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      SCHEDULE
        I

       

      EQUIPMENT
        NOTE AMORTIZATION

      

      
        	
                 

                 

                 

                Payment
                  Date

              	
                 

                Percentage
                  of

                Original
                  Amount

                to
                  Be Paid

              
	 	 

      

       

      [SEE
        SCHEDULE I TO TRUST INDENTURE

       

      WHICH
        IS INSERTED UPON ISSUANCE]

       

      *
        * *

       

      SECTION
        2.02. Issuance
        and Terms of Equipment Notes.

       

      The
        Equipment Notes shall be dated the date of issuance thereof and
        shall have the maturity date and shall bear interest as specified in Schedule
        I
        hereto. On the date of the consummation of the Transactions, the initial
        Equipment Note shall be issued in the initial Original Amount set forth in
        Schedule I hereto to the Subordination Agent on behalf of the Pass Through
        Trustee under the Pass Through Trust Agreement. The Equipment Notes shall
        be
        issued in registered form only. The Equipment Notes shall be issued in
        denominations of $1,000 and integral multiples thereof, except that one
        Equipment Note may be in an amount that is not an integral multiple of
        $1,000.

       

      Each
        Equipment Note shall bear interest at the Debt Rate (calculated
        on the basis of a year of 360 days comprised of twelve 30-day months) on
        the
        unpaid Original Amount thereof from time to time outstanding, payable in
        arrears
        on [_________, 200_], and on the first day of each month thereafter until
        maturity. The Original Amount of each Equipment Note shall be payable on
        the
        dates and in the installments equal to the corresponding percentage of the
        Original Amount as set forth in Schedule I hereto which shall be attached
        as
        Schedule I to the Equipment Notes. Notwithstanding the foregoing, the final
        payment made under each Equipment Note shall be in an amount sufficient to
        discharge in full the unpaid Original Amount and all accrued and unpaid interest
        on, and any other amounts due under, such Equipment Note. Each Equipment
        Note
        shall bear interest at the Payment Due Rate (calculated on the basis of a
        year
        of 360 days comprised of twelve 30-day months) on any part of the Original
        Amount, Make-Whole Amount, if any, and, to the extent permitted by applicable
        Law, interest and any other amounts payable thereunder not paid when due
        for any
        period during which the same shall be overdue, in each case for the period
        the
        same is overdue. Amounts shall be overdue if not paid when due (whether at
        stated maturity, by acceleration or otherwise). Notwithstanding anything
        to the
        contrary contained herein, if any date on which a payment under any Equipment
        Note becomes due and payable is not a Business Day then such payment shall
        not
        be made on such scheduled date but shall be made on the next succeeding Business
        Day and if such payment is made on such next succeeding Business Day, no
        interest shall accrue on the amount of such payment during such
        extension.

      
        
          
          

        

        
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      The
        Owner Trustee agrees to pay to the Mortgagee for distribution in
        accordance with Section 3.04 hereof: (i) to the extent not payable
        (whether or not in fact paid) under Section 6(a) of the Note Purchase Agreement
        (as originally in effect or amended with the consent of the Owner Participant),
        an amount or amounts equal to the fees payable to the Liquidity Provider
        under
        Section 2.03 of the Liquidity Facility and the related Fee Letter (as defined
        in
        the Intercreditor Agreement) multiplied by a fraction the numerator of which
        shall be the then outstanding aggregate principal amount of the Equipment
        Notes
        and the denominator of which shall be the then outstanding aggregate principal
        amount of all “Equipment Notes” (as defined in the Intercreditor Agreement);
        (ii) (x) the amount equal to interest on any Downgrade Advance (other than
        any Applied Downgrade Advance) payable under Section 3.07 of the Liquidity
        Facility minus Investment Earnings from such Downgrade Advance multiplied
        by (y)
        the fraction specified in the foregoing clause (i); (iii) (x) the amount
        equal
        to interest on any Special Termination Advance (other than any Applied Special
        Termination Advance) payable under Section 3.07 of the Liquidity Facility
        minus
        Investment Earnings from such Special Termination Advance multiplied by
        (y) the fraction specified in the foregoing clause (i); (iv) (x) the amount
        equal to interest on any Early Termination Advance (other than any Applied
        Early
        Termination Advance) payable under Section 3.07 of the Liquidity Facility
        minus
        Investment Earnings from such Early Termination Advance multiplied by (y)
        the
        fraction specified in the foregoing clause (i); and (v) if any payment default
        shall have occurred and be continuing with respect to interest on any Equipment
        Notes, (x) the excess, if any, of (1) an amount equal to interest on
        any Unpaid Advance, Applied Downgrade Advance, Applied Special Termination
        Advance or Applied Early Termination Advance payable under Section 3.07 of
        the
        Liquidity Facility over (2) the sum of Investment Earnings from any Final
        Advance plus any amount of interest at the Payment Due Rate actually payable
        (whether or not in fact paid) by Owner Trustee on the overdue scheduled interest
        on the Equipment Notes in respect of which such Unpaid Advance, Applied
        Downgrade Advance, Applied Special Termination Advance or Applied Early
        Termination Advance was made multiplied by (y) a fraction the numerator of
        which
        shall be the then aggregate overdue amounts of interest on the Equipment
        Notes
        (other than interest becoming due and payable solely as a result of acceleration
        of any such Equipment Notes) and the denominator of which shall be the then
        aggregate overdue amounts of interest on all “Equipment Notes” (as defined in
        the Intercreditor Agreement) (other than interest becoming due and payable
        solely as a result of acceleration of any such “Equipment Notes”). For purposes
        of this paragraph, (i) the terms “Applied Downgrade Advance”, “Applied
        Early Termination Advance”, “Applied Special Termination Advance”, “Downgrade
        Advance”, “Early Termination Advance”, “Final Advance”, “Investment Earnings”,
“Special Termination Advance” and “Unpaid Advance” shall have the meanings
        specified in the Liquidity Facility.

       

      The
        Equipment Notes shall be executed on behalf of the Owner Trustee
        by its President or one of its Vice Presidents, Assistant Vice Presidents
        or
        Assistant Secretaries or other authorized officer. Equipment Notes bearing
        the
        signatures of individuals who were at any time the proper officers of the
        Owner
        Trustee shall bind the Owner Trustee, notwithstanding that such individuals
        or
        any of them have ceased to hold such offices prior to the authentication
        and
        delivery of such Equipment Notes or did not hold such offices at the respective
        dates of such Equipment Notes. The Owner Trustee may from time to time execute
        and deliver Equipment Notes with respect to the Aircraft to the Mortgagee
        for
        authentication upon original issue and such Equipment Notes shall thereupon
        be
        authenticated and delivered by the Mortgagee upon the written request of
        the
        Owner Trustee signed by a Vice President or Assistant Vice President or

      
        
          
          

        

        
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      other
        authorized officer of the Owner Trustee; provided,
however, that each such request shall specify the aggregate Original
        Amount of all Equipment Notes to be authenticated hereunder on original issue
        with respect to the Aircraft. No Equipment Note shall be secured by or entitled
        to any benefit under this Trust Indenture or be valid or obligatory for any
        purposes, unless there appears on such Equipment Note a certificate of
        authentication in the form provided for herein executed by the Mortgagee
        by the
        manual signature of one of its authorized officers and such certificate upon
        any
        Equipment Notes shall be conclusive evidence, and the only evidence, that
        such
        Equipment Note has been duly authenticated and delivered hereunder.

       

      SECTION
        2.03. Payments
        from Trust Indenture Estate Only.

       

      (a) Without
        impairing any of the other rights, powers, remedies,
        privileges, liens or security interests of the Note Holders under this Trust
        Indenture, each Note Holder, by its acceptance of an Equipment Note, agrees
        that
        as between it and the Owner Trustee, except as expressly provided in this
        Trust
        Indenture, the Participation Agreement or any other Operative Agreement,
        (i) the
        obligation to make all payments of the Original Amount of, interest on,
        Make-Whole Amount, if any, and all other amounts due with respect to the
        Equipment Notes, and the performance by the Owner Trustee of every obligation
        or
        covenant contained in this Trust Indenture and in the Participation Agreement
        or
        any of the other Operative Agreements, shall be payable only from the income
        and
        proceeds from the Trust Estate to the extent included in the Trust Indenture
        Estate and only to the extent that the Owner Trustee shall have sufficient
        income or proceeds from the Trust Estate to the extent included in the Trust
        Indenture Estate to enable the Mortgagee to make such payments in accordance
        with the terms of Article III hereof, and all of the statements,
        representations, covenants and agreements made by the Owner Trustee (when
        made
        in such capacity) contained in this Trust Indenture and any agreement referred
        to herein other than the Trust Agreement, unless expressly otherwise stated,
        are
        made and intended only for the purpose of binding the Trust Estate and
        establishing the existence of rights and remedies which can be exercised
        and
        enforced against the Trust Estate; therefore, anything contained in this
        Trust
        Indenture or such other agreements to the contrary notwithstanding (except
        for
        any express provisions or representations that the Owner Trustee is responsible
        for, or is making, in its individual capacity, for which there would be personal
        liability of the Owner Trustee), no recourse shall be had with respect to
        this
        Trust Indenture or such other agreements against the Owner Trustee in its
        individual capacity or against any institution or person which becomes a
        successor trustee or co-trustee or any officer, director, trustee, servant
        or
        direct or indirect parent or controlling Person or Persons of any of them,
        and
        (ii) none of the Owner Trustee, in its individual capacity, the Owner
        Participant, the Mortgagee and any officer, director, trustee, servant,
        employee, agent or direct or indirect parent or controlling Person or Persons
        of
        any of them shall have any personal liability for any amounts payable hereunder,
        under the Participation Agreement or any of the other Operative Agreements
        or
        under the Equipment Notes except as expressly provided herein, in the Lease
        or
        in the Participation Agreement; provided, however, that nothing
        contained in this Section 2.03(a) shall be construed to limit the exercise
        and
        enforcement in accordance with the terms of this Trust Indenture or such
        other
        agreements of rights and remedies against the Trust Indenture Estate. 

      
        
          
          

        

        
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      (b) If
        (i) all or any part of the Trust Estate becomes the
        property of, or the Owner Trustee or Owner Participant becomes, a debtor
        subject
        to the reorganization provisions of the Bankruptcy Code, (ii) pursuant to
        such
        reorganization provisions, including Section 1111(b) of the Bankruptcy Code,
        the
        Owner Trustee (in its individual capacity) or the Owner Participant is required,
        by reason of the Owner Trustee (in its individual capacity) or the Owner
        Participant being held to have recourse liability to any Note Holder or the
        Mortgagee, directly or indirectly (other than the recourse liability of the
        Owner Trustee (in its individual capacity) or the Owner Participant under
        the
        Participation Agreement, the Lease or this Trust Indenture or by separate
        agreement), to make payment on account of any amount payable as Original
        Amount,
        Make-Whole Amount, if any, interest or other amounts on the Equipment Notes
        and
        (iii) any Note Holder or the Mortgagee actually receives any Excess Amount
        (as
        hereinafter defined) which reflects any payment by the Owner Trustee (in
        its
        individual capacity) or the Owner Participant on account of clause (ii) above,
        then such Note Holder or the Mortgagee, as the case may be, shall promptly
        refund to the Owner Trustee (in its individual capacity) or the Owner
        Participant (whichever shall have made such payment) such Excess Amount.

       

      For
        purposes of this Section 2.03(b), “Excess Amount” means the
        amount by which such payment exceeds the amount that would have been received
        by
        a Note Holder or the Mortgagee if the Owner Trustee (in its individual capacity)
        or the Owner Participant had not become subject to the recourse liability
        referred to in clause (ii) above. Nothing contained in this Section 2.03(b)
        shall prevent a Note Holder or the Mortgagee from enforcing any personal
        recourse obligation (and retaining the proceeds thereof) of the Owner Trustee
        (in its individual capacity) or the Owner Participant under the Participation
        Agreement, the Lease or this Trust Indenture (and any exhibits or annexes
        hereto
        or thereto) or from retaining any amount paid by Owner Participant under
        Section
        2.13 or 4.03 hereof.

       

      SECTION
        2.04. Method of
        Payment.

       

      (a) The
        Original Amount of, interest on, Make-Whole Amount, if
        any, and other amounts due under each Equipment Note or hereunder will be
        payable in Dollars by wire transfer of immediately available funds not later
        than 12:30 p.m., New York City time, on the due date of payment to the Mortgagee
        at the Corporate Trust Office for distribution among the Note Holders in
        the
        manner provided herein. The Owner Trustee shall not have any responsibility
        for
        the distribution of such payment to any Note Holder. Notwithstanding the
        foregoing or any provision in any Equipment Note to the contrary, the Mortgagee
        will use reasonable efforts to pay or cause to be paid, if so directed in
        writing by any Note Holder (with a copy to the Owner Trustee), all amounts
        paid
        by the Owner Trustee hereunder and under such holder’s Equipment Note or
        Equipment Notes to such holder or a nominee therefor (including all amounts
        distributed pursuant to Article III of this Trust Indenture) by transferring,
        or
        causing to be transferred, by wire transfer of immediately available funds
        in
        Dollars, prior to 2:00 p.m., New York City time, on the due date of payment,
        to
        an account maintained by such holder with a bank located in the continental
        United States the amount to be distributed to such holder, for credit to
        the
        account of such holder maintained at such bank. If the Mortgagee shall fail
        to
        make any such payment as provided in the immediately foregoing sentence after
        its 

      
        
          
          

        

        
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      receipt
        of funds at the place and prior to the time specified above,
        the Mortgagee, in its individual capacity and not as trustee, agrees to
        compensate such holders for loss of use of funds at the Debt Rate until such
        payment is made and the Mortgagee shall be entitled to any interest earned
        on
        such funds until such payment is made. Any payment made hereunder shall be
        made
        without any presentment or surrender of any Equipment Note, except that,
        in the
        case of the final payment in respect of any Equipment Note, such Equipment
        Note
        shall be surrendered to the Mortgagee for cancellation promptly after such
        payment. Notwithstanding any other provision of this Trust Indenture to the
        contrary, the Mortgagee shall not be required to make, or cause to be made,
        wire
        transfers as aforesaid prior to the first Business Day on which it is
        practicable for the Mortgagee to do so in view of the time of day when the
        funds
        to be so transferred were received by it if such funds were received after
        12:30
        p.m., New York City time, at the place of payment. Prior to the due presentment
        for registration of transfer of any Equipment Note, the Owner Trustee and
        the
        Mortgagee shall deem and treat the Person in whose name any Equipment Note
        is
        registered on the Equipment Note Register as the absolute owner and holder
        of
        such Equipment Note for the purpose of receiving payment of all amounts payable
        with respect to such Equipment Note and for all other purposes, and none
        of the
        Owner Trustee or the Mortgagee shall be affected by any notice to the contrary.
        So long as any signatory to the Participation Agreement or nominee thereof
        shall
        be a registered Note Holder, all payments to it shall be made to the account
        of
        such Note Holder specified in Schedule I thereto and otherwise in the manner
        provided in or pursuant to the Participation Agreement unless it shall have
        specified some other account or manner of payment by notice to the Mortgagee
        consistent with this Section 2.04.

       

      (b) The
        Mortgagee, as agent for the Owner Trustee, shall exclude
        and withhold at the appropriate rate from each payment of Original Amount
        of,
        interest on, Make-Whole Amount, if any, and other amounts due hereunder or
        under
        each Equipment Note (and such exclusion and withholding shall constitute
        payment
        in respect of such Equipment Note) any and all United States withholding
        taxes
        applicable thereto as required by Law. The Mortgagee agrees to act as such
        withholding agent and, in connection therewith, whenever any present or future
        United States taxes or similar charges are required to be withheld with respect
        to any amounts payable hereunder or in respect of the Equipment Notes, to
        withhold such amounts and timely pay the same to the appropriate authority
        in
        the name of and on behalf of the Note Holders, that it will file any necessary
        United States withholding tax returns or statements when due, and that as
        promptly as possible after the payment thereof it will deliver to each Note
        Holder (with a copy to the Owner Trustee and the Lessee) appropriate receipts
        showing the payment thereof, together with such additional documentary evidence
        as any such Note Holder may reasonably request from time to time.

       

      If
        a Note Holder which is a Non-U.S. Person has furnished to the
        Mortgagee a properly completed, accurate and currently effective U.S. Internal
        Revenue Service Form W-8BEN (or such successor form or forms as may be required
        by the United States Treasury Department) for each calendar year in which
        a
        payment is made hereunder or under the Equipment Note(s) held by such holder
        is
        made (but prior to the making of such payment), or in either of the two
        preceding calendar years, and has not notified the Mortgagee of the withdrawal
        or inaccuracy of such form prior to the date of such payment (and the Mortgagee
        has no reason 

      
        
          
          

        

        
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      to
        believe that any information set forth in such form is
        inaccurate), the Mortgagee shall withhold only the amount, if any, required
        by
        Law (after taking into account any applicable exemptions properly claimed
        by the
        Note Holder) to be withheld from payments hereunder or under the Equipment
        Notes
        held by such holder in respect of United States federal income tax. If a
        Note
        Holder (x) which is a Non-U.S. Person has furnished to the Mortgagee a properly
        completed, accurate and currently effective U.S. Internal Revenue Service
        Form
        W-8ECI in duplicate (or such successor certificate, form or forms as may
        be
        required by the United States Treasury Department as necessary in order to
        properly avoid withholding of United States federal income tax), for each
        calendar year in which a payment is made hereunder or under any Equipment
        Note
        (but prior to the making of any payment for such year), and has not notified
        the
        Mortgagee of the withdrawal or inaccuracy of such certificate or form prior
        to
        the date of such payment (and the Mortgagee has no reason to believe that
        any
        information set forth in such form is inaccurate) or (y) which is a U.S.
        Person
        has furnished to the Mortgagee a properly completed, accurate and currently
        effective U.S. Internal Revenue Service Form W-9, if applicable, prior to
        a
        payment hereunder or under the Equipment Notes held by such holder, no amount
        shall be withheld from payments in respect of United States federal income
        tax.
        If any Note Holder has notified the Mortgagee that any of the foregoing forms
        or
        certificates is withdrawn or inaccurate, or if such holder has not filed
        a form
        claiming an exemption or reduced withholding from United States withholding
        tax
        or if the Code or the regulations thereunder or the administrative
        interpretation thereof is at any time after the date hereof amended to require
        such withholding of United States federal income taxes from payments hereunder
        or under the Equipment Notes held by such holder, the Mortgagee agrees to
        withhold from each payment due to the relevant Note Holder withholding taxes
        at
        the appropriate rate under Law and will, on a timely basis as more fully
        provided above, deposit such amounts with an authorized depository and make
        such
        returns, statements, receipts and other documentary evidence in connection
        therewith as required by Law.

