Document:

Exhibit 4.25

 

EXECUTION COPY

 

 

 

NOTE PURCHASE AGREEMENT

 

dated as of November 15,
2004

 

among

 

JETBLUE
AIRWAYS CORPORATION,

 

WILMINGTON
TRUST COMPANY,

as Pass
Through Trustee under each of the

Pass Through
Trust Agreements

 

WILMINGTON
TRUST COMPANY,

as Subordination
Agent

 

WILMINGTON
TRUST COMPANY,

as Escrow
Agent

 

and

 

WILMINGTON
TRUST COMPANY,

as Paying
Agent

 

 

 

INDEX TO NOTE PURCHASE AGREEMENT

 

	
  Section 1.

  	
  Financing of Aircraft

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.

  	
  Conditions Precedent

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.

  	
  Representations and Warranties

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.

  	
  Covenants

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.

  	
  Expenses

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.

  	
  Further Assurances

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.

  	
  Miscellaneous

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.

  	
  Governing Law

  	
   

  

 

Schedules

 

	
  Schedule I

  	
  Aircraft and
  Scheduled Delivery Months

  
	
  Schedule II

  	
  Pass Through
  Trust Agreements

  
	
  Schedule III

  	
  Deposit
  Agreements

  
	
  Schedule IV

  	
  Escrow and Paying
  Agent Agreements

  
	
  Schedule V

  	
  Aggregate
  Amortization Schedule

  
	
   

  	
   

  
	
  Annex

  
	
   

  	
   

  
	
  Annex A

  	
  Definitions

  
	
   

  	
   

  
	
  Exhibits

  
	
   

  	
   

  
	
  Exhibit A

  	
  Form of Delivery
  Notice

  
	
  Exhibit B–1

  	
  Form of
  Participation Agreement

  
	
  Exhibit B–2

  	
  Form of Indenture

  

 

i

 

NOTE PURCHASE AGREEMENT

 

THIS NOTE PURCHASE AGREEMENT, dated as of November 15,
2004, among (i) JETBLUE AIRWAYS
CORPORATION, a Delaware corporation (the “Company”), (ii) WILMINGTON
TRUST COMPANY (“WTC”) a
Delaware banking corporation, not in its individual capacity except as
otherwise expressly provided herein, but solely as trustee (in such capacity
together with its successors in such capacity, the “Pass Through Trustee”) under each of the three separate Pass
Through Trust Agreements (as defined below); (iii) WILMINGTON TRUST COMPANY, a Delaware
banking corporation, as subordination agent and trustee (in such capacity
together with its successors in such capacity, the “Subordination Agent”) under the Intercreditor Agreement (as
defined below), (iv) WILMINGTON TRUST
COMPANY, a Delaware banking corporation, as Escrow Agent (in such
capacity together with its successors in such capacity, the “Escrow Agent”), under each of the Escrow
and Paying Agent Agreements (as defined below) and (v) WILMINGTON TRUST COMPANY, a Delaware
banking corporation, as Paying Agent (in such capacity together with its
successors in such capacity, the “Paying
Agent”) under each of the Escrow and Paying Agent Agreements.

 

W  I  T  N  E  S
S  E  T  H:

 

WHEREAS, capitalized terms used but not
defined herein shall have the meanings ascribed to such terms in Annex A
hereto;

 

WHEREAS, the Company has obtained
commitments from the Manufacturer pursuant to the Aircraft Purchase Agreement
for the delivery of the fifteen (15) aircraft listed on Schedule I hereto
(together with any aircraft substituted therefor in accordance with the
Aircraft Purchase Agreement prior to the delivery thereof, the “Aircraft”);

 

WHEREAS, pursuant to each of the Pass
Through Trust Agreements set forth in Schedule II hereto, and concurrently
with the execution and delivery of this Agreement, separate grantor trusts
(collectively, the “Pass Through Trusts”
and, individually, a “Pass Through Trust”)
have been created to facilitate certain of the transactions contemplated
hereby, including, without limitation, the issuance and sale of pass through
certificates pursuant thereto (collectively, the “Certificates”) to provide for a portion of the financing of
the Aircraft;

 

WHEREAS, the Company has entered into the
Underwriting Agreement dated November 9, 2004 (the “Purchase Agreement”) with the several
Underwriters (the “Underwriters”)
named therein, which provides that the Company will cause each Pass Through
Trustee to issue and sell the Certificates to the Underwriters;

 

WHEREAS, concurrently with the execution
and delivery of this Agreement, (i) the Escrow Agents and the Depositary
entered into the Deposit Agreements set forth in Schedule III hereto (the “Initial Deposit Agreements”) whereby the
applicable Escrow Agent agreed to direct the Underwriters to make certain
deposits referred to therein on the Issuance Date (the “Initial Deposits”) and to permit the
applicable Pass Through Trustee to make additional deposits from time to time
thereafter (the Initial Deposits together with such additional deposits are
collectively referred to as the “Deposits”)
and (ii) the Pass Through Trustees, the Underwriters, the Paying Agents and
the Escrow Agents entered into the Escrow and Paying

 

 

Agent
Agreements set forth in Schedule IV hereto (the “Escrow and Paying Agent Agreements”)
whereby, among other things, (a) the Underwriters agreed to deliver an
amount equal to the amount of the Initial Deposits to the Depositary on behalf
of the applicable Escrow Agent and (b) the applicable Escrow Agent, upon
the Depositary receiving such amount, has agreed to deliver escrow receipts to
be affixed to each Certificate;

 

WHEREAS, in connection with the financing
or refinancing of an Aircraft, the Company will give to the Pass Through
Trustee a Funding Notice (as defined below) specifying its election;

 

WHEREAS, upon receipt of a Funding Notice
with respect to an Aircraft, subject to the terms and conditions of this
Agreement, the applicable Pass Through Trustees will enter into the applicable
Financing Agreements relating to such Aircraft;

 

WHEREAS, upon the financing of each
Aircraft, each Pass Through Trustee will fund its purchase of Equipment Notes
with the proceeds of the sale of the Certificates or one or more Deposits
withdrawn by the applicable Escrow Agent under the related Deposit Agreement
bearing the same interest rate as the Certificates issued by such Pass Through
Trust;

 

WHEREAS, concurrently with the execution
and delivery of this Agreement, (i) Landesbank Baden-Württemberg, a bank
established in Germany as a public law institution with legal capacity, (the “Primary  Liquidity
Provider”), has entered into three revolving credit agreements
(each, a “Primary  Liquidity Facility”), one each for the
benefit of the Certificateholders of the Class G-1 Trust, Class G-2
Trust and the Class C Trust, with the Subordination Agent, as agent for
the Pass Through Trustee on behalf of each such Pass Through Trust,
(ii) Citibank, N.A. (the “Above-Cap
Liquidity Provider”) has entered into an ISDA Master Agreement,
together with the related Schedule and Confirmation,  with the Subordination Agent for the benefit
of the Certificateholders of each of the Class G-1 Trust, the
Class G-2 Trust and the Class C Trust (each an “Above-Cap Liquidity Agreement”) and
(iii) the Pass Through Trustee, the Primary Liquidity Provider, the
Above-Cap Liquidity Provider, the Policy Provider (as defined below) and the
Subordination Agent have entered into the Intercreditor Agreement, dated as of
the date hereof (the “Intercreditor Agreement”);
and

 

WHEREAS, concurrently with the execution
and delivery of this Agreement MBIA Insurance Corporation (the “Policy Provider”) has entered into the
Insurance and Indemnity Agreement (the “Policy
Provider Agreement”), with the Company and the Subordination Agent,
as agent and trustee for the Pass Through Trustee of the Class G-1 Trust
and Class G-2 Trust on behalf of the Class G-1 Trust and
Class G-2 Trust, and the Policy Provider has issued the certificate
guaranty insurance policies (collectively, the “Policies”) provided for therein for the benefit of the
Class G-1 Certificateholders and Class G-2 Certificateholders.

 

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

 

Section 1.                                          Financing
of Aircraft.  (a)  The Company confirms that it has entered into
the Aircraft Purchase Agreement with the Manufacturer pursuant to which the
Company has

 

2

 

agreed to purchase, and the Manufacturer has agreed to
deliver, the Aircraft in the months specified in Schedule I hereto, all on
and subject to terms and conditions specified in the Aircraft Purchase
Agreement.  The Company agrees to finance
the Aircraft in the manner provided herein, all on and subject to the terms and
conditions hereof and of the relevant Financing Agreements.

 

(b)                                 In
furtherance of the foregoing, the Company agrees to give the parties hereto,
the Depositary, the Policy Provider and each of the Rating Agencies not less
than two Business Days’ prior written notice in the form of the notice set out
in Exhibit A hereto (a “Funding Notice”)
of the scheduled financing date (the “Scheduled
Financing Date”) (or, in the case of a substitute Funding Notice
under Section 1(e) hereof, one Business Day’s prior notice) in respect of
each Aircraft under the Aircraft Purchase Agreement, which notice shall:

 

(i)                                     specify
the Scheduled Financing Date of such Aircraft (which shall be a Business Day
before the Cut–off Date and no later than 90 days after the Delivery Date of
such Aircraft and, except as provided in Section 1(e) hereof, the date
(the “Funding Date”) on which the
financing therefor in the manner provided herein shall be consummated);

 

(ii)                                  instruct
the applicable Pass Through Trustee to execute and deliver to the relevant
Escrow Agent a withdrawal certificate in the form of Exhibit B to the
Escrow Agent so as to provide a Notice of Purchase Withdrawal to the Depositary
with respect to the Equipment Notes to be issued in connection with the
financing of such Aircraft;

 

(iii)                               instruct
the applicable Pass Through Trustee to enter into the Participation Agreement
included in the Financing Agreements with respect to such Aircraft at such a
time on or before the Funding Date specified in such Funding Notice and to
perform its obligations thereunder; and

 

(iv)                              specify
the aggregate principal amount of each series of Equipment Notes to be issued,
and purchased by the Pass Through Trustees, in connection with the financing of
such Aircraft scheduled to be delivered on such Funding Date.

