Common use of Possession and Permitted Leases Clause in Contracts

Possession and Permitted Leases. (i) The Company will not, without the prior written consent of the Collateral Agent, lease or otherwise in any manner deliver, transfer or relinquish possession of any Airframe, Engine, Propeller or any Spare Engine or install or permit any Engine, Propeller or any Spare Engine to be installed on any airframe other than an Airframe; provided that, so long as (x) no Specified Default or Event of Default shall have occurred and be continuing at the time of such lease, delivery, transfer or relinquishment of possession or installation and (y) such action shall not deprive the Collateral Agent of the first priority perfected Lien of the Security Documents on any Aircraft, any Airframe, any Engine, Propeller or any Spare Engine, the Company (or, except with respect to subparagraph (H) below, any Permitted Lessee) may, without the prior written consent of Collateral Agent: (A) subject the Airframes, the Engines, the Propellers or engines or propellers then installed thereon and the Spare Engines to normal interchange agreements or any Engine, Propeller or any Spare Engine to normal pooling or similar arrangements, in each case customary in the airline industry and entered into by the Company (or any Permitted Lessee) in the ordinary course of its business; provided, that (1) no such agreement or arrangement contemplates or requires the transfer of title to any Airframe, any Engine, any Propeller or any Spare Engine, (2) if the Company's title to any Airframe, any Engine, any Propeller or any Spare Engine shall be divested under any such agreement or arrangement, such divestiture shall be deemed to be an Event of Loss with respect to such Airframe, Engine, Propeller or Spare Engine, as applicable, and the Company shall (or shall cause any Permitted Lessee to) comply with Section 3.01 hereof in respect thereof and (3) no such Airframe interchange arrangement shall (I) be for a period in excess of 5 days or (II) result in such Certificated Air Carrier, Permitted Lessee or other approved air carrier obtaining possessory rights for a period in excess of 5 days with respect to, or a Lien on, any Airframe, Engines, Spare Engines, Propellers, engine(s) or propeller(s) then installed on such Airframe; (B) deliver possession of any Airframe, any Engine, any Propeller or any Spare Engine to the Manufacturer thereof or to any other Person for testing, service, repair, maintenance or overhaul work on such Airframe, such Engine, such Propeller or such Spare Engine or any part thereof or for alterations or modifications in or additions to such Airframe, such Engine, such Propeller or such Spare Engine to the extent required or permitted by the terms hereof; (C) install an Engine, a Propeller or Spare Engine on an airframe owned by the Company (or any Permitted Lessee) which airframe is free and clear of all Liens, except: (1) Permitted Liens and those which apply only to the engines (other than Engines or Spare Engines), propellers (other than Propellers), Appliances, parts, instruments, appurtenances, accessories, furnishings and other equipment (other than Parts) installed on such airframe (but not to the airframe as an entirety), (2) the rights of third parties under interchange agreements which would be permitted under clause (A) above, provided that Company's title to such Engine, Propeller or Spare Engine shall not be divested as a result thereof and (3) mortgage Liens or other security interests, provided, that (as regards this clause (3)), such mortgage Liens or other security interests effectively provide that such Engine, Propeller or Spare Engine shall not become subject to the Lien of such mortgage or security interest, notwithstanding the installation thereof on such airframe; (D) install an Engine, Propeller or Spare Engine on an airframe leased to the Company (or any Permitted Lessee) or purchased by the Company (or any Permitted Lessee) subject to a conditional sale or other security agreement, provided that (1) such airframe is free and clear of all Liens, except: (x) the rights of the parties to the lease or conditional sale or other security agreement covering such airframe, or their assignees, and (y) Liens of the type permitted by subparagraph (C) of this Section 2.01(b)(i) and (2) such lease, conditional sale or other security agreement effectively provides that such Engine, Propeller or Spare Engine shall not become subject to the Lien of such lease, conditional sale or other security agreement, notwithstanding the installation thereof on such airframe; (E) install an Engine, Propeller or Spare Engine on an airframe owned by the Company (or any Permitted Lessee), leased to the Company (or any Permitted Lessee) or purchased by the Company (or any Permitted Lessee) subject to a conditional sale or other security agreement under circumstances where neither subparagraph (C) nor subparagraph (D) of this Section 2.01(b)(i) is applicable, provided that any divestiture of title to such Engine, Propeller or Spare Engine resulting from such installation shall be deemed an Event of Loss with respect to such Engine, Propeller or Spare Engine and the Company shall (or shall cause any Permitted Lessee to) comply with Section 3.01(b) hereof in respect thereof, the Collateral Agent not intending hereby to waive any right or interest it may have to or in such Engine, Propeller or Spare Engine under applicable law until compliance by the Company with such Section 3.01(b); (F) transfer (or permit any Permitted Lessee to transfer) possession of any Airframe, Engine, Propeller or any Spare Engine to the United States of America or any instrumentality or agency thereof pursuant to the Civil Reserve Air Fleet Program so long as the Company (or any Permitted Lessee) shall notify the Collateral Agent (1) prior to transferring possession of any such Airframe, Engine, Propeller or any such Spare Engine to the United States of America or any agency or instrumentality thereof pursuant to the Civil Reserve Air Fleet Program and (2) of the name and the address of the Contracting Office Representative for the Air Mobility Command of the United States Air Force to whom notice must be given pursuant to Section 4.01(a) hereof; (G) transfer possession of any Airframe, Engine, Propeller or any Spare Engine to the United States of America or any instrumentality or agency thereof pursuant to a lease, contract or other instrument, a copy of which shall be provided to the Collateral Agent; or (H) the Company may, at any time so long as no Specified Default or Event of Default shall have occurred and be continuing, enter into a lease of any Aircraft or any Spare Engine with (1) a Certificated Air Carrier, (2) any airline domiciled and principally located in a country listed on Exhibit F hereto, or (3) any other Person approved in writing by the Collateral Agent; provided that (I) no such lease shall be permitted to a lessee that is subject to a proceeding or final order under applicable bankruptcy, insolvency or reorganization laws on the date the lease is entered into, (II) in the case of a lease under subclause (2) or (3) above, on the date of such lease or any renewal or extension thereof, the United States and the country in which such lessee is domiciled and principally located maintain diplomatic relations (which for purposes of this clause (H) shall include Taiwan and any other country that is similarly situated), (III) in the case only of a lease to any Person under subclause (3) above, the Collateral Agent receives at the time of such lease an opinion of counsel (in form and from counsel reasonably satisfactory to the Collateral Agent) to the effect that (w) the terms of the proposed lease will be legal, valid, binding and (subject to customary exceptions in foreign opinions generally) enforceable in accordance with its terms against the proposed lessee in the country in which the proposed lessee is principally based, (x) there exist no possessory rights in favor of the lessee under such lease under the laws of such lessee's country of domicile that would, upon bankruptcy or insolvency of or other default by the Company and assuming at such time such lessee is not insolvent or bankrupt, prevent the return or repossession of such Aircraft or such Spare Engine in accordance with the lease and when permitted by the terms of Section 4 upon the exercise by the Collateral Agent of its remedies pursuant to such Section, (y) the laws of such lessee's country of domicile require fair compensation by the government of such jurisdiction payable in currency freely convertible into Dollars for the loss of use of such Aircraft or such Spare Engine in the event of the requisition by such government of such use, and (z) in the case of an Airframe or Spare Engine, the laws of such lessee's country of domicile would give recognition to the Company's title to the applicable Aircraft of which such Airframe is a part or such Spare Engine, to the registry of the applicable Aircraft of which such Airframe is a part or such Spare Engine (if such country maintains a registry for engines) in the name of the Company (or the proposed lessee, as "lessee", as appropriate), and to the Lien of the Security Documents, (IV) if the lessee under such lease is a governmental entity, such lessee has waived all rights of sovereign immunity, and (V) if the lessee is a Certificated Air Carrier and the Aircraft or such Spare Engine was first placed in service after October 22, 1994, the Company will be entitled as lessor to the benefits of Section 1110 of the Bankruptcy Code with respect to such Aircraft or such Spare Engine in connection with a proceeding under Chapter 11 of the Bankruptcy Code in which the lessee is the debtor. (ii) The rights of any Permitted Lessee or other transferee (other than a transferee where the transfer is of an Engine, a Propeller or Spare Engine which is to be an Event of Loss) shall be (and the sublease, assignment or other transfer document under which such transfer or sublease is governed shall explicitly provide that) during the period of such possession, subject and subordinate to, all the terms of the Security Documents (and any Permitted Lease shall expressly state that it is so subject and subordinate), including, without limitation, the covenants contained in this Article 2, including the inspection rights contained in Section 2.05 and the Collateral Agent's right to repossess such Aircraft or such Spare Engine and to avoid and terminate any lease upon such repossession, and the Company shall remain primarily liable for the performance of all of the terms of the Security Documents, and the terms of any such Permitted Lease shall not permit any Permitted Lessee to take any action not permitted to be taken by the Company in the Security Documents with respect to such Aircraft or such Spare Engine. No pooling agreement, Permitted Lease or other relinquishment of possession of any Airframe, any Engine, any Propeller or any Spare Engine shall in any way discharge or diminish any of the Company's obligations to the Collateral Agent under the Security Documents or constitute a waiver of Collateral Agent's rights or remedies hereunder or thereunder. The Collateral Agent agrees, for the benefit of the Company (and any Permitted Lessee) and for the benefit of any mortgagee or other holder of a security interest in any engine or propeller owned by the Company (or any Permitted Lessee), any lessor of any engine (other than an Engine) or propeller (other than a Propeller) leased to the Company (or any Permitted Lessee) and any conditional vendor of any engine (other than an Engine or Spare Engine) or propeller (other than a Propeller) purchased by the Company (or any Permitted Lessee) subject to a conditional sale agreement or any other security agreement, that no interest shall be created under this Security Agreement in any engine or propeller so owned, leased or purchased and that neither the Collateral Agent nor its successors or assigns will acquire or claim, as against the Company (or any Permitted Lessee) or any such mortgagee, lessor or conditional vendor or other holder of a security interest or any successor or assignee of any thereof, any right, title or interest in such engine or propeller as the result of such engine or propeller being installed on any Airframe. The Company shall provide the Collateral Agent with a copy of any Permitted Lease having a term of more than one (1) year upon entering into such Permitted Lease. (iii) In connection with any Permitted Lease, all necessary action shall be taken by the Company at its expense which is required to continue the Collateral Agent's security interest in the Aircraft, Airframes, Engines, Propellers and Spare Engines, and such Permitted Lease and all other necessary documents shall be duly filed, registered or recorded in such public offices as may be required to fully preserve the priority of the security interest of the Collateral Agent in the Aircraft, Airframes, Engines, Propellers and Spare Engines. (iv) Any Wet Lease shall not constitute a delivery, transfer or relinquishment of possession for purposes of this Section 2.01. The Collateral Agent acknowledges that any consolidation or merger of the Company or conveyance, transfer or lease of all or substantially all of the Company's assets, in each case as permitted by the Loan Documents, shall not be prohibited by this Section 2.01. (v) No Permitted Lease entered into pursuant to this Section 2.01(b) shall permit any subleasing of any Aircraft or any Spare Engine.