       

      Neither
        the Owner Trustee nor the Owner Participant shall have any
        liability for the failure of the Mortgagee to withhold taxes in the manner
        provided for herein or for any false, inaccurate or untrue evidence provided
        by
        any Note Holder hereunder.

       

      SECTION
        2.05. Application of Payments.

       

      In
        the case of each Equipment Note, each payment of Original Amount,
        Make-Whole Amount, if any, and interest due thereon shall be applied:

       

      First:
        to the payment of accrued interest on such Equipment Note (as
        well as any interest on any overdue Original Amount, any overdue Make-Whole
        Amount, if any, and to the extent permitted by Law, any overdue interest
        and any
        other overdue amounts thereunder) to the date of such payment;

       

      Second:
        to the payment of the Original Amount of such Equipment Note
        (or a portion thereof) then due thereunder;

       

      Third:
        to the payment of Make-Whole Amount, if any, and any other
        amount due hereunder or under such Equipment Note; and

      
        
          
          

        

        
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      Fourth:
        the balance, if any, remaining thereafter, to the payment of
        the Original Amount of such Equipment Note remaining unpaid (provided that
        such
        Equipment Note shall not be subject to redemption except as provided in Sections
        2.10 and 2.12 hereof).

       

      The
        amounts paid pursuant to clause “Fourth” above shall be applied
        to the installments of Original Amount of such Equipment Note in the inverse
        order of their normal maturity.

       

      SECTION
        2.06. Termination of Interest in Trust Indenture Estate.

       

      No
        Note Holder nor any other Indenture Indemnitee shall, as such,
        have any further interest in, or other right with respect to, the Trust
        Indenture Estate when and if the Original Amount of, Make-Whole Amount, if
        any,
        and interest on and other amounts due under all Equipment Notes held by such
        Note Holder and all other sums then due and payable to such Note Holder,
        such
        Indenture Indemnitee or the Mortgagee hereunder (including, without limitation,
        under the third paragraph of Section 2.02 hereof) and under the other Operative
        Agreements by the Owner Trustee and the Lessee (collectively, the “Secured
        Obligations”) shall have been paid in full.

       

      SECTION
        2.07. Registration Transfer and Exchange of Equipment
        Notes.

       

      The
        Mortgagee shall keep a register (the “Equipment Note Register”)
        in which the Mortgagee shall provide for the registration of Equipment Notes
        and
        the registration of transfers of Equipment Notes. No such transfer shall
        be
        given effect unless and until registration hereunder shall have occurred.
        The
        Equipment Note Register shall be kept at the Corporate Trust Office of the
        Mortgagee. The Mortgagee is hereby appointed “Equipment Note Registrar” for the
        purpose of registering Equipment Notes and transfers of Equipment Notes as
        herein provided. A holder of any Equipment Note intending to exchange such
        Equipment Note shall surrender such Equipment Note to the Mortgagee at the
        Corporate Trust Office, together with a written request from the registered
        holder thereof for the issuance of a new Equipment Note, specifying, in the
        case
        of a surrender for transfer, the name and address of the new holder or holders.
        Upon surrender for registration of transfer of any Equipment Note, the Owner
        Trustee shall execute, and the Mortgagee shall authenticate and deliver,
        in the
        name of the designated transferee or transferees, one or more new Equipment
        Notes of a like aggregate Original Amount. At the option of the Note Holder,
        Equipment Notes may be exchanged for other Equipment Notes of any authorized
        denominations of a like aggregate Original Amount, upon surrender of the
        Equipment Notes to be exchanged to the Mortgagee at the Corporate Trust Office.
        Whenever any Equipment Notes are so surrendered for exchange, the Owner Trustee
        shall execute, and the Mortgagee shall authenticate and deliver, the Equipment
        Notes which the Note Holder making the exchange is entitled to receive. All
        Equipment Notes issued upon any registration of transfer or exchange of
        Equipment Notes (whether under this Section 2.07 or under Section 2.08 hereof
        or
        otherwise under this Trust Indenture) shall be the valid obligations of the
        Owner Trustee evidencing the same respective obligations, and entitled to
        the
        same security and benefits under this Trust Indenture, as the Equipment Notes
        surrendered upon such registration of transfer or exchange. Every Equipment
        Note
        presented or surrendered for registration of transfer, shall (if so required
        by
        the Mortgagee) be duly endorsed, or be accompanied by a written instrument
        of
        transfer in form satisfactory to the Mortgagee duly 

      
        
          
          

        

        
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      executed
        by the Note Holder or such holder’s attorney duly authorized
        in writing, and the Mortgagee shall require evidence satisfactory to it as
        to
        the compliance of any such transfer with the Securities Act, and the securities
        Laws of any applicable state. The Mortgagee shall make a notation on each
        new
        Equipment Note of the amount of all payments of Original Amount previously
        made
        on the old Equipment Note or Equipment Notes with respect to which such new
        Equipment Note is issued and the date to which interest on such old Equipment
        Note or Equipment Notes has been paid. Interest shall be deemed to have been
        paid on such new Equipment Note to the date on which interest shall have
        been
        paid on such old Equipment Note, and all payments of the Original Amount
        marked
        on such new Equipment Note, as provided above, shall be deemed to have been
        made
        thereon. The Owner Trustee shall not be required to exchange any surrendered
        Equipment Notes as provided above during the ten-day period preceding the
        due
        date of any payment on such Equipment Note. The Owner Trustee shall in all
        cases
        deem the Person in whose name any Equipment Note shall have been issued and
        registered as the absolute owner and holder of such Equipment Note for the
        purpose of receiving payment of all amounts payable by the Owner Trustee
        with
        respect to such Equipment Note and for all purposes until a notice stating
        otherwise is received from the Mortgagee and such change is reflected on
        the
        Equipment Note Register. The Mortgagee will promptly notify the Owner Trustee
        and the Lessee of each registration of a transfer of an Equipment Note. Any
        such
        transferee of an Equipment Note, by its acceptance of an Equipment Note,
        agrees
        to the provisions of the Participation Agreement applicable to Note Holders,
        and
        shall be deemed to have covenanted to the parties to the Participation Agreement
        as to the matters covenanted by the original Loan Participant in the
        Participation Agreement. Subject to compliance by the Note Holder and its
        transferee (if any) of the requirements set forth in this Section 2.07,
        Mortgagee and Owner Trustee shall use all reasonable efforts to issue new
        Equipment Notes upon transfer or exchange within 10 Business Days of the
        date an
        Equipment Note is surrendered for transfer or exchange.

       

      SECTION
        2.08. Mutilated,
        Destroyed, Lost or Stolen Equipment Notes.

       

      If
        any Equipment Note shall become mutilated, destroyed, lost or
        stolen, the Owner Trustee shall, upon the written request of the holder of
        such
        Equipment Note, execute and the Mortgagee shall authenticate and deliver
        in
        replacement thereof a new Equipment Note, payable in the same Original Amount
        dated the same date and captioned as issued in connection with the Aircraft.
        If
        the Equipment Note being replaced has become mutilated, such Equipment Note
        shall be surrendered to the Mortgagee and a photocopy thereof shall be furnished
        to the Owner Trustee. If the Equipment Note being replaced has been destroyed,
        lost or stolen, the holder of such Equipment Note shall furnish to the Owner
        Trustee and the Mortgagee such security or indemnity as may be required by
        them
        to save the Owner Trustee and the Mortgagee harmless and evidence satisfactory
        to the Owner Trustee and the Mortgagee of the destruction, loss or theft
        of such
        Equipment Note and of the ownership thereof. If a “qualified institutional
        buyer” of the type referred to in paragraph (a)(1)(i)(A), (B), (D) or (E) of
        Rule 144A under the Securities Act (a “QIB”) or the Subordination Agent is the
        holder of any such destroyed, lost or stolen Equipment Note, then the written
        indemnity of such QIB or the Subordination Agent, signed by an authorized
        officer thereof, in favor of, delivered to and in form reasonably satisfactory
        to Lessee, Owner Trustee and Mortgagee shall be accepted as satisfactory
        indemnity and security and no further indemnity or security shall be required
        as
        a condition to the execution and delivery of such new Equipment Note. Subject
        to
        compliance by the Note Holder with the 

      
        
          
          

        

        
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      requirements
        set forth in this Section 2.08, Mortgagee and Owner
        Trustee shall use all reasonable efforts to issue new Equipment Notes within
        10
        Business Days of the date of the written request therefor from the Note
        Holder.

       

      SECTION
        2.09. Payment of
        Expenses on Transfer; Cancellation.

       

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

       

      (b) The
        Mortgagee shall cancel all Equipment Notes surrendered
        for replacement, redemption, transfer, exchange, payment or cancellation
        and
        shall destroy the canceled Equipment Notes.

       

      SECTION
        2.10. Mandatory
        Redemptions of Equipment Notes.

       

      (a) On
        the date on which Lessee is required pursuant to Section
        10.1.2 of the Lease to make payment for an Event of Loss with respect to
        the
        Aircraft, all of the Equipment Notes shall be redeemed in whole at a redemption
        price equal to 100% of the unpaid Original Amount thereof, together with
        all
        accrued interest thereon to the date of redemption and all other Secured
        Obligations owed or then due and payable to the Note Holders but without
        Make-Whole Amount.

       

      (b) If
        the Lease is terminated with respect to the Aircraft by
        Lessee pursuant to Section 9 thereof, on the date the Lease is so terminated,
        all the Equipment Notes shall be redeemed in whole at a redemption price
        equal
        to 100% of the unpaid Original Amount thereof, together with accrued interest
        thereon to the date of redemption and all other amounts then due and payable
        hereunder and under the Participation Agreement and all other Operative
        Agreements to the Note Holders plus, if such redemption is made prior to
        the
        Premium Termination Date, Make-Whole Amount, if any.

       

      SECTION
        2.11. [Reserved.]

       

      SECTION
        2.12. Redemptions; Notice of Redemption.

       

      (a) Neither
        any redemption of any Equipment Note nor any
        purchase by the Owner Trustee of any Equipment Note may be made except to
        the
        extent and in the manner expressly permitted by this Trust Indenture. No
        purchase of any Equipment Note may be made by the Mortgagee.

       

      (b) Notice
        of redemption with respect to the Equipment Notes
        shall be given by the Mortgagee by first-class mail, postage prepaid, mailed
        not
        less than 15 nor more than 60 days prior to the applicable redemption date,
        to
        each Note Holder of such Equipment Notes to be redeemed, at such Note Holder’s
        address appearing in the Equipment Note Register; provided,
however, that, in the case of a redemption to be made pursuant to
        Section
        2.10(b), such notice shall be revocable and shall be deemed 

      
        
          
          

        

        
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      revoked
        in the event that the Lease does not in fact terminate on the
        specified termination date. All notices of redemption shall state: (1) the
        redemption date, (2) the applicable basis for determining the redemption
        price,
        (3) that on the redemption date, the redemption price will become due and
        payable upon each such Equipment Note, and that, if any such Equipment Notes
        are
        then outstanding, interest on such Equipment Notes shall cease to accrue
        on and
        after such redemption date, and (4) the place or places where such Equipment
        Notes are to be surrendered for payment of the redemption price.

       

      (c) On
        or before the redemption date, the Owner Trustee (or any
        person on behalf of the Owner Trustee) shall, to the extent an amount equal
        to
        the redemption price for the Equipment Notes to be redeemed on the redemption
        date shall not then be held in the Trust Indenture Estate, deposit or cause
        to
        be deposited with the Mortgagee by 12:00 noon on the redemption date in
        immediately available funds the redemption price of the Equipment Notes to
        be
        redeemed.

       

      (d) Notice
        of redemption having been given as aforesaid (and not
        deemed revoked as contemplated in the proviso to Section 2.12(b)), the Equipment
        Notes to be redeemed shall, on the redemption date, become due and payable
        at
        the Corporate Trust Office of the Mortgagee or at any office or agency
        maintained for such purposes pursuant to Section 2.07, and from and after
        such
        redemption date (unless there shall be a default in the payment of the
        redemption price) any such Equipment Notes then outstanding shall cease to
        bear
        interest. Upon surrender of any such Equipment Note for redemption in accordance
        with said notice, such Equipment Note shall be redeemed at the redemption
        price.
        If any Equipment Note called for redemption shall not be so paid upon surrender
        thereof for redemption, the principal amount thereof shall, until paid, continue
        to bear interest from the applicable redemption date at the interest rate
        in
        effect for such Equipment Note as of such redemption date.

       

      SECTION
        2.13. Option to
        Purchase Equipment Notes.

       

      The
        Owner Trustee and the Owner Participant may, upon the events and
        subject to the terms and conditions and for the price set forth in this Section
        2.13, purchase all but not less than all of the Equipment Notes outstanding
        hereunder, and each Note Holder agrees that it will, upon such events and
        subject to such terms and conditions and upon receipt of such price, sell,
        assign, transfer and convey to such purchaser or its nominee (without recourse
        or warranty of any kind except against Liens on such Equipment Notes arising
        by,
        through or under such holder), all of the right, title and interest of such
        Note
        Holder in and to the Equipment Notes held by it, and such purchaser or its
        nominee shall assume all of such holder’s obligations under the Participation
        Agreement and hereunder.

       

      Such
        option to purchase the Equipment Notes may be exercised by the
        Owner Trustee or the Owner Participant at any time following the occurrence
        of
        any of the following events, and in any such event the purchase price thereof
        shall equal for each Equipment Note, the aggregate unpaid Original Amount
        thereof, plus accrued and unpaid interest thereon to, but not including,
        the
        date of purchase and all other Secured Obligations owed, or then due and
        payable
        hereunder, to the holder thereof (including under the third paragraph of
        Section
        2.02 hereof). Such option to purchase the Equipment Notes may be exercised
        (x) upon a Mortgagee Event or 

      
        
          
          

        

        
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      (y) in
        the event there shall have occurred and be continuing a
        Lease Event of Default, provided, however, that if such option is
        exercised prior to the Premium Termination Date pursuant to clause (y) at a
        time when there shall have occurred and be continuing for less than
        120 days a Lease Event of Default, the purchase price thereof shall equal
        the price provided in the preceding sentence plus the Make-Whole Amount,
        if
        any.

       

      Such
        option to purchase the Equipment Notes may be exercised by the
        Owner Trustee or the Owner Participant giving irrevocable written notice
        of its
        election of such option to the Mortgagee, which notice shall specify a date
        for
        such purchase at least 15 days but not more than 20 days from the date of
        such
        notice. The Mortgagee shall not exercise any of the remedies hereunder and,
        without the consent of the Owner Trustee or the Owner Participant, under
        the
        Lease, during the period from the date of the giving of such notice until
        the
        date on which such purchase is required to occur pursuant to the terms of
        the
        preceding sentence.

       

      If
        the Owner Trustee or the Owner Participant on or before the date
        of such purchase shall so request, the Note Holders will comply with all
        the
        provisions of Section 2.07 to enable new Equipment Notes to be issued to
        the
        Owner Trustee or the Owner Participant or its nominee in such denominations
        as
        the Owner Trustee or the Owner Participant shall request. All taxes, charges
        and
        expenses required pursuant to Section 2.09 in connection with the issuance
        of
        such new Equipment Note shall be borne by the Owner Participant.

       

      SECTION
        2.14. Priority
        of Distributions.

       

      The
        Owner Trustee and, by acceptance of its Equipment Notes, each
        Note Holder, hereby agree that no payment or distribution shall be made on
        or in
        respect of the Secured Obligations owed to such Note Holder, including any
        payment or distribution of cash, property or securities after the commencement
        of a proceeding of the type referred to in Section 4.02(g) hereof, except
        as
        expressly provided in Article III hereof.

       

      ARTICLE
        III

       

      RECEIPT,
        DISTRIBUTION AND APPLICATION OF

      INCOME
        FROM THE TRUST INDENTURE ESTATE

       

      SECTION
        3.01. Basic Rent
        Distribution.

       

      Except
        as otherwise provided in Sections 3.02 and 3.03 hereof, each
        installment of Basic Rent, any payment of interest on overdue installments
        of
        Basic Rent and any payment received by the Mortgagee pursuant to Section
        4.03
        hereof shall be promptly distributed in the following order of priority:

       

      
        	
              	
                First,

              	
                so much of such installment or payment as shall
                  be
                  required to pay in full the aggregate amount of the payment or
                  payments of
                  Original Amount and interest (as well as any interest on any overdue
                  Original Amount and, to the extent permitted by Law, on any overdue
                  interest) then due under all Equipment Notes shall be distributed
                  to the
                  Note Holders ratably, without priority of one over the other, in
                  the
                  proportion that the amount of such payment or payments then due
                  

              

      

      
        
          
          

        

        
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                under each Equipment Note bears to the aggregate
                  amount of
                  the payments then due under all Equipment
                  Notes;

              

      

       

      
        	
              	
                Second,    

              	
                the balance, if any, of such installment remaining
                  thereafter shall be distributed to the Owner Trustee; provided,
                  however, that if an Event of Default shall have occurred and be
                  continuing, then such balance shall not be distributed as provided
                  in this
                  clause “Second” but shall be held by the Mortgagee as part of the Trust
                  Indenture Estate and invested in accordance with Section 5.09 hereof
                  until
                  whichever of the following shall first occur: (i) all Events of
                  Default shall have been cured or waived, in which event such balance
                  shall
                  be distributed as provided in this clause “Second”, (ii) Section 3.03
                  hereof shall be applicable, in which event such balance shall be
                  distributed in accordance with the provisions of such Section 3.03,
                  or
                  (iii) the 120th day after the receipt of such payment in which
                  case such
                  payment shall be distributed as provided in this clause
                  “Second”.