 

(c)                                  Upon
receipt of a Funding Notice, the Pass Through Trustees shall, and shall cause
the Subordination Agent to, enter into and perform their obligations under the
Participation Agreement and other instructions specified in such Funding
Notice, provided that such Participation Agreement and the other
Financing Agreements to be entered into pursuant to such Participation
Agreement shall be in the forms thereof annexed hereto.  With respect to each Aircraft, the Company
shall direct WTC (or such other person that meets the eligibility requirements
to act as mortgagee under the Indenture) to execute as Loan Trustee the
Financing Agreements relating to such Aircraft to which such Loan Trustee is
intended to be a party, and the Company shall concurrently therewith execute
such Financing Agreements to which the Company is intended to be a party and
perform its respective obligations thereunder. 
Upon the request of the Policy Provider or of either Rating Agency, the
Company shall deliver or cause to be delivered to the Policy Provider or such
Rating Agency a true and complete copy of each Financing Agreement relating to
the financing of each Aircraft together with a true and complete

 

3

 

set of the legal opinions delivered to the related
Loan Trustee, Subordination Agent and Pass Through Trustee under the related
Participation Agreement.

 

(d)                                 If
after giving any Funding Notice, there shall be a delay in the financing of an
Aircraft, or if on the Scheduled Financing Date of an Aircraft the financing
thereof in the manner contemplated hereby shall not be consummated for whatever
reason, the Company shall give the parties hereto and the Policy Provider
prompt notice thereof.  Concurrently with
the giving of such notice of postponement or subsequently, the Company shall
give the parties hereto and the Policy Provider a substitute Funding Notice
specifying the date to which such delivery and related financing shall have
been re–scheduled (which shall be a Business Day before the Cut–off Date on
which the Escrow Agents shall be entitled to withdraw one or more Deposits
under each of the applicable Deposit Agreements to enable each applicable Pass
Through Trustee to fund its purchase of the related Equipment Notes).  Upon receipt of any such notice of
postponement, each applicable Pass Through Trustee shall comply with its
obligations under Section 2.01 of each of the Pass Through Trust
Agreements and thereafter the financing of the relevant Aircraft shall take
place on the re–scheduled financing date therefor (all on and subject to the
terms and conditions of the relevant Financing Agreements) unless further
postponed as provided herein.

 

(e)                                  If
the scheduled Delivery Date for any Aircraft is delayed for any reason
(including the casualty loss thereof) more than 30 days beyond the last day of
the month set forth opposite such Aircraft under the heading “Scheduled
Delivery Months” in Schedule I hereto, the Company may identify for
delivery a substitute aircraft therefor meeting the following conditions (a “Substitute Aircraft”):  (i) a Substitute Aircraft must be an
Airbus A320–200 aircraft equipped with International Aero Engines
model V2527-A5 engines, in each case manufactured after the date of this
Agreement and (ii) the Company shall be obligated to obtain prior written
consent of the Policy Provider and to obtain Rating Agency Confirmation in
respect of the replacement of any Aircraft by Substitute Aircraft.  Upon the satisfaction of the conditions set
forth above with respect to a Substitute Aircraft, the Aircraft to be replaced
shall cease to be subject to this Agreement and all rights and obligations of
the parties hereto concerning such Aircraft shall cease, and such Substitute
Aircraft shall become and thereafter be subject to the terms and conditions of
this Agreement to the same extent as such Aircraft.

 

(f)                                    The
Company shall have no liability for the failure of the Pass Through Trustees to
purchase Equipment Notes with respect to any Aircraft or Substitute Aircraft,
other than the Company’s obligation, if any, to pay the Deposit Break Amount
pursuant to Section 4(a)(i) of this Agreement.

 

(g)                                 Anything
herein to the contrary notwithstanding, the Company shall not have the right,
and shall not be entitled, at any time to request the issuance of Equipment
Notes of any series to any Pass Through Trustee in an aggregate principal
amount in excess of the amount of the Deposits then available for withdrawal by
the Escrow Agent under and in accordance with the provisions of the related
Deposit Agreement.

 

Section 2.                                          Conditions
Precedent.  The obligation of the
Pass Through Trustees to enter into, and to cause the Subordination Agent to
enter into, any Participation Agreement as

 

4

 

directed pursuant to a Funding Notice and to perform
its obligations thereunder is subject to satisfaction of the following
conditions:

 

(a)                                  no
Triggering Event shall have occurred; and

 

(b)                                 the
Company shall have delivered a certificate to each such Pass Through Trustee,
the Policy Provider and each Primary Liquidity Provider stating that the
conditions precedent to the obligation of the Pass Through Trustees and the
Subordination Agent under such Participation Agreement have been satisfied in
all material respects.

 

Anything herein to the contrary notwithstanding, the
obligation of each Pass Through Trustee to purchase Equipment Notes shall
terminate on the Cut–off Date.

 

Section 3.                                          Representations
and Warranties.  (a)  The Company represents and warrants that:

 

(i)                                     the
Company is duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and is a “citizen of the United States” as
defined in Section 40102 of the Act, and has the full corporate power,
authority and legal right under the laws of the State of Delaware to execute
and deliver this Agreement and each Financing Agreement to which it will be a
party and to carry out the obligations of the Company under this Agreement and
each Financing Agreement to which it will be a party;

 

(ii)                                  the
execution and delivery by the Company of this Agreement and the performance by
the Company of its obligations under this Agreement have been duly authorized
by the Company and will not violate its Certificate of Incorporation or by–laws
or (other than any violation that would not result in a Material Adverse Change
to the Company) the provisions of any indenture, mortgage, contract or other
agreement to which it is a party or by which it is bound; and

 

(iii)                               assuming
the due authorization, execution and delivery hereof by the other parties
hereto this Agreement constitutes the legal, valid and binding obligation of
the Company, enforceable against it in accordance with its terms, except as the
same may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally and by
general principles of equity, whether considered in a proceeding at law or in
equity.

 

(b)                                 WTC
represents and warrants that:

 

(i)                                     WTC
is duly incorporated, validly existing and in good standing under the laws of
the State of Delaware and is a “citizen of the United States” as defined in Section 40102
of the Act, and has the full corporate power, authority and legal right under
the laws of the State of Delaware and the United States pertaining to its
banking, trust and fiduciary powers to execute and deliver this Agreement and
each Financing Agreement to which it will be a party and to carry out the
obligations of WTC, in its capacity as Subordination Agent, Pass Through
Trustee or Paying Agent, as the case may be, under this Agreement and each
Financing Agreement to which it will be a party;

 

5

 

(ii)                                  the
execution and delivery by WTC, in its capacity as Subordination Agent, Pass
Through Trustee or Paying Agent, as the case may be, of this Agreement and the
performance by WTC, in its capacity as Subordination Agent, Pass Through
Trustee or Paying Agent, as the case may be, of its obligations under this
Agreement have been duly authorized by WTC, in its capacity as Subordination
Agent, Pass Through Trustee or Paying Agent, as the case may be, and will not
violate its articles of association or by–laws or the provisions of any
indenture, mortgage, contract or other agreement to which it is a party or by
which it is bound; and

 

(iii)                               this
Agreement constitutes the legal, valid and binding obligations of WTC, in its
capacity as Subordination Agent, Pass Through Trustee or Paying Agent, as the
case may be, enforceable against it in accordance with its terms, except as the
same may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally and by
general principles of equity, whether considered in a proceeding at law or in
equity.

 

(c)                                  The
Pass Through Trustee hereby confirms to each of the other parties hereto that
its representations and warranties set forth in Section 7.15 of each Pass
Through Trust Agreement are true and correct as of the date hereof.