Possession and Permitted Leases. (i) The Company Owner will not, without the ------------------------------- prior written consent of the Collateral AgentIndenture Trustee, lease or otherwise in any manner deliver, transfer or relinquish possession of any Airframe, Engine, Propeller the Airframe or any Spare Engine or install or permit any Engine, Propeller or any Spare Engine to be installed on any airframe other than an the Airframe; provided that, so long as (x) no Specified Default or Event of Default shall have occurred and be continuing at the time of such lease, delivery, transfer or relinquishment of possession or installation and (y) such action shall not deprive the Collateral Agent Indenture Trustee of the first priority perfected Lien of this Agreement on the Security Documents on any Aircraft, any Airframe, Airframe or any Engine, Propeller or any Spare Engine, the Company (or, except with respect to subparagraph (H) below, any Permitted Lessee) Owner may, without the prior written consent of Collateral AgentIndenture Trustee: (Ai) subject the Airframes, Airframe and the Engines, the Propellers Engines or engines or propellers then installed thereon and the Spare Engines to normal interchange agreements or any Engine, Propeller or any Spare Engine to normal pooling or similar arrangements, in each case customary in the airline industry and entered into by the Company Owner (or any Permitted Lessee) in the ordinary course of its businessbusiness with any air carrier; provided, that (1A) no such agreement or arrangement contemplates or requires the transfer of title to any the Airframe, any Engine, any Propeller or any Spare Engine, and (2B) if the CompanyOwner's title to any Airframe, any Engine, any Propeller or any Spare Engine shall be divested under any such agreement or arrangement, such divestiture shall be deemed to be an Event of Loss with respect to such Airframe, Engine, Propeller or Spare Engine, as applicable, Engine and the Company Owner shall (or shall cause any Permitted Lessee to) comply with Section 3.01 5.01(b) hereof in respect thereof and (3) no such Airframe interchange arrangement shall (I) be for a period in excess of 5 days or (II) result in such Certificated Air Carrier, Permitted Lessee or other approved air carrier obtaining possessory rights for a period in excess of 5 days with respect to, or a Lien on, any Airframe, Engines, Spare Engines, Propellers, engine(s) or propeller(s) then installed on such Airframethereof; (Bii) deliver possession of any Airframe, any Engine, any Propeller the Airframe or any Spare Engine to the Manufacturer manufacturer thereof or to any other Person for testing, service, repair, maintenance or overhaul work on such Airframe, such Engine, such Propeller the Airframe or such Spare Engine or any part Part of any thereof or for alterations or [Trust Indenture and Mortgage ([_________])] modifications in or additions to such Airframe, such Engine, such Propeller Airframe or such Spare Engine to the extent required or permitted by the terms hereof; (Ciii) install an Engine, a Propeller or Spare Engine on an airframe owned by the Company Owner (or any Permitted Lessee) which airframe is free and clear of all Liens, except: (1A) Permitted Liens and those which apply only to the engines (other than Engines or Spare Engines), propellers (other than Propellers), Appliancesappliances, parts, instruments, appurtenances, accessories, furnishings and other equipment (other than Parts) installed on such airframe (but not to the airframe as an entirety), (2B) the rights of third parties under interchange agreements which would be permitted under clause (Ai) above, provided that CompanyOwner's title to such Engine, Propeller or Spare Engine shall not be divested as a result thereof and (3C) mortgage Liens or other security interests, provided, that (as regards this clause (3C)), such mortgage Liens or other security interests effectively provide that such Engine, Propeller or Spare Engine shall not become subject to the Lien lien of such mortgage or security interest, notwithstanding the installation thereof on such airframe; (Div) install an Engine, Propeller or Spare Engine on an airframe leased to the Company Owner (or any Permitted Lessee) or purchased by the Company Owner (or any Permitted Lessee) subject to a conditional sale or other security agreement, provided that (1x) such airframe is free and clear of all Liens, except: (xA) the rights of the parties to the lease or conditional sale or other security agreement covering such airframe, or their assignees, and (yB) Liens of the type permitted by subparagraph (Ciii) of this Section 2.01(b)(i4.01(b) and (2y) such lease, conditional sale or other security agreement effectively provides that such Engine, Propeller or Spare Engine shall not become subject to the Lien of such lease, conditional sale or other security agreement, notwithstanding the installation thereof on such airframe; (Ev) install an Engine, Propeller or Spare Engine on an airframe owned by the Company Owner (or any Permitted Lessee), leased to the Company Owner (or any Permitted Lessee) or purchased by the Company Owner (or any Permitted Lessee) subject to a conditional sale or other security agreement under circumstances where neither subparagraph (Ciii) nor subparagraph (Div) of this Section 2.01(b)(i4.01(b) is applicable, provided that any divestiture of title to such Engine, Propeller or Spare Engine resulting from such installation shall be deemed an Event of Loss with respect to such Engine, Propeller or Spare Engine and the Company Owner shall (or shall cause any Permitted Lessee to) comply with Section 3.01(b5.01(b) hereof in respect thereof, the Collateral Agent Indenture Trustee not intending hereby to waive any right or interest it may have to or in such Engine, Propeller or Spare Engine under applicable law until compliance by the Company Owner with such Section 3.01(b5.01(b); (Fvi) to the extent permitted by Section 4.02(b) hereof, subject any appliances, Parts or other equipment owned by the Owner and removed from the Airframe or any Engine to any pooling arrangement referred to in Section 4.02(b) hereof; (vii) transfer (or permit any Permitted Lessee to transfer) possession of any Airframe, Engine, Propeller the Airframe or any Spare Engine to the United States of America or any instrumentality or agency thereof pursuant to the Civil Reserve Air Fleet Program so long as the Company Owner (or any Permitted Lessee) shall promptly notify the Collateral Agent Indenture Trustee (1x) prior to upon transferring [Trust Indenture and Mortgage ([_________])] possession of any such Airframe, Engine, Propeller the Airframe or any such Spare Engine to the United States of America or any agency or instrumentality thereof pursuant to the Civil Reserve Air Fleet Program and (2y) of the name and the address of the Contracting Office Representative for the Air Mobility Military Airlift Command of the United States Air Force to whom notice must be given pursuant to Section 4.01(a) 15 hereof; (Gviii) transfer possession of any Airframe, Engine, Propeller the Airframe or any Spare Engine to the United States of America or any instrumentality or agency thereof pursuant to a lease, contract or other instrument, a copy of which shall be provided to the Collateral AgentIndenture Trustee; or (Hix) the Company Owner may, at any time so long as no Specified Indenture Default under Section 8.01(a), (e) or (f) hereof or any Indenture Event of Default shall have occurred and be continuing, enter into a lease of any Aircraft the Aircraft, Airframe or any Spare Engine with (1) a Certificated Air Carrier, (2) any airline domiciled and principally located in a country listed on Exhibit F heretoother Permitted Air Carrier, or (3) any other Person approved in writing by the Collateral AgentPerson; provided that (IA) no such lease shall be permitted to a lessee that is subject to a proceeding or final order under applicable bankruptcy, insolvency or reorganization laws on the date the lease is entered into, (IIB) in the case of a lease under subclause (2) or (3) above, on the date of such lease or any renewal or extension thereoflease, the United States and the country in which such lessee is domiciled and principally located maintain diplomatic relations (which for purposes of this clause (Hix) shall include Taiwan and any other country that is similarly situated), ) and (IIIC) in the case only of a lease to any Person under subclause (3) above, the Collateral Agent Indenture Trustee receives at the time of such lease an opinion of counsel (in form and from counsel reasonably satisfactory to the Collateral Agent) to the effect that (w) the terms of the proposed lease will be legal, valid, binding and (subject to customary exceptions in foreign opinions generally) enforceable in accordance with its terms against the proposed lessee in the country in which the proposed lessee is principally based, (x) there exist no possessory rights in favor of the lessee under such lease under the laws of such lessee's country of domicile that which would, upon bankruptcy or insolvency of or other default by the Company and assuming at such time such lessee is not insolvent Owner or bankruptthe lessee, prevent the return or repossession of such Aircraft Engine or Airframe and such Spare Engine or engine to the Indenture Trustee in accordance with the lease and when permitted by the terms of Section 4 8.03 upon the exercise by the Collateral Agent Indenture Trustee of its remedies pursuant to such Section, (y) the laws of such lessee's country of domicile require fair compensation by the government of such jurisdiction payable in currency freely convertible into Dollars for the loss of use of such Aircraft or such Spare Engine in the event of the requisition by such government of such use, and (z) in the case of an Airframe or Spare Engine, the laws of such lessee's country of domicile would give recognition to the Company's title to the applicable Aircraft of which such Airframe is a part or such Spare Engine, to the registry of the applicable Aircraft of which such Airframe is a part or such Spare Engine (if such country maintains a registry for engines) in the name of the Company (or the proposed lessee, as "lessee", as appropriate), and to the Lien of the Security Documents, (IV) if the lessee under such lease is a governmental entity, such lessee has waived all rights of sovereign immunity, and (V) if the lessee is a Certificated Air Carrier and the Aircraft or such Spare Engine was first placed in service after October 22, 1994, the Company will be entitled as lessor to the benefits of Section 1110 of the Bankruptcy Code with respect to such Aircraft or such Spare Engine in connection with a proceeding under Chapter 11 of the Bankruptcy