Exhibit 4.1

EXECUTION COPY

NOTE PURCHASE AGREEMENT

Dated as of October 14, 2022

Among

WHEELS UP PARTNERS LLC

WHEELS UP CLASS A-1 LOAN TRUST 2022-1

and

WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Subordination Agent

Table of Contents

NOTE PURCHASE AGREEMENT

This NOTE PURCHASE AGREEMENT, dated as of October 14, 2022 (this “Agreement”), is among (i) WHEELS UP PARTNERS LLC, a Delaware limited liability company (the “Company”), (ii) WHEELS UP CLASS A-1 LOAN TRUST 2022-1, a statutory trust formed and existing under the laws of Delaware ( the “Class A-1 Trust”) and (iii) WILMINGTON TRUST, NATIONAL ASSOCIATION, a national banking association (“WTNA”), 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).

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 owns the 134 business jet aircraft listed in Schedule I hereto;

WHEREAS, pursuant to this Agreement the Company wishes to finance each of the Aircraft hereunder;

WHEREAS, pursuant to declaration of trust dated September 28, 2022, Wheels Up has caused the formation of the Class A-1 Trust, to facilitate certain of the transactions contemplated hereby, including, without limitation, the issuance of loans (“Loans”) to provide financing, among other things, for the purchase by the Class A-1 Trust of the Equipment Notes to be issued in respect of, and secured by a security interest in, each of the Aircraft;

WHEREAS, the Company has caused the Class A-1 Trust to enter into the Loan Agreement, dated as of October 14, 2022 (as amended, supplemented or otherwise modified from time to time in accordance with its terms, the “Loan Agreement”) with the lenders named therein, or otherwise a party thereto from time to time (each, a “Lender” and collectively, the “Lenders”), pursuant to which the Class A-1 Trust, as borrower, will borrow Loans from the Lenders;

WHEREAS, on the Scheduled Closing Date (or such later date as provided herein), subject to the terms and conditions of this Agreement, the Class A-1 Trust will enter into the applicable Financing Agreements relating to such Aircraft; and

WHEREAS, in order to effect the financing of each Aircraft, the Class A-1 Trust will fund its purchase of Equipment Notes with the proceeds of Loans pursuant to the Loan Agreement.

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:

[Note Purchase Agreement]

Section 1.               Financing of Aircraft. (a) The Company confirms that it currently owns the Aircraft. 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 and each of the Rating Agencies notice substantially in the form of Exhibit A hereto (a “Closing Notice”) of the Scheduled Closing Date (and the Company shall endeavor to finance each Aircraft on the Scheduled Closing Date, provided the Company may, concurrently with the delivery of the initial Closing Notice, deliver a notice of postponement in accordance with Section 1(e)) or a Business Day thereafter and before the Cut-off Date for such Aircraft, which notice shall:

(i)            specify the expected Closing Date of such Aircraft;

(ii)            instruct the Class A-1 Trust to enter into the Participation Agreement included in the Financing Agreements with respect to such Aircraft in such form and at such a time on or before the expected Closing Date specified in such Closing Notice and to perform its obligations thereunder; and

(iii)            specify the aggregate principal amount of Equipment Notes, if any, to be issued, and purchased by the Class A-1 Trust, in connection with the financing of such Aircraft scheduled on such expected Closing Date (which shall be in substantially the forms attached hereto and include the Required Terms).

Notwithstanding the foregoing, in the case of any Aircraft to be financed hereunder on the Initial Closing Date, the Closing Notice therefor may be delivered to the parties hereto on the Initial Closing Date.

(c)             Upon receipt of a Closing Notice, the Class A-1 Trust shall, and shall cause the Subordination Agent to, enter into and perform its obligations under each Participation Agreement specified in such Closing Notice, provided that such Participation Agreement and the Indenture to be entered into pursuant to such Participation Agreement shall be substantially in the forms thereof annexed hereto in all respects and, if modified in any material respect, as to which the consent of the Lenders and a Rating Agency Confirmation shall have been obtained from each Rating Agency by the Company (to be delivered by the Company to the Class A-1 Trust on or before the Closing Date on which such Participation Agreement is to be entered into, it being understood that if a Rating Agency Confirmation shall have been received with respect to any Financing Agreements and such Financing Agreements are utilized for subsequent Aircraft without material modifications, no additional Rating Agency Confirmation shall be required); provided, however, that the relevant Financing Agreements as executed and delivered shall not vary the Required Terms. Notwithstanding the foregoing, an Indenture may be modified to the extent required for the issuance of Equipment Notes pursuant to Section 4(a)(iv) of this Agreement, subject to the terms of such Section and Section 9.1(c), 9.1(d) or 9.1(e) of the Intercreditor Agreement, whichever may be applicable. The Company shall pay the reasonable costs and expenses of the Rating Agencies in connection with obtaining any such Rating Agency Confirmation. With respect to each Aircraft, the Company shall cause WTNA (or such other person that meets the eligibility requirements to act as loan trustee 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 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 any Rating Agency, the Company shall deliver or cause to be delivered to 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 set of the closing documentation (including legal opinions) delivered to the related Loan Trustee, Subordination Agent and Class A-1 Trust under the related Participation Agreement.

[Note Purchase Agreement]

(d)            The Company agrees that all Equipment Notes issued pursuant to any Indenture shall initially be registered in the name of the Subordination Agent on behalf of the Class A-1 Trust (or, in the case of any Additional Series Equipment Notes, on behalf of the Additional Series Trustee with respect to the corresponding Additional Series Obligations). The purchase price to be paid by the Class A-1 Trust for the Series A-1 Equipment Notes on each Closing Date shall be 96.0% of the principal amount of such Series A-1 Equipment Notes.

(e)             If the financing of any Aircraft on the Scheduled Closing Date (the “Delayed Aircraft”) in the manner contemplated hereby shall not be consummated for any reason the Company shall give the parties hereto prompt notice thereof. Concurrently with the giving of such notice of postponement or subsequently, the Company shall give the parties hereto a substitute Closing Notice specifying the date to which the financing of such Delayed Aircraft shall have been re-scheduled, which shall be a Business Day before the Cut-off Date for such Aircraft. Following the giving of such notice of postponement, the unapplied funds advanced by the Lenders under the Loan Agreement intended to fund the purchase of the Equipment Notes relating to such Delayed Aircraft, shall, pursuant to Section 2.1(a)(i) of the Loan Agreement, be held in a separate account with WTNA for the benefit of such Lenders with respect to such Equipment Notes until the earlier of (x) the application of such funds to purchase the relevant Equipment Notes with respect to such Delayed Aircraft and (y) the date that is 30 days after the Scheduled Closing Date with respect to such Delayed Aircraft (such 30th day, the “Prefunding Expiry Date”); provided that if the Equipment Notes relating to such Delayed Aircraft have not been purchased prior to the applicable Prefunding Expiry Date (which, for the avoidance of doubt, may be the Cut-off Date), such unapplied funds shall be paid as provided in the Loan Agreement. If a notice of postponement has been given with respect to an Aircraft, the financing of such Aircraft, as specified in a substitute Closing Notice, shall take place on the re-scheduled Closing Date therefor (all on and subject to the terms and conditions of the relevant Financing Agreements) unless further postponed as provided herein. The Company Agrees to pay the Class A-1 Trust, for the account of the Lenders, a commitment fee (but, for the avoidance of doubt, without make-whole, pre-payment or other cost, fee or penalty) equal to the interest that would have accrued on the appliable Equipment Notes with respect to each Delayed Aircraft from and including such original Scheduled Closing Date to but excluding the earlier of the date in clause (x) or (y) of this Section 1(f) as though such prefunded amounts were used by the Class A-1 Trust to acquire the applicable Equipment Notes with respect to such Delayed Aircraft on such original Scheduled Closing Date, which commitment fee shall be due and payable, in the case of clause (x), not more than three Business Days following the date specified in such clause (x) or, in the case of clause (y), not more than three Business Days following the Prefunding Expiry Date.

[Note Purchase Agreement]

(f)             The Company shall have no liability for the failure of the Class A-1 Trust to purchase Equipment Notes with respect to any Aircraft.

Section 2.               Conditions Precedent. The obligation of the Class A-1 Trust to enter into, and to cause the Subordination Agent to enter into, any Participation Agreement as directed pursuant to a Closing 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 Class A-1 Trust stating (i) that such Participation Agreement and the other Financing Agreements to be entered into pursuant to such Participation Agreement are each in substantially the form attached hereto and include each of the Required Terms and (ii) that there are no substantive modifications of such Financing Agreements from the forms of Financing Agreements attached to this Agreement, and such certification shall be true and correct.

Anything herein to the contrary notwithstanding, the obligation of the Class A-1 Trust to purchase Equipment Notes with respect to an Aircraft shall terminate on the Cut-off Date with respect to such Aircraft.

Section 3.               Representations and Warranties. (a) The Company represents and warrants to the parties hereto and to each Lender that:

(i)            the Company is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and is duly qualified to do business as a foreign limited liability company in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except where the failure to be so qualified would not have a material adverse effect on the condition (financial or otherwise), business, properties or results of operations of the Parent and its consolidated subsidiaries taken as a whole (a “Material Adverse Effect”);

(ii)            the Company is a “citizen of the United States” as defined in Section 40102(a)(15) of the Act, and holds an air carrier operating certificate issued pursuant to Chapter 447 of Title 49 of the United States Code, as amended, for aircraft capable of carrying 10 or more individuals or 6,000 pounds or more of cargo;

(iii)           the Company 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;

(iv)           the execution and delivery by the Company of this Agreement and the performance by the Company of its obligations under this Agreement and each Financing Agreement to which it will be a party have been duly authorized by the Company and will not violate its Certificate of Formation or operating agreement or the provisions of any indenture, mortgage, contract or other agreement to which it is a party or by which it is bound;

[Note Purchase Agreement]

(v)            this Agreement and each Financing Agreement to which it will be a party 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;

(vi)           except as disclosed in the Disclosure Documents (as defined below), the Company is not in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other instrument to which it is a party or by which it may be bound or to which any of its properties may be subject, except for such defaults that would not have a Material Adverse Effect;

(vii)          no consent, approval, authorization or order of, or filing with, any governmental agency or body or any court is required for the valid authorization, execution and delivery by the Company of this Agreement and the Operative Agreements to which it is or will be a party and for the consummation of the transactions contemplated herein and therein, except filings or recordings with the FAA, the IR and under the Uniform Commercial Code (the “UCC”) or other laws in effect in any applicable jurisdiction governing the perfection of security interests, which filings or recordings, with respect to any particular set of Financing Agreements, shall have been made, or duly presented for filing or recordation, or shall be in the process of being duly filed or filed for recordation, on or prior to the applicable Closing Date for each Aircraft related to such Financing Agreements;

(viii)         no representation or warranty of the Company contained in this Agreement or any other Operative Agreement or any other document or certificate furnished by or on behalf of the Company (this Agreement, the other Operative Agreements and such other documents or certificates, together with the Financial Statements and the 10-Q, the “Disclosure Documents”) or any of its Subsidiaries to the Loan Trustee, the Subordination Agent or the Lenders, or any of them, for use in connection with the transactions contemplated by this Agreement or the other Operative Agreements, taken as a whole, contained as of the date such representation, warranty, document or certificate was so furnished, any material misstatement of fact or omitted to state a material fact necessary to make the statements contained herein or therein, in light of the circumstances under which they were made, not materially misleading in their presentation of the Parent and its Subsidiaries taken as a whole. It is understood that (i) no representation or warranty is made concerning the forecasts, estimates, pro forma information, projections and statements as to anticipated future performance, conditions or values, and the assumptions on which they were based or concerning any information of a general economic nature or general information about the Parent’s and its Subsidiaries’ industry, contained in any such representation, warranty, document or certificate, except that, in the case of such forecasts, estimates, pro forma information, projections and statements, as of the date such forecasts, estimates, pro forma information, projections and statements were generated, (A) such forecasts, estimates, pro forma information, projections and statements were based on the good faith assumptions of the management of the Parent and (B) such assumptions were believed by such management to be reasonable and (ii) such forecasts, estimates, pro forma information and statements, and the assumptions on which they were based, may or may not prove to be correct;

[Note Purchase Agreement]

