Document:

Exhibit 4.29

 

TRUST INDENTURE AND MORTGAGE

[NXXXJB]

 

dated
as of  [Date]

 

between

 

JETBLUE AIRWAYS CORPORATION,

Owner

 

and

 

WILMINGTON TRUST COMPANY,

not
in its individual capacity,

except as expressly stated herein, but solely as Mortgagee,

Mortgagee

 

 

Equipment
Notes Covering

One Airbus A320-232 Aircraft

Bearing U.S. Registration Mark NXXXJB

And Manufacturer’s Serial No. [MSN]

 

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I

  	
   

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
   

  	
  THE EQUIPMENT
  NOTES

  	
   

  
	
  2.01

  	
   

  	
  Form of Equipment Notes

  	
   

  
	
  2.02

  	
   

  	
  Issuance
  and Terms of Equipment Notes

  	
   

  
	
  2.03

  	
   

  	
  Method
  of Payment

  	
   

  
	
  2.04

  	
   

  	
  Application of Payments

  	
   

  
	
  2.05

  	
   

  	
  Termination of
  Interest in Collateral

  	
   

  
	
  2.06

  	
   

  	
  Registration,
  Transfer and Exchange of Equipment Notes

  	
   

  
	
  2.07

  	
   

  	
  Mutilated, Destroyed,
  Lost or Stolen Equipment Notes

  	
   

  
	
  2.08

  	
   

  	
  Payment
  of Expenses on Transfer; Cancellation

  	
   

  
	
  2.09

  	
   

  	
  Mandatory
  Redemptions of Equipment Notes

  	
   

  
	
  2.10

  	
   

  	
  Voluntary
  Redemptions of Equipment Notes

  	
   

  
	
  2.11

  	
   

  	
  Redemptions; Notice
  of Redemption

  	
   

  
	
  2.12

  	
   

  	
  Subordination

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  	
  RECEIPT, DISTRIBUTION AND APPLICATION
  OF PAYMENTS

  	
   

  
	
  3.01

  	
   

  	
  Basic Distributions

  	
   

  
	
  3.02

  	
   

  	
  Event of Loss; Replacement;
  Optional Redemption

  	
   

  
	
  3.03

  	
   

  	
  Payments After Acceleration

  	
   

  
	
  3.04

  	
   

  	
  Certain
  Payments

  	
   

  
	
  3.05

  	
   

  	
  Other
  Payments

  	
   

  
	
  3.06

  	
   

  	
  Payments to the Owner

  	
   

  
	
  3.07

  	
   

  	
  Cooperation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
   

  	
  COVENANTS
  OF THE OWNER

  	
   

  
	
  4.01

  	
   

  	
  Liens

  	
   

  
	
  4.02

  	
   

  	
  Possession,
  Operation and Use, Registration and Markings

  	
   

  
	
  4.03

  	
   

  	
  Inspection

  	
   

  
	
  4.04

  	
   

  	
  Maintenance;
  Replacement and Pooling of Parts, Alterations, Modifications and Additions;
  Substitution of Engines

  	
   

  
	
  4.05

  	
   

  	
  Loss, Destruction or
  Requisition

  	
   

  
	
  4.06

  	
   

  	
  Insurance

  	
   

  
	
  4.07

  	
   

  	
  Merger
  of Owner

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  	
  EVENTS
  OF DEFAULT; REMEDIES OF MORTGAGEE

  	
   

  
	
  5.01

  	
   

  	
  Event
  of Default

  	
   

  
	
  5.02

  	
   

  	
  Remedies

  	
   

  
	
  5.03

  	
   

  	
  Return
  of Aircraft, Etc

  	
   

  
	
  5.04

  	
   

  	
  Remedies
  Cumulative

  	
   

  
	
  5.05

  	
   

  	
  Discontinuance of
  Proceedings

  	
   

  

 

i

 

	
  5.06

  	
   

  	
  Waiver of Past Defaults

  	
   

  
	
  5.07

  	
   

  	
  Appointment of Receiver

  	
   

  
	
  5.08

  	
   

  	
  Mortgagee
  Authorized to Execute Bills of Sale, Etc

  	
   

  
	
  5.09

  	
   

  	
  Rights of
  Note Holders to Receive Payment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
   

  	
  DUTIES
  OF THE MORTGAGEE

  	
   

  
	
  6.01

  	
   

  	
  Notice of Event of Default

  	
   

  
	
  6.02

  	
   

  	
  Action
  Upon Instructions; Certain Rights and Limitations

  	
   

  
	
  6.03

  	
   

  	
  Indemnification

  	
   

  
	
  6.04

  	
   

  	
  No Duties Except as
  Specified in Trust Indenture or Instructions

  	
   

  
	
  6.05

  	
   

  	
  No Action Except Under Trust
  Indenture or Instructions

  	
   

  
	
  6.06

  	
   

  	
  Investment of
  Amounts Held by Mortgagee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
   

  	
  THE MORTGAGEE

  	
   

  
	
  7.01

  	
   

  	
  Acceptance of Trusts
  and Duties

  	
   

  
	
  7.02

  	
   

  	
  Absence
  of Duties

  	
   

  
	
  7.03

  	
   

  	
  No
  Representations or Warranties as to Aircraft or Documents

  	
   

  
	
  7.04

  	
   

  	
  No Segregation of
  Monies; No Interest

  	
   

  
	
  7.05

  	
   

  	
  Reliance;
  Agreements; Advice of Counsel

  	
   

  
	
  7.06

  	
   

  	
  Compensation

  	
   

  
	
  7.07

  	
   

  	
  Instructions from Note
  Holders

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
   

  	
  INDEMNIFICATION

  	
   

  
	
  8.01

  	
   

  	
  Scope of Indemnification

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
   

  	
  SUCCESSOR
  AND SEPARATE TRUSTEES

  	
   

  
	
  9.01

  	
   

  	
  Resignation of Mortgagee;
  Appointment of Successor

  	
   

  
	
  9.02

  	
   

  	
  Appointment of Additional
  and Separate Trustees

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
   

  	
  SUPPLEMENTS
  AND AMENDMENTS TO THIS TRUST INDENTURE AND OTHER DOCUMENTS

  	
   

  
	
  10.01

  	
   

  	
  Instructions of Majority;
  Limitations

  	
   

  
	
  10.02

  	
   

  	
  Mortgagee
  Protected

  	
   

  
	
  10.03

  	
   

  	
  Documents Mailed to
  Note Holders

  	
   

  
	
  10.04

  	
   

  	
  No
  Request Necessary for Trust Indenture Supplement

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
   

  	
  MISCELLANEOUS

  	
   

  
	
  11.01

  	
   

  	
  Termination of Trust
  Indenture

  	
   

  
	
  11.02

  	
   

  	
  No Legal
  Title to Collateral in Note Holders

  	
   

  
	
  11.03

  	
   

  	
  Sale of
  Aircraft by Mortgagee Is Binding

  	
   

  
	
  11.04

  	
   

  	
  Trust Indenture
  for Benefit of Owner, Mortgagee, Note Holders, Related Secured Parties and the
  other Indenture Indemnitees

  	
   

  
	
  11.05

  	
   

  	
  Notices

  	
   

  

 

ii

 

	
  11.06

  	
   

  	
  Severability

  	
   

  
	
  11.07

  	
   

  	
  No Oral
  Modification or Continuing Waivers

  	
   

  
	
  11.08

  	
   

  	
  Successors and Assigns

  	
   

  
	
  11.09

  	
   

  	
  Headings

  	
   

  
	
  11.10

  	
   

  	
  Normal Commercial Relations

  	
   

  
	
  11.11

  	
   

  	
  Governing Law;
  Counterpart Form

  	
   

  
	
  11.12

  	
   

  	
  Voting By Note Holders

  	
   

  
	
  11.13

  	
   

  	
  Bankruptcy

  	
   

  
	
   

  	
   

  
	
  ANNEX
  A

  	
  Definitions

  
	
  ANNEX B

  	
  Insurance

  
	
  EXHIBIT A

  	
  Form
  of Trust Indenture and Mortgage Supplement

  
	
  SCHEDULE I

  	
  Equipment
  Notes Amortization and Interest Rates

  
						

 

iii

 

TRUST INDENTURE AND MORTGAGE
[NXXXJB]

 

TRUST
INDENTURE AND MORTGAGE [NXXXJB], dated as of [Date] (“Trust Indenture”),
between JETBLUE AIRWAYS CORPORATION,
a Delaware corporation (“Owner”), 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 parties hereto desire by this Trust
Indenture, among other things, (i) to provide for the issuance by the
Owner of the Equipment Notes and (ii) to provide for the assignment,
mortgage and pledge by the Owner to the Mortgagee, as part of the Collateral
hereunder, among other things, of all of the Owner’s right, title and interest
in and to the Aircraft and, except as hereinafter expressly provided, all
payments and other amounts received hereunder in accordance with the terms
hereof, as security for, among other things, the Owner’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 and authenticated and delivered by
the Mortgagee hereunder, the valid, binding and enforceable obligations of the
Owner; and

 

WHEREAS, all things necessary to make this Trust
Indenture the valid, binding and legal obligation of the Owner 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, Break Amount, if any, Prepayment Premium,
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 performance and observance by the Owner of all the agreements,
covenants and provisions contained herein and in the Participation Agreement
and in the Equipment Notes (the “Secured
Obligations”), for the benefit of the Note Holders and each of the
Indenture Indemnitees, and to secure the Related Secured Obligations under any
Related Indenture for the benefit of the Related Secured Parties 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 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 Note Holders, the Related Secured Parties and each of the Indenture Indemnitees,
a first priority security interest in and mortgage lien on all right, title and
interest of the Owner in, to and under the following described property, rights
and privileges, whether now

 

 

or hereafter acquired (which, collectively, together with 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 “Collateral”),
to wit:

 

(1)                                  The Airframe and Engines more
particularly described in the initial Trust Indenture Supplement dated the date
hereof, or any other 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 or hereafter acquired, 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 of Owner’s rights and interests in
and to clause 12 (Warranties and Service Life Policy) and Clause 13
(Patent Indemnity) of the Purchase Agreement insofar as they relate to the
Aircraft or any element thereof, the warranties and indemnities, including all
limitations thereto, provided in the Engine Agreement and all claims arising
under such provisions in respect of the Engines and the Bills of Sale
(reserving to the Owner, however, all of the Owner’s other rights and interest
in and to the Purchase Agreement and the Engine Agreement) together with all
rights, powers, privileges, options and other benefits of the Owner in respect
of such provisions (subject to such reservation) with respect to the Airframe
or the Engines, including, without limitation, the right to make all waivers
and agreements, to give and receive all notices and other instruments or
communications, and to take such action upon the occurrence of a default in
respect of such provisions, 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
is or may be entitled to do in respect of such provisions (subject to such
reservation), subject, with respect to the Purchase Agreement, to the terms and
conditions of the Consent and Agreement and, with respect to the Engine
Agreement, the Engine Consent and Agreement;

 

(3)                                  All proceeds with respect to the
requisition of title to or use of the Aircraft or any Engine by any Government
Entity or from the sale or other disposition of the Aircraft, the Airframe, any
Engine or other property described in any of these Granting Clauses by the
Mortgagee pursuant to the terms of this Trust Indenture, and all insurance
proceeds (other than third party liability insurance proceeds) with respect to
the Aircraft, the Airframe, any Engine or any part thereof, but excluding any
insurance maintained by the Owner and not required under Section 4.06;

 

(4)                                  All rents, revenues and other proceeds
collected by the Mortgagee pursuant to Section 5.03(b) and all monies and
securities from time to time deposited or required to be deposited with the
Mortgagee by or for the account of the Owner pursuant to any terms of this
Trust Indenture held or required to be held by the Mortgagee hereunder; and

 

2

 

(5)                                  All proceeds of the foregoing;

 

PROVIDED,
HOWEVER, that
notwithstanding any of the foregoing provisions, so long as no Event of Default
shall have occurred and be continuing, (a) the Mortgagee shall not take or
cause to be taken any action contrary to the Owner’s or any Permitted Lessee’s
right hereunder to quiet enjoyment of the Airframe and Engines, and to possess,
use, retain and control the Airframe and Engines and all revenues, income and
profits derived therefrom, and (b) the Owner shall have the right, to the
exclusion of the Mortgagee, with respect to the Purchase Agreement and the
Engine Agreement assigned hereunder, to exercise in the Owner’s name all rights
and powers assigned hereunder under the Purchase Agreement and the Engine
Agreement (other than to amend, modify or waive any of the warranties or
indemnities contained therein and assigned hereunder, except in the exercise of
the Owner’s reasonable business judgment) and to retain any recovery or benefit
resulting from the enforcement of any warranty or indemnity under the Purchase
Agreement and Engine Agreement; and provided  further  that,
notwithstanding the occurrence or continuation of an Event of Default, the
Mortgagee shall not enter into any amendment of the Purchase Agreement or
Engine Agreement which would increase the obligations of the Owner thereunder.

 

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
Note Holders, the Related Secured Parties and the Indenture Indemnitees, except
as provided in Section 2.12 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 (5) 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 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
Note Holders, the Related Secured Parties 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 Note
Holders, the Related Secured Parties or the Indenture Indemnitees be required
or obligated in any manner to perform or fulfill any obligations of the Owner
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 does hereby
constitute the Mortgagee the true and lawful attorney of the Owner, 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
or otherwise) to ask for, require, demand and receive any and all monies and
claims for monies (in each case including insurance and requisition proceeds)
due and to become due under or arising out of the Indenture Agreements, and all
other property which now or hereafter constitutes part of the Collateral, to
endorse any checks or other instruments or orders in connection therewith and
to

 

3

 

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; provided
that the Mortgagee shall not exercise any such rights except upon the
occurrence and during the continuance of an Event of Default hereunder.

 

Without limiting the
generality of the foregoing, but subject to the rights of the Owner hereunder,
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 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,  in its own name, but not in the name of the
Owner, which the Mortgagee may deem necessary or appropriate to protect and
preserve the right, title and interest of the Mortgagee in and to such 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 to any Person beyond those obligations
and liabilities specifically set forth in this Trust Indenture and in the other
Operative Agreements.

 

The Owner agrees that at
any time and from time to time, upon the written request of the Mortgagee, the
Owner will promptly and duly execute and deliver or cause to be duly executed
and delivered any and all such further instruments and documents (including
without limitation UCC continuation statements) as the Mortgagee may reasonably
deem necessary to perfect, preserve or protect the mortgage, security interests
and assignments created or intended to be created hereby or to obtain for the
Mortgagee the full benefits of the assignment hereunder and of the rights and
powers herein granted.

 

The Owner does hereby
warrant and represent that it has not assigned or pledged any of its right,
title or interest in the Collateral to anyone other than the Mortgagee except
for Liens on the Collateral that are released on or prior to the Closing Date.

 

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

 

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 hereto.  The “General
Provisions” set forth in Annex A are hereby incorporated as if set forth
in full herein.

 

4

 

ARTICLE II

THE EQUIPMENT NOTES

 

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.

 

JETBLUE AIRWAYS CORPORATION

 

SERIES [          ]
EQUIPMENT NOTE DUE
[          ] ISSUED IN
CONNECTION WITH THE AIRBUS MODEL A320-232 AIRCRAFT BEARING UNITED STATES
REGISTRATION NUMBER NXXXJB.

 

	
  No.                

  	
   

  	
  [Date]

  
	
   

  	
   

  	
  MATURITY DATE

  
	
  INTEREST
  RATE

  	
   

  	
   

  
	
  Three-Month
  LIBOR + [           ]%

  	
   

  	
  [                            ]

  

 

JETBLUE
AIRWAYS CORPORATION,
a Delaware corporation (“Owner”), hereby promises to pay to WILMINGTON TRUST COMPANY, as Subordination
Agent under the Intercreditor Agreement, 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 which shall accrue with
respect to each Interest Period at the applicable Debt Rate (calculated on the
basis of a year of 360 days and the actual number of days elapsed) in
effect for such Interest Period from the date hereof until paid in full.  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 quarterly
installments on March 15, June 15, September 15 and
December 15 of each year commencing on
                          ,
         .

 

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, whenever the date scheduled for any payment to be made
hereunder or under the Trust Indenture shall not be a Business Day, then such
payment shall not be due on such scheduled date but shall be due on the next
succeeding Business Day.

 

For purposes hereof, the
term “Trust
Indenture” means the Trust Indenture and
Mortgage [NXXXJB] dated as of [Date], between the Owner and Wilmington
Trust Company

 

5

 

(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 applicable Payment Due Rate
(calculated on the basis of a year of 360 days and the actual number of
days elapsed) on any overdue Original Amount, any overdue Break Amount, any
overdue Prepayment Premium, 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).

 

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 2.06 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, Break Amount, if any,
Prepayment Premium, 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 Break
Amount, any overdue Prepayment Premium, 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 Break Amount, if any, Prepayment Premium, 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 pursuant to the terms of the Trust Indenture
and is one of the Related Equipment Notes referred to in each Related
Indenture.  The Collateral 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 and each Related Indenture as set forth
therein.  Reference is hereby made to
the Trust Indenture and each Related 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 and each Related Indenture, as
well as for a statement of the terms and conditions of the trusts created by
the Trust Indenture and each Related Indenture, to all of which terms and

 

6

 

conditions in the Trust
Indenture and each Related Indenture each holder hereof agrees by its
acceptance of this Equipment Note.

 

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 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 nor the Mortgagee shall be affected by
notice to the contrary.

 

This Equipment Note is
subject to redemption as provided in Sections 2.09, 2.10 and 2.11 of the
Trust Indenture but not otherwise.  In
addition, this Equipment Note may be accelerated as provided in Section 5.02
of the Trust Indenture.

 

[The indebtedness
evidenced by this Equipment Note shall, to the extent and in the manner
provided in the Trust Indenture, rank in right of payment equally with all
Series G-1 Equipment Notes and Series G-2 Equipment Notes.  Principal payments on the Series G-1 Equipment
Notes and Series G-2 Equipment Notes will be subordinate to payments of
interest on the Series C Equipment Notes.](1)  [Payments of interest on the Series C Equipment Notes will
be subordinate and subject in right of payment to the prior payment of interest
on the Series G-1 Equipment Notes and Series G-2 Equipment
Notes.  Principal payments on the
Series C Equipment Notes will be subordinate and subject in right of
payment to the prior payment in full of the Secured Obligations (as defined in
the Trust Indenture) in respect of the Series G-1 Equipment Notes and
Series G-2 Equipment Notes and this Equipment Note is issued subject to
such provisions.  The Note Holder of
this Equipment Note, by accepting the same, (a) agrees to and shall be
bound by such provisions, (b) authorizes and directs the Mortgagee on his
behalf to take such action as may be necessary or appropriate to effectuate the
subordination as provided in the Trust Indenture and (c) appoints the
Mortgagee his attorney-in-fact for such purpose.](2)

 

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 LAW OF THE STATE OF NEW YORK.

 

*   *   *

 

 

(1) Insert for Series G-1
Equipment Notes and Series G-2 Equipment Notes.

(2)
Insert for Series C Equipment Notes.

 

7

 

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

 

	
   

  	
  JETBLUE AIRWAYS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

8

 

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:

  

 

9

 

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]

 

*   *   *

 

10

 

2.02                        Issuance and Terms of Equipment Notes. 
The Equipment Notes shall be dated the date of issuance thereof, shall
be issued in three separate series consisting of Series G-1,
Series G-2 and Series C and in the maturities and principal amounts
and shall bear interest as specified in Schedule I hereto.  On the date thereof, each Equipment Note
shall be issued to the Subordination Agent on behalf of the Pass Through
Trustee under the Pass Through Trust Agreements.  The Equipment Notes shall be issued in registered form only.  The Equipment Notes shall be issued in
denominations of $1,000 and integral multiples thereof, except that one
Equipment Note of each Series may be in an amount that is not an integral
multiple of $1,000.

 

Each Equipment Note shall
bear interest with respect to each Interest Period at the applicable Debt Rate
in effect for such Interest Period (calculated on the basis of a year of
360 days and the actual number of days elapsed) on the unpaid Original
Amount thereof from time to time outstanding, payable in arrears on
                   ,
          , and on each
March 15, June 15, September 15 and December 15 of each
year thereafter until maturity.  The
Original Amount of each Series G-1 Equipment Note and each Series C
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.  The Original Amount of
each Series G-2 Equipment Note shall be paid in one installment on
March 15, 2014.  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 applicable Payment Due Rate (calculated on the basis of a year
of 360 days and the actual number of days elapsed) on any part of the
Original Amount, any Break Amount, if applicable, or any Prepayment Premium, if
applicable, 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.  The period applicable to the
Payment Due Rate shall be the period commencing on the due date of such
Original Amount, Break Amount, Prepayment Premium interest or other amount and
ending on the same calendar day in the next succeeding month.  Amounts shall be overdue if not paid when
due (whether at stated maturity, by acceleration or otherwise).  Notwithstanding anything to the contrary
contained herein, whenever the date scheduled for any payment to be made
hereunder or under any Equipment Note shall not be a Business Day, then such
payment shall not be due on such scheduled date but shall be due on the next
succeeding Business Day.

 

The Owner 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, an amount equal to the fees payable to the Primary
Liquidity Provider under Section 2.03 of each Primary Liquidity Facility
multiplied by a fraction the numerator of which shall be the then outstanding
aggregate principal amount of all the Equipment Notes and the denominator of
which shall be the sum of (x) the then outstanding aggregate principal
amount of all “Series G-1 Equipment Notes”, “Series G-2 Equipment
Notes” and “Series C Equipment Notes” (each as defined in the Note
Purchase Agreement) and (y) the then outstanding aggregate amount of
Deposits under the Deposit Agreements pertaining to the Class G-1 Trust,
Class G-2 Trust and Class C Trust; (ii) to the extent not
payable (whether or not in fact paid) under Section 6(b) of the Note
Purchase Agreement, an amount equal to the fees payable to the Policy Provider
under Section 3.02 of the Policy Provider Agreement (as defined

 

11

 

in the Note Purchase
Agreement) multiplied by a fraction the numerator of which shall be the sum of
the then outstanding aggregate principal amount of the Series G-1 Equipment
Notes and Series G-2 Equipment Notes and the denominator of which shall be
the sum of (x) the then outstanding aggregate principal amount of all
“Series G-1 Equipment Notes” and “Series G-2 Equipment Notes” (each
as defined in the Note Purchase Agreement) and (y) the then outstanding
aggregate amount of the Deposits under the Deposit Agreement pertaining to the
Class G-1 Trust and Class G-2 Trust; (iii) the amount equal to
interest on any Downgrade Advance (other than any Applied Downgrade Advance)
payable under Section 3.07 of each Primary Liquidity Facility minus
Investment Earnings from such Downgrade Advance multiplied by the fraction
specified in the foregoing clause (i); (iv) the amount equal to
interest on any Non-Extension Advance (other than any Applied Non-Extension
Advance) payable under Section 3.07 of each Primary Liquidity Facility
minus Investment Earnings from such Non-Extension Advance multiplied by the
fraction specified in the foregoing clause (i); (v) if any payment
default shall have occurred and be continuing with respect to interest on any
Equipment Notes, the excess, if any, of (1) an amount equal to interest on
any Unpaid Advance, Applied Downgrade Advance or Applied Non-Extension Advance
payable under Section 3.07 of each Primary Liquidity Facility (or in the
case of the Series G-1 Equipment Notes or Series G-2 Equipment Notes,
if the Policy Provider has made a payment equivalent to such an Advance, as
would have been payable under Section 3.07 of the Primary Liquidity
Facility in respect of the Class G-1 Certificates or Class G-2
Certificates had such Advance been made) 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 on the overdue
scheduled interest on the “Equipment Notes” (as defined in the Note Purchase
Agreement in respect of which such Unpaid Advance, Applied Downgrade Advance or
Applied Non-Extension Advance was made by the Primary Liquidity Provider (or,
in the case of the Series G-1 Equipment Notes or Series G-2 Equipment
Notes, an equivalent payment was made by the Policy Provider) multiplied by 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 “Series G-1 Equipment Notes”, “Series G-2 Equipment Notes” and
“Series C Equipment Notes” (each as defined in the Note Purchase
Agreement) (other than interest becoming due and payable solely as a result of
acceleration of any such “Equipment Notes”); (vi) any
other amounts owed to the applicable Primary Liquidity Provider by the
Subordination Agent as borrower under each Primary Liquidity Facility
multiplied by the fraction specified in the foregoing clause (i) other
than (A) amounts due as repayment of advances thereunder or as interest on
such advances, except to the extent payable pursuant to clause (ii), (iii)
or (iv) above and (B) fees payable under Section 2.03 of each Primary
Liquidity Facility, (vii) all compensation and reimbursement of expenses
and disbursements payable by the Owner to the Policy Provider under the Policy
Provider Agreement except to the extent payable pursuant to clause (ii)
above multiplied by the fraction specified in the foregoing clause (ii),
(viii) Owner’s pro rata share of all compensation and reimbursement of
expenses, disbursements and advances payable by Owner under the Pass Through
Trust Agreements, (ix) Owner’s pro rata share of all compensation and
reimbursement of expenses and disbursements payable to the Subordination Agent
under the Intercreditor Agreement except with respect to any Unindemnified
Taxes incurred by the Subordination Agent in connection with the transactions
contemplated by the Intercreditor Agreement and (x) in the event Owner

 

12

 

requests any amendment to
any Operative Agreement or Pass Through Agreement, Owner’s pro rata share of
all reasonable fees and expenses (including, without limitation, fees and
disbursements of counsel) of the Escrow Agents and the Paying Agents in
connection therewith payable by the Pass Through Trustees under the Escrow
Agreements.  As used herein, “Owner’s pro rata share” means as of any time a fraction, the
numerator of which is the principal balance then outstanding of Equipment Notes
and the denominator of which is the aggregate principal balance then
outstanding of all “Equipment Notes” (as such term is defined in each of the
Operative Indentures).  For purposes of
this paragraph, the terms “Applied Downgrade Advance”, “Applied Non-Extension Advance”, “Class C Trust”, “Class G-1 Trust”, “Class G-2 Trust”, “Deposit Agreement”, “Deposit”, “Downgrade Advance”, “Final
Advance”, “Investment Earnings”,
“Non-Extension Advance” and “Unpaid Advance” shall have the meanings
specified in each Primary Liquidity Facility or the Intercreditor Agreement, as
applicable.

 

The Equipment Notes shall
be executed on behalf of the Owner by one of its authorized officers.  Equipment Notes bearing the signatures of
individuals who were at any time the proper officers of the Owner shall bind the
Owner, 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 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 signed by an authorized officer of the Owner; 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 be conclusive evidence, and the only
evidence, that such Equipment Note has been duly authenticated and delivered
hereunder.

 

The aggregate Original
Amount of the Equipment Notes issued hereunder shall not exceed
                   .

 

2.03                        Method
of Payment.

 

(a)                                  The Original Amount of, interest on, any
Break Amount, if applicable, or any Prepayment Premium, if applicable, 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
11:00 a.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 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), all amounts paid by the
Owner 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,

 

13

 

or causing to be
transferred, by wire transfer of immediately available funds in Dollars, prior
to 1:00 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 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 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 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 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,
shall exclude and withhold at the appropriate rate from each payment of
Original Amount of, interest on, Break Amount, if applicable, or Prepayment
Premium, if applicable, 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)
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) during the calendar year in which the payment hereunder or under
the Equipment Note(s) held by such holder is made (but prior to the making of
such payment), or in

 

14

 

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 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 (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 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 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.

 

Owner shall not 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.

 

2.04                        Application
of Payments.  In the case of
each Equipment Note, each payment of Original Amount, any Break Amount, if
applicable, or any Prepayment Premium, if applicable, 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 Break Amount, if applicable, or any overdue Prepayment Premium, if
applicable, 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;

 

15

 

Third:  to the payment of any Break Amount, if
applicable, or any Prepayment Premium, if applicable, and any other amount due
hereunder or under such Equipment Note; and

 

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 2.09, 2.10 and 2.11 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.

 

2.05                        Termination of Interest in Collateral.  (a) No Note
Holder or any other Indenture Indemnitee shall, as such, have any further
interest in, or other right with respect to, the Collateral when and if the
Original Amount of, any Break Amount, if applicable, or any Prepayment Premium,
if applicable, 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 and under the
other Operative Agreements by the Owner shall have been paid in full.

 

(b)                                 Upon satisfaction of the conditions
described in Section 2.05(a), no Related Secured Party shall have any
further interest in, or other right with respect to, the Collateral if (x) no
Related Event of Default shall have occurred and be continuing under any
Related Indenture or (y) all Related Secured Obligations that are due and
payable to such Related Secured Party by the Owner pursuant to each Related
Indenture shall have been paid and discharged in full.

 

2.06                        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 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 and of the same Series.  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 and of the same Series, 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 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

 

16

 

registration of
transfer or exchange of Equipment Notes (whether under this Section 2.06
or under Section 2.07 hereof or otherwise under this Trust Indenture)
shall be the valid obligations of the Owner 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 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 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 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 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 of each registration of a transfer of an Equipment Note.  Any such transferee of an Equipment Note, by
its acceptance of an Equipment Note, agrees to the provisions of this Indenture
and the Participation Agreement applicable to Note Holders, including
Sections 5.3, 5.4 and 8.1 thereof and shall be deemed to have covenanted
to the parties to the Participation Agreement as to the matters covenanted by
the original Note Holder in the Participation Agreement.  Subject to compliance by the Note Holder and
its transferee (if any) of the requirements set forth in this
Section 2.06, Mortgagee and Owner shall use all reasonable efforts to
issue new Equipment Notes upon transfer or exchange within ten Business Days of
the date an Equipment Note is surrendered for transfer or exchange.

 

2.07                        Mutilated, Destroyed, Lost or Stolen Equipment Notes.  If any
Equipment Note shall become mutilated, destroyed, lost or stolen, the Owner
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.  If the
Equipment Note being replaced has been destroyed, lost or stolen, the holder of
such Equipment Note shall furnish to the Owner and the Mortgagee such security
or indemnity as may be required by them to save and hold the Owner and the
Mortgagee harmless and evidence satisfactory to the Owner 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”) is the holder
of any such destroyed, lost or stolen Equipment Note, then the written
indemnity of such QIB, signed by an authorized officer

 

17

 

thereof, in favor
of, delivered to and in form reasonably satisfactory Owner 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 requirements set forth in this Section 2.07, Mortgagee and
Owner shall use all reasonable efforts to issue new Equipment Notes within ten
Business Days of the date of the written request therefor from the Note Holder.

 

2.08                        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.

 

2.09                        Mandatory Redemptions of Equipment Notes.  On the date
on which the Owner is required pursuant to Section 4.05 hereof to make
payment for an Event of Loss with respect to the Airframe, 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 with Break Amount, if any, but without
Prepayment Premium.

 

2.10                        Voluntary Redemptions of Equipment Notes.  All (but not
less than all) of the Equipment Notes may be redeemed by the Owner upon at
least 30 days’ revocable prior written notice to the Mortgagee, and 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 Secured Obligations owed or
then due and payable to the Note Holders plus Break Amount, if any, and
Prepayment Premium, if any.

 

2.11                        Redemptions; Notice of Redemption.

 

(a)                                  No redemption 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 25 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 that, in the case of a redemption made pursuant to
Section 2.10, such notice shall be revocable by written notice from the
Owner to Mortgagee given not later than three days prior to the redemption
date.  All notices of redemption shall
state:  (1) the redemption date,
(2) the applicable basis for determining the redemption price,
(3) that on the redemption date, the redemption price will become due and
payable upon each such Equipment Note, and that, if any such Equipment Notes
are then outstanding, interest on such Equipment Notes shall cease to

 

18

 

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 (or any person on behalf of the Owner) shall, to the extent an amount
equal to the redemption price for the Equipment Notes to be redeemed on the
redemption date shall not then be held by the Mortgagee, deposit or cause to be
deposited with the Mortgagee by 12:30 p.m. New York City time on the
redemption date in immediately available funds the redemption price of the
Equipment Notes to be redeemed.

 

(d)                                 Notice of redemption having been given
and not revoked as aforesaid, 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 2.06, 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.

 

2.12                        Subordination.

 

(a)                                  The Owner and, by acceptance of its
Equipment Notes of any Series, each Note Holder of such Series, hereby agree
that no payment or distribution shall be made on or in respect of the Secured
Obligations owed to such Note Holder of such Series, including any payment or
distribution of cash, property or securities after the commencement of a
proceeding of the type referred to in Section 5.01(v), (vi) or (vii)
hereof, except as expressly provided in Article III hereof.

 

(b)                                 By the acceptance of its Equipment Notes,
each Note Holder agrees that in the event that such Note Holder, in its
capacity as a Note Holder, shall receive any payment or distribution on any
Secured Obligations in respect of the Series of Equipment Note held by such
Note Holder which it is not entitled to receive under this Section 2.12 or
Article III hereof, it will hold any amount so received in trust for the
Note Holders entitled to such amount and will forthwith turn over such payment
to the Mortgagee in the form received to be applied as provided in
Article III hereof.

 

(c)                                  By the acceptance of its Equipment Notes,
each Note Holder agrees that in the event that such Note Holder, in its
capacity as a Note Holder, shall receive any payment or distribution pursuant
to this Trust Indenture on any Related Secured Obligations, it will hold any
amount so received in trust for the applicable Related Mortgagee and will
forthwith turn over such payment to the Mortgagee or the applicable Related
Mortgagee in the form received to be applied as provided in Article III of
the applicable Related Indenture.

 

(d)                                 The indebtedness evidenced by the Series
G-1 Equipment Notes and the Series G-2 Equipment Notes shall rank in right of
payment equally with all other Series G-1 Equipment Notes and Series G-2
Equipment Notes.  Principal payments on
the Series G-1

 

19

 

Equipment Notes
and Series G-2 Equipment Notes will be subordinate to payments of interest
on the Series C Equipment Notes. 
Payments of interest on the Series C Equipment Notes will be
subordinate and subject in right of payment to the prior payment of interest on
the Series G-1 Equipment Notes and Series G-2 Equipment Notes.  Principal payments on the Series C
Equipment Notes will be subordinate and subject in right of payment to the
prior payment in full of the Secured Obligations in respect of the Series G-1
Equipment Notes and the Series G-2 Equipment Notes.  By acceptance of its Equipment Notes of any Series, each Note
Holder of such Series (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Mortgagee on such Note Holder’s behalf to take any
action necessary or appropriate to effectuate the subordination as provided in
this Trust Indenture and (c) appoints the Mortgagee as such Note Holder’s
attorney-in-fact for such purpose.

 

ARTICLE III

RECEIPT, DISTRIBUTION AND APPLICATION OF PAYMENTS

 

3.01                        Basic
Distributions. 
Except as otherwise provided in Section 3.03 hereof, each periodic
payment of principal or interest on the Equipment Notes received by the
Mortgagee shall be promptly distributed in the following order of priority:

 

(i)                                     so much of such payment as shall be
required to pay in full the aggregate amount of the payment or payments of
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
Series G-1 Equipment Notes and Series G-2 Equipment Notes shall be
distributed to the Note Holders of Series G-1 Equipment Notes and
Series G-2 Equipment Notes ratably, without priority of one over the
other, in the proportion that the amount of such payment or payments then due
under all Series G-1 Equipment Notes and Series G-2 Equipment Notes
held by such Note Holder bears to the aggregate amount of interest payments
then due under all Series G-1 Equipment Notes and Series G-2
Equipment Notes;

 

(ii)                                  after giving effect to paragraph (i)
above, so much of such payment remaining as shall be required to pay in full
the aggregate amount of the payment or payments of 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 Series C Equipment Notes shall be
distributed to the Note Holders of Series C ratably, without priority of
one over the other, in the proportion that the amount of such payment or
payments then due under all Series C Equipment Notes held by such Note
Holder bears to the aggregate amount of interest payments then due under all
Series C Equipment Notes;

 

(iii)                               after giving effect to paragraphs (i) and (ii) above,
so much of such payment as shall be required to pay in full the aggregate
amount of the payment or payments of Original Amount then due under all
Series G-1 Equipment Notes and Series G-2 Equipment Notes shall be
distributed to the Note Holders of Series G-1 Equipment Notes and
Series G-2 Equipment Notes ratably, without priority of one over the
other, in the proportion that the amount of such payment or payments then due
under all Series G-1 Equipment Notes and Series G-2 Equipment Notes
held by such Note

 

20

 

Holder bears to the aggregate amount of such payments then due under
all Series G-1 Equipment Notes and Series G-2 Equipment Notes; and

 

(iv)                              after giving effect to
paragraphs (i), (ii) and (iii) above, so much of such payment remaining as
shall be required to pay in full the aggregate amount of the payment or
payments of Original Amount then due under all Series C Equipment Notes
shall be distributed to the Note Holders of Series C ratably, without
priority of one over the other, in the proportion that the amount of such
payment or payments then due under all Series C Equipment Notes held by such
Note Holder bears to the aggregate amount of such payments then due under all
Series C Equipment Notes.

 

3.02                        Event
of Loss; Replacement; Optional Redemption.  Except as
otherwise provided in Section 3.03 hereof, any payments received by the
Mortgagee (i) pursuant to Section 2.09 hereof with respect to the
Airframe as the result of an Event of Loss or (ii) pursuant to an optional
redemption of the Equipment Notes pursuant to Section 2.10 hereof shall be
applied to redemption of the Equipment Notes and to all other Secured
Obligations and Related 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 Owner, under the Operative
Agreements and then (b) to pay any other amounts then due (except as
provided in clause “Second” below) to the Mortgagee, the Note Holders and the
other Indenture Indemnitees under this Trust Indenture (other than the amounts
specified in clause “Second” below), the Participation Agreement or the
Equipment Notes;

 

Second, (i) to
pay the amounts specified in clause ”Third” of Section 3.03 hereof in
the order of payment set forth therein;

 

Third, as provided
in clause ”Fourth” of Section 3.03 hereof (including in the case of a
redemption pursuant to Section 2.10 hereof, Prepayment Premium, if any);
and

 

Fourth, as provided
in clause ”Sixth” of Section 3.03 hereof.

 

3.03                        Payments
After Acceleration. 
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 Article V
hereof) after an Event of Default shall have occurred and be continuing and
after the acceleration of maturity specified in Section 5.02(b) hereof, as
well as all payments or amounts then held by the Mortgagee as part of the
Collateral, 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 (other than any Unindemnified Tax and except to
the extent resulting from a failure of the Mortgagee to withhold taxes pursuant
to Section 2.03(b) hereof), expense or other loss (including,

 

21

 

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
Collateral (all such property being herein called the “Mortgaged Property”)
pursuant to Section 5.03(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) all amounts payable to the other Indenture Indemnitees hereunder
(other than the amounts specified in clauses Second and Third below) and under
the Participation Agreement; 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 6.03
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 6.03
hereof;

 

Third, (i) so
much of such payments or amounts remaining as shall be required to pay in full
the accrued but unpaid interest on all Series G-1 Equipment Notes and
Series G-2 Equipment Notes to the date of distribution, shall be
distributed to the Note Holders of the Series G-1 Equipment Notes and
Series G-2 Equipment Notes, and in case the aggregate amount to be so
distributed shall be insufficient to pay in full as aforesaid, then ratably,
without priority of one over the other, in the proportion that the aggregate
unpaid interest on all Series G-1 Equipment Notes and Series G-2 Equipment
Notes held by each Note Holder to the date of distribution, bears to the
aggregate unpaid interest on all Series G-1 Equipment Notes and Series G-2
Equipment Notes held by all such Note Holders to the date of distribution;
(ii) after giving effect to clause (i) above, so much of such
payments or amounts remaining as shall be required to pay in full the accrued
but unpaid interest on the Series C Equipment Notes to the date of
distribution, shall be distributed to the Note Holders of Series C, and in
case the aggregate amount to be so distributed shall be insufficient to pay in
full as aforesaid, then ratably, without priority of one over the other, in the
proportion that the aggregate unpaid interest on all Series C Equipment
Notes held by each Note Holder to the date of distribution, bears to the
aggregate unpaid interest on all Series C Equipment Notes held by all such
Note Holders to the date of distribution, (iii) after giving effect to
clauses (i) and (ii) above, so much of such

 

22

 

payments
or amounts remaining as shall be required to pay in full the aggregate unpaid
Original Amount of all Series G-1 Equipment Notes and Series G-2
Equipment Notes and all other Secured Obligations in respect of the
Series G-1 Equipment Notes and Series G-2 Equipment Notes (including
without limitation, Break Amount, if any, but without any Prepayment Premium)
to the date of distribution, shall be distributed to the Note Holders of the
Series G-1 Equipment Notes and Series G-2 Equipment Notes, and in
case the aggregate amount so to be distributed shall be insufficient to pay in
full as aforesaid, then ratably, without priority of one over the other, in the
proportion that the aggregate unpaid Original Amount of all Series G-1
Equipment Notes and Series G-2 Equipment Notes held by each Note Holder plus
all other amounts due hereunder or thereunder (including without limitation, Break
Amount, if any, but without any Prepayment Premium) with respect to such Series
G-1 Equipment Notes and Series G-2 Equipment Notes to the date of distribution,
bears to the aggregate unpaid Original Amount of all Series G-1 Equipment
Notes and Series G-2 Equipment Notes held by all such Note Holders plus
all other amounts due hereunder or thereunder thereon (including without
limitation, Break Amount, if any, but without any Prepayment Premium) to the
date of distribution; (iv) after giving effect to clauses (i), (ii)
and (iii) above, so much of such payments or amounts remaining as shall be
required to pay in full the aggregate unpaid Original Amount of all
Series C Equipment Notes and all other Secured Obligations in respect of
the Series C Equipment Notes (including, without limitation, Break Amount,
if any, but without any Prepayment Premium) to the date of distribution, shall
be distributed to the Note Holders of Series C Equipment Notes, and in
case the aggregate amount so to be distributed shall be insufficient to pay in
full as aforesaid, then ratably, without priority of one over the other, in the
proportion that the aggregate unpaid Original Amount of all Series C
Equipment Notes held by each Note Holder plus all other amounts due hereunder
or thereunder (including, without limitation, Break Amount, if any, but without
any Prepayment Premium) with respect to such Series C Equipment Note to the
date of distribution, bears to the aggregate unpaid Original Amount of all
Series C Equipment Notes held by all such Note Holders plus all other
amounts due thereon (including, without limitation, Break Amount, if any, but
without any Prepayment Premium) to the date of distribution;

 

Fourth, so long as a
Related Event of Default shall have occurred and be continuing under any
Related Indenture, so much of such payments or amounts remaining as shall be
required to pay in full the Related Secured Obligations due and payable under
such Related Indentures, shall be distributed to the Related Mortgagees with
respect to such Related Indentures to be applied in accordance with
Section 3.03 of such Related Indentures, and in the case the aggregate
amount so to be distributed shall be insufficient to pay in full as aforesaid,
then ratably to each such Related Mortgagee, without priority of one over the
other, in the proportion that the aggregate unpaid Related Secured Obligations
payable to a Related Mortgagee bears to the aggregate unpaid Related Secured
Obligations payable to all such Related Mortgagees;

 

23

 

Fifth, so long as
the aggregate Pool Balance (as defined in the Intercreditor Agreement) of the
Class G-1 Certificates and Class G-2 Certificates (each as defined in the
Intercreditor Agreement) (after giving effect to the reduction in such Pool
Balance, if any, that will result from the distribution of amounts allocable
under clauses “first”, “second”, “third” and “fourth” above by the
Subordination Agent under the Intercreditor Agreement on the applicable Distribution
Date (as defined in the Intercreditor Agreement)) exceeds the aggregate
outstanding principal amount of all remaining Series G-1 Equipment Notes and
Series G-2 Equipment Notes (as defined in the Note Purchase Agreement) (after
payments under clause “third” above shall reduced the principal amount of the
Series G-1 Equipment Note and Series G-2 Equipment Note to zero and, if
applicable, after application of amounts under clause ”Fourth” above shall
have reduced the outstanding principal amount of the Series G-1 Equipment
Notes and Series G-2 Equipment Notes under (and as defined in) any Related
Indenture) shall be retained by the Mortgagee to be applied to amounts not paid
when due under any Related Indenture; and

 

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

 

No Prepayment Premium
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.