              

      

           

       

      SECTION
        3.02. Event of
        Loss; Replacement; Voluntary Termination; Optional Redemption.

       

      Except
        as otherwise provided in Section 3.03 hereof, any payments
        received by the Mortgagee (i) with respect to the Airframe or the Airframe
        and
        one or more Engines as the result of an Event of Loss, or (ii) pursuant to
        a
        voluntary termination of the Lease pursuant to Section 9 thereof shall be
        applied to redemption of the Equipment Notes and to all other Secured
        Obligations by applying such funds in the following order of priority:

       

      
        	
              	
                First,

              	
                (a)
                  to reimburse the Mortgagee and the Note Holders for any reasonable
                  costs
                  or expenses incurred in connection with such redemption for which
                  they are
                  entitled to reimbursement, or indemnity by Lessee, under the Operative
                  Agreements and then (b) to pay any other Secured Obligations then
                  due to
                  the Mortgagee, the Note Holders and the other Indenture Indemnitees
                  under
                  this Trust Indenture, the Participation Agreement or the Equipment
                  Notes
                  (other than amounts specified in clause Second below);

                 

              

      

      
        
          	
                	
                  Second,

                	
                  to pay the amounts specified in clause “Third” of Section
                    3.03 hereof plus Make-Whole Amount, if any, then due and payable
                    in
                    respect of the Equipment Notes;

                   

                

        

        
          	
                	
                  Third,

                	
                  as
                    provided in clause “Fourth” of Section 3.03
                    hereof;

                

        
           

       

       

      provided,
        however, that if a Replacement Airframe or Replacement
        Engine shall be substituted for the Airframe or Engine subject to such Event
        of
        Loss as provided in Section 10 of the Lease and in accordance with Section
        5.06
        hereof, any insurance, condemnation or similar proceeds which result from
        such
        Event of Loss and are paid over to the Mortgagee shall be held by the Mortgagee
        as permitted by Section 6.04 hereof (provided that such moneys shall be invested
        as provided in Section 5.09 hereof) as additional security for the obligations
        of Lessee under the Lessee Operative Agreements and, unless otherwise applied
        pursuant to the Lease, such proceeds (and such investment earnings) shall
        be
        released to the Lessee at the Lessee’s written request upon the release of such
        damaged Airframe or Engine and the replacement thereof as provided in the
        Lease.

      
        
          
          

        

        
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      SECTION
        3.03. Payments
        After Event of Default.

       

      Except
        as otherwise provided in Section 3.04 hereof, all payments
        received and amounts held or realized by the Mortgagee (including any amounts
        realized by the Mortgagee from the exercise of any remedies pursuant to Section
        15 of the Lease or Article IV hereof) after an Event of Default shall have
        occurred and be continuing and after the declaration or other acceleration
        of
        the Equipment Notes specified in Section 4.04(b) hereof, as well as all payments
        or amounts then held by the Mortgagee as part of the Trust Indenture Estate,
        shall be promptly distributed by the Mortgagee in the following order of
        priority:

       

      
        
          	
                	
                  First, 

                	
                  so much of such payments or amounts as shall
                    be required
                    to (i) reimburse the Mortgagee or WTC for any tax (except to
                    the extent
                    resulting from a failure of the Mortgagee to withhold taxes pursuant
                    to
                    Section 2.04(b) hereof), expense or other loss (including, without
                    limitation, all amounts to be expended at the expense of, or
                    charged upon
                    the rents, revenues, issues, products and profits of, the property
                    included in the Trust Indenture Estate (all such property being
                    herein
                    called the “Mortgaged Property”) pursuant to Section 4.05(b) hereof)
                    incurred by the Mortgagee or WTC (to the extent not previously
                    reimbursed), the expenses of any sale, or other proceeding, reasonable
                    attorneys’ fees and expenses, court costs, and any other expenditures
                    incurred or expenditures or advances made by the Mortgagee, WTC
                    or the
                    Note Holders in the protection, exercise or enforcement of any
                    right,
                    power or remedy or any damages sustained by the Mortgagee, WTC
                    or any Note
                    Holder, liquidated or otherwise, upon such Event of Default shall
                    be
                    applied by the Mortgagee as between itself, WTC and the Note
                    Holders in
                    reimbursement of such expenses and any other expenses for which
                    the
                    Mortgagee, WTC or the Note Holders are entitled to reimbursement
                    under any
                    Operative Agreement and (ii) pay all Secured Obligations payable
                    to the
                    other Indenture Indemnitees hereunder and under the Participation
                    Agreement and the Lease (other than amounts specified in clauses
                    Second
                    and Third below); and in the case the aggregate amount to be
                    so
                    distributed is insufficient to pay as aforesaid in clauses (i)
                    and (ii),
                    then ratably, without priority of one over the other, in proportion
                    to the
                    amounts owed each hereunder;

                   

                

        

        
          	
                	
                  Second, 

                	
                  so much of such payments or amounts remaining
                    as shall be
                    required to reimburse the then existing or prior Note Holders
                    for payments
                    made pursuant to Section 5.03 hereof (to the extent not previously
                    reimbursed) shall be distributed to such then existing or prior
                    Note
                    Holders ratably, without priority of one over the other, in accordance
                    with the amount of the payment or payments made by each such
                    then existing
                    or prior Note Holder pursuant to said Section 5.03 hereof;

                   

                

        

      

      
        
          	
                	
                  Third, 

                	
                  so much of such payments or amounts remaining
                    as shall be
                    required to pay in full the aggregate unpaid Original Amount
                    of all
                    Equipment Notes, and the accrued but unpaid interest and other
                    amounts due
                    thereon (other than Make-Whole Amount which shall not be due
                    and payable)
                    and all other Secured Obligations in respect of the Equipment
                    Notes (other
                    than Make-Whole Amount) to the date of distribution, shall be
                    distributed
                    to the Note Holders, and in case the aggregate amount so to be
                    distributed
                    shall be insufficient to pay in full as 

                   

                

        

        
          	
                	
                   

                	
                   

                

        

      

       

                    

       

              

       

                  

      
        
          
          

        

        
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                      aforesaid, then ratably, without priority
                        of one over the
                        other, in the proportion that the aggregate unpaid Original
                        Amount of all
                        Equipment Notes held by each holder plus the accrued but
                        unpaid interest
                        and other amounts due hereunder or thereunder (other than
                        Make-Whole
                        Amount, if any) to the date of distribution, bears to the
                        aggregate unpaid
                        Original Amount of all Equipment Notes held by all such holders
                        plus the
                        accrued but unpaid interest and other amounts due thereon
                        (other than
                        Make-Whole Amount) to the date of distribution; and

                       

                    

                  

          

          
            	
                  	
                    Fourth, 

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

                  

          

        

        
          	
                	
                   

                	
                   

                

        

      

       

      No
        Make-Whole Amount shall be due and payable on the Equipment Notes
        as a consequence of the acceleration of the Equipment Notes as a result of
        an
        Event of Default.

       

      SECTION
        3.04. Certain
        Payments.

       

      (a) Any
        payments received by the Mortgagee for which no
        provision as to the application thereof is made in this Trust Indenture and
        for
        which such provision is made in the Lease or the Participation Agreement
        shall
        be applied forthwith to the purpose for which such payment was made in
        accordance with the terms of the Lease or the Participation Agreement, as
        the
        case may be.

       

      (b) Notwithstanding
        anything to the contrary contained in this
        Article III, the Mortgagee will distribute promptly upon receipt any indemnity
        payment received by it from the Owner Trustee or Lessee in respect of the
        Mortgagee in its individual capacity, any Note Holder or any other Indenture
        Indemnitee, in each case whether pursuant to Section 9 of the Participation
        Agreement or as Supplemental Rent, directly to the Person entitled thereto.
        Any
        payment received by the Mortgagee under the third paragraph of Section 2.02
        shall be distributed to the Subordination Agent to be distributed in accordance
        with the terms of the Intercreditor Agreement.

       

      (c) Notwithstanding
        anything to the contrary contained in this
        Article III, any payments received by the Mortgagee which constitute Excluded
        Payments shall be distributed promptly upon receipt by the Mortgagee directly
        to
        the Person or Persons entitled thereto.

       

      (d) Notwithstanding
        any provision of this Trust Indenture to the
        contrary, any amounts held by Mortgagee pursuant to the terms of the Lease
        shall
        be held by the Mortgagee as security for the obligations of Lessee under
        the
        Lessee Operative Agreements and, if and when required by the Lease, paid
        and/or
        applied in accordance with the applicable provisions of the Lease.

       

      SECTION
        3.05. Other
        Payments.

       

      Any
        payments received by the Mortgagee for which no provision as to
        the application thereof is made in the Lease, the Participation Agreement,
        elsewhere in this Trust Indenture or in any other Operative Agreement shall
        be
        distributed by the Mortgagee to the extent received or realized at any time
        (i)
        prior to the payment in full of all Secured Obligations 

      
        
          
          

        

        
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      due
        the Note Holders, in the order of priority specified in Section
        3.01 hereof subject to the proviso thereto, and (ii) after payment in full
        of
        all Secured Obligations, in the following order of priority:

       

       

      
        
          
            	
                  	
                    First,

                  	
                    
                      to the extent payments or amounts described
                        in clause
                        “First” of Section 3.03 hereof are otherwise obligations of Lessee
                        under
                        the Operative Agreements or for which the Lessee is obligated
                        to indemnify
                        against thereunder, in the manner provided in clause “First” of Section
                        3.03 hereof, and

                       

                    

                  

          

          
            	
                  	
                     Second,

                  	
                    in the manner provided in clause “Fourth” of Section 3.03
                      hereof.

                  

          

        

        
          	
                	
                   

                	
                   

                

        

      

       

       

      Further,
        and except as otherwise provided in Sections 3.02, 3.03 and
        3.04 hereof, all payments received and amounts realized by the Mortgagee
        under
        the Lease or otherwise with respect to the Aircraft (including, without
        limitation, all amounts realized upon the sale or release of the Aircraft
        after
        the termination of the Lease with respect thereto), to the extent received
        or
        realized at any time after payment in full of all Secured Obligations due
        the
        Note Holders, shall be distributed by the Mortgagee in the order of priority
        specified in clause (ii) of the immediately preceding sentence of this Section
        3.05.

       

      SECTION
        3.06. Payments
        to Owner Trustee.

       

      Any
        amounts distributed hereunder by the Mortgagee to the Owner
        Trustee shall be paid to the Owner Trustee (within the time limits contemplated
        by Section 2.04(a)) by wire transfer of funds of the type received by the
        Mortgagee at such office and to such account or accounts of such entity or
        entities as shall be designated by notice from the Owner Trustee to the
        Mortgagee from time to time. The Mortgagee shall not pay an amount due to
        Owner
        Trustee hereunder to any Person other than Owner Trustee, unless the Lessee
        shall have given its written consent thereto.

       

      ARTICLE
        IV

       

      COVENANTS
        OF OWNER TRUSTEE; EVENTS OF

      DEFAULT;
        REMEDIES OF MORTGAGEE

       

      SECTION
        4.01. Covenants
        of Owner Trustee.

       

      The
        Owner Trustee hereby covenants and agrees (the covenants and
        agreements only in clause (b) below being made by the Owner Trustee in its
        individual capacity) as follows:

       

      (a) the
        Owner Trustee will duly and punctually pay the Original
        Amount of, Make-Whole Amount, if any, and interest on and other amounts due
        under the Equipment Notes and hereunder in accordance with the terms of the
        Equipment Notes and this Trust Indenture and all amounts, if any, payable
        by it
        to the Note Holders under the Participation Agreement or Section 9 of the
        Lease;

       

      (b) the
        Owner Trustee in its individual capacity covenants and
        agrees that it shall not, directly or indirectly, cause or permit to exist
        a
        Lessor Lien attributable to it in 

      
        
          
          

        

        
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      its
        individual capacity with respect to the Aircraft or any other
        portion of the Trust Estate; that, subject to the proviso in Section 7.3.1
        of
        the Participation Agreement, it will promptly, at its own expense, take such
        action as may be necessary to duly discharge such Lessor Lien attributable
        to it
        in its individual capacity; and that it will make restitution to the Trust
        Indenture Estate for any actual diminution of the assets of the Trust Estate
        resulting from such Lessor Liens attributable to it in its individual
        capacity;

       

      (c) in
        the event the Owner Trustee shall have Actual Knowledge
        of an Event of Default, a Default or an Event of Loss, the Owner Trustee
        will
        give prompt written notice of such Event of Default, Default or Event of
        Loss to
        the Mortgagee, each Note Holder, Lessee and the Owner Participant;

       

      (d) the
        Owner Trustee will furnish to the Note Holders and the
        Mortgagee, promptly upon receipt thereof, duplicates or copies of all reports,
        notices, requests, demands, certificates and other instruments furnished
        to the
        Owner Trustee under the Lease, including, without limitation, a copy of each
        report or notice received pursuant to Section 9 or 8.2 or Annex D, Paragraph
        E
        of the Lease to the extent that the same shall not have been furnished or
        is not
        required to be furnished by the Lessee to the Note Holders or the Mortgagee
        pursuant to the Lease;

       

      (e) except
        with the consent of the Mortgagee (acting pursuant to
        instructions given in accordance with Section 9.01 hereof) or as provided
        in
        Section 2 of the Participation Agreement, the Owner Trustee will not contract
        for, create, incur, assume or suffer to exist any Debt, and will not guarantee
        (directly or indirectly or by an instrument having the effect of assuring
        another’s payment or performance on any obligation or capability of so doing, or
        otherwise), endorse or otherwise be or become contingently liable, directly
        or
        indirectly, in connection with the Debt of any other person; and

       

      (f) the
        Owner Trustee will not enter into any business or other
        activity other than the business of owning the Aircraft, the leasing thereof
        to
        Lessee and the carrying out of the transactions contemplated hereby and by
        the
        Lease, the Participation Agreement and the Trust Agreement and the other
        Operative Agreements.

       

      SECTION
        4.02. Event of
        Default.

       

      “Event
        of Default” means any of the following events (whatever the
        reason for such Event of Default and whether such event shall be voluntary
        or
        involuntary or come about or be effected by operation of Law or pursuant
        to or
        in compliance with any judgment, decree or order of any court or any order,
        rule
        or regulation of any administrative or governmental body):

       

      (a) any
        Lease Event of Default (provided that any such Lease
        Event of Default caused solely by a failure of Lessee to pay to the Owner
        Trustee or the Owner Participant when due any amount that is included in
        the
        definition of Excluded Payments shall not constitute an Event of Default
        unless
        notice is given by the Owner Trustee to the Mortgagee that such failure shall
        constitute an Event of Default); or

       

      (b) the
        failure of the Owner Trustee to pay when due any payment
        of Original Amount of, interest on, Make-Whole Amount, if any, or other amount
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      under
        any Equipment Note or hereunder (other than as a result of a
        Lease Event of Default or a Lease Default) and such failure shall have continued
        unremedied for ten Business Days in the case of any payment of Original Amount
        or interest or Make-Whole Amount, if any, thereon and, in the case of any
        other
        amount, for ten Business Days after the Owner Trustee or the Owner Participant
        receives written demand from the Mortgagee or any Note Holder; or

       

      (c) any
        Lien required to be discharged by the Owner Trustee, in
        its individual capacity pursuant to Section 4.01(b) hereof or in its individual
        or trust capacity pursuant to Section 7.3.1 of the Participation Agreement,
        or
        by the Owner Participant pursuant to Section 7.2.1 of the Participation
        Agreement shall remain undischarged for a period of 30 days after the Owner
        Trustee or the Owner Participant, as the case may be, shall have received
        written notice from the Mortgagee or any Note Holder of such Lien; or

       

      (d) any
        representation or warranty made by the Owner Participant
        or the Owner Trustee in the Participation Agreement or this Trust Indenture
        or
        in any certificate furnished by the Owner Participant or the Owner Trustee
        to
        the Mortgagee or any Note Holder in connection with the transactions
        contemplated by the Operative Agreements shall prove to have been false or
        incorrect when made in any material respect and continues to be material
        and
        adverse to the interests of the Mortgagee or the Note Holders; and if such
        misrepresentation is capable of being corrected and if such correction is
        being
        sought diligently, such misrepresentation shall not have been corrected within
        60 days (or, without affecting Section 4.02(f) hereof, in the case of the
        representation made in Section 6.3.6 or 6.2.6 of the Participation Agreement
        as
        to citizenship of the Owner Trustee in its individual capacity or of the
        Owner
        Participant, respectively, as soon as is reasonably practicable but in any
        event
        within 60 days) following notice thereof from the Mortgagee or any Note Holder
        to the Owner Trustee or the Owner Participant, as the case may be; or

       

      (e) other
        than as provided in (c) above or (f) below, any
        failure by the Owner Trustee or Owner Participant to observe or perform any
        other covenant or obligation of the Owner Trustee or Owner Participant, as
        the
        case may be, for the benefit of the Mortgagee or the Note Holders contained
        in
        the Participation Agreement, Section 4.2.1 of the Trust Agreement, the Equipment
        Notes or this Trust Indenture which is not remedied within a period of 60
        days
        after notice thereof has been given to the Owner Trustee and the Owner
        Participant; or

       