Code in which the lessee is the debtor. (ii) . The rights of any Permitted Lessee or other transferee (other than a transferee where the transfer is of an Engine, a Propeller or Spare Engine which is to be deemed an Event of Loss) shall be (and the sublease, assignment or other transfer document under which such transfer or sublease is governed shall explicitly provide that) during the period of such possession, subject and subordinate to, all the terms of the Security Documents this Agreement (and any Permitted Lease shall expressly state that it is so subject and subordinate), including, without limitation, the covenants contained in this Article 2, including the inspection rights contained in Section 2.05 and the Collateral AgentIndenture Trustee's right to repossess such the Aircraft or such Spare Engine and to avoid and terminate void any lease upon such repossession, and the Company Owner shall remain primarily liable for the performance of all of the terms of the Security Documentsthis Agreement, and the terms of any such Permitted Lease shall not permit any Permitted Lessee to take any action not permitted to be taken by the Company Owner in the Security Documents this Agreement with respect to such Aircraft or such Spare Enginethe Aircraft. No pooling agreement, Permitted Lease or other relinquishment of possession of any Airframe, any Engine, any Propeller the Airframe or any Spare Engine shall in any way discharge or diminish any of the CompanyOwner's obligations to the Collateral Agent Indenture Trustee under the Security Documents this Agreement or constitute a waiver of Collateral AgentIndenture Trustee's rights or remedies hereunder or thereunderhereunder. The Collateral Agent Indenture Trustee agrees, for the benefit of the Company Owner (and any Permitted Lessee) and for the benefit of any mortgagee or other holder of a security interest in any engine or propeller owned by the Company Owner (or any Permitted Lessee), any lessor of any engine (other than an Engine) or propeller (other than a Propeller) Engine leased to the Company Owner (or any Permitted Lessee) and any conditional vendor of any engine (other than an Engine or Spare Engine) or propeller (other than a Propeller) purchased by the Company Owner (or any Permitted Lessee) subject to a conditional sale agreement or any other security agreement, that no interest shall be created under this Security Agreement in any engine or propeller so owned, leased or purchased and that [Trust Indenture and Mortgage ([_________])] neither the Collateral Agent Indenture Trustee nor its successors or assigns will acquire or claim, as against the Company Owner (or any Permitted Lessee) or any such mortgagee, lessor or conditional vendor or other holder of a security interest or any successor or assignee of any thereof, any right, title or interest in such engine or propeller as the result of such engine or propeller being installed on the Airframe; provided, however, that such agreement of Indenture Trustee shall not be for the benefit of any Airframelessor or secured party of an airframe leased to Owner (or any Permitted Lessee) or purchased by Owner (or any Permitted Lessee) subject to a conditional sale or other security agreement or for the benefit of any mortgagee or any other holder of a security interest in an airframe owned by Owner (or any Permitted Lessee), on which airframe Owner (or any Permitted Lessee) then proposes to install an Engine, unless such lessor, conditional vendor, other secured party or mortgagee has expressly agreed (which agreement may be contained in such lease, conditional sale or other security agreement or mortgage) that neither it nor its successors or assigns will acquire, as against Indenture Trustee, any right, title or interest in an Engine as a result of such Engine being installed on such airframe. The Company Owner shall provide the Collateral Agent Indenture Trustee and the Rating Agencies with a copy of any Permitted Lease or any instrument evidencing a transfer pursuant to paragraph (viii) of this Section 4.01(b), in either case having a term of more than one (1) year upon year, as promptly as practicable after entering into such Permitted Lease. (iii) In connection with any Permitted Lease, all necessary action shall be taken by the Company at its expense which is required to continue the Collateral Agent's security interest in the Aircraft, Airframes, Engines, Propellers and Spare Engines, and such Permitted Lease and all or other necessary documents shall be duly filed, registered or recorded in such public offices as may be required to fully preserve the priority of the security interest of the Collateral Agent in the Aircraft, Airframes, Engines, Propellers and Spare Engines. (iv) transfer. Any Wet Lease or similar arrangement under which Owner maintains operational control of the Aircraft shall not constitute a delivery, transfer or relinquishment of possession for purposes of this Section 2.014.01. The Collateral Agent Indenture Trustee acknowledges that any consolidation or merger of the Company Owner or conveyance, transfer or lease of all or substantially all of the CompanyOwner's assets, in each case as assets permitted by the Loan Documents, Operative Documents shall not be prohibited by this Section 2.014.01. (v) No Permitted Lease entered into pursuant to this Section 2.01(b) shall permit any subleasing of any Aircraft or any Spare Engine.

Possession and Permitted Leases. (i) The Company Owner will not, without the prior written consent of the Collateral AgentIndenture Trustee, lease or otherwise in any manner deliver, transfer or relinquish possession of any Airframe, Engine, Propeller the Airframe or any Spare Engine or install or permit any Engine, Propeller or any Spare Engine to be installed on any airframe other than an the Airframe; provided that, so long as (x) no Specified Default or Event of Default shall have occurred and be continuing at the time of such lease, delivery, transfer or relinquishment of possession or installation and (y) such action shall not deprive the Collateral Agent Indenture Trustee of the first priority perfected Lien of this Agreement on the Security Documents on any Aircraft, any Airframe, Airframe or any Engine, Propeller or any Spare Engine, the Company (or, except with respect to subparagraph (H) below, any Permitted Lessee) Owner may, without the prior written consent of Collateral AgentIndenture Trustee: (Ai) subject the Airframes, Airframe and the Engines, the Propellers Engines or engines or propellers then installed thereon and the Spare Engines to normal interchange agreements or any Engine, Propeller or any Spare Engine to normal pooling or similar arrangements, in each case customary in the airline industry and entered into by the Company Owner (or any Permitted Lessee) in the ordinary course of its businessbusiness with any air carrier; provided, that (1A) no such agreement or arrangement contemplates or requires the transfer of title to any the Airframe, any Engine, any Propeller or any Spare Engine, and (2B) if the CompanyOwner's title to any Airframe, any Engine, any Propeller or any Spare Engine shall be divested under any such agreement or arrangement, such divestiture shall be deemed to be an Event of Loss with respect to such Airframe, Engine, Propeller or Spare Engine, as applicable, Engine and the Company Owner shall (or shall cause any Permitted Lessee to) comply with Section 3.01 5.01(b) hereof in respect thereof thereof; [Trust Indenture and Mortgage (3) no such Airframe interchange arrangement shall (I) be for a period in excess of 5 days or (II) result in such Certificated Air Carrier, Permitted Lessee or other approved air carrier obtaining possessory rights for a period in excess of 5 days with respect to, or a Lien on, any Airframe, Engines, Spare Engines, Propellers, engine(s) or propeller(s) then installed on such Airframe;2000-2 747-1)] (Bii) deliver possession of any Airframe, any Engine, any Propeller the Airframe or any Spare Engine to the Manufacturer manufacturer thereof or to any other Person for testing, service, repair, maintenance or overhaul work on such Airframe, such Engine, such Propeller the Airframe or such Spare Engine or any part Part of any thereof or for alterations or modifications in or additions to such Airframe, such Engine, such Propeller Airframe or such Spare Engine to the extent required or permitted by the terms hereof; (Ciii) install an Engine, a Propeller or Spare Engine on an airframe owned by the Company Owner (or any Permitted Lessee) which airframe is free and clear of all Liens, except: (1A) Permitted Liens and those Liens which apply only to the engines (other than Engines or Spare Engines), propellers (other than Propellers), Appliancesappliances, parts, instruments, appurtenances, accessories, furnishings and other equipment (other than Parts) installed on such airframe (but not to the airframe as an entirety), (2B) the rights of third parties under interchange agreements which would be permitted under clause (Ai) above, provided that CompanyOwner's title to such Engine, Propeller or Spare Engine shall not be divested as a result thereof and (3C) mortgage Liens or other security interests, provided, that (as regards this clause (3C)), such mortgage Liens or other security interests effectively provide that such Engine, Propeller or Spare Engine shall not become subject to the Lien lien of such mortgage or security interest, notwithstanding the installation thereof on such airframe; (Div) install an Engine, Propeller or Spare Engine on an airframe leased to the Company Owner (or any Permitted Lessee) or purchased by the Company Owner (or any Permitted Lessee) subject to a conditional sale or other security agreement, provided that (1x) such airframe is free and clear of all Liens, except: (xA) the rights of the parties to the lease or conditional sale or other security agreement covering such airframe, or their assignees, and (yB) Liens of the type permitted by subparagraph (Ciii) of this Section 2.01(b)(i4.01(b) and (2y) such lease, conditional sale or other security agreement effectively provides that such Engine, Propeller or Spare Engine shall not become subject to the Lien of such lease, conditional sale or other security agreement, notwithstanding the installation thereof on such airframe; (Ev) install an Engine, Propeller or Spare Engine on an airframe owned by the Company Owner (or any Permitted Lessee), leased to the Company Owner (or any Permitted Lessee) or purchased by the Company Owner (or any Permitted Lessee) subject to a conditional sale or other security agreement under circumstances where neither subparagraph (Ciii) nor subparagraph (Div) of this Section 2.01(b)(i4.01(b) is applicable, provided that any divestiture of title to such Engine, Propeller