(ix)            except as disclosed in the Disclosure Documents, the Company and its Subsidiaries have good and marketable title to all properties and assets owned by them, in each case free from liens, encumbrances and defects except where the failure to have such title and the presence of such liens, encumbrances and defects would not have a Material Adverse Effect; and except as disclosed in the Disclosure Documents, the Company and its subsidiaries hold any leased property under valid and enforceable leases with no exceptions that would have a Material Adverse Effect;

(x)             except as disclosed in the Disclosure Documents, there is no action, suit or proceeding before or by any governmental agency or body or court, domestic or foreign, now pending or, to the knowledge of the Company, threatened against the Company or any of its subsidiaries or any of their respective properties that individually (or in the aggregate in the case of any class of related lawsuits), could reasonably be expected to result in a Material Adverse Effect or that could reasonably be expected to materially and adversely affect the consummation of the transactions contemplated by this Agreement or the Operative Agreements to which the Company is a party;

(xi)            except as disclosed in the Disclosure Documents, no labor dispute with the employees of the Company or any of its Subsidiaries exists or, to the knowledge of the Company, is imminent that could reasonably be expected to have a Material Adverse Effect;

(xii)           the Company and its Subsidiaries each has all necessary consents, authorizations, approvals, orders, certificates and permits of and from, and has made all declarations and filings with, all federal, state, local and other governmental authorities, all self regulatory organizations and all courts and other tribunals, to own, lease, license and use its properties and assets and to conduct its business in the manner described in the Disclosure Documents, except to the extent that the failure to so obtain, declare or file would not have a Material Adverse Effect;

(xiii)          except as disclosed in the Disclosure Documents, (x) neither the Company nor any of its Subsidiaries is in violation of any statute, rule, regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances (collectively, “environmental laws”), owns or operates any real property contaminated with any substance that is subject to any environmental laws, or is subject to any claim relating to any environmental laws, which violation, contamination, liability or claim individually or in the aggregate is reasonably expected to have a Material Adverse Effect, and (y) the Company is not aware of any pending investigation which might lead to such a claim that is reasonably expected to have a Material Adverse Effect;

[Note Purchase Agreement]

(xiv)         except as disclosed in the Disclosure Documents, (x) the Financial Statements and the related notes thereto present fairly in all material respects the financial position of the Parent and its consolidated Subsidiaries as of the respective dates indicated and the results of their operations, changes in stockholders’ equity and the changes in their cash flows for the periods specified and (y) the Financial Statements have been prepared in conformity with GAAP applied on a consistent basis throughout the periods covered thereby except as otherwise stated therein. Since the date of the Financial Statements, except as disclosed in the Disclosure Documents, there has been no event or occurrence that has had a Material Adverse Effect, and no development reasonably likely to result in a material adverse change in the condition (financial or otherwise) business or results of operations of Parent and its Subsidiaries, taken as a whole;

(xv)          the Company is not, nor (based on applicable law as in effect on the date hereof) will the Class A-1 Trust be, as of the execution and delivery of the Loan Agreement, an “investment company”, within the meaning of the Investment Company Act of 1940, as amended (the “Investment Company Act”), in each case required to register under the Investment Company Act; and after giving effect to the making of the Loans and the application of the proceeds thereof as described in the Disclosure Documents, the Class A-1 Trust will not result in the creation of, an “investment company”, as defined in the Investment Company Act, in each case required to register under the Investment Company Act and in making the foregoing determinations as to the Class A-1 Trust the Company and the Class A-1 Trust is relying upon an analysis that the Class A-1 Trust will not be deemed to be an “investment company” under Rule 3a-7 promulgated by the U.S. Securities and Exchange Commission, under the Investment Company Act, although other exemptions or exclusions may be available to the Class A-1 Trust. The Class A-1 Trust is not a “covered fund” as defined in the final regulations issued December 10, 2013, implementing the “Volcker Rule” (Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act);

(xvi)         none of the Appraisers is an affiliate of the Company or, to the knowledge of the Company, has a substantial interest, direct or indirect, in the Company. To the knowledge of the Company, none of the officers and directors of any of such Appraisers is connected with the Company or any of its affiliates as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions;

(xvii)        the Parent (A) makes and keeps books, records and accounts, which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the material assets of the Parent and its consolidated Subsidiaries and (B) maintains a system of internal accounting controls sufficient to provide reasonable assurances that (1) transactions are executed in accordance with management's general or specific authorization; (2) transactions are recorded as necessary: (x) to permit preparation of financial statements in conformity with GAAP and (y) to maintain accountability for assets; (3) access to material assets is permitted only in accordance with management's general or specific authorization; and (4) the recorded accountability for material assets is compared with the existing material assets at reasonable intervals and appropriate action is taken with respect to any differences;

[Note Purchase Agreement]

(xviii)       the Company and its Subsidiaries have instituted and maintained policies and procedures designed to promote and achieve compliance with the Foreign Corrupt Practices Act of 1977, as amended, and to the knowledge of the Company, the Company and its subsidiaries have conducted their businesses in compliance with such policies and procedures;

(xix)          none of the Company nor any of its Subsidiaries (collectively, the “Company Entity”) or, to the knowledge of the Company, any director, executive officer or affiliate of the Company Entity is a Person that is itself, or is controlled by a Person that is, currently the subject of any sanctions administered or enforced by the U.S. Department of Treasury's Office of Foreign Assets Control (“OFAC”) (collectively, “Sanctions”); and the Company represents and covenants that the Company will not, directly or indirectly, use the proceeds of the Loans, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other Person (x) to fund or facilitate any activities or business of or with any Person or in any country or territory that, at the time of such funding or facilitation, is the subject of a comprehensive economic embargo by the United States, or (y) in any other manner that will result in a violation of Sanctions by any Person (including any Person participating in the Loans, whether as arranger, advisor, lender or otherwise); and

(xx)           each of the Engines (as defined in the respective Indentures to which the Beechcraft King Air 350i Aircraft and the Citation Aircraft are subject) relating to each Beechcraft King Air 350i Aircraft and each Citation Aircraft is enrolled and participating in an Engine Maintenance Agreement (that is in full effect and under which payment of reserves by or on behalf of the Company is current on payment and covers relevant maintenance as relates to the maintenance tasks covered by such reserves and otherwise not in breach) on the Initial Closing Date. Subject to the terms and conditions of each of the relevant Engine Maintenance Agreement and the related Maintenance Provider Consents, the account balances held by the relevant maintenance provider under each such Engine Maintenance Agreement are transferrable to the extent set forth therein.

(b)            WTNA represents and warrants that:

(i)            WTNA is a national banking association duly incorporated, validly existing and in good standing under the laws of the United States and is a “citizen of the United States” as defined in Section 40102(a)(15) of the Act, and has the full corporate power, authority and legal right under the laws of the United States and of the state of the United States in which it is located 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 WTNA, in its capacity as Subordination Agent or trustee for the Class A-1 Trust (“Trustee”), as the case may be, under this Agreement and each Financing Agreement to which it will be a party;

[Note Purchase Agreement]

(ii)            the execution and delivery by WTNA, in its capacity as Subordination Agent or Trustee, as the case may be, of this Agreement and the performance by WTNA, in its capacity as Subordination Agent or Trustee, as the case may be, of its obligations under this Agreement have been duly authorized by WTNA, in its capacity as Subordination Agent or Trustee, 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 WTNA, in its capacity as Subordination Agent or Trustee, 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 Class A-1 Trust hereby confirms to each of the other parties hereto that its representations and warranties set forth in Section 5.1 of the Loan Agreement are true and correct as of the date hereof.

(d)            The Subordination Agent represents and warrants that:

(i)             the Subordination Agent is a national banking association duly incorporated, validly existing and in good standing under the laws of the United States, and has the full corporate power, authority and legal right under the laws of the United States and of the state of the United States in which it is located 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 the United States in which it is located 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;

[Note Purchase Agreement]

(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 governmental authority or agency of the state of the United States in which it is located 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 any state of the United States in which it is located 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), and there are no Taxes payable by the Subordination Agent imposed by any state of the United States in which it is located 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); 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.

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

(i)             subject to Section 4(a)(iii) of this Agreement, the Company shall at all times maintain its corporate existence and shall not wind up, liquidate or dissolve or take any action, or fail to take any action, that would have the effect of any of the foregoing;

(ii)            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;

(iii)           Section 4.07 of each Indenture is hereby incorporated by reference herein;

(iv)            the Company shall not issue (or repay and reissue) any Additional Series Equipment Notes pursuant to any Indenture, unless it shall have obtained written confirmation from each Rating Agency that the issuance or reissuance of such Equipment Notes, as the case may be, will not result in (1) a reduction of the rating for any Class of Obligations then rated by such Rating Agency that will remain outstanding below the then current rating for such Class of Obligations or (2) a withdrawal or suspension of the rating of any Class of Obligations then rated by such Rating Agency that will remain outstanding. Any issuance (or repayment and reissuance) of Additional Series Equipment Notes shall be subject to the terms of Section 9.1(c), 9.1(d) and 9.1(e), respectively, of the Intercreditor Agreement.

[Note Purchase Agreement]

(v)            promptly after the occurrence of a Triggering Event or an Indenture Default resulting from the failure of the Company to make payments on any Equipment Note and on every Regular Distribution Date while the Triggering Event or such Indenture Default shall be continuing, the Company will, at the Subordination Agent’s request from time to time but in any event no more frequently than once every three months, provide to the Subordination Agent a statement setting forth the following information with respect to each Aircraft then subject to the lien of an Indenture: (A) whether the Aircraft are currently in service or parked in storage, (B) the maintenance status of the Aircraft and (C) the location of the Engines (as defined in the respective Indentures to which such Aircraft are subject). As used in the preceding sentence, the terms “Triggering Event”, “Indenture Default”, and “Regular Distribution Date” shall have the respective meanings set forth in the Intercreditor Agreement as originally executed;

(vi)           upon each anniversary of the Initial Closing Date, the Company shall furnish to the Loan Trustee a certificate of the Chief Financial Officer of the Company in substantially the form of Exhibit E hereto;

(vii)          so long as any Class A-1 Loans remain outstanding, the Company shall use its commercially reasonable efforts to (A) ensure that at least one of Fitch Ratings Inc., Kroll Bond Rating Agency, Moody’s Investor’s Service, Inc. or Standard & Poor’s Ratings Services, a division of McGraw Hill Inc. (each an “Acceptable Rating Agency”) maintains a rating (but not any specific rating) on the Class A-1 Loans and (B) comply in all material respects with all requirements, procedures and reasonable requests made by such Acceptable Rating Agency so as to ensure the continuation of an active rating; provided, however, that if each Acceptable Rating Agency ceases to provide ratings services to issuers or investors, the Company shall no longer have any obligations under this provision;

(viii)         the Company shall cooperate as reasonably requested by the Class A-1 Trust, or any Lender in respect thereof, to maintain the existence of the Class A-1 Trust, and shall pay the reasonable fees and expenses of the Class A-1 Trust in connection therewith;

(ix)            the Company shall deliver to the Subordination Agent:

(1)            in respect of each financial year of the Parent, audited consolidated financial statements of the Parent which are prepared in accordance with GAAP which represent fairly and accurately in all material respects the financial position of the Parent and its Subsidiaries as at the end of such financial year and results of operations and cash flows for the period then ended; and deliver to the Subordination Agent a copy of such financial statements as soon as practicable but not later than 120 days after the end of the financial year to which they relate;

[Note Purchase Agreement]

(2)            in respect of each quarterly period in each financial year of the Parent (except the fourth), unaudited (or audited, if available) consolidated financial statements of the Parent which are prepared in accordance with GAAP which represent fairly and accurately in all material respects the financial position of the Parent and its Subsidiaries as at the end of such quarterly period and results of operations and cash flows for the period then ended; and deliver to the Subordination Agent a copy of such financial statements as soon as practicable but not later than 60 days after the end of the quarterly period to which they relate; and

(3)            in lieu of delivering to the Subordination Agent the financial statements referred to in clauses (1) and (2) above, the Company may cause such financial statements to be publicly available on the internet within the time period set forth in clauses (1) and (2) above, respectively, at a location identified to the Subordination agent in writing; and

(x)            the Company shall ensure that each Beechcraft King Air 350i Aircraft and each Citation Aircraft that is enrolled and participating in an Engine Maintenance Agreement on the Initial Closing Date remains enrolled and participating at all times in such Engine Maintenance Agreement or a replacement maintenance and support program (that is in full effect and under which payment of reserves by or on behalf of the Company is current and otherwise not in breach, and covers relevant maintenance as relates to the maintenance tasks covered by such reserves) as shall provide a substantially similar scope of services (on terms that are at least as advantageous to the Company or the Loan Trustee as the Engine Maintenance Agreement being replaced), and have a term at least as long, as the Engine Maintenance Agreement being replaced, and shall ensure that no Engine Maintenance Agreement is amended, modified or supplemented in a manner adverse to the interests of the Loan Trustee without the prior written consent of the Loan Trustee (which shall not be unreasonably withheld or delayed). Upon entering into any replacement Engine Maintenance Agreement under this Section 4(a)(x) the Company shall deliver to the Loan Trustee (i) a consent and agreement among the Company, the Loan Trustee and the relevant maintenance services provider, in respect of the Company’s and the Loan Trustee’s interest in such replacement Engine Maintenance Agreement, in form and substance reasonably acceptable to the Loan Trustee (it being agreed that if such consent and agreement are substantially similar to the corresponding documents entered into in connection with the Engine Maintenance Agreement being replaced, they shall be deemed acceptable) and (ii) a certificate of an authorized officer of the Company, certifying that such replacement Engine Maintenance Agreement provides a substantially similar scope of services (on terms that are at least as advantageous to the Company or the Loan Trustee as the Engine Maintenance Agreement being replaced), and has a term at least as long as, as the Engine Maintenance Agreement being replaced.