      (f) if
        at any time when the Aircraft is registered under the
        Laws of the United States, the Owner Participant shall not be a “citizen of the
        United States” within the meaning of Section 40102(a)(15) of Part A of Subtitle
        VII of Title 49, United States Code, and as the result thereof the registration
        of the Aircraft under the Act, and regulations then applicable thereunder,
        shall
        cease to be effective; provided that no Event of Default shall be deemed
        to have
        occurred under this paragraph (f) unless such circumstances continue unremedied
        for more than 30 days after the Owner Participant has Actual Knowledge of
        the
        state of facts that resulted in such ineffectiveness and of such loss of
        citizenship; or

      
        
          
          

        

        
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      (g) at
        any time either (i) the commencement of an involuntary
        case or other proceeding in respect of the Owner Participant, the Owner Trustee,
        the Trust or the Trust Estate under the federal bankruptcy Laws, as now
        constituted or hereafter amended, or any other applicable federal or state
        bankruptcy, insolvency or other similar Law in the United States or seeking
        the
        appointment of a receiver, liquidator, assignee, custodian, trustee,
        sequestrator (or similar official) of the Owner Participant, the Owner Trustee,
        the Trust or the Trust Estate or for all or substantially all of its property,
        or seeking the winding-up or liquidation of its affairs and the continuation
        of
        any such case or other proceeding undismissed and unstayed for a period of
        60
        consecutive days; or (ii) the commencement by the Owner Participant, the
        Owner
        Trustee, the Trust or the Trust Estate of a voluntary case or proceeding
        under
        the federal bankruptcy Laws, as now constituted or hereafter amended, or
        any
        other applicable federal or state bankruptcy, insolvency or other similar
        Law in
        the United States, or the consent by the Owner Participant, the Owner Trustee,
        the Trust or the Trust Estate to the appointment of or taking possession
        by a
        receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
        similar official) of the Owner Participant, the Owner Trustee, the Trust
        or the
        Trust Estate or for all or substantially all of its property, or the making
        by
        the Owner Participant, the Owner Trustee, the Trust or the Trust Estate of
        any
        assignment for the benefit of creditors or the Owner Participant or the Owner
        Trustee shall take any action to authorize any of the foregoing;
provided, however, that an event referred to in this Section
        4.02(g) with respect to the Owner Participant shall not constitute an Event
        of
        Default if within 30 days of the commencement of the case or proceeding a
        final
        non-appealable order, judgment or decree shall be entered in such case or
        proceeding by a court or a trustee, custodian, receiver or liquidator, to
        the
        effect that, no part of the Trust Estate (except for the Owner Participant’s
        beneficial interest therein) and no right, title or interest under the Trust
        Indenture Estate shall be included in, or be subject to, any declaration
        or
        adjudication of, or proceedings with respect to, the bankruptcy, insolvency
        or
        liquidation of the Owner Participant referred to in this Section 4.02(g).

       

      SECTION
        4.03. Certain
        Rights.

       

      The
        Mortgagee shall give the Note Holders, the Owner Trustee and the
        Owner Participant prompt written notice of any Event of Default of which
        the
        Mortgagee has Actual Knowledge and shall give the Note Holders, the Owner
        Trustee and the Owner Participant not less than ten Business Days’ prior written
        notice of the date (the “Enforcement Date”) on or after which the Mortgagee may,
        subject to the limitation set forth in Section 4.04(a), commence and consummate
        the exercise of any remedy or remedies described in Section 4.04, 4.05 or
        4.06
        hereof. Without limiting the generality of the foregoing, the Mortgagee shall
        give the Owner Trustee, the Owner Participant and the Lessee at least ten
        Business Days’ prior written notice (which may be given concurrently with notice
        of the Enforcement Date) of any declaration of the Lease to be in default
        pursuant to Sections 14 and 15 of the Lease or any termination of the Lease
        or
        of the exercise of any remedy or remedies pursuant to Section 15 of the Lease.
        If an Event of Default shall have occurred and be continuing, the Owner Trustee
        shall have the rights set forth below, any of which may be exercised directly
        by
        the Owner Participant.

       

      If
        as a result of the occurrence of an Event of Default in respect of
        the nonpayment by Lessee of Basic Rent due under the Lease, the Mortgagee
        shall
        have insufficient 

      
        
          
          

        

        
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      funds
        to make any payment of Original Amount and interest on any
        Equipment Note on the day it becomes due and payable, the Owner Trustee may,
        but
        shall not be obligated to pay the Mortgagee prior to the Enforcement Date,
        in
        the manner provided in Section 2.04 hereof, for application in accordance
        with
        Section 3.01 hereof, an amount equal to the portion of the Original Amount
        and
        interest (including interest, if any, on any overdue payments of such portion
        of
        Original Amount and interest) then due and payable on the Equipment Notes,
        and,
        unless the Owner Trustee has cured Events of Default in respect of payments
        of
        Basic Rent on each of the 18 immediately preceding Basic Rent payment dates,
        or
        the Owner Trustee has cured 36 previous Events of Default in respect of payments
        of Basic Rent, such payment by the Owner Trustee shall, solely for purposes
        of
        this Trust Indenture be deemed to cure any Event of Default which would
        otherwise have arisen on account of the nonpayment by Lessee of such installment
        of Basic Rent (but not any other Default or Event of Default which shall
        have
        occurred and be continuing).

       

      If
        any Event of Default (other than in respect of the nonpayment of
        Basic Rent by the Lessee) which can be cured by the payment of money has
        occurred, the Owner Trustee may, but shall not be obligated to, cure such
        Event
        of Default by making such payment prior to the Enforcement Date as is necessary
        to accomplish the observance or performance of the defaulted covenant, condition
        or agreement to the party entitled to the same.

       

      Except
        as hereinafter in this Section 4.03 provided, the Owner
        Trustee shall not, as a result of exercising the right to cure any such Event
        of
        Default, obtain any Lien on any of the Mortgaged Property or any Rent payable
        under the Lease for or on account of costs or expenses incurred in connection
        with the exercise of such right, nor shall any claim of the Owner Trustee
        against Lessee or any other party for the repayment of such costs or expenses
        impair the prior right and security interest of the Mortgagee in and to the
        Mortgaged Property. Upon any payment by the Owner Trustee pursuant to the
        first
        or second preceding paragraphs of this Section 4.03, the Owner Trustee shall
        be
        subrogated to the rights of the Mortgagee and the Note Holders in respect
        of the
        Basic Rent which was overdue at the time of such payment and interest payable
        by
        the Lessee on account of its being overdue and any Supplemental Rent in respect
        of the reimbursement of amounts paid by Owner Trustee pursuant to the
        immediately preceding paragraph (but in either case shall have no rights
        as a
        secured party hereunder), and thereafter, the Owner Trustee shall be entitled
        (so long as the application thereof shall not give rise to an Event of Default
        hereunder) to receive such overdue Basic Rent or Supplemental Rent, as the
        case
        may be, and interest thereon upon receipt thereof by the Mortgagee;
provided, however, that (i) if the Original Amount and interest on
        the Equipment Notes shall have become due and payable pursuant to Section
        4.04(b) hereof, such subrogation shall, until the Secured Obligations shall
        have
        been paid in full, be subordinate to the rights of the Mortgagee, the Note
        Holders and the Indenture Indemnitees in respect of such payment of overdue
        Basic Rent, Supplemental Rent and such interest and (ii) the Owner Trustee
        shall
        not otherwise attempt to recover any such amount paid by it on behalf of
        the
        Lessee pursuant to this Section 4.03 except by demanding of the Lessee payment
        of such amount, or by commencing an action at law against the Lessee and
        obtaining and enforcing a judgment against the Lessee for the payment of
        such
        amount or taking appropriate action in a pending action at law against the
        Lessee (provided, however, that at no time while an Event of
        Default shall have occurred and be continuing shall any such demand be made
        or
        shall any such action be commenced (or continued) and any amounts nevertheless
        

      
        
          
          

        

        
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      received
        by the Owner Trustee in respect thereof shall be held in
        trust for the benefit of, and promptly paid to, the Mortgagee for distribution
        as provided in Section 3.03 hereof).

       

      Neither
        the Owner Trustee nor the Owner Participant shall have the
        right to cure any Lease Event of Default or Lease Default except as specified
        in
        this Section 4.03.

       

      SECTION
        4.04. Remedies.

       

      (a) If
        an Event of Default shall have occurred and be continuing
        and so long as the same shall continue unremedied, then and in every such
        case
        the Mortgagee may, subject to the second and third paragraphs of this Section
        4.04(a), exercise any or all of the rights and powers and pursue any and
        all of
        the remedies pursuant to this Article IV and shall have and may exercise
        all of
        the rights and remedies of a secured party under the Uniform Commercial Code
        and, in the event such Event of Default is also a Lease Event of Default,
        any
        and all of the remedies pursuant to Section 15 of the Lease and may take
        possession of all or any part of the properties covered or intended to be
        covered by the Lien created hereby or pursuant hereto and may exclude the
        Owner
        Participant, the Owner Trustee and Lessee and all persons claiming under
        any of
        them wholly or partly therefrom; provided, however, that the
        Mortgagee shall give the Owner Trustee and the Owner Participant twenty days’
prior written notice of its intention to sell the Aircraft. Unless an Event
        of
        Default not resulting from or relating to a Lease Event of Default has occurred
        and is continuing, the Owner Participant may bid at the sale and become the
        purchaser. Without limiting any of the foregoing, it is understood and agreed
        that the Mortgagee may exercise any right of sale of the Aircraft available
        to
        it, even though it shall not have taken possession of the Aircraft and shall
        not
        have possession thereof at the time of such sale.

       

      Anything
        in this Trust Indenture to the contrary notwithstanding, the
        Mortgagee shall not be entitled to exercise any remedy hereunder as a result
        of
        an Event of Default which arises solely by reason of one or more events or
        circumstances which constitute a Lease Event of Default unless the Mortgagee
        as
        security assignee of the Owner Trustee shall have exercised or concurrently
        be
        exercising one or more of the dispossessory remedies provided for in Section
        15
        of the Lease with respect to the Aircraft; provided, however, that
        such requirement to exercise one or more of such remedies under the Lease
        shall
        not apply in circumstances where the Mortgagee is, and has been, involuntarily
        stayed or prohibited by applicable law or court order for a continuous period
        (a
“Continuous Stay Period”) in excess of 60 days subsequent to an entry of an
        order for relief pursuant to Chapter 11 of the Bankruptcy Code (such
        60 day period, the “Section 1110 Period”);
provided further, however that the requirement to
        exercise one or more of such remedies under the Lease shall nonetheless be
        applicable during a Continuous Stay Period subsequent to the expiration of
        the
        Section 1110 Period to the extent that the continuation of such Continuous
        Stay
        Period subsequent to the expiration of the Section 1110 Period (A) results
        from
        an agreement by the trustee or the debtor-in-possession in such proceeding
        during the Section 1110 Period with the approval of the relevant court to
        perform the Lease in accordance with Section 1110(a)(2)(A) of the Bankruptcy
        Code and continues to perform as required by Section 1110(a)(2) of the
        Bankruptcy Code and cures any default (other than a default of the kind
        specified in Section 365(b)(2) of the Bankruptcy Code) within the applicable
        time period specified in Section 1110(a)(2)(B) of the Bankruptcy Code or
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      the
        Section 1110 Period with the consent of the Mortgagee pursuant to
        Section 1110(b) of the Bankruptcy Code or (C) is the consequence of the
        Mortgagee’s own failure to give any requisite notice or demand to any person. In
        the event that the applicability of Section 1110 of the Bankruptcy Code to
        the
        Aircraft is being contested by Lessee in judicial proceedings, both of the
        Mortgagee and the Owner Trustee shall have the right to participate in such
        proceedings; provided, however, that any such participation by the
        Owner Trustee shall not affect in any way any rights or remedy of the Mortgagee
        hereunder.

       

      It
        is expressly understood and agreed that, subject only to the two
        preceding paragraphs, the inability, described in such paragraphs, of the
        Mortgagee to exercise any right or remedy under the Lease shall in no event
        and
        under no circumstances prevent the Mortgagee from exercising any or all of
        its
        rights, powers and remedies under this Trust Indenture, including, without
        limitation, this Article IV.

       

      (b) If
        an Event of Default shall have occurred and be
        continuing, then and in every such case the Mortgagee may (and shall, upon
        receipt of a written demand therefor from a Majority in Interest of Note
        Holders), subject to Section 4.03 hereof, at any time, by delivery of written
        notice or notices to the Owner Trustee and the Owner Participant, declare
        all
        the Equipment Notes to be due and payable, whereupon the unpaid Original
        Amount
        of all Equipment Notes then outstanding, together with accrued but unpaid
        interest thereon (without Make-Whole Amount) and other amounts due thereunder,
        shall immediately become due and payable without presentment, demand, protest
        or
        notice, all of which are hereby waived; provided, however, that if
        an Event of Default referred to in clause (g) of Section 4.02 hereof shall
        have
        occurred or a Lease Event of Default under Section 14.5 of the Lease shall
        have
        occurred, then and in every such case the unpaid Original Amount then
        outstanding, together with accrued but unpaid interest and all other amounts
        due
        thereunder and hereunder shall immediately and without further act become
        due
        and payable without presentment, demand, protest or notice, all of which
        are
        hereby waived; provided further that in the event of a
        reorganization proceeding involving the Lessee instituted under Chapter 11
        of
        the Bankruptcy Code, if no Lease Event of Default (including any Lease Event
        of
        Default set forth in Section 14.3 of the Lease) and no other Event of Default
        (other than the failure to pay the Original Amount of the Equipment Notes
        which
        by such declaration shall have become payable) exists at any time after the
        consummation of such proceeding, such declaration shall be automatically
        rescinded without any further action on the part of any Note Holder.

       

      This
        Section 4.04(b), however, is subject to the condition that, if
        at any time after the Original Amount of the Equipment Notes shall have become
        so due and payable, and before any judgment or decree for the payment of
        the
        money so due, or any thereof, shall be entered, all overdue payments of interest
        upon the Equipment Notes and all other amounts payable under the Equipment
        Notes
        (except the Original Amount of the Equipment Notes which by such declaration
        shall have become payable) shall have been duly paid, and every other Default
        and Event of Default with respect to any covenant or provision of this Trust
        Indenture shall have been cured, then and in every such case a Majority in
        Interest of Note Holders may (but shall not be obligated to), by written
        instrument filed with the Mortgagee, rescind and annul the Mortgagee’s
        declaration (or such automatic acceleration) and its consequences; but no
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      rescission
        or annulment shall extend to or affect any subsequent
        Default or Event of Default or impair any right consequent thereon.

       

      Any
        acceleration pursuant to this Section 4.04(b) shall be
        automatically rescinded and any related declaration of an Event of Default
        annulled in the event that the Owner Trustee shall have cured, in accordance
        with Section 4.03 hereof, the Event of Default that resulted in such
        acceleration or declaration.

       

      (c) The
        Note Holders shall be entitled, at any sale pursuant to
        Section 15 of the Lease or this Section 4.04, to credit against any purchase
        price bid at such sale by such holder all or any part of the unpaid obligations
        owing to such Note Holder and secured by the Lien of this Trust Indenture
        (only
        to the extent that such purchase price would have been paid to such Note
        Holder
        pursuant to Article III hereof if such purchase price were paid in cash and
        the
        foregoing provisions of this subsection (c) were not given effect).

       

      (d) In
        the event of any sale of the Trust Indenture Estate, or
        any part thereof, pursuant to any judgment or decree of any court or otherwise
        in connection with the enforcement of any of the terms of this Trust Indenture,
        the unpaid Original Amount of all Equipment Notes then outstanding, together
        with accrued interest thereon (without Make-Whole Amount), and other amounts
        due
        thereunder, shall immediately become due and payable without presentment,
        demand, protest or notice, all of which are hereby waived.

       

      (e) Notwithstanding
        anything contained herein, so long as the
        Pass Through Trustee under the Pass Through Trust Agreement (or its designee)
        is
        a Note Holder, the Mortgagee will not be authorized or empowered to acquire
        title to any Mortgaged Property or take any action with respect to any Mortgaged
        Property so acquired by it if such acquisition or action would cause any
        Trust
        to fail to qualify as a "grantor trust" for federal income tax purposes.

       

      SECTION
        4.05. Return of
        Aircraft, Etc.

       

      (a) If
        an Event of Default shall have occurred and be continuing
        and the Equipment Notes have been accelerated, subject to Section 4.03 hereof
        and unless the Owner Trustee or the Owner Participant shall have elected
        to
        purchase the Equipment Notes, at the request of the Mortgagee, the Owner
        Trustee
        shall promptly execute and deliver to the Mortgagee such instruments of title
        and other documents as the Mortgagee may deem necessary or advisable to enable
        the Mortgagee or an agent or representative designated by the Mortgagee,
        at such
        time or times and place or places as the Mortgagee may specify, to obtain
        possession of all or any part of the Mortgaged Property included in the Trust
        Indenture Estate to which the Mortgagee shall at the time be entitled hereunder.
        If the Owner Trustee shall for any reason fail to execute and deliver such
        instruments and documents after such request by the Mortgagee, the Mortgagee
        may
        (i) obtain a judgment conferring on the Mortgagee the right to immediate
        possession and requiring the Owner Trustee to execute and deliver such
        instruments and documents to the Mortgagee, to the entry of which judgment
        the
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      extent
        permitted by Law, and (ii) pursue all or part of such
        Mortgaged Property wherever it may be found and, in the event that a Lease
        Event
        of Default has occurred and is continuing, may enter any of the premises
        of
        Lessee wherever such Mortgaged Property may be or be supposed to be and search
        for such Mortgaged Property and take possession of and remove such Mortgaged
        Property. All expenses of obtaining such judgment or of pursuing, searching
        for
        and taking such property shall, until paid, be secured by the Lien of this
        Trust
        Indenture.

