EXECUTION COPY


                                  AMTRAN, INC.


                            AMERICAN TRANS AIR, INC.


                                       and


                            WILMINGTON TRUST COMPANY



                                   as Trustee




                          PASS THROUGH TRUST AGREEMENT





                          Dated as of December 23, 1997


                 American Trans Air 1997-1A-S Pass Through Trust
          6.99% American Trans Air 1997-1A-S Pass Through Certificates


<PAGE>



                                TABLE OF CONTENTS



ARTICLE I  DEFINITIONS.........................................................2
         Section 1.01. Definitions.............................................2
         Section 1.02. COMPLIANCE CERTIFICATES AND OPINIONS...................12
         Section 1.03. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.................13
         Section 1.04. ACTS OF CERTIFICATEHOLDERS.............................13


ARTICLE II  ACQUISITION OF TRUST PROPERTY.....................................15
         Section 2.01. [Intentionally omitted]................................15
         Section 2.02. ACQUISITION OF TRUST PROPERTY..........................15
         Section 2.03.  ACCEPTANCE BY TRUSTEE.................................16
         Section 2.04.  LIMITATION OF POWERS..................................16

ARTICLE III THE CERTIFICATES..................................................16
         Section 3.01.  TITLE, FORM, DENOMINATION AND EXECUTION OF
         CERTIFICATES.........................................................16
         Section 3.02. RESTRICTIVE LEGENDS....................................18
         Section 3.03. AUTHENTICATION OF CERTIFICATES.........................19
         Section 3.04. TRANSFER AND EXCHANGE..................................19
         Section 3.05. BOOK-ENTRY   PROVISIONS  FOR  U.S.  GLOBAL
         CERTIFICATE  AND  OFFSHORE  GLOBAL  CERTICIATES......................20
         Section 3.06. SPECIAL TRANSFER PROVISIONS............................22
         Section 3.07. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES......24
         Section 3.08. PERSONS DEEMED OWNERS..................................25
         Section 3.09. CANCELLATION...........................................25
         Section 3.10. LIMITATION OF LIABILITY FOR PAYMENTS...................25
         Section 3.11. TEMPORARY CERTIFICATES.................................25


ARTICLE IV  DISTRIBUTIONS; STATEMENTS TO......................................26
         Section 4.01. CERTIFICATE ACCOUNT AND SPECIAL PAYMENTS ACCOUNT.......26
         Section 4.02. DISTRIBUTIONS FROM CERTIFICATE ACCOUNT AND SPECIAL
         PAYMENTS ACCOUNT.....................................................26
         Section 4.03. STATEMENTS TO CERTIFICATEHOLDERS.......................28
         Section 4.04. INVESTMENT OF SPECIAL PAYMENT MONEYS...................29


ARTICLE V  THE COMPANY........................................................30
         Section 5.01. MAINTENANCE OF CORPORATE EXISTENCE.....................30
         Section 5.02. CONSOLIDATION, MERGER, ETC.............................30
         Section 5.03.  RULE 144A(D)(4) INFORMATION...........................31


ARTICLE VI  DEFAULT...........................................................31
         Section 6.01. EVENTS OF DEFAULT......................................31
         Section 6.02. INCIDENTS OF SALE OF EQUIPMENT NOTES...................33
         Section 6.03. JUDICIAL PROCEEDINGS INSTITUTED BY TRUSTEE; TRUSTEE
         MAY BRING SUIT.......................................................34
         Section 6.04. CONTROL BY CERTIFICATEHOLDERS..........................34
         Section 6.05. WAIVER OF PAST DEFAULTS................................34
         Section 6.06. RIGHT OF CERTIFICATEHOLDERS TO RECEIVE PAYMENTS NOT
         TO BE IMPAIRED.......................................................35
         Section 6.07. CERTIFICATEHOLDERS MAY NOT BRING SUIT EXCEPT UNDER
         CERTAIN CONDITIONS...................................................35
         Section 6.08. REMEDIES CUMULATIVE....................................36
         Section 6.09. UNDERTAKING FOR COSTS..................................36


ARTICLE VII  THE TRUSTEE......................................................36
         Section 7.01. NOTICE OF DEFAULTS.....................................36
         Section 7.02. CERTAIN RIGHTS OF TRUSTEE..............................37
         Section 7.03. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
         CERTIFICATES.........................................................38
         Section 7.04. MAY HOLD CERTIFICATES..................................38
         Section 7.05. MONEY HELD IN TRUST....................................38
         Section 7.06. COMPENSATION AND REIMBURSEMENT.........................39
         Section 7.07. CORPORATE TRUSTEE REQUIRED, ELIGIBILITY................40
         Section 7.08. RESIGNATION AND REMOVAL: APPOINTMENT OF SUCCESSOR......40
         Section 7.09. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.................42
         Section 7.10.  MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
         BUSINESS.............................................................42
         Section 7.11. MAINTENANCE OF AGENCIES................................43
         Section 7.12. MONEY FOR CERTIFICATE PAYMENTS TO BE HELD IN TRUST.....44
         Section 7.13. REGISTRATION OF EQUIPMENT NOTES IN NAME OF
         SUBORDINATION AGENT............................44
         Section 7.14. REPRESENTATIONS AND WARRANTIES OF TRUSTEE..............44
         Section 7.15. WITHHOLDING TAXES, INFORMATION REPORTING...............45
         Section 7.16. TRUSTEE'S LIENS........................................46
         Section 7.17. PREFERENTIAL COLLECTION OF CLAIMS......................46


ARTICLE VIII  CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE................46
         Section 8.01. THE COMPANY TO FURNISH TRUSTEE WITH NAMES AND
         ADDRESSES OF CERTIFICATEHOLDERS......................................46
         Section 8.02. PRESERVATION OF INFORMATION; COMMUNICATIONS TO
         CERTIFICATEHOLDERS...................................................47
         Section 8.03. REPORTS BY TRUSTEE.....................................47
         Section 8.04. REPORTS BY THE GUARANTOR AND COMPANY...................47


ARTICLE IX  SUPPLEMENTAL AGREEMENTS...........................................48
         Section 9.01. SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF
         CERTIFICATEHOLDERS...................................................48
         Section 9.02. SUPPLEMENTAL AGREEMENTS WITH CONSENT OF
         CERTIFICATEHOLDERS...................................................49
         Section 9.03. DOCUMENTS AFFECTING IMMUNITY OR INDEMNITY..............50
         Section 9.04. EXECUTION OF SUPPLEMENTAL AGREEMENTS...................50
         Section 9.05. EFFECT OF SUPPLEMENTAL AGREEMENTS......................51
         Section 9.06. CONFORMITY WITH TRUST INDENTURE ACT....................51
         Section 9.07. REFERENCE IN CERTIFICATES TO SUPPLEMENTAL AGREEMENTS...51


ARTICLE X  AMENDMENTS TO INDENTURES AND NOTE DOCUMENTS........................51
         Section 10.01. AMENDMENTS AND SUPPLEMENTS TO INDENTURES AND OTHER
                        NOTE DOCUMENTS........................................51

ARTICLE XI  TERMINATION OF TRUSTS.............................................52
         Section 11.01. TERMINATION OF THE TRUST..............................52


ARTICLE XII  MISCELLANEOUS PROVISIONS.........................................53
         Section 12.01. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS............53
         Section 12.02. LIABILITIES OF CERTIFICATEHOLDERS.....................53
         Section 12.03. CERTIFICATES NONASSESSABLE AND FULLY PAID.............53
         Section 12.04. [Intentionally omitted]...............................53
         Section 12.05. NOTICES...............................................54
         Section 12.06. GOVERNING LAW.........................................55
         Section 12.07. SEVERABILITY OF PROVISIONS............................55
         Section 12.08. [Intentionally omitted]...............................55
         Section 12.09. EFFECT OF HEADINGS AND TABLE OF CONTENTS..............55
         Section 12.10. SUCCESSORS AND ASSIGNS................................55
         Section 12.11. BENEFITS OF AGREEMENT.................................55
         Section 12.12. LEGAL HOLIDAYS........................................55
         Section 12.13. COUNTERPARTS..........................................55
         Section 12.14. COMMUNICATION BY CERTIFICATEHOLDERS WITH OTHER
         CERTIFICATEHOLDERS...................................................56
         Section 12.15.  INTENTION OF PARTIES.................................56

Exhibit A - Form of  Certificate  to be  Delivered  in  Connection  with
            Transfers Pursuant to Regulation S
Exhibit B - Form of  Certificate  to be  Delivered  in  Connection  with
            Transfers to Non-QIB Accredited Investors
Exhibit C - Form of  Assignment  and  Assumption  Agreement
Exhibit D - Form of Certificate to be Delivered in Connection with
            Transfers to QIBs


<PAGE>





     .........This PASS THROUGH TRUST AGREEMENT,  dated as of December 23, 1997,
among AMTRAN,  INC., an Indiana  corporation (the  "Guarantor"),  AMERICAN TRANS
AIR, INC., an Indiana corporation (the "Company"), and WILMINGTON TRUST COMPANY,
a  Delaware  banking  corporation,  as  Trustee,  is made  with  respect  to the
formation of the  American  Trans Air  1997-1A-S  Pass  Through  Trust,  and the
issuance  of 6.99%  American  Trans  Air  1997-1A-S  Pass  Through  Certificates
representing fractional undivided interests in the Trust.

     WITNESSETH:

     .........WHEREAS,  the Company  has  obtained  commitments  from The Boeing
Company for the delivery of certain Aircraft;

     .........WHEREAS,  as of the Transfer  Date (as defined  below) the Company
will have financed the  acquisition of all or a portion of such Aircraft  either
(i) through  separate  leveraged lease  transactions in which the Company leases
such aircraft  (collectively,  the "LEASED  AIRCRAFT") or (ii) through  separate
secured loan transactions in which the Company owns such Aircraft (collectively,
the "OWNED AIRCRAFT");

     .........WHEREAS, as of the Transfer Date (as defined below) in the case of
each Leased Aircraft,  each Owner Trustee, acting on behalf of the corresponding
Owner Participant,  will have issued pursuant to an Indenture, on a non-recourse
basis,  three  series of  Equipment  Notes in order to  finance a portion of the
purchase price of each such Leased Aircraft;

     .........WHEREAS, as of the Transfer Date (as defined below) in the case of
each Owned Aircraft, the Company, will have issued pursuant to an Indenture,  on
a recourse  basis,  three series of Equipment  Notes to finance a portion of the
purchase price of each such Owned Aircraft;

     .........WHEREAS, as of the Transfer Date, the Related Trustee will assign,
transfer  and deliver all of such  trustee's  right,  title and  interest to the
trust  property  held by the  Related  Trustee to the  Trustee  pursuant  to the
Assignment and Assumption Agreement (as defined below);

     .........WHEREAS,  the Trustee,  effectively only, but automatically,  upon
execution  and delivery of the  Assignment  and  Assumption  Agreement,  will be
deemed to have declared the creation of this Trust (the  "1997-1A-S  Trust") for
the  benefit  of  the  Certificateholders,   and  each  Holder  of  Certificates
outstanding as of the Transfer Date, as the grantors of the 1997-1A-S  Trust, by
their respective  acceptances of the Certificates,  will join in the creation of
this 1997-1A-S Trust with the Trustee;

     .........WHEREAS,  except for those Certificates to which an Escrow Receipt
(as defined below) has been affixed, all Certificates deemed issued by the Trust
will  evidence  fractional  undivided  interests in the Trust and will convey no
rights,  benefits or interests  in respect of any property  other than the Trust
Property;

     .........WHEREAS,  the Company as the "issuer",  as such term is defined in
and solely for  purposes  of the  Securities  Act of 1933,  as  amended,  of the
Certificates to be issued pursuant hereto, and as the "obligor", as such term is
defined  in and solely  for  purposes  of the Trust  Indenture  Act of 1939,  as
amended,  and (ii) the  Guarantor  have  each  duly  authorized  the  execution,
delivery  and   effectiveness  of  this  Agreement  with  respect  to  all  such
Certificates  and  are  undertaking  to  perform  certain   administrative   and
ministerial  duties  hereunder  and are  also  undertaking  to pay the  fees and
expenses of the Trustee; and

     .........WHEREAS,  upon the  execution and delivery of the  Assignment  and
Assumption Agreement,  all of the conditions and requirements  necessary to make
this Agreement a valid, binding and legal instrument,  enforceable in accordance
with its terms  and for the  purposes  herein  expressed,  will have been  done,
performed and fulfilled, and the execution and delivery of this Agreement in the
form and with the terms hereof will have been in all respects duly authorized;

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


                                    ARTICLE I

                                   DEFINITIONS

     .........Section  1.01.  Definitions.  For all purposes of this  Agreement,
except as otherwise expressly provided or unless the context otherwise requires:

     (1) the  terms  used  herein  that are  defined  in this  Article  have the
meanings assigned to them in this Article, and include the plural as well as the
singular;

     (2) all other  terms used herein  which are defined in the Trust  Indenture
Act, either directly or by reference herein,  have the meanings assigned to them
therein;

     (3) all references in this Agreement to designated  "Articles",  "Sections"
and  other  subdivisions  are to the  designated  Articles,  Sections  and other
subdivisions of this Agreement;

     (4) the words "herein", "hereof' and "hereunder" and other words of similar
import  refer to this  Agreement as a whole and not to any  particular  Article,
Section or other subdivision; and

     (5) unless the context otherwise requires,  whenever the words "including",
"include" or  "includes"  are used herein,  it shall be deemed to be followed by
the phrase "without limitation".

     ACT:  With respect to any  Certificateholder  has the meaning  specified in
Section 1.04.

                  AFFILIATE:  With respect to any  specified  Person,  means any
other Person directly or indirectly controlling or controlled by or under direct
or  indirect  common  control  with  such  Person.  For  the  purposes  of  this
definition, "control", when used with respect to any specified Person, means the
power to  direct  the  management  and  policies  of such  Person,  directly  or
indirectly,  whether through the ownership of voting securities,  by contract or
otherwise,   and  the  terms   "controlling"   and  "controlled"  have  meanings
correlative to the foregoing.

     AGENT MEMBERS: Has the meaning specified in Section 3.05(a).


     AIRCRAFT:  means each of the Aircraft or Substitute  Aircraft in respect of
which a  Participation  Agreement  is entered into in  accordance  with the Note
Purchase Agreement.

     ASSIGNMENT  AND ASSUMPTION  AGREEMENT:  Means the assignment and assumption
agreement  substantially  in the form of Exhibit D to the Related  Pass  Through
Trust Agreement executed and delivered in accordance with Section 11.01 thereof.

     AUTHORIZED AGENT: Means any Paying Agent or Registrar for the Certificates.

     AVOIDABLE TAX: Has the meaning specified in Section 7.08(e) hereof.

     BOOK-ENTRY  CERTIFICATES:  With  respect  to  the  Certificates,   means  a
beneficial interest in the Certificates,  ownership and transfers of which shall
be made through book entries as described in Section 3.04.

     BUSINESS  DAY:  Means any day other than a  Saturday,  a Sunday or a day on
which  commercial  banks are required or  authorized  to close in  Indianapolis,
Indiana;  New York,  New York;  or  Phoenix,  Arizona;  and, so long as any such
Certificate is outstanding, a city and state in which the Trustee or any related
Loan Trustee  maintains  its  Corporate  Trust Office or receives and  disburses
funds.

     CEDEL: Means Cedel Bank societe anonyme.


     CERTIFICATE:  Means any one of the certificates issued by the Related Trust
and that are  "Outstanding"  (as  defined  in the  Related  Pass  Through  Trust
Agreement) as of the Transfer Date (the  "Transfer Date  Certificates")  and any
such certificate issued in exchange therefor or replacement  thereof pursuant to
this Agreement.

     CERTIFICATE  ACCOUNT:  Means the account or accounts created and maintained
pursuant to Section 4.01(a).

     CERTIFICATEHOLDER  OR HOLDER:  Means the Person in whose name a Certificate
is registered in the Register.

     CLEARING AGENCY:  Means an organization  registered as a "clearing  agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended.

     CLEARING AGENCY PARTICIPANT:  Means a broker, dealer, bank, other financial
institution  or  other  Person  for whom  from  time to time a  Clearing  Agency
effects, directly or indirectly,  book-entry transfers and pledges of securities
deposited with the Clearing Agency.

     COMPANY:  Means American Trans Air,  Inc., an Indiana  corporation,  or its
successor in interest pursuant to Section 5.02.

     CONTROLLING PARTY: Means the Person entitled to act as such pursuant to the
terms of the Intercreditor Agreement.

     CORPORATE  TRUST  OFFICE:  With respect to the Trustee or any Loan Trustee,
means the office of such trustee in the city at which at any particular time its
corporate trust business shall be principally administered.

     DELIVERY PERIOD  TERMINATION  DATE: Has the meaning specified in Annex A to
the Note Purchase Agreement.