 

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 any other Operative Agreement
shall be applied forthwith to the purpose for which such payment was made in
accordance with the terms of such other Operative 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 in respect of the
Mortgagee in its individual capacity, any Note Holder or any other Indenture
Indemnitee, in each case whether pursuant to Section 7 of the
Participation Agreement, 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.

 

3.05                        Other
Payments. 
Any payments received by the Mortgagee for which no provision as to the
application thereof is made 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, in the order of priority specified in
Section 3.01 hereof, and after payment in full of all amounts then due in
accordance with Section 3.01 in the manner provided in clause “Fourth” of
Section 3.03 hereof.

 

3.06                        Payments
to the Owner. 
Any amounts distributed hereunder by the Mortgagee to the Owner shall be
paid to the Owner (within the time limits contemplated by Section 2.03) by

 

24

 

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 to the Loan Trustee from time to time.

 

3.07                        Cooperation.  Prior to making any
distribution under Section 3.02 or 3.03 hereof, the Mortgagee shall
consult with the Related Mortgagees to determine amounts payable with respect
to the Related Secured Obligations.  
The Mortgagee shall cooperate with the Related Mortgagees and shall
provide such information as shall be reasonably requested by each Related
Mortgagee to enable such Related Mortgagee to determine amounts distributable
under Sections 3.02 and 3.03 of its Related Indenture.

 

ARTICLE IV

COVENANTS OF THE OWNER

 

4.01                        Liens.  The Owner will not directly or indirectly
create, incur, assume or suffer to exist any Lien on or with respect to the
Aircraft, the Airframe or any Engine or any Part, title to any of the foregoing
or any interest of Owner therein, except Permitted Liens.  The Owner shall promptly, 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 other than a Permitted Lien
arising at any time in respect of the Aircraft, the Airframe, any Engine or any
Part.

 

4.02                        Possession, Operation
and Use, Registration and Markings.

 

(a)                                  General.  Except as
otherwise expressly provided herein, the Owner shall be entitled to operate,
use, locate, employ or otherwise utilize or not utilize the Airframe, any
Engine or any Parts in any lawful manner or place in accordance with the
Owner’s business judgment.

 

(b)                                 Possession.  The Owner,
without the prior consent of Mortgagee, shall not lease or otherwise in any
manner deliver, transfer or relinquish possession of the Aircraft, the Airframe
or any Engine or install any Engine, or permit any Engine to be installed, on
any airframe other than the Airframe; provided, that so long as such action
shall not deprive the Mortgagee of the perfected Lien of this Agreement on the
Airframe or any Engine, the Owner may, without such prior written consent of
Mortgagee:

 

(i)                                     Subject or permit any Permitted Lessee to
subject any Engine to normal interchange agreements or pooling agreements or
similar arrangements, in each case customary in the commercial airline industry
and entered into by Owner or such Permitted Lessee, as the case may be, in the
ordinary course of business; provided, however, that if Owner’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, and Owner shall comply with Section 4.04(e) in respect
thereof;

 

(ii)                                  Deliver or permit any Permitted Lessee to
deliver possession of the Aircraft, Airframe, any Engine or any Part
(x) to the manufacturer thereof or to any third-party maintenance provider
for testing, service, repair, maintenance or overhaul work on

 

25

 

the Aircraft, Airframe, any Engine or any Part, or, to the extent
required or permitted by the terms hereof, for alterations or modifications in
or additions to the Aircraft, Airframe or any Engine or (y) to any Person
for the purpose of transport to a Person referred to in the preceding
clause (x);

 

(iii)                               Install or permit any Permitted Lessee to install an
Engine on an airframe owned by Owner or such Permitted Lessee, as the case may
be, free and clear of all Liens, except (x) Permitted Liens and those that
do not apply to the Engines, and (y) the rights of third parties under
normal interchange or pooling agreements and arrangements of the type that
would be permitted under Section 4.02(b)(i), provided that the Owner’s
title to such Engine and the first priority Lien of this Trust Indenture shall
not be divested or impaired as a result thereof;

 

(iv)                              Install or permit any Permitted Lessee to
install an Engine on an airframe leased to Owner or such Permitted Lessee, or
purchased by Owner or such Permitted Lessee subject to a mortgage, security
agreement, conditional sale or other secured financing arrangement, but only if
(x) such airframe is free and clear of all Liens, except (A) the
rights of the parties to such lease, or any such secured financing arrangement,
covering such airframe and (B) Liens of the type permitted by
clause (iii) above and (y) Owner or Permitted Lessee, 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 the Lien of this Trust Indenture;

 

(v)                                 Install or permit any Permitted Lessee to
install an Engine on an airframe owned by Owner or such Permitted Lessee,
leased to Owner or such Permitted Lessee, or purchased by Owner or such
Permitted Lessee subject to a conditional sale or other security agreement
under circumstances where neither clause (iii) or (iv) above is
applicable; provided, however, that any such installation shall
be deemed an Event of Loss with respect to such Engine and Owner shall comply
with Section 4.04(e) hereof in respect thereof; the Mortgagee not
intending hereby to waive any right or interest it may have to or in such
Engine under applicable law until compliance by the Owner with such
Section 4.04(e);

 

(vi)                              Transfer or permit any Permitted Lessee to
transfer possession of the Aircraft, Airframe or any Engine to the U.S.
Government, in which event Owner, or such Permitted Lessee, shall promptly
notify 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 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;

 

26

 

(vii)                           To the extent permitted by Section 4.04(c)
hereof, subject any appliances, Parts or other equipment owned by the Owner and
removed from the Airframe or any Engine to any pooling arrangement referred to
in Section 4.04(c) hereof;

 

(viii)                        Enter into a charter or Wet Lease or other similar
arrangement with respect to the Aircraft or any other aircraft on which any
Engine may be installed (which shall not be considered a transfer of possession
hereunder); provided  that the Owner’s obligations hereunder shall
continue in full force and effect notwithstanding any such charter or Wet Lease
or other similar arrangement;

 

(ix)                                Subject to the provisions of the
immediately following paragraph and so long as no Event of Default shall have
occurred and be continuing, enter into a lease with respect to the Aircraft,
Airframe or any Engine with any Permitted Air Carrier that is not the subject
to any bankruptcy, insolvency, liquidation, reorganization, dissolution or
similar proceeding and shall not have substantially all of its property in the
possession of any liquidator, trustee, receiver or similar person; provided
that, in the case only of a lease to a Permitted Air Carrier which is
not a U.S. person, (A) on the date of such lease the United States
maintains diplomatic relations with the country of domicile of such Permitted
Air Carrier (or, in the case of Taiwan, diplomatic relations at least as good
as those in effect on the Closing Date) and (B) Owner shall have furnished
Mortgagee a favorable opinion of counsel, reasonably satisfactory to Mortgagee,
in the country of domicile of such Permitted Air Carrier, that (u) the
terms of such lease are the legal, valid and binding obligations of the parties
thereto enforceable under the laws of such jurisdiction (subject to customary
exceptions), (v) it is not necessary for 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 lease, (w) Mortgagee’s
Lien in respect of, the Aircraft, Airframe and Engines will be recognized in
such jurisdiction, (x) there exist no possessory rights in favor of the
Lessee under such lease under the laws of such Lessee’s country of domicile
that would, upon bankruptcy or insolvency of the Owner or other Event of
Default and assuming at such time such Lessee is not insolvent or bankrupt,
prevent the return or repossession of the Aircraft in accordance with the terms
of this Trust Indenture, (y) 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 Owner shall provide insurance in the amounts
required with respect to hull insurance under this Trust Indenture 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 lease) and (z) the agreement of such Permitted Air Carrier that its
rights under the lease are subject and subordinate to all the terms of this
Trust Indenture is enforceable against such Permitted Air Carrier under
applicable law (subject to customary exceptions);

 

provided
that (1) the rights of any transferee who receives possession by reason of
a transfer permitted by this Section 4.02(b) (other than by a transfer of
an Engine which is deemed an Event of Loss) shall be subject and subordinate
to, and any lease permitted by this paragraph (b) shall be expressly
subject and subordinate to, all the terms of this Trust Indenture, (2) the
Owner

 

27

 

shall
remain primarily liable for the performance of all of the terms of this Trust
Indenture and all the terms and conditions of this Trust Indenture and the
other Operative Agreements shall remain in effect, (3) the Owner shall furnish
to Mortgagee evidence reasonably satisfactory to Mortgagee that the insurance
required pursuant to Section 4.06 remains in effect and (4) Owner
shall ensure that no lease or transfer of possession otherwise in compliance
with this Section 4.02(b) shall permit any action not permitted to the
Owner hereunder.  Any lease permitted by
this Section 4.02(b) shall expressly prohibit any further sublease by the
lessee.  Except as otherwise provided
herein and without in any way relieving the Owner from its primary obligation
for the performance of its obligations under this Trust Indenture, the Owner
may in its sole discretion permit a lessee to exercise any or all rights which
the Owner would be entitled to exercise under Sections 4.02 and 4.04, and
may cause a lessee to perform any or all of the Owner’s obligations under
Article IV, and the Mortgagee agrees to accept actual and full performance
thereof by a lessee in lieu of performance by the Owner.  The Owner shall promptly, but not later than
10 Business Days after entering into such lease, notify the Mortgagee and the
Rating Agencies of the existence of such lease with a term in excess of one
year and provide a copy of such lease to the Mortgagee and the Rating Agencies.

 

No pooling agreement,
Permitted Lease or other relinquishment of possession of the Airframe or any
Engine shall in any way discharge or diminish any of Owner’s obligations to the
Mortgagee under this Trust Indenture or constitute a waiver of Mortgagee’s
rights or remedies hereunder.

 

The Mortgagee agrees, and
each Note Holder by acceptance of an Equipment Note agrees, and each Related
Note Holder by acceptance of a Related Equipment Note agrees, for the benefit
of Owner (and any Permitted Lessee) and for the benefit of any mortgagee or
other holder of a security interest in any engine (other than an Engine) owned
by Owner (or any Permitted Lessee), any lessor of any engine (other than an
Engine) leased to Owner (or any Permitted Lessee) and any conditional vendor of
any engine (other than an Engine) purchased by Owner (or any Permitted Lessee)
subject to a conditional sale agreement or any other security agreement, that
no interest shall be created under this Trust Indenture in any engine so owned,
leased or purchased and that neither the Mortgagee, the Note Holders, the
Related Note Holders nor their successors or assigns will acquire or claim, as
against Owner (or any Permitted Lessee) or any such mortgagee, lessor or
conditional vendor or other holder of a security interest or any successor or
assignee of any thereof, any right, title or interest in such engine as the
result of such engine being installed on the Airframe; provided, however, that
such agreement of the Mortgagee and Note Holders shall not be for the benefit
of any lessor or secured party of an airframe leased to Owner (or any Permitted
Lessee) or purchased by Owner (or any Permitted Lessee) subject to a
conditional sale or other security agreement or for the benefit of any mortgagee
or any other holder of a security interest in an airframe owned by Owner (or
any Permitted Lessee), on which airframe Owner (or any Permitted Lessee) then
proposes to install an Engine, unless such lessor, conditional vendor, other
secured party or mortgagee has expressly agreed (which agreement may be
contained in such lease, conditional sale or other security agreement or
mortgage) that neither it nor its successors or assigns will acquire, as
against Mortgagee, any right, title or interest in an Engine as a result of
such Engine being installed on such airframe.

 

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Any Wet Lease or similar
arrangement under which Owner maintains operational control of the Aircraft
shall not constitute a delivery, transfer or relinquishment of possession for
purposes of this Section 4.02.  The
Mortgagee acknowledges that any consolidation or merger of Owner or conveyance,
transfer or lease of all or substantially all of Owner’s assets permitted by
the Operative Documents shall not be prohibited by this Section 4.02.

 

(c)                                  Operation and Use. 
So long as the Aircraft, Airframe or any Engine is subject to the Lien
of this Trust Indenture, the Owner shall not operate, use or locate the
Aircraft, Airframe or any Engine, or allow the Aircraft, Airframe or any Engine
to be operated, used or located, (i) in any area excluded from coverage by any
insurance required by the terms of Section 4.06, except in the case of a
requisition by the U.S. Government where the Owner obtains indemnity in lieu of
such insurance from the U.S. Government covering such area in accordance with
Section 4.06(c), or (ii) in any recognized area of hostilities unless
covered in accordance with Annex B by war risk and allied perils hull insurance
as required by the terms of Section 4.06 (including, without limitation,
Section 4.06(c)), unless in such case the Aircraft, the Airframe or any
Engine 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 circumstance, so long as Owner diligently
and in good faith proceeds to remove the Aircraft from such area.  The Owner shall also have the right to
operate the Aircraft without having on board the original registration
certificate or airworthiness certificate in the event that either or both such
certificates disappear from the Aircraft, but only to the extent permitted by
Exemption No. 5318 of the FAA Regulations or other similar exemption.  So long as the Aircraft, the Airframe or any
Engine is subject to the Lien of this Trust Indenture, the Owner shall not
permit such Aircraft, Airframe or any Engine, as the case may be, to be used,
operated, maintained, serviced, repaired or overhauled (x) in violation of
any Law of any Government Entity having jurisdiction binding on or applicable
to such Aircraft, Airframe or Engine or (y) in violation of any
airworthiness certificate, license or registration of any such Government Entity
relating to the Aircraft, the Airframe or any Engine, except
(i) immaterial or non-recurring violations with respect to which
corrective measures are taken promptly by Owner or Permitted Lessee, as the
case may be, upon discovery thereof, or (ii) to the extent the validity or
application of any such Law or requirement relating to any such certificate,
license or registration is being contested in good faith by Owner or Permitted
Lessee in any reasonable manner which does not materially adversely affect the
Lien of this Trust Indenture and does not involve any material risk of sale,
forfeiture or loss of the Aircraft (iii) that Owner shall not be in default
under, or required to take any action set forth in this sentence if it is not
possible for Owner to comply with the laws of a jurisdiction other than the
United States (or other jurisdiction in which the Aircraft is registered)
because of a conflict with the applicable laws of the United States (or such
other jurisdiction where the Aircraft is registered).

 

(d)                                 Registration. 
The Owner, on or prior to the date of the Closing, shall cause the
Aircraft to be duly registered with the FAA in its name under the Act and
except as otherwise permitted by this Section 4.02(d) at all times
thereafter shall cause the Aircraft to remain so registered.  So long as no Special Default or Event of
Default shall have occurred and be continuing and subject to Section 5.4.5
of the Participation Agreement, Owner may at any time cause the Aircraft to be
re-registered

 

29

 

under the laws of
a country other than the United States. 
Whether or not a Special Default or an Event of Default shall be
continuing, subject to Section 5.4.5 of the Participation Agreement, Owner
may at any time cause the Aircraft to be re-registered under the laws of the
United States.  Unless the Trust
Indenture has been discharged, Owner 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 (i) such perfection or priority
cannot be maintained solely as a result of the failure by Mortgagee to execute
and deliver any necessary documents or (ii) in the case of a registration of
the Aircraft in a country other than the United States, the Trust Indenture
need not be so recorded as provided in Section 5.4.5(d) of the
Participation Agreement).

 

(e)                                  Markings.  If permitted
by applicable Law, on or as soon as practicable after the Closing Date, Owner
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, a placard of a
reasonable size and shape bearing the legend: 
“Subject to a security interest in favor of Wilmington Trust Company,
not in its individual capacity but solely as Mortgagee.”  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, Owner shall promptly replace it with a placard complying with the
requirements of this Section 4.02(e). 
Except as above provided, Owner will not allow the name of any person
(other than Owner) to be placed on the Airframe or on any Engine as a
designation that might be interpreted as a claim of ownership, provided that
nothing herein shall prohibit Owner or any Permitted Lessee from placing its
customary colors and insignia on the Airframe and any Engine.

 

4.03                        Inspection.

 

(a)                                  At all reasonable times and upon
reasonable advance notice (taking into consideration the availability of the
Aircraft and Owner (or Permitted Lessee) personnel), so long as the Aircraft is
subject to the Lien of this Trust Indenture, Mortgagee and its authorized
representatives (including the Policy Provider) (the “Inspecting Parties”)
may (not more than once every 12 months unless an Event of Default has
occurred and is continuing in which case such inspection right shall not be so
limited) inspect the Aircraft, Airframe and Engines (including without
limitation, the Aircraft Documents) and any such Inspecting Party may make
copies of such Aircraft Documents not reasonably deemed confidential by Owner
or such Permitted Lessee.

 

(b)                                 Any inspection of the Aircraft hereunder
shall be subject to Owner’s safety and security rules applicable at the
location of the Aircraft and 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 without the express consent of the Owner (such
consent not to be given by the Mortgagee pursuant to the power of attorney
granted herein), and no such inspection shall interfere with Owner’s or any
Permitted Lessee’s maintenance and operation of the Aircraft, Airframe and
Engines.

 

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

 

30

 

(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 4.03(a)).

 

Each Inspecting Party shall
keep any information or copies obtained thereby confidential and shall not
disclose the same to any Person, except (A) to the Pass Through Trustees and to
prospective and permitted transferees of any Pass Through Trustee’s or the
Mortgagee’s interest (and such prospective and permitted transferee’s counsel,
independent insurance advisors or other agents) who agree to hold such
information confidential, (B) to any Pass Through Trustee’s or the Mortgagee’s
counsel, independent insurance advisors or other agents who agree to hold such
information confidential, (C) as may be required by any statute, court or
administrative order or decree or governmental ruling or regulation,
(D) any other Inspecting Party, so long as such Inspecting Party agrees to
hold such information confidential, and (E) as may be necessary for purposes of
protecting the interest of any such Person or for enforcement of this Trust
Indenture by the Mortgagee; provided, however, that any and all disclosures
permitted by clauses (C) and (D) above shall be made only to the extent
necessary to meet the specific requirements or needs of Persons for whom such
disclosures are hereby permitted.

 

4.04                        Maintenance; Replacement and Pooling of Parts,
Alterations, Modifications and Additions; Substitution of Engines.

 

(a)                                  Maintenance. 
Owner shall, at its own cost and expense, (1) maintain, service,
repair, and overhaul (or cause to be maintained, serviced, repaired, and
overhauled) the Aircraft (and any engine which is not an Engine but which is
installed on the Aircraft) (A) so as to keep the Aircraft in as good an
operating condition as when delivered to the Owner (ordinary wear and tear
excepted and without taking into consideration hours and cycles) and so as to
keep the Aircraft in such condition as may be necessary to enable the
airworthiness certification for the Aircraft to be maintained in good standing
at all times under the Act (or under the applicable requirements of another
Aviation Authority in the jurisdiction in which the Aircraft is registered)
except (i) when the Aircraft is being temporarily stored, (ii) when
the Aircraft is being serviced, repaired, maintained, overhauled, tested or
modified as permitted or required by the terms of this Trust Indenture,
(iii) when all Similar Aircraft have been grounded by the FAA or under the
applicable laws of any other jurisdiction in which the Aircraft is registered,
or such authority has revoked or suspended the airworthiness certificates for
such aircraft, or (iv) (x) for immaterial or non-recurring violations
with respect to which corrective measures are taken promptly by Owner or
Permitted Lessee, as the case may be, upon discovery thereof, or (y) to
the extent the validity or application of any such Law or requirement relating
to any such certificate, license or registration is being contested in good
faith by Owner or Permitted Lessee in any reasonable manner which does not
materially adversely affect the Lien of this Trust Indenture and does not
involve any material risk of sale, forfeiture or loss of the Aircraft, and
(B) in accordance with the Maintenance Program for the Aircraft and
utilizing the same or better manner of maintenance used by the Owner (or any
Permitted Lessee) with respect to similar aircraft operated by it, and (2) maintain
or cause to be maintained in English all records, logs and other materials
required to be maintained in respect of the Aircraft by the FAA or the
applicable Aviation Authority.  In any
case, the Aircraft will be maintained in accordance with the maintenance
standards required by or substantially similar to those required by the FAA or
the central aviation authority of Australia, Austria, Belgium, Canada, Denmark,
Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, New Zealand,
Norway, Spain, Sweden, Switzerland or the United Kingdom.

 

31

 

Determination of
the appropriate course of action in maintenance, including the means of
compliance with airworthiness directives, and all other matters pertaining to
the Aircraft will be within the sole discretion of the Owner.

 

(b)                                 Replacement of Parts. 
The Owner, at its own cost and expense, will promptly replace or cause
to be replaced all Parts which may from time to time become worn out, lost,
stolen, destroyed, seized, confiscated, damaged beyond repair or permanently
rendered unfit for use for any reason whatsoever, except as otherwise provided
in Sections 4.04(c) and 4.04(d). 
In addition, the Owner may, at its own cost and expense, and may permit
a Permitted Lessee, at its own cost and expense, (or any maintenance provider
for the Aircraft) to, remove (or cause to be removed) in the ordinary course of
maintenance, services, repair, overhaul or testing, any Parts, whether or not
worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair
or permanently rendered unfit for use; provided that the Owner, except as
otherwise provided herein, will, at its own cost and expense, replace, or cause
to be replaced, such Parts as promptly practicable.  All replacement parts (other than replacement parts temporarily
installed as provided in Section 4.04(c) hereof) shall be free and clear
of all Liens (except Permitted Liens), and shall be in as good an operating
condition as, and shall have a value and utility substantially equal to, the
Parts replaced, assuming such replaced Parts were in the condition and repair
required to be maintained by the terms hereof (but without taking into
consideration hours and cycles remaining until overhaul).  Except as provided in Section 4.04(d),
all Parts at any time removed from the Airframe or any Engine shall remain
subject to the Lien of this Trust Indenture, no matter where located, until
such time as such Parts shall be replaced by parts which meet the requirements
for replacement parts specified above. 
Upon any replacement part becoming incorporated or installed in or
attached to the Airframe or any Engine, without further act (subject only to
Permitted Liens and any arrangement permitted by Section 4.04(c) hereof),
(i) such replacement part shall become subject to the Lien of this Trust
Indenture and be deemed a Part for all purposes hereof to the same extent as
the Parts originally incorporated or installed in or attached to the Airframe
or such Engine and (ii) the replaced Part shall no longer be subject to
the Lien of this Trust Indenture and shall no longer be deemed a Part
hereunder.  Upon request of Owner, the
Mortgagee shall, at Owner’s expense, execute and deliver to Owner such
documents as may be reasonably required to evidence the release of any replaced
Part from the Lien of this Trust Indenture.

 

(c)                                  Pooling of Parts; Temporary Replacement
Parts.  Any Part removed from the Airframe or any
Engine as provided in Section 4.04(b) hereof may be subjected by the Owner
(or any Permitted Lessee) to a pooling arrangement of the type which is
permitted for Engines by Section 4.02(b)(i); provided that the part
replacing such removed Part shall be incorporated or installed in or attached
to such Airframe or Engine in accordance with Section 4.04(b) hereof as
promptly as practicable after the removal of such removed Part.  In addition, the Owner (or any Permitted
Lessee) may use temporary parts or pooled parts on the Aircraft that are owned
by a third party subject to a pooling arrangement as temporary replacements for
Parts, provided that the Owner (or any Permitted Lessee) as promptly thereafter
as practicable, either (1) causes such pooled or temporary replacement
part to become subject to the Lien of this Trust Indenture free and clear of
all Liens other than Permitted Liens or (2) replaces such replacement part
with a further replacement part owned by the Owner (or any Permitted Lessee)
which meets the requirements of Section 4.04(b) hereof and which shall

 

32

 

become subject to the Lien of this Trust Indenture, free and clear of
all Liens other than Permitted Liens.

 

(d)                                 Alterations, Modifications and Additions. 
The Owner shall, at its own cost and expense, make (or cause to be made)
such alterations, modifications and additions to the Airframe and Engines as
may be required from time to time to meet the applicable standards of the FAA
or any other Aviation Authority, except for (i) immaterial or non-recurring
violations with respect to which corrective measures are taken promptly by
Owner or a Permitted Lessee, as the case may be, upon discovery thereof, or
(ii) to the extent the validity or application of any such Law or requirement
is being contested in good faith by Owner or a Permitted Lessee in any
reasonable manner which does not involve any material risk of sale, loss or
forfeiture of the Aircraft and does not materially adversely affect the Lien of
this Trust Indenture.  In addition,
Owner may from time to time alter the passenger (seating) configuration of the
Aircraft and may make such alterations and modifications in and additions to
the Airframe or any Engine as the Owner (or any Permitted Lessee) may deem
desirable in the proper conduct of its business, including removal of Parts
which the Owner (or any Permitted Lessee) deems to be obsolete or no longer
suitable or appropriate for use on the Airframe or such Engine; provided that
no such alteration, modification, removal or addition impairs the condition or
airworthiness of the Airframe or such Engine, or materially diminishes the
value, utility and, in regard to the Airframe, remaining useful life (without
regard to hours and cycles) of the Airframe or such Engine below the value,
utility or remaining useful life (without regard to hours and cycles) thereof
immediately prior to such alteration, modification, removal or addition,
assuming that the Airframe or such Engine is in the condition required
hereunder.  All parts incorporated or
installed in or attached or added to the Airframe or an Engine as the result of
such alteration, modification or addition (except those parts which are
excluded from the definition of Parts or which the Owner has leased from others
and Parts which may be removed by the Owner pursuant to the next sentence) (the
“Additional
Part” or “Additional Parts”) shall, without
further act, become subject to the Lien of this Trust Indenture.  Notwithstanding the foregoing, Owner may
remove (and not replace) any Additional Part, provided that such Additional
Part (i) is in addition to, and not in replacement of or substitution for,
any Part originally incorporated or installed in or attached to the Airframe or
any Engine at the time of delivery thereof hereunder or any Part in replacement
of or substitution for any such Part, (ii) is not required to be
incorporated or installed in or attached or added to the Airframe or any Engine
pursuant to the terms of Section 4.04(a) or the first sentence of this
Section 4.04(d), and (iii) can be removed from the Airframe or such
Engine without impairing the airworthiness of the Airframe or such Engine or
materially diminishing the value, utility and remaining useful life of the
Airframe or such Engine which the Airframe or such Engine would have had at such
time had such alteration, modification or addition not occurred.  Upon the removal thereof as provided above,
such Additional Parts shall no longer be subject to the Lien of this Trust
Indenture or be deemed part of the Airframe or Engine from which it was
removed.  Notwithstanding any other
provision of this Indenture, Owner may, at any time, install or permit to be
installed in the Aircraft Passenger Convenience Equipment owned by Owner or any
Permitted Lessee or by third parties and leased or otherwise furnished to Owner
in the ordinary course of business, and Owner may remove (and not replace) or
permit to be removed (and not replaced) the same, and Mortgagee shall not
acquire a Lien thereon by virtue of such installation or otherwise, and the
rights of the owners therein shall not constitute a default under this Trust
Indenture.

 

33

 

(e)                                  Substitution of Engines. 
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, Owner shall promptly (and in any event within 15 days after such
occurrence) give the Mortgagee written notice of such Event of Loss.  The Owner shall have the right at its option
at any time while a Default or Event of Default shall not have occurred and be
continuing (or otherwise with the written consent of the Mortgagee), on at
least ten Business Days’ prior notice to the Mortgagee, to substitute, and if
an Event of Loss shall have occurred with respect to an Engine under
circumstances in which an Event of Loss with respect to the Airframe has not
occurred, shall within 90 days of the occurrence of such Event of Loss
substitute, a Replacement Engine for any Engine.  In such event, immediately upon the effectiveness of such
substitution and without further act, (i) the replaced Engine shall
thereupon be free and clear of all rights of the Mortgagee and the Lien of this
Trust Indenture and shall no longer be deemed an Engine hereunder and (ii) such
Replacement Engine shall become subject to this Trust Indenture free and clear
of all Liens (other than Permitted Liens) and be deemed an “Engine” for all
purposes hereof to the same extent as the replaced Engine.  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 of such engine of the manufacturer
thereof, and that has a value and utility (without regard to hours and cycles
remaining until the next regular maintenance check) at least equal to, and be
in as good operating condition and repair as, 
the Engine to be replaced thereby (assuming that such Engine had been
maintained in accordance with this Trust Indenture).  The Owner’s substitution hereunder shall be subject to the
fulfillment (which may be simultaneous with such replacement) of the following
conditions precedent at the Owner’s sole cost and expense, and the Mortgagee
agrees to cooperate with the Owner to the extent necessary to enable it to
timely satisfy such conditions:

 

the following documents
shall have been duly authorized, executed and delivered (and filed, if
applicable) by the respective party or parties thereto, and an executed
counterpart of each shall have been delivered to the Mortgagee:

 

(A)                              a Trust Indenture Supplement covering the
Replacement Engine, which shall have been duly filed for recordation pursuant
to the Act or such other applicable law of the jurisdiction other than the
United States in which the Aircraft of which such Replacement Engine is a part
is registered in accordance with Section 4.02(d), as the case may be;

 

(B)                                a full warranty (as to title) bill of
sale covering the Replacement Engine, executed by the former owner thereof in
favor of the Owner (or, at the Owner’s option, other evidence of the Owner’s
ownership of such Replacement Engine, reasonably satisfactory to the
Mortgagee);

 

(C)                                appropriate instruments assigning to the
Mortgagee the benefits, if any, of all manufacturer’s and vendor’s warranties
generally available and permitted to be assigned by the Owner with respect to
such Replacement Engine;

 

(D)                               Uniform Commercial Code financing
statements (or any similar statements or other documents required to be filed
or delivered pursuant to

 

34

 

the laws of the jurisdiction in which the Aircraft of which such
Replacement Engine is a part may be registered) as are deemed necessary by
counsel for the Mortgagee to protect the security interests of the Mortgagee in
the Replacement Engine;

 

(E)                                 a certificate signed by a duly authorized
officer of the Owner or by a qualified aircraft engineer or appraiser
reasonably acceptable to the Mortgagee certifying that such Replacement Engine
is of the same as or improved model of the replaced Engine and has a value and
utility (without regard to hours and cycles) at least equal to the Engine so
replaced assuming such Engine was in the condition and repair required by the
terms hereof immediately prior to the occurrence of such Event of Loss;

 

(F)                                 such evidence of compliance with the
insurance provisions of Section 4.06 with respect to such Replacement
Engine as the Mortgagee may reasonably request; and

 

(G)                                an opinion of in-house counsel to the
Owner or other counsel satisfactory to the Mortgagee, addressed to the
Mortgagee, stating that the Replacement Engine has been validly subjected to
the Lien of this Trust Indenture, the instruments subjecting such Replacement
Engine to the Lien of this Trust Indenture have been duly filed for recordation
pursuant to the Act or any other law then applicable to the registration of the
Aircraft, and no further action, filing or recording of any document is
necessary or advisable in order to establish and perfect the Lien of this Trust
Indenture on such Replacement Engine.

 

Upon satisfaction of all
conditions to such substitution, (x) the Mortgagee shall execute and deliver to
the Owner such documents and instruments, prepared at the Owner’s expense, as
the Owner shall reasonably request to evidence the release of such replaced
Engine from the Lien of this Trust Indenture, (y) the Mortgagee shall assign to
the Owner all claims it may have against any other Person relating to any Event
of Loss giving rise to such substitution and (z) the Owner shall receive all
insurance proceeds and other proceeds in respect of any Event of Loss giving
rise to such replacement in accordance with Section 4.05(d) hereof.

 

4.05                        Loss, Destruction
or Requisition.

 

(a)                                  Event of Loss With Respect to the Airframe. 
Upon the occurrence of an Event of Loss with respect to the Airframe,
the Owner shall promptly (and in any event within 15 days after such
occurrence) give the Mortgagee written notice of such Event of Loss.  The Owner shall, within 90 days after
such occurrence, give the Mortgagee written notice of Owner’s election to
either replace the Airframe as provided under Section 4.05(a)(i) or to
make payment in respect of such Event of Loss as provided under
Section 4.05(a)(ii) (it being agreed that if Owner shall not have given
the Mortgagee such notice of such election within the above specified time
period, the Owner shall be deemed to have elected to make payment in respect of
such Event of Loss as provided under Section 4.05(a)(ii)):

 

35

 

(i)                                     if Owner elects to replace the Airframe,
Owner shall, subject to the satisfaction of the conditions contained in
Section 4.05(c), as promptly as possible and in any event within
120 days after the occurrence of such Event of Loss, cause to be subjected
to the Lien of this Trust Indenture, in replacement of the Airframe with
respect to which the Event of Loss occurred, a Replacement Airframe and, if any
Engine shall have been installed on the Airframe when it suffered the Event of
Loss, a Replacement Engine therefor, such Replacement Airframe and Replacement
Engines to be free and clear of all Liens except Permitted Liens and to have 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 or Engine, as the case may be, to be replaced thereby (assuming that
such Airframe or Engine had been maintained in accordance with this Trust
Indenture); provided that if the Owner shall not perform its obligation to
effect such replacement under this clause (i) during the 120-day period of
time provided herein, it shall pay the amounts required to be paid pursuant to
and within the time frame specified in clause (ii) below; or

 

(ii)                                  if Owner elects to make a payment in
respect of such Event of Loss of the Airframe, Owner shall make a payment to
the Mortgagee for purposes of redeeming Equipment Notes in accordance with
Section 2.09 hereof on a date on or before the Business Day next following
the earlier of (x) the 120th day following the date of the occurrence of
such Event of Loss, and (y) the fourth Business Day following the receipt
of insurance proceeds with respect to such Event of Loss (but in any event not
earlier than the date of Owner’s election under Section 4.05(a) to make
payment under this Section 4.05 (a)(ii)); and upon such payment and
payment of all other Secured Obligations then due and payable and, if any
Related Indenture Event of Default has occurred and is continuing, all Related
Secured Obligations then due and payable, the Mortgagee shall, at the cost and
expense of the Owner, release from the Lien of this Trust Indenture the
Airframe and the Engines, by executing and delivering to the Owner all
documents and instruments as the Owner may reasonably request to evidence such
release.

 

(b)                                 Effect of Replacement. 
Should the Owner have provided a Replacement Airframe and Replacement
Engines, if any, as provided for in Section 4.05(a)(i), (i) the Lien
of this Trust Indenture shall continue with respect to such Replacement
Airframe and Replacement Engines, if any, as though no Event of Loss had
occurred; (ii) the Mortgagee shall, at the cost and expense of the Owner,
release from the Lien of this Trust Indenture the replaced Airframe and
Engines, if any, by executing and delivering to the Owner such documents and
instruments as the Owner may reasonably request to evidence such release; and
(iii) in the case of a replacement upon an Event of Loss, the Mortgagee
shall assign to the Owner (or if directed by the Owner, the insurers having
made payment in respect of the applicable Event of Loss) all claims the
Mortgagee may have against any other Person arising from the Event of Loss and
the Owner shall receive all insurance proceeds (other than those reserved to
others under Section 4.06(b)) and proceeds from any award in respect of
condemnation, confiscation, seizure or requisition, including any investment
interest thereon, to the extent not previously applied to the purchase price of
the Replacement Airframe and Replacement Engines, if any, as provided in
Sections 4.05(d).

 

36

 

(c)                                  Conditions to Airframe and Engine
Replacement.  The Owner’s right to substitute a
Replacement Airframe and Replacement Engines, if any, as provided in
Section 4.05(a)(i) shall be subject to the fulfillment, at the Owner’s
sole cost and expense, in addition to the conditions contained in such
Section 4.05(a)(i) of the following conditions precedent:

 

(i)                                     on the date when the Replacement Airframe
and Replacement Engines, if any, is subjected to the Lien of this Trust
Indenture (such date being referred to in this Section 4.05 as the “Replacement
Closing Date”), an executed counterpart of each of the
following documents (or, in the case of the FAA bill of sale and full warranty
bill of sale referred to below, a photocopy thereof) shall have been delivered
to the Mortgagee:

 

(A)                              a Trust Indenture Supplement covering the
Replacement Airframe and Replacement Engines, if any, which shall have been
duly filed for recordation pursuant to the Act or such other applicable law of
such jurisdiction other than the United States in which the Replacement
Airframe and Replacement Engines, if any, are to be registered in accordance
with Section 4.02(d), as the case may be;

 

(B)                                an FAA bill of sale (or a comparable
document, if any, of another Aviation Authority, if applicable) covering the
Replacement Airframe executed by the former owner thereof in favor of the
Owner;

 

(C)                                a full warranty (as to title) bill of
sale, covering the Replacement Airframe and Replacement Engines, if any,
executed by the former owner thereof in favor of the Owner (or, at the Owner’s
option, other evidence of the Owner’s ownership of such Replacement Airframe
and Replacement Engines, if any, reasonably satisfactory to the Mortgagee);

 

(D)                               appropriate instruments assigning to the
Mortgagee the benefits, if any, of all manufacturer’s and vendor’s warranties
generally available and permitted to be assigned by the Owner with respect to
such Replacement Engine; and

 

(E)                                 Uniform Commercial Code financing
statements (or any similar statements or other documents required to be filed
or delivered pursuant to the laws of the jurisdiction in which the Replacement
Airframe and Replacement Engines, if any, may be registered in accordance with
Section 4.02(d)) as are deemed necessary or desirable by counsel for the
Mortgagee to protect the security interests of the Mortgagee in the Replacement
Airframe and Replacement Engines, if any;

 

(ii)                                  the Replacement Airframe and Replacement
Engines, if any, shall be of the same model as the Airframe or Engines, as the
case may be, or an improved model of such aircraft or engines of the
manufacturer thereof, shall have a value and utility (without regard to hours
or cycles remaining until the next regular maintenance

 

37

 

check) at least equal to, and be in as good operating condition and
repair as, the Airframe and any Engines replaced (assuming such Airframe and
Engines had been maintained in accordance with this Trust Indenture);

 

(iii)                               the Mortgagee (acting directly or by authorization to
its special counsel) shall have received satisfactory evidence as to the
compliance with Section 4.06 with respect to the Replacement Airframe and
Replacement Engines, if any;

 

(iv)                              on the Replacement Closing Date,
(A) the Owner shall cause the Replacement Airframe and Replacement
Engines, if any, to be subject to the Lien of this Trust Indenture free and
clear of Liens (other than Permitted Liens) (B) the Replacement Airframe
shall have been duly certified by the FAA or other applicable Aviation
Authority as to type and airworthiness in accordance with the terms of this
Trust Indenture and (C) application for registration of the Replacement
Airframe in accordance with Section 4.02(d) shall have been duly made with
the FAA or other applicable Aviation Authority and the Owner shall have
authority to operate the Replacement Airframe;

 

(v)                                 the Mortgagee at the expense of the
Owner, shall have received (A) an opinion of counsel to the Owner, or
other counsel satisfactory to the Mortgagee, addressed to the Mortgagee, to the
effect that the Replacement Airframe and Replacement Engine, if any, has or
have duly been made subject to the Lien of this Trust Indenture, that all
required action has been taken in order to maintain, and such action shall
maintain, the effectiveness and priority (to the extent the same existed
immediately prior to the occurrence of such Event of Loss, assuming the Owner
was in compliance with all relevant terms hereof) of the security interests in
the Airframe, the Engines and title thereto created by this Trust Indenture and
Mortgagee will be entitled to the benefits of Section 1110 with respect to
the Replacement Airframe, provided that such opinion with respect to
Section 1110 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 Mortgagee, and
(B) an opinion of Owner’s aviation law counsel reasonably satisfactory to
and addressed to Mortgagee as to the due registration of any such Replacement
Airframe and the due filing for recordation of each Trust Indenture Supplement
with respect to such Replacement Airframe or Replacement Engine under the Act
or such other applicable law of the jurisdiction other than the United States
in which the Replacement Airframe is to be registered in accordance with
Section 4.02(d), as the case may be; and

 

(vi)                              the Owner shall have furnished to the
Mortgagee a certificate signed by a duly authorized officer of the Owner or by
a qualified aircraft engineer (who may be an employee of Owner) or an appraiser
reasonably acceptable to the Mortgagee certifying that the Replacement Airframe
and Replacement Engines, if any, have a value and utility and remaining useful
life (without regard to hours and cycles) at least equal to the Airframe and
any Engines so replaced (assuming that such Airframe and Engines had been
maintained in accordance with this Trust Indenture).

 

38

 

(d)                                 Non-Insurance Payments Received on
Account of an Event of Loss.  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 Annex B),
received at any time by Mortgagee or Owner from any Government Entity or any
other Person in respect of any Event of Loss will be applied as follows:

 

(i)                                     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 Owner with the applicable terms of
Section 4.05(c) with respect to the Event of Loss for which such amounts
are received, such amounts shall be paid over to, or retained by, Owner;

 

(ii)                                  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 Owner with the
applicable terms of Section 4.04(e) with respect to the Event of Loss for
which such amounts are received, such amounts shall be paid over to, or
retained by, Owner;

 

(iii)                               If such amounts are received, in whole or in part,
with respect to the Airframe, and Owner makes, has made or is deemed to have
made the election set forth in Section 4.05(a)(ii), such amounts shall be
applied as follows:

 

first, if the sum
described in Section 4.05(a)(ii) has not then been paid in full by Owner,
such amounts shall be paid to Mortgagee to the extent necessary to pay in full
such sum; and

 

second, the
remainder, if any, shall be paid to Owner.

 

Any insurance,
condemnation or other proceeds which result from an Event of Loss that are paid
to the Mortgagee and have not been applied pursuant to this
Section 4.05(d) shall be held by the Mortgagee as permitted by
Section 7.04 hereof (provided that such moneys shall be invested as
provided in Section 6.06 hereof) as additional security for the
obligations of Owner under the Operative Agreements and such proceeds (and such
investment earnings) shall be applied in accordance with this
Section 4.05(d).

 

(e)                                  Requisition for Use. 
In the event of a requisition for use by any Government Entity of the
Airframe and the Engines, if any, or engines installed on such Airframe while
such Airframe is subject to the Lien of this Trust Indenture, the Owner shall
promptly notify the Mortgagee of such requisition and all of the Owner’s
obligations under this Trust Indenture shall continue to the same extent as if
such requisition had not occurred except to the extent that the performance or
observance of any obligation by the Owner shall have been prevented or delayed
by such requisition; provided that the Owner’s obligations under this
Section 4.05 with respect to the occurrence of an Event of Loss for the
payment of money and under Section 4.06 (except while an assumption of
liability by the U.S. Government of the scope referred to in Section 4.02(c)
is in effect) shall not be reduced or delayed by such requisition.  Any payments received by the Mortgagee or
the Owner or Permitted Lessee from such Government Entity with respect to such
requisition of use shall be paid over to, or retained by, the Owner.  In the event of an Event of Loss of an
Engine resulting from the requisition for use

 

39

 

by a Government
Entity of such Engine (but not the Airframe), the Owner will replace such
Engine hereunder by complying with the terms of Section 4.04(e) and any
payments received by the Mortgagee or the Owner from such Government Entity
with respect to such requisition shall be paid over to, or retained by, the
Owner.