       

      (b) Upon
        every such taking of possession, the Mortgagee may,
        from time to time, at the expense of the Mortgaged Property, make all such
        expenditures for maintenance, use, operation, storage, insurance, leasing,
        control, management, disposition, modifications or alterations to and of
        the
        Mortgaged Property, as it may deem proper. In each such case, the Mortgagee
        shall have the right to maintain, use, operate, store, insure, lease, control,
        manage, dispose of, modify or alter the Mortgaged Property and to carry on
        the
        business and to exercise all rights and powers of the Owner Participant and
        the
        Owner Trustee relating to the Mortgaged Property, as the Mortgagee shall
        deem
        best, including the right to enter into any and all such agreements with
        respect
        to the maintenance, use, operation, storage, insurance, leasing, control,
        management, disposition, modification or alteration of the Mortgaged Property
        or
        any part thereof as the Mortgagee may determine, and the Mortgagee shall
        be
        entitled to collect and receive directly all tolls, rents (including Rent),
        revenues, issues, income, products and profits of the Mortgaged Property
        and
        every part thereof, except Excluded Payments, without prejudice, however,
        to the
        right of the Mortgagee under any provision of this Trust Indenture to collect
        and receive all cash held by, or required to be deposited with, the Mortgagee
        hereunder other than Excluded Payments. Such tolls, rents (including Rent),
        revenues, issues, income, products and profits shall be applied to pay the
        expenses of the maintenance, use, operation, storage, insurance, leasing,
        control, management, disposition, improvement, modification or alteration
        of the
        Mortgaged Property and of conducting the business thereof, and to make all
        payments which the Mortgagee may be required or may elect to make, if any,
        for
        taxes, assessments, insurance or other proper charges upon the Mortgaged
        Property or any part thereof (including the employment of engineers and
        accountants to examine, inspect and make reports upon the properties and
        books
        and records of the Owner Trustee), and all other payments which the Mortgagee
        may be required or authorized to make under any provision of this Trust
        Indenture, as well as just and reasonable compensation for the services of
        the
        Mortgagee, and of all persons properly engaged and employed by the Mortgagee
        with respect hereto.

       

      SECTION
        4.06. Remedies
        Cumulative.

       

      Each
        and every right, power and remedy given to the Mortgagee
        specifically or otherwise in this Trust Indenture shall be cumulative and
        shall
        be in addition to every other right, power and remedy herein specifically
        given
        or now or hereafter existing at Law, in equity or by statute, and each and
        every
        right, power and remedy whether specifically herein given or otherwise existing
        may be exercised from time to time and as often and in such order as may
        be
        deemed expedient by the Mortgagee, and the exercise or the beginning of the
        exercise of any power or remedy shall not be construed to be a waiver of
        the
        right to exercise at the same time or thereafter any other right, power or
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      exercise
        of any right, remedy or power or in the pursuance of any
        remedy shall impair any such right, power or remedy or be construed to be
        a
        waiver of any default on the part of the Owner Trustee or Lessee or to be
        an
        acquiescence therein.

       

      SECTION
        4.07. Discontinuance of Proceedings.

       

      In
        case the Mortgagee shall have instituted any proceeding to enforce
        any right, power or remedy under this Trust Indenture by foreclosure, entry
        or
        otherwise, and such proceedings shall have been discontinued or abandoned
        for
        any reason or shall have been determined adversely to the Mortgagee, then
        and in
        every such case the Owner Trustee, the Mortgagee and Lessee shall, subject
        to
        any determination in such proceedings, be restored to their former positions
        and
        rights hereunder with respect to the Mortgaged Property, and all rights,
        remedies and powers of the Owner Trustee, the Mortgagee or Lessee shall continue
        as if no such proceedings had been instituted.

       

      SECTION
        4.08. Waiver of
        Past Defaults.

       

      Upon
        written instruction from a Majority in Interest of Note Holders,
        the Mortgagee shall waive any past Default hereunder and its consequences
        and
        upon any such waiver such Default shall cease to exist and any Event of Default
        arising therefrom shall be deemed to have been cured for every purpose of
        this
        Trust Indenture, but no such waiver shall extend to any subsequent or other
        Default or impair any right consequent thereon; provided, however,
        that in the absence of written instructions from all the Note Holders, the
        Mortgagee shall not waive any Default (i) in the payment of the Original
        Amount,
        Make-Whole Amount, if any, and interest and other amounts due under any
        Equipment Note then outstanding, or (ii) in respect of a covenant or provision
        hereof which, under Article IX hereof, cannot be modified or amended without
        the
        consent of each Note Holder.

       

      SECTION
        4.09.
 Appointment of Receiver.

       

      The
        Mortgagee shall, as a matter of right, be entitled to the
        appointment of a receiver (who may be the Mortgagee or any successor or nominee
        thereof) for all or any part of the Mortgaged Property, whether such
        receivership be incidental to a proposed sale of the Mortgaged Property or
        the
        taking of possession thereof or otherwise, and the Owner Trustee hereby consents
        to the appointment of such a receiver and will not oppose any such appointment.
        Any receiver appointed for all or any part of the Mortgaged Property shall
        be
        entitled to exercise all the rights and powers of the Mortgagee with respect
        to
        the Mortgaged Property.

       

      SECTION
        4.10. Mortgagee
        Authorized to Execute Bills of Sale, Etc.

       

      Subject
        to the provisions of this Trust Indenture, the Owner Trustee
        irrevocably appoints the Mortgagee the true and lawful attorney-in-fact of
        the
        Owner Trustee (which appointment is coupled with an interest) in its name
        and
        stead and on its behalf, for the purpose of effectuating any sale, assignment,
        transfer or delivery for the enforcement of the Lien of this Trust Indenture,
        whether pursuant to foreclosure or power of sale, assignments and other
        instruments as may be necessary or appropriate, with full power of substitution,
        the Owner Trustee hereby ratifying and confirming all that such attorney
        or any
        substitute shall do by virtue hereof in accordance with applicable law.
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      purchaser,
        the Owner Trustee shall ratify and confirm any such sale,
        assignment, transfer or delivery, by executing and delivering to the Mortgagee
        or such purchaser all bills of sale, assignments, releases and other proper
        instruments to effect such ratification and confirmation as may be designated
        in
        any such request.

       

      SECTION
        4.11. Rights of
        Note Holders to Receive Payment.

       

      Notwithstanding
        any other provision of this Trust Indenture, the
        right of any Note Holder to receive payment of principal of, and premium
        (including, without limitation, Make-Whole Amount), if any, and interest
        on an
        Equipment Note on or after the respective due dates expressed in such Equipment
        Note, or to bring suit for the enforcement of any such payment on or after
        such
        respective dates in accordance with the terms hereof, shall not be impaired
        or
        affected without the consent of such Note Holder.

       

      ARTICLE
        V

       

      DUTIES
        OF THE MORTGAGEE

       

      SECTION
        5.01. Notice of
        Event of Default.

       

      If
        the Mortgagee shall have Actual Knowledge of an Event of Default
        or of a Default arising from a failure to pay Rent, the Mortgagee shall give
        prompt written notice thereof to the Owner Trustee, the Owner Participant,
        Lessee, and each Note Holder. Subject to the terms of Sections 2.13, 4.03,
        4.04,
        4.08, 5.02 and 5.03 hereof, the Mortgagee shall take such action, or refrain
        from taking such action, with respect to such Event of Default or Default
        (including with respect to the exercise of any rights or remedies hereunder)
        as
        the Mortgagee shall be instructed in writing by a Majority in Interest of
        Note
        Holders. Subject to the provisions of Section 5.03, if the Mortgagee shall
        not
        have received instructions as above provided within 20 days after mailing
        notice
        of such Event of Default to the Note Holders, the Mortgagee may, subject
        to
        instructions thereafter received pursuant to the preceding provisions of
        this
        Section 5.01, take such action, or refrain from taking such action, but shall
        be
        under no duty to take or refrain from taking any action, with respect to
        such
        Event of Default or Default as it shall determine advisable in the best
        interests of the Note Holders; provided, however, that the
        Mortgagee may not sell the Aircraft or any Engine without the consent of
        a
        Majority in Interest of Note Holders. For all purposes of this Trust Indenture,
        in the absence of Actual Knowledge on the part of the Mortgagee, the Owner
        Trustee or the Owner Participant, the Mortgagee, the Owner Trustee or the
        Owner
        Participant, as the case may be, shall not be deemed to have knowledge of
        a
        Default or an Event of Default (except, in the case of the Mortgagee, the
        failure of Lessee to pay any installment of Basic Rent within one Business
        Day
        after the same shall become due, if any portion of such installment was then
        required to be paid to the Mortgagee, which failure shall constitute knowledge
        of a Default) unless notified in writing by Lessee, the Owner Trustee, the
        Owner
        Participant or one or more Note Holders.

       

      SECTION
        5.02. Action
        upon Instructions; Certain Rights and Limitations.

       

      (a) Subject
        to the terms of Sections 2.13, 4.03, 4.04(a) and
        (b), 4.08, 5.01 and 5.03 hereof, upon the written instructions at any time
        and
        from time to time of a Majority 

      
        
          
          

        

        
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      in
        Interest of Note Holders, the Mortgagee shall, subject to the
        terms of this Section 5.02, take such of the following actions as may be
        specified in such instructions: (i) give such notice or direction or exercise
        such right, remedy or power hereunder as shall be specified in such
        instructions; (ii) give such notice or direction or exercise such right,
        remedy
        or power under the Lease, the Participation Agreement, the Purchase Agreement,
        the Purchase Agreement Assignment, or any other part of the Trust Indenture
        Estate as shall be specified in such instructions; and (iii) approve as
        satisfactory to the Mortgagee all matters required by the terms of the Lease
        to
        be satisfactory to the Owner Trustee, it being understood that without the
        written instructions of a Majority in Interest of Note Holders, the Mortgagee
        shall not approve any such matter as satisfactory to the Mortgagee;
provided, however, that anything contained in this Trust
        Indenture, the Lease or the other Operative Agreements to the contrary
        notwithstanding, but subject to the next paragraph hereof:

       

      (1) the
        Owner Trustee or the Owner Participant, may, without the
        consent of the Mortgagee, demand, collect, sue for or otherwise obtain all
        amounts included in Excluded Payments from Lessee and seek legal or equitable
        remedies to require Lessee to maintain the insurance coverage referred to
        in
        Section 11 of the Lease; provided, however, that the rights
        referred to in this clause (1) shall not be deemed to include the exercise
        of
        any remedies provided for in Section 15 of the Lease other than the right
        to
        proceed by appropriate court action, either at Law or in equity, to enforce
        payment by Lessee of such amounts included in Excluded Payments or performance
        by Lessee of such insurance covenant or to recover damages for the breach
        thereof or for specific performance of any other term of the Lease;

       

      (2) (A)
        so long as the Mortgagee has not foreclosed the Lien of
        the Trust Indenture, the Mortgagee shall not, without the consent of the
        Owner
        Trustee, enter into, execute or deliver amendments or modifications in respect
        of any of the provisions of the Lease, and (B) unless a Mortgagee Event shall
        have occurred and be continuing, the Mortgagee shall not, without the consent
        of
        the Owner Trustee, which consent shall not be withheld if no right or interest
        of the Owner Trustee or the Owner Participant shall be diminished or impaired
        thereby, (i) enter into, execute or deliver waivers or consents in respect
        of
        any of the provisions of the Lease, or (ii) approve any accountants, engineers,
        appraisers or counsel as satisfactory to render services for or issue opinions
        to the Owner Trustee pursuant to the Operative Agreements, provided that
        whether
        or not any Mortgagee Event has occurred and is continuing, the Owner Trustee’s
        consent shall be required with respect to any waivers or consents in respect
        of
        any of the provisions of Section 5, 7 or 11 of the Lease, or of any other
        Section of the Lease to the extent such action shall affect (y) the amount
        or
        timing of, or the right to enforce payment of any Excluded Payment or (z)
        the
        amount or timing of any amounts payable by the Lessee under the Lease as
        originally executed (or as subsequently modified with the consent of the
        Owner
        Trustee) which, absent the occurrence and continuance of an Event of Default
        hereunder, would be distributable to the Owner Trustee under Article III
        hereof;

       

      (3) whether
        or not a Default or Event of Default under the Trust
        Indenture has occurred and is continuing, the Owner Trustee and the Owner
        Participant shall have the right, together with the Mortgagee, (i) to receive
        from Lessee certificates and other 

      
        
          
          

        

        
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      documents
        and information which Lessee is required to give or furnish
        to the Owner Trustee or the Lessor pursuant to any Operative Agreement and
        (ii)
        to inspect in accordance with the Lease the Airframe and Engines and all
        Aircraft Documents;

       

      (4) so
        long as no Mortgagee Event has occurred and is
        continuing, the Owner Trustee shall have the right, to the exclusion of the
        Mortgagee, to adjust Stipulated Loss Values and Termination Values as provided
        in Section 3.2 of the Lease or to adjust any installment or amount of Basic
        Rent, Stipulated Loss Value or Termination Value, as such installments and
        amounts are set forth in Schedules 2, 3 and 4, respectively, to the Lease,
        to
        the extent of the portion of such installment or amount that would, under
        Section 3.01, 3.02 or 3.03 hereof, as the case may be, be distributable to
        the
        Owner Trustee or the Owner Participant;

       

      (5) whether
        or not a Default or Event of Default under the Trust
        Indenture has occurred and is continuing, the Owner Trustee may, without
        the
        consent of the Mortgagee, (i) solicit and make bids with respect to the Aircraft
        under Section 9 of the Lease in respect of a termination of the Lease by
        Lessee
        pursuant to Section 9 thereof, (ii) determine Fair Market Sales Value and
        Fair
        Market Rental Value under Section 17 of the Lease for all purposes except
        following a Mortgagee Event pursuant to Section 15 of the Lease, (iii) make
        an
        election pursuant to and in accordance with the provisions of Sections 9.1(b),
        9.2 and 9.3 of the Lease, and (iv) obtain insurance for its own account in
        accordance with Section 11.2 of the Lease; and

       

      (6) so
        long as no Mortgagee Event shall have occurred and be
        continuing, all other rights of the “Lessor” under the Lease shall be exercised
        by the Owner Trustee to the exclusion of the Mortgagee including, without
        limitation, the right to (i) exercise all rights with respect to
        Lessee’s use and operation, modification or maintenance of the Aircraft and any
        Engine which the Lease specifically confers on the Lessor, and (ii) consent
        to
        and approve any assignment pursuant to Section 13 of the Lease; provided,
however, that the foregoing shall not (x) limit (A) any rights separately
        granted to the Mortgagee under the Operative Agreements or (B) the right of
        the Mortgagee to receive any funds to be delivered to the “Lessor” under the
        Lease (except with respect to Excluded Payments) and under the Purchase
        Agreement or (y) confer upon the Owner Trustee the right to adversely affect
        the
        validity or enforceability of the lien of this Trust Indenture.

       

      Notwithstanding
        anything to the contrary contained herein (including
        this Section 5.02), the Mortgagee shall have the right, to the exclusion of
        the Owner Trustee and the Owner Participant, to (A) declare the Lease to
        be in
        default under Section 15 thereof and (B) subject only to the provisions of
        Sections 4.03, 4.04(a) and (b) and 2.13 hereof, exercise the remedies set
        forth
        in such Section 15 (other than in connection with Excluded Payments and provided
        that each of the Owner Trustee, Owner Participant and Mortgagee shall
        independently retain the rights set forth in clause (ii) of Section 15.1.5
        of
        the Lease) at any time that a Lease Event of Default shall have occurred
        and be
        continuing. Further and for the avoidance of doubt, and anything to the contrary
        contained herein (including this Section 5.02), in no event may the Owner
        Trustee amend or otherwise modify the provisions of Section 3.2.1(b) of the
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      the
        final sentence of the definition of Stipulated Loss Value or
        Termination Value, in any such case, without the prior written consent of
        the
        Mortgagee.

       

      The
        Mortgagee will execute and the Owner Trustee will file or cause
        to be filed such continuation statements with respect to financing statements
        relating to the security interest created hereunder in the Trust Indenture
        Estate as may be specified from time to time in written instructions of a
        Majority in Interest of Note Holders (which instructions shall be accompanied
        by
        the form of such continuation statement so to be filed). The Mortgagee will
        furnish to each Note Holder (and, during the continuation of a Mortgagee
        Event,
        to the Owner Trustee and Owner Participant), promptly upon receipt thereof,
        duplicates or copies of all reports, notices, requests, demands, certificates
        and other instruments furnished to the Mortgagee under the Lease, under the
        Participation Agreement or hereunder, including, without limitation, a copy
        of
        each report or notice received pursuant to Section 9 and Paragraph E of Annex
        D
        of the Lease, respectively, to the extent that the same shall not have been
        furnished to such holder pursuant hereto or the Lease.

       

      (b) If
        any Lease Event of Default shall have occurred and be
        continuing and the Owner Trustee shall not have cured fully such Lease Event
        of
        Default under and in accordance with Section 4.03 hereof, on request of a
        Majority in Interest of Note Holders, the Mortgagee shall declare the Lease
        to
        be in default pursuant to Section 15 thereof and exercise those remedies
        specified by such Note Holders. The Mortgagee agrees to provide to the Note
        Holders, the Owner Trustee and the Owner Participant concurrently with such
        declaration by the Mortgagee, notice of such declaration by the Mortgagee.

       

      SECTION
        5.03. Indemnification.