or Spare Engine resulting from such installation shall be deemed an Event of Loss with respect to such Engine, Propeller or Spare Engine and the Company Owner shall (or shall cause any Permitted Lessee to) comply with Section 3.01(b5.01(b) hereof in respect thereof, the Collateral Agent Indenture Trustee not intending hereby to waive any right or interest it may have to or in such Engine, Propeller or Spare Engine under applicable law until compliance by the Company Owner with such Section 3.01(b5.01(b); (Fvi) to the extent permitted by Section 4.02(b) hereof, subject any appliances, Parts or other equipment owned by the Owner and removed from the Airframe or any Engine to any pooling arrangement referred to in Section 4.02(b) hereof; [Trust Indenture and Mortgage (2000-2 747-1)] (vii) transfer (or permit any Permitted Lessee to transfer) possession of any Airframe, Engine, Propeller the Airframe or any Spare Engine to the United States of America or any instrumentality or agency thereof pursuant to the Civil Reserve Air Fleet Program so long as the Company Owner (or any Permitted Lessee) shall promptly notify the Collateral Agent Indenture Trustee (1x) prior to upon transferring possession of any such Airframe, Engine, Propeller the Airframe or any such Spare Engine to the United States of America or any agency or instrumentality thereof pursuant to the Civil Reserve Air Fleet Program and (2y) of the name and the address of the Contracting Office Representative for the Air Mobility Military Airlift Command of the United States Air Force to whom notice must be given pursuant to Section 4.01(a) 15 hereof; (Gviii) transfer possession of any Airframe, Engine, Propeller the Airframe or any Spare Engine to the United States of America or any instrumentality or agency thereof pursuant to a lease, contract or other instrument, a copy of which shall be provided to the Collateral AgentIndenture Trustee; or (Hix) the Company may, at any time so long as no Specified Indenture Default under Section 8.01(a), (e) or (f) hereof or any Indenture Event of Default shall have occurred and be continuing, enter into a lease of any Aircraft the Aircraft, Airframe or any Spare Engine with to (1) a Certificated Air Carrier, (2) any airline domiciled and principally located in a country listed on Exhibit F heretoother Permitted Air Carrier, or (3) any other Person approved in writing by the Collateral AgentPerson; provided that (IA) no such lease shall be permitted to a lessee that is subject to a proceeding or final order under applicable bankruptcy, insolvency or reorganization laws on the date the lease is entered into, (IIB) in the case of a lease under subclause (2) or (3) above, on the date of such lease or any renewal or extension thereoflease, the United States and the country in which such lessee is domiciled and principally located maintain diplomatic relations (which for purposes of this clause (Hix) shall include Taiwan and any other country that is similarly situated), ) and (IIIC) in the case only of a lease to any Person under subclause (3) above, the Collateral Agent Indenture Trustee receives at the time of such lease an opinion of counsel (in form and from counsel reasonably satisfactory to the Collateral Agent) to the effect that (w) the terms of the proposed lease will be legal, valid, binding and (subject to customary exceptions in foreign opinions generally) enforceable in accordance with its terms against the proposed lessee in the country in which the proposed lessee is principally based, (x) there exist no possessory rights in favor of the lessee under such lease under the laws of such lessee's country of domicile that which would, upon bankruptcy or insolvency of or other default by the Company and assuming at such time such lessee is not insolvent Owner or bankruptthe lessee, prevent the return or repossession of such Aircraft Engine or Airframe and such Spare Engine or engine to the Indenture Trustee in accordance with the lease and when permitted by the terms of Section 4 8.03 upon the exercise by the Collateral Agent Indenture Trustee of its remedies pursuant to such Section, (y) the laws of such lessee's country of domicile require fair compensation by the government of such jurisdiction payable in currency freely convertible into Dollars for the loss of use of such Aircraft or such Spare Engine in the event of the requisition by such government of such use, and (z) in the case of an Airframe or Spare Engine, the laws of such lessee's country of domicile would give recognition to the Company's title to the applicable Aircraft of which such Airframe is a part or such Spare Engine, to the registry of the applicable Aircraft of which such Airframe is a part or such Spare Engine (if such country maintains a registry for engines) in the name of the Company (or the proposed lessee, as "lessee", as appropriate), and to the Lien of the Security Documents, (IV) if the lessee under such lease is a governmental entity, such lessee has waived all rights of sovereign immunity, and (V) if the lessee is a Certificated Air Carrier and the Aircraft or such Spare Engine was first placed in service after October 22, 1994, the Company will be entitled as lessor to the benefits of Section 1110 of the Bankruptcy Code with respect to such Aircraft or such Spare Engine in connection with a proceeding under Chapter 11 of the Bankruptcy Code in which the lessee is the debtor. (ii) . The rights of any Permitted Lessee or other transferee (other than a transferee where the transfer is of an Engine, a Propeller or Spare Engine which is to be deemed an Event of Loss) shall be (and the sublease, assignment or other transfer document under which such transfer or sublease is governed shall explicitly provide that) during the period of such possession, subject and subordinate to, all the terms of the Security Documents this Agreement (and any Permitted Lease shall expressly state that it is so subject and subordinate), including, without limitation, the covenants contained in this Article 2, including the inspection rights contained in Section 2.05 and the Collateral AgentIndenture Trustee's right to repossess such the Aircraft or such Spare Engine and to avoid and terminate void any lease upon such repossession, and the Company Owner shall remain primarily liable for the performance of all of the terms of the Security Documentsthis Agreement, and the terms of any such Permitted Lease shall not permit any Permitted Lessee to take any action not permitted to be taken by the Company Owner in the Security Documents this Agreement with respect to such Aircraft or such Spare Enginethe Aircraft. No pooling agreement, Permitted Lease or other relinquishment of possession of any Airframe, any Engine, any Propeller the Airframe or any Spare Engine shall in any way discharge or diminish any of the CompanyOwner's obligations to the Collateral Agent Indenture Trustee under the Security Documents this Agreement or constitute a waiver of Collateral AgentIndenture Trustee's rights or remedies hereunder or thereunderhereunder. The Collateral Agent Indenture Trustee agrees, for the benefit of the Company Owner (and any Permitted Lessee) and for the benefit of any mortgagee or other holder of a security interest in any engine or propeller owned by the Company Owner (or any Permitted Lessee), [Trust Indenture and Mortgage (2000-2 747-1)] any lessor of any engine (other than an Engine) or propeller (other than a Propeller) Engine leased to the Company Owner (or any Permitted Lessee) and any conditional vendor of any engine (other than an Engine or Spare Engine) or propeller (other than a Propeller) purchased by the Company Owner (or any Permitted Lessee) subject to a conditional sale agreement or any other security agreement, that no interest shall be created under this Security Agreement in any engine or propeller so owned, leased or purchased and that neither the Collateral Agent Indenture Trustee nor its successors or assigns will acquire or claim, as against the Company Owner (or any Permitted Lessee) or any such mortgagee, lessor or conditional vendor or other holder of a security interest or any successor or assignee of any thereof, any right, title or interest in such engine or propeller as the result of such engine or propeller being installed on the Airframe; provided, however, that such agreement of Indenture Trustee shall not be for the benefit of any Airframelessor or secured party of an airframe leased to Owner (or any Permitted Lessee) or purchased by Owner (or any Permitted Lessee) subject to a conditional sale or other security agreement or for the benefit of any mortgagee or any other holder of a security interest in an airframe owned by Owner (or any Permitted Lessee), on which airframe Owner (or any Permitted Lessee) then proposes to install an Engine, unless such lessor, conditional vendor, other secured party or mortgagee has expressly agreed (which agreement may be contained in such lease, conditional sale or other security agreement or mortgage) that neither it nor its successors or assigns will acquire, as against Indenture Trustee, any right, title or interest in an Engine as a result of such Engine being installed on such airframe. The Company Owner shall provide the Collateral Agent Indenture Trustee and the Rating Agencies with a copy of any Permitted Lease or any instrument evidencing a transfer pursuant to paragraph (viii) of this Section 4.01(b), in either case having a term of more than one (1) year upon year, as promptly as practicable after entering into such Permitted Lease. (iii) In connection with any Permitted Lease, all necessary action shall be taken by the Company at its expense which is required to continue the Collateral Agent's security interest in the Aircraft, Airframes, Engines, Propellers and Spare Engines, and such Permitted Lease and all or other necessary documents shall be duly filed, registered or recorded in such public offices as may be required to fully preserve the priority of the security interest of the Collateral Agent in the Aircraft, Airframes, Engines, Propellers and Spare Engines. (iv) transfer. Any Wet Lease or similar arrangement under which Owner maintains operational control of the Aircraft shall not constitute a delivery, transfer or relinquishment of possession for purposes of this Section 2.014.01. The Collateral Agent Indenture Trustee acknowledges that any consolidation or merger of the Company Owner or conveyance, transfer or lease of all or substantially all of the CompanyOwner's assets, in each case as assets permitted by the Loan Documents, Operative Documents shall not be prohibited by this Section 2.014.01. (v) No Permitted Lease entered into pursuant to this Section 2.01(b) shall permit any subleasing of any Aircraft or any Spare Engine.