 

(f)                                    Certain Payments to be Held As Security. 
Any amount referred to in this Section 4.05 or Section 4.06
which is payable or creditable to, or retainable by, the Owner shall not be
paid or credited to, or retained by the Owner if at the time of such payment,
credit or retention any Event of Default shall have occurred and be continuing,
but shall be paid to and held by the Mortgagee as security for the obligations
of the Owner under this Trust Indenture and the Operative Agreements, and at
such time as there shall not be continuing any such Event of Default such amount
and any gain realized as a result of investments required to be made pursuant
to Section 6.06 shall to the extent not theretofore applied as provided
herein, be paid over to the Owner.

 

4.06                        Insurance.

 

(a)                                  Owner’s Obligation to Insure. 
Owner shall comply with, or cause to be complied with, each of the
provisions of Annex B, which provisions are hereby incorporated by this
reference as if set forth in full herein.

 

(b)                                 Insurance for Own Account. 
Nothing in Section 4.06 shall limit or prohibit (a) Owner from
maintaining the policies of insurance required under Annex B with higher
limits than those specified in Annex B, or (b) Mortgagee 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 Owner pursuant to this Section 4.06
and Annex B.

 

(c)                                  Indemnification by Government in Lieu of
Insurance.  Mortgagee agrees to accept, in lieu of
insurance against any risk with respect to the Aircraft described in
Annex B, indemnification from, or insurance provided by, the U.S.
Government or, upon the written consent of 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 Owner (or
any Permitted Lessee) may continue to maintain, in accordance with this
Section 4.06, shall be at least equal to the amount of insurance against
such risk otherwise required by this Section 4.06.

 

(d)                                 Application of Insurance Proceeds. 
As between Owner and Mortgagee, 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 Owner pursuant to this
Section 4.06 will be applied in accordance with Section 4.05(d).  All proceeds of insurance required to be
maintained by Owner, in accordance with Section 4.06 and Section B of
Annex B, 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 accordance with Annex B hereto.

 

40

 

4.07                        Merger of
Owner.

 

(a)                                  In General.  Owner shall
not consolidate with or merge into any other person under circumstances in
which Owner 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:

 

(i)                                     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 of Columbia and, upon consummation of such transaction, such
person will be a U.S. Air Carrier;

 

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

 

(iii)                               if the Aircraft is, at the time, registered with the
FAA, such person makes such filings and recordings with the FAA pursuant to the
Act as shall be necessary to evidence such consolidation or merger or, if the
Aircraft is, at the time, not registered with the FAA, such person makes such
filings and recordings with the Aviation Authority as shall be necessary to
evidence such consolidation or merger;

 

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

 

(v)                                 the Owner shall have delivered to the
Mortgagee and the Policy Provider, an Officer’s Certificate, and an opinion of
counsel (which may be the Owner’s General Counsel or such other internal
counsel to the Owner as shall be reasonably satisfactory to the Loan Trustee),
each stating that such consolidation, merger, conveyance, transfer or lease and
the assumption agreement mentioned in clause (ii) above comply with this
Section 4.07(a) and that all conditions precedent herein provided relating
to such transaction have been complied with (except that such opinion need not
cover the matters referred to in clause (iv) above and may rely, as to
factual matters, on a certificate of an officer of the Owner) and, in the case
of such opinion, that such assumption agreement has been duly authorized,
executed and delivered by such successor Person and is enforceable against such
successor Person in accordance with its terms, except as the same may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the rights of creditors generally and by general principles of
equity.

 

(b)                                 Effect of Merger. 
Upon any such consolidation or merger of Owner with or into, or the
conveyance, transfer or lease by Owner of all or substantially all of its
assets to, any Person in accordance with this Section 4.07, such Person
will succeed to, and be substituted for, and may exercise every right and power
of, Owner under the Operative Agreements with the same effect as if such person
had been named as “Owner” therein.  No
such consolidation or merger, or conveyance, transfer or lease, shall have the
effect of releasing Owner or such Person

 

41

 

from any of the
obligations, liabilities, covenants or undertakings of Owner under the Trust
Indenture.

 

ARTICLE V

EVENTS OF DEFAULT; REMEDIES OF MORTGAGEE

 

5.01                        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):

 

(i)                                     the failure of the Owner to pay
(i) principal of, interest on, Break Amount, if any, or Prepayment
Premium, if any, under any Equipment Note when due, and such failure shall
continue unremedied for a period of ten Business Days, or (ii) any other amount
payable by it to the Note Holders under this Trust Indenture or the
Participation Agreement when due, and such failure shall continue for a period
in excess of 10 Business Days after Owner has received written notice from
Mortgagee of the failure to make such payment when due;

 

(ii)                                  Owner 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 4.06; provided that no such lapse or cancellation shall constitute
an Event of Default until the earlier of 30 days (or if 30 days is
unavailable pursuant to Section D of Annex B, such shorter period as
is available) after receipt by Mortgagee of written notice of such lapse or
cancellation (or seven days or such shorter time as may be standard in the
industry with respect to war risk insurance, provided that the Aircraft is
returned to the United States of America and/or Canada and operated exclusively
within the United States of America and Canada with customary North American
buy-backs until such war risk insurance is restored then absence of such
insurance shall not be an Event of Default) or the date that such lapse or
cancellation is effective as to any Note Holder or Mortgagee;

 

(iii)                               Owner shall fail to observe or perform (or caused to
be observed and performed) in any material respect any other covenant,
agreement or obligation set forth herein or in any other Operative Agreement to
which Owner is a party and such failure shall continue unremedied for a period
of 30 days from and after the date of written notice thereof to Owner from
Mortgagee, unless such failure is capable of being corrected and Owner shall be
diligently proceeding to correct such failure, in which case there shall be no
Event of Default unless and until such failure shall continue unremedied for a
period of 180 days after receipt of such notice;

 

(iv)                              any representation or warranty made by
Owner herein, in the Participation Agreement or in any other Operative Agreement
to which Owner is a party (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

 

42

 

question, and (c) the same shall remain uncured (to the extent of
the adverse impact of such incorrectness on the interest of the Mortgagee) for
a period in excess of 30 days from and after the date of written notice
thereof from Mortgagee to Owner;

 

(v)                                 the Owner shall consent to the
appointment of or taking possession by a receiver, trustee or liquidator of
itself or of a substantial part of its property, or the Owner shall make a
general assignment for the benefit of its creditors, or the Owner shall file a
voluntary petition in bankruptcy or a voluntary petition or an answer seeking
reorganization, liquidation or other relief under any bankruptcy laws or
insolvency laws (as in effect at such time), or an answer admitting the
material allegations of a petition filed against it in any such case, or the
Owner shall seek relief by voluntary petition, answer or consent, under the
provisions of any other bankruptcy or similar law providing for the
reorganization or winding-up of corporations (as in effect at such time), or
the Owner shall seek an agreement, composition, extension or adjustment with
its creditors under such laws or the Owner’s board of directors shall adopt a
resolution authorizing corporate action in furtherance of any of the foregoing;

 

(vi)                              an order, judgment or decree shall be
entered by any court of competent jurisdiction appointing, without the consent
of the Owner, a receiver, trustee or liquidator of the Owner or of any
substantial part of its property, or any substantial part of the property of
the Owner shall be sequestered, or granting any other relief in respect of the
Owner as a debtor under any bankruptcy laws or other insolvency laws (as in
effect at such time), and any such order, judgment, decree, or decree of
appointment or sequestration shall remain in force undismissed, unstayed or
unvacated for a period of 90 days after the date of entry thereof;

 

(vii)                           a petition against the Owner in a proceeding 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 the Owner, any court of competent jurisdiction
shall assume jurisdiction, custody or control of the Owner of any substantial
part of its property and such jurisdiction, custody or control shall remain in
force unrelinquished, unstayed or unterminated for a period of 90 days; or

 

(viii)                        any amount in respect of (i) the Equipment Notes or
the Related Equipment Notes, including any payment of principal amount of,
interest on, or Break Amount, if any, or Prepayment Premium, if any, with
respect to any Equipment Note or Related Equipment Note has not been paid in
full on the Final Payment Date or (ii) any other amounts payable under the
Operative Agreements or Related Operative Agreements (including any amounts due
and payable pursuant to the third paragraph of Section 2.02 of any Related
Indenture and any indemnities payable by the Owner pursuant to Section 7.1
of the Participation Agreement or of any Related Participation Agreement) in
each case that are due and payable on or before the Final Payment Date are not
paid in full on the Final Payment Date;

 

provided,
however, that, notwithstanding anything to the contrary contained in this
Section 5.01, any failure of Owner to perform or observe any covenant,
condition, agreement or any error in a

 

43

 

representation
or warranty shall not constitute an Event of Default if such failure or error
is caused solely by reason of any event that constitutes an Event of Loss so
long as Owner is continuing to comply with all of the terms of
Section 4.04(e) and Section 4.05 hereof.

 

5.02                        Remedies.

 

(a)                                  If an Event of Default shall have
occurred and be continuing and so long as the same shall continue unremedied,
then and in every such case the Mortgagee may exercise any or all of the rights
and powers and pursue any and all of the remedies pursuant to this
Article V and shall have and may exercise all of the rights and remedies
of a secured party under the Uniform Commercial Code 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 and all persons
claiming under it wholly or partly therefrom; provided, that the Mortgagee
shall give the Owner twenty days’ prior written notice of its intention to sell
the Aircraft.  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.

 

(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), at any time, by delivery of written notice or notices to the
Owner, 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 and any Break Amount, if applicable, (but
without Prepayment Premium)and other amounts due thereunder or otherwise
payable hereunder, shall immediately become due and payable without
presentment, demand, protest or notice, all of which are hereby waived;
provided that if an Event of Default referred to in clause (v), (vi) or
(vii) of Section 5.01 hereof shall have occurred, then and in every such
case the unpaid Original Amount then outstanding, together with accrued but
unpaid interest and any Break Amount, if applicable, (but without Prepayment
Premium) and all other amounts due hereunder and under the Equipment Notes
shall immediately and without further act become due and payable without
presentment, demand, protest or notice, all of which are hereby waived.

 

This
Section 5.02(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 hereunder or 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 such
rescission or annulment shall extend to or affect any subsequent Default or
Event of Default or impair any right consequent thereon.

 

44

 

(c)                                  The Note Holders shall be entitled, at
any sale pursuant to this Section 5.02, 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
Collateral, 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 and any Break Amount, if
applicable, (but without Prepayment Premium) 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 any Pass Through Trust
Agreement (or its designee) is a Note Holder, the Mortgagee will not be
authorized or empowered to acquire title to any Collateral or take any action
with respect to any Collateral so acquired by it if such acquisition or action
would cause any Trust to fail to qualify as a “grantor trust” for federal
income tax purposes.

 

5.03                        Return of
Aircraft,
Etc.

 

(a)                                  If an Event of Default shall have
occurred and be continuing and the Equipment Notes have been accelerated, at
the request of the Mortgagee, the Owner 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 Collateral to which the Mortgagee shall at the time be entitled
hereunder.  If the Owner 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 to execute and deliver such instruments and documents to the Mortgagee,
to the entry of which judgment the Owner hereby specifically consents to the
fullest extent permitted by Law, and (ii) pursue all or part of such
Collateral wherever it may be found and may enter any of the premises of Owner
wherever such Collateral may be or be supposed to be and search for such
Collateral and take possession of and remove such Collateral.  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 Collateral, make all
such expenditures for maintenance, use, operation, storage, insurance, leasing,
control, management, disposition, modifications or alterations to and of the
Collateral, 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
Collateral and to exercise all rights and powers of the Owner relating to the
Collateral, 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,

 

45

 

management,
disposition, modification or alteration of the Collateral or any part thereof
as the Mortgagee may determine, and the Mortgagee shall be entitled to collect
and receive directly all rents, revenues and other proceeds of the Collateral
and every part thereof, 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.  Such rents, revenues and
other proceeds shall be applied to pay the expenses of the maintenance, use,
operation, storage, insurance, leasing, control, management, disposition,
improvement, modification or alteration of the Collateral 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 Collateral 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), 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.

 

5.04                        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
remedy.  No delay or omission by the
Mortgagee in the 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 or to be an acquiescence
therein.

 

5.05                        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 and the Mortgagee shall, subject to any
determination in such proceedings, be restored to their former positions and
rights hereunder with respect to the Collateral, and all rights, remedies and
powers of the Owner or the Mortgagee shall continue as if no such proceedings
had been instituted.

 

5.06                        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, 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, any Break
Amount, if applicable, any Prepayment Premium, if applicable, and interest and
other amounts due under any Equipment Note then outstanding, or (ii) in
respect of a covenant or provision

 

46

 

hereof which,
under Article X hereof, cannot be modified or amended without the consent
of each Note Holder.

 

5.07                        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 Collateral, whether such receivership be
incidental to a proposed sale of the Collateral or the taking of possession
thereof or otherwise, and the Owner hereby consents to the appointment of such
a receiver and will not oppose any such appointment.  Any receiver appointed for all or any part of the Collateral
shall be entitled to exercise all the rights and powers of the Mortgagee with
respect to the Collateral.

 

5.08                        Mortgagee Authorized to Execute Bills of Sale, Etc.  The Owner
irrevocably appoints, while an Event of Default has occurred and is continuing,
the Mortgagee, effective during the continuance of any Event of Default, the
true and lawful attorney-in-fact of the Owner (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 hereby ratifying and confirming all
that such attorney or any substitute shall do by virtue hereof in accordance
with applicable law.  Nevertheless, if
so requested by the Mortgagee or any purchaser, the Owner 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.

 

5.09                        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 Break 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 VI

DUTIES OF THE MORTGAGEE

 

6.01                        Notice of Event of Default. 
If the Mortgagee shall have Actual Knowledge of any Event of Default or
Default, the Mortgagee shall give prompt written notice thereof to each Note
Holder and to the Policy Provider. 
Subject to the terms of Sections 5.02, 5.06, 6.02 and 6.03 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 6.03, if the Mortgagee shall not have received instructions as
above provided within 20 days after mailing notice of such Event of
Default or Default to the Note Holders, the Mortgagee may, subject to
instructions thereafter received pursuant to the preceding provisions of this
Section 6.01, 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

 

47

 

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 Mortgagee shall not be deemed to have knowledge of a Default or
an Event of Default (except, the failure of Owner to pay any installment of
principal or interest within one Business Day after the same shall become due,
which failure shall constitute knowledge of a Default) unless notified in
writing by the Owner or one or more Note Holders.

 

6.02                        Action Upon Instructions; Certain Rights and
Limitations. 
Subject to the terms of Sections 5.02(a), 5.06, 6.01 and 6.03
hereof, upon the written instructions at any time and from time to time of a
Majority in Interest of Note Holders, the Mortgagee shall, subject to the terms
of this Section 6.02, 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 and (ii) give such notice or direction or exercise such
right, remedy or power hereunder with respect to any part of the Collateral as
shall be specified in such instructions; it being understood that without the
written instructions of a Majority in Interest of Note Holders, the Mortgagee
shall not, except as provided in Section 6.01, approve any such matter as
satisfactory to the Mortgagee.

 

The Owner will file such
continuation statements with respect to financing statements relating to the
security interest created hereunder in the Collateral 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, promptly upon receipt thereof,
duplicates or copies of all reports, notices, requests, demands, certificates
and other instruments furnished to the Mortgagee hereunder.

 

6.03                        Indemnification.  The
Mortgagee shall not be required to take any action or refrain from taking any
action under Section 6.01 (other than the first sentence thereof), 6.02 or
Article V 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 6.03. 
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 6.01
(other than the first sentence thereof) or 6.02 or Article V hereof, nor
shall any other provision of this Trust Indenture or any other Operative
Agreement be deemed to impose a duty

 

48

 

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 is otherwise contrary to Law.

 

6.04                        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 Collateral, or to otherwise take or refrain
from taking any action under, or in connection with, this Trust Indenture or
any part of the Collateral, 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 8.01
hereof), promptly take such action as may be necessary duly to discharge all
liens and encumbrances on any part of the Collateral which result from claims
against it in its individual capacity not related to the ownership of the
Aircraft or the administration of the Collateral or any other transaction
pursuant to this Trust Indenture or any document included in the Collateral.

 

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

 

6.06                        Investment of Amounts Held by Mortgagee.  Any amounts
held by the Mortgagee pursuant to Section 3.02 or 3.03, 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 so long as the Mortgagee may acquire
the same using its best efforts.  All
Cash Equivalents held by the Mortgagee pursuant to this Section 6.06 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 or negligence in the handling of funds, 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 VII

THE MORTGAGEE

 

7.01                        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

 

49

 

Indenture and
agrees to receive and disburse all monies constituting part of the Collateral
in accordance with the terms hereof. 
The Mortgagee, in its individual capacity, shall not be answerable or
accountable under any circumstances, except (i) for its own willful
misconduct or gross negligence (other than for the handling of funds actually
received by it in accordance with the terms of the Operative Agreements or the
Pass Through Agreements, for which the standard of accountability shall be
willful misconduct or negligence), (ii) as provided in the fourth sentence
of Section 2.03(a) hereof and the last sentence of Section 6.04
hereof, and (iii) from the inaccuracy of any representation or warranty of
the Mortgagee (in its individual capacity) in the Participation Agreement or
expressly made hereunder.

 

7.02                        Absence
of Duties.  Except in
accordance with written instructions furnished pursuant to Section 6.01 or
6.02 hereof, and except as provided in, and without limiting the generality of,
Sections 6.03, 6.04 and 7.07 hereof the Mortgagee shall have no duty
(i) to see to any registration of the Aircraft or any recording or filing
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
Owner 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 Collateral, (iv) to confirm, verify or inquire into the failure to
receive any financial statements from Owner, or (v) to inspect the
Aircraft at any time or ascertain or inquire as to the performance or
observance of any of Owner’s covenants herein or any Permitted Lessee’s
covenants under any assigned Permitted Lease with respect to the Aircraft.

 

7.03                        No Representations or Warranties as to Aircraft or Documents.  THE
MORTGAGEE IN ITS INDIVIDUAL OR TRUST CAPACITY DOES NOT MAKE AND SHALL NOT BE
DEEMED TO HAVE MADE AND 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.  The Mortgagee, in its individual or trust capacities, does not
make nor shall it be deemed to have made any representation or warranty as to
the validity, legality or enforceability of this Trust Indenture, the
Participation Agreement, the Equipment Notes, or the Purchase Agreement, or as
to the correctness of any statement contained in any thereof, except for 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 Note Holders make no
representation or warranty hereunder whatsoever.

 

7.04                        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, or the Owner as provided
in Article III hereof need not be segregated in any manner except to the
extent required by Law or Section 6.06 hereof, and may be deposited under
such general conditions as may be prescribed by Law, and the Mortgagee shall
not be liable for any

 

50

 

interest thereon
(except that the Mortgagee shall invest all monies held as directed by Owner so
long as no Special Default or Event of 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.

 

7.05                        Reliance; Agreements; Advice of Counsel.  The
Mortgagee shall not incur any liability to anyone in acting upon any signature,
instrument, notice, resolution, request, consent, order, certificate, report,
opinion, bond or other document or paper believed by it to be genuine and
believed by it to be signed by the proper party or parties.  The Mortgagee may accept a copy of a
resolution of the Board of Directors (or Executive Committee thereof) of the
Owner, 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 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 the
Owner the manner of which is not specifically described herein, the Mortgagee
may for all purposes hereof rely on a certificate, signed by a duly authorized
officer of the Owner, as to such fact or matter, and such certificate shall
constitute full protection to the Mortgagee for any action taken or omitted to
be taken by it in good faith in reliance thereon.  In the administration of the trusts hereunder, the Mortgagee 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 Collateral, advise with counsel, accountants and other skilled persons to
be selected and retained by it, and the Mortgagee shall not be liable for
anything done, suffered or omitted in good faith by it in accordance with the
written advice or written opinion of any such counsel, accountants or other
skilled persons.

 

7.06                        Compensation.  The Mortgagee shall be
entitled to reasonable compensation for all services rendered hereunder and
shall, on and subsequent to an Event of Default hereunder, have a priority
claim on the Collateral for the payment of such compensation (other than any
Unindemnified Tax) (and for expenses and disbursements, including the
reasonable fees and expenses of counsel), to the extent that such compensation
shall not be paid by Owner, 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 Collateral toward such payments. 
The Mortgagee agrees that it shall have no right against the Note
Holders for any fee as compensation for its services as trustee under this
Trust Indenture.

 

7.07                        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 7.07.

 

51

 

ARTICLE VIII

INDEMNIFICATION

 

8.01                        Scope
of Indemnification. 
The Mortgagee shall be indemnified by the Owner to the extent and in the
manner provided in Section 7 of the Participation Agreement.

 

ARTICLE IX

SUCCESSOR AND SEPARATE TRUSTEES

 

9.01                        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 the Owner and each Note Holder, such resignation to be
effective upon the 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 Owner, which consent
shall not be unreasonably withheld, except that such consent shall not be
necessary if an Event of Default is continuing) remove the Mortgagee without
cause by an instrument in writing delivered to the Owner 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 Event of Default shall have occurred and be
continuing, shall be subject to Owner’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 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 and the predecessor Mortgagee
an instrument accepting such appointment and assuming the obligations of the
Mortgagee 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

 

52

 

New York; Chicago,
Illinois; Hartford, Connecticut; Wilmington, Delaware; Salt Lake City, Utah;
Charlotte, North Carolina; 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 business of the Mortgagee may be transferred, shall, subject to
the terms of paragraph (c) of this Section 9.01, be a successor
Mortgagee and the Mortgagee under this Trust Indenture without further act.

 

9.02                        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 Collateral shall be situated or to
make any claim or bring any suit with respect to or in connection with the
Collateral, 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), 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 (with the written consent of the Owner, so long as no
Event of Default has occurred and is continuing) and, upon the written request
of the Mortgagee, the Owner, 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
Collateral, or to act as separate trustee or trustees of all or any part of the
Collateral, in each case with such rights, powers, duties and obligations
consistent with this 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 9.02. If the Owner shall not have taken any
action required of it under this Section 9.02(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 9.02(a) without the concurrence of the Owner,
and the Owner 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 9.02(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 9.02(a) shall die, become incapable of acting,

 

53

 

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 9.02(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 part of the Collateral or 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 Collateral in any such jurisdiction) shall be exercised and
performed by such additional or separate trustee.  No additional or separate trustee shall take any discretionary
action except on the instructions of the 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 9.02 shall be subject to, and shall
have the benefit of Articles V through IX and Article XI hereof
insofar as they apply to the Mortgagee. 
The powers of any additional or separate trustee appointed pursuant to
this Section 9.02 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, 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 under this Section 9.02(c) when
and to the extent it could so act under Section  9.02(a) hereof.

 

ARTICLE X

SUPPLEMENTS AND AMENDMENTS TO THIS TRUST INDENTURE

AND OTHER DOCUMENTS

 

10.01                 Instructions
of Majority;
Limitations.

 

(a)                                  The Mortgagee agrees with the Note Holders
that it shall not enter into any amendment, waiver or modification of,
supplement or consent to this Trust Indenture, or any other Operative Agreement
to which it is a party, 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

 

54

 

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, 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 Primary Liquidity Provider and Policy Provider, no such
amendment, waiver or modification of the terms of, or consent under, any
thereof, shall (i) modify any of the provisions of this
Section 10.01, or of Article II or III or Section 4.03, 5.01,
5.02(c), 5.02(d), 6.01 or 6.02 hereof, the definitions of “Event of Default,”
“Default,” “Majority in Interest of Note Holders,” “Break Amount”, “Prepayment
Premium” 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,
Break Amount, Prepayment Premium or interest with respect to any Equipment
Note, (iii) reduce, modify or amend any indemnities in favor of the
Mortgagee or the Note Holders (except that the Mortgagee may consent to any
waiver or reduction of an indemnity payable to it), or (iv) permit the creation
of any Lien on the Collateral 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 Collateral, except as provided in connection with the exercise of remedies
under Article V hereof; provided, further, that, without the consent of
each holder of an affected Related Equipment Note then outstanding and any
affected Primary Liquidity Provider, no amendment, waiver or modification of
the terms hereof shall reduce the amount payable with respect to such Related
Equipment Note, or the date on which any amount is payable with respect to such
Related Equipment Note or deprive any Related Note Holder of the benefit of the
Lien of this Trust Indenture or the Collateral, except as provided in
Sections 2.05 or 11.01 hereof or in connection with the exercise of
remedies under Article V hereof.

 

(b)                                 The Owner 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 in
accordance with the terms hereof 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 for the benefit of the Note Holders, or to surrender any rights or
power herein conferred upon the Owner; (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.

 

55

 

10.02                 Mortgagee
Protected. 
If, in the opinion of the institution acting as Mortgagee hereunder, any
document required to be executed by it pursuant to the terms of
Section 10.01 hereof affects any right, duty, immunity or indemnity with
respect to such institution under this Trust Indenture, such institution may in
its discretion decline to execute such document.

 

10.03                 Documents
Mailed to Note Holders. 
Promptly after the execution by the Owner or the Mortgagee of any
document entered into pursuant to Section 10.01 hereof, the Mortgagee
shall mail, by first class mail, postage prepaid, a copy thereof to Owner (if
not a party thereto) and to each Note Holder at its address last set 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.

 

10.04                 No Request Necessary for Trust Indenture Supplement.  No written
request or consent of the Note Holders pursuant to Section 10.01 hereof
shall be required to enable the Mortgagee to execute and deliver a Trust
Indenture Supplement specifically required by the terms hereof.

 

ARTICLE XI

MISCELLANEOUS

 

11.01                 Termination
of Trust Indenture. 
Upon (or at any time after) payment in full of the Original Amount of,
Break Amount, if any, Prepayment Premium, 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 and for so long as no Related Special Default or Related
Event of Default shall have occurred and be continuing, the Owner shall direct
the Mortgagee to execute and deliver to or as directed in writing by the Owner
an appropriate instrument releasing the Aircraft and the Engines and all other
Collateral from the Lien of the Trust Indenture and the Mortgagee shall execute
and deliver such instrument as aforesaid; 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
Collateral and the final distribution by the Mortgagee of all monies or other
property or proceeds constituting part of the Collateral in accordance with the
terms hereof.  Except as aforesaid
otherwise provided, this Trust Indenture and the trusts created hereby shall
continue in full force and effect in accordance with the terms hereof.

 

11.02                 No Legal Title to Collateral in Note Holders.  No holder of
an Equipment Note shall have legal title to any part of the Collateral.  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 Collateral 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 Collateral.

 

11.03                 Sale of Aircraft by Mortgagee Is Binding.  Any sale or
other conveyance of the Collateral, or any part thereof (including any part
thereof or interest therein), by the Mortgagee

 

56

 

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 Mortgagee,
the Owner and such holders in and to such Collateral 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.

 

11.04                 Trust Indenture for Benefit of Owner, Mortgagee, Note Holders, Related
Secured Parties 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, the Mortgagee, the Note
Holders, Related Secured Parties and the other Indenture Indemnitees, any legal
or equitable right, remedy or claim under or in respect of this Trust
Indenture, except that the persons referred to in the penultimate paragraph of
Section 4.02(b) shall be third party beneficiaries of such paragraph.

 

11.05                 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, addressed to it at 118-29 Queens
Blvd., Forest Hills, NY 11375, Attention: 
Vice President — Corporate Finance, facsimile number (718) 709-3630
with a copy to:  JetBlue Airways
Corporation, 118-29 Queens Blvd., Forest Hills, NY  11375, Attention:  General
Counsel, facsimile number (718) 709-3630, (ii) if to Mortgagee, addressed
to it at its office at Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890-0001, Attention:  Corporate Trust Administration, facsimile number
(302) 636-4140, (iii) if to any Note Holder or any Indenture Indemnitee,
addressed to such party at such address as such party shall have furnished by
notice to the Owner 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 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 made, given, furnished or filed by facsimile
or telecommunication transmission, when received unless received outside of
business hours, in which case on the next open of business on a Business
Day.  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.

 

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

 

11.07                 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 and the Mortgagee, in compliance with Section 10.01
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.

 

57

 

11.08                 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. 
Each Note Holder by its acceptance of an Equipment Note agrees to be
bound by this Trust Indenture and all provisions of the Operative Agreements
applicable to a Note Holder.

 

11.09                 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.

 

11.10                 Normal
Commercial Relations. 
Anything contained in this Trust Indenture to the contrary
notwithstanding, Owner and Mortgagee may conduct any banking or other financial
transactions, and have banking or other commercial relationships, with each
other, 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 Owner for any purpose whatsoever, whether related to any of the transactions
contemplated hereby or otherwise.

 

11.11                 Governing
Law; Counterpart Form. 
THIS TRUST INDENTURE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW 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 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.

 

11.12                 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.

 

11.13                 Bankruptcy.  It is the intention of the
parties that the Mortgagee shall be entitled to the benefits of
Section 1110 of the Bankruptcy Code with respect to the right to take
possession of the Aircraft, Airframe, Engines and Parts and to exercise any of
its other rights or remedies as provided herein in the event of a case under
Chapter 11 of the Bankruptcy Code in which Owner 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.

 

*   *   *

 

58

 

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.

 

	
   

  	
  JETBLUE AIRWAYS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WILMINGTON TRUST COMPANY,

  as Mortgagee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

59

 

ANNEX
A - DEFINITIONS

 

JetBlue
NXXXJB

 

 

ANNEX
A

 

DEFINITIONS

 

GENERAL
PROVISIONS

 

(a)           In each Operative
Agreement, unless otherwise expressly provided, a reference to:

 

(i)            each of “Owner,” “Mortgagee,” “Note
Holder” or any other person includes, without prejudice to the provisions of
any Operative Agreement, any successor in interest to it and any permitted
transferee, permitted purchaser or permitted assignee of it;

 

(ii)           words importing the plural include
the singular and words importing the singular include the plural;

 

(iii)          any agreement, instrument or document,
or any annex, schedule or exhibit thereto, or any other part thereof, includes,
without prejudice to the provisions of any Operative Agreement, that agreement,
instrument or document, or annex, schedule or exhibit, or part, respectively,
as amended, modified or supplemented from time to time in accordance with its
terms and in accordance with the Operative Agreements, and any agreement,
instrument or document entered into in substitution or replacement therefor;

 

(iv)          any provision of any Law includes any
such provision as amended, modified, supplemented, substituted, reissued or
reenacted prior to the Delivery Date, and thereafter from time to time;

 

(v)           the words “Agreement,” “this
Agreement,” “hereby,” “herein,” “hereto,” “hereof” and “hereunder” and words of
similar import when used in any Operative Agreement refer to such Operative
Agreement as a whole and not to any particular provision of such Operative
Agreement;

 

(vi)          the words “including,” “including,
without limitation,” “including, but not limited to,” when used in any
Operative Agreement, with respect to any matter or thing, mean including,
without limitation, such matter or thing; and

 

(vii)         a “Section,” an “Exhibit,” an “Annex”
or a “Schedule” in any Operative Agreement, or in any annex thereto, is a
reference to a section of, or an exhibit, an annex or a schedule to, such
Operative Agreement or such annex, respectively.

 

(b)           Each exhibit, annex
and schedule to each Operative Agreement is incorporated in, and shall be
deemed to be a part of, such Operative Agreement.

 

(c)           Unless otherwise
defined or specified in any Operative Agreement, all accounting terms therein
shall be construed and all accounting determinations thereunder shall be made
in accordance with GAAP.

 

 

(d)           Headings used in any
Operative Agreement are for convenience only and shall not in any way affect
the construction of, or be taken into consideration in interpreting, such
Operative Agreement.

 

DEFINED
TERMS

 

“Above-Cap
Liquidity Facilities” means, initially, the ISDA Master
Agreement, dated as of the date hereof, between the Subordination Agent, as
agent and trustee for the Pass Through Trusts, and the initial Above-Cap
Liquidity Provider, together with the Schedules and Confirmations attached
thereto, relating to each of the Class G-1 Trust, Class G-2 Trust and
Class C Trust (each as defined in the Intercreditor Agreement), in each
case as amended, supplemented or otherwise modified from time to time in
accordance with its terms.

 

“Above-Cap
Liquidity Provider” means Morgan Stanley Capital Services Inc.,
as a Class G-1 Above-Cap Liquidity Provider, Class G-2 Above-Cap
Liquidity Provider and Class C Above-Cap Liquidity Provider (as such terms
are defined in the Intercreditor Agreement) under the respective Above-Cap
Liquidity Facility, or any successor thereto.

 

“Act”
means part A of subtitle VII of title 49, United States Code, as
amended or any subsequent legislation that amends, supplements or supercedes
such provisions.

 

“Actual Knowledge”
means (a) as it applies to Mortgagee actual knowledge of a responsible
officer in the Corporate Trust Office, respectively, and (b) as it applies
to Owner, actual knowledge of a Vice President or more senior officer of Owner,
or any other officer of Owner, having responsibility for the transactions
contemplated by the Operative Agreements; provided that each of Owner and
Mortgagee shall be deemed to have “Actual Knowledge” of any matter as to which
it has received notice from Owner, any Note Holder, or Mortgagee, such notice
having been given pursuant to Section 11.6 of the Participation Agreement.

 

“Additional
Insured” means Mortgagee, Liquidity Providers, the Policy
Provider and each Note Holder.

 

“Affiliate”
means, with respect to any person, any other person directly or indirectly
controlling, controlled by or under common control with such person.  For purposes of this definition, “control”
means the power, directly or indirectly, to direct or cause the direction of
the management and policies of such person, whether through the ownership of
voting securities or by contract or otherwise and “controlling,” “controlled
by” and “under common control with” have correlative meanings.  To the extent the same Person acts as Pass
Though Trustee, Subordination Agent or Mortgagee, for purposes of Section
7.1.2, the Pass Through Trustee, Subordination Agent and Mortgagee will be
“Affiliates” of each such entity.

 

“Airbus Consent”
means the Consent and Agreement [NXXXJB], dated as of the Closing Date, of the
Airframe Manufacturer.

 

“Aircraft”
means, collectively, the Airframe and Engines.

 

“Aircraft Bill of
Sale” means the full warranty bill of sale covering the Aircraft
delivered by AVSA S.A.R.L. to Owner on the Delivery Date.

 

2

 

“Aircraft
Documents” means all technical data, manuals and log books, and
all inspection, modification and overhaul records and other service, repair,
maintenance and technical records that are required by (i) the FAA per
Federal Aviation Regulation FAR 121.380A (or successor regulation) and any
other relevant regulation promulgated by the FAA which is applicable to Owner
as an operator under Federal Aviation Regulation FAR 121 or (ii) the
relevant Aviation Authority, to be transferred with respect to the Aircraft,
Airframe, Engines or Parts; and such term shall include all additions,
renewals, revisions and replacements of any such materials from time to time
made prior to the release of the lien of the Indenture, or required to be made
prior to the release of the lien of the Indenture, by the regulations of the
FAA or the relevant Aviation Authority, and in each case in whatever form and
by whatever means or medium (including, without limitation, microfiche,
microfilm, paper, CD-ROM or computer disk) such materials may be maintained or
retained by or on behalf of Owner (provided, that all such materials shall be
maintained in the English language).

 

“Airframe”
means (a) the aircraft (excluding Engines or engines from time to time
installed thereon) manufactured by Airframe Manufacturer and identified by
Airframe Manufacturer’s model number, United States registration number and
Airframe Manufacturer’s serial number set forth in the initial Trust Indenture
Supplement and any Replacement Airframe and (b) any and all related
Parts.  Upon substitution of a
Replacement Airframe under and in accordance with the Trust Indenture, such
Replacement Airframe shall become subject to the Trust Indenture and shall be
the “Airframe” for all purposes of the Trust Indenture and the other Operative
Agreements and thereupon the Airframe for which the substitution is made shall
no longer be subject to the Trust Indenture, and such replaced Airframe shall
cease to be the “Airframe.”

 

“Airframe
Manufacturer” means Airbus SNC.

 

“Amortization
Amount” means, with respect to any Equipment Note, as of any
Payment Date, the amount determined by multiplying the percentage set forth
opposite such date on the Amortization Schedule by the Original Amount of
such Equipment Note.

 

“Amortization
Schedule” means, with respect to each Equipment Note, the
amortization schedule for such Equipment Note delivered pursuant to
Section 2.02 of the Trust Indenture.

 

“Appraiser”
means a firm of internationally recognized, independent aircraft appraisers.

 

“Aviation
Authority” means the FAA or, if the Aircraft is permitted to be,
and is, registered with any other Government Entity under and in accordance
with Section 4.02(e) of the Trust Indenture and Section 5.4.5 of the
Participation Agreement, such other Government Entity.

 

“Bankruptcy Code”
means the United States Bankruptcy Code, 11 U.S.C. Section 101 et seq.

 

“Beneficial Owner”
when used in relation to an Equipment Note means a Person that, by reason of
direct ownership, contract, share ownership or otherwise, has the right to
receive or participate in receiving, directly or indirectly, payments of
principal, interest or Break Amount in respect of such Equipment Note; provided
that a Person shall not be deemed to be a Beneficial Owner of an Equipment Note
solely because another Person in which such a Person owns

 

3

 

common stock or
other equity securities is a registered holder or Beneficial Owner of such
Equipment Note unless such Person is an Affiliate of such other Person.

 

“Bills of Sale”
means the FAA Bill of Sale and the Aircraft Bill of Sale.

 

“Break Amount”
means as of any date of payment, redemption or acceleration for any Equipment
Notes (the “Applicable Date”), an
amount determined by the Mortgagee on the date that is two (2) LIBOR Business
Days prior to the Applicable Date pursuant to the formula set forth below:

 

The
Break Amount shall be calculated as follows:

 

Break
Amount = Z-Y

 

Where:

 

X
= with respect to any applicable Interest Period, the sum of (i) the
amount of the outstanding principal amount for such Equipment Notes as of the
first day of the then applicable Interest Period plus (ii) interest
payable thereon during such entire Interest Period at then effective
Three-Month LIBOR.

 

Y
= X, discounted to present value from the last day of the then applicable
Interest Period to the Applicable Date using then effective Three-Month LIBOR
as the discount rate.

 

Z
= X, discounted to present value from the last day of the then applicable
Interest Period to the Applicable Date using a rate equal to the applicable
London interbank offered rate for a period commencing on the Applicable Date
and ending on the last day of the applicable Interest Period, determined by the
Mortgagee as of two LIBOR Business Days prior to the Applicable Date as the
discount rate.

 

No Break Amount will be payable (x) if the Break
Amount, as calculated pursuant to the formula set forth above, is equal to or
less than zero or (y) on, or in respect of, any Applicable Date that is a
Payment Date.

 

“Business Day”
means any day other than a Saturday, Sunday or other day on which commercial
banks are authorized or required by law to close in New York, New York, Darien,
Connecticut or the city in which the Corporate Trust Office is maintained.

 

“Cash Equivalents”
means the following securities (which shall mature within 90 days of the date
of purchase thereof):  (a) direct
obligations of the U.S. Government; (b) obligations fully guaranteed by
the U.S. Government; (c) certificates of deposit issued by, or bankers’
acceptances of, or time deposits or a deposit account with Mortgagee or any
bank, trust company or national banking association incorporated or doing
business under the laws of the United States or any state thereof having a
combined capital and surplus and retained earnings of at least $500,000,000 and
having an individual rating of “C” or better from Fitch Ratings; or
(d) commercial paper of any issuer doing business under the laws of the
United States or one of

 

4

 

the states thereof
and in each case having a rating assigned to such commercial paper by
Standard & Poor’s or Moody’s equal to A1, P1 or higher.

 

“Certificated Air
Carrier” means a Citizen of the United States holding a carrier
operating certificate issued by the Secretary of Transportation pursuant to
Chapter 447 of Title 49 of the United States Code for aircraft capable of
carrying ten or more individuals or 6,000 pounds or more of cargo or that
otherwise is certified or registered to the extent required to fall within the
purview of Section 1110 of Title 11 of the United States Code or any analogous
successor provision of the Bankruptcy Code.

 

“Citizen of the
United States” is as defined in Section 40102(a)(15) of the
Act and in the FAA Regulations or any similar legislation of the United States
of America enacted in substitution or replacement therefor.

 

“Closing”
means the closing of the transactions contemplated by the Participation
Agreement.

 

“Closing Date”
means the date on which the Closing occurs, which shall be the date of Trust
Indenture Supplement No. 1.

 

“Code”
means the Internal Revenue Code of 1986; provided, that when used in relation
to a Plan, “Code” shall mean the Internal Revenue Code of 1986 and any
regulations and rulings issued thereunder.

 

“Collateral”
is defined in the first paragraph of the Granting Clause of the Trust
Indenture.

 

“Consent and
Agreement” means the Manufacturer Consent and Agreement
[NXXXJB], dated as of the Closing Date, of AVSA S.A.R.L.

 

“Corporate Trust
Office” means the Corporate Trust Administration Department of
Mortgagee located at Mortgagee’s address for notices under the Participation
Agreement or such other office at which Mortgagee’s corporate trust business
shall be administered which Mortgagee shall have specified by notice in writing
to Owner and each Note Holder.

 

“CRAF”
means the Civil Reserve Air Fleet Program established pursuant to 10 U.S.C.
Section 9511-13 or any similar substitute program.

 

“Debt Rate”
means, (i) with respect to any Series, the rate per annum specified for
such Series under the heading “Interest Rate” in Schedule I to the Trust
Indenture and (ii) for any other purpose, including, without limitation,
the calculation of the Payment Due Rate with respect to any period, the
weighted average interest rate per annum during such period borne by the
outstanding Equipment Notes, excluding any interest payable at the Payment Due
Rate.

 

“Default”
means any event or condition that with the giving of notice or the lapse of
time or both would become an Indenture Event of Default.

 

5

 

“Delivery Date”
means the date the Aircraft was delivered new to the Owner from AVSA S.A.R.L.

 

“Deposit
Agreement” means each of the three Deposit Agreements between
the Depositary and the Escrow Agent, dated as of the Issuance Date, each of
which relates to one of the Pass Through Trusts, provided that, for purposes of
any obligation of Owner, no amendment, modification or supplement to, or
substitution or replacement of, any such Deposit Agreement shall be effective
unless consented to by Owner.

 

“Depositary”
means HSH Nordbank AG, New York Branch, as Depositary under each Deposit
Agreement.

 

“DGAC”
means the Direction Générale de l’Aviation Civile of the Republic of France or
any other government entity suceeding to the functions of the Direction
Générale de l’Aviation Civile.

 

“Dollars,”
“United States Dollars” or
“$” means the lawful
currency of the United States.

 

“DOT”
means the Department of Transportation of the United States or any Government
Entity succeeding to the functions of such Department of Transportation.