     DEPOSIT  AGREEMENT:  Means  the  Deposit  Agreement  (Class  A) dated as of
December 23, 1997 relating to the  Certificates,  between the Depositary and the
Escrow Agent,  as the same may be amended,  supplemented  or otherwise  modified
from time to time in accordance with its terms.

     DEPOSITARY:  Means NBD  Bank,  National  Association,  a  national  banking
association.

     DEPOSITS: Has the meaning specified in the Deposit Agreement.

     DIRECTION: Has the meaning specified in Section 1.04(c).

     DISTRIBUTION  DATE: Means each Regular  Distribution  Date and each Special
Distribution Date.

     DTC: Means The Depository Trust Company,  its nominees and their respective
successors.

     EQUIPMENT  NOTE:  Means  the  "Secured  Certificates"  as  defined  in  the
Indentures.

     ERISA:  Means the  Employee  Retirement  Income  Security  Act of 1974,  as
amended from time to time, or any successor federal statute.

     ESCROW AGENT: Means, initially,  First Security Bank, National Association,
and any  replacement  or successor  therefor  appointed in  accordance  with the
Escrow Agreement.

     ESCROW  AGREEMENT:  Means the Escrow and Paying Agent  Agreement  (Class A)
dated as of December  23, 1997  relating to the  Certificates,  among the Escrow
Agent,  the Escrow  Paying  Agent,  the Related  Trustee (and after the Transfer
Date,  the  Trustee)  and the  Initial  Purchasers,  as the same may be amended,
supplemented  or otherwise  modified  from time to time in  accordance  with its
terms.

     ESCROW  PAYING  AGENT:  Means the Person  acting as paying  agent under the
Escrow Agreement.

     ESCROW RECEIPT:  Means the receipt substantially in the form annexed to the
Escrow Agreement  representing a fractional undivided interest in the funds held
in escrow thereunder.

     EUROCLEAR: Means the Euroclear System.

     EVENT OF DEFAULT:  Means the  occurrence of an Indenture  Default under any
Indenture pursuant to which Equipment Notes held by the Trust were issued.

     FINAL WITHDRAWAL: Has the meaning specified in the Escrow Agreement.

     FINAL WITHDRAWAL DATE: Has the meaning specified in the Escrow Agreement.

     FRACTIONAL  UNDIVIDED INTEREST:  Means the fractional undivided interest in
the Trust that is evidenced by a Certificate.

     GLOBAL CERTIFICATES: Has the meaning assigned to such term in Section 3.01.

     GUARANTOR: Means Amtran, Inc., an Indiana corporation,  or its successor in
interest.

     INDENTURE:  Means each of the three separate  trust  indenture and security
agreements  relating to the Aircraft,  each entered into pursuant to the related
Participation  Agreement, in each case as the same may be amended,  supplemented
or otherwise modified from time to time in accordance with its terms.

     INDENTURE  DEFAULT:  With  respect  to any  Indenture,  means  any Event of
Default (as such term is defined in such Indenture).

     INITIAL  PURCHASERS:  Means  Salomon  Brothers  Inc and  Furman  Selz  LLC,
collectively.

     INITIAL REGULAR  DISTRIBUTION  DATE:  Means the first Regular  Distribution
Date on which a Scheduled Payment is to be made.

     INSTITUTIONAL  ACCREDITED INVESTOR: Means an institutional investor that is
an "accredited  investor"  within the meaning set forth in Rule 501(a)(1),  (2),
(3) or (7) of Regulation D under the Securities Act.

     INTERCREDITOR  AGREEMENT:  Means the Intercreditor Agreement dated December
23, 1997 among the Related  Trustee (and after the Transfer  Date, the Trustee),
the Related Other Trustees (and after the Transfer  Date,  the Other  Trustees),
the  Liquidity  Provider,  the  liquidity  providers,  if any,  relating  to the
Certificates  issued  under (and as defined in) the Related  Other Pass  Through
Trust  Agreements,   and  Wilmington  Trust  Company,   as  Subordination  Agent
thereunder, as amended,  supplemented or otherwise modified from time to time in
accordance with its terms.

     ISSUANCE DATE: Means the date of the issuance of the Certificates.

     LEASE:  Means any lease between an Owner  Trustee,  as the lessor,  and the
Company, as the lessee, referred to in the related Indenture, as each such lease
may be amended or  supplemented  in accordance  with its respective  terms;  and
LEASES means all such leases.

     LEASED  AIRCRAFT:  Has the meaning  specified in the second recital to this
Agreement.

     LETTER OF  REPRESENTATIONS:  Means the  agreement  dated the Issuance  Date
among the Company, the Trustee and the initial Clearing Agency.

     LIQUIDITY FACILITY:  Means the Irrevocable Revolving Credit Agreement Class
A Certificates dated December 23, 1997 relating to the Certificates  between the
Liquidity   Provider  and  the  Subordination   Agent,  as  amended,   replaced,
supplemented  or otherwise  modified  from time to time in  accordance  with its
terms and the terms of the Intercreditor Agreement.

     LIQUIDITY  PROVIDER:  Means,  initially,  ING Bank,  a Dutch bank,  and any
replacement  or successor  therefor  appointed in accordance  with the Liquidity
Facility and the Intercreditor Agreement.

     LOAN  TRUSTEE:  With  respect  to  any  Equipment  Note  or  the  Indenture
applicable  thereto,  means  the bank or  trust  company  designated  as loan or
indenture  trustee under such Indenture;  and any successor to such Loan Trustee
as such  trustee;  and LOAN TRUSTEES  means all of the Loan  Trustees  under the
Indentures.

     NON-U.S.  PERSON:  Means a Person  that is not a U.S.  Person as defined in
Regulation S.

     NOTE  DOCUMENTS:  With  respect to any  Equipment  Note,  means the related
Indenture,  Lease  (if the  related  Aircraft  is  leased  to the  Company)  and
Participation Agreement.

     NOTE  PURCHASE  AGREEMENT:  Means the Note Purchase  Agreement  dated as of
December 23, 1997 among the Related  Trustee (and after the Transfer  Date,  the
Trustee),  the Related Other  Trustees (and after the Transfer  Date,  the Other
Trustees),  the  Company,  the Escrow  Agent,  the Escrow  Paying  Agent and the
Subordination  Agent,  as the same may be  amended,  supplemented  or  otherwise
modified from time to time, in accordance with its terms.

     OFFERING MEMORANDUM:  Means the Offering Memorandum dated December 17, 1997
relating to the offering of the Certificates  and the certificates  issued under
the Related Other Pass Through Trust Agreements.

     OFFICER'S  CERTIFICATE:  Means a certificate  signed (a) in the case of the
Guarantor or the Company,  by (i) the President or any Executive  Vice President
or Senior Vice President of the Guarantor or the Company, respectively,  signing
alone  or (ii)  any Vice  President  of the  Guarantor  or the  Company  signing
together  with the  Secretary,  the  Assistant  Secretary,  the Treasurer or any
Assistant Treasurer of the Guarantor or the Company, respectively, or (b) in the
case of the Trustee or an Owner Trustee or a Loan Trustee, a Responsible Officer
of the Trustee or such Owner Trustee or such Loan Trustee, as the case may be.

     OFFSHORE  GLOBAL  CERTIFICATES:  Has the  meaning  assigned to such term in
Section 3.01.

     OFFSHORE  PHYSICAL  CERTIFICATES:  Has the meaning assigned to such term in
Section 3.01.

     OPINION OF COUNSEL: Means a written opinion of legal counsel who (a) in the
case of counsel for the Guarantor or the Company,  may be (i) a senior  attorney
in rank of the  officers of the  Guarantor  or the  Company a principal  duty of
which is  furnishing  advice  as to legal  matters  or (ii) such  other  counsel
designated  by the  Guarantor or the Company and  reasonably  acceptable  to the
Trustee  and (b) in the case of any Owner  Trustee or any Loan  Trustee,  may be
such counsel as may be  designated by any of them whether or not such counsel is
an  employee  of any of them,  and who  shall be  reasonably  acceptable  to the
Trustee.

     OTHER  PASS  THROUGH  TRUST  AGREEMENT:  Means (i) the  American  Trans Air
1997-1B-S  Pass  Through  Trust  Agreement  relating to the  American  Trans Air
1997-1B-S  Pass Through  Trust,  and (ii) the American  Trans Air 1997-1C-S Pass
Through  Trust  Agreement  relating to the  American  Trans Air  1997-1C-S  Pass
Through  Trust,  each  dated the date  hereof;  and  OTHER  PASS  THROUGH  TRUST
AGREEMENTS means all such agreements.

     OTHER TRUSTEE: Means the trustee under each of the Other Pass Through Trust
Agreements, and any successor or other trustee appointed as provided therein and
Other Pass Through Trustees means both such trustees.

     OTHER TRUSTS: Means the American Trans Air 1997-1B-S Pass Through Trust and
the American Trans Air 1997-1C-S Pass Through Trust.

     OUTSTANDING:  With  respect  to  Certificates,  means,  as of the  date  of
determination,  all  Transfer  Date  Certificates,  and all  other  Certificates
theretofore  authenticated  and  delivered  under this  Agreement,  in each case
except:

     (i) Certificates  theretofore canceled by the Registrar or delivered to the
Trustee or the Registrar for cancellation;

     (ii) All of the  Certificates  if money in the full amount required to make
the final distribution with respect thereto pursuant to Section 11.01 hereof has
been  theretofore  deposited  with the  Trustee in trust for the Holders of such
Certificates  as provided in Section 4.01 pending  distribution of such money to
such Certificateholders pursuant to such final distribution payment; and

     (iii)  Certificates in exchange for or in lieu of which other  Certificates
have been authenticated and delivered pursuant to this Agreement.

     OWNED  AIRCRAFT:  Has the meaning  specified in the second  recital to this
Agreement.

     OWNER  PARTICIPANT:  With respect to any Equipment  Note,  means the "Owner
Participant"  as referred to in the Indenture  pursuant to which such  Equipment
Note is issued and any permitted  successor or assign of such Owner Participant;
and  Owner  Participants  at any time of  determination  means  all of the Owner
Participants thus referred to in the Indentures.

     OWNER  TRUSTEE:  With  respect  to any  Equipment  Note,  means the  "Owner
Trustee",  as referred to in the Indenture pursuant to which such Equipment Note
is issued,  not in its  individual  capacity  but solely as  trustee;  and Owner
Trustees  means  all of  the  Owner  Trustees  party  to  any of the  respective
Indentures.

     PARTICIPATION  AGREEMENT:  Means each Participation Agreement to be entered
into by the Related Trustee and the Related Other Trustees  pursuant to the Note
Purchase  Agreement,  as the  same may be  amended,  supplemented  or  otherwise
modified in accordance with its terms;  and  PARTICIPATION  AGREEMENTS means all
such agreements.

     PAYING  AGENT:  Means the paying agent  maintained  and  appointed  for the
Certificates pursuant to Section 7.11.

     PERMITTED INVESTMENTS: Means obligations of the United States of America or
agencies  or  instrumentalities  thereof for the payment of which the full faith
and credit of the United States of America is pledged, maturing in not more than
60 days or such lesser time as is necessary for payment of any Special  Payments
on a Special Distribution Date.

     PERSON:   Means  any  person,   including  any   individual,   corporation,
partnership,   joint  venture,   association,   joint  stock   company,   trust,
unincorporated   organization,   or   government  or  any  agency  or  political
subdivision thereof.

     PHYSICAL CERTIFICATES: Has the meaning specified in Section 3.01.

     POOL BALANCE: Means, as of any date, (i) the original aggregate face amount
of the  "Certificates"  as defined in the Related Pass Through  Trust  Agreement
less  (ii)  the  aggregate  amount  of all  payments  made  in  respect  of such
Certificates  other than payments made in respect of interest or premium thereon
or reimbursement of any costs or expenses incurred in connection  therewith less
(iii) the aggregate amount of unused Deposits  distributed as a Final Withdrawal
other than payments in respect of interest or premium thereon.  The Pool Balance
as of any Distribution Date shall be computed after giving effect to the payment
of principal, if any, on the Equipment Notes or other Trust Property held in the
Trust and the distribution  thereof to be made on such Distribution Date and the
distribution of the Final Withdrawal to be made on such Distribution Date.

     POOL FACTOR:  Means,  as of any date, the quotient  (rounded to the seventh
decimal place) computed by dividing (i) the Pool Balance as at such date by (ii)
the  original  aggregate  face  amount of the  "Certificates"  as defined in the
Related Pass Through  Trust  Agreement.  The Pool Factor as of any  Distribution
Date shall be computed after giving effect to the payment of principal,  if any,
on the Equipment Notes or other Trust Property and the  distribution  thereof to
be made on such  Distribution  Date and the distribution of the Final Withdrawal
to be made on such Distribution Date.

     PRIVATE PLACEMENT LEGEND: Has the meaning specified in Section 3.02.

     PTC EVENT OF DEFAULT:  Means any failure to pay within 10 Business  Days of
the due date thereof:  (i) the  outstanding  Pool Balance on October 15, 2018 or
(ii)  interest  due on the  Certificates  on any  Distribution  Date (unless the
Subordination  Agent  shall have made an  Interest  Drawing  (as  defined in the
Intercreditor  Agreement) or a withdrawal or withdrawals  from a cash collateral
account pursuant to Section 3.6(f) of the Intercreditor Agreement,  with respect
thereto in an amount  sufficient to pay such interest and shall have distributed
such amount to the Certificateholders).

     PURCHASE  AGREEMENT:  Means the Purchase  Agreement dated December 17, 1997
among the Initial Purchasers, the Company and the Depositary, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
its terms.

     QIB: Means a qualified institutional buyer as defined in Rule 144A.

     RECORD DATE:  Means (i) for  Scheduled  Payments to be  distributed  on any
Regular  Distribution  Date,  other  than the final  distribution,  the 15th day
(whether or not a Business Day)  preceding such Regular  Distribution  Date, and
(ii) for Special  Payments to be distributed on any Special  Distribution  Date,
other than the final distribution,  the 15th day (whether or not a Business Day)
preceding such Special Distribution Date.

     REGISTER and  REGISTRAR:  Mean the register  maintained  and the  registrar
appointed pursuant to Sections 3.04 and 7.11.

     REGULAR  DISTRIBUTION  DATE:  With  respect to  distributions  of Scheduled
Payments in respect of the  Certificates,  means each date designated as such in
this Agreement, until payment of all the Scheduled Payments to be made under the
Equipment Notes held in the Trust has been made; PROVIDED, HOWEVER, that, if any
such day shall not be a Business Day, the related  distribution shall be made on
the next succeeding Business Day without additional interest.

     REGULATION S RESTRICTED DATE: Means the date 40-days after the later of the
commencement of the initial offering of the Certificates and the date of initial
issuance thereof.

     RELATED OTHER PASS THROUGH TRUST AGREEMENTS:  Means the "Other Pass Through
Trust Agreements" as defined in the Related Pass Through Trust Agreement.

     RELATED OTHER TRUSTS:  Means the "Other Trustees" as defined in the Related
Pass Through Trust Agreement.

     RELATED  OTHER TRUSTS:  Means the "Other  Trusts" as defined in the Related
Pass Through Trust Agreement.

     RELATED  PASS  THROUGH  TRUST  AGREEMENT:  Means  the  American  Trans  Air
1997-1A-O  Pass  Through  Trust  Agreement  relating to the  American  Trans Air
1997-1A-O Pass Through Trust, dated as of December 23, 1997, between the Company
and the  institution  acting as trustee  thereunder as amended,  supplemented or
otherwise modified from time to time in accordance with its terms.

     RELATED  TRUST:  Means the American Trans Air 1997-1A-O Pass Through Trust,
formed under the Related Pass Through Trust Agreement.

     RELATED  TRUSTEE:  Means the  institution  serving as the trustee under the
Related Pass Through Trust Agreement.

     REQUEST: Means a request by the Company setting forth the subject matter of
the request accompanied by an Officer's Certificate and an Opinion of Counsel as
provided in Section 1.02 of this Agreement.

     RESPONSIBLE OFFICER:  With respect to the Trustee, any Loan Trustee and any
Owner Trustee, means any officer in the Corporate Trust Division of the Trustee,
Loan  Trustee  or Owner  Trustee  or any other  officer  customarily  performing
functions  similar to those  performed  by the  persons who at the time shall be
such officers,  respectively,  or to whom any corporate trust matter is referred
because of his knowledge of and familiarity with a particular subject.

     RULE  144A:  Means  Rule 144A under the  Securities  Act and any  successor
regulation thereto.