Possession and Permitted Leases. (i) The Company Owner will not, without the ------------------------------- prior written consent of the Collateral AgentIndenture Trustee, lease or otherwise in any manner deliver, transfer or relinquish possession of any Airframe, Engine, Propeller the Airframe or any Spare Engine or install or permit any Engine, Propeller or any Spare Engine to be installed on any airframe other than an the Airframe; provided that, so long as (x) no Specified Default or Event of Default shall have occurred and be continuing at the time of such lease, delivery, transfer or relinquishment of possession or installation and (y) such action shall not deprive the Collateral Agent Indenture Trustee of the first priority perfected Lien of this Agreement on the Security Documents on any Aircraft, any Airframe, Airframe or any Engine, Propeller or any Spare Engine, the Company (or, except with respect to subparagraph (H) below, any Permitted Lessee) Owner may, without the prior written consent of Collateral AgentIndenture Trustee: (Ai) subject the Airframes, Airframe and the Engines, the Propellers Engines or engines or propellers then installed thereon and the Spare Engines to normal interchange agreements or any Engine, Propeller or any Spare Engine to normal pooling or similar [Trust Indenture And Mortgage (2001-1 747-1)] arrangements, in each case customary in the airline industry and entered into by the Company Owner (or any Permitted Lessee) in the ordinary course of its businessbusiness with any air carrier; provided, that (1A) no such agreement or arrangement contemplates or requires the transfer of title to any the Airframe, any Engine, any Propeller or any Spare Engine, and (2B) if the CompanyOwner's title to any Airframe, any Engine, any Propeller or any Spare Engine shall be divested under any such agreement or arrangement, such divestiture shall be deemed to be an Event of Loss with respect to such Airframe, Engine, Propeller or Spare Engine, as applicable, Engine and the Company Owner shall (or shall cause any Permitted Lessee to) comply with Section 3.01 5.01(b) hereof in respect thereof and (3) no such Airframe interchange arrangement shall (I) be for a period in excess of 5 days or (II) result in such Certificated Air Carrier, Permitted Lessee or other approved air carrier obtaining possessory rights for a period in excess of 5 days with respect to, or a Lien on, any Airframe, Engines, Spare Engines, Propellers, engine(s) or propeller(s) then installed on such Airframethereof; (Bii) deliver possession of any Airframe, any Engine, any Propeller the Airframe or any Spare Engine to the Manufacturer manufacturer thereof or to any other Person for testing, service, repair, maintenance or overhaul work on such Airframe, such Engine, such Propeller the Airframe or such Spare Engine or any part Part of any thereof or for alterations or modifications in or additions to such Airframe, such Engine, such Propeller Airframe or such Spare Engine to the extent required or permitted by the terms hereof; (Ciii) install an Engine, a Propeller or Spare Engine on an airframe owned by the Company Owner (or any Permitted Lessee) which airframe is free and clear of all Liens, except: (1A) Permitted Liens and those Liens which apply only to the engines (other than Engines or Spare Engines), propellers (other than Propellers), Appliancesappliances, parts, instruments, appurtenances, accessories, furnishings and other equipment (other than Parts) installed on such airframe (but not to the airframe as an entirety), (2B) the rights of third parties under interchange agreements which would be permitted under clause (Ai) above, provided that CompanyOwner's title to such Engine, Propeller or Spare Engine shall not be divested as a result thereof and (3C) mortgage Liens or other security interests, provided, that (as regards this clause (3C)), such mortgage Liens or other security interests effectively provide that such Engine, Propeller or Spare Engine shall not become subject to the Lien lien of such mortgage or security interest, notwithstanding the installation thereof on such airframe; (Div) install an Engine, Propeller or Spare Engine on an airframe leased to the Company Owner (or any Permitted Lessee) or purchased by the Company Owner (or any Permitted Lessee) subject to a conditional sale or other security agreement, provided that (1x) such airframe is free and clear of all Liens, except: (xA) the rights of the parties to the lease or conditional sale or other security agreement covering such airframe, or their assignees, and (yB) Liens of the type permitted by subparagraph (Ciii) of this Section 2.01(b)(i4.01(b) and (2y) such lease, conditional sale or other security agreement effectively provides that such Engine, Propeller or Spare Engine shall not become subject to the Lien of such lease, conditional sale or other security agreement, notwithstanding the installation thereof on such airframe; (Ev) install an Engine, Propeller or Spare Engine on an airframe owned by the Company Owner (or any Permitted Lessee), leased to the Company Owner (or any Permitted Lessee) or purchased by the Company Owner (or any Permitted Lessee) subject to a conditional sale or other security agreement under circumstances where neither subparagraph (Ciii) nor subparagraph (Div) of this Section 2.01(b)(i4.01(b) is applicable, provided that any divestiture of title to such Engine, Propeller or Spare Engine resulting from such installation shall be deemed an Event of Loss with respect to such Engine, Propeller or Spare Engine and the Company Owner shall (or shall cause any Permitted Lessee to) comply with Section 3.01(b5.01(b) hereof in respect thereof, the Collateral Agent Indenture Trustee not intending hereby to waive any right or interest it may have to or in such Engine, Propeller or Spare Engine under applicable law until compliance by the Company Owner with such Section 3.01(b5.01(b); [Trust Indenture and Mortgage (2001-1 747-1)] (vi) to the extent permitted by Section 4.02(b) hereof, subject any appliances, Parts or other equipment owned by the Owner and removed from the Airframe or any Engine to any pooling arrangement referred to in Section 4.02(b) hereof; (Fvii) transfer (or permit any Permitted Lessee to transfer) possession of any Airframe, Engine, Propeller the Airframe or any Spare Engine to the United States of America or any instrumentality or agency thereof pursuant to the Civil Reserve Air Fleet Program so long as the Company Owner (or any Permitted Lessee) shall promptly notify the Collateral Agent Indenture Trustee (1x) prior to upon transferring possession of any such Airframe, Engine, Propeller the Airframe or any such Spare Engine to the United States of America or any agency or instrumentality thereof pursuant to the Civil Reserve Air Fleet Program and (2y) of the name and the address of the Contracting Office Representative for the Air Mobility Military Airlift Command of the United States Air Force to whom notice must be given pursuant to Section 4.01(a) 15 hereof; (Gviii) transfer possession of any Airframe, Engine, Propeller the Airframe or any Spare Engine to the United States of America or any instrumentality or agency thereof pursuant to a lease, contract or other instrument, a copy of which shall be provided to the Collateral AgentIndenture Trustee; or (Hix) the Company may, at any time so long as no Specified Indenture Default under Section 8.01(a), (e) or (f) hereof or any Indenture Event of Default shall have occurred and be continuing, enter into a lease of any Aircraft the Aircraft, Airframe or any Spare Engine with to (1) a Certificated Air Carrier, (2) any airline domiciled and principally located in a country listed on Exhibit F heretoother Permitted Air Carrier, or (3) any other Person approved in writing by the Collateral AgentPerson; provided that (IA) no such lease shall be permitted to a lessee that is subject to a proceeding or final order under applicable bankruptcy, insolvency or reorganization laws on the date the lease is entered into, (IIB) in the case of a lease under subclause (2) or (3) above, on the date of such lease or any renewal or extension thereoflease, the United States and the country in which such lessee is domiciled and principally located maintain diplomatic relations (which for purposes of this clause (Hix) shall include Taiwan and any other country that is similarly situated), ) and (IIIC) in the case only of a lease to any Person under subclause (3) above, the Collateral Agent Indenture Trustee receives at the time of such lease an opinion of counsel (in form and from counsel reasonably satisfactory to the Collateral Agent) to the effect that (w) the terms of the proposed lease will be legal, valid, binding and (subject to customary exceptions in foreign opinions generally) enforceable in accordance with its terms against the proposed lessee in the country in which the proposed lessee is principally based, (x) there exist no possessory rights in favor of the lessee under such lease under the laws of such lessee's country of domicile that which would, upon bankruptcy or insolvency of or other default by the Company and assuming at such time such lessee is not insolvent Owner or bankruptthe lessee, prevent the return or repossession of such Aircraft Engine or Airframe and such Spare Engine or engine to the Indenture Trustee in accordance with the lease and when permitted by the terms of Section 4 8.03 upon the exercise by the Collateral Agent Indenture Trustee of its remedies pursuant to such Section, (y) the laws of such lessee's country of domicile require fair compensation by the government of such jurisdiction payable in currency freely convertible into Dollars for the loss of use of such Aircraft or such Spare Engine in the event of the requisition by such government of such use, and (z) in the case of an Airframe or Spare Engine, the laws of such lessee's country of domicile would give recognition to the Company's title to the applicable Aircraft of which such Airframe is a part or such Spare Engine, to the registry of the applicable Aircraft of which such Airframe is a part or such Spare Engine (if such country maintains a registry for engines) in the name of the Company (or the proposed lessee, as "lessee", as appropriate), and to the Lien of the Security Documents, (IV) if the lessee under such lease is a governmental entity, such lessee has waived all rights of sovereign immunity, and (V) if the lessee is a Certificated Air Carrier and the Aircraft or such Spare Engine was first placed in service after October 22, 1994, the Company will be entitled as lessor to the benefits of Section 1110 of the Bankruptcy Code with respect to such Aircraft or such Spare Engine in connection with a proceeding under Chapter 11 of the Bankruptcy Code in which the lessee is the debtor. (ii) . The rights of any Permitted Lessee or other transferee (other than a transferee where the transfer is of an