 

“Eligible Account”
means an account established by and with an Eligible Institution at the request
of the Mortgagee, which institution agrees, for all purposes of the UCC
including Article 8 thereof, that (a) such account shall be a
“securities account” (as defined in Section 8-501 of the UCC),
(b) all property (other than cash) credited to such account shall be
treated as a “financial asset” (as defined in Section 8-102(9) of the
UCC), (c) the Mortgagee shall be the “entitlement holder” (as defined in
Section 8-102(7) of the UCC) in respect of such account, (d) it will
comply with all entitlement orders issued by the Mortgagee to the exclusion of
the Owner, and (e) the “securities intermediary jurisdiction” (under
Section 8-110(e) of the UCC) shall be the State of New York.

 

“Eligible
Institution” means the corporate trust department of
(a) WTC, acting solely in its capacity as a “securities intermediary” (as
defined in Section 8-102(14) of the UCC), or (b) a depository
institution organized under the laws of the United States of America or any one
of the states thereof or the District of Columbia (or any U.S. branch of a
foreign bank), which has a long-term unsecured debt rating from Moody’s and
Standard & Poor’s of at least A-3 or its equivalent.

 

“Engine”
means (a) each of the engines manufactured by Engine Manufacturer and
identified by Engine Manufacturer’s model number and Engine Manufacturer’s
serial number set forth in the initial Trust Indenture Supplement and
originally installed on the Airframe on the Closing Date, and any Replacement
Engine, in any case whether or not from time to time installed on such Airframe
or installed on any other airframe or aircraft, and (b) any and all related
Parts.  Upon substitution of a
Replacement Engine under and in accordance with the Trust Indenture, such
Replacement Engine shall become subject to the Trust Indenture and shall be an
“Engine” for all purposes of the Trust Indenture  and the other Operative Agreements and

 

6

 

thereupon the
Engine for which the substitution is made shall no longer be subject to the
Trust Indenture, and such replaced Engine shall cease to be an “Engine.”

 

“Engine Agreement”
means the V2500® General Terms of Sale dated May 4, 1999 between the Owner
(f/k/a New Air Corporation) and Engine Manufacturer, but only insofar as such
agreement relates to the Engines.

 

“Engine Consent
and Agreement” means the Engine Consent and Agreement [NXXXJB]
dated as of the Closing Date of the Engine Manufacturer.

 

“Engine
Manufacturer” means IAE International Aero Engines, AG.

 

“Equipment Note
Register” is defined in Section 2.06 of the Trust
Indenture.

 

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

 

“ERISA”
means the Employee Retirement Income Security Act of 1974 and any regulations
and rulings issued thereunder.

 

“Escrow Agent”
means Wilmington Trust Company, as Escrow Agent under each of the Escrow
Agreements.

 

“Escrow Agreement”
means each of the three Escrow and Paying Agent Agreements among the Escrow
Agent, the Paying Agent, certain underwriters of the Pass Through Certificates
named therein and one of the Pass Through Trustees, dated as of the Issuance
Date, each of which relates to one of the Pass Through Trusts, provided that,
for purposes of any obligation of Owner, no amendment, modification or
supplement to, or substitution or replacement of, any such Escrow Agreement
shall be effective unless consented to by Owner.

 

“Event of Default”
is defined in Section 5.01 of the Trust Indenture.

 

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

 

(a)           the destruction of
such property, damage to such property beyond practical or economic repair or
rendition of such property permanently unfit for normal use;

 

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

 

(c)           any theft, hijacking
or disappearance of such property for a period of 180 consecutive days or more
(or, if earlier, the date on which Owner has confirmed to Mortgagee in writing
that Owner cannot recover such property);

 

7

 

(d)           any seizure,
condemnation, confiscation, taking or requisition (including loss of title) of
such property (other than a requisition of use by the U.S. Government or any
government of registry of the Aircraft or agency or instrumentality thereof)
for a period exceeding 180 consecutive days; provided, however, that in the
case of a requisition of title, the requisition of title shall not have been
reversed within 120 days from the date of such requisition of title;

 

(e)           as a result of any
law, rule, regulation, order or any other action by the Aviation Authority or
by any Government Entity of the government of registry of the Aircraft or by
any Government Entity otherwise having jurisdiction over the operation or use
of the Aircraft, the use of such property in the normal course of Owner’s (or
any Permitted Lessee’s) business of passenger air transportation is prohibited
for a period of 180 consecutive days, unless Owner (or such Permitted Lessee),
prior to the expiration of such 180-day period, shall have undertaken and shall
be diligently carrying forward such steps as may be necessary or desirable to
permit the normal use of such property by Owner (or such Permitted Lessee), but
in any event if such use shall have been prohibited for a period of two
consecutive years, provided that no Event of Loss shall be deemed to have
occurred if such prohibition has been applicable to Owner’s (or such Permitted
Lessee’s) entire U.S. fleet of such property and Owner (or such Permitted
Lessee), prior to the expiration of such two-year period, shall have conformed
at least one unit of such property in its fleet to the requirements of any such
law, rule, regulation, order or other action and commenced regular commercial
use of the same in such jurisdiction and shall be diligently carrying forward,
in a manner which does not discriminate against such property in so conforming
such property, steps which are necessary or desirable to permit the normal use
of the Aircraft by Owner (or such Permitted Lessee), but in any event if such
use shall have been prohibited for a period of three years; or

 

(f)            the requisition for
the use by any government of registry of the Aircraft (other than the U.S.
Government) or any instrumentality or agency thereof, which shall have occurred
and shall have continued for more than two years.

 

An
Event of Loss with respect to the Aircraft shall be deemed to have occurred if
an Event of Loss occurs with respect to the Airframe.

 

“Expenses”
means any and all liabilities, obligations, losses, damages, settlements,
penalties, claims, actions, suits, costs, expenses and disbursements (including,
without limitation, reasonable fees and disbursements of legal counsel,
accountants, appraisers, inspectors or other professionals, and costs of
investigation).

 

“FAA”
means the Federal Aviation Administration of the United States or any
Government Entity succeeding to the functions of such Federal Aviation
Administration.

 

“FAA Bill of Sale”
means a bill of sale for the Aircraft on AC Form 8050-2 (or such other form as
may be approved by the FAA) delivered to Owner on the Delivery Date by AVSA
S.A.R.L.

 

“FAA Filed
Documents” means the Trust Indenture, the Trust Indenture
Supplement, the FAA Bill of Sale and an application for registration of the
Aircraft with the FAA in the name of Owner.

 

8

 

“FAA Regulations”
means the Federal Aviation Regulations issued or promulgated pursuant to the
Act from time to time.

 

“Final Payment
Date” shall mean March 15, 2014, or if such day is not a
Business Day, the next succeeding Business Day.

 

“Financing
Statement” means the UCC-1 (and, where appropriate, UCC-3)
financing statement covering the Collateral showing Mortgagee as secured party,
for filing in Delaware and each other jurisdiction that, in the opinion of
Mortgagee, is necessary to perfect its Lien on the Collateral.

 

“French Pledge
Agreement” means the Pledge Agreement [NXXXJB], dated the
Closing Date, between the Owner  (as
Pledgor) and the Mortgagee (as beneficiary).

 

“GAAP”
means generally accepted accounting principles as set forth in the statements
of financial accounting standards issued by the Financial Accounting Standards
Board of the American Institute of Certified Public Accountants, as such
principles may at any time or from time to time be varied by any applicable
financial accounting rules or regulations issued by the SEC and, with respect
to any person, shall mean such principles applied on a basis consistent with
prior periods except as may be disclosed in such person’s financial statements.

 

“Government
Entity” means (a) any federal, state, provincial or similar
government, and any body, board, department, commission, court, tribunal,
authority, agency or other instrumentality of any such government or otherwise
exercising any executive, legislative, judicial, administrative or regulatory
functions of such government or (b) any other government entity having
jurisdiction over any matter contemplated by the Operative Agreements or
relating to the observance or performance of the obligations of any of the
parties to the Operative Agreements.

 

“Indemnitee”
means (i) WTC and Mortgagee, (ii) each separate or additional trustee
appointed pursuant to the Trust Indenture, (iii) the Subordination Agent,
the Paying Agent, the Escrow Agent and, solely in respect of Section 7.1
of the Participation Agreement, each Pass Through Trustee, (iv) the
Liquidity Providers and the Policy Provider, (v) each Note Holder and each
Related Note Holder, (vi) each Affiliate of the persons described in
clauses (i) through (v), inclusive and (vii) the respective directors,
officers and employees of each of the persons described in clauses
(i) through (vi) inclusive; provided that the persons described in clauses
(iii) and (v), and their respective Affiliates, directors, officers and
employees are Indemnitees only for purposes of Section 7.1 of the
Participation Agreement.

 

“Indenture
Agreements” means the Purchase Agreement,  the Consent and Agreement, the Engine
Consent and Agreement, the Bills of Sale and any other contract, agreement or
instrument from time to time assigned or pledged under the Trust Indenture.

 

“Indenture
Default” means any condition, circumstance, act or event that,
with the giving of notice, the lapse of time or both, would constitute an
Indenture Event of Default.

 

“Indenture Event
of Default” means any one or more of the conditions,
circumstances, acts or events set forth in Section 5.01 of the Trust
Indenture.

 

9

 

“Indenture
Indemnitee” means (i) WTC and the Mortgagee, (ii) each
separate or additional trustee appointed pursuant to the Trust Indenture,
(iii) the Subordination Agent, (iv) the Liquidity Providers and the
Policy Provider, (v) the Paying Agent, (vi) the Escrow Agent,
(vii) each Pass Through Trustee (to the extent it is an Indemnitee) and
(viii) each of the respective directors, officers, employees and agents of
each of the persons described in clauses (i) through (vii) inclusive above.

 

“Intercreditor
Agreement” means that certain Intercreditor Agreement among the
Pass Through Trustees, the Liquidity Providers, the Policy Provider and the
Subordination Agent, dated as of the Issuance Date, provided that, with respect
to any matter specified in the second proviso to the first sentence of
Section 9.1(a) of the Intercreditor Agreement, no amendment, modification
or supplement to, or substitution or replacement of, such Intercreditor
Agreement shall be effective unless consented to by Owner.

 

“Interest Period”
means the period commencing on and including the Closing Date and ending on but
excluding the next succeeding Payment Date, and thereafter, each successive
period commencing on and including the immediately preceding Payment Date and
ending on but excluding the next succeeding Payment Date.

 

“IRS”
means the Internal Revenue Service of the United States or any Government
Entity succeeding to the functions of such Internal Revenue Service.

 

“Issuance Date”
means March 24, 2004.

 

“Law”
means (a) any constitution, treaty, statute, law, decree, regulation,
order, rule or directive of any Government Entity, and (b) any judicial or
administrative interpretation or application of, or decision under, any of the
foregoing.

 

“LIBOR Business
Day” means any day on which dealings are carried on in the
London interbank market.

 

“Lien”
means any mortgage, pledge, lien, charge, encumbrance or security interest
affecting the title to or any interest in property.

 

“Liquidity
Facilities” means the Primary Liquidity Facilities and the
Above-Cap Liquidity Facilities.

 

“Liquidity
Providers” means the Primary Liquidity Provider and the
Above-Cap Liquidity Provider.

 

“Maintenance
Program” means the maintenance program for the Aircraft of the
Owner or a Permitted Lessee which is approved by the government of registry of
the Aircraft.

 

“Majority in
Interest of Note Holders” means as of a particular date of
determination, (i) the holders of a majority in aggregate unpaid Original
Amount of all Equipment Notes outstanding as of such date (excluding any
Equipment Notes held by Owner or any of its Affiliates (unless all Equipment
Notes then outstanding shall be held by Owner or any Affiliate of Owner), it
being understood that a Pass Through Trustee shall not be deemed to be an

 

10

 

Affiliate of the
Owner unless 100% of the aggregate face amount of the Pass Through Certificates
issued by the corresponding Pass Through Trust are held by the Owner or an
Affiliate of the Owner or a Pass Through Trustee is otherwise under the control
of the Owner or an Affiliate of the Owner); provided that for the purposes of
directing any action or casting any vote or giving any consent, waiver or
instruction hereunder any Note Holder of an Equipment Note or Equipment Notes
may allocate, in such Note Holder’s sole discretion, any fractional portion of
the principal amount of such Equipment Note or Equipment Notes in favor of or
in opposition to any such action, vote, consent, waiver or instruction and
(ii) if all the Secured Obligations have been paid in full, the majority
of Related Mortgagees.

 

“Material Adverse
Change” means, with respect to any person, any event, condition
or circumstance that materially and adversely affects such person’s business or
consolidated financial condition, or its ability to observe or perform its
obligations, liabilities and agreements under the Operative Agreements.

 

“Minimum
Liability Insurance Amount” is defined in Schedule 3 to the
Participation Agreement.

 

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

 

“Mortgaged
Property” is defined in Section 3.03 of the Trust
Indenture.

 

“Mortgagee”
means Wilmington Trust Company, a Delaware banking corporation, not in its
individual capacity but solely as mortgagee under the Trust Indenture.

 

“Mortgagee
Agreements” means, collectively, the Participation Agreement,
the Trust Indenture and each other agreement between Mortgagee and any other
party to the Participation Agreement, relating to the Transactions, delivered
on the Closing Date.

 

“Net Worth”
means, for any person, the excess of its total assets over its total
liabilities.

 

“Non-U.S. Person”
means any Person other than a United States person, as defined in
Section 7701(a)(30) of the Code.

 

“Note Holder”
means at any time each registered holder of one or more Equipment Notes.

 

“Note Purchase
Agreement” means the Note Purchase Agreement, dated as of the
Issuance Date, among JetBlue Airways Corporation, the Subordination Agent, the
Escrow Agent, the Paying Agent and the Pass Through Trustee under each Pass
Through Trust Agreement providing for, among other things, the issuance and
sale of the Equipment Notes.

 

“Officer’s
Certificate” means, in respect of any party to the Participation
Agreement, a certificate signed by the Chairman, the President, any Vice
President (including those with varying ranks such as Executive, Senior,
Assistant or Staff Vice President), the Treasurer or the Secretary of such
party.

 

11

 

“Operative
Agreements” means, collectively, the Participation Agreement,
the Consent and Agreement, the Airbus Consent, the French Pledge Agreement, the
Engine Consent and Agreement, the Trust Indenture, the initial Trust Indenture
Supplement, the Bills of Sale, and the Equipment Notes.

 

“Operative
Indentures” means each of the indentures under which equipment
notes have been issued and purchased by the Pass Through Trustees pursuant to
the Note Purchase Agreement.

 

“Original Amount,”
with respect to an Equipment Note, means the stated original principal amount
of such Equipment Note and, with respect to all Equipment Notes, means the aggregate
stated original principal amounts of all Equipment Notes.

 

“Owner”
means JetBlue Airways Corporation, a Delaware corporation and its successors
and permitted assigns.

 

“Participation Agreement” means the
Participation Agreement [NXXXJB] dated as of the Closing Date among Owner, the
Pass Through Trustees, Subordination Agent and Mortgagee.

 

“Parts” means all
appliances, parts, components, instruments, appurtenances, accessories,
furnishings, seats and other equipment of whatever nature (excluding (a) Engines
or engines, (b) any items leased by Owner from a third party,
(c) Passenger Convenience Equipment and (d) cargo containers) that
may from time to time be installed or incorporated in or attached or
appurtenant to the Airframe or any Engine, and any of the foregoing removed
from the Airframe or any Engine unless title thereto shall cease to be vested
in Owner in accordance with Section 4.04 of the Trust Indenture.

 

“Passenger
Convenience Equipment” means components or systems installed on
or affixed to the Airframe that are used to provide telecommunications services
or electronic entertainment to passengers aboard the Aircraft.

 

“Pass Through
Agreements” means the Pass Through Trust Agreements, the Note
Purchase Agreement, the Deposit Agreements, the Escrow Agreements, the
Intercreditor Agreement, the Liquidity Facilities, the Policy Provider
Agreement and the Fee Letters referred to in Section 2.03 of each of the
Primary Liquidity Facilities; provided, that no amendment, modification or
supplement to, or substitution or replacement of, any such Fee Letter shall be
effective for purposes of any obligation of Owner, unless consented to by
Owner.

 

“Pass Through
Certificates” means the pass through certificates issued by the
Pass Through Trusts and any other pass through certificates issued in exchange
for or replacement of such pass through certificates.

 

“Pass Through
Trust” means each of the three separate pass through trusts
created under the Pass Through Trust Agreements.

 

“Pass Through
Trust Agreement” means each of the three separate pass through
trust agreements dated as of the Issuance Date by and between the Owner and a
Pass Through Trustee

 

12

 

and each Related
Pass Through Trust Agreement (as defined in each Pass Through Trust Agreement).

 

“Pass Through
Trustee” means Wilmington Trust Company, a Delaware banking
corporation, in its capacity as trustee under each Pass Through Trust
Agreement.

 

“Pass Through
Trustee Agreements” means the Participation Agreement, the Pass
Through Trust Agreements, the Note Purchase Agreement, the Deposit Agreements,
the Escrow Agreements and the Intercreditor Agreement.

 

“Paying Agent”
means Wilmington Trust Company, as Paying Agent under each of the Escrow
Agreements.

 

“Payment Date”
means each March 15, June 15, September 15 and December 15,
commencing on                          
; provided, that if any such date is not a Business Day, the relevant
Payment Date shall be the next succeeding Business Day.

 

“Payment Due Rate”
means, with respect to (i) any payment made to Note Holder under any
Series of Equipment Notes, the lesser of (a) the applicable Debt Rate for
the applicable period as provided in the second paragraph of Section 2.02
of the Trust Indenture plus 1% and (b) the maximum rate permitted by
applicable law and (ii) any other payment made under any Operative
Agreement to any other Person, 5% per annum (computed on the basis of a year of
360 days and actual number of days elapsed).

 

“Permitted Air
Carrier” means (i) any manufacturer of airframes or
aircraft engines, or any Affiliate of a manufacturer of airframes or aircraft
engines, (ii) any Permitted Foreign Air Carrier, (iii) any person
approved in writing by Mortgagee or (iv) any U.S. Air Carrier.

 

“Permitted
Country” means any country listed on Schedule 4 to the
Participation Agreement.

 

“Permitted
Foreign Air Carrier” means any air carrier with its principal
executive offices in any Permitted Country and which is authorized to conduct
commercial airline operations and to operate jet aircraft similar to the
Aircraft under the applicable Laws of such Permitted Country.

 

“Permitted
Government Entity” means (i) the U.S. Government or
(ii) any Government Entity if the Aircraft is then registered under the
laws of the country of such Government Entity.

 

“Permitted Lease”
means a lease permitted under Section 4.02(b) of the Trust Indenture.

 

“Permitted Lessee”
means the lessee under a Permitted Lease.

 

“Permitted Lien”
means (a) the rights of Mortgagee under the Operative Agreements, or of
any Permitted Lessee under any Permitted Lease; (b) Liens attributable to
Mortgagee (both in its capacity as trustee under the Trust Indenture and in its
individual capacity); (c) the rights of others under agreements or
arrangements to the extent expressly permitted by the terms of
Section 4.02(b) or 4.04 of the Trust Indenture; (d) Liens for Taxes
of, or other government or

 

13

 

statutory fees,
charges or levies (including any thereof in respect of any airport or air
navigation authority) imposed against, Owner or any Permitted Lessee (or any of
their respective U.S. federal tax law consolidated groups (if applicable))
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 risk of
the sale, forfeiture or loss of the Aircraft, the Airframe, or any Engine or
the interest of Mortgagee therein or impair the Lien of the Trust Indenture;
(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 60 days or is being
contested in good faith by appropriate proceedings, so long as such Liens and
such proceedings do not involve any material risk of the sale, forfeiture or
loss of the Aircraft, the Airframe, or any Engine or the interest of Mortgagee
therein or impair the Lien of the Trust Indenture; (f) Liens arising out
of any judgment or award against Owner (or any Permitted Lessee), so long as
such judgment shall, within 60 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 60 days after the expiration of
such stay, and so long as during any such 60 day period there is not, or any
such judgment or award does not involve, any material risk of the sale,
forfeiture or loss of the Aircraft, the Airframe, or any Engine or the interest
of Mortgagee therein or impair the Lien of the Trust Indenture;
(g) salvage or similar rights of insurers under policies required to be
maintained by Owner under Section 4.06 of the Trust Indenture; and
(h) any other Lien with respect to which Owner (or any Permitted Lessee)
shall have provided a bond, cash collateral or other security adequate in the
reasonable opinion of Mortgagee.

 

“Persons”
or “persons” means
individuals, firms, partnerships, joint ventures, trusts, trustees, Government
Entities, organizations, associations, corporations, limited liability
companies, government agencies, committees, departments, authorities and other
bodies, corporate or incorporate, whether having distinct legal status or not,
or any member of any of the same.

 

“Plan”
means any employee benefit plan within the meaning of Section 3(3) of
ERISA, and any plan within the meaning of Section 4975(e)(1) of the Code.

 

“Policy Provider”
means MBIA Insurance Corporation.

 

“Policy Provider
Agreement” means the Insurance and Indemnity Agreement dated as
of the Issuance Date among the Subordination Agent, Owner and the Policy
Provider.

 

“Prepayment
Premium” means, collectively, the Series G Prepayment
Premium and the Series C Prepayment Premium.

 

“Primary
Liquidity Facilities” means the three Revolving Credit
Agreements (consisting of a separate Revolving Credit Agreement with each
Primary Liquidity Provider with respect to each of the Class G-1 Trust,
Class G-2 Trust and Class C Trust (each as defined in the Intercreditor
Agreement) between the Subordination Agent, as borrower, and the Primary
Liquidity Provider, each dated as of the Issuance Date.

 

14

 

“Primary
Liquidity Provider” means Landesbank Hessen-Thüringen
Girozentrale, as a Class G-1 Primary Liquidity Provider, Class G-2
Primary Liquidity Provider and Class C Primary Liquidity Provider (as such
terms are defined in the Intercreditor Agreement) under the respective Primary
Liquidity Facilities, or any successor thereto.

 

“Purchase
Agreement” means the AVSA A320 Purchase Agreement dated as of
April 20, 1999 between AVSA S.A.R.L. and Owner (including all exhibits
thereto, together with all letter agreements entered into that by their terms
constitute part of such Purchase Agreement), but only insofar as the foregoing
relates to the Aircraft.

 

“QIB”
is defined in Section 2.08 of the Trust Indenture.

 

“Related
Equipment Note” means, collectively, the “Equipment Notes” as
defined in each Related Indenture.

 

“Related Event of
Default” means an “Event of Default” as defined in each Related
Indenture.

 

“Related
Indenture Indemnitee” means each Indenture Indemnitee under a
Related Indenture.

 

“Related
Indentures” means each of those certain Trust Indenture and
Mortgages (other than the Trust Indenture) under which equipment notes have
been issued by the Owner and purchased by the Pass Through Trustees (whether
before or after the date of the Trust Indenture).

 

“Related
Mortgagee” has the meaning ascribed to the term “Mortgagee” in
each of the Related Indentures.

 

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

 

“Related
Operative Agreements” has the meaning ascribed to the term
“Operative Agreements” in each of the Related Indentures.

 

“Related
Participation Agreement” has the meaning ascribed to the term
“Participation Agreement” in each of the Related Indentures.

 

“Related Secured
Obligations” has the meaning ascribed to the term “Secured
Obligations” in each of the Related Indentures.

 

“Related Secured
Parties” means, collectively, the Related Note Holders and
Related Indenture Indemnities.

 

“Replacement
Airframe” means any airframe substituted for the Airframe
pursuant to Article IV of the Trust Indenture.

 

“Replacement
Engine” means an engine substituted for an Engine pursuant to
Article IV of the Trust Indenture.

 

15

 

“SEC”
means the Securities and Exchange Commission of the United States, or any
Government Entity succeeding to the functions of such Securities and Exchange
Commission.

 

“Section 1110”
means 11 U.S.C. Section 1110 of the Bankruptcy Code or any successor or
analogous section of the federal bankruptcy Law in effect from time to time.

 

“Secured
Obligations” is defined in the granting clause of the Trust
Indenture.

 

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

 

“Security”
means a “security” as defined in Section 2(1) of the Securities Act.

 

“Senior Holder”
is defined in Section 2.12(c) of the Trust Indenture.

 

“Series”
means any or all of Series G-1, Series G-2 or Series C.

 

“Series C”
or “Series C Equipment Notes”
means Equipment Notes issued under the Trust Indenture and designated as
“Series C” thereunder, in the Original Amount and maturities and bearing
interest as specified in Schedule I to the Trust Indenture under the
heading “Series C.”

 

“Series C
Prepayment Premium” means in the case of the prepayment pursuant
to Section 2.10 of the Indenture of the Series C Equipment Notes, an
amount equal to the following percentage of the Original Amount prepaid:

 

	
  If redeemed during the 12 month

  period ending on the anniversary of

  the Issuance Date indicated below

  	
   

  	
  Prepayment
  Premium

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1st

  	
   

  	
  3.00

  	
  %

  
	
  2nd

  	
   

  	
  2.00

  	
  %

  
	
  3rd

  	
   

  	
  1.00

  	
  %

  
	
  Thereafter

  	
   

  	
  0.00

  	
  %

  

 

“Series G Prepayment
Premium” means in the case of the prepayment pursuant to
Section 2.10 of the Indenture of the Series G-1 Equipment Notes and
Series G-2 Equipment Notes, an amount equal to the following percentage of
the Original Amount prepaid:

 

	
  If redeemed during the 12 month

  period ending on the anniversary of

  the Issuance Date indicated below

  	
   

  	
  Prepayment
  Premium

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1st

  	
   

  	
  1.50

  	
  %

  
	
  2nd

  	
   

  	
  1.20

  	
  %

  
	
  3rd

  	
   

  	
  0.90

  	
  %

  
	
  4th

  	
   

  	
  0.60

  	
  %

  
	
  5th

  	
   

  	
  0.30

  	
  %

  
	
  Thereafter

  	
   

  	
  0.00

  	
  %

  

 

16

 

“Series G-1”
or “Series G-1 Equipment Notes”
means Equipment Notes issued under the Trust Indenture and designated as
“Series G-1” thereunder, in the Original Amount and maturities and bearing
interest as specified in Schedule I to the Trust Indenture under the
heading “Series G-1.”

 

“Series G-2”
or “Series G-2 Equipment Notes”
means Equipment Notes issued under the Trust Indenture and designated as
“Series G-2” thereunder, in the Original Amount and maturities and bearing
interest as specified in Schedule I to the Trust Indenture under the
heading “Series G-2.”

 

“Similar Aircraft”
means an Airbus A320-232 of comparable vintage and/or configuration as the
Aircraft, and, if applicable, powered by powerplants or having systems or
avionics comparable to those of the Aircraft.

 

“Special Default”
means (i) the failure by Owner to pay any amount of principal of or
interest, Break Amount or Prepayment Premium on any Equipment Note when due or
(ii) the occurrence of any Default or Event of Default referred to in
Section 5.01(v), (vi) or (vii) of the Trust Indenture.

 

“Standard &
Poor’s” means Standard & Poor’s Ratings Services, a
division of McGraw-Hill Inc.

 

“Subordination
Agent” means Wilmington Trust Company, as subordination agent
under the Intercreditor Agreement.

 

“Subordination
Agent Agreements” means the Participation Agreement, the
Liquidity Facilities and the Intercreditor Agreement.

 

“Taxes”
means all license, recording, documentary, registration and other similar fees
and all taxes, levies, imposts, duties, assessments or withholdings of any
nature whatsoever imposed by any Taxing Authority, together with any penalties,
additions to tax, fines or interest thereon or additions thereto.

 

“Taxing Authority”
means any federal, state or local government or other taxing authority in the
United States, any foreign government or any political subdivision or taxing
authority thereof, any international taxing authority or any territory or
possession of the United States or any taxing authority thereof.

 

“Three-Month LIBOR” means, with respect
to each Interest Period, the interest rate per annum (calculated on the basis
of a 360-day year and actual days elapsed) at which deposits in United States
dollars are offered to prime banks in the London interbank market as indicated
on display page 3750 (British Bankers Association-LIBOR) of the Dow Jones
Markets Service (or such other page as may replace such display
page 3750 for the purpose of displaying London interbank offered rates for
United States dollar deposits) or, if not so indicated, the average (rounded
upwards to the nearest 1/100 %), as determined by the Mortgagee,
of such rates as indicated on the Reuters LIBO Page (or such other
page as may replace such Reuters Screen LIBO Page for the purpose of
displaying London interbank offered rates for United States dollar

 

17

 

deposits) or, if neither such alternative is indicated, the
average (rounded upwards to the nearest 1/100 %), as determined by the Mortgagee,
of such rates offered by four major reference banks in the London interbank
market, as selected by the Mortgagee after consultation with Owner, to prime
banks in the London interbank market, in each case at or about
11:00 a.m.(London time) on the day that is two LIBOR Business Days prior
to the first day of such Interest Period (in the case of the Interest Period
beginning on the Closing Date, if such date is not a Regular Distribution Date
(as defined in the Intercreditor Agreement), the immediately preceding Regular
Distribution Date (as defined in the Intercreditor Agreement) or, if there is
no such date, the Issuance Date) (the “Three-Month
LIBOR Reference Date”) for deposits for a period of three months in
an amount substantially equal to the principal amount of the Equipment Notes
then outstanding. The Mortgagee will, if necessary, request that each of the
reference banks provide a quotation of its rate.  If at least two such quotations are provided, the rate will be
the average of the quotations (rounded to the nearest 1/100 %).  If fewer than two quotations are provided,
Three-Month LIBOR will be determined for the applicable Three-Month LIBOR
Reference Date as the arithmetic mean of the rates quoted at approximately
11:00 a.m., New York time, on that Three-Month LIBOR Reference Date, by
three major banks in New York City, as selected by the Mortgagee after
consultation with Owner, for loans in U.S. dollars to lending European banks,
for a period of three months, commencing on that Three-Month LIBOR Reference
Date, and in a principal amount that is representative of a single transaction
in U.S. dollars in that market at that time. 
If the banks so selected by the Mortgagee are not quoting as mentioned
above, the rate will be Three-Month LIBOR for the immediately preceding
Interest Period.  Notwithstanding the
foregoing, if a payment default on any Equipment Note or Related Equipment Note
exists on any Regular Distribution Date (as defined in the Intercreditor
Agreement), from such Regular Distribution Date and for each full Interest
Period while such default is continuing, Three-Month LIBOR will not exceed 8%.

 

“Transactions”
means the transactions contemplated by the Participation Agreement and the
other Operative Agreements.

 

“Transaction
Expenses” means (subject in each case to any fee cap or other
arrangement previously agreed with Owner): 
(i) the reasonable and actual fees, expenses and disbursements
incurred in connection with the negotiation, execution and delivery of the
Operative Agreements of (1) Morris, James, Hitchens & Williams
LLP, special counsel for Mortgagee, (2) Vedder, Price, Kaufman &
Kammholz, P.C., special counsel to Owner, (3) DeBee, Gilchrist &
Lidia, special counsel in Oklahoma City, Oklahoma, and (4)  Clifford
Chance, special French counsel, (ii) all fees, taxes and other charges
payable in connection with the recording or filing of instruments and financing
statements, such information to be furnished by Owner and (iii) the
initial fee and reasonable and actual disbursements of Mortgagee under the
Trust Indenture.

 

“Transfer”
means the transfer, sale, assignment or other conveyance (whether directly or
indirectly through a transfer of stock, partnership interest or other ownership
interest) of all or any interest in any property, right or interest.

 

“Transferee”
means a person to which any Note Holder purports or intends to Transfer any or
all of its right, title or interest in its Equipment Note and the Collateral,
as described in Section 8 of the Participation Agreement.

 

18

 

“Trust Indenture”
means the Trust Indenture and Mortgage [NXXXJB], dated as of the Closing Date,
between Owner and Mortgagee.

 

“Trust Indenture
Supplement” means a Trust Indenture and Mortgage [NXXXJB]
Supplement, substantially in the form of Exhibit A to the Trust Indenture,
with appropriate modifications to reflect the purpose for which it is being
used.

 

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

 

“Unindemnified
Tax” means (i) any Tax imposed on the net income, net worth
or capital, any franchise Tax or similar doing business Tax of the Mortgagee,
the Subordination Agent or any Pass Through Trustee and (ii) any
withholding Tax imposed by the United States (including, without limitation,
any withholding Tax imposed by the United States which is imposed or increased
as a result of the Mortgagee’s, the Subordination Agent’s or any Pass Through
Trustee’s failure to deliver to the Owner any certificate or document necessary
to establish that payments under the Operative Agreements are exempt from
withholding Tax).

 

“United States”
or “U.S.” means the United
States of America; provided, that for geographic purposes, “United States”
means, in aggregate, the 50 states and the District of Columbia of the United
States of America.

 

“U.S. Air Carrier”
means a Certificated Air Carrier.

 

“U.S. Government”
means the federal government of the United States, or any instrumentality or
agency thereof.

 

“U.S. Person”
means any Person described in Section 7701(a)(30) of the Code.

 

“Wet Lease”
means any arrangement whereby Owner agrees to furnish the Airframe and Engines
or engines installed thereon to a third party pursuant to which the Airframe
and such Engines or engines (i) shall at all times be in the sole
possession and control of Owner, (ii) shall be operated in all respects
solely by regular employees of Owner possessing all current certificates and
licenses that are required under the Act or any FAA Regulations for the
possession, use and operation of the Airframe and such Engines or engines (or,
if the Airframe is then under foreign registration, in accordance with Section
4.02 of the Trust Indenture, the foregoing requirement shall apply in respect
of all certificates and licenses required by such government of registration
and the applicable Aviation Authority for the possession, use and operation of
the Airframe and such Engines or engines), and (iii) shall in all events
be maintained, insured and otherwise used and operated in compliance with the
terms and provisions of the Trust Indenture.

 

“WTC”
means Wilmington Trust Company, a Delaware banking corporation, not in its
capacity as Mortgagee under the Trust Indenture, but in its individual
capacity.

 

19

 

ANNEX B

 

INSURANCE

 

A.                                   Bodily Injury Liability and Property
Damage Liability Insurance.

 

1.                                       Except as
provided in paragraph 2 of this Section A or Section 4.06(c) of
the Trust Indenture, and subject to the self insurance to the extent permitted
by Section D hereof, Owner will at all times carry and maintain or cause
to be carried and maintained, at no expense to any Additional Insured, on a
non-discriminatory basis, comprehensive airline liability insurance, including
passenger legal liability, bodily injury liability, property damage liability
and contractual liability (exclusive of manufacturer’s product liability
insurance and including, without limitation, aircraft liability war risk and
allied perils insurance, if and to the extent the same is maintained by Owner
(or Permitted Lessee) with respect to other Similar Aircraft owned or leased,
and operated by Owner (or Permitted Lessee) on the same routes) with respect to
the Aircraft (a) in an amount per occurrence not less than the greater of
(x) the amount of comprehensive airline legal liability insurance from
time to time applicable to aircraft owned or leased and operated by Owner of
the same type and operating on similar routes as the Aircraft and (y) the
Minimum Liability Insurance Amount, (b) of the type and covering the same
risks as from time to time applicable to aircraft operated by the Owner (or any
Permitted Lessee) of the same type which comprise the Owner’s (or such
Permitted Lessee’s) fleet and (c) which is maintained in effect with insurers
or reinsurers of recognized responsibility. 
The Owner shall maintain cargo liability insurance in an amount not less
than the amount of cargo liability insurance maintained for other Similar
Aircraft operated by the Owner.

 

2.                                       During any
period that the Aircraft or an Engine is on the ground and not in operation,
the Owner may carry or cause to be carried as to such non-operating property,
in lieu of the insurance required by paragraph 1 above, and subject to the
self-insurance to the extent permitted by Section D hereof, insurance
otherwise conforming to the provisions of said paragraph 1 except that
(a) the amounts of coverage shall not be required to exceed the amounts of
bodily injury liability and property damage liability insurance from time to time
applicable to aircraft or engines, as the case may be, owned or leased by the
Owner (or any Permitted Lessee) of the same or similar type as the Aircraft or
Engine, as the case may be, which comprise the Owner’s (or such Permitted
Lessee’s) fleet and which are on the ground and not in operation and
(b) the scope of the risks covered and the type of insurance shall be the
same as from time to time shall be applicable to aircraft or engines, as the
case may be, owned or leased by the Owner (or any Permitted Lessee) of the same
or similar type which comprise the Owner’s (or such Permitted Lessee’s) fleet
and which are on the ground and not in operation.

 

B.                                     Insurance Against Loss or Damage to the
Aircraft.

 

1.                                       Except as
provided in paragraph 2 of this Section B or Section 4.06(c) of
the Trust Indenture, and subject to the provisions of Section D hereof
permitting self-insurance, Owner shall at all times carry and maintain or cause
to be carried and maintained, at no expense to any Additional Insured, in effect
with insurers or reinsurers of recognized responsibility all-risk aircraft hull
insurance covering the Aircraft and all-risk aircraft hull insurance covering
Engines and Parts while temporarily removed from the Aircraft and not replaced
by similar

 

20

 

components
(including, without limitation, aircraft hull war risk and allied perils
insurance, if and to the extent the same is maintained by Owner (or any
Permitted Lessee) with respect to other aircraft owned or leased, and operated
by Owner (or such Permitted Lessee) on the same routes or if the maintenance of
such insurance is customary for air carriers with comparable route structures
flying similar aircraft on similar routes); provided, that the foregoing
insurance shall at all times while the Aircraft is subject to this Trust
Indenture be for an amount (taking into account self-insurance to the extent
permitted by Section D) not less than 105% of the unpaid Original Amount
(the “Agreed
Value”).  In the case
of a loss with respect to an engine (other than an Engine) installed on the
Airframe, Mortgagee shall promptly remit any payment made to it of any
insurance proceeds in respect of such loss to Owner or any third party that is
entitled to receive such proceeds.

 

All losses will be
adjusted by Owner with the insurers; provided, however, that during a period
when any Event of Default shall have occurred and be continuing, Owner shall
not agree to any such adjustment without the consent of the Mortgagee.

 

The insurance payments
for any property damage loss to the Airframe or any Engine not constituting an
Event of Loss with respect thereto shall be paid, to the extent such proceeds
are not paid by the insurer(s) directly to the person effecting the repair, as
follows:  all payments in respect of
losses less than or equal to $5,000,000 shall be paid to the Owner (or any
Permitted Lessee if directed by the Owner), and (x) all payments with
respect to losses greater than $5,000,000 up to an amount equal to the Agreed
Value and (y) all payment with respect to losses received while a Special
Default shall have occurred and be continuing, shall be paid to Mortgagee, to
be held as collateral security for the Owner’s obligations hereunder, and
applied to reimburse the Owner for accomplishing repairs and/or replacements as
required, or to pay suppliers directly for such repairs and/or replacements as
directed by the Owner (or any Permitted Lessee if directed by the Owner).  In the case of any payment to Mortgagee
(other than in respect of an Event of Loss of the Aircraft) Mortgagee shall,
upon receipt of evidence reasonably satisfactory to it that the damage giving
rise to such payment shall have been repaired or that such payment shall then
be required to pay for repairs then being made or the replacement of the Engine
suffering the Event of Loss, pay the amount of such payment, and any interest
or income earned thereon, to the Owner or its order.

 

2.                                       During any
period that the Aircraft is on the ground and not in operation, the Owner may
carry or cause to be carried, in lieu of the insurance required by
paragraph 1 above, and subject to the self-insurance to the extent
permitted by Section D hereof, insurance otherwise conforming with the
provisions of said paragraph 1 except that the scope of the risks and the
type of insurance shall be the same as from time to time applicable to aircraft
owned or leased and operated by the Owner (or any Permitted Lessee) of the same
or similar type which comprise the Owner’s (or such Permitted Lessee’s) fleet
similarly on the ground and not in operation, provided that, subject to the
self-insurance to the extent permitted by Section D hereof, the Owner
shall maintain or cause to be maintained insurance against risk of loss or damage
to the Aircraft in an amount at least equal to the Agreed Value during such
period that the Aircraft is on the ground and not in operation.

 

C.                                     Reports, Etc. 
The Owner will furnish, or cause to be furnished, to Mortgagee on or
before the Closing Date and annually on or before the renewal dates of the
Owner’s (or the

 

21

 

Permitted Lessee’s)
relevant insurance policies, a report, signed by any recognized independent
firm of insurance brokers selected by the Owner, reasonably acceptable to
Mortgagee, which brokers may be regularly retained by the Owner or any
Permitted Lessee (the “Insurance Broker”), describing in
reasonable detail the commercial hull and liability insurance then carried and
maintained with respect to the Aircraft and stating the opinion of such firm
that, to its knowledge, such commercial insurance complies with the terms of
this Annex B.  Such information
shall remain confidential as provided in Section 6 of the Participation
Agreement.  The Owner will cause such
Insurance Broker to agree to advise the Mortgagee in writing of any default in
the payment of premium and of any other act or omission on the part of the
Owner (or any Permitted Lessee) of which it has actual knowledge and which will
invalidate or render unenforceable, in whole or in part, any commercial
insurance as required by the terms hereof and to advise Mortgagee at least
thirty (30) days (seven (7) days in the case of war risk and allied
perils insurance and ten (10) days in the case of nonpayment of premium)
prior to the cancellation, lapse or material adverse change of any insurance
maintained pursuant to this Annex B, provided that, if the notice period
set forth above is not reasonably obtainable, the Insurance Broker shall provide
for such shorter or longer period as may be obtainable in the international
insurance market.  In the event that the
Owner shall fail to maintain or cause to be maintained insurance as herein
provided, Mortgagee may, at its sole option, provide such insurance and, in
such event, the Owner shall, upon demand, reimburse Mortgagee for the cost
thereof.

 

D.                                    Self-Insurance. 
Owner may self-insure, by way of deductible, premium adjustment
provisions in insurance policies, or otherwise, under a program applicable to
all aircraft in the Owner’s fleet, the risks required to be insured against
pursuant to Sections A and B hereof but in no case shall the
self-insurance with respect to the Aircraft exceed the lesser of (x) 50%
of the largest replacement value of any single aircraft in Owner’s fleet or
(y) 1.5% of the average aggregate insurable value (during the preceding
calendar year) of all aircraft on which Owner carries insurance, unless the
Insurance Broker shall certify that the standard among major U.S. airlines is a
higher level of self-insurance, in which case Owner may self-insure the
Aircraft to such higher level; provided, however, that nothing contained in
this Section D limiting Owner’s right to self-insure shall be deemed to
apply to any mandatory minimum per aircraft (or, if applicable, per policy
period or per annum), hull or liability insurance deductible imposed by hull or
liability insurers that do not exceed industry standards for major U.S.
airlines.