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(xi)            The Company agrees (A) to pay, or cause to be paid, to each of the Class A-1 Trustee, the Facility Agent and the Security Trustee from time to time reasonable compensation for all services rendered by them under the Operative Agreements and the Trust Obligation Agreements (as defined in each Indenture) including, without limitation, all expenses of the Class A-1 Trust in connection therewith (subject to any agreed fee estimates, and which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) and (B) except as otherwise expressly provided herein or in any other Operative Agreement, to reimburse, or cause to be reimbursed, the Class A-1 Trustee, the Facility Agent or the Security Trustee upon its request for all reasonable out-of-pocket expenses, disbursements and advances incurred or made by the Class A-1 Trustee, the Facility Agent or the Security Trustee, as the case may be, in accordance with any provision of the Operative Agreements or Trust Obligation Agreements (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence, willful misconduct or bad faith or as may be incurred due to such Person’s breach of its representations and warranties set forth in the Operative Agreements or Trust Obligation Agreements.

(b)            WTNA, 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(a)(15) 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 WTNA giving any such notice, WTNA shall, subject to Section 9.01 of any Indenture then entered into, resign as Loan Trustee in respect of such Indenture.

(c)             LTV Test and Cure Rights.

(i)             (A) On or prior to each Scheduled Collateral Test Date and (B) within 30 days of any other Collateral Test Date, the Company will be required to deliver to the Loan Trustee (x) three (3) Appraisals, each from a different Appraiser and dated no earlier than 60 days prior to the applicable Collateral Test Date, and (y) a certificate in substantially the form of Exhibit F demonstrating whether or not an LTV Ratio Trigger Event has occurred as of such Collateral Test Date, based on the Appraisals delivered pursuant to clause (x); provided that in the case of clause (B), the Company shall be required to deliver new Appraisals only in respect of the Aircraft subject to the relevant Engine Maintenance Agreement, and the relevant LTV Ratio calculations will be based on such Appraisals and, in relation to any other Aircraft, the Appraisals delivered on the most recent Scheduled Collateral Test Date (or, prior to the first Scheduled Collateral Test Date, the Appraisals delivered in connection with the Initial Closing Date).

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(ii)            If such certificate described in (c)(i) above demonstrates that an LTV Ratio Trigger Event has occurred and is continuing as of such Collateral Test Date, the Company shall, on a date that is no later than 60 days after such Collateral Test Date (the “Collateral Cure Date”), (1) redeem in part Equipment Notes at par (pro rata across each Series and with respect to each Aircraft) in an aggregate amount equal to (but not exceeding) the amount required such that, after giving effect to such redemption (an “LTV Cure Redemption”), no LTV Ratio Trigger Event shall be continuing (such amount, the “Cure Amount”); and/or (2) provided the Cure Amount, after giving effect to prepayments made pursuant to clauses (1) above, is less than 10% of the Aggregate Outstanding Principal Balance, deposit cash in an aggregate amount equal to the Cure Amount into an Eligible Account established pursuant Section 3.07 of an Indenture (the “Cure Cash Collateral Account”) and/or (3) pledge additional aircraft (of any model included in the Initial Portfolio or otherwise listed in the definition of “Eligible Aircraft”) to the Loan Trustee, pursuant to a security agreement in form and substance reasonably satisfactory to the Majority Lenders (as defined in the Loan Agreement), such that after giving effect to such pledge, no LTV Ratio Trigger Event shall be continuing.

(iii)           If the Company elects to cure any LTV Ratio Trigger Event by depositing the Cure Amount into the Cure Cash Collateral Account, the Company will be required to, on a date that is no later than 180 days after the Collateral Cure Date (the “Cash Collateral End Date”), deliver new Appraisals (dated no earlier than 60 days prior to such Cash Collateral End Date) to the Loan Trustee. If, as of such Cash Collateral End Date, an LTV Ratio Trigger Event has occurred and is continuing, the Company shall be required to make an LTV Cure Redemption in an aggregate amount equal to the amount required to cure the then existing LTV Ratio Trigger Event, provided, however, that if no LTV Ratio Trigger Event is continuing as of such Cash Collateral End Date, all or part of the Cure Amount shall be released to the Company in an aggregate amount such that, after giving effect to such release, no LTV Ratio Trigger Event shall exist.

(iv)            The Company shall not be required to pay any “Prepayment Premium” in connection with any LTV Cure Redemption unless, after giving effect thereto, the aggregate principal amount of LTV Cure Redemptions made on or prior to the date thereof exceeds $50,000,000 (and, in such case, “Prepayment Premium” shall be payable only on that portion of the principal amount redeemed that is in excess of $50,000,000).

(d)            Change of Control Put Option.

(i)            Within 30 days following the occurrence of any Change of Control, the Company shall provide a written notice to the Class A-1 Trust (and the Class A-1 Trust shall promptly forward such notice to each Lender) containing the following information (such notice, a “Change of Control Offer”):

(1)            that a Change of Control has occurred and that such Lender has the right to require the Class A-1 Trust to prepay such Lender’s outstanding Loans (in whole, but not in part) at a prepayment price equal to (x) if such prepayment is scheduled to occur prior to the third anniversary of the Initial Closing Date, 101% of the unpaid principal amount thereof or (y) otherwise, 100% of the unpaid principal amount thereof, in each case plus accrued and unpaid interest to the date of prepayment;

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(2)            the date of prepayment (the “Prepayment Date”), which shall be no earlier than 15 days nor later than 30 days from the date such Change of Control Offer is mailed; and

(3)            a statement that any Lender wishing to have its Loans prepaid pursuant to such Change of Control Offer must comply with Section 4(d)(ii) of this Agreement.

(ii)            In order to accept any Change of Control Offer, a Lender must provide written notice (such notice, a “Change of Control Option Notice”) to the Class A-1 Trust and the Company in writing prior to 12:00 noon, New York time, at least five Business Days prior to the Prepayment Date with respect to such Change of Control Offer (the “Election Time”) of such Lender’s election to require the Class A-1 Trust to prepay all of such Lender’s outstanding Loans pursuant to such Change of Control Offer and the principal amount of such Lender’s Loans to be prepaid.

(iii)            If any Change of Control Notice is delivered in accordance with Section 4(d)(ii) above, the Company shall, on the Prepayment Date, redeem Class A-1 Equipment Notes at par (pro rata with respect to each Aircraft) in an aggregate principal amount equal to the principal amount of Loans to be prepaid pursuant to such Change of Control Notice, together with accrued interest thereon to the date of redemption plus “Prepayment Premium” (as defined in each applicable Indenture), if any.

Section 5.               Notices. Unless otherwise specifically provided herein, all notices required or permitted by the terms of this Agreement shall be in English and in writing, and any such notice shall become effective upon being delivered personally or, if promptly confirmed by mail, when dispatched by facsimile or other written telecommunication, addressed to such party hereto at its address or facsimile number set forth below the signature of such party at the foot of this Agreement or to such other address or facsimile number as such party may hereafter specify by notice to the other parties.

Section 6.               Expenses. So long as no Equipment Notes have been issued in respect of any Aircraft, the Company agrees to pay, (i) all compensation and reimbursement of expenses and disbursements payable by the Company under each Operative Agreement and (ii) all compensation and reimbursement of expenses and disbursements payable to the Subordination Agent under the Intercreditor Agreement except with respect to any income or franchise taxes incurred by the Subordination Agent in connection with the transactions contemplated by the Intercreditor Agreement.

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.

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Section 8.               Miscellaneous. (a) Provided that the transactions contemplated hereby have been consummated, in whole or in part, and except as otherwise provided for herein, the representations, warranties and agreements herein of the Company, the Subordination Agent and the Class A-1 Trust, and the Company’s, the Subordination Agent’s and the Class A-1 Trust’s obligations under any and all thereof, shall survive the execution and delivery of this Agreement and the issuance of the Equipment Notes referred to herein, and may be relied upon by any subsequent Lender, regardless of any investigation made at any time by or on behalf of such Lender, on the condition and understanding that such representations and warranties are made only as of the date hereof.

(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 Class A-1 Trust 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 Lenders, 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 Lenders 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, representation, warranty, power, privilege, benefit, interest, remedy or claim to the Lenders or 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 person 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 LAWS OF THE STATE OF NEW YORK. THIS AGREEMENT IS BEING DELIVERED IN THE STATE OF NEW YORK.

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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.

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SCHEDULE I to
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SCHEDULE II to
Note Purchase Agreement

[Intentionally Omitted.]

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SCHEDULE III to
Note Purchase Agreement

REQUIRED TERMS

Equipment Notes

Obligor: Wheels Up

Maximum Principal Amount:

The initial principal amount and amortization schedule of the Series A-1 Equipment Notes issued with respect to an Aircraft shall be as set forth in the following table for that Aircraft (it being understood that if the Equipment Notes are issued on or after a scheduled payment date set forth below, such payment date will not be included in the amortization schedule and the initial principal amount shall be reduced by the amount otherwise due on such payment date):

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[Schedules to be inserted]

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Indenture

Debt Rate (as such term is defined in Annex A of the form of Indenture marked as Exhibit C of the Note Purchase Agreement (the “Indenture Form”)) for Series A-1 (computed on the basis of a 360-day year consisting of twelve 30-day months, payable semi-annually in arrears): 12%.

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SCHEDULE IV to
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IP Security Subordination and Intercreditor Terms

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ANNEX A to
Note Purchase Agreement

DEFINITIONS

“10-Q” means the Quarterly Report on Form 10-Q of Wheels Up Experience Inc. for the quarter ended on June 30, 2022 as filed with the U.S. Securities and Exchange Commission by the Parent.

“Act” means 49 U.S.C. §§ 40101-46507.

“Additional Aircraft” means, each Eligible Aircraft owned by the Company that is not included in the Initial Portfolio, and is financed with Additional Pari Passu Equipment Notes.

“Additional Pari Passu Equipment Notes” means, any Equipment Notes issued in accordance with Section 9.1(e) of the Intercreditor Agreement in respect of any Additional Aircraft.

“Additional Series Equipment Notes” means Equipment Notes of each series issued under an Indenture and designated other than as “Series A-1” issued thereunder, if any.

“Additional Series Obligations” has the meaning given to the term “Additional Obligations” in the Intercreditor Agreement.

“Additional Series Trustee” the meaning given to the term “Additional Trustee” in the Intercreditor Agreement.

“Adjusted Available Liquidity” means, as of any date of determination, the sum of unrestricted cash plus unutilized credit commitments under any credit facility of the Company or the Guarantors (not including the commitments under the Operative Agreements) as to which all conditions to drawing have been met as of such date.

“Adjusted Fair Market Value” means, with respect to any Aircraft, the average of the fair market values of such Aircraft, in each case, as adjusted by the relevant Appraiser to account for utilization, as set forth in three (3) Appraisals (one from each Appraiser); provided that, if the Aircraft is subject to an engine maintenance program under which payment of reserves by or on behalf of the Company is current, the Adjusted Fair Market Value shall assume “full life” (or other applicable) engine maintenance status as relates to the maintenance tasks covered by such reserves, in accordance with the relevant Appraiser’s methodology.