 

(d)                                 The
Subordination Agent represents and warrants that:

 

(i)                                     the
Subordination Agent is duly incorporated, validly existing and in good standing
under the laws of the State of Delaware, and has the full corporate power,
authority and legal right under the laws of the State of Delaware and the
United States pertaining to its banking, trust and fiduciary powers to execute
and deliver this Agreement and each Financing Agreement to which it is or will
be a party and to perform its obligations under this Agreement and each
Financing Agreement to which it is or will be a party,

 

(ii)                                  this
Agreement has been duly authorized, executed and delivered by the Subordination
Agent; this Agreement constitutes the legal, valid and binding obligations of
the Subordination Agent enforceable against it in accordance with its terms,
except as the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of creditors
generally and by general principles of equity, whether considered in a
proceeding at law or in equity;

 

(iii)                               none
of the execution, delivery and performance by the Subordination Agent of this
Agreement contravenes any law, rule or regulation of the State of Delaware or
any United States governmental authority or agency regulating the Subordination
Agent’s banking, trust or fiduciary powers or any judgment or order applicable
to or binding on the Subordination Agent and do not contravene the
Subordination Agent’s articles of association or by–laws or result in any
breach of, or constitute a default under, any agreement or instrument to which
the Subordination Agent is a party or by which it or any of its properties may
be bound;

 

6

 

(iv)                              neither
the execution and delivery by the Subordination Agent of this Agreement nor the
consummation by the Subordination Agent of any of the transactions contemplated
hereby requires the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action with respect to, any
Delaware governmental authority or agency or any federal governmental authority
or agency regulating the Subordination Agent’s banking, trust or fiduciary
powers;

 

(v)                                 there
are no Taxes payable by the Subordination Agent imposed by the State of
Delaware or any political subdivision or taxing authority thereof in connection
with the execution, delivery and performance by the Subordination Agent of this
Agreement (other than franchise or other taxes based on or measured by any fees
or compensation received by the Subordination Agent for services rendered in
connection with the transactions contemplated by the Intercreditor Agreement or
any of the Liquidity Facilities), and there are no Taxes payable by the
Subordination Agent imposed by the State of Delaware or any political
subdivision thereof in connection with the acquisition, possession or ownership
by the Subordination Agent of any of the Equipment Notes (other than franchise
or other taxes based on or measured by any fees or compensation received by the
Subordination Agent for services rendered in connection with the transactions
contemplated by the Intercreditor Agreement or any of the Liquidity
Facilities); and

 

(vi)                              there
are no pending or threatened actions or proceedings against the Subordination
Agent before any court or administrative agency which individually or in the
aggregate, if determined adversely to it, would materially adversely affect the
ability of the Subordination Agent to perform its obligations under this
Agreement.

 

(e)                                  The
Escrow Agent represents and warrants that:

 

(i)                                     the
Escrow Agent is duly incorporated, validly existing and in good standing under
the laws of the State of Delaware and has the full corporate power, authority
and legal right under the laws of the State of Delaware pertaining to its
banking, trust and fiduciary powers to execute and deliver this Agreement, each
Deposit Agreement and each Escrow and Paying Agent Agreement (collectively, the
“Escrow Agent Agreements”) and to
carry out the obligations of the Escrow Agent under each of the Escrow Agent
Agreements;

 

(ii)                                  the
execution and delivery by the Escrow Agent of each of the Escrow Agent
Agreements and the performance by the Escrow Agent of its obligations hereunder
and thereunder have been duly authorized by the Escrow Agent and will not
violate its articles of association or by–laws or the provisions of any
indenture, mortgage, contract or other agreement to which it is a party or by
which it is bound; and

 

(iii)                               each
of the Escrow Agent Agreements constitutes the legal, valid and binding
obligations of the Escrow Agent enforceable against it in accordance with its
terms, except as the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of creditors
generally and by general principles of equity, whether considered in a
proceeding at law or in equity.

 

7

 

(f)                                    The
Paying Agent represents and warrants that:

 

(i)                                     the
Paying Agent is duly incorporated, validly existing and in good standing under
the laws of the State of Delaware and has the full corporate power, authority
and legal right under the laws of the State of Delaware and the United States
pertaining to its banking, trust and fiduciary powers to execute and deliver
this Agreement and the Escrow and Paying Agent Agreement (collectively, the “Paying Agent Agreements”) and to carry out
the obligations of the Paying Agent under each of the Paying Agent Agreements;

 

(ii)                                  the
execution and delivery by the Paying Agent of each of the Paying Agent
Agreements and the performance by the Paying Agent of its obligations hereunder
and thereunder have been duly authorized by the Paying Agent and will not
violate its articles of association or by–laws or the provisions of any
indenture, mortgage, contract or other agreement to which it is a party or by
which it is bound; and

 

(iii)                               each
of the Paying Agent Agreements constitutes the legal, valid and binding
obligations of the Paying Agent enforceable against it in accordance with its
terms, except as the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of creditors
generally and by general principles of equity, whether considered in a
proceeding at law or in equity.

 

Section 4.                                          Covenants.  (a) The Company covenants with each of
the other parties hereto that:

 

(i)                                     on
the date that the Depositary is obligated to pay the amount of the Final
Withdrawals to the Paying Agent pursuant to the Deposit Agreements relating to
the Class G-1 Trust, Class G-2 Trust and the Class C Trust, the
Company shall pay to the Pass Through Trustee of each such Trust no later than 12:30 p.m.
(New York time) an amount equal to the Deposit Break Amount, if any, required
to be paid in respect of each such Final Withdrawal amount;

 

(ii)                                  the
Company shall not consolidate with or merge into any other person under
circumstances in which the Company 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 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 (as defined in the Financing
Agreements).  Upon any such consolidation
or merger of the Company with or into, or the conveyance, transfer or lease by
the Company of all or substantially all of its assets to, any Person in
accordance with this Section 4(a)(ii), such Person will succeed to, and be
substituted for, and may exercise every right and power of, the Company under
the Operative Agreements and Financing Agreements with the same effect as if
such person had been named as the “Company” or “Owner” therein.  No such consolidation or merger, or
conveyance, transfer or lease, shall have the effect of releasing the Company
or such Person from any of the obligations, liabilities, covenants or
undertakings of the Company under the Financing Agreements;

 

8

 

(iii)                               the
Company shall at all times remain a U.S. Air Carrier (as defined in the
Financing Agreements) and shall at all times be otherwise certificated and
registered to the extent necessary to entitle the Loan Trustee to the rights
afforded to secured parties of aircraft equipment under Section 1110;

 

(iv)                              the
Company agrees to provide written notice to each of the parties hereto of the
occurrence of the Cut–off Date no later than one Business Day after the date
thereof; such notice to refer specifically to the Pass Through Trustee’s
obligation to assign, transfer and deliver all of its right, title and interest
to the Trust Property (as defined in each Pass Through Trust Agreement) to the
trustee of the Related Trust (as defined in each Pass Through Trust Agreement)
in accordance with Section 11.01 of each of the Pass Through Trust Agreements;
and

 

(v)                                 On
the Issuance Date, the Depositary’s long–term issuer credit rating shall be at
least A from Standard & Poor’s and short-term unsecured debt rating
shall be P–1 from Moody’s (the “Depository
Threshold Rating”).  If the
Depositary’s long–term issuer credit rating or short-term unsecured debt
rating, as the case may be, shall at any time fall below A from
Standard & Poor’s or P–1 from Moody’s (provided, that so long as HSH
Nordbank is the Depositary, for Standard & Poor’s the “long-term issuer
credit rating” shall refer to (x) on or prior to July 18, 2005, HSH
Nordbank’s long-term issuer credit rating with the benefit of state guarantees
and (y) after July 18, 2005, HSH Nordbank’s long-term issuer credit rating
without the benefit of state guarantees unless Standard & Poor’s has
notified the Subordination Agent that another rating would be applicable to HSH
Nordbank’s obligations under the Deposit Agreements, in which case, such other
applicable rating), as the case may be, the Company shall, within 45 days
of such event occurring, cause the Depositary to be replaced with a depository
bank (a “Replacement Depositary”)
on the following terms and preconditions:

 

(A)                              the
Replacement Depositary must be one that meets the Depositary Threshold Rating
(unless the Company shall have obtained (i) written confirmation from each
Rating Agency that such replacement will not cause a reduction of any rating
then in effect for any Class of Certificates by such Rating Agency (without
regard to any downgrading of any rating of the Depositary being replaced and
without regard to the Policies) and (ii) the prior written consent of the
Policy Provider) and the Company shall have obtained written confirmation from
each Rating Agency that such replacement will not cause a reduction of any
rating then in effect for any Class of Certificates by such Rating Agency
(without regard to any downgrading of any rating of the Depositary being
replaced and without regard to the Policies);

 

(B)                                the
Company shall pay all fees, expenses and other amounts then owing to the
replaced Depositary; and

 

(C)                                the
Company shall cause the Escrow Agent and the Replacement Depositary to enter
into a Replacement Deposit Agreement for each Class of Certificates and shall
cause the Replacement Depositary to deliver to the Company, the Policy Provider
and each Rating Agency legal opinions and other

 

9

 

closing
documentation substantially similar in scope and substance as those that were
delivered by the Depositary being replaced in connection with the execution and
delivery of the Deposit Agreement being replaced.

 

Upon satisfaction of the foregoing conditions, the
Company shall instruct each Pass Through Trustee, and each Pass Through Trustee
agrees, to execute and deliver to the Escrow Agent a duly completed Withdrawal
Certificate (as defined in the Escrow and Paying Agent Agreements) together
with a Notice of Replacement Withdrawal (as defined in the Escrow and Paying
Agent Agreements).

 

Each of the parties hereto agrees, at the Company’s
request, to enter into any amendments to this Agreement, the Escrow and Paying
Agent Agreements and any other Operative Agreements as may be necessary or
desirable to give effect to the replacement of the Depositary with the
Replacement Depositary and the replacement of the Deposit Agreements with the
Replacement Deposit Agreements.

 

Upon the execution and delivery of the Replacement
Deposit Agreements, the Replacement Depositary shall be deemed to be the
Depositary with all of the rights and obligations of the Depositary hereunder
and under the other Operative Agreements and the Replacement Deposit Agreements
shall be deemed to be the Deposit Agreements hereunder and under the other
Operative Agreements, except that the obligations of the replaced Depositary
under the last two sentences of Section 2.4 of its Deposit Agreements
shall remain in full force and effect notwithstanding the execution and
delivery of the Replacement Deposit Agreements.