 

E.                                      Terms of Insurance Policies. 
Any policies carried in accordance with Sections A and B hereof
covering the Aircraft, and any policies taken out in substitution or
replacement for any such policies, as applicable, (1) shall name the
Additional Insureds as additional insureds, as their interests may appear,
(2) shall name the Mortgagee as sole loss payee to the extent provided in
clause (12) below, (3) may provide for self-insurance to the extent
permitted in Section D, (4) shall provide that if the insurers cancel
such insurance for any reason whatsoever, or the same is allowed to lapse for
nonpayment of premium or if any material change is made in the insurance which
adversely affects the interest of any Additional Insured, such cancellation,
lapse, or change shall not be effective as to the Additional Insureds for
thirty (30) days (or ten (10) days in the case of nonpayment of
premium) after sending to (but, in the case of war risk and allied perils
coverage, seven (7) days after sending to) the Additional Insureds of
written notice by such insurers of such cancellation or change (or, if the case
of war risk and allied perils insurance underwritten by the FAA, seven days
after publication in the Federal Register), provided,

 

22

 

however, that if, in respect of the war risk
and allied perils coverage, such policies shall provide for such shorter period
as may be available in the international insurance market, (5) shall
provide that in respect of the Additional Insureds’ respective interests in such
policies the insurance shall not be invalidated by any action or inaction of
the Owner (or any Permitted Lessee) and shall insure the respective interests
of the Additional Insureds regardless of any breach or violation of any
warranty, declaration or condition contained in such policies by the Owner (or
any Permitted Lessee), (6) shall be primary without any right of
contribution from any other insurance which is carried by any Additional
Insured, (7) shall expressly provide that all of the provisions thereof, except
the limits of liability, shall operate in the same manner as if a separate
policy covered each insured, (8) shall waive any right of subrogation of
the insurers against the Additional Insureds to the same extent Owner has
agreed in the Operative Agreements to indemnify the Additional Insureds and
shall waive any right of the insurers to set-off or counterclaim or any other
deduction, whether by attachment or otherwise, in respect of any liability of
any Additional Insured, (9) shall provide that losses (other than for
total loss of the Aircraft) shall be adjusted with the Owner (or, if an Event
of Default shall have occurred which is continuing, with the Mortgagee),
(10) shall provide that the Additional Insureds are not liable for any
insurance premiums, (11) shall be effective with respect to both domestic
and international operations, (12) shall provide that for any loss not
constituting an Event of Loss (i) except as specified in clause (iii)
below, in the event of a loss involving proceeds in excess of $5,000,000,
all proceeds in respect of such loss up to the amount of the Agreed Value
shall, to the extent such proceeds are not paid by the insurer(s) directly to
the person effecting the repair, be payable to the Mortgagee to be held by the Mortgagee
(whether such payment is made to the Owner (or any Permitted Lessee) or any
third party), it being understood and agreed that in the case of any payment to
the Mortgagee otherwise than in respect of an Event of Loss of the Aircraft,
the Mortgagee shall, upon receipt of evidence reasonably satisfactory to it
that the damage giving rise to such payment shall have been repaired or that
such payment shall then be required to pay for repairs then being made or the
replacement of the Engine suffering the Event of Loss, pay the amount of such
payment, and any interest or income earned thereon, to the Owner or its order,
(ii) except as specified in the following clause (iii), all proceeds
of $5,000,000 or less (regardless of the total amount of proceeds
resulting from such loss) and any proceeds of any loss in excess of the Agreed
Value shall be paid to the Owner or its order and (iii) notwithstanding
anything to the contrary contained in the preceding clauses (i) and (ii),
if a Special Default shall have occurred and be continuing and the insurers
have been notified thereof by Mortgagee, all proceeds of loss shall be paid to
the Mortgagee and (13) if war risk coverage is maintained, shall contain
a 50/50 clause in accordance with Provisional Claims Settlement Clause AVS103
(or its equivalent).

 

F.                                      AVN 67B.  Owner may
procure endorsements to the relevant insurance policies required to be
maintained pursuant to Section 4.06 of the Trust Indenture and this Annex
B so as to incorporate the terms of AVN 67B into such policies, in which event,
to the extent that any provision of any such AVN 67B endorsement conflicts or
is otherwise inconsistent with the requirements of Section 4.06 of the
Trust Indenture or this Annex B then such endorsement shall be deemed to
satisfy such requirements to the extent covered by such endorsement.  If the terms of AVN 67B are incorporated
into such policies, Owner will cause its Insurance Broker to issue an
undertaking letter to the Additional Insureds confirming that the Insurance
Broker will promptly advise the Additional Insureds upon becoming aware of the
cancellation of or any material change in such insurance policies.

 

23

 

G.                                     Insurers of Recognized Responsibility. 
For the purposes of this Annex B, “insurers of recognized
responsibility” shall include independent recognized commercial insurance
companies and any captive and/or industry-managed insurance company, in each
case of recognized responsibility; provided that if the primary insurers are
not insurers of recognized responsibility but the relevant insurance policies
are reinsured with insurers of recognized responsibility, the obligation of
Owner hereunder to maintain such insurance with insurers of recognized
responsibility shall be deemed satisfied if such insurance shall contain a
customary “cut-through” endorsement and shall provide that any payment by the
reinsurers shall be made notwithstanding any bankruptcy, insolvency or
liquidation of the original insurer and/or that the original insurer has made
no payment under the original policies.

 

24

 

EXHIBIT A

TO

TRUST INDENTURE AND MORTGAGE [NXXXJB]

 

TRUST INDENTURE AND MORTGAGE
[NXXXJB] SUPPLEMENT NO.__

 

This TRUST INDENTURE AND MORTGAGE [NXXXJB] SUPPLEMENT
NO.     , dated
                        ,
         (herein called this “Trust
Indenture Supplement”) of JETBLUE
AIRWAYS CORPORATION, as Owner (the “Owner”).

 

W
I T N E S S E T H:

 

WHEREAS, the Trust Indenture and Mortgage, dated
as of
                         ,
        (as amended and supplemented to the
date hereof, the “Trust Indenture”) between the Owner
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, the 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 hereby confirms that the
Lien of the Trust Indenture on the Collateral covers all of Owner’s right,
title and interest in and to the following described property:

 

AIRFRAME

 

One airframe identified
as follows:

 

	
  Manufacturer

  	
   

  	
  Model

  	
   

  	
  U.S. Registration Number

  	
   

  	
  Manufacturer’s Serial
  Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Airbus

  	
   

  	
  A320-232

  	
   

  	
   

  	
   

  	
   

  

 

together
with all of the Owner’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.

 

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

1

 

together
with all of Owner’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’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.

 

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
Note Holders and the Indenture Indemnitees, except as provided in
Section 2.12 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 hereby incorporated by reference herein and is hereby ratified,
approved and confirmed.

 

AND,
FURTHER, the
Owner hereby acknowledges that the Aircraft referred to in this Trust Indenture
Supplement has been delivered to the Owner and is included in the property of
the Owner subject to the pledge and mortgage thereof under the Trust Indenture.

 

*   *   *

 

2

 

IN
WITNESS WHEREOF,
the Owner 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.

 

	
   

  	
  JETBLUE AIRWAYS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

3

 

SCHEDULE I

 

	
   

  	
   

  	
  Original Amount

  	
   

  	
  Interest Rate

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Series
  G-1:

  	
   

  	
  $

  	
   

  	
   

  	
  For
  each Interest Period (or for purposes of calculating the Payment Due Rate,
  such other period as provided in Section 2.02 of the Trust Indenture), a
  rate per annum equal to the sum of (x) Three -Month LIBOR for such
  Interest Period (or such other period) and (y) 0.375% per annum.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Series G-2:

  	
   

  	
  $

  	
   

  	
   

  	
  For
  each Interest Period (or for purposes of calculating the Payment Due Rate,
  such other period as provided in Section 2.02 of the Trust Indenture), a
  rate per annum equal to the sum of (x) Three-Month LIBOR for such
  Interest Period (or such other period) and (y) 0.420% per annum.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Series
  C:

  	
   

  	
  $

  	
   

  	
   

  	
  For
  each Interest Period (or for purposes of calculating the Payment Due Rate,
  such other period as provided in Section 2.02 of the Trust Indenture), a
  rate per annum equal to the sum of (x) Three-Month LIBOR and (y) 4.25%
  per annum.

  

 

1

 

EQUIPMENT NOTE AMORTIZATION

 

	
  Payment Date

  	
   

  	
  Percentage of Original

  Amount to be Paid

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

2

 

 

 

ANNEX
A - DEFINITIONS

 

JetBlue
NXXXJB

 

 

ANNEX A

 

DEFINITIONS

 

GENERAL PROVISIONS

 

(a)           In each Operative Agreement, unless
otherwise expressly provided, a reference to:

 

(i)            each of “Owner,” “Mortgagee,” “Note
Holder” or any other person includes, without prejudice to the provisions of
any Operative Agreement, any successor in interest to it and any permitted
transferee, permitted purchaser or permitted assignee of it;

 

(ii)           words importing the plural include
the singular and words importing the singular include the plural;

 

(iii)          any agreement, instrument or document,
or any annex, schedule or exhibit thereto, or any other part thereof, includes,
without prejudice to the provisions of any Operative Agreement, that agreement,
instrument or document, or annex, schedule or exhibit, or part, respectively,
as amended, modified or supplemented from time to time in accordance with its
terms and in accordance with the Operative Agreements, and any agreement,
instrument or document entered into in substitution or replacement therefor;

 

(iv)          any provision of any Law includes any
such provision as amended, modified, supplemented, substituted, reissued or
reenacted prior to the Delivery Date, and thereafter from time to time;

 

(v)           the words “Agreement,” “this
Agreement,” “hereby,” “herein,” “hereto,” “hereof” and “hereunder” and words of
similar import when used in any Operative Agreement refer to such Operative
Agreement as a whole and not to any particular provision of such Operative
Agreement;

 

(vi)          the words “including,” “including,
without limitation,” “including, but not limited to,” when used in any
Operative Agreement, with respect to any matter or thing, mean including,
without limitation, such matter or thing; and

 

(vii)         a “Section,” an “Exhibit,” an “Annex”
or a “Schedule” in any Operative Agreement, or in any annex thereto, is a
reference to a section of, or an exhibit, an annex or a schedule to, such
Operative Agreement or such annex, respectively.

 

(b)           Each exhibit, annex and schedule to
each Operative Agreement is incorporated in, and shall be deemed to be a part
of, such Operative Agreement.

 

(c)           Unless otherwise defined or specified
in any Operative Agreement, all accounting terms therein shall be construed and
all accounting determinations thereunder shall be made in accordance with GAAP.

 

 

(d)           Headings used in any Operative
Agreement are for convenience only and shall not in any way affect the
construction of, or be taken into consideration in interpreting, such Operative
Agreement.

 

DEFINED TERMS

 

“Above-Cap
Liquidity Facilities” means, initially, the ISDA Master
Agreement, dated as of the date hereof, between the Subordination Agent, as
agent and trustee for the Pass Through Trusts, and the initial Above-Cap
Liquidity Provider, together with the Schedules and Confirmations attached
thereto, relating to each of the Class G-1 Trust, Class G-2 Trust and
Class C Trust (each as defined in the Intercreditor Agreement), in each
case as amended, supplemented or otherwise modified from time to time in
accordance with its terms.

 

“Above-Cap
Liquidity Provider” means Morgan Stanley Capital Services Inc.,
as a Class G-1 Above-Cap Liquidity Provider, Class G-2 Above-Cap
Liquidity Provider and Class C Above-Cap Liquidity Provider (as such terms
are defined in the Intercreditor Agreement) under the respective Above-Cap
Liquidity Facility, or any successor thereto.

 

“Act”
means part A of subtitle VII of title 49, United States Code, as
amended or any subsequent legislation that amends, supplements or supercedes
such provisions.

 

“Actual Knowledge”
means (a) as it applies to Mortgagee actual knowledge of a responsible
officer in the Corporate Trust Office, respectively, and (b) as it applies
to Owner, actual knowledge of a Vice President or more senior officer of Owner,
or any other officer of Owner, having responsibility for the transactions
contemplated by the Operative Agreements; provided that each of Owner and
Mortgagee shall be deemed to have “Actual Knowledge” of any matter as to which
it has received notice from Owner, any Note Holder, or Mortgagee, such notice
having been given pursuant to Section 11.6 of the Participation Agreement.

 

“Additional
Insured” means Mortgagee, Liquidity Providers, the Policy
Provider and each Note Holder.

 

“Affiliate”
means, with respect to any person, any other person directly or indirectly
controlling, controlled by or under common control with such person.  For purposes of this definition, “control”
means the power, directly or indirectly, to direct or cause the direction of
the management and policies of such person, whether through the ownership of
voting securities or by contract or otherwise and “controlling,” “controlled
by” and “under common control with” have correlative meanings.  To the extent the same Person acts as Pass
Though Trustee, Subordination Agent or Mortgagee, for purposes of Section
7.1.2, the Pass Through Trustee, Subordination Agent and Mortgagee will be
“Affiliates” of each such entity.

 

“Airbus Consent”
means the Consent and Agreement [NXXXJB], dated as of the Closing Date, of the
Airframe Manufacturer.

 

“Aircraft”
means, collectively, the Airframe and Engines.

 

“Aircraft Bill of
Sale” means the full warranty bill of sale covering the Aircraft
delivered by AVSA S.A.R.L. to Owner on the Delivery Date.

 

2

 

“Aircraft
Documents” means all technical data, manuals and log books, and
all inspection, modification and overhaul records and other service, repair,
maintenance and technical records that are required by (i) the FAA per
Federal Aviation Regulation FAR 121.380A (or successor regulation) and any
other relevant regulation promulgated by the FAA which is applicable to Owner
as an operator under Federal Aviation Regulation FAR 121 or (ii) the
relevant Aviation Authority, to be transferred with respect to the Aircraft,
Airframe, Engines or Parts; and such term shall include all additions,
renewals, revisions and replacements of any such materials from time to time
made prior to the release of the lien of the Indenture, or required to be made
prior to the release of the lien of the Indenture, by the regulations of the
FAA or the relevant Aviation Authority, and in each case in whatever form and
by whatever means or medium (including, without limitation, microfiche,
microfilm, paper, CD-ROM or computer disk) such materials may be maintained or
retained by or on behalf of Owner (provided, that all such materials shall be
maintained in the English language).

 

“Airframe”
means (a) the aircraft (excluding Engines or engines from time to time
installed thereon) manufactured by Airframe Manufacturer and identified by
Airframe Manufacturer’s model number, United States registration number and
Airframe Manufacturer’s serial number set forth in the initial Trust Indenture
Supplement and any Replacement Airframe and (b) any and all related
Parts.  Upon substitution of a
Replacement Airframe under and in accordance with the Trust Indenture, such
Replacement Airframe shall become subject to the Trust Indenture and shall be
the “Airframe” for all purposes of the Trust Indenture and the other Operative
Agreements and thereupon the Airframe for which the substitution is made shall
no longer be subject to the Trust Indenture, and such replaced Airframe shall
cease to be the “Airframe.”

 

“Airframe
Manufacturer” means Airbus SNC.

 

“Amortization
Amount” means, with respect to any Equipment Note, as of any
Payment Date, the amount determined by multiplying the percentage set forth
opposite such date on the Amortization Schedule by the Original Amount of
such Equipment Note.

 

“Amortization
Schedule” means, with respect to each Equipment Note, the
amortization schedule for such Equipment Note delivered pursuant to
Section 2.02 of the Trust Indenture.

 

“Appraiser”
means a firm of internationally recognized, independent aircraft appraisers.

 

“Aviation
Authority” means the FAA or, if the Aircraft is permitted to be,
and is, registered with any other Government Entity under and in accordance
with Section 4.02(e) of the Trust Indenture and Section 5.4.5 of the
Participation Agreement, such other Government Entity.

 

“Bankruptcy Code”
means the United States Bankruptcy Code, 11 U.S.C. Section 101 et seq.

 

“Beneficial Owner”
when used in relation to an Equipment Note means a Person that, by reason of
direct ownership, contract, share ownership or otherwise, has the right to
receive or participate in receiving, directly or indirectly, payments of
principal, interest or Break Amount in respect of such Equipment Note; provided
that a Person shall not be deemed to be a Beneficial Owner of an Equipment Note
solely because another Person in which such a Person owns

 

3

 

common stock or
other equity securities is a registered holder or Beneficial Owner of such
Equipment Note unless such Person is an Affiliate of such other Person.

 

“Bills of Sale”
means the FAA Bill of Sale and the Aircraft Bill of Sale.

 

“Break Amount”
means as of any date of payment, redemption or acceleration for any Equipment
Notes (the “Applicable Date”), an
amount determined by the Mortgagee on the date that is two (2) LIBOR Business
Days prior to the Applicable Date pursuant to the formula set forth below:

 

The Break Amount shall be
calculated as follows:

 

Break Amount = Z-Y

 

Where:

 

X = with respect to any
applicable Interest Period, the sum of (i) the amount of the outstanding
principal amount for such Equipment Notes as of the first day of the then
applicable Interest Period plus (ii) interest payable thereon during such
entire Interest Period at then effective Three-Month LIBOR.

 

Y = X, discounted to present
value from the last day of the then applicable Interest Period to the
Applicable Date using then effective Three-Month LIBOR as the discount rate.

 

Z = X, discounted to present
value from the last day of the then applicable Interest Period to the
Applicable Date using a rate equal to the applicable London interbank offered
rate for a period commencing on the Applicable Date and ending on the last day
of the applicable Interest Period, determined by the Mortgagee as of two LIBOR
Business Days prior to the Applicable Date as the discount rate.

 

No Break Amount will be payable (x) if the Break
Amount, as calculated pursuant to the formula set forth above, is equal to or
less than zero or (y) on, or in respect of, any Applicable Date that is a
Payment Date.

 

“Business Day”
means any day other than a Saturday, Sunday or other day on which commercial
banks are authorized or required by law to close in New York, New York, Darien,
Connecticut or the city in which the Corporate Trust Office is maintained.

 

“Cash Equivalents”
means the following securities (which shall mature within 90 days of the date
of purchase thereof):  (a) direct
obligations of the U.S. Government; (b) obligations fully guaranteed by
the U.S. Government; (c) certificates of deposit issued by, or bankers’
acceptances of, or time deposits or a deposit account with Mortgagee or any
bank, trust company or national banking association incorporated or doing
business under the laws of the United States or any state thereof having a
combined capital and surplus and retained earnings of at least $500,000,000 and
having an individual rating of “C” or better from Fitch Ratings; or
(d) commercial paper of any issuer doing business under the laws of the
United States or one of

 

4

 

the states thereof
and in each case having a rating assigned to such commercial paper by
Standard & Poor’s or Moody’s equal to A1, P1 or higher.

 

“Certificated Air
Carrier” means a Citizen of the United States holding a carrier
operating certificate issued by the Secretary of Transportation pursuant to
Chapter 447 of Title 49 of the United States Code for aircraft capable of
carrying ten or more individuals or 6,000 pounds or more of cargo or that otherwise
is certified or registered to the extent required to fall within the purview of
Section 1110 of Title 11 of the United States Code or any analogous successor
provision of the Bankruptcy Code.

 

“Citizen of the
United States” is as defined in Section 40102(a)(15) of the
Act and in the FAA Regulations or any similar legislation of the United States
of America enacted in substitution or replacement therefor.

 

“Closing”
means the closing of the transactions contemplated by the Participation
Agreement.

 

“Closing Date”
means the date on which the Closing occurs, which shall be the date of Trust
Indenture Supplement No. 1.

 

“Code”
means the Internal Revenue Code of 1986; provided, that when used in relation
to a Plan, “Code” shall mean the Internal Revenue Code of 1986 and any
regulations and rulings issued thereunder.

 

“Collateral”
is defined in the first paragraph of the Granting Clause of the Trust
Indenture.

 

“Consent and
Agreement” means the Manufacturer Consent and Agreement
[NXXXJB], dated as of the Closing Date, of AVSA S.A.R.L.

 

“Corporate Trust
Office” means the Corporate Trust Administration Department of
Mortgagee located at Mortgagee’s address for notices under the Participation
Agreement or such other office at which Mortgagee’s corporate trust business
shall be administered which Mortgagee shall have specified by notice in writing
to Owner and each Note Holder.

 

“CRAF”
means the Civil Reserve Air Fleet Program established pursuant to 10 U.S.C.
Section 9511-13 or any similar substitute program.

 

“Debt Rate”
means, (i) with respect to any Series, the rate per annum specified for
such Series under the heading “Interest Rate” in Schedule I to the Trust
Indenture and (ii) for any other purpose, including, without limitation,
the calculation of the Payment Due Rate with respect to any period, the
weighted average interest rate per annum during such period borne by the
outstanding Equipment Notes, excluding any interest payable at the Payment Due
Rate.

 

“Default”
means any event or condition that with the giving of notice or the lapse of
time or both would become an Indenture Event of Default.

 

5

 

“Delivery Date”
means the date the Aircraft was delivered new to the Owner from AVSA S.A.R.L.

 

“Deposit
Agreement” means each of the three Deposit Agreements between
the Depositary and the Escrow Agent, dated as of the Issuance Date, each of
which relates to one of the Pass Through Trusts, provided that, for purposes of
any obligation of Owner, no amendment, modification or supplement to, or
substitution or replacement of, any such Deposit Agreement shall be effective
unless consented to by Owner.

 

“Depositary”
means HSH Nordbank AG, New York Branch, as Depositary under each Deposit
Agreement.

 

“DGAC”
means the Direction Générale de l’Aviation Civile of the Republic of France or
any other government entity suceeding to the functions of the Direction
Générale de l’Aviation Civile.

 

“Dollars,”
“United States Dollars” or
“$” means the lawful
currency of the United States.

 

“DOT”
means the Department of Transportation of the United States or any Government
Entity succeeding to the functions of such Department of Transportation.

 

“Eligible Account”
means an account established by and with an Eligible Institution at the request
of the Mortgagee, which institution agrees, for all purposes of the UCC
including Article 8 thereof, that (a) such account shall be a
“securities account” (as defined in Section 8-501 of the UCC),
(b) all property (other than cash) credited to such account shall be
treated as a “financial asset” (as defined in Section 8-102(9) of the
UCC), (c) the Mortgagee shall be the “entitlement holder” (as defined in
Section 8-102(7) of the UCC) in respect of such account, (d) it will
comply with all entitlement orders issued by the Mortgagee to the exclusion of
the Owner, and (e) the “securities intermediary jurisdiction” (under
Section 8-110(e) of the UCC) shall be the State of New York.

 

“Eligible
Institution” means the corporate trust department of
(a) WTC, acting solely in its capacity as a “securities intermediary” (as
defined in Section 8-102(14) of the UCC), or (b) a depository
institution organized under the laws of the United States of America or any one
of the states thereof or the District of Columbia (or any U.S. branch of a
foreign bank), which has a long-term unsecured debt rating from Moody’s and
Standard & Poor’s of at least A-3 or its equivalent.

 

“Engine”
means (a) each of the engines manufactured by Engine Manufacturer and
identified by Engine Manufacturer’s model number and Engine Manufacturer’s
serial number set forth in the initial Trust Indenture Supplement and
originally installed on the Airframe on the Closing Date, and any Replacement
Engine, in any case whether or not from time to time installed on such Airframe
or installed on any other airframe or aircraft, and (b) any and all
related Parts.  Upon substitution of a
Replacement Engine under and in accordance with the Trust Indenture, such
Replacement Engine shall become subject to the Trust Indenture and shall be an
“Engine” for all purposes of the Trust Indenture  and the other Operative Agreements and

 

6

 

thereupon the
Engine for which the substitution is made shall no longer be subject to the Trust
Indenture, and such replaced Engine shall cease to be an “Engine.”

 

“Engine Agreement”
means the V2500® General Terms of Sale dated May 4, 1999 between the Owner
(f/k/a New Air Corporation) and Engine Manufacturer, but only insofar as such
agreement relates to the Engines.

 

“Engine Consent
and Agreement” means the Engine Consent and Agreement [NXXXJB]
dated as of the Closing Date of the Engine Manufacturer.

 

“Engine
Manufacturer” means IAE International Aero Engines, AG.

 

“Equipment Note
Register” is defined in Section 2.06 of the Trust
Indenture.

 

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

 

“ERISA”
means the Employee Retirement Income Security Act of 1974 and any regulations
and rulings issued thereunder.

 

“Escrow Agent”
means Wilmington Trust Company, as Escrow Agent under each of the Escrow
Agreements.

 

“Escrow Agreement”
means each of the three Escrow and Paying Agent Agreements among the Escrow
Agent, the Paying Agent, certain underwriters of the Pass Through Certificates
named therein and one of the Pass Through Trustees, dated as of the Issuance
Date, each of which relates to one of the Pass Through Trusts, provided that,
for purposes of any obligation of Owner, no amendment, modification or
supplement to, or substitution or replacement of, any such Escrow Agreement
shall be effective unless consented to by Owner.

 

“Event of Default”
is defined in Section 5.01 of the Trust Indenture.

 

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

 

(a)           the destruction of such property,
damage to such property beyond practical or economic repair or rendition of
such property permanently unfit for normal use;

 

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

 

(c)           any theft, hijacking or disappearance
of such property for a period of 180 consecutive days or more (or, if earlier,
the date on which Owner has confirmed to Mortgagee in writing that Owner cannot
recover such property);

 

7

 

(d)           any seizure, condemnation,
confiscation, taking or requisition (including loss of title) of such property
(other than a requisition of use by the U.S. Government or any government of
registry of the Aircraft or agency or instrumentality thereof) for a period
exceeding 180 consecutive days; provided, however, that in the case of a
requisition of title, the requisition of title shall not have been reversed
within 120 days from the date of such requisition of title;

 

(e)           as a result of any law, rule, regulation,
order or any other action by the Aviation Authority or by any Government Entity
of the government of registry of the Aircraft or by any Government Entity
otherwise having jurisdiction over the operation or use of the Aircraft, the
use of such property in the normal course of Owner’s (or any Permitted
Lessee’s) business of passenger air transportation is prohibited for a period
of 180 consecutive days, unless Owner (or such Permitted Lessee), prior to the
expiration of such 180-day period, shall have undertaken and shall be
diligently carrying forward such steps as may be necessary or desirable to
permit the normal use of such property by Owner (or such Permitted Lessee), but
in any event if such use shall have been prohibited for a period of two consecutive
years, provided that no Event of Loss shall be deemed to have occurred if such
prohibition has been applicable to Owner’s (or such Permitted Lessee’s) entire
U.S. fleet of such property and Owner (or such Permitted Lessee), prior to the
expiration of such two-year period, shall have conformed at least one unit of
such property in its fleet to the requirements of any such law, rule,
regulation, order or other action and commenced regular commercial use of the
same in such jurisdiction and shall be diligently carrying forward, in a manner
which does not discriminate against such property in so conforming such
property, steps which are necessary or desirable to permit the normal use of
the Aircraft by Owner (or such Permitted Lessee), but in any event if such use
shall have been prohibited for a period of three years; or

 

(f)            the requisition for the use by any
government of registry of the Aircraft (other than the U.S. Government) or any
instrumentality or agency thereof, which shall have occurred and shall have
continued for more than two years.

 

An
Event of Loss with respect to the Aircraft shall be deemed to have occurred if
an Event of Loss occurs with respect to the Airframe.

 

“Expenses”
means any and all liabilities, obligations, losses, damages, settlements,
penalties, claims, actions, suits, costs, expenses and disbursements
(including, without limitation, reasonable fees and disbursements of legal
counsel, accountants, appraisers, inspectors or other professionals, and costs
of investigation).

 

“FAA”
means the Federal Aviation Administration of the United States or any
Government Entity succeeding to the functions of such Federal Aviation
Administration.

 

“FAA Bill of Sale”
means a bill of sale for the Aircraft on AC Form 8050-2 (or such other form as
may be approved by the FAA) delivered to Owner on the Delivery Date by AVSA
S.A.R.L.

 

“FAA Filed
Documents” means the Trust Indenture, the Trust Indenture
Supplement, the FAA Bill of Sale and an application for registration of the
Aircraft with the FAA in the name of Owner.

 

8

 

“FAA Regulations”
means the Federal Aviation Regulations issued or promulgated pursuant to the
Act from time to time.

 

“Final Payment
Date” shall mean March 15, 2014, or if such day is not a
Business Day, the next succeeding Business Day.

 

“Financing
Statement” means the UCC-1 (and, where appropriate, UCC-3)
financing statement covering the Collateral showing Mortgagee as secured party,
for filing in Delaware and each other jurisdiction that, in the opinion of
Mortgagee, is necessary to perfect its Lien on the Collateral.

 

“French Pledge
Agreement” means the Pledge Agreement [NXXXJB], dated the
Closing Date, between the Owner  (as
Pledgor) and the Mortgagee (as beneficiary).

 

“GAAP”
means generally accepted accounting principles as set forth in the statements
of financial accounting standards issued by the Financial Accounting Standards
Board of the American Institute of Certified Public Accountants, as such
principles may at any time or from time to time be varied by any applicable
financial accounting rules or regulations issued by the SEC and, with respect
to any person, shall mean such principles applied on a basis consistent with
prior periods except as may be disclosed in such person’s financial statements.

 

“Government
Entity” means (a) any federal, state, provincial or similar
government, and any body, board, department, commission, court, tribunal,
authority, agency or other instrumentality of any such government or otherwise
exercising any executive, legislative, judicial, administrative or regulatory
functions of such government or (b) any other government entity having
jurisdiction over any matter contemplated by the Operative Agreements or
relating to the observance or performance of the obligations of any of the
parties to the Operative Agreements.

 

“Indemnitee”
means (i) WTC and Mortgagee, (ii) each separate or additional trustee
appointed pursuant to the Trust Indenture, (iii) the Subordination Agent,
the Paying Agent, the Escrow Agent and, solely in respect of Section 7.1
of the Participation Agreement, each Pass Through Trustee, (iv) the
Liquidity Providers and the Policy Provider, (v) each Note Holder and each
Related Note Holder, (vi) each Affiliate of the persons described in
clauses (i) through (v), inclusive and (vii) the respective directors,
officers and employees of each of the persons described in clauses
(i) through (vi) inclusive; provided that the persons described in clauses
(iii) and (v), and their respective Affiliates, directors, officers and
employees are Indemnitees only for purposes of Section 7.1 of the
Participation Agreement.

 

“Indenture
Agreements” means the Purchase Agreement,  the Consent and Agreement, the Engine
Consent and Agreement, the Bills of Sale and any other contract, agreement or
instrument from time to time assigned or pledged under the Trust Indenture.

 

“Indenture
Default” means any condition, circumstance, act or event that,
with the giving of notice, the lapse of time or both, would constitute an
Indenture Event of Default.

 

“Indenture Event
of Default” means any one or more of the conditions,
circumstances, acts or events set forth in Section 5.01 of the Trust
Indenture.

 

9

 

“Indenture
Indemnitee” means (i) WTC and the Mortgagee, (ii) each
separate or additional trustee appointed pursuant to the Trust Indenture,
(iii) the Subordination Agent, (iv) the Liquidity Providers and the
Policy Provider, (v) the Paying Agent, (vi) the Escrow Agent,
(vii) each Pass Through Trustee (to the extent it is an Indemnitee) and
(viii) each of the respective directors, officers, employees and agents of
each of the persons described in clauses (i) through (vii) inclusive above.

 

“Intercreditor
Agreement” means that certain Intercreditor Agreement among the
Pass Through Trustees, the Liquidity Providers, the Policy Provider and the
Subordination Agent, dated as of the Issuance Date, provided that, with respect
to any matter specified in the second proviso to the first sentence of
Section 9.1(a) of the Intercreditor Agreement, no amendment, modification
or supplement to, or substitution or replacement of, such Intercreditor
Agreement shall be effective unless consented to by Owner.

 

“Interest Period”
means the period commencing on and including the Closing Date and ending on but
excluding the next succeeding Payment Date, and thereafter, each successive
period commencing on and including the immediately preceding Payment Date and
ending on but excluding the next succeeding Payment Date.

 

“IRS”
means the Internal Revenue Service of the United States or any Government
Entity succeeding to the functions of such Internal Revenue Service.

 

“Issuance Date”
means March 24, 2004.

 

“Law”
means (a) any constitution, treaty, statute, law, decree, regulation,
order, rule or directive of any Government Entity, and (b) any judicial or
administrative interpretation or application of, or decision under, any of the
foregoing.

 

“LIBOR Business
Day” means any day on which dealings are carried on in the
London interbank market.

 

“Lien”
means any mortgage, pledge, lien, charge, encumbrance or security interest
affecting the title to or any interest in property.

 

“Liquidity
Facilities” means the Primary Liquidity Facilities and the Above-Cap
Liquidity Facilities.

 

“Liquidity
Providers” means the Primary Liquidity Provider and the
Above-Cap Liquidity Provider.

 

“Maintenance
Program” means the maintenance program for the Aircraft of the
Owner or a Permitted Lessee which is approved by the government of registry of
the Aircraft.

 

“Majority in
Interest of Note Holders” means as of a particular date of
determination, (i) the holders of a majority in aggregate unpaid Original
Amount of all Equipment Notes outstanding as of such date (excluding any
Equipment Notes held by Owner or any of its Affiliates (unless all Equipment
Notes then outstanding shall be held by Owner or any Affiliate of Owner), it
being understood that a Pass Through Trustee shall not be deemed to be an

 

10

 

Affiliate of the
Owner unless 100% of the aggregate face amount of the Pass Through Certificates
issued by the corresponding Pass Through Trust are held by the Owner or an
Affiliate of the Owner or a Pass Through Trustee is otherwise under the control
of the Owner or an Affiliate of the Owner); provided that for the purposes of
directing any action or casting any vote or giving any consent, waiver or
instruction hereunder any Note Holder of an Equipment Note or Equipment Notes
may allocate, in such Note Holder’s sole discretion, any fractional portion of
the principal amount of such Equipment Note or Equipment Notes in favor of or
in opposition to any such action, vote, consent, waiver or instruction and
(ii) if all the Secured Obligations have been paid in full, the majority
of Related Mortgagees.

 

“Material Adverse
Change” means, with respect to any person, any event, condition
or circumstance that materially and adversely affects such person’s business or
consolidated financial condition, or its ability to observe or perform its
obligations, liabilities and agreements under the Operative Agreements.

 

“Minimum
Liability Insurance Amount” is defined in Schedule 3 to the
Participation Agreement.

 

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

 

“Mortgaged
Property” is defined in Section 3.03 of the Trust
Indenture.

 

“Mortgagee”
means Wilmington Trust Company, a Delaware banking corporation, not in its
individual capacity but solely as mortgagee under the Trust Indenture.

 

“Mortgagee
Agreements” means, collectively, the Participation Agreement,
the Trust Indenture and each other agreement between Mortgagee and any other
party to the Participation Agreement, relating to the Transactions, delivered
on the Closing Date.

 

“Net Worth”
means, for any person, the excess of its total assets over its total
liabilities.

 

“Non-U.S. Person”
means any Person other than a United States person, as defined in
Section 7701(a)(30) of the Code.

 

“Note Holder”
means at any time each registered holder of one or more Equipment Notes.

 

“Note Purchase
Agreement” means the Note Purchase Agreement, dated as of the
Issuance Date, among JetBlue Airways Corporation, the Subordination Agent, the
Escrow Agent, the Paying Agent and the Pass Through Trustee under each Pass
Through Trust Agreement providing for, among other things, the issuance and
sale of the Equipment Notes.

 

“Officer’s
Certificate” means, in respect of any party to the Participation
Agreement, a certificate signed by the Chairman, the President, any Vice
President (including those with varying ranks such as Executive, Senior,
Assistant or Staff Vice President), the Treasurer or the Secretary of such
party.

 

11

 

“Operative
Agreements” means, collectively, the Participation Agreement,
the Consent and Agreement, the Airbus Consent, the French Pledge Agreement, the
Engine Consent and Agreement, the Trust Indenture, the initial Trust Indenture
Supplement, the Bills of Sale, and the Equipment Notes.

 

“Operative
Indentures” means each of the indentures under which equipment
notes have been issued and purchased by the Pass Through Trustees pursuant to
the Note Purchase Agreement.

 

“Original Amount,”
with respect to an Equipment Note, means the stated original principal amount
of such Equipment Note and, with respect to all Equipment Notes, means the
aggregate stated original principal amounts of all Equipment Notes.

 

“Owner”
means JetBlue Airways Corporation, a Delaware corporation and its successors
and permitted assigns.

 

“Participation Agreement” means the
Participation Agreement [NXXXJB] dated as of the Closing Date among Owner, the
Pass Through Trustees, Subordination Agent and Mortgagee.

 

“Parts” means all
appliances, parts, components, instruments, appurtenances, accessories,
furnishings, seats and other equipment of whatever nature (excluding
(a) Engines or engines, (b) any items leased by Owner from a third
party, (c) Passenger Convenience Equipment and (d) cargo containers)
that may from time to time be installed or incorporated in or attached or
appurtenant to the Airframe or any Engine, and any of the foregoing removed
from the Airframe or any Engine unless title thereto shall cease to be vested
in Owner in accordance with Section 4.04 of the Trust Indenture.

 

“Passenger
Convenience Equipment” means components or systems installed on
or affixed to the Airframe that are used to provide telecommunications services
or electronic entertainment to passengers aboard the Aircraft.

 

“Pass Through
Agreements” means the Pass Through Trust Agreements, the Note
Purchase Agreement, the Deposit Agreements, the Escrow Agreements, the
Intercreditor Agreement, the Liquidity Facilities, the Policy Provider
Agreement and the Fee Letters referred to in Section 2.03 of each of the
Primary Liquidity Facilities; provided, that no amendment, modification or
supplement to, or substitution or replacement of, any such Fee Letter shall be
effective for purposes of any obligation of Owner, unless consented to by
Owner.

 

“Pass Through Certificates”
means the pass through certificates issued by the Pass Through Trusts and any
other pass through certificates issued in exchange for or replacement of such
pass through certificates.

 

“Pass Through
Trust” means each of the three separate pass through trusts
created under the Pass Through Trust Agreements.

 

“Pass Through
Trust Agreement” means each of the three separate pass through
trust agreements dated as of the Issuance Date by and between the Owner and a
Pass Through Trustee

 

12

 

and each Related
Pass Through Trust Agreement (as defined in each Pass Through Trust Agreement).

 

“Pass Through
Trustee” means Wilmington Trust Company, a Delaware banking
corporation, in its capacity as trustee under each Pass Through Trust
Agreement.

 

“Pass Through
Trustee Agreements” means the Participation Agreement, the Pass
Through Trust Agreements, the Note Purchase Agreement, the Deposit Agreements,
the Escrow Agreements and the Intercreditor Agreement.

 

“Paying Agent”
means Wilmington Trust Company, as Paying Agent under each of the Escrow
Agreements.

 

“Payment Date”
means each March 15, June 15, September 15 and December 15,
commencing on                          
; provided, that if any such date is not a Business Day, the relevant
Payment Date shall be the next succeeding Business Day.

 

“Payment Due Rate”
means, with respect to (i) any payment made to Note Holder under any
Series of Equipment Notes, the lesser of (a) the applicable Debt Rate for
the applicable period as provided in the second paragraph of Section 2.02
of the Trust Indenture plus 1% and (b) the maximum rate permitted by
applicable law and (ii) any other payment made under any Operative
Agreement to any other Person, 5% per annum (computed on the basis of a year of
360 days and actual number of days elapsed).

 

“Permitted Air
Carrier” means (i) any manufacturer of airframes or
aircraft engines, or any Affiliate of a manufacturer of airframes or aircraft
engines, (ii) any Permitted Foreign Air Carrier, (iii) any person
approved in writing by Mortgagee or (iv) any U.S. Air Carrier.

 

“Permitted
Country” means any country listed on Schedule 4 to the
Participation Agreement.

 

“Permitted
Foreign Air Carrier” means any air carrier with its principal
executive offices in any Permitted Country and which is authorized to conduct
commercial airline operations and to operate jet aircraft similar to the
Aircraft under the applicable Laws of such Permitted Country.

 

“Permitted
Government Entity” means (i) the U.S. Government or
(ii) any Government Entity if the Aircraft is then registered under the
laws of the country of such Government Entity.

 

“Permitted Lease”
means a lease permitted under Section 4.02(b) of the Trust Indenture.

 

“Permitted Lessee”
means the lessee under a Permitted Lease.

 

“Permitted Lien”
means (a) the rights of Mortgagee under the Operative Agreements, or of
any Permitted Lessee under any Permitted Lease; (b) Liens attributable to
Mortgagee (both in its capacity as trustee under the Trust Indenture and in its
individual capacity); (c) the rights of others under agreements or
arrangements to the extent expressly permitted by the terms of
Section 4.02(b) or 4.04 of the Trust Indenture; (d) Liens for Taxes
of, or other government or

 

13

 

statutory fees,
charges or levies (including any thereof in respect of any airport or air
navigation authority) imposed against, Owner or any Permitted Lessee (or any of
their respective U.S. federal tax law consolidated groups (if applicable))
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 risk of
the sale, forfeiture or loss of the Aircraft, the Airframe, or any Engine or
the interest of Mortgagee therein or impair the Lien of the Trust Indenture;
(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 60 days or is being
contested in good faith by appropriate proceedings, so long as such Liens and
such proceedings do not involve any material risk of the sale, forfeiture or
loss of the Aircraft, the Airframe, or any Engine or the interest of Mortgagee
therein or impair the Lien of the Trust Indenture; (f) Liens arising out
of any judgment or award against Owner (or any Permitted Lessee), so long as
such judgment shall, within 60 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 60 days after the expiration of such
stay, and so long as during any such 60 day period there is not, or any such
judgment or award does not involve, any material risk of the sale, forfeiture
or loss of the Aircraft, the Airframe, or any Engine or the interest of
Mortgagee therein or impair the Lien of the Trust Indenture; (g) salvage
or similar rights of insurers under policies required to be maintained by Owner
under Section 4.06 of the Trust Indenture; and (h) any other Lien
with respect to which Owner (or any Permitted Lessee) shall have provided a
bond, cash collateral or other security adequate in the reasonable opinion of
Mortgagee.

 

“Persons”
or “persons” means
individuals, firms, partnerships, joint ventures, trusts, trustees, Government
Entities, organizations, associations, corporations, limited liability
companies, government agencies, committees, departments, authorities and other
bodies, corporate or incorporate, whether having distinct legal status or not,
or any member of any of the same.

 

“Plan”
means any employee benefit plan within the meaning of Section 3(3) of
ERISA, and any plan within the meaning of Section 4975(e)(1) of the Code.

 

“Policy Provider”
means MBIA Insurance Corporation.

 

“Policy Provider
Agreement” means the Insurance and Indemnity Agreement dated as
of the Issuance Date among the Subordination Agent, Owner and the Policy
Provider.

 

“Prepayment
Premium” means, collectively, the Series G Prepayment
Premium and the Series C Prepayment Premium.

 

“Primary
Liquidity Facilities” means the three Revolving Credit
Agreements (consisting of a separate Revolving Credit Agreement with each
Primary Liquidity Provider with respect to each of the Class G-1 Trust,
Class G-2 Trust and Class C Trust (each as defined in the Intercreditor
Agreement) between the Subordination Agent, as borrower, and the Primary
Liquidity Provider, each dated as of the Issuance Date.

 

14

 

“Primary
Liquidity Provider” means Landesbank Hessen-Thüringen
Girozentrale, as a Class G-1 Primary Liquidity Provider, Class G-2
Primary Liquidity Provider and Class C Primary Liquidity Provider (as such
terms are defined in the Intercreditor Agreement) under the respective Primary
Liquidity Facilities, or any successor thereto.

 

“Purchase
Agreement” means the AVSA A320 Purchase Agreement dated as of
April 20, 1999 between AVSA S.A.R.L. and Owner (including all exhibits
thereto, together with all letter agreements entered into that by their terms
constitute part of such Purchase Agreement), but only insofar as the foregoing
relates to the Aircraft.

 

“QIB”
is defined in Section 2.08 of the Trust Indenture.