“Affiliate” of any Person means any other Person that directly or indirectly controls, is controlled by or is under common control with such Person.

“Age” means, as of any date of determination and with respect to any Aircraft, the number of years (rounded to the nearest hundredth) since the manufacture of such Aircraft calculated by reference to the date of delivery of such Aircraft from the manufacturer.

“Agreement Date” has the meaning set forth in the Purchase Agreement.

“Aggregate Appraised Value” means, as of any date of determination, the sum of the Adjusted Fair Market Values as of such date with respect to each Aircraft (excluding any such Aircraft as to which all Equipment Notes under the applicable Indenture have been redeemed or otherwise repaid).

“Aggregate Outstanding Principal Balance” means, as of any date of determination, the aggregate outstanding principal amount of the Class A Obligations as of such date after giving effect to all principal payments made in respect of the Equipment Notes on or prior to such date.

“Aircraft” means, initially, each aircraft on Schedule I to the Note Purchase Agreement, and, as to each such aircraft, following the execution of the applicable Indenture, any Aircraft subject to such Indenture together, if applicable, with each Additional Aircraft from time to time subject to an Indenture (excluding any such Aircraft as to which all Equipment Notes under the applicable Indenture have been redeemed or otherwise repaid).

“Appraisal” means each desktop appraisal prepared by an Appraiser and delivered by the Company to the Loan Trustee.

“Appraiser” means each of (i) Ascend by Cirium, (ii) Aircraft Value Reference (currently published by Vref Publishing), (iii) Aircraft Bluebook (currently published by Penton Media) and (iv) if any of the foregoing are unavailable, any other independent nationally recognized ISTAT certified appraiser.

“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.

“Capital Stock” means, for any entity, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) stock issued by that entity, but shall not include any debt securities convertible or exchangeable for any securities otherwise constituting Capital Stock pursuant to this definition until so converted or exchanged.

“CFC” means a Subsidiary of the Parent that is classified as a controlled foreign corporation under Section 957 of the Internal Revenue Code.

“Change of Control” means (a) any “person” or “group” within the meaning of Sections 13(d) and 14(d) (if applicable) of the Exchange Act, other than the Parent, its Subsidiaries and the employee benefit plans of the Parent and its Subsidiaries, has become the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of common stock of the Parent representing more than 50% of the voting power of the Voting Stock of the Parent; or (b) the consummation of (i) any recapitalization, reclassification or change of the common stock (other than changes resulting from a subdivision or combination) of the Parent as a result of which such common stock would be converted into, or exchanged for, stock, other securities, other property or assets; (ii) any share exchange, consolidation, merger or combination of the Parent pursuant to which the common Stock will be converted into cash, securities or other property or assets; or (iii) any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of the Parent and its Subsidiaries, taken as a whole, to any Person other than one or more of the Parent’s Subsidiaries; provided, however, that a transaction described in clause (ii) in which the holders of all classes of the Parent’s Voting Stock immediately prior to such transaction own, directly or indirectly, more than 50% of all classes of Voting Stock of the continuing or surviving corporation or other transferee, as applicable, or the parent thereof immediately after such transaction in substantially the same proportions (relative to each other) as such ownership immediately prior to such transaction shall not be a Change of Control pursuant to this clause (b).

“Class” has the meaning given to such term in the Intercreditor Agreement.

“Class A-1 Trust” has the meaning set forth in the recitals to the Note Purchase Agreement.

“Class A-1 Trustee” means WTNA, as trustee of the Class A-1 Trust.

“Closing” means, in the case of any Aircraft, the consummation of the issuance of the Equipment Notes with respect to such Aircraft pursuant to the Note Purchase Agreement.

“Closing Date” means, with respect to any Aircraft, the date on which the Closing of such Aircraft occurs.

“Closing Notice” has the meaning set forth in Section 1(b) of the Note Purchase Agreement.

“Collateral Test Date” means (a) each Scheduled Collateral Test Date and (b) the date any Engine Maintenance Agreement (as defined in the Indentures) is terminated, materially modified in a manner that would affect the Adjusted Fair Market Value of the relevant Aircraft, or the Company defaults in the payment of any amounts payable by it thereunder (and any relevant grace period has expired), the result of which is to permit the relevant maintenance provider to terminate such Engine Maintenance Agreement.

“Company” means Wheels Up Partners LLC, a Delaware limited liability company.

“Consolidated Net Income” means, for any period, the consolidated net income (if any) of the Parent and its Subsidiaries, determined on a consolidated basis in accordance with GAAP; provided that, there shall be included the amount of any membership initiation and membership renewal fees received by the Parent or any of its Subsidiaries in such period and not recognized as income under GAAP for such period, and provided further that, there shall be excluded (a) the income (or deficit) of any Person accrued prior to the date it becomes a Subsidiary of the Parent or is merged into or consolidated with the Parent or any of its Subsidiaries, (b) the income (or deficit) of any Person (other than a Subsidiary of the Parent) in which the Parent or any of its Subsidiaries has an ownership interest, except to the extent that any such income is actually received by the Parent or such Subsidiary in the form of dividends or similar distributions, (c) the undistributed earnings of any Subsidiary of the Parent (other than the Company) that is not a Guarantor to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary to the Company or a Guarantor is not at the time permitted by the terms of any contractual obligation (other than under any Operative Agreement) or requirement of law applicable to such Subsidiary, (d) the amount of any membership initiation and membership renewal fees recognized as income under GAAP for such period but received by the Parent or any of its Subsidiaries in a prior period and previously included in the calculation of Consolidated Net Income or Consolidated Net Loss for such prior period and (e) all unusual, extraordinary or non-recurring gains and non-cash income.

“Consolidated Net Loss” means, for any period, the consolidated net loss (if any) of the Parent and its Subsidiaries, determined on a consolidated basis in accordance with GAAP; provided that, there shall be included the amount of any membership initiation and membership renewal fees received by the Parent or any of its Subsidiaries in such period and not recognized as income under GAAP for such period, and provided further that, there shall be excluded (a) the income (or deficit) of any Person accrued prior to the date it becomes a Subsidiary of the Parent or is merged into or consolidated with the Parent or any of its Subsidiaries, (b) the income (or deficit) of any Person (other than a Subsidiary of the Parent) in which the Parent or any of its Subsidiaries has an ownership interest, except to the extent that any such income is actually received by the Parent or any of its Subsidiaries in the form of dividends or similar distributions, (c) the undistributed earnings of any Subsidiary of the Parent (other than the Company) that is not a Guarantor to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary to the Company or a Guarantor is not at the time permitted by the terms of any contractual obligation (other than under any Operative Agreement) or requirement of law applicable to such Subsidiary and (d) the amount of any membership initiation and membership renewal fees recognized as income under GAAP for such period but received by the Parent or any of its Subsidiaries in a prior period and previously included in the calculation of Consolidated Net Income or Consolidated Net Loss for such prior period.

“Cut-off Date” means, with respect to any Aircraft, the earlier of (i) the Prefunding Expiry Date with respect to such Aircraft and (ii) the date on which a Triggering Event occurs.

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

“Eligible Aircraft” means, in respect of any issuance of Additional Pari Passu Equipment Notes, any of the below-listed models, or any model included in the Initial Portfolio, in each case, that has been acquired pursuant to a bona fide sale from a third-party Person that is not the Company or an Affiliate thereof, on arm’s length terms, which sale has closed no more than 90 days prior to the issuance date of such Additional Pari Passu Equipment Notes:

“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.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

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

“Facility Agent” means WTNA, as facility agent under the Loan Agreement.

“Financial Statements” means the audited consolidated financial statements of the Parent, together with the related schedules and notes, as at June 30, 2022, as filed with the U.S. Securities and Exchange Commission.

“Financing Agreements” means, collectively, with respect to any Aircraft, the Participation Agreement, the Indenture and the Equipment Notes issued thereunder, and the Maintenance Provider Consent, if applicable, in each case, relating to such Aircraft.

“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.

“Guarantee Event” means that the Unrestricted Subsidiaries, in the aggregate but excluding any Special Purpose Subsidiaries, represent more than 10% of the total assets or total revenue of the Parent and its Subsidiaries on a consolidated basis.

“Guarantors” has the meaning set forth in the Notes Guaranty.

“Indenture” means the Trust Indenture and Mortgage substantially in the form of Exhibit C to the Note Purchase Agreement.

“Initial Closing Date” means the Scheduled Closing Date.

“Initial Portfolio” means each of the Aircraft listed on Schedule I to the Note Purchase Agreement.

“Intercreditor Agreement” means the Intercreditor Agreement, dated as of the Agreement Date, among the Class A-1 Trust and the Subordination Agent.

“Investment” means, with respect to any Person, any advance, loan, extension of credit (by way of guaranty or otherwise) or capital contribution to, or purchase any equity interests, bonds, notes, debentures or other debt securities of, or any assets constituting a business unit of, or any other investment in, such Person.

“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.

“Lenders” has the meaning set forth in the recitals to the Note Purchase Agreement.

“Loans” has the meaning set forth in the recitals to the Note Purchase Agreement.

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

“LTV Ratio” means, as of any date of determination, the ratio (expressed as a percentage) of (a) the excess of (i) the Aggregate Outstanding Principal Balance over (ii) the amount of any cash on deposit in the Cure Cash Collateral Account as of such date to (b) the Aggregate Appraised Value as of such date.

“LTV Ratio Issuance Event” means, as of the date of issuance of Additional Pari Passu Equipment Notes, based on Appraisals that are no more than 60 days old and after giving pro forma effect to such issuance, such issuance would immediately result in (i) an increased LTV Ratio or (ii) an LTV Ratio in excess of the Target LTV Ratio in effect on such date.

“LTV Ratio Preservation Amount” means, in respect of any redemption of Equipment Notes pursuant to Section 2.11(c) of any Indenture (the “Special Redemption”), the principal amount (if any) of Equipment Notes required to be redeemed under the other Indentures such that, immediately after giving effect to such Special Redemption, no LTV Preservation Event is continuing.

“LTV Ratio Preservation Event” means, as of date of any redemption of Equipment Notes pursuant to Section 2.11(c) of any Indenture, the LTV Ratio immediately following such redemption (calculated after giving effect thereto and to any related redemptions of Equipment Notes under Section 2.10(b) of any other Indenture), exceeds the LTV Ratio immediately prior to such redemption plus 1.0%, in each case based on the Appraisals most recently delivered under the Note Purchase Agreement (or, prior to the first anniversary of the Initial Closing Date, the Appraisals delivered in connection with the Initial Closing Date).

“LTV Ratio Trigger Event” means, as of any Collateral Test Date, the LTV Ratio exceeds 72.5%.

“Maintenance Provider Consent” means, if applicable with respect to an Aircraft, an assignment and consent in respect of the engine maintenance agreements in respect of such Aircraft among the Company, the Loan Trustee and the related maintenance provider (initially, (i) Pratt & Whitney Canada Corp., for each engine attached to the King Air 350i Aircraft, (ii) Pratt & Whitney Canada Corp., for each engine attached to the Citation XL and Citation XLS Aircraft and (iii) Rolls-Royce Corporation, for each engine attached to the Citation X Aircraft) substantially in the form of Exhibit D-1 or D-2, as applicable, or in a form otherwise reasonably satisfactory to the Loan Trustee.

“Minimum Liability Amount” means, for any Aircraft and the Indenture related thereto, $100,000,000.

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

“Notes Guaranty” means the Guarantee dated as of the Agreement Date issued by the Guarantors for the benefit of the Loan Trustee and the applicable parties (and third party beneficiaries) to the Note Purchase Agreement, as such guarantee may be amended, supplemented or otherwise modified from time to time.

“Obligations” has the meaning given to such term in the Intercreditor Agreement.

“Operative Agreements” has the meaning given to such term in the Intercreditor Agreement.

“Parent” means Wheels Up Experience Inc., a Delaware corporation.

“Participation Agreement” means the Participation Agreement substantially in the form of Exhibit B to 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.

“Portfolio” means, as of any date of determination, all Aircraft financed pursuant to the Indentures (excluding any such Aircraft as to which all Equipment Notes under the applicable Indenture have been redeemed or otherwise repaid).

“Prefunding Expiry Date” has the meaning set forth in Section 1(e) of the Note Purchase Agreement.

“Principal Redemption Amount” means, in respect of the redemption of any Equipment Notes under Section 2.11(c) of the related Indenture, (x) the percentage set forth below for the applicable model of the “Aircraft” under and as defined in such Indenture, multiplied by (y) the unpaid Original Amount of such Equipment Notes at the time of such redemption.