Engine, a Propeller or Spare Engine which is to be deemed an Event of Loss) shall be (and the sublease, assignment or other transfer document under which such transfer or sublease is governed shall explicitly provide that) during the period of such possession, subject and subordinate to, all the terms of the Security Documents this Agreement (and any Permitted Lease shall expressly state that it is so subject and subordinate), including, without limitation, the covenants contained in this Article 2, including the inspection rights contained in Section 2.05 and the Collateral AgentIndenture Trustee's right to repossess such the Aircraft or such Spare Engine and to avoid and terminate void any lease upon such repossession, and the Company Owner shall remain primarily liable for the performance of all of the terms of the Security Documentsthis Agreement, and the terms of any such Permitted Lease shall not permit any Permitted Lessee to take any action not permitted to be taken by the Company Owner in the Security Documents this Agreement with respect to such Aircraft or such Spare Enginethe Aircraft. No pooling agreement, Permitted Lease or other relinquishment of possession of any Airframe, any Engine, any Propeller the Airframe or any Spare Engine shall in any way discharge or diminish any of the CompanyOwner's obligations to the Collateral Agent Indenture Trustee under the Security Documents this Agreement or constitute a waiver of Collateral AgentIndenture Trustee's rights or remedies hereunder or thereunderhereunder. The Collateral Agent [Trust Indenture and Mortgage (2001-1 747-1)] Indenture Trustee agrees, for the benefit of the Company Owner (and any Permitted Lessee) and for the benefit of any mortgagee or other holder of a security interest in any engine or propeller owned by the Company Owner (or any Permitted Lessee), any lessor of any engine (other than an Engine) or propeller (other than a Propeller) Engine leased to the Company Owner (or any Permitted Lessee) and any conditional vendor of any engine (other than an Engine or Spare Engine) or propeller (other than a Propeller) purchased by the Company Owner (or any Permitted Lessee) subject to a conditional sale agreement or any other security agreement, that no interest shall be created under this Security Agreement in any engine or propeller so owned, leased or purchased and that neither the Collateral Agent Indenture Trustee nor its successors or assigns will acquire or claim, as against the Company Owner (or any Permitted Lessee) or any such mortgagee, lessor or conditional vendor or other holder of a security interest or any successor or assignee of any thereof, any right, title or interest in such engine or propeller as the result of such engine or propeller being installed on the Airframe; provided, however, that such agreement of Indenture Trustee shall not be for the benefit of any Airframelessor or secured party of an airframe leased to Owner (or any Permitted Lessee) or purchased by Owner (or any Permitted Lessee) subject to a conditional sale or other security agreement or for the benefit of any mortgagee or any other holder of a security interest in an airframe owned by Owner (or any Permitted Lessee), on which airframe Owner (or any Permitted Lessee) then proposes to install an Engine, unless such lessor, conditional vendor, other secured party or mortgagee has expressly agreed (which agreement may be contained in such lease, conditional sale or other security agreement or mortgage) that neither it nor its successors or assigns will acquire, as against Indenture Trustee, any right, title or interest in an Engine as a result of such Engine being installed on such airframe. The Company Owner shall provide the Collateral Agent Indenture Trustee and the Rating Agencies with a copy of any Permitted Lease or any instrument evidencing a transfer pursuant to paragraph (viii) of this Section 4.01(b), in either case having a term of more than one (1) year upon year, as promptly as practicable after entering into such Permitted Lease. (iii) In connection with any Permitted Lease, all necessary action shall be taken by the Company at its expense which is required to continue the Collateral Agent's security interest in the Aircraft, Airframes, Engines, Propellers and Spare Engines, and such Permitted Lease and all or other necessary documents shall be duly filed, registered or recorded in such public offices as may be required to fully preserve the priority of the security interest of the Collateral Agent in the Aircraft, Airframes, Engines, Propellers and Spare Engines. (iv) transfer. Any Wet Lease or similar arrangement under which Owner maintains operational control of the Aircraft shall not constitute a delivery, transfer or relinquishment of possession for purposes of this Section 2.014.01. The Collateral Agent Indenture Trustee acknowledges that any consolidation or merger of the Company Owner or conveyance, transfer or lease of all or substantially all of the CompanyOwner's assets, in each case as assets permitted by the Loan Documents, Operative Documents shall not be prohibited by this Section 2.014.01. (v) No Permitted Lease entered into pursuant to this Section 2.01(b) shall permit any subleasing of any Aircraft or any Spare Engine.

Possession and Permitted Leases. (i) The Company Such Grantor will not, without the prior written consent of the Collateral Agent, lease or otherwise in any manner deliver, transfer or relinquish possession of any Airframe, Engine, Propeller or any Spare Engine or install or permit any Engine, Propeller or any Spare Engine to be installed on any airframe other than an Airframe; provided that, so long as (x) no Specified Default or Event of Default shall have occurred and be continuing at the time of such lease, delivery, transfer or relinquishment of possession or installation and (y) such action shall not deprive the Collateral Agent of the first a second priority perfected security Lien (subject only to the First Lien) of the Security Documents on any Aircraft, any Airframe, any Engine, Propeller or any Spare Engine, the Company such Grantor (or, except with respect to subparagraph (H) below, any Permitted Lessee) may, without the prior written consent of Collateral Agent: (A) subject the Airframes, the Engines, the Propellers or engines or propellers then installed thereon and the Spare Engines to normal interchange agreements or any Engine, Propeller or any Spare Engine to normal pooling or similar arrangements, in each case customary in the airline industry and entered into by the Company such Grantor (or any Permitted Lessee) in the ordinary course of its business; provided, that (1) no such agreement or arrangement contemplates or requires the transfer of title to any Airframe, any Engine, any Propeller or any Spare Engine, (2) if the Company's such Grantor’s title to any Airframe, any Engine, any Propeller or any Spare Engine shall be divested under any such agreement or arrangement, such divestiture shall be deemed to be an Event of Loss with respect to such Airframe, Engine, Propeller or Spare Engine, as applicable, and the Company such Grantor shall (or shall cause any Permitted Lessee to) comply with Section 3.01 4.1 hereof in respect thereof and (3) no such Airframe interchange arrangement shall shall (I) be for a period in excess of 5 days or (II) result in such Certificated Air Carrier, Permitted Lessee or other approved air carrier obtaining possessory rights for a period in excess of 5 days with respect to, or a Lien on, any Airframe, Engines, Spare Engines, Propellers, engine(s) or propeller(s) then installed on such Airframe; (B) deliver possession of any Airframe, any Engine, any Propeller or any Spare Engine to the Manufacturer thereof or to any other Person for testing, service, repair, maintenance or overhaul work on such Airframe, such Engine, such Propeller or such Spare Engine or any part thereof or for alterations or modifications in or additions to such Airframe, such Engine, such Propeller or such Spare Engine to the extent required or permitted by the terms hereof; (C) install an Engine, a Propeller or Spare Engine on an airframe owned by the Company such Grantor (or any Permitted Lessee) which airframe is free and clear of all Liens, except: : (1) the First Lien and other Permitted Liens and those which apply only to the engines (other than Engines or Spare Engines), propellers (other than Propellers), Appliances, parts, instruments, appurtenances, accessories, furnishings and other equipment (other than Parts) installed on such airframe (but not to the airframe as an entirety), (2) the rights of third parties under interchange agreements which would be permitted under clause (A) above, provided that Company's such Grantor’s title to such Engine, Propeller or Spare Engine shall not be divested as a result thereof and (3) mortgage Liens or other security interests, provided, that (as regards this clause (3)), such mortgage Liens or other security interests effectively provide that such Engine, Propeller or Spare Engine shall not become subject to the Lien of such mortgage or security interest, notwithstanding the installation thereof on such airframe; (D) install an Engine, Propeller or Spare Engine on an airframe leased to the Company (or any Permitted Lessee) or purchased by the Company (or any Permitted Lessee) subject to a conditional sale or other security agreement, provided that (1) such airframe is free and clear of all Liens, except: (x) the rights of the parties to the lease or conditional sale or other security agreement covering such airframe, or their assignees, and (y) Liens of the type permitted by subparagraph (C) of this Section 2.01(b)(i) and (2) such lease, conditional sale or other security agreement effectively provides that such Engine, Propeller or Spare Engine shall not become subject to the Lien of such lease, conditional sale or other security agreement, notwithstanding the installation thereof on such airframe; (E) install an Engine, Propeller or Spare Engine on an airframe owned by the Company (or any Permitted Lessee), leased to the Company (or any Permitted Lessee) or purchased by the Company (or any Permitted Lessee) subject to a conditional sale or other security agreement under circumstances where neither subparagraph (C) nor subparagraph (D) of this Section 2.01(b)(i) is applicable, provided that any divestiture of title to such Engine, Propeller or Spare Engine resulting from such installation shall be deemed an Event of Loss with respect to such Engine, Propeller or Spare Engine and the Company shall (or shall cause any Permitted Lessee to) comply with Section 3.01(b) hereof in respect thereof, the Collateral Agent not intending hereby to waive any right or interest it may have to or in such Engine, Propeller or Spare Engine under applicable law until compliance by the Company with such Section 3.01(b); (F) transfer (or permit any Permitted Lessee to transfer) possession of any