 

(b)                                 WTC,
in its individual capacity, covenants with each of the other parties to this
Agreement 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”
as defined in Section 40102 of the Act 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.  Upon
WTC giving any such notice, WTC shall, subject to Section 9.02 of any
Indenture then entered into, resign as Loan Trustee in respect of such
Indenture.

 

(c)                                  The
Subordination Agent covenants with each of the other parties hereto that it
will not agree or consent to any amendment or modification to any Liquidity
Facility, the Policy Provider Agreement or the JetBlue Provisions (as defined
in the Intercreditor Agreement) of the Intercreditor Agreement without the
Company’s consent, if such amendment or modification would materially adversely
affect the interests of the Company.

 

(d)                                 The
Escrow Agent covenants with each of the other parties hereto that it will not
agree or consent to any amendment or modification to (i) any Deposit
Agreement or Escrow and Paying Agent Agreement without the Company’s consent if
such amendment or modification would adversely affect the interests of the
Company or (ii) the Deposit Agreement for the Class G-1Trust,
Class G-2 Trust or the Escrow and Paying Agent Agreement for the
Class G-1 Trust or Class G-2 Trust without the Policy Provider’s
consent, if such amendment or modification would adversely affect the interests
of the Policy Provider.

 

10

 

Section 5.                                          Notices.  Unless otherwise expressly permitted by the
terms hereof, all notices, requests, demands, authorizations, directions,
consents, waivers and other communications required or permitted to be made,
given, furnished or filed hereunder shall be in writing (it being understood
that the specification of a writing in certain instances and not in others does
not imply an intention that a writing is not required as to the latter), shall
refer specifically to this Agreement, and shall be personally delivered, sent
by facsimile or telecommunication transmission (which in either case provides
written confirmation to the sender of its delivery), sent by registered mail or
certified mail, return receipt requested, postage prepaid, or sent by overnight
courier service, in each case to the respective address or facsimile number set
forth for such party below the signature of such party on the signature
page of this Agreement, or to such other address, facsimile or other
number as each party hereto may hereafter specify by notice to the other
parties hereto.  Notice shall be given to
the Policy Provider at the address specified in the Intercreditor
Agreement.  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.

 

Section 6.                                          Expenses.  (a) The Company agrees to pay to the
Subordination Agent when due for application in accordance with the
Intercreditor Agreement an amount or amounts 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 amount of the Deposits under the Deposit Agreements
pertaining to the Class G-1 Trust and Class G-2 Trust and
Class C Trust and the denominator of which shall be the sum of
(x) the then outstanding aggregate principal amount of the Series G-1
Equipment Notes, Series G-2 Equipment Notes and Series C Equipment
Notes issued under all of the Indentures and (y) the then outstanding
aggregate amount of the Deposits under the Deposit Agreements pertaining to the
Class G-1 Trust, Class G-2 Trust and the Class C Trust.

 

(b)                                 The
Company agrees to pay to the Subordination Agent when due for application in
accordance with the Intercreditor Agreement an amount or amounts equal to the
fees payable to the Policy Provider under Section 3.02 of the Policy
Provider Agreement multiplied by a fraction the numerator of which shall be the
then outstanding aggregate amount of the Deposits under the Deposit Agreement
pertaining to the Class G-1 Trust and Class G-2 Trust and the denominator
of which shall be the sum of (x) the then outstanding aggregate principal
amount of the Series G-1 Equipment Notes and Series G-2 Equipment
Notes issued under all of the Indentures 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.

 

(c)                                  So
long as no Equipment Notes have been issued in respect of any Aircraft, the
Company agrees to pay (i) to the Subordination Agent when due (A) 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 while such Downgrade Advance shall be
outstanding, (B) 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 while such Non–Extension
Advance shall be outstanding and (C) any other amounts owed to the Primary

 

11

 

Liquidity Provider by the Subordination Agent as
borrower under each Primary Liquidity Facility (other than (x) amounts due
as payment of advances thereunder or as interest on such advances, except to
the extent payable pursuant to clause (A) or (B) and
(y) fees payable under Section 6(a) above), (ii) all
compensation and reimbursement of expenses, disbursements and advances payable
by the Company under the Pass Through Trust Agreements, (iii) all
compensation and reimbursement of expenses and disbursements payable to the
Subordination Agent under the Intercreditor Agreement (as may be modified by
any separate letter agreement) except with respect to any Unindemnified Taxes
incurred by the Subordination Agent in connection with the transactions
contemplated by the Intercreditor Agreement, (iv) all compensation and
reimbursement of expenses and disbursements payable to the Policy Provider
under the Policy Provider Agreement (except for fees payable under Section 6(b)
above), and (v) in the event the Company requests an amendment to any
Operative Agreement, all reasonable fees and expenses (including, without
limitation, fees and disbursements of counsel) of the Escrow Agent, the Paying
Agent or the Policy Provider in connection therewith.  For purposes of this Section 6(b), the
terms “Applied Downgrade Advance”, “Applied Non–Extension Advance”, “Downgrade
Advance”, “Investment Earnings” and “Non–Extension Advance” shall have the
meanings specified in each Primary Liquidity Facility.

 

Section 7.                                          Further
Assurances.  Each party hereto 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 any other party hereto shall reasonably request in
connection with its administration of, or to carry out more effectually the
purposes of, or to better assure and confirm unto it the rights and benefits to
be provided under, this Agreement.

 

Section 8.                                          Miscellaneous.  (a) Provided that the transactions
contemplated hereby have been consummated, and except as otherwise provided for
herein, the representations, warranties and agreements herein of the Company,
the Subordination Agent, the Escrow Agent, the Paying Agent and the Pass
Through Trustee, and the Company’s, the Subordination Agent’s, the Escrow Agent’s,
the Paying Agent’s and the Pass Through Trustee’s obligations under any and all
thereof, shall survive the expiration or other termination of this Agreement
and the other agreements referred to herein.

 

(b)                                 This
Agreement may be executed in any number of counterparts (and each of the
parties hereto shall not be required to execute the same counterpart).  Each counterpart of this Agreement, including
a signature page executed by each of the parties hereto, shall be an
original counterpart of this Agreement, but all of such counterparts together
shall constitute one instrument.  Neither
this Agreement nor any of the terms hereof may be terminated, amended,
supplemented, waived or modified orally, but only by an instrument in writing
signed by the party against which the enforcement of the termination,
amendment, supplement, waiver or modification is sought.  The index preceding this Agreement and the
headings of the various Sections of this Agreement are for convenience of
reference only and shall not modify, define, expand or limit any of the terms
or provisions hereof.  The terms of this
Agreement shall be binding upon, and shall inure to the benefit of, the Company
and its successors and permitted assigns, the Pass Through Trustee and its
successors as Pass Through Trustee (and any additional trustee appointed) under
any of the Pass Through Trust Agreements, the Escrow Agent and its successors
as Escrow Agent under the Escrow and Paying Agent Agreements, the Paying Agent

 

12

 

and its successors as Paying Agent under the Escrow
and Paying Agent Agreement, the Policy Provider and its successors as Policy
Provider under the Intercreditor Agreement and the Subordination Agent and its
successors as Subordination Agent under the Intercreditor Agreement.

 

(c)                                  This
Agreement is not intended to, and shall not, provide any person not a party
hereto (other than the Underwriters, the Policy Provider and each of the
beneficiaries of Section 6 hereof) with any rights of any nature
whatsoever against any of the parties hereto, and no person not a party hereto
(other than the Underwriters, the Policy Provider and each of the beneficiaries
of Section 6 hereof) shall have any right, power or privilege in respect
of, or have any benefit or interest arising out of, this Agreement.  To the extent that this Agreement expressly
confers upon, gives or grants any right, power, privilege, benefit, interest,
remedy or claim to any of the beneficiaries of Section 6 hereof
(including, but not limited to rights, powers, privileges, benefits, interests,
remedies and claims under Section 6) each such party is hereby recognized
as a third party beneficiary hereunder and may enforce any such right, power,
privilege, benefit, interest, remedy or claim.

 

Section 9.                                          Governing
Law.  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.  THIS AGREEMENT IS BEING DELIVERED
IN THE STATE OF NEW YORK.

 

13

 

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

 

	
   

  	
  JETBLUE AIRWAYS CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/
  John Harvey

  	
   

  
	
   

  	
  Title: VP
  Corporate Finance & Treasurer

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  118-29
  Queens Blvd.

  
	
   

  	
   

  	
  Forest
  Hills, NY 11375

  
	
   

  	
   

  	
  Attention:

  	
  Vice
  President –

  Corporate Finance

  
	
   

  	
   

  	
  Facsimile:

  	
  718-709-3639

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy
  to:

  
	
   

  	
   

  
	
   

  	
   

  	
  118-29
  Queens Blvd.