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

“Qualifying Aircraft” means any Aircraft, so long as the number of Aircraft of the same model as such Aircraft (including such Aircraft) for which the related Equipment Notes have been redeemed under Section 2.11(c) of the related Indenture, does not exceed the “Prepayment Cap” set forth below for such model (but in all events excluding any Aircraft added as Collateral to cure an LTV Ratio Trigger Event).

“Rating Agencies” means, collectively, at any time, each nationally recognized rating agency which shall have been requested to rate the Loans and which shall then be rating such Loans. The initial Rating Agency will be Kroll Bond Rating Agency.

“Rating Agency Confirmation” means, with respect to any Financing Agreement that has been modified in any material respect from the forms thereof attached to the Note Purchase Agreement, either (a) a written confirmation from each of the Rating Agencies that the use of such Financing Agreement with such modifications, which shall in the particular case require Rating Agency Confirmation, would not result in (i) a reduction of the rating for the Obligations then rated by such Rating Agency below the then current rating for such Class of Obligations or (ii) a withdrawal or suspension of the rating of the Obligations then rated by such Rating Agency or (b) in the case of the initial Rating Agency, that such Rating Agency has received written notice of such modifications at least 10 Business Days prior to the effective date thereof, and has not, prior to such effectiveness, provided written notice to the Company and the Subordination Agent that such modifications would result in any of the actions specified in the foregoing clauses (i) and (ii).

“Required Terms” means the terms set forth on Schedule III to the Note Purchase Agreement.

“Restricted Payments” has the meaning set forth in Section 4(a)(vi) of the Note Purchase Agreement.

“Scheduled Closing Date” means October 14, 2022.

“Scheduled Collateral Test Date” means each anniversary of the Initial Closing Date, commencing in 2023.

“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.

“Security Trustee” means WTNA, as security trustee under the Loan Agreement.

“Series A-1 Equipment Notes” means the “Series A-1 Equipment Notes” as defined in each Indenture entered into pursuant to the Note Purchase Agreement.

“Special Purpose Subsidiary” means a Subsidiary of the Company which has been organized for the purpose of owning one or more aircraft (other than any Aircraft) and meets the each of the following criteria: (a) not conducting, transacting or otherwise engaging in, or committing to conduct, transact or otherwise engage in, any business or operations other than those incidental to its ownership of one or more aircraft, (b) not incurring, creating, assuming or suffering to exist any indebtedness or other liabilities or financial obligations, except obligations incidental to the ownership, registration, leasing, subleasing, financing, management or operation of its aircraft (it being understood that obligations in respect of Indebtedness under a single credit facility for the financing such Special Purpose Subsidiary’s aircraft and the aircraft of any other Special Purpose Subsidiary shall be considered incidental to the financing of each such Person’s aircraft), and (c) not owning, registering, leasing, subleasing, financing, managing or otherwise operating any properties or assets other than its aircraft.

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

“Subsidiary” means, with respect to any Person, any corporation, partnership, joint venture, limited liability company, association, trust or estate of which (or in which) more than 50% of (a) the issued and outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency), (b) the interest in the capital or profits of such partnership, joint venture, association or limited liability company or (c) the beneficial interest in such trust or estate is at the time of determination directly or indirectly owned or controlled by such Person or by one or more of its Subsidiaries.

“Target LTV Ratio” means, as of any date of determination, the threshold percentage set forth in the table below for such date (or, if such date is not set forth below, the most recent date set forth below to have occurred).

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

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

“Threshold Amount” means, for any Aircraft and the Indenture related thereto, $100,000.

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

“Unrestricted Subsidiary” means any Subsidiary of the Parent other than (a) any Guarantor, and (b) any CFC that is not a Guarantor, if the equity interests representing at least 65% of the total combined voting power of all classes of stock in such CFC have been pledged to the Loan Trustee.

“Voting Stock” of any Person means Capital Stock of such Person that is generally entitled (a) to vote in the election of directors of such Person or (b) if such Person is not a corporation, to vote or otherwise participate in the selection of the governing body, partners, managers or others that will control the management or policies of such Person.

“Weighted Average Age” means, as of any date of determination, the quotient of (a) the sum of each Weighted Average Age Component for each Aircraft over (b) the Aggregate Appraised Value as of such date of determination.

“Weighted Average Age Component” means, as of any date of determination, for any Aircraft, the product of (i) such Aircraft's Adjusted Fair Market Value and (ii) the Age of such Aircraft as of such date of determination.

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

[Note Purchase Agreement]

EXHIBIT A to
Note Purchase Agreement

FORM OF CLOSING NOTICE

Dated as of [_________]

To each of the addressees listed in Schedule A hereto

Ladies and Gentlemen:

Reference is made to the Note Purchase Agreement, dated as of October 14, 2022, among Wheels Up Partners LLC (the “Company”) and WHEELS UP CLASS A-1 LOAN TRUST 2022-1 (the “Class A-1 Trust”) and Wilmington Trust, National Association, as Subordination Agent under the Intercreditor Agreement (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 [__] Model [_______] aircraft with manufacturer’s serial number [______] (the “Aircraft”), of the following:

(1)            The expected Closing Date of the Aircraft is [_________]; and

(2)            The aggregate amount of each series of Equipment Notes to be issued, and purchased by the Class A-1 Trust, on the Closing Date, in connection with the financing of such Aircraft is as follows:

(a)            the Class A-1 Trust shall purchase Series A-1 Equipment Notes in the amount of $[__________]; and

The Company hereby instructs the Class A-1 Trust to (a) enter into the Participation Agreement [____] dated as of [___________] among the Company, as Owner, and Wilmington Trust, National Association, as Mortgagee and Subordination Agent, (b) perform its obligations thereunder and (c) deliver such certificates, documents and legal opinions relating to such Class A-1 Trust as required thereby.

[Note Purchase Agreement]

[Note Purchase Agreement]

Schedule A to Closing Notice

Wilmington Trust, National Association,

As Subordination Agent and Paying Agent

Address: 1100 North Market Street
Wilmington, Delaware 19890-1605
Attention: Corporate Trust Administration
Email: cmay@wilmingtontrust.com
Facsimile: (302) 636-4140

Wheels Up Class A-1 Loan Trust 2022-1

c/o Wilmington Trust, National Association,

Address: 1100 North Market Street
Wilmington, Delaware 19890-1605
Attention: Corporate Trust Administration
Email: cmay@wilmingtontrust.com
Facsimile: (302) 636-4140

Kroll Bond Rating Agency, Inc.

805 Third Avenue, 29th Floor

New York, NY 10022

Attention: Arielle Smelkinson

Email: arielle.smelkinson@kbra.com

EXHIBIT B to
Note Purchase Agreement

FORM OF PARTICIPATION AGREEMENT

PARTICIPATION AGREEMENT N[___]

Dated as of October [__], 2022

among

WHEELS UP PARTNERS LLC,
Owner,

WHEELS UP CLASS A-1 LOAN TRUST 2022-1,

and

WILMINGTON TRUST, NATIONAL ASSOCIATION,
Not in its individual capacity
except as expressly provided herein,
but solely as Mortgagee, Subordination Agent
under the Intercreditor Agreement

One [Beechcraft][Cessna][Hawker] Model [__] Aircraft
Bearing Manufacturer’s Serial No.[______]
and U.S. Registration No. N[_______]

TABLE OF CONTENTS

Page

TABLE OF CONTENTS

(continued) 

Page

SCHEDULES AND EXHIBITS

PARTICIPATION AGREEMENT N[__]

PARTICIPATION AGREEMENT N[__], dated as of October [__], 2022 (this “Agreement”), among (a) WHEELS UP PARTNERS LLC, a Delaware limited liability company (“Owner”), (b) WILMINGTON TRUST, NATIONAL ASSOCIATION, a national banking association, not in its individual capacity, except as expressly provided herein, but solely as Mortgagee (in its capacity as Mortgagee, “Mortgagee” and in its individual capacity, “WTNA”), (c) Wheels Up Class A-1 Loan Trust 2022-1, a statutory trust formed and existing under the laws of Delaware (the “Class A-1 Trust”), and (d) WILMINGTON TRUST, NATIONAL ASSOCIATION, not in its individual capacity, except as expressly provided herein, but solely as Subordination Agent under the Intercreditor Agreement (“Subordination Agent”).

RECITALS

A.            The Owner wishes to finance the Aircraft.

B.            Pursuant to the Loan Agreement, the Class A-1 Trust, as borrower, will borrow from the Lenders the Class A-1 Loans on the terms and subject to the conditions set forth therein.

C.            The Class A-1 Trustee has agreed to use a portion of the proceeds from the Class A-1 Loans or any other Trust Obligations to purchase from the Owner the Equipment Notes bearing the same interest rate as the Class A-1 Loans or such other Trust Obligations, as applicable.

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

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

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

SECTION 1.  DEFINITIONS AND CONSTRUCTION

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

Participation Agreement N[__]

SECTION 2  SECURED LOANS; CLOSING

2.1            Making of Loans and Issuance of Equipment Notes. Subject to the terms and conditions of this Agreement, on the date hereof or on such other date agreed to by the parties hereto (the “Closing Date”):

(a)            Each Applicable Trustee listed on Schedule 2 shall make a secured loan to the Owner in the amount in Dollars set forth for such Applicable Trustee for the Aircraft in Schedule III to the Note Purchase Agreement; and

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

In addition, the Owner shall have the option after the Closing Date to issue (and repay and reissue) from time to time Additional Series Equipment Notes, subject to the terms of the Note Purchase Agreement and the Intercreditor Agreement. If Additional Series Equipment Notes are so issued after the Closing Date, the Note Holder of such Equipment Notes shall be entitled to execute a counterpart to this Agreement and become a party hereto.

2.2            Closing.

(a)            The Closing shall take place at the offices of Milbank LLP, 55 Hudson Yards, New York, New York 10001, or at such other place as the parties shall agree.

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

SECTION 3.  CONDITIONS PRECEDENT

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

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

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

Participation Agreement N[__]

(i)            this Agreement;

(ii)            the Trust Indenture;

(iii)            the Maintenance Provider Consent;

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

(v)            the Bills of Sale;

(vi)            (A) a copy of the Certificate of Formation and LLC Agreement of Owner and the written consent of the member of the Owner, in each case certified as of the Closing Date, by an officer of Owner, duly authorizing the execution, delivery and performance by Owner of the Operative Agreements to which it is party required to be executed and delivered by Owner on or prior to the Closing Date in accordance with the provisions hereof and thereof; and (B) an incumbency certificate of Owner as to the person or persons authorized to execute and deliver the Operative Agreements on behalf of Owner;

(vii)            an Officer’s Certificate of Owner, dated as of the Closing Date, stating that its representations and warranties set forth in this Agreement are true and correct in all material respects as of the Closing Date (or, to the extent that any such representation and warranty expressly relates to an earlier date, true and correct in all material respects as of such earlier date), and in each case, except to the extent qualified by materiality, in which case such representations and warranties shall be true and correct;

(viii)            the Financing Statements;

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

(A)            an opinion of Vedder Price P.C., special counsel to the Owner and the Guarantors, substantially in the form of Exhibit A;

(B)            an opinion of Morris James LLP, special counsel to Mortgagee and to such Applicable Trustee, substantially in the form of Exhibit C;

(C)            an opinion of McAfee & Taft, special counsel in Oklahoma City, Oklahoma, substantially in the form of Exhibit D; and

(x)            a copy of a current, valid Standard Certificate of Airworthiness for the Aircraft duly issued by the FAA (except as otherwise provided in Section 4.02(d) of the Trust Indenture) together with a copy of a duly executed application for registration (or of a certificate of aircraft registration) of the Aircraft with the FAA in the name of the Owner.

Participation Agreement N[__]

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

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

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

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

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

3.1.8            Title. Owner shall have good title to the Aircraft, free and clear of all Liens, except Permitted Liens.

3.1.9            Certification. The Aircraft shall have been duly certificated by the FAA as to type and airworthiness.

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

Participation Agreement N[__]

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

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

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

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

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

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

3.2.2            Other Conditions Precedent. Each of the conditions set forth in Sections 3.1.4, 3.1.5, 3.1.6 and 3.1.10 shall have been satisfied unless the failure of any such condition to be satisfied is the result of any action or inaction by Mortgagee.