     SCHEDULED PAYMENT: With respect to any Equipment Note, means any payment of
principal and interest on such  Equipment Note or any payment of interest on the
Certificates with funds drawn under the Liquidity  Facility (other than any such
payment which is not in fact received by the Trustee or any Subordination  Agent
within five days of the date on which such  payment is scheduled to be made) due
from the obligor  thereon which payment  represents the installment of principal
at the stated maturity of such  installment of principal on such Equipment Note,
the payment of  regularly  scheduled  interest  accrued on the unpaid  principal
amount of such Equipment Note, or both;  PROVIDED that any payment of principal,
premium,  if any, or interest  resulting  from the redemption or purchase of any
Equipment Note shall not constitute a Scheduled Payment.

     SEC:  Means the  Securities  and Exchange  Commission  as from time to time
constituted or created under the Securities  Exchange Act of 1934, or, if at any
time after the execution of this  instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties on such date.

     SECURITIES ACT: Means the United States  Securities Act of 1933, as amended
from time to time, or any successor thereto.

     SPECIAL DISTRIBUTION DATE: Means each date on which a Special Payment is to
be distributed as specified in this Agreement;  PROVIDED,  HOWEVER, that, if any
such day shall not be a Business Day, the related  distribution shall be made on
the next succeeding Business Day without additional interest.

     SPECIAL  PAYMENT:  Means any payment  (other  than a Scheduled  Payment) in
respect of, or any proceeds of, any Equipment Note or Trust Indenture Estate (as
defined in each Indenture) or Special Redemption Premium (if applicable).

     SPECIAL  PAYMENTS  ACCOUNT:  Means the  account  or  accounts  created  and
maintained pursuant to Section 4.01(b).

     SPECIAL  REDEMPTION  PREMIUM:  Means the  premium,  if any,  payable by the
Company  in  respect  of the  Final  Withdrawal  pursuant  to the Note  Purchase
Agreement.

     SUBORDINATION  AGENT:  Shall have the  meaning  specified  therefor  in the
Intercreditor Agreement.

     SUBSTITUTE  AIRCRAFT:  Has  the  meaning  specified  in the  Note  Purchase
Agreement.

     TRANSFER DATE: Means the moment of execution and delivery of the Assignment
and Assumption Agreement by each of the parties thereto.

     TRANSFER DATE CERTIFICATES:  Has the meaning specified in the definition of
"Certificates".

     TRUST:  Means the trust  created  by this  Agreement,  the  estate of which
consists of Trust Property.

     TRUST  INDENTURE ACT: Except as otherwise  provided in Section 9.06,  means
the  Trust  Indenture  Act of 1939 as in  force  at the  date as of  which  this
Agreement was executed.

     TRUST  PROPERTY:  Means (i) the Equipment Notes held as the property of the
Trust,  all monies at any time paid thereon and all monies due and to become due
thereunder,  (ii) the  rights  of the Trust  and the  Trustee,  on behalf of the
Trust,  under  the  Intercreditor  Agreement,  the  Escrow  Agreement,  the Note
Purchase Agreement and the Liquidity Facilities,  including, without limitation,
all monies  receivable  in respect of such  rights,  PROVIDED  that  rights with
respect to the Deposits or under the Escrow  Agreement will not constitute Trust
Property, and (iii) funds from time to time deposited in the Certificate Account
and the Special Payments Account and,  subject to the  Intercreditor  Agreement,
any proceeds  from the sale by the Trustee  pursuant to Article VI hereof of any
such Equipment Note.

     TRUSTEE:  Means Wilmington Trust Company, or its successor in interest, and
any successor trustee appointed as provided herein.

     U.S. GLOBAL CERTIFICATE: Has the meaning specified in Section 3.01.

     U.S. PHYSICAL CERTIFICATES: Has the meaning specified in Section 3.01.

                  Section 1.02. COMPLIANCE  CERTIFICATES AND OPINIONS.  Upon any
application or request by the Company,  any Owner Trustee or any Loan Trustee to
the  Trustee to take any  action  under any  provision  of this  Agreement,  the
Company,  such Owner  Trustee or such Loan  Trustee,  as the case may be,  shall
furnish to the Trustee an Officers'  Certificate stating that, in the opinion of
the signers,  all conditions  precedent,  if any, provided for in this Agreement
relating  to the  proposed  action  have been  complied  with and an  Opinion of
Counsel  stating  that  in the  opinion  of such  counsel  all  such  conditions
precedent,  if any, have been complied with, except that in the case of any such
application  or  request  as to  which  the  furnishing  of  such  documents  is
specifically  required  by any  provision  of this  Agreement  relating  to such
particular  application or request, no additional certificate or opinion need be
furnished.

                  Every certificate or opinion with respect to compliance with a
condition or covenant  provided for in this Agreement  (other than a certificate
provided pursuant to Section 8.04(d)) shall include:

     (1) a statement that each  individual  signing such  certificate or opinion
has read such  covenant  or  condition  and the  definitions  in this  Agreement
relating thereto;

     (2) a brief  statement  as to the  nature and scope of the  examination  or
investigation   upon  which  the  statements  or  opinions   contained  in  such
certificate or opinion are based;

     (3) a statement that, in the opinion of each such  individual,  he has made
such  examination or  investigation  as is necessary to enable him to express an
informed  opinion as to  whether  or not such  covenant  or  condition  has been
complied with; and

     (4) a statement as to whether, in the opinion of each such individual, such
condition or covenant has been complied with.

                  Section 1.03. FORM OF DOCUMENTS  DELIVERED TO TRUSTEE.  In any
case where  several  matters are required to be  certified  by, or covered by an
opinion of, any specified  Person,  it is not necessary that all such matters be
certified  by, or covered by the opinion of, only one such Person,  or that they
be so certified or covered by only one document, but one such Person may certify
or give an  opinion  with  respect  to some  matters  and one or more other such
Persons as to other  matters  and any such Person may certify or give an opinion
as to such matters in one or several documents.

                  Any  Opinion of Counsel  stated to be based on the  opinion of
other counsel shall be accompanied by a copy of such other opinion.

                  Where any Person is required  to make,  give or execute two or
more applications,  requests, consents,  certificates,  statements,  opinions or
other instruments under this Agreement,  they may, but need not, be consolidated
and form one instrument.

                  Section 1.04. ACTS OF CERTIFICATEHOLDERS.
                                --------------------------

                  (a) Any direction, consent, waiver or other action provided by
this Agreement to be given or taken by Certificateholders may be embodied in and
evidenced by one or more  instruments of  substantially  similar tenor signed by
such  Certificateholders  in person or by an agent or proxy  duly  appointed  in
writing;  and, except as herein otherwise expressly provided,  such action shall
become  effective  when such  instrument  or  instruments  are  delivered to the
Trustee and, where it is hereby expressly  required  pursuant to this Agreement,
to the Company or any Loan  Trustee.  Such  instrument or  instruments  (and the
action embodied therein and evidenced  thereby) are herein sometimes referred to
as the "Act" of the  Certificateholders  signing such instrument or instruments.
Proof of execution of any such  instrument or of a writing  appointing  any such
agent shall be sufficient  for any purpose of this  Agreement and  conclusive in
favor of the Trustee,  the Company and any Loan  Trustee,  if made in the manner
provided in this Section.

                  (b) The fact and date of the  execution  by any  Person of any
such instrument or writing may be proved by the certificate of any notary public
or other officer of any jurisdiction authorized to take acknowledgments of deeds
or administer  oaths that the Person  executing such instrument  acknowledged to
him the  execution  thereof,  or by an affidavit of a witness to such  execution
sworn to before any such notary or such other  officer and where such  execution
is by an officer of a corporation  or  association or a member of a partnership,
on behalf of such corporation,  association or partnership,  such certificate or
affidavit shall also constitute sufficient proof of his authority.  The fact and
date of the execution of any such instrument or writing, or the authority of the
Person  executing the same,  may also be proved in any other  reasonable  manner
which the Trustee deems sufficient.

                  (c)  In  determining  whether  the  Certificateholders  of the
requisite Fractional Undivided Interests of Certificates  Outstanding have given
any  direction,  consent  or  waiver  (a  "Direction"),  under  this  Agreement,
Certificates owned by the Company,  the Guarantor,  any Owner Trustee, any Owner
Participant or any Affiliate of any such Person shall be disregarded  and deemed
not to be  Outstanding  for purposes of any such  determination.  In determining
whether the Trustee shall be protected in relying upon any such Direction,  only
Certificates  which the Trustee  knows to be so owned  shall be so  disregarded.
Notwithstanding  the  foregoing,  (i)  if  any  such  Person  owns  100%  of the
Certificates  Outstanding,  such  Certificates  shall not be so  disregarded  as
aforesaid,  and (ii) if any amount of  Certificates  so owned by any such Person
have been pledged in good faith, such  Certificates  shall not be disregarded as
aforesaid  if the pledgee  establishes  to the  satisfaction  of the Trustee the
pledgee's right so to act with respect to such Certificates and that the pledgee
is not the Company,  the Guarantor,  any Owner Trustee, any Owner Participant or
any Affiliate of any such Person.

                  (d) The Company may, at its option by delivery of an Officer's
Certificate   to  the   Trustee,   set  a   record   date   to   determine   the
Certificateholders entitled to give any consent, request, demand, authorization,
direction,  notice, waiver or other Act.  Notwithstanding  Section 316(c) of the
Trust Indenture Act, such record date shall be the record date specified in such
Officer's  Certificate  which shall be a date not more than 30 days prior to the
first  solicitation of  Certificateholders  in connection  therewith.  If such a
record date is fixed, such consent request,  demand,  authorization,  direction,
notice,  waiver or other Act may be given before or after such record date,  but
only the  Certificateholders  of record at the close of  business on such record
date shall be deemed to be  Certificateholders  for the purposes of  determining
whether   Certificateholders   of  the  requisite   proportion  of   Outstanding
Certificates  have  authorized or agreed or consented to such consent,  request,
demand,  authorization,  direction,  notice,  waiver or other Act,  and for that
purpose the Outstanding  Certificates  shall be computed as of such record date;
PROVIDED  that no  such  consent,  request,  demand,  authorization,  direction,
notice, waiver or other Act by the  Certificateholders on such record date shall
be deemed effective unless it shall become effective  pursuant to the provisions
of this Agreement not later than one year after the record date.

                  (e) Any  direction,  consent,  waiver  or other  action by the
Certificateholder  of any Certificate shall bind the  Certificateholder of every
Certificate  issued upon the transfer thereof or in exchange therefor or in lieu
thereof, whether or not notation of such action is made upon such Certificate.

                  (f)  Except  as   otherwise   provided  in  Section   1.04(c),
Certificates  owned  by or  pledged  to any  Person  shall  have  an  equal  and
proportionate   benefit  under  the  provisions  of  this   Agreement,   without
preference, priority, or distinction as among all of the Certificates.



                                   ARTICLE II

                          ACQUISITION OF TRUST PROPERTY

                  Section 2.01. [Intentionally omitted].

                  Section 2.02.  ACQUISITION OF TRUST  PROPERTY.  The Trustee is
hereby irrevocably authorized and directed to execute and deliver the Assignment
and  Assumption  Agreement on the date specified in Section 11.01 of the Related
Pass Through Trust Agreement, subject only to the satisfaction of the conditions
to such execution set forth in said Section 11.01.  This Agreement  (except only
for the immediately preceding sentence hereof, which is effective upon execution
and delivery  hereof) shall become  effective upon the execution and delivery of
the Assignment and Assumption  Agreement by the Trustee and the Related Trustee,
automatically  and without any  further  signature  or action on the part of the
Company and the Trustee,  and shall  thereupon  constitute the legal,  valid and
binding obligation of the parties hereto enforceable against each of the parties
hereto in  accordance  with its terms.  Upon such  execution and delivery of the
Assignment and Assumption Agreement, the Related Trust shall be terminated,  the
Certificateholders  shall receive beneficial  interests in the Trust in exchange
for their  interests in the Related Trust equal to their  respective  beneficial
interests in the Related Trust and the  "Outstanding" (as defined in the Related
Pass Through Trust Agreement) pass through certificates  representing fractional
undivided  interests  in the Related  Trust shall be deemed for all  purposes of
this  Agreement and the Related Pass Through Trust  Agreement,  without  further
signature  or  action  of any  party or  Certificateholder,  to be  Certificates
representing the same Fractional  Undivided Interests in the Trust and the Trust
Property. By acceptance of its Certificate,  each Certificateholder  consents to
and ratifies such assignment, transfer and delivery of the trust property of the
Related Trust to the Trustee upon the  execution and delivery of the  Assignment
and Assumption Agreement.

                  Section  2.03.  ACCEPTANCE BY TRUSTEE.  The Trustee,  upon the
execution and delivery of the Assignment and Assumption Agreement,  acknowledges
its  acceptance of all right,  title,  and interest in and to the Trust Property
and  declares  that the  Trustee  holds  and will hold such  right,  title,  and
interest for the benefit of all then present and future Certificateholders, upon
the trusts herein set forth. By the acceptance of each Certificate  issued to it
under the Related  Pass Through  Trust  Agreement  and deemed  issued under this
Agreement,  each Holder of any such  Certificate as grantor of the Trust thereby
joins in the creation and declaration of the Trust.

                  Section 2.04.  LIMITATION OF POWERS.  The Trust is constituted
solely for the purpose of making the  investment  in the Equipment  Notes,  and,
except as set forth herein,  the Trustee shall not be authorized or empowered to
acquire  any  other  investments  or  engage in any  other  activities  and,  in
particular, the Trustee shall not be authorized or empowered to do anything that
would  cause such Trust to fail to  qualify  as a  "grantor  trust" for  federal
income tax purposes  (including  as subject to this  restrictions  acquiring the
Aircraft  (as defined in the  respective  related  Indentures)  by bidding  such
Equipment  Notes or  otherwise,  or taking any action  with  respect to any such
Aircraft once acquired).



                                   ARTICLE III
                                THE CERTIFICATES

     Section 3.01. TITLE, FORM, DENOMINATION AND EXECUTION OF CERTIFICATES.
             -------------------------------------------------------

                  (a) The  Certificates  shall be known as the "6.99%  1997-1A-S
Pass Through  Certificates"  of the Trust.  Each  Certificate  will  represent a
fractional  undivided  interest in the Trust and shall be  substantially  in the
form set forth as Exhibit A to the Related Pass Through  Trust  Agreement,  with
such appropriate  insertions,  omissions,  substitutions and other variations as
are required or permitted  by the Related Pass Through  Trust  Agreement or this
Agreement, as the case may be, or as the Trustee may deem appropriate to reflect
the fact that the  Certificates  are being  issued  hereunder  as opposed to the
Related Pass Through  Trust  Agreement,  and may have such  letters,  numbers or
other marks of identification and such legends or endorsements placed thereon as
may be required to comply with the rules of any  securities  exchange or as may,
consistently   herewith,   be   determined  by  the  officers   executing   such
Certificates,  as evidenced by their execution of the Certificates.  Any portion
of the text of any Certificate may be set forth on the reverse thereof,  with an
appropriate  reference  thereto  on the face of the  Certificate.  At the Escrow
Agent's  request  under  the  Escrow  Agreement,  the  Trustee  shall  affix the
corresponding  Escrow Receipt to any Certificate issued hereunder.  Any transfer
or exchange of any  Certificate  shall also effect a transfer or exchange of the
related  Escrow  Receipt.  Prior to the Final  Withdrawal  Date,  no transfer or
exchange of any Certificate shall be permitted unless the  corresponding  Escrow
Receipt  is  attached  thereto  and  also is so  transferred  or  exchanged.  By
acceptance  of any  Certificate  to which an Escrow  Receipt is  attached,  each
Holder of such Certificate acknowledges and accepts the restrictions on transfer
of the Escrow Receipt set forth herein and in the Escrow Agreement.

                  (b) The Certificates  shall be issued only in fully registered
form without coupons and only in denominations of $100,000 or integral multiples
of $1,000 in excess  thereof,  except  that one  Certificate  may be issued in a
denomination of less than $100,000.  Each Certificate shall be dated the date of
its authentication.  The aggregate Fractional Undivided Interest of Certificates
shall not at any time exceed $63,105,000.

                  (c)  Certificates  offered  and sold in  reliance on Rule 144A
shall be issued initially in the form of a single  permanent global  Certificate
in  registered  form,  substantially  in the form set forth as  Exhibit A to the
Related  Pass  Through  Trust  Agreement  with such  applicable  legends  as are
provided  for in  clauses  (a)  and  (b)  of  Section  3.02  (the  "U.S.  Global
Certificate").  The U.S. Global  Certificate will be registered in the name of a
nominee for DTC and  deposited  with the  Trustee,  as  custodian  for DTC.  The
aggregate  principal amount of the U.S. Global Certificate may from time to time
be  increased  or  decreased  by  adjustments  made on the records of DTC or its
nominee,  or of the  Trustee,  as  custodian  for  the  DTC or its  nominee,  as
hereinafter provided.