Airframe, Engine, Propeller or any Spare Engine to the United States of America or any instrumentality or agency thereof pursuant to the Civil Reserve Air Fleet Program so long as the Company (or any Permitted Lessee) shall notify the Collateral Agent (1) prior to transferring possession of any such Airframe, Engine, Propeller or any such Spare Engine to the United States of America or any agency or instrumentality thereof pursuant to the Civil Reserve Air Fleet Program and (2) of the name and the address of the Contracting Office Representative for the Air Mobility Command of the United States Air Force to whom notice must be given pursuant to Section 4.01(a) hereof; (G) transfer possession of any Airframe, Engine, Propeller or any Spare Engine to the United States of America or any instrumentality or agency thereof pursuant to a lease, contract or other instrument, a copy of which shall be provided to the Collateral Agent; or (H) the Company may, at any time so long as no Specified Default or Event of Default shall have occurred and be continuing, enter into a lease of any Aircraft or any Spare Engine with (1) a Certificated Air Carrier, (2) any airline domiciled and principally located in a country listed on Exhibit F hereto, or (3) any other Person approved in writing by the Collateral Agent; provided that (I) no such lease shall be permitted to a lessee that is subject to a proceeding or final order under applicable bankruptcy, insolvency or reorganization laws on the date the lease is entered into, (II) in the case of a lease under subclause (2) or (3) above, on the date of such lease or any renewal or extension thereof, the United States and the country in which such lessee is domiciled and principally located maintain diplomatic relations (which for purposes of this clause (H) shall include Taiwan and any other country that is similarly situated), (III) in the case only of a lease to any Person under subclause (3) above, the Collateral Agent receives at the time of such lease an opinion of counsel (in form and from counsel reasonably satisfactory to the Collateral Agent) to the effect that (w) the terms of the proposed lease will be legal, valid, binding and (subject to customary exceptions in foreign opinions generally) enforceable in accordance with its terms against the proposed lessee in the country in which the proposed lessee is principally based, (x) there exist no possessory rights in favor of the lessee under such lease under the laws of such lessee's country of domicile that would, upon bankruptcy or insolvency of or other default by the Company and assuming at such time such lessee is not insolvent or bankrupt, prevent the return or repossession of such Aircraft or such Spare Engine in accordance with the lease and when permitted by the terms of Section 4 upon the exercise by the Collateral Agent of its remedies pursuant to such Section, (y) the laws of such lessee's country of domicile require fair compensation by the government of such jurisdiction payable in currency freely convertible into Dollars for the loss of use of such Aircraft or such Spare Engine in the event of the requisition by such government of such use, and (z) in the case of an Airframe or Spare Engine, the laws of such lessee's country of domicile would give recognition to the Company's title to the applicable Aircraft of which such Airframe is a part or such Spare Engine, to the registry of the applicable Aircraft of which such Airframe is a part or such Spare Engine (if such country maintains a registry for engines) in the name of the Company (or the proposed lessee, as "lessee", as appropriate), and to the Lien of the Security Documents, (IV) if the lessee under such lease is a governmental entity, such lessee has waived all rights of sovereign immunity, and (V) if the lessee is a Certificated Air Carrier and the Aircraft or such Spare Engine was first placed in service after October 22, 1994, the Company will be entitled as lessor to the benefits of Section 1110 of the Bankruptcy Code with respect to such Aircraft or such Spare Engine in connection with a proceeding under Chapter 11 of the Bankruptcy Code in which the lessee is the debtor. (ii) The rights of any Permitted Lessee or other transferee (other than a transferee where the transfer is of an Engine, a Propeller or Spare Engine which is to be an Event of Loss) shall be (and the sublease, assignment or other transfer document under which such transfer or sublease is governed shall explicitly provide that) during the period of such possession, subject and subordinate to, all the terms of the Security Documents (and any Permitted Lease shall expressly state that it is so subject and subordinate), including, without limitation, the covenants contained in this Article 2, including the inspection rights contained in Section 2.05 and the Collateral Agent's right to repossess such Aircraft or such Spare Engine and to avoid and terminate any lease upon such repossession, and the Company shall remain primarily liable for the performance of all of the terms of the Security Documents, and the terms of any such Permitted Lease shall not permit any Permitted Lessee to take any action not permitted to be taken by the Company in the Security Documents with respect to such Aircraft or such Spare Engine. No pooling agreement, Permitted Lease or other relinquishment of possession of any Airframe, any Engine, any Propeller or any Spare Engine shall in any way discharge or diminish any of the Company's obligations to the Collateral Agent under the Security Documents or constitute a waiver of Collateral Agent's rights or remedies hereunder or thereunder. The Collateral Agent agrees, for the benefit of the Company (and any Permitted Lessee) and for the benefit of any mortgagee or other holder of a security interest in any engine or propeller owned by the Company (or any Permitted Lessee), any lessor of any engine (other than an Engine) or propeller (other than a Propeller) leased to the Company (or any Permitted Lessee) and any conditional vendor of any engine (other than an Engine or Spare Engine) or propeller (other than a Propeller) purchased by the Company (or any Permitted Lessee) subject to a conditional sale agreement or any other security agreement, that no interest shall be created under this Security Agreement in any engine or propeller so owned, leased or purchased and that neither the Collateral Agent nor its successors or assigns will acquire or claim, as against the Company (or any Permitted Lessee) or any such mortgagee, lessor or conditional vendor or other holder of a security interest or any successor or assignee of any thereof, any right, title or interest in such engine or propeller as the result of such engine or propeller being installed on any Airframe. The Company shall provide the Collateral Agent with a copy of any Permitted Lease having a term of more than one (1) year upon entering into such Permitted Lease. (iii) In connection with any Permitted Lease, all necessary action shall be taken by the Company at its expense which is required to continue the Collateral Agent's security interest in the Aircraft, Airframes, Engines, Propellers and Spare Engines, and such Permitted Lease and all other necessary documents shall be duly filed, registered or recorded in such public offices as may be required to fully preserve the priority of the security interest of the Collateral Agent in the Aircraft, Airframes, Engines, Propellers and Spare Engines. (iv) Any Wet Lease shall not constitute a delivery, transfer or relinquishment of possession for purposes of this Section 2.01. The Collateral Agent acknowledges that any consolidation or merger of the Company or conveyance, transfer or lease of all or substantially all of the Company's assets, in each case as permitted by the Loan Documents, shall not be prohibited by this Section 2.01. (v) No Permitted Lease entered into pursuant to this Section 2.01(b) shall permit any subleasing of any Aircraft or any Spare Engine.and

Possession and Permitted Leases. (i) The Company Owner will not, without the prior written consent of the Collateral AgentIndenture Trustee, lease or otherwise in any manner deliver, transfer or relinquish possession of any Airframe, Engine, Propeller the Airframe or any Spare Engine or install or permit any Engine, Propeller or any Spare Engine to be installed on any airframe other than an the Airframe; provided that, so long as (x) no Specified Default or Event of Default shall have occurred and be continuing at the time of such lease, delivery, transfer or relinquishment of possession or installation and (y) such action shall not deprive the Collateral Agent Indenture Trustee of the first priority perfected Lien of this Agreement on the Security Documents on any Aircraft, any Airframe, Airframe or any Engine, Propeller or any Spare Engine, the Company (or, except with respect to subparagraph (H) below, any Permitted Lessee) Owner may, without the prior written consent of Collateral Agent:Indenture Trustee: [Trust Indenture and Mortgage (1997 747-1)] (Ai) subject the Airframes, Airframe and the Engines, the Propellers Engines or engines or propellers then installed thereon and the Spare Engines to normal interchange agreements or any Engine, Propeller or any Spare Engine to normal pooling or similar arrangements, in each case customary in the airline industry and entered into by the Company Owner (or any Permitted Lessee) in the ordinary course of its businessbusiness with any air carrier; provided, that (1A) no such agreement or arrangement contemplates or requires the transfer of title to any the Airframe, any Engine, any Propeller or any Spare Engine, and (2B) if the CompanyOwner's title to any Airframe, any Engine, any Propeller or any Spare Engine shall be divested under any such agreement or arrangement, such divestiture shall be deemed to be an Event of Loss with respect to such Airframe, Engine, Propeller or Spare Engine, as applicable, Engine and the Company Owner shall (or shall cause any Permitted Lessee to) comply with Section 3.01 5.01(b) hereof in respect thereof and (3) no such Airframe interchange arrangement shall (I) be for a period in excess of 5 days or (II) result in such Certificated Air Carrier, Permitted Lessee or other approved air carrier obtaining possessory rights for a period in excess of 5 days with respect to, or a Lien on, any Airframe, Engines, Spare Engines, Propellers, engine(s) or propeller(s) then installed on such Airframethereof; (Bii) deliver possession of any Airframe, any Engine, any Propeller the Airframe or any Spare Engine to the Manufacturer manufacturer thereof or to any other Person for testing, service, repair, maintenance or overhaul work on such Airframe, such Engine, such Propeller the Airframe or such Spare in or Engine or any part Part of any thereof or for alterations or modifications in or additions to such Airframe, such Engine, such Propeller Airframe or such Spare Engine