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

Participation Agreement N[__]

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

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

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

3.3.2            Other Conditions Precedent. Each of the conditions set forth in Sections 3.1.4, 3.1.5, 3.1.6, 3.1.7, 3.1.8, 3.1.9, 3.1.10, 3.1.11, 3.1.12 and 3.1.13 shall have been satisfied or waived by Owner, unless the failure of any such condition to be satisfied is the result of any action or inaction by Owner.

3.4            Post-Registration Opinion. Promptly upon the recordation of the FAA Filed Documents pursuant to the Act, Owner will cause McAfee & Taft, special counsel in Oklahoma City, Oklahoma, to deliver to Owner, the Applicable Trustee and Mortgagee a favorable opinion or opinions addressed to each of them with respect to such recordation.

SECTION 4.     REPRESENTATIONS AND WARRANTIES

4.1            Owner’s Representations and Warranties. On the Closing Date, Owner represents and warrants to the Class A-1 Trust, Subordination Agent and Mortgagee that:

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

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

Participation Agreement N[__]

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

4.1.4            Approvals. The execution and delivery by Owner of the Operative Agreements to which Owner is a party, the performance by Owner of its obligations thereunder and the consummation by Owner on the Closing Date of the transactions contemplated thereby do not and will not require the consent or approval of, or the giving of notice to, or the registration with, or the recording or filing of any documents with, or the taking of any other action in respect of, (a) any trustee or other holder of any Debt of Owner and (b) any Government Entity, other than (x) the filings, registrations and recordations referred to in Section 4.1.6 and (y) filings, recordings, notices or other ministerial actions pursuant to any routine recording, contractual or regulatory requirements applicable to it.

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

4.1.6            Registration and Recordation. Except for (a) the registration of the Aircraft with the FAA pursuant to the Act in the name of Owner (and the periodic renewal of such registration with the FAA prior to its expiration), (b) the filing with the FAA of the AC Forms 8050-135 with respect to the International Interests (or Prospective International Interests) granted under the Trust Indenture thereon and the filing with the FAA for recordation (and recordation) of the FAA Filed Documents, (c) the registration of the International Interest (or Prospective International Interest) in the Airframe and Engines with the International Registry, (d) the filing of the Financing Statements (and continuation statements relating thereto at periodic intervals), and (e) the affixation of the nameplates referred to in Section 4.02(f) of the Trust Indenture, no further action, including any filing or recording of any document (including any financing statement in respect thereof under Article 9 of the UCC) is necessary in order to establish and perfect Mortgagee’s security interest in the Aircraft as against Owner and any other Person, in each case, in any applicable jurisdictions in the United States.

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

Participation Agreement N[__]

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

4.1.9        Compliance With Laws.

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

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

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

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

4.1.11      Broker’s Fees. No Person acting on behalf of Owner is or will be entitled to any broker’s fee, commission or finder’s fee in connection with the Transactions, other than the fees and expenses payable by Owner in connection with making of the Class A-1 Loans.

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

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

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

4.2.1        Organization, Etc. WTNA is a national banking association duly organized, validly existing and in good standing under the Laws of the United States of America, holding a valid certificate to do business as a national banking association with corporate and banking authority to execute and deliver, and perform its obligations under, the Trust Obligation Agreements and the Operative Agreements to which it is a party.

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

4.2.3        No Violation. The execution and delivery by WTNA, in its individual capacity or as Mortgagee, an Applicable Trustee (as the applicable agent acting on behalf thereof) or Subordination Agent, as the case may be, of the Trust Obligation Agreements and the Operative Agreements to which it is a party, the performance by WTNA, in its individual capacity or as Mortgagee, an Applicable Trustee (as the applicable agent acting on behalf thereof) or Subordination Agent, as the case may be, of its obligations thereunder and the consummation on the Closing Date of the transactions contemplated thereby, do not and will not (a) violate any provision of the Certificate of Incorporation or By-Laws of WTNA, (b) violate any Law applicable to or binding on WTNA, in its individual capacity or (except in the case of any Law relating to any Plan) as Mortgagee, an Applicable Trustee (as the applicable agent acting on behalf thereof) or Subordination Agent, or (c) violate or constitute any default under (other than any violation or default that would not result in a Material Adverse Change to WTNA, in its individual capacity or Mortgagee, an Applicable Trustee (as the applicable agent acting on behalf thereof) or Subordination Agent), or result in the creation of any Lien (other than the Lien of the Trust Indenture) upon any property of WTNA, in its individual capacity or as Mortgagee, an Applicable Trustee or Subordination Agent, or any of WTNA’s subsidiaries under, any indenture, mortgage, chattel mortgage, deed of trust, conditional sales contract, lease, loan or other agreement, instrument or document to which WTNA, in its individual capacity or as Mortgagee, an Applicable Trustee (as the applicable agent acting on behalf thereof) or Subordination Agent, is a party or by which WTNA, in its individual capacity or as Mortgagee, an Applicable Trustee (as the applicable agent acting on behalf thereof) or Subordination Agent, or any of their respective properties is bound.

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

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

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

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

4.2.8        Litigation. There are no pending or, to the Actual Knowledge of WTNA, threatened actions or proceedings against WTNA, in its individual capacity or as Mortgagee, an Applicable Trustee (as the applicable agent acting on behalf thereof) or Subordination Agent, before any court, administrative agency or tribunal which, if determined adversely to WTNA, in its individual capacity or as Mortgagee, an Applicable Trustee (as the applicable agent acting on behalf thereof) or Subordination Agent, as the case may be, would materially adversely affect the ability of WTNA, in its individual capacity or as Mortgagee, an Applicable Trustee (as the applicable agent acting on behalf thereof) or Subordination Agent, as the case may be, to perform its obligations under any of the Mortgagee Agreements, the Applicable Trustee Agreements or the Subordination Agent Agreements.

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

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

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

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

SECTION 5.      COVENANTS, UNDERTAKINGS AND AGREEMENTS

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

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

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

5.1.3        Certain Assurances.

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

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

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

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

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

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

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

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

5.2.3        Performance of Agreements. WTNA, in its individual capacity and as Mortgagee, an Applicable Trustee (as the applicable agent acting on behalf thereof) or Subordination Agent, as the case may be, shall perform its obligations under the Trust Obligation Agreements and the Operative Agreements in accordance with the terms thereof.

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

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

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

5.3.2        Transfer; Compliance.

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

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

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

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

5.4           Agreements.

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

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

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

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

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

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

(i)           each of the following requirements is satisfied:

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

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

(C)            such country is a country with which the United States then maintains normal diplomatic relations or, if such country is Taiwan, the United States then maintains diplomatic relations at least as good as those in effect on the Closing Date; and

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

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

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

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

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

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

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

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

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

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

SECTION 6.      CONFIDENTIALITY

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

SECTION 7.      INDEMNIFICATION AND EXPENSES

7.1           General Indemnity.

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

(a)            The Operative Agreements, the Trust Obligation Agreements or the enforcement of any of the terms of any of the Operative Agreements or the Trust Obligation Agreements;

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

(c)            The offer, sale, or delivery of any Equipment Notes, the Class A-1 Loans or any interest therein or represented thereby; and

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

(e)            The formation, preservation, operation, maintenance and termination of the Class A-1 Trust.

7.1.2        Exceptions. Notwithstanding anything contained in Section 7.1.1, Owner shall not be required to indemnify, protect, defend and hold harmless any Indemnitee pursuant to Section 7.1.1 in respect of any Expense of such Indemnitee:

(a)            For any Taxes or a loss of Tax benefit, whether or not Owner is required to indemnify therefor pursuant to Section 7.3;

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

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

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

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

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

(g)            To the extent attributable to the offer or sale by such Indemnitee or any related Indemnitee of any interest in the Aircraft, the Equipment Notes, the Class A-1 Loans, or any similar interest, in violation of the Securities Act or other applicable federal, state or foreign securities Laws (other than any thereof caused by acts or omissions of Owner);

(h)            (i) With respect to any Indemnitee (other than Mortgagee), to the extent attributable to the failure of the Mortgagee to distribute funds received and distributable by it in accordance with the Trust Indenture, (ii) with respect to any Indemnitee (other than the Subordination Agent), to the extent attributable to the failure of the Subordination Agent to distribute funds received and distributable by it in accordance with the Intercreditor Agreement, (iii) with respect to any Indemnitee (other than the Applicable Trustees), to the extent attributable to the failure of an Applicable Trustee to distribute funds received and distributable by it in accordance with the Applicable Trust Agreements, (iv) with respect to Mortgagee, to the extent attributable to the negligence or willful misconduct of Mortgagee in the distribution of funds received and distributable by it in accordance with the Trust Indenture, (v) with respect to the Subordination Agent, to the extent attributable to the negligence or willful misconduct of the Subordination Agent in the distribution of funds received and distributable by it in accordance with the Intercreditor Agreement and (vi) with respect to the Applicable Trustees, to the extent attributable to the negligence or willful misconduct of an Applicable Trustee in the distribution of funds received and distributable by it in accordance with the Applicable Trust Agreement;

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

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

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

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

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

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

(o)            To the extent consisting of principal of, or interest or “Premium” on, the “Loans” under the Loan Agreement (including, without limitation, any “PIK Amounts” thereunder).

For purposes of this Section 7.1, a Person shall be considered a “related” Indemnitee with respect to an Indemnitee if such Person is an Affiliate or employer of such Indemnitee, a director, officer, employee, agent, or servant of such Indemnitee or any such Affiliate or a successor or permitted assignee of any of the foregoing.

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

7.1.4        Notice. If a claim for any Expense that an Indemnitee shall be indemnified against under this Section 7.1 is made, such Indemnitee shall give prompt written notice thereof to Owner. Notwithstanding the foregoing, the failure of any Indemnitee to notify Owner as provided in this Section 7.1.4, or in Section 7.1.5, shall not release Owner from any of its obligations to indemnify such Indemnitee hereunder, except to the extent that such failure results in an additional Expense to Owner (in which event Owner shall not be responsible for such additional expense) or materially impairs Owner’s ability to contest such claim.

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7.1.5        Notice of Proceedings; Defense of Claims; Limitations.

(a)            In case any action, suit or proceeding shall be brought against any Indemnitee for which Owner is responsible under this Section 7.1, such Indemnitee shall notify Owner of the commencement thereof and Owner may, at its expense, participate in and to the extent that it shall wish (subject to the provisions of the following paragraph), assume and control the defense thereof and, subject to Section 7.1.5(c), settle or compromise the same.

(b)            Owner or its insurer(s) shall have the right, at its or their expense, to investigate or, if Owner or its insurer(s) shall agree not to dispute liability to the Indemnitee giving notice of such action, suit or proceeding under this Section 7.1.5 for indemnification hereunder or under any insurance policies pursuant to which coverage is sought, control the defense of, any action, suit or proceeding, relating to any Expense for which indemnification is sought pursuant to this Section 7.1, and each Indemnitee shall cooperate with Owner or its insurer(s) with respect thereto; provided that, Owner shall not be entitled to control the defense of any such action, suit, proceeding or compromise any such Expense during the continuance of any Event of Default. In connection with any such action, suit or proceeding being controlled by Owner, such Indemnitee shall have the right to participate therein, at its sole cost and expense, with counsel reasonably satisfactory to Owner; provided that, such Indemnitee’s participation does not, in the reasonable opinion of the independent counsel appointed by the Owner or its insurers to conduct such proceedings, interfere with the defense of such case.

(c)            In no event shall any Indemnitee enter into a settlement or other compromise with respect to any Expense without the prior written consent of Owner, which consent shall not be unreasonably withheld or delayed, unless such Indemnitee waives its right to be indemnified with respect to such Expense under this Section 7.1.

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

(e)            If an Indemnitee is not a party to this Agreement, Owner may require such Indemnitee to agree in writing to the terms of this Section 7 and Section 11.8 prior to making any payment to such Indemnitee under this Section 7.

(f)            Nothing contained in this Section 7.1.5 shall be deemed to require an Indemnitee to contest any Expense or to assume responsibility for or control of any judicial proceeding with respect thereto.

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7.1.6        Information. Owner will provide the relevant Indemnitee with such information not within the control of such Indemnitee, as is in Owner’s control or is reasonably available to Owner, which such Indemnitee may reasonably request and will otherwise cooperate with such Indemnitee so as to enable such Indemnitee to fulfill its obligations under Section 7.1.5. The Indemnitee shall supply Owner with such information not within the control of Owner, as is in such Indemnitee’s control or is reasonably available to such Indemnitee, which Owner may reasonably request to control or participate in any proceeding to the extent permitted by Section 7.1.5.