                  (d) Certificates offered and sold in offshore  transactions in
reliance  on  Regulation  S shall  be  issued  in the  form of a  single  global
Certificate in registered form, substantially in the form set forth as Exhibit A
to the Related Pass Through Trust Agreement with such applicable  legends as are
provided for in clause (b) of Section 3.02 (the "Offshore Global  Certificate").
The Temporary  Offshore Global  Certificate  will be registered in the name of a
nominee  of DTC for  credit  to the  account  of the  Agent  Members  acting  as
depositories for Euroclear and Cedel and deposited with the Trustee as custodian
for DTC. The U.S. Global  Certificate and the Offshore Global  Certificates  are
sometimes referred to as the "Global Certificates".

                  (e) Certificates offered and sold to Institutional  Accredited
Investors shall be issued in the form of permanent certificated  Certificates in
registered form in substantially  the form set forth as Exhibit A to the Related
Pass Through Trust Agreement with such applicable legends as are provided for in
clauses (a) and (b) of Section 3.02 hereto (the "U.S.  Physical  Certificates").
Certificates issued pursuant to Section 3.05(b) in exchange for interests in any
Offshore  Global  Certificate  shall  be in the form of  permanent  certificated
Certificates in registered form substantially in the form set forth in Exhibit A
(the "Offshore Physical  Certificates").  The Offshore Physical Certificates and
U.S. Physical Certificates are sometimes  collectively herein referred to as the
"Physical Certificates".

                  (f) The definitive  Certificates  shall be in registered  form
and shall be  typed,  printed,  lithographed  or  engraved  or  produced  by any
combination  of these  methods or may be  produced in any other  manner,  all as
determined by the officers  executing such  Certificates,  as evidenced by their
execution of such Certificates.

                  Section 3.02. RESTRICTIVE LEGENDS.
                                -------------------

                  (a) Subject to Section 3.06, each U.S. Global  Certificate and
each U.S.  Physical  Certificate  shall bear the following  legend (the "Private
Placement Legend") on the face thereof:

                  THIS  CERTIFICATE  HAS NOT  BEEN  REGISTERED  UNDER  THE  U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD  WITHIN  THE UNITED  STATES OR TO, OR FOR THE  ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING  SENTENCE.  BY ITS
ACQUISITION  HEREOF,  THE  HOLDER  (1)  REPRESENTS  THAT (A) IT IS A  "QUALIFIED
INSTITUTIONAL  BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT
IS AN INSTITUTIONAL  "ACCREDITED  INVESTOR" (AS DEFINED IN RULE 501(A)(1),  (2),
(3) OR (7)  OF  REGULATION  D  UNDER  THE  SECURITIES  ACT)  (AN  "INSTITUTIONAL
ACCREDITED  INVESTOR")  OR (C) IT IS NOT A U.S.  PERSON  AND IS  ACQUIRING  THIS
CERTIFICATE IN AN OFFSHORE TRANSACTION,  (2) AGREES THAT IT WILL NOT, WITHIN TWO
YEARS AFTER THE LATER OF THE ORIGINAL  ISSUANCE OF THIS  CERTIFICATE OR THE LAST
DATE ON WHICH THIS  CERTIFICATE WAS HELD BY AMERICAN TRANS AIR, INC.  ("ATA") OR
AN AFFILIATE OF ATA, RESELL OR OTHERWISE TRANSFER THIS CERTIFICATE EXCEPT (A) TO
ATA OR ANY  SUBSIDIARY  THEREOF,  (B) INSIDE THE  UNITED  STATES TO A  QUALIFIED
INSTITUTIONAL  BUYER IN COMPLIANCE  WITH RULE 144A UNDER THE SECURITIES ACT, (C)
INSIDE THE  UNITED  STATES TO AN  INSTITUTIONAL  ACCREDITED  INVESTOR  ACQUIRING
$100,000 OR MORE AGGREGATE  PRINCIPAL  AMOUNT OF SUCH  CERTIFICATES  THAT, TAKES
DELIVERY OF THIS  CERTIFICATE  IN  DEFINITIVE  FORM AND PRIOR TO SUCH  TRANSFER,
FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN  REPRESENTATIONS AND
AGREEMENTS  RELATING TO THE  RESTRICTIONS ON TRANSFER OF THIS  CERTIFICATE  (THE
FORM OF WHICH LETTER CAN BE OBTAINED FROM THE  TRUSTEE),  (D) OUTSIDE THE UNITED
STATES  IN AN  OFFSHORE  TRANSACTION  IN  COMPLIANCE  WITH  RULE 904  UNDER  THE
SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE  SECURITIES  ACT (IF  AVAILABLE)  OR (F)  PURSUANT TO AN EFFECTIVE
REGISTRATION  STATEMENT  UNDER THE  SECURITIES  ACT, AND (3) AGREES THAT IT WILL
DELIVER  TO EACH  PERSON  TO WHOM  THIS  CERTIFICATE  IS  TRANSFERRED  A  NOTICE
SUBSTANTIALLY  TO THE  EFFECT OF THIS  LEGEND.  IN CASE THIS  CERTIFICATE  IS IN
DEFINITIVE FORM IN CONNECTION WITH ANY TRANSFER OF THIS  CERTIFICATE  WITHIN TWO
YEARS AFTER THE LATER OF THE ORIGINAL  ISSUANCE OF THE  CERTIFICATE  OR THE LAST
DATE ON WHICH  THIS  CERTIFICATE  WAS HELD BY ATA OR AN  AFFILIATE  OF ATA,  THE
HOLDER MUST CHECK THE  APPROPRIATE  BOX SET FORTH ON THE REVERSE HEREOF RELATING
TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS  CERTIFICATE  TO THE TRUSTEE.  AS
USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON"
HAVE THE MEANINGS  GIVEN TO THEM BY REGULATION S UNDER THE  SECURITIES  ACT. THE
PASS  THROUGH  TRUST  AGREEMENT  CONTAINS A PROVISION  REQUIRING  THE TRUSTEE TO
REFUSE  TO  REGISTER  ANY  TRANSFER  OF THIS  CERTIFICATE  IN  VIOLATION  OF THE
FOREGOING RESTRICTIONS.

     (b) Each Global  Certificate  shall also bear the  following  legend on the
face thereof:

UNLESS THIS  CERTIFICATE  IS PRESENTED BY AN  AUTHORIZED  REPRESENTATIVE  OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION  ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR  REGISTRATION  OF TRANSFER,  EXCHANGE OR PAYMENT,  AND ANY CERTIFICATE
ISSUED IN EXCHANGE FOR THIS  CERTIFICATE IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER NAME AS IS REQUESTED  BY AN  AUTHORIZED  REPRESENTATIVE  OF DTC
(AND ANY  PAYMENT  HEREON  IS MADE TO CEDE & CO. OR TO SUCH  OTHER  ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR  OTHERWISE  BY OR TO ANY PERSON IS WRONGFUL  INASMUCH AS
THE REGISTERED OWNER HEREOF,  CEDE & CO., HAS AN INTEREST  HEREIN.  TRANSFERS OF
THIS GLOBAL CERTIFICATE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART,
TO  NOMINEES OF DTC OR TO A SUCCESSOR  THEREOF OR SUCH  SUCCESSOR'S  NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL  CERTIFICATE  SHALL BE LIMITED TO TRANSFERS
MADE IN ACCORDANCE WITH THE  RESTRICTIONS SET FORTH IN SECTIONS 3.05 AND 3.06 OF
THE PASS THROUGH TRUST AGREEMENT REFERRED TO HEREIN.

                  Section 3.03.  AUTHENTICATION OF CERTIFICATES.  No Certificate
shall be entitled to any benefit under this  Agreement or be valid or obligatory
for any purpose,  unless there  appears on such  Certificate  a  certificate  of
authentication  substantially  in the form  provided for herein  executed by the
Trustee by the manual signature of one of its authorized  signatories,  and such
certificate  upon any  Certificate  shall be conclusive  evidence,  and the only
evidence,  that such  Certificate  has been  duly  authenticated  and  delivered
hereunder.

                  Section 3.04. TRANSFER AND EXCHANGE.
                                ---------------------

                  (a) The Trustee shall cause to be kept at the office or agency
to be maintained by it in accordance with the provisions of Section 7.11 of this
Agreement a register (the "Register") for the Certificates in which,  subject to
such reasonable  regulations as it may prescribe,  the Trustee shall provide for
the  registration  of the  Certificates  and of transfers  and  exchanges of the
Certificates  as herein  provided.  The Trustee shall initially be the registrar
(the  "Registrar") for the purpose of registering the Certificates and transfers
and exchanges of the Certificates as herein provided.  A  Certificateholder  may
transfer a Certificate by written  application to the Registrar stating the name
of the  proposed  transferee  and  otherwise  complying  with the  terms of this
Agreement,  including  providing  a written  certificate  or other  evidence  of
compliance with any restrictions on transfer. No such transfer shall be effected
until,  and such transferee  shall succeed to the rights of a  Certificateholder
only upon, final acceptance and registration of the transfer by the Registrar in
the Register.  Prior to the registration of any transfer by a  Certificateholder
as  provided  herein,  the  Trustee  shall  treat the  person in whose  name the
Certificate is registered as the owner thereof for all purposes, and the Trustee
shall not be  affected by notice to the  contrary.  Furthermore,  DTC shall,  by
acceptance of a Global Certificate, agree that transfers of beneficial interests
in such Global  Certificate  may be effected  only through a  book-entry  system
maintained by DTC (or its agent), and that ownership of a beneficial interest in
the  Certificate  shall  be  required  to be  reflected  in a book  entry.  When
Certificates  are  presented  to the  Registrar  with a request to register  the
transfer or to exchange them for an equal face amount of  Certificates  of other
authorized denominations,  the Registrar shall register the transfer or make the
exchange as  requested if its  requirements  for such  transactions  are met. To
permit  registrations  of transfers and exchanges in accordance  with the terms,
conditions and restrictions  hereof,  the Trustee shall execute and authenticate
Certificates at the Registrar's request. No service charge shall be made for any
registration  of transfer or exchange of the  Certificates,  but the Trustee may
require  payment by the transferor of a sum sufficient to cover any transfer tax
or similar  governmental charge payable in connection  therewith (other than any
such transfer taxes or other similar governmental charges payable upon exchanges
pursuant to Section 3.11 or 9.07).

  Section 3.05. BOOK-ENTRY PROVISIONS FOR U.S. GLOBAL CERTIFICATE AND OFFSHORE
                              GLOBAL CERTIFICATES.

                  (a) Members  of, or  participants  in, DTC  ("Agent  Members")
shall have no rights under this Agreement with respect to any Global Certificate
held on their  behalf by DTC,  or the Trustee as its  custodian,  and DTC may be
treated by the  Trustee and any agent of the  Trustee as the  absolute  owner of
such  Global  Certificate  for  all  purposes  whatsoever.  Notwithstanding  the
foregoing,  nothing herein shall prevent the Trustee or any agent of the Trustee
from giving effect to any written  certification,  proxy or other  authorization
furnished  by DTC or shall  impair,  as between DTC and its Agent  Members,  the
operation  of  customary  practices  governing  the  exercise of the rights of a
holder of any  Certificate.  Upon the  issuance of any Global  Certificate,  the
Registrar  or its duly  appointed  agent  shall  record a nominee  of DTC as the
registered holder of such Global Certificate.

                  (b)  Transfers of any Global  Certificate  shall be limited to
transfers of such Global  Certificate in whole,  but not in part, to nominees of
DTC, its successor or such  successor's  nominees.  Beneficial  interests in the
U.S. Global  Certificate and any Offshore Global  Certificate may be transferred
in accordance with the rules and procedures of DTC and the provisions of Section
3.06.  Beneficial interests in the U.S. Global Certificate or an Offshore Global
Certificate  shall be (or, under the Related Pass Through Trust  Agreement,  may
have  been)  delivered  to all  beneficial  owners in the form of U.S.  Physical
Certificates or Offshore Physical  Certificates,  as the case may be, if (i) the
Company  notifies  the  Trustee in writing  that DTC is  unwilling  or unable to
discharge  properly  its  responsibilities  as  depositary  for the U.S.  Global
Certificate  or such Offshore  Global  Certificate,  as the case may be, and the
Company is unable to locate a qualified  successor  depositary within 90 days of
such  notice or (ii) after the  occurrence  of an Event of  Default,  beneficial
owners of the U.S. Global Certificate or Offshore Global Certificates evidencing
Fractional Undivided Interests  aggregating not less than a majority in interest
in the Trust, by Act of such Certificateholders delivered to the Company and the
Trustee,  advise the Company,  the Trustee and DTC through its  Clearing  Agency
Participants in writing that the continuation of a book-entry system through DTC
is no longer in the best interests of the  Certificateholders,  then the Trustee
shall notify all owners of beneficial  interests in the U.S. Global  Certificate
or an Offshore  Global  Certificate,  through DTC, of the occurrence of any such
event and the availability of definitive Certificates.

                  (c) Any beneficial  interest in one of the Global Certificates
that is transferred to a Person who takes delivery in the form of an interest in
the other Global  Certificate will, upon such transfer,  cease to be an interest
in  such  Global  Certificate  and  become  an  interest  in  the  other  Global
Certificate  and,  accordingly,  will  thereafter  be  subject  to all  transfer
restrictions, if any, and other procedures applicable to beneficial interests in
such other Global Certificate for as long as it remains such an interest.

                  (d)      [Intentionally omitted].

                  (e) In connection  with the transfer of the entire U.S. Global
Certificate or an entire  Offshore Global  Certificate to the beneficial  owners
thereof  pursuant  to  paragraph  (b) of this  Section  3.05,  such U.S.  Global
Certificate or Offshore Global Certificate,  as the case may be, shall be deemed
to be  surrendered  to the  Trustee  for  cancellation,  and the  Trustee  shall
execute, authenticate and deliver, to each beneficial owner identified by DTC in
exchange for its beneficial interest in such U.S. Global Certificate or Offshore
Global  Certificate,  as the case may be, an equal aggregate principal amount of
U.S. Physical  Certificates or Offshore Physical  Certificates,  as the case may
be, of authorized denominations.

                  (f) Any U.S. Physical Certificate delivered in exchange for an
interest  in the U.S.  Global  Certificate  pursuant  to  paragraph  (b) of this
Section  3.05 shall,  except as otherwise  provided by paragraph  (f) of Section
3.06, bear the Private Placement Legend.

                  (g) Any Offshore  Physical  Certificate  delivered in exchange
for an interest in an Offshore Global  Certificate  pursuant to paragraph (b) of
this Section  shall,  except as otherwise  provided by paragraph  (f) of Section
3.06, bear the applicable  legend regarding  transfer  restrictions set forth in
Section 3.02(a).

                  (h) The registered  holder of the U.S.  Global  Certificate or
any Offshore Global  Certificate  may grant proxies and otherwise  authorize any
Person,  including  Agent  Members and Persons that may hold  interests  through
Agent Members,  to take any action which a Holder is entitled to take under this
Agreement or the Certificates.

     Section 3.06. SPECIAL TRANSFER  PROVISIONS.  The following provisions shall
apply to theCertificates:

     (a) TRANSFERS TO NON-QIB INSTITUTIONAL  ACCREDITED INVESTORS. The following
provisions shall apply with respect to the registration of any proposed transfer
of a Certificate  to any  Institutional  Accredited  Investor which is not a QIB
(excluding  transfers  to, or on or after the  Regulation S Restricted  Date, by
Non-U.S. Persons):

                  (i)  The  Registrar   shall   register  the  transfer  of  any
         Certificate,   whether  or  not  such  Certificate  bears  the  Private
         Placement Legend,  if (x) the requested  transfer is at least two years
         after the later of the original issue date of the  Certificates and the
         last date on which  such  Certificate  was held by the  Company  or any
         affiliate  thereof or (y) the proposed  transferee has delivered to the
         Registrar  a letter  substantially  in the form of Exhibit B hereto and
         the aggregate principal amount of the Certificates being transferred is
         at least $100,000.

                  (ii) If the proposed  transferor is an Agent Member  holding a
         beneficial  interest in the U.S. Global Certificate or, at a date prior
         to the Regulation S Restricted  Date, an Offshore  Global  Certificate,
         upon receipt by the Registrar of (x) the documents, if any, required by
         paragraph (i) and (y)  instructions  given in accordance with DTC's and
         the  Registrar's  procedures,  the Registrar shall reflect on its books
         and records the date of the  transfer  and a decrease in the  principal
         amount  of such  U.S.  Global  Certificate  in an  amount  equal to the
         principal  amount  of the  beneficial  interest  in  such  U.S.  Global
         Certificate to be transferred,  and the Company shall execute,  and the
         Trustee  shall  authenticate  and deliver to the  transferor  or at its
         direction,  one or more U.S.  Physical  Certificates  of like tenor and
         amount.