 

“Related Equipment
Note” means, collectively, the “Equipment Notes” as defined in
each Related Indenture.

 

“Related Event of
Default” means an “Event of Default” as defined in each Related
Indenture.

 

“Related
Indenture Indemnitee” means each Indenture Indemnitee under a
Related Indenture.

 

“Related
Indentures” means each of those certain Trust Indenture and
Mortgages (other than the Trust Indenture) under which equipment notes have
been issued by the Owner and purchased by the Pass Through Trustees (whether
before or after the date of the Trust Indenture).

 

“Related
Mortgagee” has the meaning ascribed to the term “Mortgagee” in
each of the Related Indentures.

 

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

 

“Related
Operative Agreements” has the meaning ascribed to the term
“Operative Agreements” in each of the Related Indentures.

 

“Related
Participation Agreement” has the meaning ascribed to the term
“Participation Agreement” in each of the Related Indentures.

 

“Related Secured
Obligations” has the meaning ascribed to the term “Secured
Obligations” in each of the Related Indentures.

 

“Related Secured
Parties” means, collectively, the Related Note Holders and
Related Indenture Indemnities.

 

“Replacement
Airframe” means any airframe substituted for the Airframe
pursuant to Article IV of the Trust Indenture.

 

“Replacement
Engine” means an engine substituted for an Engine pursuant to
Article IV of the Trust Indenture.

 

15

 

“SEC”
means the Securities and Exchange Commission of the United States, or any
Government Entity succeeding to the functions of such Securities and Exchange
Commission.

 

“Section 1110”
means 11 U.S.C. Section 1110 of the Bankruptcy Code or any successor or
analogous section of the federal bankruptcy Law in effect from time to time.

 

“Secured
Obligations” is defined in the granting clause of the Trust
Indenture.

 

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

 

“Security”
means a “security” as defined in Section 2(1) of the Securities Act.

 

“Senior Holder”
is defined in Section 2.12(c) of the Trust Indenture.

 

“Series”
means any or all of Series G-1, Series G-2 or Series C.

 

“Series C”
or “Series C Equipment Notes”
means Equipment Notes issued under the Trust Indenture and designated as
“Series C” thereunder, in the Original Amount and maturities and bearing
interest as specified in Schedule I to the Trust Indenture under the
heading “Series C.”

 

“Series C
Prepayment Premium” means in the case of the prepayment pursuant
to Section 2.10 of the Indenture of the Series C Equipment Notes, an
amount equal to the following percentage of the Original Amount prepaid:

 

	
  If redeemed during the 12 month

  period ending on the anniversary of

  the Issuance Date indicated below

  	
   

  	
  Prepayment
  Premium

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1st

  	
   

  	
  3.00

  	
  %

  
	
  2nd

  	
   

  	
  2.00

  	
  %

  
	
  3rd

  	
   

  	
  1.00

  	
  %

  
	
  Thereafter

  	
   

  	
  0.00

  	
  %

  

 

“Series G
Prepayment Premium” means in the case of the prepayment pursuant
to Section 2.10 of the Indenture of the Series G-1 Equipment Notes
and Series G-2 Equipment Notes, an amount equal to the following
percentage of the Original Amount prepaid:

 

	
  If redeemed during the 12 month

  period ending on the anniversary of

  the Issuance Date indicated below

  	
   

  	
  Prepayment
  Premium

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1st

  	
   

  	
  1.50

  	
  %

  
	
  2nd

  	
   

  	
  1.20

  	
  %

  
	
  3rd

  	
   

  	
  0.90

  	
  %

  
	
  4th

  	
   

  	
  0.60

  	
  %

  
	
  5th

  	
   

  	
  0.30

  	
  %

  
	
  Thereafter

  	
   

  	
  0.00

  	
  %

  

 

16

 

“Series G-1”
or “Series G-1 Equipment Notes”
means Equipment Notes issued under the Trust Indenture and designated as
“Series G-1” thereunder, in the Original Amount and maturities and bearing
interest as specified in Schedule I to the Trust Indenture under the
heading “Series G-1.”

 

“Series G-2”
or “Series G-2 Equipment Notes”
means Equipment Notes issued under the Trust Indenture and designated as
“Series G-2” thereunder, in the Original Amount and maturities and bearing
interest as specified in Schedule I to the Trust Indenture under the
heading “Series G-2.”

 

“Similar Aircraft”
means an Airbus A320-232 of comparable vintage and/or configuration as the
Aircraft, and, if applicable, powered by powerplants or having systems or
avionics comparable to those of the Aircraft.

 

“Special Default”
means (i) the failure by Owner to pay any amount of principal of or
interest, Break Amount or Prepayment Premium on any Equipment Note when due or
(ii) the occurrence of any Default or Event of Default referred to in
Section 5.01(v), (vi) or (vii) of the Trust Indenture.

 

“Standard &
Poor’s” means Standard & Poor’s Ratings Services, a
division of McGraw-Hill Inc.

 

“Subordination
Agent” means Wilmington Trust Company, as subordination agent
under the Intercreditor Agreement.

 

“Subordination
Agent Agreements” means the Participation Agreement, the
Liquidity Facilities and the Intercreditor Agreement.

 

“Taxes”
means all license, recording, documentary, registration and other similar fees
and all taxes, levies, imposts, duties, assessments or withholdings of any
nature whatsoever imposed by any Taxing Authority, together with any penalties,
additions to tax, fines or interest thereon or additions thereto.

 

“Taxing Authority”
means any federal, state or local government or other taxing authority in the
United States, any foreign government or any political subdivision or taxing
authority thereof, any international taxing authority or any territory or
possession of the United States or any taxing authority thereof.

 

“Three-Month LIBOR” means, with respect
to each Interest Period, the interest rate per annum (calculated on the basis
of a 360-day year and actual days elapsed) at which deposits in United States
dollars are offered to prime banks in the London interbank market as indicated
on display page 3750 (British Bankers Association-LIBOR) of the Dow Jones
Markets Service (or such other page as may replace such display
page 3750 for the purpose of displaying London interbank offered rates for
United States dollar deposits) or, if not so indicated, the average (rounded
upwards to the nearest 1/100 %), as determined by the Mortgagee,
of such rates as indicated on the Reuters LIBO Page (or such other
page as may replace such Reuters Screen LIBO Page for the purpose of
displaying London interbank offered rates for United States dollar

 

17

 

deposits) or, if neither such alternative is indicated, the
average (rounded upwards to the nearest 1/100 %), as determined by the Mortgagee,
of such rates offered by four major reference banks in the London interbank
market, as selected by the Mortgagee after consultation with Owner, to prime
banks in the London interbank market, in each case at or about
11:00 a.m.(London time) on the day that is two LIBOR Business Days prior
to the first day of such Interest Period (in the case of the Interest Period
beginning on the Closing Date, if such date is not a Regular Distribution Date
(as defined in the Intercreditor Agreement), the immediately preceding Regular
Distribution Date (as defined in the Intercreditor Agreement) or, if there is
no such date, the Issuance Date) (the “Three-Month
LIBOR Reference Date”) for deposits for a period of three months in
an amount substantially equal to the principal amount of the Equipment Notes
then outstanding. The Mortgagee will, if necessary, request that each of the
reference banks provide a quotation of its rate.  If at least two such quotations are provided, the rate will be
the average of the quotations (rounded to the nearest 1/100 %).  If fewer than two quotations are provided,
Three-Month LIBOR will be determined for the applicable Three-Month LIBOR
Reference Date as the arithmetic mean of the rates quoted at approximately
11:00 a.m., New York time, on that Three-Month LIBOR Reference Date, by
three major banks in New York City, as selected by the Mortgagee after
consultation with Owner, for loans in U.S. dollars to lending European banks,
for a period of three months, commencing on that Three-Month LIBOR Reference
Date, and in a principal amount that is representative of a single transaction
in U.S. dollars in that market at that time. 
If the banks so selected by the Mortgagee are not quoting as mentioned
above, the rate will be Three-Month LIBOR for the immediately preceding
Interest Period.  Notwithstanding the
foregoing, if a payment default on any Equipment Note or Related Equipment Note
exists on any Regular Distribution Date (as defined in the Intercreditor
Agreement), from such Regular Distribution Date and for each full Interest
Period while such default is continuing, Three-Month LIBOR will not exceed 8%.

 

“Transactions”
means the transactions contemplated by the Participation Agreement and the
other Operative Agreements.

 

“Transaction
Expenses” means (subject in each case to any fee cap or other
arrangement previously agreed with Owner): 
(i) the reasonable and actual fees, expenses and disbursements
incurred in connection with the negotiation, execution and delivery of the
Operative Agreements of (1) Morris, James, Hitchens & Williams
LLP, special counsel for Mortgagee, (2) Vedder, Price, Kaufman &
Kammholz, P.C., special counsel to Owner, (3) DeBee, Gilchrist &
Lidia, special counsel in Oklahoma City, Oklahoma, and (4)  Clifford
Chance, special French counsel, (ii) all fees, taxes and other charges
payable in connection with the recording or filing of instruments and financing
statements, such information to be furnished by Owner and (iii) the
initial fee and reasonable and actual disbursements of Mortgagee under the
Trust Indenture.

 

“Transfer”
means the transfer, sale, assignment or other conveyance (whether directly or
indirectly through a transfer of stock, partnership interest or other ownership
interest) of all or any interest in any property, right or interest.

 

“Transferee”
means a person to which any Note Holder purports or intends to Transfer any or
all of its right, title or interest in its Equipment Note and the Collateral,
as described in Section 8 of the Participation Agreement.

 

18

 

“Trust Indenture”
means the Trust Indenture and Mortgage [NXXXJB], dated as of the Closing Date,
between Owner and Mortgagee.

 

“Trust Indenture
Supplement” means a Trust Indenture and Mortgage [NXXXJB]
Supplement, substantially in the form of Exhibit A to the Trust Indenture,
with appropriate modifications to reflect the purpose for which it is being
used.

 

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

 

“Unindemnified
Tax” means (i) any Tax imposed on the net income, net worth
or capital, any franchise Tax or similar doing business Tax of the Mortgagee,
the Subordination Agent or any Pass Through Trustee and (ii) any
withholding Tax imposed by the United States (including, without limitation,
any withholding Tax imposed by the United States which is imposed or increased
as a result of the Mortgagee’s, the Subordination Agent’s or any Pass Through
Trustee’s failure to deliver to the Owner any certificate or document necessary
to establish that payments under the Operative Agreements are exempt from
withholding Tax).

 

“United States”
or “U.S.” means the United
States of America; provided, that for geographic purposes, “United States”
means, in aggregate, the 50 states and the District of Columbia of the United
States of America.

 

“U.S. Air Carrier”
means a Certificated Air Carrier.

 

“U.S. Government”
means the federal government of the United States, or any instrumentality or
agency thereof.

 

“U.S. Person”
means any Person described in Section 7701(a)(30) of the Code.

 

“Wet Lease”
means any arrangement whereby Owner agrees to furnish the Airframe and Engines
or engines installed thereon to a third party pursuant to which the Airframe
and such Engines or engines (i) shall at all times be in the sole
possession and control of Owner, (ii) shall be operated in all respects
solely by regular employees of Owner possessing all current certificates and licenses
that are required under the Act or any FAA Regulations for the possession, use
and operation of the Airframe and such Engines or engines (or, if the Airframe
is then under foreign registration, in accordance with Section 4.02 of the
Trust Indenture, the foregoing requirement shall apply in respect of all
certificates and licenses required by such government of registration and the
applicable Aviation Authority for the possession, use and operation of the
Airframe and such Engines or engines), and (iii) shall in all events be
maintained, insured and otherwise used and operated in compliance with the
terms and provisions of the Trust Indenture.

 

“WTC”
means Wilmington Trust Company, a Delaware banking corporation, not in its
capacity as Mortgagee under the Trust Indenture, but in its individual
capacity.

 

19Exhibit 4.30

 

CONFIDENTIAL:  SUBJECT TO RESTRICTIONS ON DISSEMINATION

SET FORTH IN SECTION 6 OF THIS AGREEMENT

 

PARTICIPATION
AGREEMENT

[NXXXJB]

 

Dated
as of [Date]

 

among

 

JETBLUE AIRWAYS CORPORATION,

Owner,

 

and

 

WILMINGTON TRUST COMPANY,

Not in its individual capacity except as expressly provided herein,

but solely as Mortgagee, Subordination Agent under the

Intercreditor Agreement and Pass Through Trustee under

each of the Pass Through Trust Agreements

 

One
Airbus Model A320-232 Aircraft

Bearing Manufacturer’s Serial No. [MSN]

 

 

TABLE OF CONTENTS

 

	
  Section 1.

  	
   

  	
  Definitions
  and Construction

  	
   

  
	
  Section 2.

  	
   

  	
  Secured Loans;
  Closing

  	
   

  
	
  2.1

  	
   

  	
  Making
  of Loans and Issuance of Equipment Notes

  	
   

  
	
  2.2

  	
   

  	
  Closing

  	
   

  
	
  Section 3.

  	
   

  	
  Conditions
  Precedent

  	
   

  
	
  3.1

  	
   

  	
  Conditions
  Precedent to Obligations of Pass Through Trustees

  	
   

  
	
   

  	
   

  	
  3.1.1

  	
  Equipment Notes

  	
   

  
	
   

  	
   

  	
  3.1.2

  	
  Delivery of Documents

  	
   

  
	
   

  	
   

  	
  3.1.3

  	
  Violation of Law

  	
   

  
	
   

  	
   

  	
  3.1.4

  	
  Representations,
  Warranties and Covenants

  	
   

  
	
   

  	
   

  	
  3.1.5

  	
  No Event of Default

  	
   

  
	
   

  	
   

  	
  3.1.6

  	
  No Event of Loss

  	
   

  
	
   

  	
   

  	
  3.1.7

  	
  Title

  	
   

  
	
   

  	
   

  	
  3.1.8

  	
  Certification

  	
   

  
	
   

  	
   

  	
  3.1.9

  	
  Section 1110

  	
   

  
	
   

  	
   

  	
  3.1.10

  	
  Filing

  	
   

  
	
   

  	
   

  	
  3.1.11

  	
  No Proceedings

  	
   

  
	
   

  	
   

  	
  3.1.12

  	
  Governmental Action

  	
   

  
	
   

  	
   

  	
  3.1.13

  	
  Note Purchase Agreement

  	
   

  
	
   

  	
   

  	
  3.1.14

  	
  Perfected Security
  Interest

  	
   

  
	
  3.2

  	
   

  	
  Conditions
  Precedent to Obligations of Mortgagee

  	
   

  
	
   

  	
   

  	
  3.2.1

  	
  Documents

  	
   

  
	
   

  	
   

  	
  3.2.2

  	
  Other Conditions
  Precedent

  	
   

  
	
  3.3

  	
   

  	
  Conditions
  Precedent to Obligations of Owner

  	
   

  
	
   

  	
   

  	
  3.3.1

  	
  Documents

  	
   

  
	
   

  	
   

  	
  3.3.2

  	
  Other Conditions
  Precedent

  	
   

  
	
  3.4

  	
   

  	
  Post-Registration Matters

  	
   

  
	
  Section 4.

  	
   

  	
  Representations
  and Warranties

  	
   

  
	
  4.1

  	
   

  	
  Owner’s
  Representations and Warranties

  	
   

  
	
   

  	
   

  	
  4.1.1

  	
  Organization;
  Qualification

  	
   

  
	
   

  	
   

  	
  4.1.2

  	
  Corporate Authorization

  	
   

  
	
   

  	
   

  	
  4.1.3

  	
  No
  Violation

  	
   

  
	
   

  	
   

  	
  4.1.4

  	
  Approvals

  	
   

  
	
   

  	
   

  	
  4.1.5

  	
  Valid and Binding
  Agreements

  	
   

  
	
   

  	
   

  	
  4.1.6

  	
  Litigation

  	
   

  
	
   

  	
   

  	
  4.1.7

  	
  Financial Condition

  	
   

  
	
   

  	
   

  	
  4.1.8

  	
  Registration and
  Recordation

  	
   

  
	
   

  	
   

  	
  4.1.9

  	
  Location

  	
   

  
	
   

  	
   

  	
  4.1.10

  	
  No Event of Loss

  	
   

  
	
   

  	
   

  	
  4.1.11

  	
  Compliance With Laws

  	
   

  
	
   

  	
   

  	
  4.1.12

  	
  Securities Laws

  	
   

  
	
   

  	
   

  	
  4.1.13

  	
  Broker’s
  Fees

  	
   

  
	
   

  	
   

  	
  4.1.14

  	
  Section 1110

  	
   

  

 

i

 

	
  4.2

  	
   

  	
  WTC’s
  Representations and Warranties

  	
   

  
	
   

  	
   

  	
  4.2.1

  	
  Organization, Etc

  	
   

  
	
   

  	
   

  	
  4.2.2

  	
  Corporate Authorization

  	
   

  
	
   

  	
   

  	
  4.2.3

  	
  No
  Violation

  	
   

  
	
   

  	
   

  	
  4.2.4

  	
  Approvals

  	
   

  
	
   

  	
   

  	
  4.2.5

  	
  Valid and Binding
  Agreements

  	
   

  
	
   

  	
   

  	
  4.2.6

  	
  Citizenship

  	
   

  
	
   

  	
   

  	
  4.2.7

  	
  No Liens

  	
   

  
	
   

  	
   

  	
  4.2.8

  	
  Litigation

  	
   

  
	
   

  	
   

  	
  4.2.9

  	
  Securities Laws

  	
   

  
	
   

  	
   

  	
  4.2.10

  	
  Investment

  	
   

  
	
   

  	
   

  	
  4.2.11

  	
  Taxes

  	
   

  
	
   

  	
   

  	
  4.2.12

  	
  Broker’s
  Fees

  	
   

  
	
  Section 5.

  	
   

  	
  Covenants,
  Undertakings and Agreements

  	
   

  
	
  5.1

  	
   

  	
  Covenants of Owner

  	
   

  
	
   

  	
   

  	
  5.1.1

  	
  Corporate
  Existence; U.S. Air Carrier

  	
   

  
	
   

  	
   

  	
  5.1.2

  	
  Notice of Change of
  Location

  	
   

  
	
   

  	
   

  	
  5.1.3

  	
  Certain Assurances

  	
   

  
	
   

  	
   

  	
  5.1.4

  	
  Securities Laws

  	
   

  
	
  5.2

  	
   

  	
  Covenants of WTC

  	
   

  
	
   

  	
   

  	
  5.2.1

  	
  Liens

  	
   

  
	
   

  	
   

  	
  5.2.2

  	
  Securities Act

  	
   

  
	
   

  	
   

  	
  5.2.3

  	
  Performance of
  Agreements

  	
   

  
	
   

  	
   

  	
  5.2.4

  	
  Withholding Taxes

  	
   

  
	
  5.3

  	
   

  	
  Covenants of Note Holders

  	
   

  
	
   

  	
   

  	
  5.3.1

  	
  Withholding Taxes

  	
   

  
	
   

  	
   

  	
  5.3.2

  	
  Transfer; Compliance

  	
   

  
	
  5.4

  	
   

  	
  Agreements

  	
   

  
	
   

  	
   

  	
  5.4.1

  	
  Quiet Enjoyment

  	
   

  
	
   

  	
   

  	
  5.4.2

  	
  Consents

  	
   

  
	
   

  	
   

  	
  5.4.3

  	
  Insurance

  	
   

  
	
   

  	
   

  	
  5.4.4

  	
  Extent of
  Interest of Note Holders

  	
   

  
	
   

  	
   

  	
  5.4.5

  	
  Foreign Registration

  	
   

  
	
   

  	
   

  	
  5.4.6

  	
  Interest in Certain
  Engines

  	
   

  
	
   

  	
   

  	
  5.4.7

  	
  Lease Assignment

  	
   

  
	
  Section 6.

  	
   

  	
  Confidentiality

  	
   

  
	
  Section 7.

  	
   

  	
  Indemnification
  and Expenses

  	
   

  
	
  7.1

  	
   

  	
  General Indemnity

  	
   

  
	
   

  	
   

  	
  7.1.1

  	
  General

  	
   

  
	
   

  	
   

  	
  7.1.2

  	
  Exclusions

  	
   

  
	
   

  	
   

  	
  7.1.3

  	
  After Tax Basis; Etc

  	
   

  
	
   

  	
   

  	
  7.1.4

  	
  Notice and Contest

  	
   

  
	
   

  	
   

  	
  7.1.5

  	
  Subrogation;
  Reimbursement

  	
   

  

 

ii

 

	
  7.2

  	
   

  	
  Transaction Costs

  	
   

  
	
   

  	
   

  	
  7.2.1

  	
  Invoices and Payment

  	
   

  
	
   

  	
   

  	
  7.2.2

  	
  Payment of Other
  Expenses

  	
   

  
	
  Section 8.

  	
   

  	
  Assignment
  or Transfer of Interests

  	
   

  
	
  8.1

  	
   

  	
  Note
  Holders

  	
   

  
	
  8.2

  	
   

  	
  Effect of Transfer

  	
   

  
	
  Section 9.

  	
   

  	
  Section 1110

  	
   

  
	
  Section 10.

  	
   

  	
  Change of
  Citizenship

  	
   

  
	
  10.1

  	
   

  	
  Generally

  	
   

  
	
  10.2

  	
   

  	
  Mortgagee

  	
   

  
	
  Section 11.

  	
   

  	
  Miscellaneous

  	
   

  
	
  11.1

  	
   

  	
  Amendments

  	
   

  
	
  11.2

  	
   

  	
  Severability

  	
   

  
	
  11.3

  	
   

  	
  Survival

  	
   

  
	
  11.4

  	
   

  	
  Counterparts

  	
   

  
	
  11.5

  	
   

  	
  No
  Waiver

  	
   

  
	
  11.6

  	
   

  	
  Notices

  	
   

  
	
  11.7

  	
   

  	
  Governing
  Law; Submission to Jurisdiction; Venue

  	
   

  
	
  11.8

  	
   

  	
  Third Party Beneficiary

  	
   

  
	
  11.9

  	
   

  	
  Entire Agreement

  	
   

  
	
  11.10

  	
   

  	
  Further Assurances

  	
   

  

 

ANNEX, SCHEDULES AND
EXHIBITS 

 

	
  ANNEX A

  	
   

  	
  –

  	
   

  	
  Definitions

  
	
  SCHEDULE 1

  	
   

  	
  –

  	
   

  	
  Accounts;
  Addresses

  
	
  SCHEDULE 2

  	
   

  	
  –

  	
   

  	
  Loan Amounts

  
	
  SCHEDULE 3

  	
   

  	
  –

  	
   

  	
  Certain
  Terms

  
	
  SCHEDULE 4

  	
   

  	
  –

  	
   

  	
  Permitted
  Countries

  
	
  EXHIBIT A

  	
   

  	
  –

  	
   

  	
  Opinion of special New
  York counsel to Owner

  
	
  EXHIBIT B

  	
   

  	
  –

  	
   

  	
  Opinion of in-house
  counsel to Owner

  
	
  EXHIBIT C

  	
   

  	
  –

  	
   

  	
  Opinion of special
  counsel in Oklahoma City, Oklahoma

  
	
  EXHIBIT D

  	
   

  	
  –

  	
   

  	
  Opinion of special counsel
  to Mortgagee

  
	
  EXHIBIT E

  	
   

  	
  –

  	
   

  	
  Opinion of special
  French counsel

  

 

iii

 

PARTICIPATION AGREEMENT

 

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

 

RECITALS

 

A.                                   Owner and AVSA S.A.R.L. have entered into
the Purchase Agreement, pursuant to which, among other things, AVSA S.A.R.L.
has agreed to sell to Owner and Owner has agreed to purchase from AVSA
S.A.R.L., certain aircraft, including the Aircraft.

 

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

 

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

 

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

 

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

 

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

 

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.  The “General Provisions”
set forth in Annex A are hereby incorporated as if set forth in full
herein.

 

Section 2.                                          Secured Loans; Closing.

 

2.1                                 Making of Loans and Issuance of Equipment Notes.  Subject to
the terms and conditions of this Agreement, on the date hereof or on such other
date agreed to by the parties hereto (the “Closing Date”):  each Pass Through Trustee shall make a
secured loan to Owner in the amount in Dollars opposite such Trustee’s  name on Schedule 2, such loan to be
evidenced by one or more Equipment Notes, dated the Closing Date, issued to the
Subordination Agent as the registered holder on behalf of each such Pass
Through Trustee for the related Pass Through Trust by Owner in accordance with
this Agreement and the Trust Indenture of the Series set forth opposite such
Trustee’s name on Schedule 2, in an aggregate principal amount equal to
the amount of the secured loan made by each such Pass Through Trustee.

 

2.2                                 Closing.

 

(a)                                  The Closing shall occur at the offices of
Vedder, Price, Kaufman & Kammholz, P.C., 805 Third Avenue, New York, New
York  10022, or such other place as the
parties shall agree.

 

(b)                                 All payments pursuant to this
Section 2 shall be made in immediately available funds to [Owner’s] [AVSA
S.A.R.L.’s] account set forth in Schedule 1 hereto as directed by Owner.

 

Section 3.                                          Conditions Precedent.

 

3.1                                 Conditions Precedent to Obligations of Pass Through
Trustees. 
The obligation of each Pass Through Trustee to make the secured loan
described in Section 2.1 on the Closing Date is subject to satisfaction or
waiver by each such Trustee, on or prior to the Closing Date, of the conditions
precedent set forth below in this Section 3.1:

 

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

 

3.1.2                        Delivery
of Documents. 
The Subordination Agent on behalf of each Pass Through Trustee shall
have received executed counterparts or conformed copies of the following
documents:

 

(i)                                     this Agreement;

 

(ii)                                  the Trust Indenture;

 

(iii)                               the initial Trust Indenture Supplement;

 

2

 

(iv)                              the Consent and Agreement, Engine Consent
and Agreement and the Airbus Consent;

 

(v)                                 the Equipment Notes dated the Closing
Date; provided, that only the Subordination Agent shall receive the
authenticated Equipment Notes;

 

(vi)                              an excerpted copy of the Purchase
Agreement and Engine Agreement to the extent relating to Airframe
Manufacturer’s or Engine Manufacturer’s warranties or related obligations
assigned pursuant to the Trust Indenture; provided, that only Mortgagee shall
receive copies of such excerpted agreements (copies of which may be inspected
by Pass Through Trustees and their respective special counsel on the Closing
Date, but after the Closing Date such copies shall be retained by Mortgagee and
may be inspected and reviewed by Pass Through Trustees, the Policy Provider or
their respective counsel if and only if there shall have occurred and be
continuing a Default or an Event of Default);

 

(vii)                           the Bills of Sale;

 

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

 

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

 

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

 

(xi)                                a copy of a current, valid [Export
Certificate of Airworthiness for the Aircraft duly issued by the DGAC]
[Standard FAA Certificate of Airworthiness for the Aircraft];

 

(xii)                             [an application for registration of the
Aircraft with the FAA in the name of Owner, provided, that only special counsel
in Oklahoma City, Oklahoma shall receive the sole executed copy thereof for
filing with the FAA] [a copy of the FAA certificate of registration for the
Aircraft];

 

(xiii)                          the Financing Statement;

 

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

 

3

 

(A)                              an opinion of Vedder Price
Kaufman & Kammholz, P.C., special New York counsel to Owner,
substantially in the form of Exhibit A;

 

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

 

(C)                                an opinion of DeBee, Gilchrist &
Lidia, special counsel in Oklahoma City, Oklahoma, substantially in the form of
Exhibit C;

 

(D)                               an opinion of Morris, James,
Hitchens & Williams LLP, special counsel to Mortgagee, substantially
in the form of Exhibit D; and

 

(E)                                 an opinion of special French counsel,
substantially in the form of Exhibit E; and

 

(xv)                            the French Pledge Agreement.

 

3.1.3                        Violation of Law.  No change shall have occurred after the date
of this Agreement in any applicable Law that makes it a violation of Law for
(a) Owner, any Pass Through Trustee, Subordination Agent or Mortgagee to
execute, deliver and perform the Operative Agreements to which any of them is a
party or (b) any Pass Through Trustee to make the loan contemplated by
Section 2.1, to acquire an Equipment Note or to realize the benefits of
the security afforded by the Trust Indenture.

 

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

 

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

 

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

 

3.1.7                        Title.  Owner shall have good title [,subject to
filing and recordation of the FAA Bill of Sale with the FAA,] to the Aircraft,
free and clear of Liens, except (a) the Lien created by the Trust
Indenture and the initial Trust Indenture Supplement, (b) Liens permitted
by clause (d) (solely for Taxes not yet due) of the definition of “Permitted Liens” in Annex A to
the Trust Indenture and (c) Liens permitted by clauses (e) and (g) of
such definition.

 

4

 

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

 

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

 

3.1.10                  Filing.  On the Closing Date
(a) the FAA Filed Documents shall have been duly filed for recordation (or
shall be in the process of being so duly filed for recordation) with the FAA in
accordance with the Act and (b) the Financing Statement shall have been
duly filed (or shall be in the process of being so duly filed) in the
appropriate jurisdiction.

 

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

 

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

 

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

 

3.1.14                  Perfected
Security Interest. 
On the Closing Date, after giving effect to the filing of the FAA Filed
Documents and the Financing Statement, Mortgagee shall have a duly perfected
first priority security interest in all of Owner’s right, title and interest in
the Aircraft, subject only to Permitted Liens.

 

3.2                                 Conditions Precedent to Obligations of Mortgagee.  The
obligation of Mortgagee to authenticate the Equipment Notes on the Closing Date
is subject to the satisfaction or waiver by Mortgagee, on or prior to the
Closing Date, of the conditions precedent set forth below in this
Section 3.2.

 

3.2.1                        Documents.  Executed originals of the
agreements, instruments, certificates or documents described in
Section 3.1.2 shall have been received by Mortgagee, except as
specifically provided therein, unless the failure to receive any such
agreement, instrument, certificate or document is the result of any action or
inaction by Mortgagee.

 

5

 

3.2.2                        Other
Conditions Precedent. 
Each of the conditions set forth in Sections 3.1.3, 3.1.4, 3.1.5
and 3.1.9 shall have been satisfied unless the failure of any such condition to
be satisfied is the result of any action or inaction by Mortgagee.

 

3.3                                 Conditions Precedent to Obligations of Owner.  The
obligation of Owner to participate in the transaction contemplated hereby on
the Closing Date is subject to the satisfaction or waiver by Owner, on or prior
to the Closing Date, of the conditions precedent set forth below in this
Section 3.3.

 

3.3.1                        Documents.  Executed originals of the
agreements, instruments, certificates or documents described in
Section 3.1.2 shall have been received by Owner, except as specifically
provided therein, and shall be satisfactory to Owner, unless the failure to
receive any such agreement, instrument, certificate or document is the result
of any action or inaction by Owner.  In
addition, the Owner shall have received the following:

 

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

 

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

 

3.3.2                        Other
Conditions Precedent. 
Each of the conditions set forth in Sections 3.1.3, 3.1.4, 3.1.6,
3.1.7, 3.1.8, 3.1.10, 3.1.11, 3.1.12 and 3.1.13 shall have been satisfied or
waived by Owner, unless the failure of any such condition to be satisfied is
the result of any action or inaction by Owner.

 

3.4                                 Post-Registration Matters.  Promptly
following the registration of the Aircraft and the recordation of the FAA Filed
Documents pursuant to the Act, Owner will cause DeBee, Gilchrist & Lidia,
special counsel in Oklahoma City, Oklahoma, to deliver to Owner, each  Pass Through Trustee and Mortgagee a
favorable opinion or opinions addressed to each of them with respect to such
registration and recordation.

 

Section 4.                                          Representations and Warranties.

 

4.1                                 Owner’s Representations and Warranties.  Owner
represents and warrants to each Pass Through Trustee, Subordination Agent and
Mortgagee that as of the date hereof:

 

4.1.1                        Organization;
Qualification. 
Owner is a corporation duly incorporated, validly existing and in good
standing under the Laws of the State of Delaware having an organizational

 

6

 

identification number 2936994 and its true and complete name as
indicated on the public record of the State of Delaware is “JetBlue Airways
Corporation”.  Owner has the corporate
power and authority to conduct the business in which it is currently engaged
and to own or hold under lease its properties and to enter into and perform its
obligations under the Operative Agreements to which it is a party.  Owner is duly qualified to do business as a
foreign corporation in good standing in each jurisdiction in which the nature
and extent of the business conducted by it, or the ownership of its properties,
requires such qualification, except where the failure to be so qualified would
not give rise to a Material Adverse Change to Owner.

 

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

 

4.1.3                        No Violation. 
The execution and delivery by Owner of the Operative Agreements to which
it is a party, the performance by Owner of its obligations thereunder and the
consummation by Owner on the Closing Date of the transactions contemplated
thereby, do not and will not (a) violate any provision of the Certificate
of Incorporation or By-Laws of Owner, (b) violate any Law applicable to or
binding on Owner or (c) violate or constitute any default under (other
than any violation or default that would not result in a Material Adverse
Change to Owner), or result in the creation of any Lien (other than Permitted
Liens) upon the Aircraft under, any indenture, mortgage, chattel mortgage, deed
of trust, conditional sales contract, lease, loan or other material agreement,
instrument or document to which Owner is a party or by which Owner or any of
its properties is bound.

 

4.1.4                        Approvals.  The execution and delivery by
Owner of the Operative Agreements to which it is a party, the performance by
Owner of its obligations thereunder and the consummation by Owner on the
Closing Date of the transactions contemplated thereby do not and will not
require the consent or approval of, or the giving of notice to, or the
registration with, or the recording or filing of any documents with, or the
taking of any other action in respect of, (a) any trustee or other holder
of any Debt of Owner and (b) any Government Entity, other than the filing
of (w) the FAA Filed Documents and the Financing Statement (and continuation
statements periodically), (x) filings, recordings, notices or other
ministerial actions pursuant to any routine recording, contractual or
regulatory requirements applicable to it, (y) filings, recordings, notices
or other actions contemplated by the Operative Agreements in connection with
the leasing or reregistration of the Aircraft and (z) filings, recordings,
notices or other actions all of which have either been, or will be, completed
on or prior to the Closing Date and will be in full force and effect on the Closing
Date.

 

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

 

7

 

of creditors generally and general principles of equity, whether
considered in a proceeding at law or in equity.

 

4.1.6                        Litigation. 
Except as set forth in Owner’s most recent Annual Report on
Form 10-K, as amended, filed by Owner with the SEC on or prior to the
Closing Date, or in any Quarterly Report on Form 10-Q or Current Report on
Form 8-K filed by Owner with the SEC subsequent to such Form 10-K and
on or prior to the Closing Date, no action, claim or proceeding is now pending
or, to the Actual Knowledge of Owner, threatened, against Owner, before any
court, governmental body, arbitration board, tribunal or administrative agency,
which is reasonably likely to be determined adversely to Owner and if
determined adversely to Owner would result in a Material Adverse Change.

 

4.1.7                        Financial
Condition. 
The audited consolidated balance sheet of Owner with respect to Owner’s
most recent fiscal year included in Owner’s most recent Annual Report on
Form 10-K, as amended, filed by Owner with the SEC, and the related
consolidated statements of operations and cash flows for the period then ended
have been prepared in conformity with GAAP and present fairly in all material
respects the financial condition of Owner and its consolidated subsidiaries as
of such date and the results of its operations and cash flows for such period,
and since the date of such balance sheet, there has been no material adverse
change in such financial condition or operations of Owner, except for matters
disclosed in (a) the financial statements referred to above or
(b) any subsequent Quarterly Report on Form 10-Q or Current Report on
Form 8-K filed by Owner with the SEC on or prior to the date hereof or
(c) any press releases issued by Owner and posted on Owner’s website or in
any other public filing with the SEC.

 

4.1.8                        Registration
and Recordation. 
Except for (a) the registration of the Aircraft with the FAA
pursuant to the Act in the name of Owner, (b) the filing for recordation
(and recordation) of the FAA Filed Documents, (c) the filing of the
Financing Statement (and continuation statements relating thereto at periodic
intervals) and (d) the affixation of the nameplates referred to in
Section 4.02(f) of the Trust Indenture, no further action, including any
filing or recording of any document (including any financing statement in
respect thereof under Article 9 of the UCC) is necessary in order to
establish and perfect the Mortgagee’s security interest in the Aircraft, as
against Owner and any other Person, in each case, in any applicable
jurisdictions in the United States.

 

4.1.9                        Location.  The “location” (as such term
is used in 9-307 of Article 9 of the UCC) of Owner is the State of Delaware.

 

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

 

4.1.11                  Compliance
With Laws.

 

(a)                                  Owner is a U.S. Air Carrier.

 

8

 

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

 

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

 

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

 

4.1.13                  Broker’s Fees. 
No Person acting on behalf of Owner is or will be entitled to any
broker’s fee, commission or finder’s fee in connection with the Transactions.

 

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

 

4.2                                 WTC’s Representations and Warranties.  WTC  represents and warrants (with respect to
Section 4.2.10 solely in its capacity as Subordination Agent) to Owner
that:

 

4.2.1                        Organization, Etc.  WTC is a
Delaware banking corporation duly organized, validly existing and in good
standing under the Laws of the State of Delaware, authorized to do business as
a Delaware banking corporation with banking authority to execute and deliver,
and perform its obligations under, the Mortgagee Agreements, the Pass Through
Trustee Agreements and the Subordination Agent Agreements.

 

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

 

4.2.3                        No Violation. 
The execution and delivery by WTC, in its individual capacity or as
Mortgagee, as Pass Through Trustee or as Subordination Agent, as the case may
be, of the Mortgagee Agreements, the Pass Through Trustee Agreements and the
Subordination Agent Agreements, the performance by WTC, in its individual
capacity or as Mortgagee, as Pass Through Trustee or as Subordination Agent, as
the case may be, of its obligations thereunder and the consummation on the
Closing Date of the transactions contemplated thereby, do not and will

 

9

 

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

 

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

 

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

 

4.2.6                        Citizenship. 
WTC is a Citizen of the United States.

 

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

 

4.2.8                        Litigation. 
There are no pending or, to the Actual Knowledge of WTC, threatened
actions or proceedings against WTC, in its individual capacity or as Mortgagee,
as Pass Through Trustee or Subordination Agent, before any court,
administrative agency or

 

10

 

tribunal which, if determined adversely to WTC, in its individual
capacity or as Mortgagee, as Pass Through Trustee or Subordination Agent, as
the case may be, would materially adversely affect the ability of WTC, in its
individual capacity or as Mortgagee, as Pass Through Trustee or Subordination
Agent, as the case may be, to perform its obligations under any of the
Mortgagee Agreements, the Pass Through Trustee Agreements or the Subordination
Agent Agreements.

 

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

 

4.2.10                  Investment. 
The Equipment Notes to be acquired by the Subordination Agent are being
acquired by it for the account of the Pass Through Trustees, for investment and
not with a view to any resale or distribution thereof, except that, subject to
the restrictions on transfer set forth in Section 8, the disposition by it
of its Equipment Notes shall at all times be within its control.

 

4.2.11                  Taxes.  There are no Taxes payable by
any Pass Through Trustee or WTC, as the case may be, imposed by the State of
Delaware or any political subdivision or taxing authority thereof in connection
with the execution, delivery and performance by such Pass Through Trustee or
WTC, as the case may be, of this Agreement or any of the Pass Through Trustee
Agreements (other than franchise or other taxes based on or measured by any
fees or compensation received by any such Pass Through Trustee or WTC, as the
case may be, for services rendered in connection with the transactions
contemplated by any of the Pass Through Trust Agreements), and there are no
Taxes payable by any Pass Through Trustee or WTC, as the case may be, imposed
by the State of Delaware or any political subdivision thereof in connection
with the acquisition, possession or ownership by any such Pass Through Trustee
of any of the Equipment Notes (other than franchise or other taxes based on or
measured by any fees or compensation received by any such Pass Through Trustee
or WTC, as the case may be, for services rendered in connection with the transactions
contemplated by any of the Pass Through Trust Agreements), and, assuming that
the trusts created by the Pass Through Trust Agreements will not be taxable as
corporations, but, rather, each will be characterized as a grantor trust under
subpart E, Part I of Subchapter J of the Code or as a
partnership under Subchapter K of the Code, such trusts will not be
subject to any Taxes imposed by the State of Delaware or any political
subdivision thereof.

 

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

 

Section 5.                                          Covenants, Undertakings and Agreements.

 

5.1                                 Covenants of Owner.  Owner
covenants and agrees, at its own cost and expense, with Note Holder and
Mortgagee as follows:

 

11

 

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

 

5.1.2                        Notice
of Change of Location. 
Owner will give Mortgagee timely written notice (but in any event within
30 days prior to the expiration of the period of time specified under
applicable Law to prevent lapse of perfection) of any change in its “location”
(as such term is used in Section 9-307 of Article 9 of the UCC) and
will promptly take any action required by Section 5.1.3(c) as a result of
such change in location.

 

5.1.3                        Certain Assurances.

 

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

 

(b)                                 Owner shall promptly take such action
with respect to the recording, filing, re-recording and refiling of the Trust
Indenture and any supplements thereto, including, without limitation, the
initial Trust Indenture Supplement, as shall be necessary to establish and
protect the perfection and priority of the Lien created by the Trust Indenture.

 

(c)                                  Owner, at its sole cost and expense, will
cause the FAA Filed Documents, the Financing Statement (and any amendments
thereto necessitated by any combination, consolidation or merger of the Owner
pursuant to Section 4.07 of the Trust Indenture, or any change in location
described in Section 5.1.2) and, upon the written direction of Mortgagee,
together with copies thereof suitable for filing, any continuation statements
in respect of the Financing Statement as shall be necessary, subject only to
the execution and delivery thereof by Mortgagee, as applicable, to be duly and
timely filed and recorded, or filed for recordation, to the extent permitted
under the Act (with respect to the FAA Filed Documents) or the UCC or similar
law of any other applicable jurisdiction.

 

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

 

5.2                                 Covenants of WTC.  WTC in its individual capacity or as
Mortgagee, as each Pass Through Trustee or Subordination Agent, as the case may
be, covenants and agrees with Owner as follows:

 

5.2.1                        Liens.  WTC (a) will not directly or indirectly
create, incur, assume or suffer to exist any Lien attributable to it on or with
respect to all or any part of the Collateral or the

 

12

 

Aircraft, (b) will, at its own cost and expense, promptly take
such action as may be necessary to discharge any Lien attributable to WTC on
all or any part of the Collateral or the Aircraft and (c) will personally
hold harmless and indemnify Owner, each Note Holder and each of their
respective Affiliates, successors and permitted assigns and the Collateral from
and against (i) any and all Expenses, (ii) any reduction in the
amount payable out of the Collateral and (iii) any interference with the
possession, operation or other use of all or any part of the Aircraft, imposed
on, incurred by or asserted against any of the foregoing as a consequence of
any such Lien.

 

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

 

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

 

5.2.4                        Withholding Taxes.  WTC shall
indemnify (on an after-tax basis) and hold harmless Owner against any United
States withholding taxes (and related interest, penalties and additions to tax)
as a result of the failure by WTC to withhold on payments to any Note Holder if
such Note Holder failed to provide to Mortgagee necessary certificates or forms
to substantiate the right to exemption from such withholding tax.  Any amount payable hereunder shall be paid
within 30 days after receipt by WTC of a written demand therefor.