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

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

7.2            Expenses.

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

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

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7.3            General Tax Indemnity

7.3.1        General. Except as provided in Section 7.3.2, Owner agrees that each payment paid by Owner under the Equipment Notes, and any other payment or indemnity paid by Owner to a Tax Indemnitee under any Operative Agreement, shall be free of all withholdings or deductions with respect to Taxes of any nature (other than U.S. federal, state or local withholding taxes on, based on or measured by gross or net income, including, without limitation, any such taxes imposed under FATCA), and in the event that Owner shall be required by applicable law to make any such withholding or deduction for any such payment (x) Owner shall make all such withholdings or deductions, (y) the amount payable by Owner shall be increased so that after making all required withholdings or deductions such Tax Indemnitee receives the same amount that it would have received had no such withholdings or deductions been made, and (z) Owner shall pay the full amount withheld or deducted to the relevant Taxing Authority in accordance with applicable law. Except as provided in Section 7.3.2 and whether or not any of the transactions contemplated hereby are consummated, Owner shall pay, indemnify, protect, defend and hold each Tax Indemnitee harmless from all Taxes imposed by any Taxing Authority that may from time to time be imposed on or asserted against any Tax Indemnitee or the Aircraft, the Airframe, any Engine or any Part or any interest in any of the foregoing (whether or not indemnified against by any other Person), upon or with respect to the Operative Agreements or the transactions or payments contemplated thereby, including but not limited to any Tax imposed upon or with respect to (x) the Aircraft, the Airframe, any Engine, any Part, any Operative Agreement (including without limitation any Equipment Notes) or any data or any other thing delivered or to be delivered under an Operative Agreement, (y) the purchase, manufacture, acceptance, rejection, sale, transfer of title, return, ownership, mortgaging, delivery, transport, charter, rental, lease, re-lease, sublease, assignment, possession, repossession, presence, use, condition, storage, preparation, maintenance, modification, alteration, improvement, operation, registration, transfer or change of registration, reregistration, repair, replacement, overhaul, location, control, the imposition of any Lien, financing, refinancing requested by the Owner, abandonment or other disposition of the Aircraft, the Airframe, any Engine, any Part, any data or any other thing delivered or to be delivered under an Operative Agreement or (z) interest, fees or any other income, proceeds, receipts or earnings, whether actual or deemed, arising upon, in connection with, or in respect of, any of the Operative Agreements (including the property or income or other proceeds with respect to property held as part of the Collateral) or the transactions contemplated thereby.

7.3.2        Certain Exceptions. The provisions of Section 7.3.1 shall not apply to, and Owner shall have no liability hereunder for, Taxes:

(a)            imposed on a Tax Indemnitee by the federal government of the United States or any Taxing Authority or governmental subdivision of the United States or therein (including any state or local Taxing Authority) (i) on, based on, or measured by, gross or net income or gross or net receipts, including capital gains taxes, excess profits taxes, minimum taxes from tax preferences, alternative minimum taxes, branch profits taxes, accumulated earnings taxes, personal holding company taxes, succession taxes and estate taxes, and any withholding taxes on, based on or measured by gross or net income or receipts, including, without limitation, any such taxes imposed under FATCA or (ii) on, or with respect to, or measured by, capital or net worth or in the nature of a franchise tax or a tax for the privilege of doing business (other than, in the case of clause (i) or (ii), sales, use, license or property Taxes);

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(b)            imposed on a Tax Indemnitee by any Taxing Authority or governmental subdivision thereof or therein outside of the United States (including any Taxing Authority in or of a territory, possession or commonwealth of the United States) (i) on, based on, or measured by, gross or net income or gross or net receipts, including capital gains taxes, excess profits taxes, minimum taxes from tax preferences, alternative minimum taxes, branch profits taxes, accumulated earnings taxes, personal holding company taxes, succession taxes and estate taxes, and any withholding taxes on, based on or measured by gross or net income or receipts or (ii) on, or with respect to, or measured by, capital or net worth or in the nature of a franchise tax or a tax for the privilege of doing business (other than, in the case of clause (i) or (ii), (A) sales, use, license or property Taxes, or (B) any Taxes imposed by any Taxing Authority (other than a Taxing Authority within whose jurisdiction such Tax Indemnitee is incorporated or organized or maintains its principal place of business) if such Tax Indemnitee would not have been subject to Taxes of such type by such jurisdiction but for (I) the location, use or operation of the Aircraft, the Airframe, any Engine or any Part thereof by an Owner Person within the jurisdiction of the Taxing Authority imposing such Tax, or (II) the activities of any Owner Person in such jurisdiction, including, but not limited to, use of any other aircraft by Owner in such jurisdiction, (III) the status of any Owner Person as a foreign entity or as an entity owned in whole or in part by foreign persons, (IV) Owner having made (or having been deemed to have made) payments to such Tax Indemnitee from the relevant jurisdiction or (V) in the case of the Class A-1 Trust, the Note Holders or any related Tax Indemnitee, the Owner being incorporated or organized or maintaining a place of business or conducting activities in such jurisdiction);

(c)            on, or with respect to, or measured by, any trustee fees, commissions or compensation received by any Applicable Trustee, Subordination Agent or Mortgagee;

(d)            that are being contested as provided in Section 7.3.4 hereof;

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

(f)            imposed on or with respect to a Tax Indemnitee (including the transferee in those cases in which the Tax on transfer is imposed on, or is collected from, the transferee) as a result of a transfer or other disposition (including a deemed transfer or disposition) by such Tax Indemnitee or a related Tax Indemnitee of any interest in the Aircraft, the Airframe, any Engine or any Part, any interest arising under the Operative Agreements or any Equipment Note or as a result of a transfer or disposition (including a deemed transfer or disposition) of any interest in a Tax Indemnitee (other than (A) a substitution or replacement of the Aircraft, the Airframe, any Engine or any Part by an Owner Person that is treated for Tax purposes as a transfer or disposition, or (B) a transfer pursuant to an exercise of remedies upon an Event of Default that shall have occurred and have been continuing);

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

(h)            consisting of any interest, penalties or additions to tax imposed on a Tax Indemnitee as a result of (in whole or in part) failure of such Tax Indemnitee or a related Tax Indemnitee to file any return properly and timely, unless such failure shall be caused by the failure of Owner to fulfill its obligations, if any, under Section 7.3.6 with respect to such return;

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

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

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

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

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

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

7.3.3        Payment.

(a)            Owner’s indemnity obligation to a Tax Indemnitee under this Section 7.3 shall equal the amount which, after taking into account any Tax imposed upon the receipt or accrual of the amounts payable under this Section 7.3 and any tax benefits actually recognized by such Tax Indemnitee as a result of the indemnifiable Tax (including, without limitation, any benefits recognized as a result of an indemnifiable Tax being utilized by such Tax Indemnitee as a credit against Taxes not indemnifiable under this Section 7.3), shall equal the amount of the Tax indemnifiable under this Section 7.3.

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(b)            At Owner’s request, the computation of the amount of any indemnity payment owed by Owner or any amount owed by a Tax Indemnitee to Owner pursuant to this Section 7.3 shall be verified and certified by an independent public accounting firm selected by such Tax Indemnitee and reasonably satisfactory to Owner. Such verification shall be binding. The costs of such verification (including the fee of such public accounting firm) shall be borne by Owner unless such verification shall result in an adjustment in Owner’s favor of 5% or more of the net present value of the payment as computed by such Tax Indemnitee, in which case the costs shall be paid by such Tax Indemnitee.

(c)            Each Tax Indemnitee shall provide Owner with such certifications, information and documentation as shall be in such Tax Indemnitee’s possession and as shall be reasonably requested by Owner to minimize any indemnity payment pursuant to this Section 7.3; provided, that notwithstanding anything to the contrary contained herein, no Tax Indemnitee shall be required to provide Owner with any Tax returns.

(d)            Each Tax Indemnitee shall promptly forward to Owner any written notice, bill or advice received by it from any Taxing Authority concerning any Tax for which it seeks indemnification under this Section 7.3. Owner shall pay any amount for which it is liable pursuant to this Section 7.3 directly to the appropriate Taxing Authority if legally permissible or upon demand of a Tax Indemnitee, to such Tax Indemnitee within 30 days of such demand (or, if a contest occurs in accordance with Section 7.3.4, within 30 days after a Final Determination (as defined below)), but in no event more than one Business Day prior to the date the Tax to which such amount payable hereunder relates is due. If requested by a Tax Indemnitee in writing, Owner shall furnish to the appropriate Tax Indemnitee the original or a certified copy of a receipt for Owner’s payment of any Tax paid by Owner or such other evidence of payment of such Tax as is acceptable to such Tax Indemnitee. Owner shall also furnish promptly upon written request such data as any Tax Indemnitee may reasonably require to enable such Tax Indemnitee to comply with the requirements of any taxing jurisdiction unless such data is not reasonably available to Owner or, unless such data is specifically requested by a Taxing Authority, is not customarily furnished by domestic air carriers under similar circumstances. For purposes of this Section 7.3, a “Final Determination” shall mean (i) a decision, judgment, decree or other order by any court of competent jurisdiction that occurs pursuant to the provisions of Section 7.3.4, which decision, judgment, decree or other order has become final and unappealable, (ii) a closing agreement or settlement agreement entered into in accordance with Section 7.3.4 that has become binding and is not subject to further review or appeal (absent fraud, misrepresentation, etc.), or (iii) the termination of administrative proceedings and the expiration of the time for instituting a claim in a court proceeding.

(e)            If any Tax Indemnitee shall actually realize a tax savings by reason of any Tax paid or indemnified by Owner pursuant to this Section 7.3 (whether such tax savings shall be by means of a foreign tax credit, depreciation or cost recovery deduction or otherwise) and such savings is not otherwise taken into account in computing such payment or indemnity such Tax Indemnitee shall pay to Owner an amount equal to the lesser of (i) the amount of such tax savings, plus any additional tax savings recognized as the result of any payment made pursuant to this sentence, when, as, if, and to the extent, realized or (ii) the amount of all payments pursuant to this Section 7.3 by Owner to such Tax Indemnitee (less any payments previously made by such Tax Indemnitee to Owner pursuant to this Section 7.3.3(e)) (and the excess, if any, of the amount described in clause (i) over the amount described in clause (ii) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Owner to make payments to such Tax Indemnitee pursuant to this Section 7.3); provided, that such Tax Indemnitee shall not be required to make any payment pursuant to this sentence so long as an Indenture Event of Default of a monetary nature has occurred and is continuing. If a tax benefit is later disallowed or denied, the disallowance or denial shall be treated as a Tax indemnifiable under Section 7.3.1 without regard to the provisions of Section 7.3.2 (other than Section 7.3.2(f)). Each such Tax Indemnitee shall in good faith use reasonable efforts in filing its tax returns and in dealing with Taxing Authorities to seek and claim any such tax benefit.

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7.3.4            Contest.

(a)            If a written claim is made against a Tax Indemnitee for Taxes with respect to which Owner could be liable for payment or indemnity hereunder, or if a Tax Indemnitee makes a determination that a Tax is due for which Owner could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give Owner notice in writing of such claim (provided, that failure to so notify Owner shall not relieve Owner of its indemnity obligations hereunder unless such failure to notify effectively forecloses Owner’s rights to require a contest of such claim) and shall take no action with respect to such claim without the prior written consent of Owner for 30 days following the receipt of such notice by Owner; provided, that, in the case of a claim made against a Tax Indemnitee, if such Tax Indemnitee shall be required by law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so inform Owner, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and sue for a refund prior to the end of such 30-day period if (i)(A) the failure to so pay the Tax would result in substantial penalties (unless immediately reimbursed by Owner) and the act of paying the Tax would not materially prejudice the right to contest or (B) the failure to so pay would result in criminal penalties and (ii) such Tax Indemnitee shall take any action so required in connection with so paying the Tax in a manner that is the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Owner with copies of any requests for information from any Taxing Authority relating to such Taxes with respect to which Owner may be required to indemnify hereunder. If requested by Owner in writing within 30 days after its receipt of such notice, such Tax Indemnitee shall, at the expense of Owner (including, without limitation, all reasonable costs, expenses and reasonable attorneys’ and accountants’ fees and disbursements), in good faith contest (or, if permitted by applicable law, allow Owner to contest) through appropriate administrative and judicial proceedings the validity, applicability or amount of such Taxes by (I) resisting payment thereof, (II) not paying the same except under protest if protest is necessary and proper or (III) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding. If requested to do so by Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the United States Supreme Court. If and to the extent the Tax Indemnitee is able to separate the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Agreements without, in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Owner to control the conduct of any such proceeding and shall provide to Owner (at Owner’s cost and expense) with such information or data that is in such Tax Indemnitee’s control or possession that is reasonably necessary to conduct such contest. In the case of a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in good faith regarding the manner of contesting such claim and shall keep Owner reasonably informed regarding the progress of such contest. A Tax Indemnitee shall not fail to take any action expressly required by this Section 7.3.4 (including, without limitation, any action regarding any appeal of an adverse determination with respect to any claim) or settle or compromise any claim without the prior written consent of the Owner (except as contemplated by Section 7.3.4(b) or (c)).