     (b) TRANSFERS TO QIBS. The following provisions shall apply with respect to
the  registration of any proposed  transfer of a Certificate to a QIB (excluding
Non-U.S. Persons):

                  (i) If the  Certificate  to be  transferred  consists  of U.S.
         Physical Certificates or an interest in any Offshore Global Certificate
         prior to the Regulation S Restricted Date, the Registrar shall register
         the  transfer if such  transfer is being made by a proposed  transferor
         who has  checked  the box  provided  for on the  form of U.S.  Physical
         Certificate  or delivered a  certificate  to the Trustee in the form of
         Exhibit E hereto stating,  or has otherwise advised the Trustee and the
         Registrar in writing,  that the sale has been made in  compliance  with
         the  provisions  of Rule  144A to a  transferee  who,  in the case of a
         transfer of a U.S. Physical  Certificate,  has signed the certification
         provided for on the form of Certificate and, in the case of an Offshore
         Global  Certificate  transferred  prior to the  Regulation S Restricted
         Date,  who has  signed  the  certification  provided  for in  Exhibit E
         hereto, stating, or has otherwise advised the Trustee and the Registrar
         in writing,  that it is purchasing the  Certificate for its own account
         or an  account  with  respect  to which it  exercises  sole  investment
         discretion and that it, or the Person on whose behalf it is acting with
         respect to any such account,  is a QIB within the meaning of Rule 144A,
         and is aware that the sale to it is being made in reliance on Rule 144A
         and has been advised of the applicable transfer  restrictions  relating
         to  the  Certificates  and  acknowledges  that  it  has  received  such
         information  regarding the Trust and/or the Company as it has requested
         pursuant to Rule 144A or has determined not to request such information
         and that it is aware that the  transferor is relying upon its foregoing
         representations  in order  to claim  the  exemption  from  registration
         provided by Rule 144A.

                  (ii) Upon receipt by the Registrar of the  documents  referred
         to in clause (i) above and instructions  given in accordance with DTC's
         and the Registrar's procedures therefor, the Registrar shall reflect on
         its books and records the date of such  transfer and an increase in the
         principal  amount of the U.S. Global  Certificate in an amount equal to
         the principal amount of the U.S. Physical  Certificates or interests in
         the Offshore Global Certificate, as the case may be, being transferred,
         and the  Trustee  shall  cancel  such  U.S.  Physical  Certificates  or
         decrease the amount of such Offshore Global Certificate so transferred.

     (c) [Intentionally omitted].

     (d) TRANSFERS OF INTERESTS IN THE OFFSHORE  GLOBAL  CERTIFICATE ON OR AFTER
THE REGULATION S RESTRICTED  DATE. The Registrar  shall register any transfer of
interests  in the  Offshore  Global  Certificate  on or after the  Regulation  S
Restricted Date without requiring any additional certification.

     (e) TRANSFERS TO NON-U.S.  PERSONS AT ANY TIME.  The  following  provisions
shall apply with respect to any registration of any transfer of a Certificate to
a Non-U.S. Person:

                  (i) The Registrar  shall  register any proposed  transfer of a
         U.S. Global  Certificate or U.S.  Physical  Certificate to any Non-U.S.
         Person,  upon  receipt of a  certificate  substantially  in the form of
         Exhibit A hereto from the  proposed  transferor.  The  Registrar  shall
         promptly send a copy of such certificate to the Company.

                  (ii) (A) Upon receipt by the  Registrar of (x) the  documents,
         if any,  required by paragraph (c) and (y)  instructions  in accordance
         with DTC's and the Registrar's procedures,  the Registrar shall reflect
         on its books and records the date of such transfer and shall cancel the
         Physical Certificate, if any, so transferred, or decrease the principal
         amount of any such U.S.  Global  Certificate  in an amount equal to the
         principal  amount  of the  beneficial  interest  in  such  U.S.  Global
         Certificate to be transferred, and (B) upon receipt by the Registrar of
         instructions  given  in  accordance  with  DTC's  and  the  Registrar's
         procedures,  the  Registrar  shall reflect on its books and records the
         date and an increase in the  principal  amount of the  Offshore  Global
         Certificate  in an  amount  equal to the  principal  amount of the U.S.
         Physical  Certificate or the U.S. Global  Certificate,  as the case may
         be, to be  transferred,  and the  Trustee  shall  cancel  the  Physical
         Certificate, if any, so transferred or decrease the amount of such U.S.
         Global Certificate.

     (f) PRIVATE PLACEMENT LEGEND. Upon the transfer, exchange or replacement of
Certificates  not bearing the Private  Placement  Legend,  the  Registrar  shall
deliver  Certificates that do not bear the Private  Placement  Legend.  Upon the
transfer,  exchange or replacement of Certificates bearing the Private Placement
Legend,  the  Registrar  shall deliver only  Certificates  that bear the Private
Placement Legend unless either (i) the  circumstances  contemplated by paragraph
(a)(i)(x)  or (e)(ii) of this  Section  3.06 exist or (ii) there is delivered to
the  Registrar  an Opinion of Counsel to the effect that neither such legend nor
the  related  restrictions  on  transfer  are  required  in  order  to  maintain
compliance with the provisions of the Securities Act.

     (g)  GENERAL.  By its  acceptance  of any  Certificate  bearing the Private
Placement   Legend,   each  Holder  of  such  a  Certificate   acknowledges  the
restrictions  on transfer of such  Certificate  set forth in this  Agreement and
agrees  that  it  will  transfer  such  Certificate  only  as  provided  in this
Agreement. The Registrar shall not register a transfer of any Certificate unless
such transfer complies with the restrictions on transfer of such Certificate set
forth in this Agreement.  In connection with any transfer of Certificates,  each
Certificateholder  agrees by its acceptance of the  Certificates  to furnish the
Registrar  or  the  Trustee  such   certifications,   legal  opinions  or  other
information  as either  of them may  reasonably  require  to  confirm  that such
transfer is being made  pursuant to an  exemption  from,  or a  transaction  not
subject to, the registration  requirements of the Securities Act;  PROVIDED that
the  Registrar  shall not be required to determine the  sufficiency  of any such
certifications, legal opinions or other information.

                  Until such time as no  Certificates  remain  Outstanding,  the
Registrar  shall  retain  copies  of all  letters,  notices  and  other  written
communications  received  pursuant to Section  3.05 or this  Section  3.06.  The
Trustee,  if not the Registrar at such time, shall have the right to inspect and
make copies of all such letters,  notices or other written communications at any
reasonable time upon the giving of reasonable written notice to the Registrar.

                  Section   3.07.   MUTILATED,   DESTROYED,   LOST   OR   STOLEN
CERTIFICATES.  If (a) any mutilated Certificate is surrendered to the Registrar,
or the Registrar receives evidence to its satisfaction of the destruction,  loss
or theft of any Certificate, and (b) there is delivered to the Registrar and the
Trustee such  security,  indemnity  or bond,  as may be required by them to save
each of them  harmless,  then,  in the absence of notice to the Registrar or the
Trustee that such  Certificate has been acquired by a bona fide  purchaser,  the
Trustee shall execute,  authenticate and deliver,  in exchange for or in lieu of
any such mutilated,  destroyed, lost or stolen Certificate, a new Certificate or
Certificates,  in  authorized  denominations  and of like  Fractional  Undivided
Interest.  In  connection  with the issuance of any new  Certificate  under this
Section 3.07, the Trustee shall require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other  expenses  (including  the fees and  expenses  of the  Trustee and the
Registrar)  connected  therewith.  Any duplicate  Certificate issued pursuant to
this  Section  3.07 shall  constitute  conclusive  evidence  of the  appropriate
Fractional  Undivided  Interest in the related Trust,  as if originally  issued,
whether or not the lost stolen or  destroyed  Certificate  shall be found at any
time.

                  Section 3.08. PERSONS DEEMED OWNERS. Prior to due presentation
of a Certificate for registration of transfer,  the Trustee, the Registrar,  and
any  Paying  Agent of the  Trustee  may  treat  the  person  in  whose  name any
Certificate  is registered as the owner of such  Certificate  for the purpose of
receiving  distributions  pursuant  to Section  4.02 and for all other  purposes
whatsoever,  and neither the Trustee, the Registrar, nor any Paying Agent of the
Trustee shall be affected by any notice to the contrary.

                  Section 3.09.  CANCELLATION.  All Certificates surrendered for
payment or transfer or exchange shall, if surrendered to any Person party hereto
other than the  Registrar,  be delivered to the Registrar for  cancellation.  No
Certificates  shall  be  authenticated  in  lieu  of  or  in  exchange  for  any
Certificates  cancelled  as  provided  in  this  Section,  except  as  expressly
permitted by this Agreement.  All cancelled  Certificates  held by the Registrar
shall be destroyed and a  certification  of their  destruction  delivered to the
Trustee.

                  Section  3.10.  LIMITATION  OF  LIABILITY  FOR  PAYMENTS.  All
payments or distributions made to Certificateholders shall be made only from the
Trust  Property  and only to the extent that the Trustee  shall have  sufficient
income or proceeds  from the Trust  Property to make such payments in accordance
with the terms of Article IV of this Agreement.  Each Certificateholder,  by its
acceptance of a  Certificate,  agrees that it will look solely to the income and
proceeds from the Trust  Property to the extent  available for  distribution  to
such Certificateholder as provided in this Agreement.

                  Section  3.11.   TEMPORARY   CERTIFICATES.   Until  definitive
Certificates are ready for delivery,  the Trustee shall  authenticate  temporary
Certificates.  Temporary  Certificates  shall  be  substantially  in the form of
definitive  Certificates but may have insertions,  substitutions,  omissions and
other  variations  determined to be  appropriate  by the officers  executing the
temporary  Certificates,  as  evidenced  by their  execution  of such  temporary
Certificates.  If  temporary  Certificates  are issued,  the Trustee  will cause
definitive  Certificates to be prepared without  unreasonable  delay.  After the
preparation  of definitive  Certificates,  the temporary  Certificates  shall be
exchangeable  for  definitive  Certificates  upon  surrender  of  the  temporary
Certificates at the office or agency of the Trustee  designated for such purpose
pursuant  to  Section  7.11,  without  charge  to  the  Certificateholder.  Upon
surrender  for  cancellation  of any one or  more  temporary  Certificates,  the
Trustee shall execute, authenticate and deliver in exchange therefor a like face
amount  of  definitive  Certificates  of  authorized  denominations.   Until  so
exchanged,  the  temporary  Certificates  shall be entitled to the same benefits
under this Agreement as definitive Certificates.



                                   ARTICLE IV

                          DISTRIBUTIONS; STATEMENTS TO
                               CERTIFICATEHOLDERS

         Section 4.01. CERTIFICATE ACCOUNT AND SPECIAL PAYMENTS ACCOUNT.
                ------------------------------------------------

                  (a) The Trustee shall  establish and maintain on behalf of the
Certificateholders  a  Certificate  Account as one or more  non-interest-bearing
accounts.  The  Trustee  shall  hold the  Certificate  Account  in trust for the
benefit  of  the  Certificateholders,  and  shall  make  or  permit  withdrawals
therefrom  only as  provided  in this  Agreement.  On each day when a  Scheduled
Payment  is made to the  Trustee,  the  Trustee,  upon  receipt  thereof,  shall
immediately  deposit the  aggregate  amount of such  Scheduled  Payment into the
Certificate Account.

                  (b) The Trustee shall  establish and maintain on behalf of the
Certificateholders  a Special  Payments  Account as one or more accounts,  which
shall be  non-interest-bearing  except as provided in Section 4.04.  The Trustee
shall  hold the  Special  Payments  Account  in  trust  for the  benefit  of the
Certificateholders,  and shall  make or  permit  withdrawals  therefrom  only as
provided in this  Agreement.  On each day when one or more Special  Payments are
made to the  Trustee,  the  Trustee,  upon receipt  thereof,  shall  immediately
deposit the aggregate  amount of such Special Payments into the Special Payments
Account.

                  (c) The Trustee shall cause the Subordination Agent to present
to the Loan Trustee to which an Equipment  Note relates such  Equipment  Note on
the date of its stated  final  maturity  or, in the case of any  Equipment  Note
which is to be redeemed  in whole  pursuant to the  relevant  Indenture,  on the
applicable redemption date under such Indenture.

            Section 4.02. DISTRIBUTIONS FROM CERTIFICATE ACCOUNT AND
                           SPECIAL PAYMENTS ACCOUNT.
       -------------------------------------------------------------------

                  (a) On each Regular Distribution Date or as soon thereafter as
the Trustee has confirmed  receipt of the payment of the Scheduled  Payments due
on such date, the Trustee shall  distribute out of the  Certificate  Account the
entire amount deposited  therein pursuant to Section 4.01 (a). There shall be so
distributed to each  Certificateholder of record on the Record Date with respect
to such  Regular  Distribution  Date (other  than as  provided in Section  11.01
concerning the final distribution), by check mailed to such Certificateholder at
the address appearing in the Register,  such  Certificateholder's PRO RATA share
(based on the aggregate  Fractional Undivided Interest in the Trust held by such
Certificateholder)  of the aggregate amount in the Certificate  Account,  except
that, with respect to Certificates  registered on the Record Date in the name of
the nominee of DTC (initially, such nominee to be Cede & Co.), such distribution
shall be made by wire  transfer in  immediately  available  funds to the account
designated by such nominee.

                  (b) On each  Special  Distribution  Date with  respect  to any
Special  Payment or as soon  thereafter as the Trustee has confirmed  receipt of
any Special  Payments due on the  Equipment  Notes or realized  upon the sale of
such Equipment  Note, the Trustee shall  distribute out of the Special  Payments
Account the entire amount deposited  therein pursuant to Section 4.01(b) of such
Special  Payment.  There shall be so  distributed to each  Certificateholder  of
record on the Record Date with respect to such Special  Distribution Date (other
than as provided in Section 11.01 concerning the final  distribution),  by check
mailed to such Certificateholder at the address appearing in the Register,  such
Certificateholder's  pro rata share (based on the aggregate Fractional Undivided
Interest in the Trust held by such Certificateholder) of the aggregate amount in
the Special Payments  Account on account of such Special  Payment,  except that,
with respect to  Certificates  registered  on the Record Date in the name of the
nominee of DTC  (initially,  such nominee to be Cede & Co.),  such  distribution
shall be made by wire  transfer in  immediately  available  funds to the account
designated by such nominee.

                  (c) The Trustee  shall,  at the expense of the Company,  cause
notice of each  Special  Payment to be mailed to each  Certificateholder  at his
address as it appears in the Register. In the event of redemption or purchase of
Equipment Notes held in the Trust,  such notice shall be mailed not less than 20
days prior to the date any such Special  Payment is scheduled to be distributed.
In the event the Company is required to pay a Special  Redemption Premium to the
Trustee under the Note Purchase Agreement, such notice shall be mailed, together
with the notice by the Escrow  Paying  Agent  under  Section  2.06 of the Escrow
Agreement, not less than 20 days prior to the Special Distribution Date for such
amount,  which Special  Distribution Date shall be the Final Withdrawal Date. In
the case of any other Special  Payments,  such notice shall be mailed as soon as
practicable  after the Trustee has confirmed that it has received funds for such
Special Payment,  stating the Special Distribution Date for such Special Payment
which  shall  occur not less than 20 days  after the date of such  notice and as
soon as practicable thereafter. Notices mailed by the Trustee shall set forth:

     (i) the Special  Distribution  Date and the Record Date therefor (except as
otherwise provided in Section 11.01),

     (ii) the  amount  of the  Special  Payment  for  each  $1,000  face  amount
Certificate and the amount thereof constituting principal,  premium, if any, and
interest,

     (iii) the reason for the Special Payment, and

     (iv) if the  Special  Distribution  Date  is the  same  date  as a  Regular
Distribution Date for the Certificates,  the total amount to be received on such
date for each $1,000 face amount Certificate.

                  If the  amount  of (i)  premium,  if  any,  payable  upon  the
redemption  or purchase  of an  Equipment  Note or (ii) the  Special  Redemption
Premium,  if any,  has not been  calculated  at the time that the Trustee  mails
notice of a Special Payment, it shall be sufficient if the notice sets forth the
other amounts to be distributed  and states that any premium  received will also
be distributed.

                  If any redemption of the Equipment  Notes held in the Trust is
cancelled,  the Trustee, as soon as possible after leasing thereof,  shall cause
notice  thereof  to be mailed to each  Certificateholder  at its  address  as it
appears on the Register.