       

      The
        Mortgagee shall not be required to take any action or refrain
        from taking any action under Section 5.01 (other than the first sentence
        thereof), 5.02 or Article IV hereof unless the Mortgagee shall have been
        indemnified to its reasonable satisfaction against any liability, cost or
        expense (including counsel fees) which may be incurred in connection therewith
        pursuant to a written agreement with one or more Note Holders. The Mortgagee
        agrees that it shall look solely to the Note Holders for the satisfaction
        of any
        indemnity (except expenses for foreclosure of the type referred to in clause
        “First” of Section 3.03 hereof) owed to it pursuant to this Section 5.03. The
        Mortgagee shall not be under any obligation to take any action under this
        Trust
        Indenture or any other Operative Agreement and nothing herein or therein
        shall
        require the Mortgagee to expend or risk its own funds or otherwise incur
        the
        risk of any financial liability in the performance of any of its rights or
        powers if it shall have reasonable grounds for believing that repayment of
        such
        funds or adequate indemnity against such risk or liability is not reasonably
        assured to it (the written indemnity of any Note Holder who is a QIB, signed
        by
        an authorized officer thereof, in favor of, delivered to and in form reasonably
        satisfactory to the Mortgagee shall be accepted as reasonable assurance of
        adequate indemnity). The Mortgagee shall not be required to take any action
        under Section 5.01 (other than the first sentence thereof) or 5.02 or Article
        IV
        hereof, nor shall any other provision of this Trust Indenture or any other
        Operative Agreement be deemed to impose a duty on the Mortgagee to take any
        action, if the Mortgagee shall have been advised by counsel that such action
        is
        contrary to the terms hereof or of the Lease or is otherwise contrary to
        Law.

      
        
          
          

        

        
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      SECTION
        5.04. No Duties
        Except as Specified in Trust Indenture or Instructions.

       

      The
        Mortgagee shall not have any duty or obligation to use, operate,
        store, lease, control, manage, sell, dispose of or otherwise deal with the
        Aircraft or any other part of the Trust Indenture Estate, or to otherwise
        take
        or refrain from taking any action under, or in connection with, this Trust
        Indenture or any part of the Trust Indenture Estate, except as expressly
        provided by the terms of this Trust Indenture or as expressly provided in
        written instructions from Note Holders as provided in this Trust Indenture;
        and
        no implied duties or obligations shall be read into this Trust Indenture
        against
        the Mortgagee. The Mortgagee agrees that it will in its individual capacity
        and
        at its own cost and expense (but without any right of indemnity in respect
        of
        any such cost or expense under Section 7.01 hereof), promptly take such action
        as may be necessary duly to discharge all liens and encumbrances on any part
        of
        the Trust Indenture Estate which result from claims against it in its individual
        capacity not related to the ownership of the Aircraft or the administration
        of
        the Trust Indenture Estate or any other transaction pursuant to this Trust
        Indenture or any document included in the Trust Indenture Estate.

       

      SECTION
        5.05. No Action
        Except Under Lease, Trust Indenture or Instructions.

       

      The
        Owner Trustee and the Mortgagee agree that they will not use,
        operate, store, lease, control, manage, sell, dispose of or otherwise deal
        with
        the Aircraft or any other part of the Trust Indenture Estate except (i) as
        required by the terms of the Lease or (ii) in accordance with the powers
        granted
        to, or the authority conferred upon, the Owner Trustee and the Mortgagee
        pursuant to this Trust Indenture and in accordance with the express terms
        hereof.

       

      SECTION
        5.06. Replacement Airframes and Replacement Engines.

       

      At
        any time an Airframe or Engine is to be replaced under or pursuant
        to Section 10 of the Lease by a Replacement Airframe or Replacement Engine,
        if
        no Lease Event of Default is continuing, the Owner Trustee shall direct the
        Mortgagee to execute and deliver to the Owner Trustee an appropriate instrument
        releasing such Airframe and/or Engine as appropriate from the Lien of this
        Trust
        Indenture and the Mortgagee shall execute and deliver such instrument as
        aforesaid, but only upon compliance by Lessee with the applicable provisions
        of
        Section 10 of the Lease.

       

      SECTION
        5.07. Indenture
        Supplements for Replacements.

       

      If
        a Replacement Airframe or Replacement Engine is being substituted
        as contemplated by Section 10 of the Lease, the Owner Trustee and the Mortgagee
        agree for the benefit of the Note Holders and Lessee, subject to fulfillment
        of
        the conditions precedent and compliance by Lessee with its obligations set
        forth
        in Section 10 of the Lease and the requirements of Section 5.06 hereof with
        respect to such Replacement Airframe or Replacement Engine, to execute and
        deliver a Lease Supplement and a Trust Indenture Supplement, as applicable,
        as
        contemplated by Section 10 of the Lease.

      
        
          
          

        

        
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      SECTION
        5.08. Effect of
        Replacement.

       

      In
        the event of the substitution of a Replacement Airframe or of a
        Replacement Engine pursuant to Section 10 of the Lease, all provisions of
        this
        Trust Indenture relating to the Airframe or Engine or Engines being replaced
        shall be applicable to such Replacement Airframe or Replacement Engine or
        Engines with the same force and effect as if such Replacement Airframe or
        Replacement Engine or Engines were the same airframe or engine or engines,
        as
        the case may be, as the Airframe or Engine or Engines being replaced but
        for the
        Event of Loss with respect to the Airframe or Engine or Engines being
        replaced.

       

      SECTION
        5.09. Investment
        of Amounts Held by Mortgagee.

       

      Any
        amounts held by the Mortgagee as assignee of the Owner Trustee’s
        rights to hold monies for security pursuant to Section 4.4 of the Lease shall
        be
        held in accordance with the terms of such Section and the Mortgagee agrees,
        for
        the benefit of Lessee, to perform the duties of the Owner Trustee under such
        Section. Any amounts held by the Mortgagee pursuant to the proviso in Clause
        "Second" of the first sentence of Section 3.01, pursuant to Section 3.02,
        or
        pursuant to any provision of any other Operative Agreement providing for
        amounts
        to be held by the Mortgagee which are not distributed pursuant to the other
        provisions of Article III hereof shall be invested by the Mortgagee from
        time to
        time in Cash Equivalents as directed by the Owner Trustee so long as the
        Mortgagee may acquire the same using its best efforts. All Cash Equivalents
        held
        by the Mortgagee pursuant to Section 4.4 of the Lease or this Section 5.09
        shall
        either be (a) registered in the name of, payable to the order of, or
        specially endorsed to, the Mortgagee, or (b) held in an Eligible Account.
        Unless otherwise expressly provided in this Trust Indenture, any income realized
        as a result of any such investment, net of the Mortgagee’s reasonable fees and
        expenses in making such investment, shall be held and applied by the Mortgagee
        in the same manner as the principal amount of such investment is to be applied
        and any losses, net of earnings and such reasonable fees and expenses, shall
        be
        charged against the principal amount invested. The Mortgagee shall not be
        liable
        for any loss resulting from any investment required to be made by it under
        this
        Trust Indenture other than by reason of its willful misconduct or gross
        negligence, and any such investment may be sold (without regard to its maturity)
        by the Mortgagee without instructions whenever such sale is necessary to
        make a
        distribution required by this Trust Indenture.

       

      ARTICLE
        VI

       

      THE
        OWNER TRUSTEE AND THE MORTGAGEE

       

      SECTION
        6.01. Acceptance
        of Trusts and Duties.

       

      The
        Mortgagee accepts the duties hereby created and applicable to it
        and agrees to perform the same but only upon the terms of this Trust Indenture
        and agrees to receive and disburse all monies constituting part of the Trust
        Indenture Estate in accordance with the terms hereof. The Owner Trustee,
        in its
        individual capacity, and the Mortgagee, in its individual capacity, shall
        not be
        answerable or accountable under any circumstances, except (i) for their own
        willful misconduct or gross negligence (other than for the handling of funds,
        for which the standard of accountability shall be willful misconduct or
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      Mortgagee,
        as provided in the third sentence of Section 2.04(a)
        hereof and the last sentence of Section 5.04 hereof, and (iii) for liabilities
        that may result, in the case of the Owner Trustee, from the inaccuracy of
        any
        representation or warranty of the Owner Trustee expressly made in its individual
        capacity in the Participation Agreement or in Section 4.01(b) or 6.03 hereof
        (or
        in any certificate furnished to the Mortgagee or any Note Holder in connection
        with the transactions contemplated by the Operative Agreements) or, in the
        case
        of the Mortgagee (in its individual capacity), from the inaccuracy of any
        representation or warranty of the Mortgagee (in its individual capacity)
        in the
        Participation Agreement or expressly made hereunder. Neither the Owner Trustee
        nor the Mortgagee shall be liable for any action or inaction of the other
        or of
        the Owner Participant.

       

      SECTION
        6.02. Absence of
        Duties.

       

      In
        the case of the Mortgagee, except in accordance with written
        instructions furnished pursuant to Section 5.01 or 5.02 hereof, and except
        as
        provided in, and without limiting the generality of, Sections 5.03, 5.04
        and
        6.08 hereof and, in the case of the Owner Trustee, except as provided in
        Section
        4.01(b) hereof, the Owner Trustee and the Mortgagee shall have no duty (i)
        to
        see to any registration of the Aircraft or any recording or filing of the
        Lease
        or of this Trust Indenture or any other document, or to see to the maintenance
        of any such registration, recording or filing, (ii) to see to any insurance
        on
        the Aircraft or to effect or maintain any such insurance, whether or not
        Lessee
        shall be in default with respect thereto, (iii) to see to the payment or
        discharge of any lien or encumbrance of any kind against any part of the
        Trust
        Estate or the Trust Indenture Estate, (iv) to confirm, verify or inquire
        into
        the failure to receive any financial statements from Lessee, or (v) to inspect
        the Aircraft at any time or ascertain or inquire as to the performance or
        observance of any of Lessee’s covenants under the Lease with respect to the
        Aircraft. The Owner Participant shall not have any duty or responsibility
        hereunder, including, without limitation, any of the duties mentioned in
        clauses
        (i) through (v) above; provided, however, that nothing contained
        in this sentence shall limit any obligations of the Owner Participant under
        the
        Participation Agreement or relieve the Owner Participant from any restriction
        under Section 4.03 hereof.

       

      SECTION
        6.03. No
        Representations or Warranties as to Aircraft or Documents.

       

      NEITHER
        THE MORTGAGEE IN ITS INDIVIDUAL OR TRUST CAPACITY NOR THE
        OWNER TRUSTEE IN ITS INDIVIDUAL CAPACITY OR AS OWNER TRUSTEE UNDER THE TRUST
        AGREEMENT, MAKES OR SHALL BE DEEMED TO HAVE MADE AND EACH HEREBY EXPRESSLY
        DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE,
        AIRWORTHINESS, VALUE, COMPLIANCE WITH SPECIFICATIONS, CONDITION, DESIGN,
        QUALITY, DURABILITY, OPERATION, MERCHANTABILITY OR FITNESS FOR USE FOR A
        PARTICULAR PURPOSE OF THE AIRCRAFT OR ANY ENGINE, AS TO THE ABSENCE OF LATENT
        OR
        OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY
        INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF
        OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR ANY OTHER REPRESENTATION
        OR
        WARRANTY WHATSOEVER,
except
        the Owner Trustee in its individual capacity warrants that (i) the Owner
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      Delivery
        Date whatever title was conveyed to it, and (ii) the
        Aircraft is free and clear of Lessor Liens attributable to the Owner Trustee
        in
        its individual capacity. Neither the Owner Trustee, in its individual capacity
        or as Owner Trustee under the Trust Agreement, nor the Mortgagee, in its
        individual or trust capacities, makes or shall be deemed to have made any
        representation or warranty as to the validity, legality or enforceability
        of
        this Trust Indenture, the Trust Agreement, the Participation Agreement, the
        Equipment Notes, the Lease, the Purchase Agreement or the Purchase Agreement
        Assignment with the Consent and Agreement attached thereto, or as to the
        correctness of any statement contained in any thereof, except for the
        representations and warranties of the Owner Trustee made in its individual
        capacity and the representations and warranties of the Mortgagee in its
        individual capacity, in each case expressly made in this Trust Indenture
        or in
        the Participation Agreement. The Loan Participant, the Note Holders and the
        Owner Participant make no representation or warranty hereunder whatsoever.

       

      SECTION
        6.04. No
        Segregation of Monies; No Interest.

       

      Any
        monies paid to or retained by the Mortgagee pursuant to any
        provision hereof and not then required to be distributed to the Note Holders,
        Lessee or the Owner Trustee as provided in Article III hereof need not be
        segregated in any manner except to the extent required by Law or Section
        4.4 of
        the Lease and Section 5.09 hereof, and may be deposited under such general
        conditions as may be prescribed by Law, and the Mortgagee shall not be liable
        for any interest thereon (except that the Mortgagee shall invest all monies
        held
        as directed by Lessee so long as no Lease Event of Default or Lease Default
        has
        occurred and is continuing (or in the absence of such direction, by the Majority
        in Interest of Note Holders) in Cash Equivalents; provided,
however, that any payments received, or applied hereunder, by the
        Mortgagee shall be accounted for by the Mortgagee so that any portion thereof
        paid or applied pursuant hereto shall be identifiable as to the source
        thereof.

       

      SECTION
        6.05. Reliance;
        Agreements; Advice of Counsel.

       

      Neither
        the Owner Trustee nor the Mortgagee shall incur any liability
        to anyone in acting upon any signature, instrument, notice, resolution, request,
        consent, order, certificate, report, opinion, bond or other document or paper
        believed by it to be genuine and believed by it to be signed by the proper
        party
        or parties. The Owner Trustee and the Mortgagee may accept a copy of a
        resolution of the Board of Directors (or Executive Committee thereof) of
        any
        party to the Participation Agreement, certified by the Secretary or an Assistant
        Secretary thereof as duly adopted and in full force and effect, as conclusive
        evidence that such resolution has been duly adopted and that the same is
        in full
        force and effect. As to the aggregate unpaid Original Amount of Equipment
        Notes
        outstanding as of any date, the Owner Trustee may for all purposes hereof
        rely
        on a certificate signed by any Vice President or other authorized corporate
        trust officer of the Mortgagee. As to any fact or matter relating to Lessee
        the
        manner of ascertainment of which is not specifically described herein, the
        Owner
        Trustee and the Mortgagee may for all purposes hereof rely on a certificate,
        signed by a duly authorized officer of Lessee, as to such fact or matter,
        and
        such certificate shall constitute full protection to the Owner Trustee and
        the
        Mortgagee for any action taken or omitted to be taken by them in good faith
        in
        reliance thereon. The Mortgagee shall assume, and shall be fully protected
        in
        assuming, that the Owner Trustee is authorized by the Trust Agreement to
        enter
        into this Trust Indenture and to take all action to be taken by it pursuant
        to
        the provisions hereof, and shall not inquire into the authorization of the
        

      
        
          
          

        

        
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      Owner
        Trustee with respect thereto. In the administration of the
        trusts hereunder, the Owner Trustee and the Mortgagee each may execute any
        of
        the trusts or powers hereof and perform its powers and duties hereunder directly
        or through agents or attorneys and may, at the expense of the Trust Indenture
        Estate, advise with counsel, accountants and other skilled persons to be
        selected and retained by it, and the Owner Trustee and the Mortgagee shall
        not
        be liable for anything done, suffered or omitted in good faith by them in
        accordance with the written advice or written opinion of any such counsel,
        accountants or other skilled persons.

       

      
      

      SECTION
        6.06. Capacity
        in Which Acting.

       

      The
        Owner Trustee acts hereunder solely as trustee as herein and in
        the Trust Agreement provided, and not in its individual capacity, except
        as
        otherwise expressly provided herein, in the Trust Agreement and in the
        Participation Agreement.

       

      SECTION
        6.07. Compensation.

       

      The
        Mortgagee shall be entitled to reasonable compensation, including
        expenses and disbursements (including the reasonable fees and expenses of
        counsel), for all services rendered hereunder and shall, on and subsequent
        to an
        Event of Default hereunder, have a priority claim on the Trust Indenture
        Estate
        for the payment of such compensation, to the extent that such compensation
        shall
        not be paid by Lessee, and shall have the right, on and subsequent to an
        Event
        of Default hereunder, to use or apply any monies held by it hereunder in
        the
        Trust Indenture Estate toward such payments. The Mortgagee agrees that it
        shall
        have no right against the Loan Participant, the Note Holders, the Owner Trustee
        or the Owner Participant for any fee as compensation for its services as
        trustee
        under this Trust Indenture.

       

      SECTION
        6.08. Instructions from Note Holders.

       

      In
        the administration of the trusts created hereunder, the Mortgagee
        shall have the right to seek instructions from a Majority in Interest of
        Note
        Holders should any provision of this Trust Indenture appear to conflict with
        any
        other provision herein or should the Mortgagee’s duties or obligations hereunder
        be unclear, and the Mortgagee shall incur no liability in refraining from
        acting
        until it receives such instructions. The Mortgagee shall be fully protected
        for
        acting in accordance with any instructions received under this Section
        6.08.

       

      ARTICLE
        VII

       

      INDEMNIFICATION
        OF MORTGAGEE BY OWNER
        TRUSTEE

       

      SECTION
        7.01. Scope of
        Indemnification.