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(b)            Notwithstanding the foregoing, in no event shall a Tax Indemnitee be required to pursue any contest (or to permit Owner to pursue any contest) unless (i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses incurred by such Tax Indemnitee in connection with contesting such Taxes, including, without limitation, all reasonable out of pocket costs and expenses and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such contest shall involve the payment of the claim, Owner shall advance the amount thereof (to the extent indemnified hereunder) plus interest, penalties and additions to tax with respect thereto that are required to be paid prior to the commencement of such contest on an interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any net realized tax benefits resulting from such advance including any tax benefits resulting from making such payment), (iii) such Tax Indemnitee shall have reasonably determined that the action to be taken will not result in any material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall have made provisions to protect the interests of any such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax Indemnitee agrees to notify Owner in writing promptly after it becomes aware of any such risk), (iv) no Indenture Event of Default shall have occurred and be continuing unless Owner has provided security for its obligations hereunder by advancing to such Tax Indemnitee before proceeding or continuing with such contest, the amount of the Tax being contested, plus any interest and penalties and an amount estimated in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial action controlled by Owner, Owner shall have acknowledged its liability for such claim hereunder, provided that Owner shall not be bound by its acknowledgment if the Final Determination articulates conclusions of law and fact that demonstrate that Owner has no liability for the contested amounts hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release, waive, compromise or settle any claim which may be indemnifiable by Owner pursuant to this Section 7.3 without the written permission of Owner, Owner’s obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, subject to Section 7.3.4(c), and subject to Section 7.3.4(c), such Tax Indemnitee shall repay to Owner any amount previously paid or advanced to such Tax Indemnitee with respect to such claim, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax.

(c)            Notwithstanding anything contained in this Section 7.3, a Tax Indemnitee will not be required to contest the imposition of any Tax and shall be permitted to settle or compromise any claim without Owner’s consent if such Tax Indemnitee (i) shall waive its right to indemnity under this Section 7.3 with respect to such Tax (and any directly related claim and any claim the outcome of which is determined based upon the outcome of such claim), (ii) shall pay to Owner any amount previously paid or advanced by Owner pursuant to this Section 7.3 with respect to such Tax, plus interest at the rate that would have been payable by the relevant Taxing Authority with respect to a refund of such Tax, and (iii) shall agree to discuss with Owner the views or positions of any relevant Taxing Authority with respect to the imposition of such Tax.

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7.3.5            Refund. If any Tax Indemnitee shall receive a refund of, or be entitled to a credit against other liability for, all or any part of any Taxes paid, reimbursed or advanced by Owner, such Tax Indemnitee shall pay to Owner within 30 days of such receipt an amount equal to the lesser of (a) the amount of such refund or credit plus any net tax benefit (taking into account any Taxes incurred by such Tax Indemnitee by reason of the receipt of such refund or realization of such credit) actually realized by such Tax Indemnitee as a result of any payment by such Tax Indemnitee made pursuant to this sentence (including this clause (a)) and (b) such tax payment, reimbursement or advance by Owner to such Tax Indemnitee theretofore made pursuant to this Section 7.3 (and the excess, if any, of the amount described in clause (a) over the amount described in clause (b) shall be carried forward and applied to reduce pro tanto any subsequent obligation of Owner to make payments to such Tax Indemnitee pursuant to this Section 7.3). If, in addition to such refund or credit, such Tax Indemnitee shall receive (or be credited with) an amount representing interest on the amount of such refund or credit, such Tax Indemnitee shall pay to Owner within 30 days of such receipt or realization of such credit that proportion of such interest that shall be fairly attributable to Taxes paid, reimbursed or advanced by Owner prior to the receipt of such refund or realization of such credit.

7.3.6            Tax Filing. If any report, return or statement is required to be filed with respect to any Tax which is subject to indemnification under this Section 7.3, Owner shall timely file the same (except for any such report, return or statement which a Tax Indemnitee has timely notified the Owner in writing that such Tax Indemnitee intends to file, or for which such Tax Indemnitee is required by law to file, in its own name); provided, that the relevant Tax Indemnitee shall furnish Owner with any information in such Tax Indemnitee’s possession or control that is reasonably necessary to file any such return, report or statement and is reasonably requested in writing by Owner (it being understood that the Tax Indemnitee shall not be required to furnish copies of its actual tax returns, although it may be required to furnish relevant information contained therein). Owner shall either file such report, return or statement and send a copy of such report, return or statement to such Tax Indemnitee, or, where Owner is not permitted to file such report, return or statement, it shall notify such Tax Indemnitee of such requirement and prepare and deliver such report, return or statement to such Tax Indemnitee in a manner satisfactory to such Tax Indemnitee within a reasonable time prior to the time such report, return or statement is to be filed.

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

7.3.8            Non-Parties. If a Tax Indemnitee is not a party to this Agreement, Owner may require the Tax Indemnitee to agree in writing, in a form reasonably acceptable to Owner, to the terms of this Section 7.3 and Section 11.8 prior to making any payment to such Tax Indemnitee under this Section 7.3.

7.3.9            Subrogation. Upon payment of any Tax by Owner pursuant to this Section 7.3 to or on behalf of a Tax Indemnitee, Owner, without any further action, shall be subrogated to any claims that such Tax Indemnitee may have relating thereto. Such Tax Indemnitee shall cooperate with Owner (to the extent such cooperation does not result in any unreimbursed cost, expense or liability to such Tax Indemnitee) to permit Owner to pursue such claims.

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7.4            Payments. Any payments made pursuant to Section 7.1 or 7.3 shall be due on the 60th day after demand therefor and shall be made directly to the relevant Indemnitee or Tax Indemnitee or to Owner, in immediately available funds at such bank or to such account as specified by such Indemnitee or Tax Indemnitee or Owner, as the case may be, in written directives to the payor, or, if no such direction shall have been given, by check of the payor payable to the order of, and mailed to, such Indemnitee or Tax Indemnitee or Owner, as the case may be, by certified mail, postage prepaid, at its address as set forth in this Agreement.

7.5            Interest. If any amount, payable by Owner, any Indemnitee or any Tax Indemnitee under Section 7.1 or 7.3 is not paid when due, the person obligated to make such payment shall pay on demand, to the extent permitted by Law, to the person entitled thereto, interest on any such amount for the period from and including the due date for such amount to but excluding the date the same is paid, at the Payment Due Rate. Such interest shall be paid in the same manner as the unpaid amount in respect of which such interest is due.

7.6            Benefit of Indemnities. The obligations of Owner in respect of all indemnities, obligations, adjustments and payments in Section 7.1 or 7.3 are expressly made for the benefit of, and shall be enforceable by, the Indemnitee or Tax Indemnitee entitled thereto, notwithstanding any provision of the Trust Indenture.

SECTION 8.     ASSIGNMENT OR TRANSFER OF INTEREST

8.1            Note Holders. Subject to Section 5.3.2 hereof and Section 2.07 of the Trust Indenture, any Note Holder may, at any time and from time to time, Transfer or grant participations in all or any portion of the Equipment Notes and/or all or any portion of its beneficial interest in its Equipment Notes to any person (it being understood that the sale or issuance of the Trust Obligations by an Applicable Trustee shall not be considered a Transfer or participation); provided, that any participant in any such participations shall not have any direct rights under the Operative Agreements or any Lien on all or any part of the Aircraft or the Collateral and Owner shall not have any increased liability or obligations as a result of any such participation; and, provided further, that any Transfer or participation to a Competitor (as defined in the Loan Agreement) or an Affiliate of a Competitor by a Note Holder shall require the prior written consent of the Owner (and any attempted Transfer or participation by a Note Holder to a Competitor or an Affiliate of a Competitor without such consent shall be null and void) unless such Transfer or participation is completed pursuant to an exercise of remedies in accordance with Article V of the Trust Indenture while an Event of Default has occurred and is continuing. In the case of any such Transfer, the Transferee, by acceptance of Equipment Notes in connection with such Transfer, shall be deemed to be bound by (i) all of the covenants of Note Holders contained in the Operative Agreements and (ii) certain terms of the Intercreditor Agreement as specified in such Equipment Notes and/or Section 2.07 of the Trust Indenture.

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

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SECTION 9.     SECTION 1110

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

SECTION 10.     CHANGE OF CITIZENSHIP

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

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

SECTION 11.     MISCELLANEOUS

11.1            Amendments. No provision of this Agreement may be amended, supplemented, waived, modified, discharged, terminated or otherwise varied orally, but only by an instrument in writing that specifically identifies the provision of this Agreement that it purports to amend, supplement, waive, modify, discharge, terminate or otherwise vary and is signed by the party against which the enforcement of the amendment, supplement, waiver, modification, discharge, termination or variance is sought. The Owner and the Mortgagee may enter into one or more agreements supplemental hereto without the consent of any Note Holder to provide for the issuance (and payment and reissuance) from time to time of one or more separate series of Additional Series Equipment Notes (and any Related Additional Series Equipment Notes) and for Trust Obligations of any Applicable Trustee that acquires any such Equipment Notes and to make changes relating to any of the foregoing (including without limitation to provide for the relative priority of different series of Additional Series Equipment Notes as between such series), provided that such Equipment Notes are issued in accordance with the Note Purchase Agreement and Section 9.1 of the Intercreditor Agreement. Each such amendment, supplement, waiver, modification, discharge, termination or variance shall be effective only in the specific instance and for the specific purpose for which it is given. No provision of this Agreement shall be varied or contradicted by oral communication, course of dealing or performance or other manner not set forth in an agreement, document or instrument in writing and signed by the party against which enforcement of the same is sought.

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

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

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

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

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

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

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11.8            GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.

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

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

(c)            EACH PARTY HERETO HEREBY IRREVOCABLY CONSENTS AND AGREES TO THE SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE MADE BY MAILING COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, AT THE ADDRESS SET FORTH PURSUANT TO SECTION 11.7. EACH PARTY HERETO HEREBY AGREES THAT SERVICE UPON IT, OR ANY OF ITS AGENTS, IN EACH CASE IN ACCORDANCE WITH THIS SECTION 11.8(c), SHALL CONSTITUTE VALID AND EFFECTIVE PERSONAL SERVICE UPON SUCH PARTY, AND EACH PARTY HERETO HEREBY AGREES THAT THE FAILURE OF ANY OF ITS AGENTS TO GIVE ANY NOTICE OF SUCH SERVICE TO ANY SUCH PARTY SHALL NOT IMPAIR OR AFFECT IN ANY WAY THE VALIDITY OF SUCH SERVICE ON SUCH PARTY OR ANY JUDGMENT RENDERED IN ANY ACTION OR PROCEEDING BASED THEREON.

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

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

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11.9            Third-Party Beneficiary. This Agreement is not intended to, and shall not, provide any person not a party hereto (other than the Indenture Indemnitees (including the Related Note Holders), each of which is an intended third party beneficiary with respect to the provisions of Section 7.1 (and, in the case of the Tax Indemnitees, Section 7.3) and the persons referred to in Section 5.4.6, which are intended third party beneficiaries with respect to such Section) with any rights of any nature whatsoever against any of the parties hereto and no person not a party hereto (other than the Indenture Indemnitees (including the Related Note Holders), with respect to the provisions of Section 7.1 (and, in the case of the Tax Indemnitees, Section 7.3), and the persons referred to in Section 5.4.6 with respect to the provisions of such Section) shall have any right, power or privilege in respect of any party hereto, or have any benefit or interest, arising out of this Agreement.

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

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

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