                  Section 4.03. STATEMENTS TO CERTIFICATEHOLDERS.
                                --------------------------------

                  (a) On each Regular Distribution Date and Special Distribution
Date, the Trustee will include with each  distribution to  Certificateholders  a
statement,  giving  effect  to such  distribution  to be  made  on such  Regular
Distribution  Date or Special  Distribution  Date,  as the case may be,  setting
forth the following information (in the case of a Special Payment, including any
Special Redemption Premium,  reflecting in part the information  provided by the
Escrow  Paying  Agent  under the Escrow  Agreement)  (per a $1,000  face  amount
Certificate as to clauses (ii), (iii), (iv) and (v) below):

     (i) the aggregate  amount of funds  distributed on such  Distribution  Date
hereunder and under the Escrow  Agreement,  indicating  the amount  allocable to
each source;

     (ii) the amount of such distribution  allocable to principal and the amount
allocable to premium (including any Special Redemption Premium), if any;

     (iii) the amount of such distribution hereunder allocable to interest;

     (iv) the amount of such distribution  under the Escrow Agreement  allocable
to interest on the Deposits;

     (v) the amount of such distribution under the Escrow Agreement allocable to
the principal of the unused Deposits; and

     (vi) the Pool Balance and the Pool Factor.

                  With respect to the  Certificates  registered in the name of a
Clearing  Agency or its nominee,  on the record date prior to each  Distribution
Date,  the Trustee will request from the Clearing  Agency a securities  position
listing  setting  forth  the  names  of all  the  Clearing  Agency  Participants
reflected  on  the  Clearing   Agency's  books  as  holding   interests  in  the
Certificates  on such record date. On each  Distribution  Date, the Trustee will
mail to each such Clearing Agency Participant the statement  described above and
will make  available  additional  copies as  requested by such  Clearing  Agency
Participant for forwarding to holders of Certificates.

                  (b) Within a  reasonable  period of time after the end of each
calendar  year but not later than the latest date  permitted by law, the Trustee
shall  furnish to each Person who at any time during  such  calendar  year was a
Certificateholder  of  record  a  statement  containing  the sum of the  amounts
determined  pursuant to clauses (a)(i)  through  (a)(v),  inclusive,  above with
respect to the Trust for such  calendar  year or, in the event such Person was a
Certificateholder  of record  during a portion of such  calendar  year,  for the
applicable  portion of such year, and such other items as are readily  available
to the  Trustee  and  which a  Certificateholder  shall  reasonably  request  as
necessary for the purpose of such Certificateholder's preparation of its federal
income tax returns.  With respect to  Certificates  registered  in the name of a
Clearing  Agency or its  nominee,  such  report  and such other  items  shall be
prepared on the basis of  information  supplied  to the Trustee by the  Clearing
Agency  Participants  and shall be  delivered  by the  Trustee to such  Clearing
Agency  Participants  to be available for  forwarding  by such  Clearing  Agency
Participants.

                  (c) Promptly  following  (i) the Transfer  Date,  if there has
been any change in the  information  set forth in clauses (x), (y) and (z) below
from that set forth in pages 102 and 103 of the  Offering  Memorandum,  and (ii)
any early  redemption or purchase of, or any default in the payment of principal
or interest in respect of, any of the Equipment  Notes held in the Trust, or any
Final Withdrawal,  the Trustee shall furnish to  Certificateholders of record on
such date a statement  setting  forth (x) the  expected  Pool  Balances for each
subsequent  Regular  Distribution  Date  following  the Transfer  Date,  (y) the
related Pool Factors for such  Regular  Distribution  Dates and (z) the expected
principal  distribution schedule of the Equipment Notes, in the aggregate,  held
as Trust Property at the date of such notice.  With respect to the  Certificates
registered  in the name of a Clearing  Agency or its  nominee,  on the  Transfer
Date,  the Trustee will request from the Clearing  Agency a securities  position
listing  setting  forth  the  names  of all  the  Clearing  Agency  Participants
reflected  on  the  Clearing   Agency's  books  as  holding   interests  in  the
"Certificates"  (as defined in the Related Pass Through Trust  Agreement) on the
Delivery  Period  Termination  Date. The Trustee will mail to each such Clearing
Agency  Participant  the  statement  described  above  and will  make  available
additional  copies  as  requested  by  such  Clearing  Agency   Participant  for
forwarding to holders of Certificates.

                  Section 4.04.  INVESTMENT OF SPECIAL PAYMENT MONEYS. Any money
received  by the  Trustee  pursuant to Section  4.01(b)  representing  a Special
Payment  which  is  not  to  be  promptly   distributed  shall,  to  the  extent
practicable,  be  invested in  Permitted  Investments  by the Trustee  (and such
Permitted  Investments  shall  be  registered  in the  name of the  Trustee)  as
directed in writing by the Company pending  distribution of such Special Payment
pursuant to Section  4.02.  Any  investment  made  pursuant to this Section 4.04
shall be in such Permitted Investments having maturities not later than the date
that such  moneys are  required to be used to make the  payment  required  under
Section 4.02 on the applicable  Special  Distribution Date and the Trustee shall
hold any such Permitted  Investments  until maturity.  The Trustee shall have no
liability  with respect to any  investment  made  pursuant to this Section 4.04,
other than by reason of the willful misconduct or negligence of the Trustee. All
income and earnings from such  investments  shall be distributed on such Special
Distribution Date as part of such Special Payment.



                                    ARTICLE V

                                   THE COMPANY

                  Section 5.01. MAINTENANCE OF CORPORATE EXISTENCE. The Company,
at its own cost and expense, will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate  existence,  rights and
franchises,   except  as  otherwise  specifically  permitted  in  Section  5.02;
PROVIDED,  HOWEVER, that the Company shall not be required to preserve any right
or franchise if the Company shall determine that the preservation  thereof is no
longer desirable in the conduct of the business of the Company.

                  Section 5.02.  CONSOLIDATION,  MERGER,  ETC. The Company shall
not consolidate with or merge into any other corporation or convey,  transfer or
lease substantially all of its assets as an entirety to any Person unless:

                  (a) the corporation formed by such consolidation or into which
         the  Company  is merged or the Person  which  acquires  by  conveyance,
         transfer or lease  substantially all of the assets of the Company as an
         entirety shall be organized and validly  existing under the laws of the
         United  States of  America  or any state  thereof  or the  District  of
         Columbia  and a "citizen  of the United  States" (as defined in Section
         40102(a)(15)  of Title 49 of the  United  States  Code)  holding an air
         carrier   operating   certificate   issued  by  the  Federal   Aviation
         Administration,  or any successor agency thereto (the "FAA"),  pursuant
         to  Chapter  447 of Title  49,  United  States  Code,  authorizing  the
         operation in air  transportation  of aircraft capable of carrying 10 or
         more  individuals or 6,000 pounds or more of cargo pursuant to Part 121
         of the FAA's regulations (14 CFR Part 121);

                  (b) the corporation formed by such consolidation or into which
         the  Company  is merged or the Person  which  acquires  by  conveyance,
         transfer or lease  substantially all of the assets of the Company as an
         entirety  shall  execute and deliver to the Trustee a duly  authorized,
         valid,  binding  and  enforceable   agreement  in  form  and  substance
         reasonably satisfactory to the Trustee containing an assumption by such
         successor corporation or Person of the due and punctual performance and
         observance of each covenant and  condition of the Note  Documents,  the
         Note Purchase Agreement, the Other Pass Through Trust Agreements and of
         this Agreement to be performed or observed by the Company;

                  (c) immediately  after giving effect to such  transaction,  no
         Event of Default  applicable to the  Certificates or event which is, or
         after  notice or passage of time,  or both,  would be, such an Event of
         Default shall have occurred and be continuing; and

                  (d)  the  Company  shall  have  delivered  to the  Trustee  an
         Officers'  Certificate  of the Company and an Opinion of Counsel of the
         Company  (which  may  be  the  Company's  General  Counsel)  reasonably
         satisfactory  to the Trustee,  each  stating  that such  consolidation,
         merger,  conveyance,  transfer  or lease and the  assumption  agreement
         mentioned  in clause (b) above  comply with this  Section 5.02 and that
         all  conditions   precedent   herein  provided  for  relating  to  such
         transaction have been complied with.

                  Upon any consolidation or merger, or any conveyance,  transfer
or lease of  substantially  all of the assets of the  Company as an  entirety in
accordance with this Section 5.02, the successor corporation or Person formed by
such  consolidation  or into  which  the  Company  is  merged  or to which  such
conveyance, offer or lease is made shall succeed to, and be substituted for, and
may exercise every right and power of, the Company under this Agreement with the
same  effect as if such  successor  corporation  or Person had been named as the
Company herein.  No such conveyance,  transfer or lease of substantially  all of
the assets of the Company as an entirety  shall have the effect of releasing the
Company or any  successor  corporation  or Person which shall  theretofore  have
become such in the manner  prescribed in this Section 5.02 from its liability in
respect of this Agreement,  the Note Purchase  Agreement or any Note Document to
which it is a party.

                  Section 5.03. RULE 144A(D)(4)  INFORMATION.  So long as any of
the  Certificates  are  "restricted  securities"  within  the  meaning  of  Rule
144(a)(3)  under the  Securities  Act, at any time when the Guarantor is neither
subject  to  Section  13 or 15(d) of the  Securities  Exchange  Act of 1934,  as
amended (the "EXCHANGE  ACT"), the Company and the Guarantor will provide to any
holder of such restricted  securities,  or to any prospective  purchaser of such
restricted securities designated by a holder, upon the request of such holder or
prospective  purchaser,  any information required to be delivered to holders and
prospective purchasers of the Certificates pursuant to Rule 144A(d)(4) under the
Securities Act.



                                   ARTICLE VI

                                     DEFAULT

                  Section 6.01. EVENTS OF DEFAULT.
                                -----------------

     (a) EXERCISE OF REMEDIES.  Upon the occurrence and during the  continuation
of any Indenture Default under any Indenture,  the Trustee may, to the extent it
is the  Controlling  Party at such time,  direct the  exercise  of  remedies  as
provided in the Intercreditor Agreement.

     (b)  PURCHASE   RIGHTS  OF   CERTIFICATEHOLDERS.   By   acceptance  of  its
Certificate, each Certificateholder agrees
that  at any  time  after  the  occurrence  and  during  the  continuation  of a
Triggering Event:

                  (i) each  Class B  Certificateholder  shall  have the right to
         purchase all, but not less than all, of the Certificates upon ten days'
         written notice to the Trustee and each other Class B Certificateholder,
         PROVIDED that (A) if prior to the end of such ten-day  period any other
         Class   B   Certificateholder   notifies   such   purchasing   Class  B
         Certificateholder  that such other Class B  Certificateholder  wants to
         participate in such purchase, then such other Class B Certificateholder
         may join with the purchasing Class B Certificateholder to purchase all,
         but not less  than  all,  of the  Certificates  pro  rata  based on the
         Fractional  Undivided  Interest  in the Class B Trust held by each such
         Class B  Certificateholder  and (B) if prior to the end of such ten-day
         period  any  other  Class  B  Certificateholder  fails  to  notify  the
         purchasing   Class  B   Certificateholder   of  such   other   Class  B
         Certificateholder's desire to participate in such a purchase, then such
         other Class B  Certificateholder  shall lose its right to purchase  the
         Certificates pursuant to this Section 6.01(b); and

                  (ii)  each  Class C  Certificateholder  shall  have the  right
         (which shall not expire upon any purchase of the Certificates  pursuant
         to clause (i) above) to  purchase  all,  but not less than all,  of the
         Certificates and the Class B Certificates upon ten days' written notice
         to  the   Trustee,   the  Class  B  Trustee  and  each  other  Class  C
         Certificateholder,  PROVIDED  that  (A) if  prior  to the  end of  such
         ten-day  period  any  other  Class C  Certificateholder  notifies  such
         purchasing   Class  C   Certificateholder   that  such  other  Class  C
         Certificateholder  wants to  participate  in such  purchase,  then such
         other Class C  Certificateholder  may join with the purchasing  Class C
         Certificateholder  to  purchase  all,  but not less  than  all,  of the
         Certificates  and the  Class  B  Certificates  pro  rata  based  on the
         Fractional  Undivided  Interest  in the Class C Trust held by each such
         Class C  Certificateholder  and (B) if prior to the end of such ten-day
         period  any  other  Class  C  Certificateholder  fails  to  notify  the
         purchasing   Class  C   Certificateholder   of  such   other   Class  C
         Certificateholder's desire to participate in such a purchase, then such
         other Class C  Certificateholder  shall lose its right to purchase  the
         Certificates pursuant to this Section 6.01(b);

                  The purchase price with respect to the  Certificates  shall be
equal to the Pool Balance of the Certificates,  together with accrued and unpaid
interest thereon to the date of such purchase,  without  premium,  but including
any other  amounts  then due and  payable to the  Certificateholders  under this
Agreement,  the Intercreditor Agreement, the Escrow Agreement, the Note Purchase
Agreement  or  any  Note  Document  or on or in  respect  of  the  Certificates;
PROVIDED,  HOWEVER,  that (i) if such purchase occurs after the Record Date with
respect to the Final  Withdrawal  Date,  such purchase price shall be reduced by
the aggregate amount of unused Deposits and interest to be distributed under the
Escrow Agreement (which deducted amounts shall remain  distributable to, and may
be retained by, the  Certificateholder  as of such Record Date) and (ii) if such
purchase occurs after a Record Date but prior to the Distribution  Date relating
to such Record Date,  such  purchase  price shall be reduced by the amount to be
distributed  hereunder on such related Distribution Date (which deducted amounts
shall remain distributable to, and may be retained by, the  Certificateholder as
of such Record Date);  PROVIDED,  FURTHER, that no such purchase of Certificates
shall be  effective  unless the  purchaser  shall  certify to the  Trustee  that
contemporaneously with such purchase, such purchaser is purchasing,  pursuant to
the terms of this  Agreement  and the Other Pass Through Trust  Agreements,  the
Certificates,  and the Class B Certificates which are senior to the Certificates
held by such purchaser.  Each payment of the purchase price of the  Certificates
shall be made to an account or accounts  designated by the Trustee and each such
purchase shall be subject to the terms of this Section.  Each  Certificateholder
agrees by its acceptance of its  Certificates  that it will,  subject to Section
3.04  hereof,  upon payment  from such Class B  Certificateholder(s)  or Class C
Certificateholder(s), as the case may be, of the purchase price set forth in the
first sentence of this paragraph, forthwith sell, assign, transfer and convey to
the purchaser thereof (without recourse,  representation or warranty of any kind
except for its own acts),  all of the right,  title,  interest and obligation of
such  Certificateholder  in, this Agreement,  the Escrow Agreement,  the Deposit
Agreement,  the  Intercreditor  Agreement,  the  Liquidity  Facility,  the  Note
Documents,  the Note Purchase Agreement and all Certificates and Escrow Receipts
held by such  Certificateholder  (excluding all right,  title and interest under
any of the foregoing to the extent such right, title or interest is with respect
to an obligation  not then due and payable as respects any action or inaction or
state of affairs  occurring  prior to such sale) and the purchaser  shall assume
all of such  Certificateholder's  obligations  under this Agreement,  the Escrow
Agreement,  the Deposit Agreement,  the Intercreditor  Agreement,  the Liquidity
Facility,  the Note  Documents  and the  Note  Purchase  Agreement  and all such
Certificates  and  Escrow  Receipts.  The  Certificates  will  be  deemed  to be
purchased on the date payment of the purchase price is made  notwithstanding the
failure of the  Certificateholders  to deliver any Certificates  (whether in the
form of Physical  Certificates or beneficial  interests in Global  Certificates)
and, upon such a purchase, (i) the only rights of the Certificateholders will be
to deliver the  Certificates to the purchaser and receive the purchase price for
the   Certificates   and  (ii)  if  the   purchaser   shall  so   request   such
Certificateholder  will comply with all of the provisions of Section 3.04 hereof
to enable new  Certificates to be issued to the purchaser in such  denominations
as it shall request. All charges and expenses in connection with the issuance of
any such new Certificates shall be borne by the purchaser thereof.

                  As   used    in    this    Section    6.01(b),    the    terms
"Certificateholder",     "Class",    "Class    B    Certificate",    "Class    B
Certificateholder",  "Class B Trust", "Class B Trustee",  "Class C Certificate",
"Class C  Certificateholder",  "Class C Trust" and "Class C Trustee"  shall have
the respective meanings assigned to such terms in the Intercreditor Agreement.

                  Section 6.02.  INCIDENTS OF SALE OF EQUIPMENT NOTES.  Upon any
sale of all or any part of the  Equipment  Notes made either  under the power of
sale  given  under this  Agreement  or  otherwise  for the  enforcement  of this
Agreement, the following shall be applicable:

                  (1)  CERTIFICATEHOLDERS  AND  TRUSTEE MAY  PURCHASE  EQUIPMENT
         NOTES.  Any  Certificateholder,  the Trustee in its  individual  or any
         other  capacity or any other Person may bid for and purchase any of the
         Equipment  Notes, and upon compliance with the terms of sale, may hold,
         retain,  possess  and  dispose  of such  Equipment  Notes in their  own
         absolute right without further accountability.

                  (2) RECEIPT OF TRUSTEE SHALL DISCHARGE PURCHASER.  The receipt
         of the Trustee or of the officer making such sale shall be a sufficient
         discharge to any purchaser for his purchase  money,  and,  after paying
         such purchase money and receiving  such receipt,  such purchaser or its
         personal  representative  or assigns shall not be obliged to see to the
         application of such purchase money, or be in any way answerable for any
         loss, misapplication or non-application thereof.