  
	
   

  	
   

  	
  Forest
  Hills, NY 11375

  
	
   

  	
   

  	
  Attention:
  General Counsel

  
	
   

  	
   

  	
  Facsimile:
  718-709-3630

  
						

 

	
   

  	
  WILMINGTON TRUST COMPANY,

  
	
   

  	
  not in its
  individual capacity, except as

  otherwise provided herein, but solely as Pass

  Through Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ W.
  Chris Sponenberg

  	
   

  
	
   

  	
  Name: W.
  Chris Sponenberg

  
	
   

  	
  Title: Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  Rodney
  Square North

  
	
   

  	
   

  	
  1100 North
  Market Street

  
	
   

  	
   

  	
  Wilmington,
  Delaware 19890-0001

  
	
   

  	
   

  	
  Attention:

  	
  Corporate
  Trust Administration

  
	
   

  	
   

  	
  Facsimile:

  	
  (302) 636-4140

  
						

 

14

 

	
   

  	
  WILMINGTON TRUST COMPANY,

  
	
   

  	
  not in its
  individual capacity, except as

  otherwise provided herein, but solely as

  Subordination Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ W.
  Chris Sponenberg

  	
   

  
	
   

  	
  Name: W.
  Chris Sponenberg

  
	
   

  	
  Title: Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  Rodney
  Square North

  
	
   

  	
   

  	
  1100 North
  Market Street

  
	
   

  	
   

  	
  Wilmington,
  Delaware 19890-0001

  
	
   

  	
   

  	
  Attention:

  	
  Corporate
  Trust 

  
	
   

  	
   

  	
  Administration

  
	
   

  	
   

  	
  Facsimile:

  	
  (302) 636-4140

  
						

 

	
   

  	
  WILMINGTON TRUST COMPANY,

  
	
   

  	
  as Escrow
  Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ W.
  Chris Sponenberg

  	
   

  
	
   

  	
  Name: W.
  Chris Sponenberg

  
	
   

  	
  Title: Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  Rodney
  Square North

  
	
   

  	
   

  	
  1100 North
  Market Street

  
	
   

  	
   

  	
  Wilmington,
  Delaware 19890-0001

  
	
   

  	
   

  	
  Attention:

  	
  Corporate
  Trust Administration

  
	
   

  	
   

  	
  Facsimile:

  	
  (302) 636-4140

  
						

 

	
   

  	
  WILMINGTON TRUST COMPANY,

  
	
   

  	
  as Paying
  Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ W.
  Chris Sponenberg

  	
   

  
	
   

  	
  Name: W.
  Chris Sponenberg

  
	
   

  	
  Title: Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  Rodney
  Square North

  
	
   

  	
   

  	
  1100 North
  Market Street

  
	
   

  	
   

  	
  Wilmington,
  Delaware 19890-0001

  
	
   

  	
   

  	
  Attention:

  	
  Corporate
  Trust Administration

  
	
   

  	
   

  	
  Facsimile:

  	
  (302) 636-4140

  
						

 

15

 

SCHEDULE I TO

NOTE PURCHASE AGREEMENT

 

AIRCRAFT AND SCHEDULED DELIVERY
MONTHS

 

	
  Aircraft Type

  	
   

  	
  Expected

  Registration

  Number

  	
   

  	
  Expected

  Manufacturer’s

  Serial Number

  	
   

  	
  Scheduled

  Delivery Month

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Airbus A320

  	
   

  	
  N603JB

  	
   

  	
  2352

  	
   

  	
  January 2005

  
	
  Airbus A320

  	
   

  	
  N605JB

  	
   

  	
  2368

  	
   

  	
  February 2005

  
	
  Airbus A320

  	
   

  	
  N606JB

  	
   

  	
  2384

  	
   

  	
  February 2005

  
	
  Airbus A320

  	
   

  	
  N607JB

  	
   

  	
  2386

  	
   

  	
  March 2005

  
	
  Airbus A320

  	
   

  	
  N608JB

  	
   

  	
  2415

  	
   

  	
  April 2005

  
	
  Airbus A320

  	
   

  	
  N612JB

  	
   

  	
  2430

  	
   

  	
  May 2005

  
	
  Airbus A320

  	
   

  	
  N613JB

  	
   

  	
  TBD

  	
   

  	
  June 2005

  
	
  Airbus A320

  	
   

  	
  N615JB

  	
   

  	
  TBD

  	
   

  	
  June 2005

  
	
  Airbus A320

  	
   

  	
  N618JB

  	
   

  	
  TBD

  	
   

  	
  July 2005

  
	
  Airbus A320

  	
   

  	
  N621JB

  	
   

  	
  TBD

  	
   

  	
  July 2005

  
	
  Airbus A320

  	
   

  	
  N623JB

  	
   

  	
  TBD

  	
   

  	
  August 2005

  
	
  Airbus A320

  	
   

  	
  N624JB

  	
   

  	
  TBD

  	
   

  	
  August 2005

  
	
  Airbus A320

  	
   

  	
  N625JB

  	
   

  	
  TBD

  	
   

  	
  October 2005

  
	
  Airbus A320

  	
   

  	
  N627JB

  	
   

  	
  TBD

  	
   

  	
  November 2005

  
	
  Airbus A320

  	
   

  	
  N629JB

  	
   

  	
  TBD

  	
   

  	
  November 2005

  

 

1

 

SCHEDULE II TO

NOTE PURCHASE AGREEMENT

 

PASS THROUGH TRUST AGREEMENTS

 

Pass Through
Trust Agreement dated as of the Issuance Date between the Company and the Pass
Through Trustee in respect of JetBlue Airways Pass Through Trust,
Series 2004–2G-1–O.

 

Pass Through
Trust Agreement dated as of the Issuance Date between the Company and the Pass
Through Trustee in respect of JetBlue Airways Pass Through Trust,
Series 2004–2G-2–O.

 

Pass Through
Trust Agreement dated as of the Issuance Date between the Company and the Pass
Through Trustee in respect of JetBlue Airways Pass Through Trust,
Series 2004–2C–O.

 

1

 

SCHEDULE III

TO NOTE PURCHASE AGREEMENT

 

DEPOSIT AGREEMENTS

 

Deposit
Agreement (Class G-1) dated as of the Issuance Date between the Depositary
and the Escrow Agent.

 

Deposit
Agreement (Class G-2) dated as of the Issuance Date between the Depositary
and the Escrow Agent.

 

Deposit
Agreement (Class C) dated as of the Issuance Date between the Depositary
and the Escrow Agent.

 

1

 

SCHEDULE IV TO

NOTE PURCHASE AGREEMENT

 

ESCROW AND PAYING AGENT
AGREEMENTS

 

Escrow and
Paying Agent Agreement (Class G-1) dated as of the Issuance Date among the
Escrow Agent, the Underwriters, the Pass Through Trustee and the Paying Agent.

 

Escrow and
Paying Agent Agreement (Class G-2) dated as of the Issuance Date among the
Escrow Agent, the Underwriters, the Pass Through Trustee and the Paying Agent.

 

Escrow and
Paying Agent Agreement (Class C) dated as of the Issuance Date among the
Escrow Agent, the Underwriters, the Pass Through Trustee and the Paying Agent.

 

1

 

SCHEDULE V

TO NOTE PURCHASE AGREEMENT

 

AGGREGATE AMORTIZATION SCHEDULE

 

	
  Date

  	
   

  	
  2004-2G-1 Trust

  Scheduled Principal

  Payment

  	
   

  	
  2004-2G-2 Trust

  Scheduled Principal

  Payment

  	
   

  	
  2004-2C Trust

  Scheduled Principal

  Payment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Issuance Date

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  0.00

  	
   

  
	
  February 15, 2005

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  
	
  May 15, 2005

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  
	
  August 15, 2005

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  
	
  November 15, 2005

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  11,900,000.00

  	
   

  
	
  February 15, 2006

  	
   

  	
  2,154,619.37

  	
   

  	
  0.00

  	
   

  	
  6,670,469.28

  	
   

  
	
  May 15, 2006

  	
   

  	
  2,166,038.50

  	
   

  	
  0.00

  	
   

  	
  6,704,743.03

  	
   

  
	
  August 15, 2006

  	
   

  	
  4,352,553.40

  	
   

  	
  0.00

  	
   

  	
  13,472,868.60

  	
   

  
	
  November 15, 2006

  	
   

  	
  2,191,582.50

  	
   

  	
  0.00

  	
   

  	
  6,783,811.78

  	
   

  
	
  February 15, 2007

  	
   

  	
  2,154,966.00

  	
   

  	
  0.00

  	
   

  	
  6,670,469.28

  	
   

  
	
  May 15, 2007

  	
   

  	
  2,166,038.50

  	
   

  	
  0.00

  	
   

  	
  6,704,743.03

  	
   

  
	
  August 15, 2007

  	
   

  	
  4,352,553.40

  	
   

  	
  0.00

  	
   

  	
  13,472,868.60

  	
   

  
	
  November 15, 2007

  	
   

  	
  2,191,582.50

  	
   

  	
  0.00

  	
   

  	
  6,783,811.78

  	
   

  
	
  February 15, 2008

  	
   

  	
  2,154,966.00

  	
   

  	
  0.00

  	
   

  	
  6,670,469.28

  	
   

  
	
  May 15, 2008

  	
   

  	
  2,166,038.50

  	
   

  	
  0.00

  	
   

  	
  6,704,743.03

  	
   

  
	
  August 15, 2008

  	
   

  	
  4,352,553.40

  	
   

  	
  0.00

  	
   

  	
  13,472,868.60

  	
   

  
	
  November 15, 2008

  	
   

  	
  5,391,348.73

  	
   

  	
  0.00

  	
   

  	
  $

  	
  30,054,133.71

  	
   

  
	
  February 15, 2009

  	
   

  	
  2,134,044.00

  	
   

  	
  0.00

  	
   

  	
   

  	
   

  
	
  May 15, 2009

  	
   

  	
  2,145,009.00

  	
   

  	
  0.00

  	
   

  	
   

  	
   

  
	
  August 15, 2009

  	
   

  	
  4,310,295.60

  	
   

  	
  0.00

  	
   

  	
   

  	
   

  
	
  November 15, 2009

  	
   

  	
  8,358,863.97

  	
   