 

5.3                                 Covenants of Note Holders.  Each Note
Holder (including Subordination Agent) as to itself only covenants and agrees
with Owner and Mortgagee as follows:

 

5.3.1                        Withholding Taxes.  Such Note
Holder (if it is a Non-U.S. Person) agrees to indemnify (on an after-tax basis)
and hold harmless Owner and Mortgagee against any United States withholding
taxes (and related interest, penalties and additions to tax) as a result of the
failure to provide Mortgagee necessary certificates or forms to substantiate
the right to exemption from, or reduction of, such withholding taxes or as a
result of the inaccuracy or invalidity of any certificate or form provided by
such Note Holder to Mortgagee in connection with such withholding taxes.  Any amount payable hereunder shall be paid
within 30 days after receipt by a Note Holder of a written demand
therefor.

 

5.3.2                        Transfer;
Compliance.

 

(a)                                  Such Note Holder will (i) not
transfer any Equipment Note or interest therein in violation of the Securities
Act or applicable state or foreign securities Law; provided, that the foregoing
provisions of this section shall not be deemed to impose on such Note
Holder any responsibility with respect to any such offer, sale or solicitation
by any other party hereto,

 

13

 

and (ii) perform and comply with the obligations specified to be
imposed on it (as a Note Holder) under each of the Trust Indenture and the form
of Equipment Note set forth in the Trust Indenture.

 

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

 

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

 

(ii)                                  a written covenant that it will not
transfer any Equipment Note or any interest in, or represented by, any
Equipment Note unless the subsequent transferee also makes the representation
described in clause (i) above and agrees to comply with
Section 5.3.2(a) and this clause (ii).

 

5.4                                 Agreements.

 

5.4.1                        Quiet Enjoyment.

 

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

 

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

 

5.4.3                        Insurance.  (a) Each Note Holder, Pass
Through Trustee, the Subordination Agent and Mortgagee agrees not to obtain or
maintain insurance for its own account as permitted by Section 4.06 of the
Trust Indenture if such insurance would limit or otherwise adversely affect

 

14

 

the coverage of any insurance required to be obtained or maintained by
Owner pursuant to Section 4.06 and Annex B of the Trust Indenture.

 

(b)                                 Each Note Holder, the Owner, the Pass
Through Trustee, the Subordination Agent, Mortgagee and each other Additional
Insured agrees that upon receipt of any proceeds of insurance in connection
with the loss or damage to the Aircraft, other than as contemplated by the
Indenture, such Person will pay such amounts to the Mortgagee for application
in accordance with the terms of the Indenture.

 

5.4.4                        Extent
of Interest of Note Holders.  A Note Holder shall not, as
such, have any further interest in, or other right with respect to, the
Collateral when and if the principal and Break Amount, if any, of and interest
on the Equipment Note held by such Holder, and all other sums, then due and
payable to such Holder hereunder and under any other Operative Agreement, shall
have been paid in full.

 

5.4.5                        Foreign
Registration. 
Each Note Holder and Mortgagee hereby agrees, for the benefit of Owner
but subject to the provisions of Section 4.02(b) and 4.02(d) of the Trust
Indenture:

 

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

 

(i)                                     each of the following requirements is
satisfied:

 

(A)                              no Special Default or Event of Default
shall have occurred and be continuing at the time of such registration; and

 

(B)                                such proposed change of registration is
made in connection with a Permitted Lease to a Permitted Air Carrier;

 

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

 

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

 

(B)                                the obligations of Owner, and the rights
and remedies of Mortgagee, under the Trust Indenture are valid, binding and
enforceable under the laws of such jurisdiction (or the laws of the
jurisdiction to which the laws of such jurisdiction would refer as the
applicable governing law);

 

(C)                                after giving effect to such change in
registration, the Lien of the Trust Indenture on the Owner’s right, title and
interest in and to the Aircraft shall either (x) continue as a valid and
duly perfected first priority security interest and all filing, recording or
other action necessary to protect the same shall have been accomplished (or, if
such opinion cannot be given at the time of such proposed change in
registration because such change in registration is not yet

 

15

 

effective, (1) the opinion shall detail what
filing, recording or other action is necessary and (2) the Mortgagee shall
have received a certificate from Owner that all possible preparations to accomplish
such filing, recording and other action shall have been done, and such filing,
recording and other action shall be accomplished and a supplemental opinion to
that effect shall be delivered to the Mortgagee on or prior to the effective
date of such change in registration) or (y) continue as provided in the
preceding clause (x) (subject to the provisions of the parenthetical in
such clause) except for any filing, recording or other action required as of a
date after the effective date of such change in registration, and specifying
the nature thereof;

 

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

 

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

 

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

 

(i)                                     to the effect that the provisions of
Section 4.06 of the Trust Indenture have been complied with after giving
effect to such change of registration;

 

(ii)                                  of the payment by Owner of all reasonable
out-of-pocket expenses of each Note Holder and Mortgagee in connection with
such change of registry, including, without limitation (1) the reasonable
fees and disbursements of counsel to Mortgagee, (2) any filing or
recording fees, Taxes or similar payments incurred in connection with the
change of registration of the Aircraft and the creation and perfection of the
security interest therein in favor of Mortgagee for the benefit of Note Holders,
and (3) all costs and expenses incurred in connection with any filings
necessary to continue in the United States the perfection of the security
interest in the Aircraft in favor of Mortgagee for the benefit of Note Holders;
and

 

(iii)                               to the effect that the tax and other
indemnities in favor of each person named as an indemnitee under any other
Operative Agreement afford each such person substantially the same protection
as provided prior to such change of registration (or Owner shall have agreed upon
additional indemnities that, together with such original indemnities, in the
reasonable judgment of Mortgagee, afford such protection);

 

16

 

(c)                                  Mortgagee agrees that if Owner requests a
change of registration pursuant to this Section 5.4.5, it will take all
such action reasonably requested by Owner in order to effect such a change in
registration, including the execution and delivery of such documents and
instruments as may be necessary or advisable in connection therewith; and

 

(d)                                 Anything to the contrary in the Operative
Agreements notwithstanding, each of the parties hereto agrees that so long as
the conditions in paragraphs (a) and (b) of this Section 5.4.5 have
been satisfied (including the legal opinion required under
Section 5.4.5(a)(ii)), (A) reregistration of the Aircraft may be
effected in a jurisdiction in which (i) the Aircraft is not registered in
the name of the Owner and/or (ii) the Trust Indenture is not recorded of
record in such jurisdiction and/or no filing is made in such jurisdiction in
respect of the Lien of the Trust Indenture and (B) perfection of the
Mortgagee’s Lien on the Collateral may be effected through a pledge or other
unconventional (from a United States perspective) structure.  The provisions of this Section 5.4.5(d)
are not intended to, and shall not, permit the Owner to effect any financing of
the Aircraft in connection with any such reregistration.

 

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

 

5.4.7                        Lease Assignment.  Owner shall
collaterally assign any lease effected in accordance with
Section 4.02(b)(viii) of the Trust Indenture with a base term in excess of
two years to Mortgagee as security for Owner’s obligations under the Operative
Agreements pursuant to an instrument of assignment reasonably satisfactory to
Mortgagee; provided, however, that unless an Event of Default
shall be continuing, the Owner shall be entitled to exercise all of the rights
of the “lessor” under such lease to the exclusion of Mortgagee.  In addition, any such lease entered into by
Owner and so collaterally assigned shall provide that any payments due under
such lease shall be paid by the lessee directly to Owner unless an Event of
Default shall have occurred and be continuing and the lessee has been notified by
Mortgagee thereof in writing, in which case such payments shall, so long as
such Event of Default shall be continuing, be paid by the lessee directly to
Mortgagee for application as provided in Section 6.06 of the Trust
Indenture.

 

Section 6.                                          Confidentiality.  Owner, Note
Holders and Mortgagee shall keep the Participation Agreement and Annex B
to the Trust Indenture confidential and shall not disclose, or cause to be
disclosed, the same to any Person, except (A) to prospective and permitted
transferees of Owner’s, a Note Holder’s, a Liquidity Provider’s, a Pass Through
Trustee’s, the Policy Provider’s, Mortgagee’s or other Indenture Indemnitee’s
interest or their respective counsel or special counsel, independent insurance
brokers, auditors, or other agents who agree to hold such information
confidential, (B) Owner’s, a Note Holder’s, a Liquidity Provider’s, a Pass
Through Trustee’s, the Policy Provider’s, Mortgagee’s or other Indenture
Indemnitee’s counsel

 

17

 

or special counsel, independent insurance brokers, auditors, or other
agents, Affiliates or investors who agree to hold such information
confidential, (C) as may be required by any statute, court or
administrative order or decree, legal process or governmental ruling or
regulation, including those of any applicable insurance regulatory bodies
(including, without limitation, the National Association of Insurance
Commissioners), federal or state banking examiners, Internal Revenue Service
auditors or any stock exchange, (D) with respect to a Note Holder, the
Policy Provider or any Pass Through Trustee, to a nationally recognized rating
agency for the purpose of obtaining a rating on the Equipment Notes or the Pass
Through Trust Certificates or to support an NAIC rating for the Equipment Notes
or (E) such other Persons as are reasonably deemed necessary by the
disclosing party in order to protect the interests of such party or for the
purposes of enforcing such documents by such party; provided, that any and all
disclosures permitted by clauses (C), (D) or (E) above shall be made only
to the extent necessary to meet the specific requirements or needs of the
Persons making such disclosures.

 

Section 7.                                          Indemnification and Expenses.

 

7.1                                 General Indemnity.

 

7.1.1                        General.  Subject to
Section 7.1.4, Owner hereby agrees to indemnify each Indemnitee against,
and agrees to protect, save and keep harmless each of them from any and all
Expenses imposed on, incurred by or asserted against any Indemnitee arising out
of or resulting from any one or more of the following:  (i) the Aircraft, the Airframe, any
Engine or any Part, including without limitation (A) the operation,
possession, use, maintenance, overhaul, testing, registration, reregistration,
delivery, non-delivery, sublease, nonuse, modification, alteration, repair,
storage, airworthiness, replacement, substitution, abandonment or return of the
Aircraft, the Airframe, any Engine or any Part by the Owner, any lessee or any
other Person whatsoever (each, an “Indemnified
Act”), whether or not
such Indemnified Act is in compliance with the terms of the Trust Indenture,
including, without limitation, tort liability, claims for death, personal
injury or property damage or other loss or harm to any person whatsoever and
claims relating to any laws, rules or regulations pertaining to such
Indemnified Act including environmental control, noise and pollution laws,
rules or regulations and (B) the manufacture, design, acceptance,
rejection, delivery, or condition of the Aircraft, the Airframe, any Engine or
any Part, including, without limitation, latent and other defects, whether or
not discoverable, or trademark or copyright infringement; (ii) the
Operative Agreements or the enforcement of any of the terms of the Operative Agreements;
and (iii) the offer, sale and delivery of any Equipment Notes, any pass
through certificates issued in respect thereof or successor debt obligations
issued in connection with the refunding or refinancing thereof or any interest
therein or represented thereby or in any way relating to or arising out of the
offer or sale of any interest in the Collateral or any similar interest arising
out of the Trust Indenture and the Collateral (including, without limitation,
any claim arising out of the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, or any other Federal or state statute, law or
regulation, or at common law or otherwise relating to securities (collectively “Securities Liabilities”)) (the indemnity provided in this
clause (iii) to extend also to any Person who controls an Indemnitee, its
successors, assigns, employees, directors, officers, servants and agents within
the meaning of Section 15 of the Securities Act of 1933, as amended).

 

18

 

7.1.2                        Exclusions. 
The foregoing indemnity in Section 7.1.1 shall not extend to any
Expense of any Indemnitee to the extent attributable to one or more of the
following:  (1) any representation
or warranty by such Indemnitee or any Related Indemnitee (as defined below)
thereof in the Operative Agreements or any Pass Through Agreements being
incorrect in any material respect; (2) the failure by such Indemnitee or
Related Indemnitee thereof to perform or observe any agreement, covenant or
condition in any of the Operative Agreements or any Pass Through Agreements;
(3) acts or omissions involving the willful misconduct or gross negligence
of such Indemnitee or Related Indemnitee thereof (other than gross negligence
imputed to such Indemnitee or Related Indemnitee thereof solely by reason of
its interest in the Aircraft); (4) in the case of any Note Holder, a
disposition (voluntary or involuntary) by such Note Holder of all or any part
of its interest in an Equipment Note or, in the case of any other Indemnitee, a
disposition by such Indemnitee of all or any part of such Indemnitee’s interest
in the Airframe, any Engine, Operative Agreements or any Pass Through
Agreements; (5) losses arising out of inspection rights under the Trust
Indenture; (6) other than during the continuation of an Event of Default,
the authorization or giving or withholding of any future amendments,
supplements, waivers or consents with respect to any of the Operative
Agreements or any Pass Through Agreements, which amendments, supplements,
waivers or consents are not required pursuant to the terms of the Operative
Agreements or any Pass Through Agreements and not requested by Owner;
(7) any loss of tax benefits, any Tax, or increase in tax liability under
any tax law whether or not Owner is required to indemnify thereof or pursuant
to this Agreement; (8) any fine or expense incurred by any Indemnitee as a
result of such Indemnitee’s having engaged in a “prohibited transaction” within
the meaning of Section 406 of ERISA or Section 4975 of the Code;
(9) any amount which constitutes an expense that is to be borne by any
Indemnitee pursuant to the Operative Agreements or any Pass Through Agreements;
(10) any costs associated with overhead or normal administration of the
Collateral; (11) any amount which constitutes a loss of future profits;
(12) acts or omissions involving the negligence of such Indemnitee in the
operation of an aircraft which is involved in an accident with the Aircraft or
an aircraft on which an Engine is installed; (13) any amount to the extent
attributable to the failure of the Mortgagee, Subordination Agent or Pass
Through Trustee to distribute funds received and distributable by it in
accordance with the terms of the Trust Indenture, the Intercreditor Agreement
or the Pass Through Trust Agreement, respectively; (14) except to the extent
attributable to acts or event occurring on or prior thereto, acts or events
which occur after the termination of the Trust Indenture in accordance with its
terms; (15)  any amount resulting from
any Lien on the Collateral which such Indemnitee or any of its Related
Indemnitees is required to discharge under the Operative Agreements or any Pass
Through Agreement; (16) amounts to the extent attributable to the offer or sale
by such Indemnitee or any Related Indemnitee of any interest in the Aircraft,
any Equipment Note, any Pass Through Certificate or any similar interest in
violation of the Securities Act, other applicable federal, state or foreign
securities laws or any other law on or prior to the applicable Issuance Date;
or (17) amounts related to activities or transactions of such Indemnitee (or
any Related Indemnitee) not arising out of or resulting from, or attributable
to the transactions contemplated by the Operative Agreements or the Pass
Through Agreements.

 

For purposes of this
Section 7.1.2, “Related Indemnitee” means, with respect to any Indemnitee,
any director, officer, employee, agent, servant or Affiliate of any thereof.

 

19

 

7.1.3                        After Tax Basis; Etc.  Owner
further agrees that any payment or indemnity pursuant to this Section 7.1
in respect of any “Expense” shall be in an amount which, after deduction of all
Taxes required to be paid by such recipient with respect to such payment or
indemnity under the laws of any federal, state or local government or taxing
authority in the United States, or under the laws of any taxing authority or
governmental subdivision of a foreign country, or any territory or possession
of the United States or any international authority, shall be equal to the
excess, if any, of (A) the amount of such Expense over (B) the net
reduction in Taxes required to be paid by such recipient resulting from the
accrual or payment of such Expense.

 

The agreement of Owner in
this Section 7.1 constitutes a separate agreement with respect to each
Indemnitee and is enforceable directly by each such Indemnitee.

 

7.1.4                        Notice and Contest.  If a claim
is made against an Indemnitee involving one or more Expenses and such
Indemnitee has notice thereof, such Indemnitee shall promptly after receiving
such notice give notice of such claim to Owner; provided that the failure to
provide such notice shall not release Owner from any of its obligations to
indemnify hereunder except to the extent that such failure results in an
additional Expense to Owner (in which case Owner shall not be responsible for
such additional Expense) or Owner is prejudiced as a result of the failure to
give such notice in a timely fashion, and no payment by Owner to an Indemnitee
pursuant to this Section 7.1 shall be deemed to constitute a waiver or
release of any right or remedy which Owner may have against such Indemnitee for
any actual damages as a result of the failure by such Indemnitee to give Owner
such notice.  Owner shall be entitled,
at its sole cost and expense, acting through counsel reasonably acceptable to
the respective Indemnitee, so long as Owner has acknowledged in writing its
responsibility for such Expense hereunder (provided that such acknowledgment
does not apply if such Expense is covered by Section 7.1.2 or if the
decision of a court or arbitrator provides that Owner is not liable hereunder),
(A) in any judicial or administrative proceeding that involves solely a
claim for one or more Expenses, to assume responsibility for and control
thereof, (B) in any judicial or administrative proceeding involving a
claim for one or more Expenses and other claims related or unrelated to the
transactions contemplated by the Operative Agreements, to assume responsibility
for and control of such claim for Expenses to the extent that the same may be
and is severed from such other claims (and such Indemnitee shall use its
reasonable efforts to obtain such severance), and (C) in any other case,
to be consulted by such Indemnitee with respect to judicial proceedings subject
to the control of such Indemnitee and to be allowed, at Owner’s sole expense,
to participate therein.  An Indemnitee
may participate at its own expense and with its own counsel in any judicial
proceeding controlled by Owner pursuant to the preceding provisions.  Notwithstanding any of the foregoing, Owner
shall not be entitled to assume responsibility for and control of any such judicial
or administrative proceedings if any Event of Default shall have occurred and
be continuing, if such proceedings will involve a material risk of the sale,
forfeiture or loss of, or the creation of any Lien (other than a Permitted
Lien) on the Aircraft or the Collateral, unless Owner shall have posted a bond
or other security reasonably satisfactory to the relevant Indemnitee with
respect to such risk or if such proceedings could entail any risk of criminal
liability being imposed on such Indemnitee.

 

Each affected Indemnitee
shall supply Owner with such information reasonably requested by Owner as is
necessary or advisable for Owner to control or participate in any proceeding to

 

20

 

the extent permitted by
this Section 7.1.  Such Indemnitee shall
not enter into a settlement or other compromise with respect to any Expense
without the prior written consent of Owner, which consent shall not be
unreasonably withheld or delayed, unless such Indemnitee waives its right to be
indemnified with respect to such Expense under this Section 7.1.

 

Owner shall supply each
affected Indemnitee with such information reasonably requested by such
Indemnitee as is necessary or advisable for such Indemnitee to control or
participate in any proceeding to the extent permitted by this Section 7.1.

 

7.1.5                        Subrogation;
Reimbursement. 
To the extent of any payment of any Expense pursuant to this
Section 7.1, Owner, without any further action, shall be subrogated to any
claims the affected Indemnitee may have relating thereto (other than with
respect to any of such Indemnitee’s insurance policies).  Such Indemnitee agrees to give such further
assurances or agreements and to cooperate with Owner to permit Owner to pursue
such claims, if any, to the extent reasonably requested by Owner.

 

In the event that Owner
shall have paid an Expense to an Indemnitee pursuant to this Section 7.1,
and such Indemnitee subsequently shall be reimbursed in respect of such
indemnified amount from any other Person, such Indemnitee shall promptly pay
Owner the amount of such reimbursement, including interest received
attributable thereto, provided that no Event of Default has occurred and is
continuing, in which case such amounts shall be paid over to Mortgagee to hold
as security for Owner’s obligations as provided in Section 6.06 of the
Trust Indenture.

 

Any indemnity payable
under this Section 7.1 shall be payable by Owner within 30 days of
the demand therefor (accompanied by supporting documentation) by the Indemnitee
entitled thereto.

 

7.2                                 Transaction Costs.

 

7.2.1                        Invoices
and Payment. 
Each of the Mortgagee, the Pass Through Trustees, and the Subordination
Agent shall promptly submit to Owner for its prompt approval (which shall not
be unreasonably withheld) copies of invoices in reasonable detail of the
Transaction Expenses for which it is responsible for providing information as
they are received (but in no event later than the 120th day after the Closing
Date).  If so submitted and approved,
the Owner agrees promptly, but in any event no later than the 135th day
after the Closing Date, to pay Transaction Expenses.

 

7.2.2                        Payment
of Other Expenses. 
Owner shall pay (i) the ongoing fees and expenses of Mortgagee as
set out in separate letter agreement, and (ii) all reasonable
out-of-pocket costs and expenses (including the reasonable fees and
disbursements of counsel) incurred by Mortgagee or any Note Holder in
connection with any waiver, amendment or modification of any Operative
Agreement to the extent requested by Owner.

 

Section 8.                                          Assignment or Transfer of Interests.

 

8.1                                 Note Holders. 
Subject to Section 5.3.2 hereof and Section 2.07 of the Trust
Indenture, any Note Holder may, at any time and from time to time, Transfer or
grant

 

21

 

participations in all or any portion of the Equipment Notes and/or all
or any portion of its beneficial interest in its Equipment Notes and the
Collateral to any person (it being understood that the sale or issuance of Pass
Through Certificates by a Pass Through Trustee shall not be considered a
Transfer or participation); provided, that any participant in any such
participations shall not have any direct rights under the Operative Agreements
or any Lien on all or any part of the Aircraft or Collateral and Owner shall
not have any increased liability or obligations as a result of any such
participation.  In the case of any such
Transfer, the Transferee, by acceptance of Equipment Notes in connection with
such Transfer, shall be deemed to be bound by all of the covenants of Note
Holders contained in the Operative Agreements.

 

8.2                                 Effect of Transfer.  Upon any
Transfer in accordance with Section 8.1 (other than any Transfer by any
Note Holder, to the extent it only grants participations in Equipment Notes or
in its beneficial interest therein), Transferee shall be deemed a “Note
Holder,” for all purposes of this Agreement and the other Operative Agreements
and, and each reference herein to Note Holder, shall thereafter be deemed a
reference to such Transferee for all purposes, and the transferring Note Holder
shall be released from all of its liabilities and obligations under this
Agreement and any other Operative Agreements to the extent such liabilities and
obligations arise after such Transfer and, in each case, to the extent such
liabilities and obligations are assumed by the Transferee; provided, that such
transferring Note Holder (and its respective Affiliates, successors, assigns,
agents, servants, representatives, directors and officers) will continue to
have the benefit of any rights or indemnities under any Operative Agreement
vested or relating to circumstances, conditions, acts or events prior to such
Transfer.

 

Section 9.                                          Section 1110.  It is the
intention of each of Owner, the Note Holders (such intention being evidenced by
each of their acceptance of an Equipment Note) and Mortgagee that Mortgagee
shall be entitled to the benefits of Section 1110 in the event of a case
under Chapter 11 of the Bankruptcy Code in which Owner is a debtor.

 

Section 10.                                   Change of Citizenship.

 

10.1                           Generally. 
Without prejudice to the representations, warranties or covenants
regarding the status of any party hereto as a Citizen of the United States,
each of Owner, WTC and Mortgagee agrees that it will, immediately upon obtaining
knowledge of any facts that would cast doubt upon its continuing status as a
Citizen of the United States and promptly upon public disclosure of
negotiations in respect of any transaction which would or might adversely
affect such status, notify in writing all parties hereto of all relevant
matters in connection therewith.

 

10.2                           Mortgagee.  Upon WTC giving any notice in
accordance with Section 10.1, Mortgagee shall (if and so long as such
citizenship is necessary under the Act as in effect at such time or, if it is
not necessary, if and so long as Mortgagee’s citizenship could have any adverse
effect on Owner or any Note Holder), subject to Section 9.02 of the Trust
Indenture, resign (subject to the appointment of a replacement) as Mortgagee
promptly upon its ceasing to be such a citizen.

 

Section 11.                                   Miscellaneous.

 

22

 

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

 

11.2                           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.

 

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

 

11.4                           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.

 

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

 

11.6                           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

 

23

 

understood that the specification of a writing in certain instances and
not in others does not imply an intention that a writing is not required as to
the latter), shall refer specifically to this Agreement or other applicable
Operative Agreement, and shall be personally delivered, sent by facsimile or
telecommunication transmission (which in either case provides written
confirmation to the sender of its delivery), sent by registered mail or
certified mail, return receipt requested, postage prepaid, or sent by overnight
courier service, in each case to the respective address or facsimile number set
forth for such party in Schedule 1, or to such other address, facsimile or
other number as each party hereto may hereafter specify by notice to the other
parties hereto. Each such notice, request, demand, authorization, direction,
consent, waiver or other communication shall be effective when received or, if
made, given, furnished or filed by facsimile or telecommunication transmission,
when received unless received outside of business hours, in which case on the
next open of business on a Business Day.

 

11.7                           Governing Law; Submission to Jurisdiction; Venue.

 

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

 

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

 

(c)                                  EACH PARTY HERETO HEREBY IRREVOCABLY
CONSENTS AND AGREES TO THE SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS,
NOTICES AND DOCUMENTS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH SUIT,
ACTION OR PROCEEDING MAY BE MADE BY MAILING COPIES THEREOF BY REGISTERED
OR CERTIFIED MAIL, POSTAGE PREPAID, AT THE ADDRESS SET FORTH PURSUANT TO
SECTION 11.6.  EACH PARTY HERETO
HEREBY AGREES THAT SERVICE UPON IT, OR ANY OF ITS AGENTS, IN EACH CASE IN
ACCORDANCE WITH THIS SECTION 11.7(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,

 

24

 

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.

 

11.8                           Third Party Beneficiary.  This
Agreement is not intended to, and shall not, provide any person not a party
hereto (other than the Liquidity Providers, the Policy Provider, the Escrow
Agent and the Paying Agent, each of which is an intended third party
beneficiary with respect to the provisions of Section 7.1) with any rights
of any nature whatsoever against any of the parties hereto and no person not a
party hereto (other than the Liquidity Providers, the Escrow Agent and the
Paying Agent, with respect to the provisions of Section 9.1) shall have
any right, power or privilege in respect of any party hereto, or have any
benefit or interest, arising out of this Agreement.

 

11.9                           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, among any of the parties hereto with
respect to such subject matter are hereby superseded in their entireties.

 

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

 

[This
space intentionally left blank]

 

25

 

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

 

	
   

  	
   

  	
  JETBLUE AIRWAYS CORPORATION,

  Owner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: 

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WILMINGTON TRUST COMPANY,

  not in its individual capacity, except as

  expressly provided herein, but solely as

  Mortgagee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
   

  
	
   

  	
   

  	
  Name: 

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WILMINGTON TRUST COMPANY,

  not in its individual capacity, except as

  expressly provided herein, but solely as Pass

  Through Trustee under the Pass Through

  Trust Agreement for the JetBlue Airways

  Pass Through Trust, 2004-1G-1

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WILMINGTON TRUST COMPANY,

  not in its individual capacity, except as

  expressly provided herein, but solely as Pass

  Through Trustee under the Pass Through

  Trust Agreement for the JetBlue Airways

  Pass Through Trust, 2004-1G-2

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: 

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					

 

26

 

	
   

  	
   

  	
  WILMINGTON TRUST COMPANY,

  not in its individual capacity, except as

  expressly provided herein, but solely as Pass

  Through Trustee under the Pass Through

  Trust Agreement for the JetBlue Airways

  Pass Through Trust, 2004-1C

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WILMINGTON TRUST COMPANY,

  not in its individual capacity, except as

  expressly provided herein, but solely as

  Subordination Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					

 

27

 

SCHEDULE 1

TO

PARTICIPATION AGREEMENT

 

ACCOUNTS; ADDRESSES

 

Address For Notices

 

	
  JETBLUE
  AIRWAYS CORPORATION

  	
   

  	
  JetBlue
  Airways Corporation

  118-29 Queens Blvd.

  Forest Hills, NY  11375

  Attention:  Vice President – Corporate
  Finance

  Facsimile:

  
	
   

  	
   

  	
   

  
	
  AVSA
  S.A.R.L.

  	
   

  	
  AVSA
  S.A.R.L.

  2, rond-point Maurice Bellonte

  31700 Blagnac, France

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Account
  Details:

  Credit Lyonnais New York

  for the account of AVSA S.A.R.L.

  ABA No. 026008073

  Account No. 0118 363 000 100

  Attention:  William McIllvain

  Ref:  JetBlue/MSN [MSN]

  
	
   

  	
   

  	
   

  
	
  WILMINGTON
  TRUST COMPANY,

  AS MORTGAGEE

  	
   

  	
  Wilmington
  Trust Company

  One Rodney Square

  1100 North Market Street

  Wilmington, Delaware 19890-0001

  Attention:  Corporate Trust
  Administration

  Facsimile:  (302) 636-4140

  Telephone:  (302) 636-6000

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Account
  Details:

  
	
   

  	
   

  	
   

  
	
  WILMINGTON
  TRUST COMPANY,

  AS SUBORDINATION AGENT

  	
   

  	
  Wilmington
  Trust Company

  ABA No. 031100092

  Account No. [          ]

  Ref. N[XXX]JB

  

 

1

 

	
  WILMINGTON
  TRUST COMPANY,

  AS PASS THROUGH TRUSTEE FOR THE

  2004-1G-1 PASS THROUGH TRUST

  	
   

  	
  Wilmington
  Trust Company

  One Rodney Square

  1100 North Market Street

  Wilmington, Delaware 19890-0001

  Attention:  Corporate Trust
  Administration

  Facsimile:  (302) 636-4140

  Telephone:  (302) 636-6000

  
	
   

  	
   

  	
   

  
	
  WILMINGTON
  TRUST COMPANY,

  AS PASS THROUGH TRUSTEE FOR THE

  2004-1G-2 PASS THROUGH TRUST

  	
   

  	
  Wilmington
  Trust Company

  One Rodney Square

  1100 North Market Street

  Wilmington, Delaware 19890-0001

  Attention:  Corporate Trust
  Administration

  Facsimile:  (302) 636-4140

  Telephone:  (302) 636-6000

  
	
   

  	
   

  	
   

  
	
  WILMINGTON
  TRUST COMPANY,

  AS PASS THROUGH TRUSTEE FOR THE

  2004-1C PASS THROUGH TRUST

  	
   

  	
  Wilmington
  Trust Company

  One Rodney Square

  1100 North Market Street

  Wilmington, Delaware 19890-0001

  Attention:  Corporate Trust
  Administration

  Facsimile:  (302) 636-4140

  Telephone:  (302) 636-6000

  

 

2

 

SCHEDULE 2

TO

PARTICIPATION AGREEMENT

 

LOANS

 

	
  Pass Through

  Trustee

  	
   

  	
  Series of

  Equipment Notes

  	
   

  	
  Dollar Amount

  of Loan

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

1

 

SCHEDULE 3

TO

PARTICIPATION AGREEMENT

 

CERTAIN TERMS

 

	
  Minimum
  Liability Insurance Amount:

  	
   

  	
  $

  	
  300,000,000

  

 

1

 

SCHEDULE 4

TO

PARTICIPATION AGREEMENT

 

PERMITTED COUNTRIES

 

	
  Argentina

  	
  Morocco

  
	
  Australia

  	
  Netherlands

  
	
  Austria

  	
  New
  Zealand

  
	
  Bahamas

  	
  Norway

  
	
  Belgium

  	
  Oman

  
	
  Brazil

  	
  Paraguay

  
	
  Canada

  	
  People’s
  Republic of China

  
	
  Chile

  	
  Philippines

  
	
  Cyprus

  	
  Poland

  
	
  Czech
  Republic

  	
  Portugal

  
	
  Denmark

  	
  Qatar

  
	
  Egypt

  	
  Republic
  of China (Taiwan)

  
	
  Ecuador

  	
  Singapore

  
	
  France

  	
  Slovakia

  
	
  Germany

  	
  South
  Africa

  
	
  Greece

  	
  South
  Korea

  
	
  Hungary

  	
  Spain

  
	
  Iceland

  	
  Sri
  Lanka

  
	
  India

  	
  Sweden

  
	
  Indonesia

  	
  Switzerland

  
	
  Ireland

  	
  Thailand

  
	
  Italy

  	
  Tobago

  
	
  Jamaica

  	
  Trinidad

  
	
  Japan

  	
  Tunisia

  
	
  Jordan

  	
  Turkey

  
	
  Kuwait

  	
  United
  Kingdom

  
	
  Luxembourg

  	
  Uruguay

  
	
  Malaysia

  	
  Venezuela

  
	
  Malta

  	
   

  
	
  Mexico

  	
   

  

 

1

 

EXHIBIT A

 

[FORM OF OPINION OF OWNER’S
SPECIAL NEW YORK COUNSEL]

 

To the Persons Listed on
Schedule I

Attached Hereto

 

Re:                               Mortgage of Airbus Model A320-232
Aircraft with Manufacturer’s

Serial Number [MSN] and U.S. Registration Number NXXXJB

 

Gentlemen:

 

We have been requested by
JetBlue Airways Corporation, a
Delaware corporation (the “Company”), to act as special New York counsel
with respect to, and to render this opinion letter in connection with, the
transactions contemplated by the Participation Agreement [NXXXJB], dated as of
[Date] (the “Participation
Agreement”), among Wilmington
Trust Company, a Delaware banking corporation (“WTC”),
as Mortgagee (the “Mortgagee”), the Company, as Owner, and WTC, in
its capacity as Subordination Agent under the Intercreditor Agreement (as
defined in the Participation Agreement) and as Pass Through Trustee under the
Pass Through Trust Agreements (as defined in the Participation Agreement).  Capitalized terms used herein and not
otherwise defined herein have the respective meanings given those terms in the
Participation Agreement.

 

In connection with this
opinion letter we have examined, among other things, originals or copies
certified or otherwise identified to our satisfaction of the following
documents:

 

(i)                                     Participation Agreement;

 

(ii)                                  Trust Indenture;

 

(iii)                               Trust Indenture Supplement No. 1;

 

(iv)                              Consent and Agreement;

 

(v)                                 Engine Consent and Agreement;

 

(vi)                              Forms of the Equipment Notes; and

 

(vii)                           Bills of Sale.

 

We have also examined and
relied upon such other documents and such other corporate records, certificates
and other statements of governmental officials and corporate officers and other
representatives of the Company as we have deemed necessary or appropriate for
the purposes of this opinion.  As to
certain facts material to the opinions expressed herein, we have relied upon
representations and warranties contained in the Operative Agreements.  The opinions expressed herein are subject to
the following exceptions, assumptions, qualifications and limitations:

 

1

 

A.                                   The opinions set forth below are limited
to the laws of the State of New York, the federal laws of the United States of
America and the General Corporation Law of the State of Delaware, except that
we express no opinion with respect to (i) the laws, regulations or
ordinances of any county, town or municipality or governmental subdivision or
agency thereof, (ii) state securities or blue sky laws or federal
securities laws, including the Securities Act and the Investment Company Act of
1940, (iii) any federal or state tax, antitrust or fraudulent transfer of
conveyance laws, (iv) the Employee Retirement Income Security Act of 1974,
as amended, or (v) the Act (except as expressly provided in
paragraph 3 below), or any other laws, rules or regulations governing,
regulating or relating to the acquisition, ownership, registration, use or sale
of an aircraft, airframe or aircraft engine or to the particular nature of the
equipment to be acquired by the Owner. 
In addition, our opinions are based upon a review of those laws,
statutes, rules and regulations which, in our experience, are normally
applicable to transactions of the type contemplated by the Participation
Agreement.

 

B.                                     The opinion set forth in paragraph 1
below is subject to (i) limitations on enforceability arising from
applicable bankruptcy, insolvency, reorganization, moratorium, receivership,
fraudulent conveyance, fraudulent transfer, preferential transfer and similar
laws relating to or affecting the rights and remedies of the creditors or
lessors generally and the effect of general principles of equity, including,
without limitation, laches and estoppel as equitable defenses and concepts of materiality,
reasonableness, good faith and fair dealing (regardless of whether such
enforceability is considered or applied in a proceeding in equity or at law)
and considerations of impracticability or impossibility of performance, and
defenses based upon unconscionability of otherwise enforceable obligations in
the context of the factual circumstances under which enforcement thereof is
sought and (ii) the qualification that the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought.  In addition,
certain remedial and procedural provisions of the Operative Agreements to which
the Company is a party (the “Company
Documents”) and the
Trust Indenture are or may be unenforceable in whole or in part, but the
inclusion of such provisions does not affect the validity of those agreements
and does not, in our opinion, make the remedies provided in those agreements,
or otherwise available under applicable law, inadequate for the practical
realization of the substantive benefits purported to be provided thereby,
except for the economic consequences resulting from any delay imposed by, or
any procedure required by, applicable laws, rules, regulations and by
constitutional requirements.  We express
no opinion as to (i) any provision contained in any Operative Agreement
(a) providing for indemnification or exculpation of any Person for such
Person’s gross negligence, willful misconduct, recklessness or unlawful conduct
or in respect of liabilities under the Securities Act, (b) providing for
late payment charges or an increase in interest rate upon delinquency in
payment or the occurrence of a default or other specified event but only to the
extent such provision is deemed to constitute a penalty or liquidated damages
provision, (c) as such provision relates to the subject matter
jurisdiction of federal courts or the waiver of inconvenient forum with respect
to proceedings in federal courts, (d) that purports to establish (or may
be construed to establish) evidentiary standards or (e) providing for the
waiver of any statutory right or any broadly or vaguely stated rights or
unknown future rights, or any waiver which is against public policy
considerations or (ii) Section 11.2 or 11.7(c) of the Participation
Agreement or any comparable provision of any other Operative Agreement.  Under certain circumstances the requirement
that the provisions of an Operative Agreement may be modified or waived only in
writing or only in a specific instance

 

2

 

and provisions to the
effect that failure or delay in exercising any right, remedy, power and/or
privilege will not impair or waive such right, remedy, power and/or privilege
may be unenforceable to the extent that an oral agreement has been effected or
a course of dealing has occurred modifying such provisions.  A court may modify or limit contractual agreements
regarding attorneys’ fees.

 

C.                                     To the extent that our opinions expressed
herein involve conclusions as to the matters set forth in the opinions dated
the date hereof of Morris, James, Hitchens & Williams LLP or DeBee,
Gilchrist & Lidia being delivered to you on the date hereof, we have assumed,
without independent investigation, the correctness of the matters set forth in
such opinions.

 

D.                                    We have assumed the due authorization,
execution and delivery of the Operative Agreements by each of the parties
thereto, that each of such parties has the power and authority to execute,
deliver and perform each such Operative Agreement and has obtained or made all
necessary consents, approvals, filings and registrations in connection
therewith (except any required under New York law by the Company), that such
execution, delivery and performance does not violate its charter, by-laws or
similar instrument, that each Operative Agreement constitutes the legal, valid
and binding obligation of each party thereto (other than the Company)
enforceable against such Person in accordance with its terms, that value has
been given by each Pass Through Trustee to the Company under the Trust
Indenture, that the Company has rights in the Collateral, that each of the
Company and WTC is duly organized, validly existing and in good standing in its
jurisdiction of organization and qualified to transact business in each other
jurisdiction where such qualification is required.

 

E.                                      We have assumed the due authorization,
execution and issuance of the Equipment Notes by the Company and the due
authentication of the Equipment Notes by the Mortgagee and the delivery thereof
against payment therefor, all in accordance with the Participation Agreement
and the Trust Indenture, and that the Equipment Notes conform to the forms
thereof examined by us.

 

F.                                      We have assumed that all signatures on
documents examined by us are genuine, that all persons signing such documents
have legal capacity, that all documents submitted to us as originals are
authentic and that all documents submitted to us as copies or specimens conform
with the originals, which facts we have not independently verified.

 

G.                                     We express no opinion as to any provision
in any Operative Agreement that is contrary to Section 9-401, or
Part VI of Article 9, of the UCC.

 

H.                                    We have not made any examination of, and
express no opinion with respect to (and to the extent relevant have assumed the
accuracy and sufficiency of), (i) descriptions of, the legal or beneficial
ownership of, or the title or condition of title to, the Collateral or any
other property covered by any of the Operative Agreements, (ii) except as
expressly set forth in paragraphs 3 and 5 below, the existence, creation,
validity or attachment of any Lien thereof, (iii) except as expressly set
forth in paragraph 3 below, the perfection of any Lien thereon and
(iv) the priority of any Lien thereon.

 

3

 

I.                                         The opinions expressed herein are given
as of the date hereof.  We assume no
obligation to advise you of any facts or circumstance that may come to our
attention, or any changes in law that may occur after the date hereof, which
may affect the opinion expressed herein.

 

J.                                        To the extent the opinions rendered refer
to security interests in proceeds, we note that Section 9-315 of the UCC
provides that proceeds of a security interest to which the UCC is applicable is
continuously perfected, but becomes unperfected unless one of the measures
required to be taken by Section 9-315(d) thereof is taken within 21 days
after receipt of the proceeds by the “debtor.”

 

Based on and subject to
the foregoing, we are of the opinion that:

 

1.                                       Each Company
Document constitutes the valid and binding obligation of the Company and is
enforceable against the Company in accordance with its terms.

 

2.                                       Except for the
matters referred to in clauses (i), (ii) and (iii) of
paragraph 3 below, no approval, authorization or other action by or filing
with any governmental authority is required for the execution and delivery by
the Company of the Company Documents or the consummation of the transactions
contemplated thereby to occur at the Closing.

 

3.                                       Except for
(i) the registration of the Aircraft with the FAA pursuant to the Act,
(ii) the filing and recordation in accordance with the Act of the FAA
Filed Documents, and assuming that at the time of such filing no other
unrecorded document relating to the Aircraft has been filed pursuant to the Act
and (iii) the filing of the Financing Statement referred to in
Section 3.1.14 of the Participation Agreement, and the filing of periodic
continuation statements with respect thereto, (a) no further filing or
recording of any document is necessary (x) to establish the Company’s
title to the Airframe and Engines, and (y) to create a valid security
interest in the Company’s interest as owner of the Airframe and Engines, and
(b) no further filing or recording of any document in the State of New
York, under the Act or under the UCC as currently in effect in New York is
required to perfect a security interest in the Company’s right, title and
interest in the Collateral, to the extent it is subject to Article 9 of
the UCC, in favor of the Mortgagee pursuant to the Trust Indenture.

 

4.                                       So long as the
Company, on the date hereof, holds an air carrier operating certificate issued
by the Secretary of Transportation pursuant to Chapter 447 of
Title 49 of the United States Code for aircraft capable of carrying 10 or
more individuals or 6,000 pounds or more of cargo, the Mortgagee will be
entitled to the benefits of Section 1110 of Title 11 of the United
States Code with respect to the Airframe and Engines delivered on the date
hereof in connection with any case commenced by or against the Company under
Chapter 11 of Title 11 of the United States Code.

 

5.                                       Upon issuance,
execution, authentication and delivery of the Equipment Notes at the Closing,
the Trust Indenture creates the security interest in favor of the Mortgagee, as
trustee for the benefit of the holders of the Equipment Notes, in the
Collateral it purports to create to the extent that the UCC applies to a
security interest in such property.

 

4

 

This opinion is being
delivered pursuant to Section 3.1.2(xvi)(A) of the Participation
Agreement.  This opinion may be relied
upon by you (and any permitted Transferee under Section 8.1 of the
Participation Agreement) in connection with the matters set forth herein and,
without our prior written consent, may not be relied upon for any other purpose
and may not be furnished to any other Person for any purpose.