                  (3)  APPLICATION  OF MONEYS  RECEIVED  UPON  SALE.  Any moneys
         collected  by the Trustee  upon any sale made either under the power of
         sale given by this  Agreement or otherwise for the  enforcement of this
         Agreement shall be applied as provided in Section 4.02.

                  Section  6.03.  JUDICIAL  PROCEEDINGS  INSTITUTED  BY TRUSTEE;
TRUSTEE  MAY BRING  SUIT.  If there  shall be a failure  to make  payment of the
principal of,  premium,  if any, or interest on any Equipment  Note, or if there
shall be any failure to pay Rent (as defined in the  relevant  Lease)  under any
Lease when due and payable, then the Trustee, in its own name, and as trustee of
an express trust, as holder of such Equipment  Notes, to the extent permitted by
and in  accordance  with the  terms  of the  Intercreditor  Agreement,  the Note
Purchase  Agreement  and  the  Note  Documents  (subject  to the  rights  of the
applicable  Owner  Trustee  or Owner  Participant  to cure any such  failure  in
accordance with Section 4.03 of the applicable Indenture), shall be entitled and
empowered to institute any suits,  actions or  proceedings  at law, in equity or
otherwise,  for the  collection of the sums so due and unpaid on such  Equipment
Notes or under such Lease and may  prosecute  any such  claim or  proceeding  to
judgment or final  decree with  respect to the whole  amount of any such sums so
due and unpaid.

                  Section  6.04.  CONTROL  BY  CERTIFICATEHOLDERS.   Subject  to
Section 6.03 and the Intercreditor  Agreement,  the  Certificateholders  holding
Certificates evidencing Fractional Undivided Interests aggregating not less than
a majority  in  interest  in the Trust  shall have the right to direct the time,
method and place of conducting any  proceeding  for any remedy  available to the
Trustee with respect to the Trust or pursuant to the terms of the  Intercreditor
Agreement,  or exercising any trust or power conferred on the Trustee under this
Agreement or the Intercreditor Agreement,  including any right of the Trustee as
Controlling  Party  under  the  Intercreditor  Agreement  or as  holder  of  the
Equipment Notes, PROVIDED that:

     (1) such  Direction  shall not be in conflict  with any rule of law or with
this  Agreement  and would not  involve the  Trustee in  personal  liability  or
expense,

     (2) the Trustee  shall not determine  that the action so directed  would be
unjustly  prejudicial  to  the   Certificateholders  not  taking  part  in  such
Direction, and

     (3) the  Trustee  may take any other  action  deemed  proper by the Trustee
which is not inconsistent with such Direction.

                  Section  6.05.  WAIVER  OF  PAST  DEFAULTS.   Subject  to  the
Intercreditor Agreement, the Certificateholders  holding Certificates evidencing
Fractional Undivided Interests  aggregating not less than a majority in interest
in the Trust (i) may on behalf of all of the  Certificateholders  waive any past
Event of Default  hereunder and its  consequences  or (ii) if the Trustee is the
Controlling  Party,  may direct the  Trustee to  instruct  the  applicable  Loan
Trustee  to  waive  any past  Indenture  Default  under  any  Indenture  and its
consequences,  and thereby annul any Direction given by such  Certificateholders
or the Trustee to such Loan Trustee with respect thereto, except a default:

     (1) in the  deposit  of any  Scheduled  Payment or  Special  Payment  under
Section 4.01 or in the  distribution  of any payment  under  Section 4.02 on the
Certificates, or

     (2) in the payment of the principal of (premium, if any) or interest on the
Equipment Notes, or

     (3) in respect of a covenant or  provision  hereof  which under  Article IX
hereof   cannot  be   modified   or  amended   without   the   consent  of  each
Certificateholder holding an Outstanding Certificate affected thereby.

                  Upon any such waiver,  such default  shall cease to exist with
respect to the Certificates and any Event of Default arising  therefrom shall be
deemed to have  been  cured for every  purpose  and any  direction  given by the
Trustee on behalf of the  Certificateholders  to the relevant Loan Trustee shall
be  annulled  with  respect  thereto;  but no such  waiver  shall  extend to any
subsequent or other  default or Event of Default or impair any right  consequent
thereon. Upon any such waiver, the Trustee shall vote the Equipment Notes issued
under the relevant Indenture to waive the corresponding Indenture Default.

                  Section 6.06. RIGHT OF  CERTIFICATEHOLDERS TO RECEIVE PAYMENTS
NOT TO BE IMPAIRED.  Anything in this Agreement to the contrary notwithstanding,
including,  without  limitation,   Section  6.07  hereof,  but  subject  to  the
Intercreditor   Agreement,   the  right  of  any  Certificateholder  to  receive
distributions  of  payments  required  pursuant  to Section  4.02  hereof on the
Certificates  when due, or to  institute  suit for the  enforcement  of any such
payment  on or  after  the  applicable  Regular  Distribution  Date  or  Special
Distribution Date, shall not be impaired or affected without the consent of such
Certificateholder.

                  Section  6.07.  CERTIFICATEHOLDERS  MAY NOT BRING SUIT  EXCEPT
UNDER  CERTAIN  CONDITIONS.  A  Certificateholder  shall  not have the  right to
institute any suit,  action or proceeding at law or in equity or otherwise  with
respect  to  this  Agreement,  for  the  appointment  of a  receiver  or for the
enforcement of any other remedy under this Agreement, unless:

     (1) such  Certificateholder  previously  shall have given written notice to
the Trustee of a continuing Event of Default;

     (2) Certificateholders holding Certificates evidencing Fractional Undivided
Interests  aggregating  not less than 25% of the Trust shall have  requested the
Trustee in writing to institute  such action,  suit or proceeding and shall have
offered to the Trustee indemnity as provided in Section 7.02(e);

     (3) the Trustee  shall have  refused or  neglected  to  institute  any such
action, suit or proceeding for 60 days after receipt of such notice, request and
offer of indemnity; and

     (4) no Direction  inconsistent  with such written request has been given to
the  Trustee  during  such  60-day  period  by  the  Certificateholders  holding
Certificates evidencing Fractional Undivided Interests aggregating not less than
a majority in interest in the Trust.

                  It is  understood  and  intended  that  no one or  more of the
Certificateholders  shall have any right in any  manner  whatever  hereunder  or
under the  Certificates  to (i) surrender,  impair,  waive,  affect,  disturb or
prejudice any property in the Trust Property or the lien of any Indenture on any
property subject thereto, or the rights of the Certificateholders or the holders
of the related  Equipment Notes,  (ii) obtain or seek to obtain priority over or
preference to any other such  Certificateholder or (iii) enforce any right under
this Agreement,  except in the manner herein provided and for the equal, ratable
and common  benefit of all the  Certificateholders  subject to the provisions of
this Agreement.

                  Section  6.08.   REMEDIES   CUMULATIVE.   Every  remedy  given
hereunder  to the  Trustee  or to any of  the  Certificateholders  shall  not be
exclusive  of any other  remedy or  remedies,  and every  such  remedy  shall be
cumulative  and in addition  to every other  remedy  given  hereunder  or now or
hereafter given by statute, law, equity or otherwise.

                  Section  6.09.  UNDERTAKING  FOR  COSTS.  In any  suit for the
enforcement of any right or remedy under this Agreement,  or in any suit against
the Trustee for any action taken,  suffered or omitted by it as Trustee, a court
may require any party  litigant in such suit to file an  undertaking  to pay the
costs of such suit, and may assess costs against any such party litigant, in the
manner and to the extent  provided in the Trust  Indenture  Act;  PROVIDED  that
neither  this Section nor the Trust  Indenture  Act shall be deemed to authorize
any court to require such an  undertaking  or to make such an  assessment in any
suit instituted by the Company or the Guarantor.



                                   ARTICLE VII

                                   THE TRUSTEE

                  Section 7.01.  NOTICE OF DEFAULTS.  As promptly as practicable
after,  and in any event within 90 days after the  occurrence of any default (as
such term is defined below) hereunder actually known to the Trustee, the Trustee
shall transmit by mail to the Company,  the related Owner Trustees,  the related
Loan Trustees and the  Certificateholders  in accordance  with Section 313(c) of
the Trust Indenture Act, notice of such default hereunder  actually known to the
Trustee, unless such default shall have been cured or waived; PROVIDED, HOWEVER,
that,  except  in the case of a  default  in the  payment  of the  principal  of
(premium,  if any) or  interest on any  Equipment  Note,  the  Trustee  shall be
protected in  withholding  such notice if and so long as the board of directors,
the executive  committee or a trust  committee of directors  and/or  Responsible
Officers of the Trustee in good faith  determine  that the  withholding  of such
notice is in the  interests of the  Certificateholders.  For the purpose of this
Section, the term "default" means any event that is, or after notice or lapse of
time or both would become, an Event of Default.

     Section  7.02.  CERTAIN  RIGHTS OF TRUSTEE.  Subject to the  provisions  of
Section 315 of the Trust

Indenture Act:

     (a) the Trustee  may rely and shall be  protected  in acting or  refraining
from acting in reliance upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction,  consent, order, bond, debenture or
other paper or document  believed by it to be genuine and to have been signed or
presented by the proper party or parties;

     (b) any request or  direction  of the  Company  mentioned  herein  shall be
sufficiently evidenced by a Request;

     (c) whenever in the  administration  of this Agreement or the Intercreditor
Agreement  the  Trustee  shall  deem it  desirable  that a matter  be  proved or
established  prior to taking,  suffering or omitting any action  hereunder,  the
Trustee (unless other evidence be herein  specifically  prescribed)  may, in the
absence  of bad faith on its part,  rely upon an  Officers'  Certificate  of the
Company, any Owner Trustee or any Loan Trustee;

     (d) the Trustee may consult  with counsel and the advice of such counsel or
any Opinion of Counsel shall be full and complete  authorization  and protection
in respect of any action  taken,  suffered  or omitted by it  hereunder  in good
faith and in reliance thereon;

     (e) the Trustee  shall be under no obligation to exercise any of the rights
or powers vested in it by this Agreement or the  Intercreditor  Agreement at the
request or direction of any of the Certificateholders pursuant to this Agreement
or the Intercreditor Agreement unless such Certificateholders shall have offered
to the Trustee reasonable  security or indemnity against the cost,  expenses and
liabilities  which might be incurred by it in  compliance  with such  request or
direction;

     (f) the Trustee shall not be bound to make any investigation into the facts
or  matters  stated  in  any  resolution,  certificate,  statement,  instrument,
opinion, or report, notice, request, direction,  consent, order, bond, debenture
or other paper or document;

     (g) the  Trustee  may  execute  any of the  trusts  or  powers  under  this
Agreement  or the  Intercreditor  Agreement  or perform  any  duties  under this
Agreement or the Intercreditor Agreement either directly or by or through agents
or attorneys  and the Trustee  shall not be  responsible  for any  misconduct or
negligence  on the part of any agent or attorney  appointed  with due care by it
under this Agreement or the Intercreditor Agreement;

     (h) the  Trustee  shall not be liable with  respect to any action  taken or
omitted to be taken by it in good faith in accordance  with the direction of the
Certificateholders   holding   Certificates   evidencing   Fractional  Undivided
Interests aggregating not less than a majority in interest in the Trust relating
to the time,  method  and place of  conducting  any  proceeding  for any  remedy
available to the Trustee,  or exercising  any trust or power  conferred upon the
Trustee, under this Agreement or the Intercreditor Agreement;

     (i) the  Trustee  shall not be  required to expend or risk its own funds in
the performance of any of its duties under this Agreement, or in the exercise of
any of its rights or powers,  if it shall have reason to believe that  repayment
of such funds or adequate  indemnity against such risk is not reasonably assured
to it; and

     (j) except  during the  continuance  of an Event of  Default,  the  Trustee
undertakes  and  shall  be  responsible  to  perform  only  such  duties  as are
specifically set forth herein and no implied  covenants or obligations  shall be
read into this Agreement or be enforceable against Trustee.

                  Section  7.03.  NOT  RESPONSIBLE  FOR  RECITALS OR ISSUANCE OF
CERTIFICATES. The recitals contained herein and in the Certificates,  except the
certificates  of  authentication,  shall not be taken as the  statements  of the
Trustee,  and the  Trustee  assumes  no  responsibility  for their  correctness.
Subject to Section 7.14, the Trustee makes no representations as to the validity
or  sufficiency  of this  Agreement,  the  Note  Purchase  Agreement,  any  Note
Documents,  any  Participation  Agreement or any  Intercreditor  Agreement,  the
Deposit Agreement, the Escrow Agreement and Equipment Notes or the Certificates,
except that the Trustee  hereby  represents and warrants that this Agreement has
been,  and each  Certificate,  the  Intercreditor  Agreement,  the Note Purchase
Agreement,  the Escrow  Agreement  and each  Certificate  will be,  executed and
delivered by one of its officers who is duly  authorized  to execute and deliver
such document on its behalf.

                  Section 7.04. MAY HOLD CERTIFICATES.  The Trustee,  any Paying
Agent,  Registrar  or any of  their  Affiliates  or any  other  agent,  in their
respective individual or any other capacity,  may become the owner or pledgee of
Certificates  and subject to Sections 310(b) and 311 of the Trust Indenture Act,
if  applicable,  may otherwise deal with the Company,  the Guarantor,  the Owner
Trustees or the Loan  Trustees with the same rights it would have if it were not
Trustee, Paying Agent, Registrar or such other agent.

                  Section 7.05.  MONEY HELD IN TRUST.  Money held by the Trustee
or the Paying Agent in trust  hereunder need not be segregated  from other funds
except to the extent  required  herein or by law and neither the Trustee nor the
Paying Agent shall have any  liability  for interest upon any such moneys except
as provided for herein.

        Section 7.06. COMPENSATION AND REIMBURSEMENT. The Company agrees:
                         ------------------------------

                  (1) to pay, or cause to be paid,  to the Trustee  compensation
         (as set out in a separate  fee  agreement  between  the Trustee and the
         Company) for all services rendered by it hereunder (which  compensation
         shall  not  be  limited  by any  provision  of  law  in  regard  to the
         compensation of a trustee of an express trust);

                  (2)  except  as  otherwise   expressly   provided   herein  to
         reimburse, or cause to be reimbursed,  the Trustee upon its request for
         all  reasonable  out-of-pocket  expenses,  disbursements  and  advances
         incurred or made by the Trustee in  accordance  with any  provision  of
         this Agreement or the Intercreditor Agreement (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 the Trustee's breach of its  representations and
         warranties set forth in Section 7.14;

                  (3) to indemnify, or cause to be indemnified, the Trustee for,
         and to hold it harmless against,  any loss, liability or expense (other
         than for or with  respect  to any  tax)  incurred  without  negligence,
         willful  misconduct  or bad faith,  on its part,  arising  out of or in
         connection  with  the  acceptance  or  administration  of  this  Trust,
         including the costs and expenses of defending  itself against any claim
         or liability in connection  with the exercise or  performance of any of
         its powers or duties hereunder,  except for any such loss, liability or
         expense   incurred   by   reason  of  the   Trustee's   breach  of  its
         representations  and  warranties set forth in Section 7.14. The Trustee
         shall  notify the Company and the  Guarantor  promptly of any claim for
         which it may seek indemnity. The Company and the Guarantor shall defend
         the claim and the Trustee shall  cooperate in the defense.  The Trustee
         may have  separate  counsel  with the  consent of the  Company  and the
         Guarantor  and the Company and the  Guarantor  will pay the  reasonable
         fees  and  expenses  of  such  counsel.  Neither  the  Company  nor the
         Guarantor need pay for any settlement made without its consent; and

                  (4) to  indemnify,  or cause to be  indemnified,  the Trustee,
         solely  in its  individual  capacity,  for,  and to  hold  it  harmless
         against,  any tax  (except  to the extent  the  Trustee  is  reimbursed
         therefor   pursuant   to  the   next   paragraph,   provided   that  no
         indemnification shall be available with respect to any tax attributable
         to the Trustee's  compensation  for serving as such)  incurred  without
         negligence,  willful  misconduct or bad faith, on its part, arising out
         of or in  connection  with the  acceptance  or  administration  of this
         Trust,  including  any costs and expenses  incurred in  contesting  the
         imposition of any such tax. The Trustee,  in its  individual  capacity,
         shall  notify the Company and the  Guarantor  promptly of any claim for
         any tax for which it may seek  indemnity.  The Trustee shall permit the
         Company and the Guarantor to contest the imposition of such tax and the
         Trustee,  in its individual  capacity,  shall cooperate in the defense.
         The Trustee, in its individual capacity, may have separate counsel with
         the consent of the Company  and the  Guarantor  and the Company and the
         Guarantor  will pay the  reasonable  fees and expenses of such counsel.
         Neither the Company nor the  Guarantor  need pay for any taxes paid, in
         settlement or otherwise, without its consent.