  	
  0.00

  	
   

  	
   

  	
   

  
	
  February 15, 2010

  	
   

  	
  2,092,200.00

  	
   

  	
  0.00

  	
   

  	
   

  	
   

  
	
  May 15, 2010

  	
   

  	
  2,102,950.00

  	
   

  	
  0.00

  	
   

  	
   

  	
   

  
	
  August 15, 2010

  	
   

  	
  4,225,780.00

  	
   

  	
  0.00

  	
   

  	
   

  	
   

  
	
  November 15, 2010

  	
   

  	
  8,105,335.37

  	
   

  	
  0.00

  	
   

  	
   

  	
   

  
	
  February 15, 2011

  	
   

  	
  2,050,356.00

  	
   

  	
  0.00

  	
   

  	
   

  	
   

  
	
  May 15, 2011

  	
   

  	
  2,060,891.00

  	
   

  	
  0.00

  	
   

  	
   

  	
   

  
	
  August 15, 2011

  	
   

  	
  4,141,264.40

  	
   

  	
  0.00

  	
   

  	
   

  	
   

  
	
  November 15, 2011

  	
   

  	
  7,851,806.77

  	
   

  	
  0.00

  	
   

  	
   

  	
   

  
	
  February 15, 2012

  	
   

  	
  2,008,512.00

  	
   

  	
  0.00

  	
   

  	
   

  	
   

  
	
  May 15, 2012

  	
   

  	
  2,018,832.00

  	
   

  	
  0.00

  	
   

  	
   

  	
   

  
	
  August 15, 2012

  	
   

  	
  4,056,748.80

  	
   

  	
  0.00

  	
   

  	
   

  	
   

  
	
  November 15, 2012

  	
   

  	
  7,598,278.17

  	
   

  	
  0.00

  	
   

  	
   

  	
   

  
	
  February 15, 2013

  	
   

  	
  1,966,668.00

  	
   

  	
  0.00

  	
   

  	
   

  	
   

  
	
  May 15, 2013

  	
   

  	
  1,976,773.00

  	
   

  	
  0.00

  	
   

  	
   

  	
   

  
	
  August 15, 2013

  	
   

  	
  3,972,233.20

  	
   

  	
  0.00

  	
   

  	
   

  	
   

  
	
  November 15, 2013

  	
   

  	
  12,689,414.03

  	
   

  	
  0.00

  	
   

  	
   

  	
   

  

 

1

 

	
  Date

  	
   

  	
  2004-2G-1 Trust

  Scheduled Principal

  Payment

  	
   

  	
  2004-2G-2 Trust

  Scheduled Principal

  Payment

  	
   

  	
  2004-2C Trust

  Scheduled Principal

  Payment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  February 15, 2014

  	
   

  	
  1,882,980.00

  	
   

  	
  0.00

  	
   

  	
   

  	
   

  
	
  May 15, 2014

  	
   

  	
  1,892,655.00

  	
   

  	
  0.00

  	
   

  	
   

  	
   

  
	
  August 15, 2014

  	
   

  	
  3,803,202.00

  	
   

  	
  0.00

  	
   

  	
   

  	
   

  
	
  November 15, 2014

  	
   

  	
  12,182,356.83

  	
   

  	
  0.00

  	
   

  	
   

  	
   

  
	
  February 15, 2015

  	
   

  	
  1,799,292.00

  	
   

  	
  0.00

  	
   

  	
   

  	
   

  
	
  May 15, 2015

  	
   

  	
  1,808,537.00

  	
   

  	
  0.00

  	
   

  	
   

  	
   

  
	
  August 15, 2015

  	
   

  	
  3,634,170.80

  	
   

  	
  0.00

  	
   

  	
   

  	
   

  
	
  November 15, 2015

  	
   

  	
  11,675,299.63

  	
   

  	
  0.00

  	
   

  	
   

  	
   

  
	
  February 15, 2016

  	
   

  	
  1,715,604.00

  	
   

  	
  0.00

  	
   

  	
   

  	
   

  
	
  May 15, 2016

  	
   

  	
  1,724,419.00

  	
   

  	
  0.00

  	
   

  	
   

  	
   

  
	
  August 15, 2016

  	
   

  	
  12,973,387.63

  	
   

  	
  0.00

  	
   

  	
   

  	
   

  
	
  November 15, 2016

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  185,418,000.00

  	
   

  	
   

  	
   

  
										

 

2

 

ANNEX A TO

NOTE PURCHASE AGREEMENT

 

DEFINITIONS

 

“Above-Cap Liquidity Agreements” has the
meaning set forth in the recitals to the Note Purchase Agreement.

 

“Above-Cap Liquidity Provider” has the
meaning set forth in the recitals to the Note Purchase Agreement.

 

“Act” means 49 U.S.C. §§ 40101–46507.

 

“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.

 

“Aircraft” has the meaning set forth in
the second recital to the Note Purchase Agreement.

 

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

 

“Assumed Amortization Schedule” means Schedule V
to the Note Purchase Agreement.

 

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

 

“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 or Wilmington, Delaware.

 

“Certificate” has the meaning set forth
in the third recital to the Note Purchase Agreement.

 

“Certificateholder” means the Person in
whose name a Certificate is registered in the Register.

 

“Class” means the class of Certificates
issued by each Pass Through Trust.

 

“Class C Certificates” has the meaning
specified in the Intercreditor Agreement.

 

1

 

“Class C Trust” has the meaning
specified in the Intercreditor Agreement.

 

“Class G-1 Certificates” has the meaning
specified in the Intercreditor Agreement.

 

“Class G-1 Trust” has the meaning
specified in the Intercreditor Agreement.

 

“Class G-2 Certificates” has the meaning
specified in the Intercreditor Agreement.

 

“Class G-2 Trust” has the meaning
specified in the Intercreditor Agreement.

 

“Company” means JetBlue Airways
Corporation, a Delaware corporation.

 

“Corporate Trust Office” with respect to
any Pass Through Trustee or any Loan Trustee, means the office of such trustee
in the city at which at any particular time its corporate trust business shall
be principally administered.

 

“Cut–off Date” means the earlier of
(a) the day after the Delivery Period Termination Date and (b) the
date on which a Triggering Event occurs.

 

“Delivery Date” means the Business Day
on which an Aircraft is delivered to and accepted by the Company.

 

“Delivery Period Termination Date” means
the earlier of (a) February 28, 2006, or, if the Equipment Notes
relating to all of the Aircraft (or Substitute Aircraft in lieu thereof) have
not been purchased by the Pass Through Trustees on or prior to such date due to
any reason beyond the control of the Company and not occasioned by the Company’s
fault or negligence, May 31, 2006 and (b) the date on which Equipment
Notes issued with respect to all of the Aircraft (or Substitute Aircraft in
lieu thereof) have been purchased by the Pass Through Trustees in accordance
with the Note Purchase Agreement.

 

“Deposit” has the meaning set forth in
the fifth recital to the Note Purchase Agreement.

 

“Deposit Agreement” shall mean the
initial Deposit Agreements set forth on Schedule III hereto and, from and
after the transfer of the Deposits to a Replacement Depositary, shall refer to
the corresponding Replacement Deposit Agreements between the Escrow Agent and
the Replacement Depositary.

 

“Depositary” means HSH Nordbank AG,
acting through its New York Branch, a New York State licensed branch office of
Landesbank organized under the laws of Germany, and, from and after the
transfer of the Deposits to a Replacement Depositary, shall mean such
Replacement Depositary.

 

“Deposit Break Amount” means, as of any
date of distribution of remaining Deposits relating to the Class G-1
Trust, Class G-2 Trust or Class C Trust (the “Applicable Date”), an amount determined by
the Class G-1 Trustee, Class G-2 Trustee or Class C Trustee, as
applicable, on the date that is two LIBOR Business Days prior to the Applicable
Date pursuant to the formula set forth below.

 

2

 

The Deposit Break
Amount will be calculated as follows:

 

Deposit Break
Amount = Z–Y

 

Where:

 

X =                             with
respect to any applicable interest period, the sum of (i) the amount of
such remaining Deposits as of the Applicable Date 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 then applicable interest period, determined by
the relevant Trustee as of two LIBOR Business Days prior to the Applicable Date
as the discount rate.

 

No Deposit
Break Amount will be payable (x) if the Deposit 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 Regular
Distribution Date.

 

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

 

“Escrow Agent” has the meaning set forth
in the first paragraph of the Note Purchase Agreement.

 

“Escrow and Paying Agent Agreement” has
the meaning set forth in the fifth recital to the Note Purchase Agreement.

 

“FAA” means the Federal Aviation
Administration of the United States.

 

“Final Withdrawal” with respect to each
Escrow and Paying Agent Agreement, has the meaning set forth in Section 1.02
thereof.

 

“Financing Agreements” means,
collectively, the Participation Agreement, the Indenture and the Equipment
Notes issued thereunder.

 

“Funding Date” has the meaning set forth
in Section 1(b) hereof.

 

“Funding Notice” has the meaning set
forth in Section 1(b) hereof.

 

3

 

“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.

 

“Indenture” means a Trust Indenture and
Mortgage substantially in the form of Exhibit B–2 to the Note Purchase
Agreement.

 

“Intercreditor Agreement” has the
meaning set forth in the ninth recital to the Note Purchase Agreement.

 

“Issuance Date” means the date of the
original issuance of the Certificates.

 

“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.