to the extent required or permitted by the terms hereof; (Ciii) install an Engine, a Propeller or Spare Engine on an airframe owned by the Company Owner (or any Permitted Lessee) which airframe is free and clear of all Liens, except: (1A) Permitted Liens and those which apply only to the engines (other than Engines or Spare Engines), propellers (other than Propellers), Appliancesappliances, parts, instruments, appurtenances, accessories, furnishings and other equipment (other than Parts) installed on such airframe (but not to the airframe as an entirety), (2B) the rights of third parties under interchange agreements which would be permitted under clause (Ai) above, provided that CompanyOwner's title to such Engine, Propeller or Spare Engine shall not be divested as a result thereof and (3C) mortgage Liens or other security interests, provided, that (as regards this clause (3C)), such mortgage Liens or other security interests effectively provide that such Engine, Propeller or Spare Engine shall not become subject to the Lien lien of such mortgage or security interest, notwithstanding the installation thereof on such airframe; (Div) install an Engine, Propeller or Spare Engine on an airframe leased to the Company Owner (or any Permitted Lessee) or purchased by the Company Owner (or any Permitted Lessee) subject to a conditional sale or other security agreement, provided that (1x) such airframe is free and clear of all Liens, except: (xA) the rights of the parties to the lease or conditional sale or other security agreement covering such airframe, or their assignees, and (yB) Liens of the type permitted by subparagraph (Ciii) of this Section 2.01(b)(i4.01(b) and (2y) such lease, conditional sale or other security agreement effectively provides that such Engine, Propeller or Spare Engine shall not become subject to the Lien lien of such lease, conditional sale or other security agreement, notwithstanding the installation thereof on such airframe; (Ev) install an Engine, Propeller or Spare Engine on an airframe owned by the Company Owner (or any Permitted Lessee), leased to the Company Owner (or any Permitted Lessee) or purchased by the Company (or any Permitted Lessee) subject to a conditional sale or other security agreement under circumstances where neither subparagraph (C) nor subparagraph (D) of this Section 2.01(b)(i) is applicable, provided that any divestiture of title to such Engine, Propeller or Spare Engine resulting from such installation shall be deemed an Event of Loss with respect to such Engine, Propeller or Spare Engine and the Company shall (or shall cause any Permitted Lessee to) comply with Section 3.01(b) hereof in respect thereof, the Collateral Agent not intending hereby to waive any right or interest it may have to or in such Engine, Propeller or Spare Engine under applicable law until compliance by the Company with such Section 3.01(b); (F) transfer (or permit any Permitted Lessee to transfer) possession of any Airframe, Engine, Propeller or any Spare Engine to the United States of America or any instrumentality or agency thereof pursuant to the Civil Reserve Air Fleet Program so long as the Company (or any Permitted Lessee) shall notify the Collateral Agent (1) prior to transferring possession of any such Airframe, Engine, Propeller or any such Spare Engine to the United States of America or any agency or instrumentality thereof pursuant to the Civil Reserve Air Fleet Program and (2) of the name and the address of the Contracting Office Representative for the Air Mobility Command of the United States Air Force to whom notice must be given pursuant to Section 4.01(a) hereof; (G) transfer possession of any Airframe, Engine, Propeller or any Spare Engine to the United States of America or any instrumentality or agency thereof pursuant to a lease, contract or other instrument, a copy of which shall be provided to the Collateral Agent; or (H) the Company may, at any time so long as no Specified Default or Event of Default shall have occurred and be continuing, enter into a lease of any Aircraft or any Spare Engine with (1) a Certificated Air Carrier, (2) any airline domiciled and principally located in a country listed on Exhibit F hereto, or (3) any other Person approved in writing by the Collateral Agent; provided that (I) no such lease shall be permitted to a lessee that is subject to a proceeding or final order under applicable bankruptcy, insolvency or reorganization laws on the date the lease is entered into, (II) in the case of a lease under subclause (2) or (3) above, on the date of such lease or any renewal or extension thereof, the United States and the country in which such lessee is domiciled and principally located maintain diplomatic relations (which for purposes of this clause (H) shall include Taiwan and any other country that is similarly situated), (III) in the case only of a lease to any Person under subclause (3) above, the Collateral Agent receives at the time of such lease an opinion of counsel (in form and from counsel reasonably satisfactory to the Collateral Agent) to the effect that (w) the terms of the proposed lease will be legal, valid, binding and (subject to customary exceptions in foreign opinions generally) enforceable in accordance with its terms against the proposed lessee in the country in which the proposed lessee is principally based, (x) there exist no possessory rights in favor of the lessee under such lease under the laws of such lessee's country of domicile that would, upon bankruptcy or insolvency of or other default by the Company and assuming at such time such lessee is not insolvent or bankrupt, prevent the return or repossession of such Aircraft or such Spare Engine in accordance with the lease and when permitted by the terms of Section 4 upon the exercise by the Collateral Agent of its remedies pursuant to such Section, (y) the laws of such lessee's country of domicile require fair compensation by the government of such jurisdiction payable in currency freely convertible into Dollars for the loss of use of such Aircraft or such Spare Engine in the event of the requisition by such government of such use, and (z) in the case of an Airframe or Spare Engine, the laws of such lessee's country of domicile would give recognition to the Company's title to the applicable Aircraft of which such Airframe is a part or such Spare Engine, to the registry of the applicable Aircraft of which such Airframe is a part or such Spare Engine (if such country maintains a registry for engines) in the name of the Company (or the proposed lessee, as "lessee", as appropriate), and to the Lien of the Security Documents, (IV) if the lessee under such lease is a governmental entity, such lessee has waived all rights of sovereign immunity, and (V) if the lessee is a Certificated Air Carrier and the Aircraft or such Spare Engine was first placed in service after October 22, 1994, the Company will be entitled as lessor to the benefits of Section 1110 of the Bankruptcy Code with respect to such Aircraft or such Spare Engine in connection with a proceeding under Chapter 11 of the Bankruptcy Code in which the lessee is the debtor. (ii) The rights of any Permitted Lessee or other transferee (other than a transferee where the transfer is of an Engine, a Propeller or Spare Engine which is to be an Event of Loss) shall be (and the sublease, assignment or other transfer document under which such transfer or sublease is governed shall explicitly provide that) during the period of such possession, subject and subordinate to, all the terms of the Security Documents (and any Permitted Lease shall expressly state that it is so subject and subordinate), including, without limitation, the covenants contained in this Article 2, including the inspection rights contained in Section 2.05 and the Collateral Agent's right to repossess such Aircraft or such Spare Engine and to avoid and terminate any lease upon such repossession, and the Company shall remain primarily liable for the performance of all of the terms of the Security Documents, and the terms of any such Permitted Lease shall not permit any Permitted Lessee to take any action not permitted to be taken by the Company in the Security Documents with respect to such Aircraft or such Spare Engine. No pooling agreement, Permitted Lease or other relinquishment of possession of any Airframe, any Engine, any Propeller or any Spare Engine shall in any way discharge or diminish any of the Company's obligations to the Collateral Agent under the Security Documents or constitute a waiver of Collateral Agent's rights or remedies hereunder or thereunder. The Collateral Agent agrees, for the benefit of the Company (and any Permitted Lessee) and for the benefit of any mortgagee or other holder of a security interest in any engine or propeller owned by the Company (or any Permitted Lessee), any lessor of any engine (other than an Engine) or propeller (other than a Propeller) leased to the Company (or any Permitted Lessee) and any conditional vendor of any engine (other than an Engine or Spare Engine) or propeller (other than a Propeller) purchased by the Company (or any Permitted Lessee) subject to a conditional sale agreement or any other security agreement, that no interest shall be created under this Security Agreement in any engine or propeller so owned, leased or purchased and that neither the Collateral Agent nor its successors or assigns will acquire or claim, as against the Company (or any Permitted Lessee) or any such mortgagee, lessor or conditional vendor or other holder of a security interest or any successor or assignee of any thereof, any right, title or interest in such engine or propeller as the result of such engine or propeller being installed on any Airframe. The Company shall provide the Collateral Agent with a copy of any Permitted Lease having a term of more than one (1) year upon entering into such Permitted Lease. (iii) In connection with any Permitted Lease, all necessary action shall be taken by the Company at its expense which is required to continue the Collateral Agent's security interest in the Aircraft, Airframes, Engines, Propellers and Spare Engines, and such Permitted Lease and all other necessary documents shall be duly filed, registered or recorded in such public offices as may be required to fully preserve the priority of the security interest of the Collateral Agent in the Aircraft, Airframes, Engines, Propellers and Spare Engines. (iv) Any Wet Lease shall not constitute a delivery, transfer or relinquishment of possession for purposes of this Section 2.01. The Collateral Agent acknowledges that any consolidation or merger of the Company or conveyance, transfer or lease of all or substantially all of the Company's assets, in each case as permitted by the Loan Documents, shall not be prohibited by this Section 2.01. (v) No Permitted Lease entered into pursuant to this Section 2.01(b) shall permit any subleasing of any Aircraft or any Spare Engine.Owner