       

      The
        Owner Trustee, not in its individual capacity, but solely as
        Owner Trustee, hereby agrees, whether or not any of the transactions
        contemplated hereby shall be consummated, except as to matters covered by
        any
        indemnity furnished as contemplated by Section 5.03 hereof and except as
        otherwise provided in Section 2.03 or 2.04(b) hereof, to assume liability
        for,
        and does hereby indemnify, protect, save and keep harmless the Mortgagee
        (in its
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      against
        any and all liabilities, obligations, losses, damages,
        penalties, taxes (excluding any taxes payable by the Mortgagee on or measured
        by
        any compensation received by the Mortgagee for its services under this Trust
        Indenture), claims, actions, suits, costs, expenses or disbursements (including
        legal fees and expenses) of any kind and nature whatsoever, which may be
        imposed
        on, incurred by or asserted against the Mortgagee (whether or not also
        indemnified against by any other person under any other document) in any
        way
        relating to or arising out of this Trust Indenture or any other Operative
        Agreement to which it is a party or the enforcement of any of the terms of
        any
        thereof, or in any way relating to or arising out of the manufacture, purchase,
        acceptance, non-acceptance, rejection, ownership, delivery, lease, possession,
        use, operation, condition, sale, return or other disposition of the Aircraft
        or
        any Engine (including, without limitation, latent or other defects, whether
        or
        not discoverable, and any claim for patent, trademark or copyright
        infringement), or in any way relating to or arising out of the administration
        of
        the Trust Indenture Estate or the action or inaction of the Mortgagee hereunder
        except only in the case of willful misconduct or gross negligence (or negligence
        in the case of handling funds) of the Mortgagee in the performance of its
        duties
        hereunder or resulting from the inaccuracy of any representation or warranty
        of
        the Mortgagee (in its individual capacity) referred to in Section 6.03 hereof,
        or as provided in Section 6.01 hereof or in the last sentence of Section
        5.04
        hereof, or as otherwise excluded by the terms of Section 9.1 or 9.3 of the
        Participation Agreement from Lessee’s indemnities under such Sections. In
        addition, if necessary, the Mortgagee shall be entitled to indemnification
        from
        the Trust Indenture Estate for any liability, obligation, loss, damage, penalty,
        claim, action, suit, cost, expense or disbursement indemnified against pursuant
        to this Section 7.01 to the extent not reimbursed by Lessee or others, but
        without releasing any of them from their respective agreements of reimbursement;
        and to secure the same the Mortgagee shall have a prior Lien on the Trust
        Indenture Estate. Without limiting the foregoing, the Mortgagee agrees that,
        prior to seeking indemnification from the Trust Indenture Estate, it will
        demand, and diligently pursue in good faith (but with no duty to exhaust
        all
        legal remedies therefor), indemnification available to the Mortgagee from
        Lessee
        under the Lease or the Participation Agreement.

       

      ARTICLE
        VIII

       

      SUCCESSOR
        AND SEPARATE TRUSTEES

       

      SECTION
        8.01. Notice of
        Successor Owner Trustee.

       

      In
        the case of any appointment of a successor to the Owner Trustee
        pursuant to the Trust Agreement including upon any merger, conversion,
        consolidation or sale of substantially all of the corporate trust business
        of
        the Owner Trustee pursuant to the Trust Agreement, the successor Owner Trustee
        shall give prompt written notice thereof to the Mortgagee, Lessee and the
        Note
        Holders.

       

      SECTION
        8.02. Resignation of Mortgagee; Appointment of Successor.

       

      (a) The
        Mortgagee or any successor thereto may resign at any
        time without cause by giving at least 30 days’ prior written notice to Lessee,
        the Owner Trustee, the Owner Participant and each Note Holder, such resignation
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      acceptance
        of the trusteeship by a successor Mortgagee. In addition,
        a Majority in Interest of Note Holders may at any time (but only with the
        consent of the Lessee, which consent shall not be unreasonably withheld,
        except
        that such consent shall not be necessary if a Lease Event of Default is
        continuing) remove the Mortgagee without cause by an instrument in writing
        delivered to the Owner Trustee, Lessee, the Owner Participant and the Mortgagee,
        and the Mortgagee shall promptly notify each Note Holder thereof in writing,
        such removal to be effective upon the acceptance of the trusteeship by a
        successor Mortgagee. In the case of the resignation or removal of the Mortgagee,
        a Majority in Interest of Note Holders may appoint a successor Mortgagee
        by an
        instrument signed by such holders, which successor, so long as no Lease Event
        of
        Default shall have occurred and be continuing, shall be subject to Lessee’s
        reasonable approval. If a successor Mortgagee shall not have been appointed
        within 30 days after such notice of resignation or removal, the Mortgagee,
        the
        Owner Trustee, the Owner Participant or any Note Holder may apply to any
        court
        of competent jurisdiction to appoint a successor Mortgagee to act until such
        time, if any, as a successor shall have been appointed as above provided.
        The
        successor Mortgagee so appointed by such court shall immediately and without
        further act be superseded by any successor Mortgagee appointed as above
        provided.

       

      (b) Any
        successor Mortgagee, however appointed, shall execute
        and deliver to the Owner Trustee, the predecessor Mortgagee and the Lessee
        an
        instrument accepting such appointment and assuming the obligations of the
        Mortgagee under this Trust Indenture and the Participation Agreement arising
        from and after the time of such appointment, and thereupon such successor
        Mortgagee, without further act, shall become vested with all the estates,
        properties, rights, powers and duties of the predecessor Mortgagee hereunder
        in
        the trust hereunder applicable to it with like effect as if originally named
        the
        Mortgagee herein; but nevertheless upon the written request of such successor
        Mortgagee, such predecessor Mortgagee shall execute and deliver an instrument
        transferring to such successor Mortgagee, upon the trusts herein expressed
        applicable to it, all the estates, properties, rights and powers of such
        predecessor Mortgagee, and such predecessor Mortgagee shall duly assign,
        transfer, deliver and pay over to such successor Mortgagee all monies or
        other
        property then held by such predecessor Mortgagee hereunder.

       

      (c) Any
        successor Mortgagee, however appointed, shall be a bank
        or trust company having its principal place of business in the Borough of
        Manhattan, City and State of New York; Chicago, Illinois; Hartford, Connecticut;
        Wilmington, Delaware; or Boston, Massachusetts and having (or whose obligations
        under the Operative Agreements are guaranteed by an affiliated entity having)
        a
        combined capital and surplus of at least $100,000,000, if there be such an
        institution willing, able and legally qualified to perform the duties of
        the
        Mortgagee hereunder upon reasonable or customary terms.

       

      (d) Any
        corporation into which the Mortgagee may be merged or
        converted or with which it may be consolidated, or any corporation resulting
        from any merger, conversion or consolidation to which the Mortgagee shall
        be a
        party, or any corporation to which substantially all the corporate trust
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      transferred,
        shall, subject to the terms of paragraph (c) of this
        Section 8.02, be a successor Mortgagee and the Mortgagee under this Trust
        Indenture without further act.

       

      SECTION
        8.03. Appointment of Additional and Separate Trustees.

       

      (a) Whenever
        (i) the Mortgagee shall deem it necessary or
        desirable in order to conform to any Law of any jurisdiction in which all
        or any
        part of the Trust Indenture Estate shall be situated or to make any claim
        or
        bring any suit with respect to or in connection with the Trust Indenture
        Estate,
        this Trust Indenture, any other Indenture Agreement, the Equipment Notes
        or any
        of the transactions contemplated by the Participation Agreement, (ii) the
        Mortgagee shall be advised by counsel satisfactory to it that it is so necessary
        or prudent in the interests of the Note Holders (and the Mortgagee shall
        so
        advise the Owner Trustee and Lessee), or (iii) the Mortgagee shall have been
        requested to do so by a Majority in Interest of Note Holders, then in any
        such
        case, the Mortgagee and, upon the written request of the Mortgagee, the Owner
        Trustee, shall execute and deliver an indenture supplemental hereto and such
        other instruments as may from time to time be necessary or advisable either
        (1)
        to constitute one or more bank or trust companies or one or more persons
        approved by the Mortgagee, either to act jointly with the Mortgagee as
        additional trustee or trustees of all or any part of the Trust Indenture
        Estate,
        or to act as separate trustee or trustees of all or any part of the Trust
        Indenture Estate, in each case with such rights, powers, duties and obligations
        consistent with this Trust Indenture as may be provided in such supplemental
        indenture or other instruments as the Mortgagee or a Majority in Interest
        of
        Note Holders may deem necessary or advisable, or (2) to clarify, add to or
        subtract from the rights, powers, duties and obligations theretofore granted
        any
        such additional or separate trustee, subject in each case to the remaining
        provisions of this Section 8.03. If the Owner Trustee shall not have taken
        any
        action requested of it under this Section 8.03(a) that is permitted or required
        by its terms within 15 days after the receipt of a written request from the
        Mortgagee so to do, or if an Event of Default shall have occurred and be
        continuing, the Mortgagee may act under the foregoing provisions of this
        Section
        8.03(a) without the concurrence of the Owner Trustee, and the Owner Trustee
        hereby irrevocably appoints (which appointment is coupled with an interest)
        the
        Mortgagee, its agent and attorney-in-fact to act for it under the foregoing
        provisions of this Section 8.03(a) in either of such contingencies. The
        Mortgagee may, in such capacity, execute, deliver and perform any such
        supplemental indenture, or any such instrument, as may be required for the
        appointment of any such additional or separate trustee or for the clarification
        of, addition to or subtraction from the rights, powers, duties or obligations
        theretofore granted to any such additional or separate trustee. In case any
        additional or separate trustee appointed under this Section 8.03(a) shall
        die,
        become incapable of acting, resign or be moved, all the assets, property,
        rights, powers, trusts, duties and obligations of such additional or separate
        trustee shall revert to the Mortgagee until a successor additional or separate
        trustee is appointed as provided in this Section 8.03(a).

       

      (b) No
        additional or separate trustee shall be entitled to
        exercise any of the rights, powers, duties and obligations conferred upon
        the
        Mortgagee in respect of the custody, investment and payment of monies and
        all
        monies received by any such additional or separate trustee from or constituting
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      otherwise
        payable under any Operative Agreement to the Mortgagee
        shall be promptly paid over by it to the Mortgagee. All other rights, powers,
        duties and obligations conferred or imposed upon any additional or separate
        trustee shall be exercised or performed by the Mortgagee and such additional
        or
        separate trustee jointly except to the extent that applicable Law of any
        jurisdiction in which any particular act is to be performed renders the
        Mortgagee incompetent or unqualified to perform such act, in which event
        such
        rights, powers, duties and obligations (including the holding of title to
        all or
        part of the Trust Indenture Estate in any such jurisdiction) shall be exercised
        and performed by such additional or separate trustee. No additional or separate
        trustee shall take any discretionary action except on the instructions of
        the
        Mortgagee or a Majority in Interest of Note Holders. No trustee hereunder
        shall
        be personally liable by reason of any act or omission of any other trustee
        hereunder, except that the Mortgagee shall be liable for the consequences
        of its
        lack of reasonable care in selecting, and the Mortgagee’s own actions in acting
        with, any additional or separate trustee. Each additional or separate trustee
        appointed pursuant to this Section 8.03 shall be subject to, and shall have
        the
        benefit of Articles IV through VIII and Article X hereof insofar as they
        apply
        to the Mortgagee. The powers of any additional or separate trustee appointed
        pursuant to this Section 8.03 shall not in any case exceed those of the
        Mortgagee hereunder.

       

      (c) If
        at any time the Mortgagee shall deem it no longer
        necessary or in order to conform to any such Law or take any such action
        or
        shall be advised by such counsel that it is no longer so necessary or desirable
        in the interest of the Note Holders, or in the event that the Mortgagee shall
        have been requested to do so in writing by a Majority in Interest of Note
        Holders, the Mortgagee and, upon the written request of the Mortgagee, the
        Owner
        Trustee, shall execute and deliver an indenture supplemental hereto and all
        other instruments and agreements necessary or proper to remove any additional
        or
        separate trustee. The Mortgagee may act on behalf of the Owner Trustee under
        this Section 8.03(c) when and to the extent it could so act under Section
        8.03(a) hereof.

       

      ARTICLE
        IX

       

      SUPPLEMENTS
        AND AMENDMENTS TO 

      TRUST
        INDENTURE AND OTHER DOCUMENTS

       

      SECTION
        9.01. Instructions of Majority; Limitations.

       

      (a) Except
        as provided in Section 5.02 hereof, the Owner Trustee
        agrees it shall not enter into any amendment of or supplement to the Lease,
        the
        Purchase Agreement, the Purchase Agreement Assignment or the Consent and
        Agreement, or execute and deliver any written waiver or modification of,
        or
        consent under, the terms of the Lease, the Purchase Agreement, the Purchase
        Agreement Assignment or the Consent and Agreement, unless such supplement,
        amendment, waiver, modification or consent is consented to in writing by
        the
        Mortgagee and a Majority in Interest of Note Holders. Anything to the contrary
        contained herein notwithstanding, without the necessity of the consent of
        any of
        the Note Holders or the Mortgagee, (i) any Excluded Payments payable to the
        Owner Participant may be modified, amended, changed or waived in such manner
        

      
        
          
          

        

        
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      as
        shall be agreed to by the Owner Participant and Lessee, (ii) the
        Owner Trustee and Lessee may enter into amendments of or additions to the
        Lease
        to modify Section 5 (except to the extent that such amendment would affect
        the
        rights or exercise of remedies under Section 15 of the Lease) or Section
        17 of
        the Lease so long as such amendments, modifications and changes do not and
        would
        not affect the time of, or reduce the amount of, Rent payments (except to
        the
        extent expressly permitted by Section 5.02 hereof) until after the payment
        in
        full of all Secured Obligations or otherwise adversely affect the Note Holders
        and (iii) the Owner Trustee may enter into a Lease Supplement (x) to evidence
        the succession of another party as the Owner Trustee in accordance with the
        terms of the Trust Agreement or (y) to provide for subjecting any Replacement
        Airframe or Replacement Engine to the Lease in accordance with the terms
        of the
        Lease.

       

      (b) Without
        limiting the provisions of Section 9.01 hereof, the
        Mortgagee agrees with the Note Holders that it shall not consent to or enter
        into any amendment, waiver or modification of or supplement or consent to
        this
        Trust Indenture, the Lease, the Purchase Agreement, the Purchase Agreement
        Assignment, the Consent and Agreement or the Participation Agreement, or
        any
        other agreement included in the Trust Indenture Estate, unless such supplement,
        amendment, waiver, modification or consent is consented to in writing by
        a
        Majority in Interest of Note Holders, but upon the written request of a Majority
        in Interest of Note Holders, the Mortgagee shall from time to time enter
        into
        any such supplement or amendment, or execute and deliver any such waiver,
        modification or consent, as may be specified in such request and as may be
        (in
        the case of any such amendment, supplement or modification), to the extent
        such
        agreement is required, agreed to by the Owner Trustee and Lessee or, as may
        be
        appropriate, the Airframe Manufacturer or the Engine Manufacturer;
provided, however, that, without the consent of each holder of an
        affected Equipment Note then outstanding and of the Liquidity Provider, no
        such
        amendment of or supplement to this Trust Indenture, the Lease, the Purchase
        Agreement, the Purchase Agreement Assignment, the Consent and Agreement or
        the
        Participation Agreement or waiver or modification of the terms of, or consent
        under, any thereof, shall (i) modify any of the provisions of this Section
        9.01,
        or of Article II or III or Section 4.02, 4.04(c), 4.04(d), 5.02 or 5.06 hereof,
        Section 13.3, 14 (except to add an Event of Default) or 16 of the Lease,
        Section
        15.1 of the Participation Agreement, the definitions of “Event of Default,”
“Default,” “Lease Event of Default,” “Lease Default,” “Majority in Interest of
        Note Holders,” “Make-Whole Amount” or “Note Holder,” or the percentage of Note
        Holders required to take or approve any action hereunder, (ii) reduce the
        amount, or change the time of payment or method of calculation of any amount,
        of
        Original Amount, Make-Whole Amount, if any, or interest with respect to any
        Equipment Note, or alter or modify the provisions of Article III hereof with
        respect to the order of priorities in which distribution thereunder shall
        be
        made as among the Note Holders, the Owner Trustee and Lessee, (iii) reduce,
        modify or amend any indemnities in favor of the Owner Trustee, the Mortgagee
        or
        the Note Holders (except that the Owner Trustee (in its individual capacity)
        or
        the Mortgagee, as the case may be, may consent to any waiver or reduction
        of an
        indemnity payable to it) or the other Indenture Indemnitees, (iv) consent
        to any
        change in the Trust Indenture or the Lease which would permit redemption
        of
        Equipment Notes earlier than permitted under Section 2.10 hereof or the purchase
        or exchange of the Equipment Notes other than as permitted by Section 2.13
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      Participation
        Agreement, reduce the amount or extend the time of
        payment of Basic Rent, Stipulated Loss Value, or Termination Value for the
        Aircraft in each case as set forth in the Lease, or modify, amend or supplement
        the Lease or consent to any assignment of the Lease, in either case releasing
        Lessee from its obligations in respect of the payment of Basic Rent, Stipulated
        Loss Value or Termination Value for the Aircraft or altering the absolute
        and
        unconditional character of the obligations of Lessee to pay Rent as set forth
        in
        Sections 3 and 16 of the Lease or (vi) permit the creation of any Lien on
        the
        Trust Indenture Estate or any part thereof other than Permitted Liens or
        deprive
        any Note Holder of the benefit of the Lien of this Trust Indenture on the
        Trust
        Indenture Estate, except as provided in connection with the exercise of remedies
        under Article IV hereof.

       

      (c) At
        any time after the date hereof, the Owner Trustee and the
        Mortgagee may enter into one or more agreements supplemental hereto without
        the
        consent of any Note Holder for any of the following purposes: (i) (a) to
        cure
        any defect or inconsistency herein or in the Equipment Notes, or to make
        any
        change not inconsistent with the provisions hereof (provided that such change
        does not adversely affect the interests of any Note Holder in its capacity
        solely as Note Holder) or (b) to cure any ambiguity or correct any mistake;
        (ii) to evidence the succession of another party as the Owner Trustee in
        accordance with the terms of the Trust Agreement or to evidence the succession
        of a new trustee hereunder pursuant hereto, the removal of the trustee hereunder
        or the appointment of any co-trustee or co-trustees or any separate or
        additional trustee or trustees; (iii) to convey, transfer, assign, mortgage
        or
        pledge any property to or with the Mortgagee or to make any other provisions
        with respect to matters or questions arising hereunder so long as such action
        shall not adversely affect the interests of the Note Holders in its capacity
        solely as Note Holder; (iv) to correct or amplify the description of any
        property at any time subject to the Lien of this Trust Indenture or better
        to
        assure, convey and confirm unto the Mortgagee any property subject or required
        to be subject to the Lien of this Trust Indenture, the Airframe or Engines
        or
        any Replacement Airframe or Replacement Engine; (v) to add to the covenants
        of
        the Owner Trustee for the benefit of the Note Holders, or to surrender any
        rights or power herein conferred upon the Owner Trustee, the Owner Participant
        or the Lessee; (vi) to add to the rights of the Note Holders; and (vii) to
        include on the Equipment Notes any legend as may be required by Law.