 

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

 

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

 

“Loan Trustee” means the “Mortgagee” as
defined in the Financing Agreements.

 

“Manufacturer” means Airbus S.A.S.,
solely in its capacity as manufacturer or seller of Aircraft.

 

“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.

 

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

 

“Note Purchase Agreement” means the Note
Purchase Agreement to which this Annex A is attached.

 

“Notice of Purchase Withdrawal” with
respect to each Deposit Agreement, has the meaning set forth in Section 2.3
thereof.

 

4

 

“Operative Agreements” means,
collectively, the Pass Through Trust Agreements, the Escrow and Paying Agent
Agreements, the Deposit Agreements, the Liquidity Facilities, the Policy Provider
Agreement, the Policy, the Intercreditor Agreement, the Equipment Notes, the
Certificates and the Financing Agreements.

 

“Participation Agreement” means a
Participation Agreement substantially in the form of Exhibit B–1 to the
Note Purchase Agreement.

 

“Pass Through Trust” has the meaning set
forth in the third recital to the Note Purchase Agreement.

 

“Pass Through Trust Agreement” has the
meaning set forth in the third recital to the Note Purchase Agreement.

 

“Pass Through Trustee” has the meaning
set forth in the first paragraph of the Note Purchase Agreement.

 

“Paying Agent” has the meaning set forth
in the first paragraph of the Note Purchase Agreement.

 

“Person” means any individual, firm,
partnership, joint venture, trust, trustee, Government Entity, organization,
association, corporation, limited liability company, government agency,
committee, department, authority and other body, corporate or incorporate,
whether having distinct legal status or not, or any member of any of the same.

 

“Policy” has the meaning set forth in
the tenth recital to the Note Purchase Agreement.

 

“Policy Provider” has the meaning set
forth in the tenth recital to the Note Purchase Agreement.

 

“Policy Provider Agreement” has the
meaning set forth in the tenth recital to the Note Purchase Agreement.

 

“Policy Provider Obligations” has the
meaning specified in the Intercreditor Agreement.

 

“Primary Liquidity Facility” has the
meaning set forth in the recitals to the Note Purchase Agreement.

 

“Primary Liquidity Provider” has the meaning
set forth in the recitals to the Note Purchase Agreement.

 

“Rating Agencies” means, collectively,
at any time, each nationally recognized rating agency which shall have been
requested to rate the Certificates and which shall then be rating the Certificates.  The initial Rating Agencies will be Moody’s
Investors Service, Inc. and Standard & Poor’s Rating Services, a
division of The McGraw–Hill Companies Inc.

 

5

 

“Rating Agency Confirmation” means, with
respect to any action proposed to be taken, a written confirmation from each of
the Rating Agencies that such action would not result in (i) a reduction
of the rating for any Class of Certificates below the then current rating for
such Class of Certificates (without regard to the Policy) or (ii) a
withdrawal or suspension of the rating of any Class of Certificates.

 

“Register” means the register maintained
pursuant to Sections 3.04 and 7.12 of each Pass Through Trust Agreement.

 

“Regular Distribution Dates” shall mean February 15,
May 15, August 15 and November 15 of each year, commencing February 15,
2005.

 

“Replacement Deposit Agreement” means,
for each Class of Certificates, a deposit agreement substantially in the form
of the replaced Deposit Agreement for such Class of Certificates as shall
permit the Rating Agencies to confirm in writing their respective ratings then
in effect for such Class of Certificates (before the downgrading of such
ratings, if any, as a result of the downgrading of the Depositary and without
regard to the Policy).

 

“Replacement Depositary” has the meaning
set forth in Section 4(a)(v) of the Note Purchase Agreement.

 

“Scheduled Financing Date” has the
meaning set forth in Section 1(b) hereof.

 

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

 

“Series C Equipment Notes” means
Equipment Notes issued under an Indenture and designated as “Series C”
thereunder.

 

“Series G-1 Equipment Notes” means
Equipment Notes issued under an Indenture and designated as “Series G-1”
thereunder.

 

“Series G-2 Equipment Notes” means
Equipment Notes issued under an Indenture and designated as “Series G-2”
thereunder.

 

“Special Indenture Event of Default”
means an “Event of Default” as defined in any Indenture resulting from the
failure of the Company to make any scheduled payments on any Equipment Note.

 

“Subordination Agent” has the meaning
set forth in the first paragraph of the Note Purchase Agreement.

 

“Substitute Aircraft” has the meaning
set forth in Section 1(e) of the Note Purchase Agreement.

 

“Taxes” means all license, recording,
documentary, registration and other similar fees and all taxes, levies,
imposts, duties, charges, assessments or withholdings of any nature

 

6

 

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” has the meaning
assigned to such term in the Indenture.

 

“Triggering Event” has the meaning
assigned to such term in the Intercreditor Agreement.

 

“Underwriters” has the meaning set forth
in the fourth recital to the Note Purchase Agreement.

 

“Unindemnified Taxes” has the meaning
assigned to such term in the Intercreditor Agreement.

 

“WTC” has the meaning set forth in the
first paragraph of the Note Purchase Agreement.

 

7

 

EXHIBIT A TO

NOTE PURCHASE AGREEMENT

 

FORM OF FUNDING NOTICE

 

Dated as of                              ,
        

 

To each of the addressees listed

  in Schedule A
hereto

 

Re:                               Delivery
Notice in accordance with Note Purchase

Agreement referred to below

 

Gentlemen:

 

Reference
is made to the Note Purchase Agreement dated as of November 15, 2004 among
JetBlue Airways Corporation (the “Company”),
Wilmington Trust Company, as Pass Through Trustee under each of the Pass
Through Trust Agreements (as defined therein) (the “Pass Through Trustee”), Wilmington Trust Company, as
Subordination Agent (the “Subordination Agent”),
Wilmington Trust Company, as Escrow Agent (the “Escrow Agent”) and Wilmington Trust Company, as Paying Agent
(the “Paying Agent”) (as in effect
from time to time, the “Note Purchase
Agreement”).  Unless otherwise
defined herein, capitalized terms used herein shall have the meanings set forth
in the Note Purchase Agreement or, to the extent not defined therein, the
Intercreditor Agreement.

 

Pursuant
to Section 1(b) of the Note Purchase Agreement, the undersigned hereby
notifies you, in respect of the Airbus A320-232 aircraft with manufacturer’s
serial number                 
(the “Aircraft”), of the
following:

 

(1)           The Scheduled Financing Date of the
Aircraft is                      ,
        ; and

 

(2)           The aggregate amount of each series
of Equipment Notes to be issued, and purchased by the respective Pass Through
Trustees, on the Scheduled Financing Date, in connection with the financing of
such Aircraft is as follows:

 

(a)                                  the Class G-1
Trustee shall purchase Series G-1 Equipment Notes in the amount of $                  ;

 

(b)                                 the Class G-2
Trustee shall purchase Series G-2 Equipment Notes in the amount of $                  ;
and

 

(c)                                  the Class C
Trustee shall purchase Series C Equipment Notes in the amount of $                  .

 

The
Company hereby instructs the Class G-1 Trustee to (i) execute a
Withdrawal Certificate in the form of Annex A hereto dated                      ,
           [a date which is
no later than one Business Day prior to the Scheduled Financing Date] and
attach thereto a Notice of

 

1

 

Purchase
Withdrawal dated such date completed as set forth on Exhibit A hereto and
(ii) deliver such Withdrawal Certificate and Notice of Purchase Withdrawal
to the applicable Escrow Agent.

 

The
Company hereby instructs the Class G-2 Trustee to (i) execute a
Withdrawal Certificate in the form of Annex A hereto dated                      ,
           [a date which is
no later than one Business Day prior to the Scheduled Financing Date] and
attach thereto a Notice of Purchase Withdrawal dated such date completed as set
forth on Exhibit B hereto and (ii) deliver such Withdrawal
Certificate and Notice of Purchase Withdrawal to the applicable Escrow Agent.

 

The
Company hereby instructs the Class C Trustee to (i) execute a
Withdrawal Certificate in the form of Annex A hereto dated                      ,
           [a date which is
no later than one Business Day prior to the Scheduled Financing Date] and
attach thereto a Notice of Purchase Withdrawal dated such date completed as set
forth on Exhibit C hereto and (ii) deliver such Withdrawal
Certificate and Notice of Purchase Withdrawal to the applicable Escrow Agent.

 

The
Company hereby instructs each Pass Through Trustee to (i) purchase
Equipment Notes of a series and in an amount set forth opposite such Pass
Through Trustee in clause (2) above with a portion of the proceeds of the
withdrawals of Deposits referred to in the applicable Notice of Purchase
Withdrawal referred to above and (ii) re–deposit with the Depositary the
excess, if any, of the amount so withdrawn over the purchase price of
such Equipment Notes.

 

The
Company hereby instructs each Pass Through Trustee to (a) enter into the
Participation Agreement dated as of                      ,
           among the Company,
as Owner, the Subordination Agent, the Pass Through Trustee, Wilmington Trust
Company, as Mortgagee, (b) perform its obligations thereunder and
(c) deliver such certificates, documents and legal opinions relating to
such Pass Through Trustee as required thereby.

 

	
  Yours
  faithfully,

  
	
   

  
	
  JetBlue Airways Corporation

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  

 

2

 

SCHEDULE A

 

Wilmington Trust Company, as

  Pass
Through Trustee, Subordination

 
Agent, Escrow Agent and Paying Agent

Rodney Square North

1100 North Market Street

Wilmington, Delaware 19890-0001

Attention: 
Corporate Trust

 
Administration

Facsimile:
(302) 636-4140

 

Standard & Poor’s Ratings Services

55 Water Street, 35th Floor

New York, New York 10041

Attention: 
Betsy R. Snyder

Facsimile:
(212) 438–7811

 

Moody’s Investors Service, Inc.