 

	
   

  	
  Very
  truly yours,

  

 

5

 

SCHEDULE I

 

Wilmington
Trust Company, individually, as Mortgagee, as Subordination Agent and as each
Pass Through Trustee

 

Landesbank
Hessen-Thüringen Girozentrale, as Primary Liquidity Provider

 

Morgan
Stanley Capital Services Inc., as Above-Cap Liquidity Provider

 

MBIA
Insurance Corporation, as Policy Provider

 

Moody’s
Investors Service, Inc.

 

Morgan
Stanley & Co. Incorporated, as representative for Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc. and
Credit Lyonnais Securities (USA) Inc.

 

Standard &
Poor’s Ratings Group

 

6

 

EXHIBIT B

 

[FORM OF OPINION OF OWNER’S
IN-HOUSE COUNSEL]

To the Persons Listed on

Schedule I Hereto

 

Re:                               Mortgage of Airbus Model A320-232
Aircraft with Manufacturer’s Serial Number [MSN] and U.S. Registration
Number NXXXJB

 

Ladies
and Gentlemen:

 

I am Vice President and
General Counsel of JetBlue Airways Corporation,
a Delaware corporation (the “Company”), and have acted in such capacity in
connection with the transactions contemplated by the Participation Agreement
[NXXXJB] dated as of [Date], among Wilmington Trust Company, a Delaware
banking corporation, as Mortgagee, Subordination Agent under the Intercreditor
Agreement (as defined in the Participation Agreement) and as Pass Through
Trustee under the Pass Through Trust Agreements (as defined in the
Participation Agreement) and the Company, as Owner (the “Participation Agreement”).  All capitalized terms used herein and not
otherwise defined herein shall have the respective meanings given those terms
in the Participation Agreement.  This
opinion letter is being furnished to you pursuant to Section 3.1.2(xiv)(B)
of the Participation Agreement.

 

In rendering the opinions
set forth herein, I have examined:

 

(i)                                     an execution copy of the Participation
Agreement;

 

(ii)                                  an execution copy of the Trust Indenture;

 

(iii)                               an execution copy of the Trust Indenture
Supplement No. 1;

 

(iv)                              an execution copy of the Consent and
Agreement;

 

(v)                                 an execution copy of the Engine Consent
and Agreement;

 

(vi)                              an execution copy of the Equipment Notes
delivered today;

 

(vii)                           an execution copy of the Bills of Sale;
and

 

(viii)                        the opinion of DeBee, Gilchrist &
Lidia, special FAA counsel, dated the date hereof.

 

I have also examined such
other documents, instruments and materials as I have considered relevant in
connection with the opinions set forth herein.

 

Subject to the comments
and qualifications set forth below, I am of the opinion that:

 

1

 

(a)                                  The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware; and has the corporate power and authority to enter into and perform
its obligations under the Participation Agreement, the Trust Indenture, the
Trust Indenture Supplement No. 1 and the Equipment Notes (collectively, the “Company Documents”).

 

(b)                                 The Company is a “citizen of the United
States” and holds an air carrier operating certificate issued by the Secretary
of Transportation pursuant to Chapter 447 of Title 49 of the United States Code
for aircraft capable of carrying 10 or more individuals or 6,000 pounds or more
of cargo, and such certificate is in full force and effect.

 

(c)                                  Each of the Company Documents has been
duly executed and delivered on behalf of the Company.  The execution, delivery and performance by the Company of the
Company Documents, and the consummation of the transactions contemplated
thereby, have been duly authorized by all necessary corporate action on the
part of the Company, and do not (i) contravene any law, judgment, government
rule, regulation, order, writ, injunction or decree of any court or governmental
authority applicable to the Company or binding on the Company or the
certificate of incorporation or bylaws of the Company or (ii) require
stockholder approval.

 

(d)                                 The execution, delivery and performance
by Company of the Company Documents, and the consummation of the transactions
contemplated thereby, do not violate or constitute a default under (other than
any violation or default that would not result in a Material Adverse Change to
Owner), or result in the creation of any Lien (other than Permitted Liens) upon
the Aircraft under, (i) the Company’s corporate charter or by-laws or
(ii) any indenture, mortgage, contract, or other agreement known to me to
which the Company is a party or by which it or its properties may be bound.

 

(e)                                  There are no pending or, to the best of
my knowledge and information, threatened actions or proceedings before any
court or administrative agency or arbitrator that question the validity of any
of the Company Documents or the Company’s ability to perform its obligations
under the Company Documents or that would have been required to be disclosed in
the Company’s Annual Report on Form 10-K filed for the year ended
                 ,
on any subsequent Quarterly Report on Form10-Q or Current Report on Form 8-K,
except such as are therein disclosed.

 

Whenever a statement
herein is qualified by “to the best of my knowledge and information” or similar
phrase, it is intended to indicate that neither I nor any lawyer employed by
the Company has current actual knowledge of the inaccuracy of such
statement.  However, except as otherwise
expressly indicted, I have not undertaken any independent investigation to
determine the accuracy of any such statement, and no inference that I have any
knowledge of any matters pertaining to such statement should be drawn.

 

The opinions set forth
herein are subject to, and are limited by, the following assumptions,
qualifications, limitations and exceptions in addition to those set forth
elsewhere herein:

 

2

 

A.                                   I have not examined the title to the
Aircraft or the Engines and I do not express any opinion as to such title or as
to the due filing or recording of any instrument affecting title.  (Such matters are covered by the
above-referenced opinion of DeBee Gilchrist & Lidia.).

 

B.                                     This letter is given as of the date
hereof.  I have no obligation to advise
the recipients of this letter (or any third party) of changes of law or fact
that may occur after the date hereof.

 

C.                                     I am a member of the bar of the State of
New York and I do not express any opinion as to matters governed by any laws
other than the State of New York, the Federal laws of the United States of
America and the general corporate laws of the State of Delaware.

 

	
   

  	
  Very truly yours,  

  
	
   

  	
   

  
	
   

  	
  James G. Hnat

  Vice President and General Counsel

  JetBlue Airways Corporation

  

 

3

 

SCHEDULE I

 

Wilmington
Trust Company, individually and as Mortgagee, as Subordination Agent and as
each Applicable Pass Through Trustee

 

Landesbank
Hessen-Thüringen Girozentrale, as Primary Liquidity Provider

 

Morgan
Stanley Capital Services Inc., as Above-Cap Liquidity Provider

 

MBIA Insurance
Corporation, as Policy Provider

 

Moody’s
Investors Service, Inc.

 

Morgan
Stanley & Co. Incorporated, as representative for Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc. and
Credit Lyonnais Securities (USA) Inc.

 

Standard &
Poor’s Ratings Group

 

4

 

EXHIBIT C

 

[FORM OF FAA COUNSEL OPINION]

 

                   ,
[2004]

 

To the Addressees on 

Schedule I Attached Hereto:

 

Re:                               JetBlue Airways Corporation;

Our File Number: 5157.0035

 

Ladies
& Gentlemen:

 

This opinion is rendered
in connection with Section 3.1.2(xiv)(C) of the Participation Agreement
[N     JB], dated as of
                                    ,
[2004] (the “Participation Agreement”),
among JETBLUE AIRWAYS CORPORATION,
a Delaware Corporation, as owner (the “Owner”),
and WILMINGTON TRUST COMPANY, a
Delaware Banking Corporation, not in its individual capacity, except as
expressly provided therein, but solely as Mortgagee (in its capacity as
mortgagee, “Mortgagee”), WILMINGTON TRUST COMPANY, not in its
individual capacity, except as expressly provided therein, but solely as Pass
Through Trustee under each of the Pass Through Trust Agreements (as such terms
are defined in the Participation Agreement), and WILMINGTON TRUST COMPANY, not in its individual capacity,
except as expressly provided therein, but solely as Subordination Agent under
the Intercreditor Agreement (as such terms are defined in the Participation
Agreement), as such Participation Agreement relates to the following-described
aircraft and engines:

 

AIRCRAFT

 

	
  Manufacturer

  	
   

  	
  Model

  	
   

  	
  Serial

  Number

  	
   

  	
  U.S. Registration

  Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Airbus

  	
   

  	
  A320-232

  	
   

  	
  [MSN]

  	
   

  	
  [N    JB]

  

 

hereafter referred to as the “Aircraft”;
and

 

ENGINES

 

	
  Manufacturer

  	
   

  	
  Model

  	
   

  	
  Serial Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  International
  Aero Engines

  	
   

  	
  [     ]

  	
   

  	
  [MSN]

  
	
  International
  Aero Engines

  	
   

  	
  [     ]

  	
   

  	
  [MSN]

  

 

hereafter
referred to as the “Engines”; this
opinion is rendered with respect to matters arising under that portion of
Section 40102 and Section 44101 through Section 44112 of Title
49, United

 

1

 

States
Code, “Transportation” (the “Act”), relating to the recordation of
instruments and the registration of the Aircraft pursuant to the Act.

 

Except as otherwise
defined herein, terms are used in this opinion as they are defined in the Act.

 

This letter confirms that
the following described instruments (the “Instruments”)
were filed with the Federal Aviation Administration (the “FAA”) on
                     
        ,
        , at the Central Standard Times
noted below:

 

(1)                                  Aircraft Bill
of Sale (FAA AC Form 8050-2), dated
                
       ,
        (the “Bill of Sale”), between AVSA, S.A.R.L., as seller, and The
Owner, as purchaser, filed at    :   
   .m.;

 

(2)                                  Aircraft
Registration Application (FAA AC Form 8050-1), dated
                  
       ,
        (the “Application”), in the name of The Owner, filed at
   :       .m.; and

 

(3)                                  Trust Indenture
and Mortgage [N       JB], dated as of
                 
       ,        ,
between The Owner, as mortgagor, and the Mortgagee, with Trust Indenture and
Mortgage [N       JB] Supplement No. 1,
dated
                        
       ,
       , executed by The Owner, as
mortgagor, attached (herein collectively the “Mortgage”),
filed with the FAA as one instrument at
   :       
       .m.

 

PLEASE NOTE:  The Mortgage was filed with the FAA with
certain proprietary information in attachments thereto intentionally omitted
from the FAA filing counterpart thereof as containing confidential financial
information.

 

Based upon examination of
the Instruments and the records maintained by the FAA under the Act (the “Records”) as deemed necessary to render
this opinion and as were made available, the undersigned is of the opinion that
as of the time of filing noted above:

 

(a)                                  The Bill of
Sale and the Mortgage are in due form for recording pursuant to the Act and
have been duly filed for recordation with the FAA pursuant to the Act;

 

(b)                                 The Application
is in due form for filing and has been duly filed with the FAA pursuant to and
in accordance with the provisions of the Act;

 

(c)                                  The Aircraft is
presently eligible for registration with the FAA under the Act in the name of
the Owner, and the filing with the FAA of the Bill of Sale and the Application
will cause the FAA to register the Aircraft, in due course, in the name of the
Owner and to issue to the Owner a Certificate of Aircraft Registration (AC Form
8050-3) for the Aircraft pursuant to and in accordance with the provisions of
the Act;

 

2

 

(d)                                 The Owner has
valid legal title to the Aircraft, and the Aircraft and the Engines are free of
all liens and encumbrances except those created by the Mortgage;

 

(e)                                  The filing of
the Mortgage for recordation will, upon recordation, result in a duly perfected
first priority mortgage on and a security interest in the Aircraft and the
Engines, in favor of the Mortgagee, under the terms of the Mortgage;

 

(f)                                    Except for the
recording of the Mortgage with the FAA as described herein, no further filing
or recording, including any filing or recording of the Mortgage or any other
document in any other place within the United States, is necessary in order to
create and perfect the Mortgagee’s first priority mortgage on and a security
interest in the Aircraft and the Engines, under the terms of the Mortgage, as
against any third parties under the applicable laws of any jurisdiction within
the United States; and

 

(g)                                 Neither the
execution, delivery and performance of the Instruments by the parties thereto,
nor the consummation of any of the transactions contemplated thereby, require
the consent or approval of, or the giving of notice to, or the registration of,
or the taking of any other action in respect of the FAA under the Act and the
regulations adopted thereunder, except the filings specified elsewhere in this
opinion.

 

The opinions expressed
herein are as to federal laws of the United States only.  Pursuant to Section 44108 of the Act,
the validity of any instrument, the recording of which is provided for by
Section 44107 of the Act, is subject to the laws of the State, the
District of Columbia, or the territory or possession of the United States at
which the conveyance, lease or instrument is delivered (the “Governing Laws”).  The undersigned expresses no opinions as to such Governing Laws
and assumes the Instruments and the documents in the Records are legally
sufficient under such Governing Laws to create valid and enforceable interests
of the type they purport to create and to release or terminate those interests
which they purport to release or terminate. 
No opinion is expressed as to times when the Aircraft and the Engines
are outside the United States.

 

Since the examination was
limited to the Records, the opinion does not cover liens which are perfected
without the filing of notice thereof with the FAA, such as and including, but
not limited to, federal tax liens, liens arising under Title 29, United States
Code, Section 1368(a), possessory artisans’ liens, or matters of which the
parties have actual notice.  The opinion
is subject to the accuracy of FAA personnel and contractors in the filing,
indexing and recording of the Records and in searching for cross-reference
index cards for the Engines.  The
opinion does not cover documents, if any, which may have been filed for recordation
but not listed upon the indices of Records available for examination
immediately prior to our examination for the purpose of this opinion.

 

3

 

The opinions as to title
of the Aircraft and liens upon the Aircraft and the Engines relate only to the
time beginning with United States registration, and not to times when the
Aircraft may have been upon a foreign aircraft registry.

 

The opinion relating to
registration of the Aircraft is only as to its current eligibility for
registration and not with respect to events which may occur in the future which
may affect continued eligibility for registration.  As to matters of citizenship, the undersigned has relied upon
representations made by the Owner in the Application.  It is assumed the Aircraft is not registered under the laws of
any other country.

 

In rendering this opinion
with respect to the eligibility of the Mortgage for recordation with certain
proprietary information intentionally omitted therefrom, we have relied upon
the opinion of John A. Cassady, Deputy Chief Counsel of the FAA issued
September 16, 1994 (Federal Register/Volume 59,
Number 182/September 21, 1994).

 

The undersigned has
assumed that all documents are authentic and all signatures are genuine and
properly authorized.

 

This opinion is supplied
to and may be relied upon by the entities to whom it is addressed, solely for
the purposes described herein.

 

	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
  DEBEE GILCHRIST
  & LIDIA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Jack P.
  Gilchrist

  

 

4

 

SCHEDULE I

to Opinion of
                
       ,
       

 

Re:                               JetBlue Airways
Corporation;

One (1) Airbus A320-232 Aircraft, Serial

Number [MSN], U.S. Registration Number

[N       JB]; and Two (2) International Aero

Engines [       ] Engines, Serial Numbers

[MSN] and [MSN];

Our File Number: 5157.0035

ADDRESSEES

 

Wilmington
Trust Company, as mortgagee, as subordination agent and as pass through trustee

 

JetBlue
Airways Corporation

 

Landesbank
Hessen-Thüringen Girozentrale, as Primary Liquidity Provider

 

Morgan
Stanley Capital Services Inc., as above-cap liquidity provider

 

MBIA
Insurance Corporation, as policy provider

 

Moody’s
Investors Service, Inc.

 

Morgan
Stanley & Co. Incorporated, as representative for Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc. and
Credit Lyonnais Securities (USA) Inc.

 

Standard &
Poor’s Ratings Group

 

5

 

EXHIBIT D

 

[FORM OF WTC COUNSEL’S OPINION]

 

[date]

 

To Each of the Persons

Listed on Schedule A

Attached Hereto

 

Re:                               JetBlue Airways Financing of One Airbus
A320-232

Aircraft Bearing Manufacturer’s Serial Number [MSN]

 

Ladies
and Gentlemen:

 

We have acted as special
counsel to Wilmington Trust Company,
a Delaware banking corporation (in its individual capacity, “Wilmington Trust”), in connection with the Trust Indenture and Mortgage [NXXXJB],
dated as of [Date] (the “Trust
Indenture”), between
Wilmington Trust, not in its individual capacity, except as expressly stated
therein, but solely as Mortgagee (the “Mortgagee”), and JetBlue Airways Corporation (the “Owner”).  Pursuant to the Participation Agreement
[NXXXJB], dated as of [Date] (the “Participation
Agreement”), among JetBlue
Airways Corporation, as
Owner, and Wilmington Trust, not in its individual capacity except as expressly
provided therein, but solely as Mortgagee, Subordination Agent under the
Intercreditor Agreement, and Pass Through Trustee under each of the Pass
Through Agreements, financing is being provided for the acquisition of one
Airbus A320-232 Aircraft bearing Manufacturer’s Serial No. [MSN].  This opinion is furnished pursuant to
Section 3.1.2(xvi)(D) of the Participation Agreement.  Capitalized terms used herein and not
otherwise defined are used as defined in the Participation Agreement or, if not
defined therein, as defined in the Trust Indenture, except that reference
herein to any instrument shall mean such instrument as in effect on the date
hereof.

 

We have examined executed
counterparts, forms or copies otherwise identified to our satisfaction of the
following documents:

 

(a)                                  the Participation Agreement;

 

(b)                                 the Trust Indenture and the Trust
Indenture Supplement (the documents in paragraphs (a) and (b) above
being collectively referred to as the “Mortgagee
Documents”);

 

(c)                                  the Equipment Notes being issued today
and authenticated by the Mortgagee (the “Equipment
Notes”);

 

(d)                                 a Certificate of Good Standing for
Wilmington Trust, obtained as of a recent date from the Secretary of State of the
State of Delaware;

 

(e)                                  one or more certificates of an officer of
Wilmington Trust, dated the Delivery Date (the “Officer’s Certificate”), certifying as to the truth of its
representations and warranties set forth in the Participation Agreement; and

 

1

 

(f)                                    one or more certificates and/or
affidavits of an officer of Wilmington Trust, dated the Delivery Date
(collectively, the “Secretary’s
Certificate”),
certifying as to, among other things, the amended charter of Wilmington Trust
attached thereto (the “Charter”), the amended bylaws of Wilmington
Trust attached thereto (the “Bylaws”), and the citizenship of Wilmington
Trust.

 

For purposes of this
letter, we have not reviewed any documents other than the documents referenced
in paragraphs (a) through (f) above. 
In particular, we have not reviewed and express no opinion as to any
other document that is referred to in, incorporated by reference into, or
attached to any of the documents reviewed by us.  The opinions in this letter relate only to the documents
specified in such opinions, and not to any exhibit, schedule, or other
attachment to, or any other document referred to in or incorporated by
reference into, any of such documents. 
We have assumed that there exists no provision in any document that we
have not reviewed that bears upon or is inconsistent with or contrary to the
opinions in this letter.  We have
conducted no factual investigation of our own, and have relied solely upon the
documents reviewed by us, the statements and information set forth in such
documents, certain statements of governmental authorities and others (as
applicable), and the additional matters recited or assumed in this letter, all
of which we assume to be true, complete, and accurate in all respects and none
of which we have independently investigated or verified.

 

Based upon and subject to
the foregoing and subject to the assumptions, exceptions, qualifications, and
limitations in this letter, it is our opinion that:

 

1.                                       Wilmington Trust has been duly
incorporated and is validly existing as a Delaware banking corporation in good
standing under the laws of the State of Delaware, and has the corporate power
and authority to execute, deliver and perform, in its individual capacity, or
as Mortgagee, Pass Through Trustee, or Subordination Agent, as the case may be,
the Mortgagee Documents, and to authenticate the Equipment Notes.  Wilmington Trust is a “citizen of the United
States” as defined in Section 40103(a)(15) of Title 49, U.S.C.,
as amended.

 

2.                                       Each of the Mortgagee Documents has been
duly authorized, executed and delivered by Wilmington Trust in its individual
capacity, or as Mortgagee, the Pass Through Trustee, or Subordination Agent, as
the case may be, and constitutes the legal, valid and binding obligation of
Wilmington Trust in its individual capacity, or as the Mortgagee, the Pass
Through Trustee or  Subordination Agent,
as the case may be, enforceable against Wilmington Trust, the Mortgagee, the
Pass Through Trustee or the Subordination Agent, as the case may be, in
accordance with its terms.

 

3.                                       The execution, delivery and performance
by Wilmington Trust, the Mortgagee, the Pass Through Trustee or the
Subordination Agent, as the case may be, of the Mortgagee Documents to which
each is a party, the authentication by the Mortgagee of the Equipment Notes and
the consummation by Wilmington Trust, the Mortgagee, the Pass Through Trustee
or the Subordination Agent, as the case may be, of any of the transactions
contemplated thereby are not in violation of the Charter or Bylaws of
Wilmington Trust or of any law, governmental rule, or regulation of the State
of Delaware or of any law, governmental rule, or regulation of the United
States of America governing the banking and trust powers of Wilmington Trust
or, to our knowledge, of any indenture, mortgage, bank credit agreement, note
or bond purchase

 

2

 

agreement, long-term
lease, license or other agreement or instrument to which it is a party or by
which it is bound or, to our knowledge, of any judgment or order of the State
of Delaware or the United States of America relating to the banking and trust
powers of Wilmington Trust.

 

4.                                       Neither the execution and delivery by
Wilmington Trust, the Mortgagee, the Pass Through Trustee or the Subordination
Agent, as the case may be, of the Mortgagee Documents to which each is a party,
the authentication of the Equipment Notes, nor the consummation of any of the
transactions by Wilmington Trust, the Mortgagee, the Pass Through Trustee or
the Subordination Agent, as the case may be, contemplated thereby requires the
consent or approval of, the giving of notice to, the registration with, or the
taking of any other action in respect of, any governmental authority or agency
of the State of Delaware or the United States of America governing the banking
or trust powers of Wilmington Trust or under any Delaware law.

 

5.                                       There are no taxes, fees or other charges
(other than taxes payable by Wilmington Trust on or measured by any
compensation received by Wilmington Trust for its services as Mortgagee,
Subordination Agent or Pass Through Trustee) payable under the laws of the
State of Delaware or any political subdivision thereof in respect of the execution,
delivery and performance by Wilmington Trust (in its individual capacity, as
Mortgagee, Pass Through Trustee or Subordination Agent, as the case may be) of
the Mortgagee Documents and the Equipment Notes, which taxes, fees or other
charges would not have been imposed if Wilmington Trust were not a Delaware
banking corporation and did not perform its obligations as Mortgagee under the
Trust Indenture in the State of Delaware.

 

6.                                       The Equipment Notes have been duly and
validly authenticated by the Mortgagee in accordance with the Trust Indenture.

 

7.                                       To our knowledge, there are no
proceedings pending or threatened against or affecting Wilmington Trust, the
Mortgagee in any court or before any governmental authority, agency,
arbitration board or tribunal which, if adversely determined, individually or
in the aggregate, would materially and adversely affect the Mortgaged Property
or the right, power and authority of Wilmington Trust in its individual
capacity, or as Mortgagee, Pass Through Trustee, or  Subordination Agent, as the case may be, to enter into or perform
its obligations under the Mortgagee Documents or which would call into question
or challenge the validity of any of the Mortgage Documents or the
enforceability thereof.

 

The foregoing opinions are
subject to the following assumptions, exceptions and qualifications:

 

A.                                   The opinions in this letter are limited
to the laws of the State of Delaware as enacted and currently in effect and the
federal laws of the United States of America governing the banking and trust
powers of Wilmington Trust as enacted and currently in effect (other than
(i) federal securities laws, including, without limitation, the Securities
Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the
Trust Indenture Act of 1939, as amended, the Investment Company Act of 1940, as
amended, and rules, regulations, orders, and decisions relating thereto,
(ii) Part A of Subtitle VII of Title 49 of the United
States Code, as amended, and rules, regulations, orders, and decisions relating
thereto (except as stated in the second sentence in numbered paragraph 1
above, which opinion is based solely on the Officer’s Certificate),

 

3

 

(iii) the Federal
Communications Act of 1934, as amended, and rules, regulations, orders, and
decisions relating thereto, (iv) the Employee Retirement Income Security
Act of 1974, as amended, and rules, regulations, orders, and decisions relating
thereto, (v) securities laws of the State of Delaware, and rules,
regulations, orders, and decisions relating thereto, (vi) laws, rules,
regulations, orders, ordinances, and decisions of any county, town,
municipality, or special political subdivision of the State of Delaware, and
(vii) laws, rules, regulations, orders, and decisions applicable to the
particular nature of the property or activities of the Trusts) and we have
considered and express no opinion on the effect of, concerning matters
involving, or otherwise with respect to any other laws of any jurisdiction, or
rules, regulations, orders, or decisions relating thereto.  Insofar as the foregoing opinions relate to
the validity and enforceability of the Transaction Documents expressed to be
governed by the laws of the State of New York, we have assumed that each such
document is legal, valid, binding and enforceable in accordance with its terms
under such laws (as to which we express no opinion).

 

B.                                     The foregoing opinions relating to
enforceability are subject to (i) bankruptcy, insolvency, moratorium,
reorganization, receivership, fraudulent conveyance, preferential transfer,
liquidation, and similar laws relating to or affecting rights and remedies of
creditors generally, (ii) principles of equity, including, without
limitation, applicable law relating to fiduciary duties (regardless of whether
considered and applied in a proceeding in equity or at law),
(iii) standards of good faith, fair dealing, course of dealing, course of
performance, materiality, and reasonableness that may be applied by a court,
considerations of public policy, and the exercise of judicial discretion, and
(iv) federal or state securities law and public policy considerations
relating to indemnification or contribution.

 

C.                                     We have assumed: (i) except as
stated in numbered paragraph 1 above, the due incorporation or due
formation, as the case may be, due organization, and valid existence in good
standing of each of the parties (other than natural persons) to the documents
reviewed by us under the laws of all relevant jurisdictions; (ii) the
legal capacity of all relevant natural persons, (iii) except as stated in
numbered paragraph 2 above, the due authorization, execution, and delivery
of each of the documents reviewed by us by each of the parties thereto; and (iv) except
as stated in numbered paragraph 1 above, that each of such parties had and
has the power and authority to execute, deliver, and perform such documents.

 

D.                                    We have assumed that (i) all
signatures (other than signatures by officers of Wilmington Trust, in its individual
capacity, or as Mortgagee, the Pass Through Trustee, or Subordination Agent, as
the case may be, on the Mortgage Documents, as the case may be, on the
Transaction Documents and the Certificates) on all documents reviewed by us are
genuine, (ii) all documents furnished to us as originals are authentic,
(iii) all documents furnished to us as copies or specimens conform to the
originals thereof, (iv) all documents furnished to us in final draft or
final or execution form conform to the final, executed originals of such
documents, (v) each document reviewed by us constitutes the entire
agreement among the parties thereto with respect to the subject matter thereof,
and (vi) except as stated in numbered paragraph 2 above, each
document reviewed by us constitutes a legal, valid and binding obligation of
each of the parties thereto, enforceable against each of such parties in
accordance with its terms.

 

E.                                      We express no opinion concerning
(i) ownership of, title to, or any similar interest in any property, (ii) creation
or attachment of any lien, pledge, mortgage, or security interest,

 

4

 

(iii) perfection of
any lien, pledge, mortgage, or security interest, or (iv) priority of any
lien, pledge, mortgage, or security interest.

 

F.                                      For purposes of this letter, an opinion
that is limited “to our knowledge” means that, in the course of our
representation of Wilmington Trust as described above, attorneys in this firm
who have worked substantively on this letter and the transactions contemplated
by the Mortgagee Documents have not, without undertaking any investigation or
verification of the subject matter of such opinion, obtained actual knowledge
that such opinion is incorrect.

 

G.                                     The opinion set forth in paragraph 1
above concerning the citizenship of Wilmington Trust is based upon an affidavit
of Wilmington Trust, made by an authorized representative, the facts set forth
in which we have not independently verified.

 

This letter speaks only
as of the date hereof, and we assume no obligation to advise anyone of any
changes in the foregoing subsequent to the delivery of this letter.  We consent to your relying on this letter on
the date hereof in connection with the matters set forth herein.  Without our prior written consent, this
letter may not be furnished or quoted to, or relied upon by, any other person
or entity, or any governmental authority, or relied upon for any other purpose.

 

In addition, the opinions
in this letter are limited to the opinions expressly stated in numbered
paragraphs 1 through 7 of this letter, and no other opinions may be
inferred beyond such matters expressly stated.

 

Very truly yours,

 

5

 

SCHEDULE A

 

Wilmington
Trust Company, as Mortgagee, Subordination Agent and Pass Through Trustee

 

Landesbank
Hessen-Thüringen Girozentrale, as Primary Liquidity Provider

 

Morgan
Stanley Capital Services Inc., as Above-Cap Liquidity Provider

 

MBIA
Insurance Corporation, as Policy Provider

 

Moody’s
Investors Service, Inc.

 

Morgan
Stanley & Co. Incorporated, as representative for Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc. and
Credit Lyonnais Securities (USA) Inc.

 

Standard &
Poor’s Ratings Group

 

6

 

EXHIBIT E

 

[FORM OF OPINION OF SPECIAL
FRENCH COUNSEL]

 

To:                              The Opinion Addressees referred to in
Schedule hereof

 

Re:                               Airbus Model A320-232 Aircraft

Manufacturer’s Serial No.        

US Registration Number NXXXJB (the “Aircraft”)

 

Dear
Sirs,

 

1.                                       We have been requested by JetBlue Airways Corporation, a Delaware
corporation (the “Company”), to
act as special French counsel with respect to, and to render this opinion
letter in connection with, certain transactions contemplated by the Participation
Agreement [NXXXJB], dated as of
           , 2004 (the “Participation Agreement”), among the
Company as Owner, Wilmington Trust Company,
a Delaware banking corporation (“WTC”),
as Mortgagee (the “Mortgagee”),
and WTC (in its capacity as Subordination Agent under the Intercreditor
Agreement) (as defined in the Participation Agreement) and Pass Through Trustee
under the Pass Through Trust Agreements (as defined in the Participation
Agreement).

 

2.                                       This opinion is being delivered pursuant
to Section 3.1.2(xv)(E) of the Participation Agreement.

 

3.                                       We have examined:

 

(a)                                  a copy of the
granting clause of a Trust Indenture and Mortgage [NXXXJB], dated as of
[              ]
(the “Trust Indenture”) made
between the Company and the Mortgagee;

 

(b)                                 a copy of a consent and agreement to (i)
the granting clause of the Trust Indenture and (ii) the Pledge Agreement dated
[              ]
(the “AVSA Consent and Agreement”) made between AVSA S.A.R.L. (“AVSA”), the
Company, and Mortgagee;

 

(c)                                  a copy of a consent and agreement to (i)
the granting clause of the Trust Indenture and (ii) the Pledge Agreement of
Airbus SNC (“Airbus”) (formerly
known as Airbus GIE) dated
[              ]
(the “Airbus Consent and Agreement”);
and

 

(d)                                 a copy of a pledge agreement entitled “Convention de Nantissement de créances”
dated as of the date hereof in the French language and its English translation
(the “Pledge Agreement”) made
between the Company (as pledgor) and the Mortgagee (as pledgee);

 

(e)                                  a Bill of Sale dated
[                     ]
executed by AVSA in favour of the Company; and

 

(f)                                    an FAA Bill of Sale dated
[              ]
executed by AVSA in favour of the Company.

 

1

 

The documents referred to
in paragraphs (a) to (f) above are referred to herein as the “Documents”.

 

We have also examined :

 

(a)                                  a copy of the constitutive documents (statuts) of Airbus dated
[              ];

 

(b)                                 an extract (extrait K-bis) dated
[              ]
and issued by the commercial and companies registry (registre du commerce et des sociétés) of Toulouse, France,
relating to Airbus;

 

(c)                                  a certificate issued by Airbus dated
[              ]
relating to the extract (extrait K-bis)
and constitutive documents (statuts)
mentioned in (a) and (b) above;

 

(d)                                 a copy of the constitutive documents (statuts) of AVSA dated
[              ];

 

(e)                                  an extract (extrait K-bis) dated
[              ]
and issued by the commercial and companies registry (registre du commerce et des sociétés) of Toulouse, France,
relating to AVSA;

 

(f)                                    a certificate issued by AVSA dated
[              ]
relating to the extract (extrait K-bis)
and constitutive documents (statuts)
mentioned in (d) and (e) above.

 

4.                                       For the purpose of giving this opinion we
have assumed:

 

(i)                                     that the Documents
have been duly executed by the parties thereto;

 

(ii)                                  the genuineness
of all signatures;

 

(iii)                               the
completeness and conformity to the originals of all documents supplied to us as
copies or as facsimiles;

 

(iv)                              the accuracy,
at the date hereof, of the factual matters set forth in the documents listed in
items (a) to (f) of paragraph 3 above;

 

(v)                                 the Documents
expressed to be governed by New York law constitute the legal, valid and
binding obligations of the parties thereto under New York law;

 

(vi)                              The withdrawal
of (a) Airbus France SAS (b) Airbus Deutschland GmbH and (c) Airbus España S.L
as members of Airbus GIE, and the transfer of their membership to Airbus SAS
was duly completed in accordance with and is valid under French law; and

 

(vii)                           The
transformation of Airbus GIE into Airbus SNC was duly completed in accordance
with and is valid under French law.

 

5.                                       Having considered the Documents we are of
the opinion, subject to the qualifications set out in paragraph 6 below,
that:

 

2

 

(i)                                     Airbus SNC
(formerly known as Airbus GIE) is a société
en nom collectif duly organized and existing under the laws of the
French Republic, and has the power and authority to carry on its business as
now conducted.  Airbus SAS, a société par actions simplifiée
incorporated under the laws of France, with its principal place of business at
1, Rond-Point Maurice Bellonte, 31700 Blagnac Cedex, France registered with the
Commercial and companies registry of Toulouse under n° 383474814 is the sole
present shareholder of Airbus SNC, is, without the need to proceed against any
collateral security for the indebtedness of Airbus SNC or to take any other
legal action or process (except for service on Airbus SNC, by process server “huissier” of notice to perform and
subsequent failure by Airbus SNC to do so), jointly and severally liable with
Airbus SNC for all liabilities of Airbus SNC, and jointly and severally liable
with (a) each of Airbus France SAS, Airbus Deutschland GmbH and Airbus
España S.L (each previously a member of Airbus GIE) for the debts arising out
of obligations contracted by Airbus GIE prior to the registration of its
withdrawal as member of Airbus GIE with the commercial and companies registry (registre du commerce et des sociétés) of
Toulouse, and (b) Airbus UK Limited for the debts arising out of obligations
contracted by Airbus SNC (either prior to or after its conversion from the
corporate form of groupement d’intérêt
économique) prior to the transfer of the interest of Airbus UK
Limited in Airbus SNC to the Guarantor (provided that this transfer has been
duly registered with the commercial and companies registry of Toulouse);

 

(ii)                                  AVSA is a société à responsabilité limitée duly
established and existing under the laws of the French Republic and has the
power and authority to carry on its business as now conducted;

 

(iii)                               Each of Airbus
and AVSA has full power and authority to enter into and to execute, deliver and
perform its obligations under those of the Documents to which it is a party;
such obligations are legal, valid and binding upon them, respectively, are
enforceable in accordance with their respective terms and rank pari passu with
the other unsecured obligations of Airbus or AVSA, as the case may be;

 

(iv)                              Assuming that
under New York law, the Mortgagee would be entitled to take proceedings in its
own name and on its own account to recover from the Company the full amount of
all amounts secured by the Pledge Agreement and subject to the registration and
process server (huissier)
requirements set out in paragraph 6(c) hereof and the observation set out in
paragraph 6 (e) hereof, the Pledge Agreement:

 

(a)                                  duly creates
for the benefit of the Mortgagee the security interests which the Pledge
Agreement purports to create and the Mortgagee is entitled to the benefits and
security afforded thereby; and

 

(b)                                 would be
effective as against Airbus, AVSA and third parties to perfect the pledge of
the obligations of Airbus (if any) and AVSA that are the subject of the Pledge
Agreement;

 

(v)                                 The choice of
the laws of the State of New York to govern the Documents (which are expressed
to be so governed) is valid under the laws of the French Republic and a French
court would uphold such choice of law in any suit on the Documents brought in a
French court;

 

3

 

(vi)                              All actions,
authorizations, approvals, consents, conditions and things required at law to
be taken, fulfilled and done to authorize the execution, delivery and performance
by Airbus and AVSA of those of the Documents to which they respectively are
party have been taken, obtained, fulfilled and done; and no consents under any
exchange control laws, rules or regulations of the French Republic are
necessary in connection therewith;

 

(vii)                           Neither the
execution and delivery and performance of the Documents to which Airbus and
AVSA respectively are a party, nor the consummation of the transactions
contemplated thereby, contravenes or violates any law, judgment, governmental
rule, regulation or order applicable to or binding on Airbus or AVSA;

 

(viii)                        The transfer of
title from AVSA to the Company is exempt from French VAT provided that the
conditions set out in Article 74 of the Appendix III to the French Code Général des Impôts are satisfied and
in particular provided that (i) the Aircraft is to be exported outside the
European Union and (ii) AVSA files the export declaration (Document Administratif Unique) showing
that the Aircraft has been exported; and

 

(ix)                                Under the laws
of the French Republic, Airbus and AVSA are subject to private commercial law
and to suit, and neither Airbus nor AVSA, nor their respective properties have
any immunity from the jurisdiction of any court or any legal process (whether
through service of notice, attachment prior to notice, attachment prior to
judgment, attachment in aid of execution, execution or otherwise), except that,
with respect to Airbus:

 

(a)                                  to the extent
that Airbus occupies or possesses any property by virtue of any license or
grant from the French State, such property and the title of Airbus thereto may
be immune from suit or execution on the grounds of sovereignty; and

 

(b)                                 suit and
execution against Airbus or its property may be affected by action taken by the
French public authorities in the interests of national defense or on the
occurrence of exceptional circumstances of paramount importance to the national
interest of France, as such concept is understood under the constitution, laws
and regulations of France.

 

6.                                       This opinion must be read subject to the
following qualifications and observations as to French law:

 

(a)                                  the remedy of
specific performance may not be available in a French court;

 

(b)                                 in respect of
payment obligations, a French court has power under Article 1244-1 of the
French Code Civil to grant time
to a debtor (not in excess of two years), taking into account the position of
the debtor and the needs of the creditor;

 

(c)                                  in order to
ensure the validity as against third parties of the pledge (“nantissement”) created by the Pledge
Agreement in accordance with the provisions of Article 2075 of the French Code Civil, it is necessary for the signed
French version of the Pledge Agreement to be registered with the French tax
administration, involving payment of a stamp

 

4

 

duty
of a nominal amount. In addition the nantissement
created by the Pledge Agreement will need to be served on each of the obligors
by process server “huissier”, in
accordance with the provisions of Article 2075 of the French Code Civil.  We have been instructed to assist in carrying out such
formalities which we intend to do upon receipt of duly executed originals of
the Pledge Agreement and we anticipate that there will be no difficulty in
accomplishing these formalities;

 

(d)                                 in the event of
any proceedings being brought in a French court in respect of a monetary
obligation expressed to be payable in a currency other than euros, a French
court would probably give judgment expressed as an order to pay, not such
currency, but its euro equivalent at the time of payment or enforcement of
judgment. With respect to a bankruptcy, insolvency, liquidation, moratorium,
reorganization, reconstruction or similar proceedings, French law may require
that all claims or debts be converted into euros at an exchange rate determined
by the court at a date related thereto, such as the date of commencement of a
winding-up;

 

(e)                                  pledges over
non-monetary claims are unusual under French law. In principle, pledges over claims
of this type should be effective against Airbus, AVSA and third parties but in
the absence of case law, there is a lack of certainty about the pledge being
effective;

 

(f)                                    a determination
or certificate as to any matter provided for in the Documents might be held by
a French court not to be final, conclusive or binding, if such determination or
certificate could be shown to have an unreasonable, incorrect or arbitrary
basis or not to have been given or made in good faith;

 

(g)                                 claims may
become barred by effluxion of time or may be or become subject to defense of
set-off or counterclaim;

 

(h)                                 a French court
may stay proceedings if concurrent proceedings are being brought elsewhere;

 

(i)                                     we express no
opinion as to whether any provision in the documents conferring a right of
set-off or similar right would be effective against a liquidator or a creditor;

 

(j)                                     the enforcement
against Airbus of any of the Documents to which it is a party may be limited by
applicable bankruptcy, insolvency, arrangement, moratorium or similar laws
relating to or affecting the enforcement of creditors’ rights generally, as
such laws are applied to Airbus.  The
enforcement against AVSA of any of the Documents to which it is a party may be limited
to such laws, as such laws are applied to AVSA.  The enforcement against Airbus SAS of any obligation of Airbus
contained in the Documents may be limited by such laws, as such laws are
applied to such shareholder;

 

(k)                                  our opinion as
to the enforceability of the Documents relates only to their enforceability in
France in circumstances where the competent French court has and accepts
jurisdiction.  The term “enforceability”
refers to the legal character of the obligations assumed by the parties under
the documents, i.e. that they are of a character which French law enforces or

 

5

 

recognizes.  It does not mean that the Documents will be
enforced in all circumstances or in foreign jurisdictions or by or against
third parties or that any particular remedy will be available;

 

(l)                                     Article 899
of the French Code Général des Impôts
provides that agreements evidencing an undertaking to pay a sum of money are
subject to stamp duties (droits de timbre)
of a nominal amount if made in the French Republic; agreements made in a
foreign country are subject to stamp duty of a nominal amount before certain
use thereof can be made in the French Republic (Article 897 of the Code  Général
des Impôts).  Payment of such
stamp duty will not be a condition to the validity of any written undertaking,
although such payment will be necessary before any such written undertaking can
be used in any way in France, either in a public act or a declaration of any
kind or before any public or administrative body; and

 

(m)                               As a result of
Article 1844-5 of the French Code Civil,
a société en nom collectif (“SNC”) must have at least two shareholders;
if a single person holds the entire share capital of the SNC (which is the case
in the present situation, Airbus SAS being the sole shareholder of Airbus SNC)
any third party may request the relevant court that the SNC be wound up if
share(s) has (have) not been transferred to another person within one year from
the date of transfer to the sole shareholder of the shares it did not hold originally.
The court may grant the sole shareholder the opportunity to regularize the
status of the shareholding of the SNC within a further six-month period of
time.

 

We are qualified as
French Avocats.

 

No opinion is expressed
herein as to laws other than the laws of the French Republic as of the date
hereof.  This opinion is for your use
and that of no one else, and is limited to (i) the matters specifically
mentioned herein, and (ii) the purpose set out above.

 

Yours faithfully,

 

Clifford
Chance

 

6

 

Schedule

 

Opinion Addressees

 

Wilmington
Trust Company, as Mortgagee, Subordination Agent and Pass Through Trustee

 

Landesbank
Hessen-Thüringen Girozentrale, as Primary Liquidity Provider

 

Morgan
Stanley Capital Services Inc., as Above-Cap Liquidity Provider

 

MBIA
Insurance Corporation, as Policy Provider

 

Moody’s
Investors Service, Inc.

 

Morgan
Stanley & Co. Incorporated, as representative for Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc. and
Credit Lyonnais Securities (USA) Inc.

 

Standard &
Poor’s Ratings Group

 

7

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