       

      SECTION
        9.02. Trustees
        Protected.

       

      If,
        in the opinion of the institution acting as Owner Trustee under
        the Trust Agreement or the institution acting as Mortgagee hereunder, any
        document required to be executed by it pursuant to the terms of Section 9.01
        hereof affects any right, duty, immunity or indemnity with respect to such
        institution under this Trust Indenture or the Lease, such institution may
        in its
        discretion decline to execute such document.

       

      SECTION
        9.03. Documents
        Mailed to Note Holders.

       

      Promptly
        after the execution by the Owner Trustee or the Mortgagee of
        any document entered into pursuant to Section 9.01 hereof, the Mortgagee
        shall
        mail, by first class mail, postage prepaid, a copy thereof to Lessee and
        to each
        Note Holder at its address last set 

      
        
          
          

        

        
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      forth
        in the Equipment Note Register, but the failure of the
        Mortgagee to mail such copies shall not impair or affect the validity of
        such
        document.

       

      SECTION
        9.04. No Request
        Necessary for Lease Supplement or Trust Indenture Supplement.

       

      No
        written request or consent of the Mortgagee, the Note Holders or
        the Owner Participant pursuant to Section 9.01 hereof shall be required to
        enable the Owner Trustee to enter into any Lease Supplement specifically
        required by the terms of the Lease or to execute and deliver a Trust Indenture
        Supplement specifically required by the terms hereof.

       

      ARTICLE
        X

       

      MISCELLANEOUS

       

      SECTION
        10.01. Termination of Trust Indenture.

       

      Upon
        (or at any time after) payment in full of the Original Amount
        of, Make-Whole Amount, if any, and interest on and all other amounts due
        under
        all Equipment Notes and provided that there shall then be no other Secured
        Obligations due to the Indenture Indemnitees, the Note Holders and the Mortgagee
        hereunder or under the Participation Agreement or other Operative Agreement,
        the
        Owner Trustee shall direct the Mortgagee to execute and deliver to or as
        directed in writing by the Owner Trustee an appropriate instrument releasing
        the
        Aircraft and the Engines from the Lien of this Trust Indenture and releasing
        the
        Lease, the Purchase Agreement, the Purchase Agreement Assignment with the
        Consent and Agreement attached thereto from the assignment and pledge thereof
        hereunder and the Mortgagee shall execute and deliver such instrument as
        aforesaid and give written notice thereof to Lessee; provided,
however, that this Trust Indenture and the trusts created hereby
        shall
        earlier terminate and this Trust Indenture shall be of no further force or
        effect upon any sale or other final disposition by the Mortgagee of all property
        constituting part of the Trust Indenture Estate and the final distribution
        by
        the Mortgagee of all monies or other property or proceeds constituting part
        of
        the Trust Indenture Estate in accordance with the terms hereof. Except as
        aforesaid otherwise provided, this Trust Indenture and the trusts created
        hereby
        shall continue in full force and effect in accordance with the terms
        hereof.

       

      SECTION
        10.02. No
        Legal Title to Trust Indenture Estate in Note Holders.

       

      No
        holder of an Equipment Note shall have legal title to any part of
        the Trust Indenture Estate. No transfer, by operation of law or otherwise,
        of
        any Equipment Note or other right, title and interest of any Note Holder
        in and
        to the Trust Indenture Estate or hereunder shall operate to terminate this
        Trust
        Indenture or entitle such holder or any successor or transferee of such holder
        to an accounting or to the transfer to it of any legal title to any part
        of the
        Trust Indenture Estate.

      
        
          
          

        

        
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      SECTION
        10.03. Sale of
        Aircraft by Mortgagee Is Binding.

       

      Any
        sale or other conveyance of the Trust Indenture Estate, or any
        part thereof (including any part thereof or interest therein), by the Mortgagee
        made pursuant to the terms of this Trust Indenture shall bind the Note Holders
        and shall be effective to transfer or convey all right, title and interest
        of
        the Trustee, the Owner Trustee, the Owner Participant and such holders in
        and to
        such Trust Indenture Estate or part thereof. No purchaser or other grantee
        shall
        be required to inquire as to the authorization, necessity, expediency or
        regularity of such sale or conveyance or as to the application of any sale
        or
        other proceeds with respect thereto by the Mortgagee.

       

      SECTION
        10.04. Trust
        Indenture for Benefit of Owner Trustee, Mortgagee, Owner Participant, Note
        Holders and the Other Indenture Indemnitees.

       

      Nothing
        in this Trust Indenture, whether express or implied, shall be
        construed to give any person other than the Owner Trustee, the Mortgagee,
        the
        Owner Participant, the Note Holders and the other Indenture Indemnitees,
        any
        legal or equitable right, remedy or claim under or in respect of this Trust
        Indenture.

       

      SECTION
        10.05. Notices.

       

      Unless
        otherwise expressly specified or permitted by the terms
        hereof, all notices, requests, demands, authorizations, directions, consents,
        waivers or documents provided or permitted by this Trust Indenture to be
        made,
        given, furnished or filed shall be in writing, personally delivered or mailed
        by
        certified mail, postage prepaid, or by facsimile or confirmed telex, and
        (i) if
        to the Owner Trustee, addressed to it at MAC: U1228-120, 299 South Main
        Street, 12th Floor, Salt Lake City, Utah 84111 with a copy to the Owner
        Participant addressed as provided in clause (iii) below, (ii) if to Mortgagee,
        addressed to it at its office at Rodney Square North, 1100 North Market Street,
        Wilmington, Delaware 19890, Attention: Corporate Trust Administration, facsimile
        number (302) 651-8882, (iii) if to any Participant, Lessee, any Note Holder
        or
        any other Indenture Indemnitee, addressed to such party at such address as
        such
        party shall have furnished by notice to the Owner Trustee and the Mortgagee,
        or,
        until an address is so furnished, addressed to the address of such party
        (if
        any) set forth on Schedule 1 to the Participation Agreement or in the Equipment
        Note Register. Whenever any notice in writing is required to be given by
        the
        Owner Trustee, any Participant or the Mortgagee or any Note Holder to any
        of the
        other of them, such notice shall be deemed given and such requirement satisfied
        when such notice is received, or if such notice is mailed by certified mail,
        postage prepaid, three Business Days after being mailed, addressed as provided
        above. Any party hereto may change the address to which notices to such party
        will be sent by giving notice of such change to the other parties to this
        Trust
        Indenture.

       

      SECTION
        10.06. Severability.

       

      Any
        provision of this Trust Indenture which is prohibited or
        unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
        to the extent of such prohibition or unenforceability without invalidating
        the
        remaining provisions hereof. Any such prohibition or 

      
        
          
          

        

        
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      unenforceability
        in any particular jurisdiction shall not invalidate
        or render unenforceable such provision in any other jurisdiction.

       

      SECTION
        10.07. No Oral
        Modification or Continuing Waivers.

       

      No
        term or provision of this Trust Indenture or the Equipment Notes
        may be changed, waived, discharged or terminated orally, but only by an
        instrument in writing signed by the Owner Trustee and the Mortgagee, in
        compliance with Section 9.01 hereof. Any waiver of the terms hereof or of
        any
        Equipment Note shall be effective only in the specific instance and for the
        specific purpose given.

       

      SECTION
        10.08. Successors and Assigns.

       

      All
        covenants and agreements contained herein shall be binding upon,
        and inure to the benefit of, each of the parties hereto and the permitted
        successors and assigns of each, all as herein provided. Any request, notice,
        direction, consent, waiver or other instrument or action by any Note Holder
        shall bind the successors and assigns of such holder. This Trust Indenture
        and
        the Trust Indenture Estate shall not be affected by any amendment or supplement
        to the Trust Agreement or by any other action taken under or in respect of
        the
        Trust Agreement, except that each reference in this Trust Indenture to the
        Trust
        Agreement shall mean the Trust Agreement as amended and supplemented from
        time
        to time to the extent permitted hereby, thereby and by the Participation
        Agreement. Each Note Holder by its acceptance of an Equipment Note agrees
        to be
        bound by this Trust Indenture and all provisions of the Participation Agreement
        applicable to a Loan Participant or a Note Holder.

       

      SECTION
        10.09. Headings.

       

      The
        headings of the various Articles and sections herein and in the
        table of contents hereto are for convenience of reference only and shall
        not
        define or limit any of the terms or provisions hereof.

       

      SECTION
        10.10. Normal
        Commercial Relations.

       

      Anything
        contained in this Trust Indenture to the contrary
        notwithstanding, Owner Trustee, Mortgagee, any Participant or any bank or
        other
        Affiliate of such Participant may conduct any banking or other financial
        transactions, and have banking or other commercial relationships, with Lessee,
        fully to the same extent as if this Trust Indenture were not in effect,
        including without limitation the making of loans or other extensions of credit
        to Lessee for any purpose whatsoever, whether related to any of the transactions
        contemplated hereby or otherwise.

       

      SECTION
        10.11. Governing Law; Counterpart Form.

       

      THIS
        TRUST INDENTURE SHALL IN ALL RESPECTS BE GOVERNED BY, AND
        CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
        INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE. THIS TRUST
        INDENTURE IS BEING DELIVERED IN THE STATE OF NEW YORK. This Trust Indenture
        may
        be executed by the parties hereto in separate 

      
        
          
          

        

        
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      counterparts
        (or upon separate signature pages bound together into
        one or more counterparts), each of which when so executed and delivered shall
        be
        an original, but all such counterparts shall together constitute but one
        and the
        same instrument.

       

      SECTION
        10.12. Voting
        by Note Holders.

       

      All
        votes of the Note Holders shall be governed by a vote of a
        Majority in Interest of Note Holders, except as otherwise provided herein.

       

      SECTION
        10.13. Bankruptcy.

       

      It
        is the intention of the parties that the Owner Trustee, as lessor
        under the Lease (and the Mortgagee as assignee of the Owner Trustee hereunder),
        shall be entitled to the benefits of Section 1110 with respect to the right
        to
        take possession of the Aircraft, Airframe, Engines and Parts and to enforce
        any
        of its other rights or remedies as provided in the Lease in the event of
        a case
        under Chapter 11 of the Bankruptcy Code in which Lessee is a debtor, and
        in any
        instance where more than one construction is possible of the terms and
        conditions hereof or any other pertinent Operative Agreement, each such party
        agrees that a construction which would preserve such benefits shall control
        over
        any construction which would not preserve such benefits.

       

      [This
        space intentionally left blank.]

      
        
          
          

        

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

       

      WELLS
        FARGO BANK NORTHWEST, 

      NATIONAL
        ASSOCIATION, not in its individual 

      capacity,
        except as expressly provided herein, but 

      solely
        as Owner Trustee, as Owner Trustee

       

      By:_____________________________________ 

          
Name:

           Title:

       

      WILMINGTON
        TRUST COMPANY, as Mortgagee

       

      By:_____________________________________ 

          
Name:

           Title:

      

      

      
        
          
            

          

          
          

        

        
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      EXHIBIT
        A

      TO
        TRUST INDENTURE AND MORTGAGE [TN]

       

      TRUST
        INDENTURE AND MORTGAGE [TN] SUPPLEMENT

       

      This
        TRUST INDENTURE AND MORTGAGE [TN] SUPPLEMENT NO. 1, dated
        __________ (herein called this “Trust Indenture Supplement”) of WELLS FARGO BANK
        NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity, but solely
        as
        Owner Trustee (herein called the “Owner Trustee”) under that certain [Amended
        and Restated]3 Trust Agreement [TN] dated as of [DD] (the “Trust
        Agreement”), between the Owner Trustee and the Owner Participant named
        therein.

       

      W
        I T N E S S E T H:

       

      WHEREAS,
        the Trust Indenture and Mortgage [TN], dated as of [DD] (as
        amended and supplemented to the date hereof, the “Trust Indenture”) between the
        Owner Trustee and Wilmington Trust Company, as Mortgagee (the “Mortgagee”),
        provides for the execution and delivery of a supplement thereto substantially
        in
        the form hereof, which shall particularly describe the Aircraft, and shall
        specifically mortgage such Aircraft to the Mortgagee; and

       

      WHEREAS,
        each of the Trust Agreement and Trust Indenture relates to
        the Airframe and Engines described below, and a counterpart of the Trust
        Indenture is attached hereto and made a part hereof and this Trust Indenture
        Supplement, together with such counterpart of the Trust Indenture, is being
        filed for recordation on the date hereof with the FAA as one document;

       

      NOW,
        THEREFORE, this Trust Indenture Supplement witnesseth that the
        Owner Trustee hereby confirms that the Lien of the Trust Indenture on the
        Trust
        Indenture Estate covers all of Owner Trustee’s right, title and interest in and
        to the following described property:

       

      AIRFRAME

       

      One
        airframe identified as follows:

      

      
        	
                 

                 

                 

                Manufacturer

              	
                 

                 

                 

                Model

              	
                 

                FAA

                Registration

                Number

              	
                 

                 

                Manufacturer’s

                Serial
                  Number

              
	
                 

                Embraer-Empresa
                  Brasileira de Aeronáutica S.A.

                 

              	
                 

                EMB-145
                  XR

                 

              	 	 

      

       

      together
        with all of the Owner Trustee’s right, title and interest in
        and to all Parts of whatever nature, whether now owned or hereinafter acquired
        and which are from time to time incorporated or installed in or attached
        to said
        airframe.

       

      ___________________________

       

      3. Delete
        for New Aircraft.

      
        
          
          

        

        
          
          

          
            

          

        

        
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      AIRCRAFT
        ENGINES

       

      Two
        aircraft engines, each such engine having 750 or more rated
        take-off horsepower or the equivalent thereof, identified as follows:

      

      
        	
                 

                 

                Manufacturer

              	
                 

                 

                Manufacturer’s
                  Model

              	
                 

                 

                Serial
                  Number

              
	 	 	 
	 	 	 

      

       

      together
        with all of Owner Trustee’s right, title and interest in and
        to all Parts of whatever nature, whether now owned or hereafter acquired
        and
        which are from time to time incorporated or installed in or attached to either
        of such engines.

       

      Together
        with all of Owner Trustee’s right, title and interest in and
        to (a) all Parts of whatever nature, which from time to time are included
        within
        the definition of “Airframe” or “Engine”, whether now owned or hereafter
        acquired, including all substitutions, renewals and replacements of and
        additions, improvements, accessions and accumulations to the Airframe and
        Engines (other than additions, improvements, accessions and accumulations
        which
        constitute appliances, parts, instruments, appurtenances, accessories,
        furnishings or other equipment excluded from the definition of Parts) and
        (b)
        all Aircraft Documents.

       

      As
        further security for the obligations referred to above and secured
        by the Trust Indenture and hereby, the Owner Trustee has granted, bargained,
        sold, assigned, transferred, conveyed, mortgaged, pledged and confirmed,
        and
        does hereby grant, bargain, sell, assign, transfer, convey, mortgage, pledge
        and
        confirm, unto the Mortgagee, its successors and assigns, for the security
        and
        benefit of the Loan Participant, the Note Holders and the Indenture Indemnitees,
        in the trust created by the Trust Indenture, all of the right, title and
        interest of the Owner Trustee in, to and under the Lease Supplement of even
        date
        herewith covering the property described above.

       

      Notwithstanding
        any provision hereof, no Excluded Payment shall
        constitute security for any of the aforementioned obligations.

       

      TO
        HAVE AND TO HOLD all and singular the aforesaid property unto the
        Mortgagee, its successors and assigns, in trust for the equal and proportionate
        benefit and security of the Loan Participant, the Note Holders and the Indenture
        Indemnitees, except as provided in Section 2.14 and Article III of the Trust
        Indenture without any preference, distinction or priority of any one Equipment
        Note over any other by reason of priority of time of issue, sale, negotiation,
        date of maturity thereof or otherwise for any reason whatsoever, and for
        the
        uses and purposes and subject to the terms and provisions set forth in the
        Trust
        Indenture.

       

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

      
        
          
          

        

        
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      AND,
        FURTHER, the Owner Trustee hereby acknowledges that the Aircraft
        referred to in this Trust Indenture Supplement and the aforesaid Lease
        Supplement has been delivered to the Owner Trustee and is included in the
        property of the Owner Trustee covered by all the terms and conditions of
        the
        Trust Agreement, subject to the pledge and mortgage thereof under the Trust
        Indenture.

       

      *
        * *

       

      IN
        WITNESS WHEREOF, the Owner Trustee has caused this Trust Indenture
        Supplement to be duly executed by one of its officers, thereunto duly
        authorized, on the day and year first above written.

       

      WELLS
        FARGO BANK NORTHWEST, 

      NATIONAL
        ASSOCIATION, not in its individual 

      capacity,
        but solely as Owner Trustee, Owner 

      Trustee

       

      By:____________________________________

           
Name:

           
Title:

      

      

      
        
          
            

          

          
          

        

        
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      TRUST
        INDENTURE AND MORTGAGE

       

      SCHEDULE
        I

      

      
        	
                 

                Original
                  Amount

              	
                 

                Interest
                  Rate

              
	 	
              
	 	 
	 	 

      

      

      

      

      

      
        
          
            

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
             

          

        

      

      TRUST
        INDENTURE AND MORTGAGE

       

      EQUIPMENT
        NOTE AMORTIZATION

      

      

      
        	
                 

                 

                Payment
                  Date

              	
                Percentage
                  of

                Original
                  Amount

                   
   
to
                  Be
                  Paid

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