99 Church Street

New York, New York 10007

Attention: 
Richard Bittenbender

Facsimile: (212) 553–4661

 

MBIA Insurance Corporation

113 King Street

Armonk, New York 10504

Attention: Insured Portfolio Management, Structural Finance

Facsimile: (914) 765-3163

 

HSH Nordbank AG, New York Branch

590 Madison Ave.

New York, New York 10022-2540

Attention: 
Transportation-Americas

Facsimile: (212) 407-6033

 

3

 

ANNEX A TO EXHIBIT A

 

WITHDRAWAL CERTIFICATE

 

(Class     )(1)

 

WILMINGTON TRUST COMPANY,

as Escrow
Agent

 

Dear Sirs:

 

Reference
is made to the Escrow and Paying Agent Agreement, dated as of November 15,
2004 (the “Agreement”).  We hereby certify to you that the conditions
to the obligations of the undersigned to execute a Participation Agreement
pursuant to the Note Purchase Agreement have been satisfied.  Pursuant to Section 1.02(c) of the
Agreement, please execute the attached Notice of Purchase Withdrawal and
immediately transmit by facsimile to the Depositary, at 212-407-6033,
Attention:  Transportation - Americas.

 

	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
  WILMINGTON TRUST COMPANY, not

  in its individual capacity by solely as Pass

  Through Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
  Dated:
                         ,
  200

  	
   

  

 

 

(1)          Insert
letter of appropriate class of Certificates.

 

1

 

ANNEX A TO FUNDING NOTICE

 

NOTICE OF PURCHASE WITHDRAWAL

 

HSH Nordbank AG, New York Branch

590 Madison Avenue

New York, NY 10022-2540

Attention: 
Transportation - Americas

Telecopier:  212-407-6033

 

Gentlemen:

 

Reference
is made to the Deposit Agreement (Class G-1) dated as of November 15,
2004 (the “Deposit Agreement”)
between Wilmington Trust Company, as Escrow Agent, and HSH Nordbank AG, acting
through its New York Branch, as Depositary (the “Depositary”).

 

In
accordance with Section 2.5(a) of the Deposit Agreement, the undersigned
hereby requests the withdrawal of the entire amount of the Deposit, $                  ,
Account No.                             .

 

The
undersigned hereby directs the Depositary to pay the proceeds of the Deposit to
[                      ,
Account No.                     ,
Reference:                            ]
on                            ,
200  , upon the telephonic request of a representative of Wilmington
Trust Company, the Pass Through Trustee.

 

	
   

  	
  WILMINGTON TRUST COMPANY, as

  Escrow Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
  Dated:                     ,
  200  

  	
   

  

 

2

 

EXHIBIT B

 

NOTICE OF PURCHASE WITHDRAWAL

 

HSH Nordbank AG, New York Branch

590 Madison Avenue

New York, NY 10022-2540

Attention: 
Transportation - Americas

Telecopier:  212-407-6033

 

Gentlemen:

 

Reference
is made to the Deposit Agreement (Class G-2) dated as of November 15,
2004 (the “Deposit Agreement”)
between Wilmington Trust Company, as Escrow Agent, and HSH Nordbank AG, acting
through its New York Branch, as Depositary (the “Depositary”).

 

In
accordance with Section 2.5(a) of the Deposit Agreement, the undersigned
hereby requests the withdrawal of the entire amount of the Deposit, $                  ,
Account No.                             .

 

The
undersigned hereby directs the Depositary to pay the proceeds of the Deposit to
[                      ,
Account No.                     ,
Reference:                            ]
on                            ,
200  , upon the telephonic request of a representative of Wilmington
Trust Company, the Pass Through Trustee.

 

	
   

  	
  WILMINGTON TRUST COMPANY, as

  Escrow Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
  Dated:                     ,
  200  

  	
   

  

 

1

 

EXHIBIT C

 

NOTICE OF PURCHASE WITHDRAWAL

 

HSH Nordbank AG, New York Branch

590 Madison Avenue

New York, NY 10022-2540

Attention: 
Transportation - Americas

Telecopier:  212-407-6033

 

Gentlemen:

 

Reference
is made to the Deposit Agreement (Class C) dated as of November 15,
2004 (the “Deposit Agreement”)
between Wilmington Trust Company, as Escrow Agent, and HSH Nordbank AG, acting
through its New York Branch, as Depositary (the “Depositary”).

 

In
accordance with Section 2.5(a) of the Deposit Agreement, the undersigned
hereby requests the withdrawal of the entire amount of the Deposit, $              ,
Account No.                     .

 

The
undersigned hereby directs the Depositary to pay the proceeds of the Deposit to
[                    ,
Account No.               ,
Reference:                      ]
on                        ,
200  , upon the telephonic request of a representative of the
Wilmington Trust Company, Pass Through Trustee.

 

	
   

  	
  WILMINGTON TRUST COMPANY, as

  Escrow Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
  Dated:                     ,
  200  

  	
   

  

 

1

 

EXHIBIT B–1 TO

NOTE PURCHASE AGREEMENT

 

FORM OF PARTICIPATION AGREEMENT

 

1

 

EXHIBIT B–2 TO

NOTE PURCHASE AGREEMENT

 

FORM OF INDENTURE

 

1Exhibit 4.26

 

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

  	
   

  	
   

  
	
  5.06

  	
   

  	
  Waiver of Past
  Defaults

  	
   

  	
   

  
	
  5.07

  	
   

  	
  Appointment of
  Receiver

  	
   

  	
   

  
	
  5.08

  	
   

  	
  Mortgagee
  Authorized to Execute Bills of Sale, Etc

  	
   

  	
   

  

 

i

 

	
  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

  	
   

  	
   

  
	
  11.06

  	
   

  	
  Severability

  	
   

  	
   

  
	
  11.07

  	
   

  	
  No Oral
  Modification or Continuing Waivers

  	
   

  	
   

  
	
  11.08

  	
   

  	
  Successors and
  Assigns

  	
   

  	
   

  
	
  11.09

  	
   

  	
  Headings

  	
   

  	
   

  
	
  11.10

  	
   

  	
  Normal Commercial
  Relations

  	
   

  	
   

  

 

ii

 

	
  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 February 15, May 15,
August 15 and November 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
February 15, May 15, August 15 and November 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 November 15, 2016.  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 with respect to all of
the Indentures (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

 

11

 

payable to the Policy Provider under Section 3.02
of the Policy Provider Agreement (as defined 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 with respect to all of the Indentures (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 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 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 with respect to all of the Indentures
(as defined in the Note Purchase Agreement)); (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 (iii); (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 (iii) 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

 

12

 

the foregoing clause (ii) (without taking into
account clause (y) thereof), (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 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. 

 

13

 

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, 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 2.03.

 

(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.

 

14

 

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 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;

 

15

 

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

 

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

 

16

 

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 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

 

17

 

“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 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)

 

18

 

the applicable basis for
determining the redemption price, (3) that on the redemption date, the
redemption price will become due and payable upon each such Equipment Note, and
that, if any such Equipment Notes are then outstanding, interest on such
Equipment Notes shall cease to accrue on and after such redemption date, and
(4) the place or places where such Equipment Notes are to be surrendered
for payment of the redemption price.

 

(c)           On
or before the redemption date, the Owner (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.

 

19

 

(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
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

 

20

 

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 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,
to pay the amounts specified in clause ”Third” of Section 3.03 hereof
in the order of payment set forth therein (including in the case of a
redemption pursuant to Section 2.10 hereof, Prepayment Premium, if any);

 

Third,
as provided in clause ”Fourth” of Section 3.03 hereof; 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

 

21

 

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,
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

 

22

 

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
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

 

23

 

Related
Mortgagee bears to the aggregate unpaid Related Secured Obligations payable to
all such Related Mortgagees;

 

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.

 

24

 

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 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 Mortgagee 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;

 

25

 

(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 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

 

26

 

whom notices must be given and to whom requests or
claims must be made to the extent applicable under CRAF;

 

(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);

 

27

 

provided that (1) the rights of any
Permitted Lessee or other 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
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

 

28

 

against Mortgagee, any right, title or interest in an
Engine as a result of such Engine being installed on such airframe.

 

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, (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, or (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

 

29

 

time cause the Aircraft
to be re-registered 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.

 

30

 

(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.

 

(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

 

31

 

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. 
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

 

32

 

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 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

 

33

 

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.

 

(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;

 

34

 

(D)          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 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 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 (10) 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 ten (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) 709-3639 with a copy to:  JetBlue Airways Corporation, 118-29 Queens
Blvd., Forest Hills, NY  11375,
Attention:  General Counsel, facsimile
number (718) 709-3631, (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 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

 

60

 

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

 

61

 

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.  To the extent such agreement is reasonably
obtainable, 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,

 

62

 

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.

 

63

 

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.

 

64

 

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) 0.450% 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
  for such Interest Period (or such other period) and (y) 3.10% per annum.

  	
   

  

 

1

 

EQUIPMENT NOTE AMORTIZATION

 

	
  Payment Date

  	
   

  	
  Percentage of Original 

  Amount to be Paid

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00074-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00074-of-00352.parquet"}]]