                  The Trustee shall be entitled to reimbursement from, and shall
have a lien  prior to the  Certificates  upon,  the Trust  Property  for any tax
incurred  without  negligence,  bad  faith or  willful  misconduct  on its part,
arising out of or in connection  with the acceptance or  administration  of such
Trust (other than any tax attributable to the Trustee's compensation for serving
as such), including any costs and expenses incurred in contesting the imposition
of any such tax.  The Trustee  shall notify the Company of any claim for any tax
for which it may seek reimbursement.  The Trustee shall cooperate in the contest
by the Company of any such  claim.  If the  Trustee  reimburses  itself from the
Trust  Property  for any such tax it will  within  30 days  mail a brief  report
setting  forth  the  amount  of such tax and the  circumstances  thereof  to all
Certificateholders as their names and addresses appear in the Register.

                  As security  for the  performance  of the  obligations  of the
Company  under  this  Section  the  Trustee  shall  have  a  lien  prior  to the
Certificates upon the Trust Property.

                  Section 7.07. CORPORATE TRUSTEE REQUIRED,  ELIGIBILITY . There
shall at all times be a Trustee  hereunder  which  shall be eligible to act as a
trustee  under  Section  310(a) of the  Trust  Indenture  Act and  shall  have a
combined capital and surplus of at least  $75,000,000 (or a combined capital and
surplus in excess of $5,000,000  and the  obligations  of which,  whether now in
existence or hereafter incurred,  are fully and unconditionally  guaranteed by a
corporation  organized and doing  business  under the laws of the United States,
any  State or  Territory  thereof  or of the  District  of  Columbia  that has a
combined  capital  and  surplus of at least  $75,000,000).  If such  corporation
publishes  reports of  conditions at least  annually,  pursuant to law or to the
requirements of federal, state,  territorial or District of Columbia supervising
or examining authority, then for the purposes of this Section 7.07, the combined
capital  and  surplus  of such  corporation  shall be deemed to be its  combined
capital  and  surplus as set forth in its most recent  report of  conditions  so
published.

                  In case at any time the Trustee  shall cease to be eligible in
accordance  with the  provisions  of this  Section  7.07 to act as Trustee,  the
Trustee  shall resign  immediately  as Trustee in the manner and with the effect
specified in Section 7.08.

        Section 7.08. RESIGNATION AND REMOVAL: APPOINTMENT OF SUCCESSOR.
                -------------------------------------------------

                  (a)  No   resignation   or  removal  of  the  Trustee  and  no
appointment  of a  successor  Trustee  pursuant  to this  Article  shall  become
effective  until the acceptance of  appointment  by the successor  Trustee under
Section 7.09.

                  (b) The  Trustee  may  resign at any time as trustee by giving
written notice thereof to the Company, the Authorized Agents, the Owner Trustees
and the Loan  Trustees.  If an instrument  of acceptance by a successor  Trustee
shall not have been delivered to the Company,  the Authorized  Agents, the Owner
Trustees,  the Loan Trustees and the Trustee  within 30 days after the giving of
such notice of  resignation,  the  resigning  Trustee may  petition any court of
competent jurisdiction for the appointment of a successor Trustee.

                  (c)  The  Trustee  may be  removed  at any  time by Act of the
Certificateholders   holding   Certificates   evidencing   Fractional  Undivided
Interests  aggregating  not  less  than a  majority  in  interest  in the  Trust
delivered to the Trustee, the Company, the Owner Trustees and the Loan Trustees.

                  (d)      If at any time:

                  (1) the Trustee  shall fail to comply with  Section 310 of the
         Trust Indenture Act after written request therefor by the Company or by
         any Certificateholder who has been a bona fide certificateholder for at
         least six months; or

                  (2) the Trustee shall cease to be eligible  under Section 7.07
         and shall fail to resign after written request  therefor by the Company
         or by any such Certificateholder; or

                  (3) the Trustee  shall become  incapable of acting or shall be
         adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
         property  shall be appointed or any public officer shall take charge or
         control of the Trustee or of its property or affairs for the purpose of
         rehabilitation, conservation or liquidation;

then,  in any  case,  (i) the  Company  may  remove  the  Trustee  or  (ii)  any
Certificateholder  who has been a bona fide  Certificateholder  for at least six
months may, on behalf of himself and all others similarly situated, petition any
court  of  competent  jurisdiction  for  the  removal  of the  Trustee  and  the
appointment of a successor Trustee.

                  (e) If a  Responsible  Officer  of the  Trustee  shall  obtain
actual knowledge of an Avoidable Tax (as hereinafter  defined) which has been or
is likely to be  asserted,  the Trustee  shall  promptly  notify the Company and
shall,  within 30 days of such notification,  resign as Trustee hereunder unless
within  such  30-day  period the  Trustee  shall have  received  notice that the
Company  has  agreed to pay such  tax.  The  Company  shall  promptly  appoint a
successor Trustee in a jurisdiction  where there are no Avoidable Taxes. As used
herein,  an "Avoidable  Tax" means a state or local tax: (i) upon (w) the Trust,
(x) the Trust Property,  (y) Certificateholders or (z) the Trustee for which the
Trustee is  entitled to seek  reimbursement  from the Trust  Property,  and (ii)
which  would be avoided  if the  Trustee  were  located  in  another  state,  or
jurisdiction  within a state,  within the United  States.  A tax shall not be an
Avoidable  Tax if the Company or any Owner Trustee shall agree to pay, and shall
pay, such tax.

                  (f)  If  the  Trustee  shall  resign,  be  removed  or  become
incapable of acting as trustee or if a vacancy  shall occur in the office of the
Trustee for any cause, the Company shall promptly  appoint a successor  Trustee.
If, within 90 days after such  resignation,  removal or  incapability,  or other
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Certificateholders   holding   Certificates   evidencing   Fractional  Undivided
Interests  aggregating  not  less  than a  majority  in  interest  in the  Trust
delivered to the Company, the Owner Trustees,  the Loan Trustee and the retiring
Trustee,  the successor  Trustees so appointed  shall,  with the approval of the
Company, which approval shall not be unreasonably  withheld,  forthwith upon its
acceptance of such  appointment,  become the successor Trustee and supersede the
successor  Trustee  appointed as provided above.  If no successor  Trustee shall
have been so appointed as provided above and accepted  appointment in the manner
hereinafter  provided,  the resigning Trustee or any  Certificateholder  who has
been a bona fide  Certificateholder  for at least six months  may,  on behalf of
himself  and all others  similarly  situated,  petition  any court of  competent
jurisdiction for the appointment of a successor Trustee.

                  (g) The successor  Trustee of a Trust shall give notice of the
resignation and removal of the Trustee and appointment of the successor  Trustee
by mailing written notice of such event by first-class mail, postage prepaid, to
the Certificateholders as their names and addresses appear in the Register. Each
notice shall include the name of such  successor  Trustee and the address of its
Corporate Trust Office.

                  Section 7.09.  ACCEPTANCE OF APPOINTMENT  BY SUCCESSOR.  Every
successor Trustee appointed hereunder shall execute,  acknowledge and deliver to
the  Company  and  to  the  retiring   Trustee  an  instrument   accepting  such
appointment,  and thereupon the  resignation or removal of the retiring  Trustee
shall become effective and such successor Trustee, without any further act, deed
or  conveyance,  shall  become  vested with all the rights,  powers,  trusts and
duties of the retiring Trustee;  but, on request of the Company or the successor
Trustee,   such  retiring  Trustee  shall  execute  and  deliver  an  instrument
transferring to such successor Trustee all such rights, powers and trusts of the
retiring  Trustee and shall duly assign,  transfer and deliver to such successor
Trustee  all  property  and  money  held  by  such  retiring  Trustee,   subject
nevertheless to its lien, if any,  provided for in Section 7.06. Upon request of
any such successor Trustee, the Company, the retiring Trustee and such successor
Trustee  shall  execute  and  deliver any and all  instruments  containing  such
provisions  as shall be  necessary  or desirable to transfer and confirm to, and
for more fully and certainly vesting in, such successor Trustee all such rights,
powers and trusts.

                  No successor  Trustee shall accept its  appointment  unless at
the time of such  acceptance  such  successor  Trustee  shall be  qualified  and
eligible under this Article.

                  Section 7.10. MERGER, CONVERSION,  CONSOLIDATION OR SUCCESSION
TO BUSINESS.  Any corporation  into which the Trustee may be merged or converted
or with which it may be  consolidated,  or any  corporation  resulting  from any
merger,  conversion or  consolidation  to which the Trustee shall be a party, or
any corporation  succeeding to all or  substantially  all of the corporate trust
business  of the  Trustee,  shall be the  successor  of the  Trustee  hereunder,
PROVIDED such corporation  shall be otherwise  qualified and eligible under this
Article,  without the execution or filing of any paper or any further act on the
part of any of the  parties  hereto.  In case any  Certificates  shall have been
executed or authenticated, but not delivered, by the Trustee then in office, any
successor by merger,  conversion or consolidation to such authenticating Trustee
may adopt such  execution  or  authentication  and deliver the  Certificates  so
executed or authenticated  with the same effect as if such successor Trustee had
itself executed or authenticated such Certificates.

                  Section 7.11. MAINTENANCE OF AGENCIES.
                                -----------------------

                  (a) There shall at all times be maintained an office or agency
where  Certificates may be presented or surrendered for registration of transfer
or for  exchange,  and for payment  thereof and where  notices and demands to or
upon the Trustee in respect of such  Certificates  may be served.  Presentations
and demands may be made and notices may be served at the Corporate  Trust Office
of the Trustee.

                  (b) There shall at all times be a Registrar and a Paying Agent
hereunder with respect to the Certificates.  Each such Authorized Agent shall be
a bank or trust  company,  shall be a corporation  organized and doing  business
under the laws of the United  States or any state,  with a combined  capital and
surplus of at least $75,000,000,  or a corporation having a combined capital and
surplus in excess of $5,000,000  the  obligations  of which are  guaranteed by a
corporation  organized and doing business under the laws of the United States or
any state,  with a combined  capital  and surplus of at least  $75,000,000,  and
shall be authorized under such laws to exercise corporate trust powers,  subject
to supervision by federal or state  authorities.  The Trustee shall initially be
the Paying  Agent and, as provided in Section  3.04,  Registrar  hereunder  with
respect to the  Certificates.  Each Registrar  shall furnish to the Trustee,  at
stated  intervals  of not more than six  months,  and at such other times as the
Trustee  may  request in  writing,  a copy of the  Register  maintained  by such
Registrar.

                  (c) Any  corporation  into which any  Authorized  Agent may be
merged or converted  or with which it may be  consolidated,  or any  corporation
resulting from any merger,  consolidation  or conversion to which any Authorized
Agent,  shall be a party, or any  corporation  succeeding to the corporate trust
business of any  Authorized  Agent,  shall be the  successor of such  Authorized
Agent hereunder,  if such successor corporation is otherwise eligible under this
Section,  without the execution or filing of any paper or any further act on the
part  of  the  parties  hereto  or  such  Authorized  Agent  or  such  successor
corporation.

                  (d) Any  Authorized  Agent  may at any time  resign  by giving
written notice of resignation  to the Trustee,  the Company,  the Owner Trustees
and the Loan Trustees. The Company may, and at the request of the Trustee shall,
at any time  terminate  the  agency of any  Authorized  Agent by giving  written
notice of  termination  to such  Authorized  Agent and to the Trustee.  Upon the
resignation  or  termination  of an Authorized  Agent or in case at any time any
such  Authorized  Agent shall cease to be eligible  under this Section  (when in
either  case,  no  other  Authorized  Agent  performing  the  functions  of such
Authorized Agent shall have been appointed),  the Company shall promptly appoint
one or more qualified successor  Authorized Agents,  reasonably  satisfactory to
the Trustee, to perform the functions of the Authorized Agent which has resigned
or whose  agency has been  terminated  or who shall have  ceased to be  eligible
under  this  Section.  The  Company  shall  give  written  notice  of  any  such
appointment made by it to the Trustee, the Owner Trustees and the Loan Trustees;
and in each  case the  Trustee  shall  mail  notice of such  appointment  to all
Certificateholders as their names and addresses appear on the Register.

                  (e) The Company agrees to pay, or cause to be paid,  from time
to time to each Authorized Agent reasonable compensation for its services and to
reimburse it for its reasonable expenses.

                  Section  7.12.  MONEY FOR  CERTIFICATE  PAYMENTS TO BE HELD IN
TRUST. All moneys deposited with any Paying Agent for the purpose of any payment
on  Certificates  shall be  deposited  and held in trust for the  benefit of the
Certificateholders  entitled to such payment,  subject to the provisions of this
Section. Moneys so deposited and held in trust shall constitute a separate trust
fund for the benefit of the Certificateholders  with respect to which such money
was deposited.

                  The Trustee may at any time,  for the purpose of obtaining the
satisfaction  and discharge of this Agreement or for any other  purpose,  direct
any Paying  Agent to pay to the  Trustee  all sums held in trust by such  Paying
Agent,  such sums to be held by the  Trustee  upon the same trusts as those upon
which such sums were held by such  Paying  Agent and,  upon such  payment by any
Paying  Agent to the  Trustee,  such Paying  Agent  shall be  released  from all
further liability with respect to such money.

                  Section  7.13.  REGISTRATION  OF  EQUIPMENT  NOTES  IN NAME OF
SUBORDINATION AGENT. The Trustee agrees that all Equipment Notes to be purchased
by the  Trust  shall be  issued  in the name of the  Subordination  Agent or its
nominee  and held by the  Subordination  Agent in trust for the  benefit  of the
Certificateholders,  or, if not so held, the Subordination  Agent or its nominee
shall be reflected as the owner of such  Equipment  Notes in the register of the
issuer of such Equipment Notes.

     Section 7.14. REPRESENTATIONS AND WARRANTIES OF TRUSTEE. The Trustee hereby
represents and warrants on the Transfer Date that:

     (a) the Trustee is a Delaware  banking  corporation  organized  and validly
existing, and in good standing under the laws of the State of Delaware;

     (b) the Trustee has full  power,  authority  and legal right to receive the
Trust Property  assigned by the Related Trustee,  assume the obligations  under,
and perform,  the Assignment  and  Assumption  Agreement,  this  Agreement,  the
Intercreditor  Agreement,  the Escrow Agreement, the Note Purchase Agreement and
the Note Documents to which it is a party and has taken all necessary  action to
authorize such receipt,  assumption and  performance by it of the Assignment and
Assumption Agreement,  this Agreement,  the Intercreditor  Agreement, the Escrow
Agreement,  the Note Purchase  Agreement and the Note Documents to which it is a
party;

     (c) the receipt of the Trust  Property  under the Assignment and Assumption
Agreement and the  performance  by the Trustee of the  Assignment and Assumption
Agreement,  this Agreement,  the Intercreditor  Agreement, the Escrow Agreement,
the Note Purchase  Agreement  and the Note  Documents to which it is a party (i)
will not violate any  provision of any United  States  federal law or the law of
the State of Delaware  governing  the banking and trust powers of the Trustee or
any order, writ, judgment,  or decree of any court,  arbitrator,or  governmental
authority  applicable to the Trustee or any of its assets, (ii) will not violate
any  provision of the  articles of  association  or by-laws of the Trustee,  and
(iii) will not violate any provision of, or  constitute,  with or without notice
or lapse of time, a default  under,  or result in the creation or  imposition of
any lien on any  properties  included  in the  Trust  Property  pursuant  to the
provisions of, any mortgage, indenture, contract, agreement or other undertaking
to which it is a party,  which  violation,  default or lien could  reasonably be
expected to have an adverse  effect on the Trustee's  performance  or ability to
perform its duties hereunder or thereunder or on the  transactions  contemplated
herein or therein;

     (d) the receipt of the Trust  Property  under the Assignment and Assumption
Agreement and the  performance  by the Trustee of the  Assignment and Assumption
Agreement,  this Agreement,  the Intercreditor  Agreement, the Escrow Agreement,
the Note Purchase  Agreement and the Note  Documents to which it is a party will
not require the authorization, consent, or approval of, the giving of notice to,
the filing or  registration  with,  or the taking of any other action in respect
of, any  governmental  authority or agency of the United  States or the State of
Delaware  regulating the banking and corporate trust  activities of the Trustee;
and

     (e) the  Assignment  and  Assumption  Agreement  has been duly executed and
delivered  by the Trustee and this  Agreement,  the  Assignment  and  Assumption
Agreement,  the Intercreditor Agreement, the Escrow Agreement, the Note Purchase
Agreement and the Note  Documents to which it is a party have been duly executed
and  delivered  by the  Trustee and  constitute  the legal,  valid,  and binding
agreements  of the  Trustee,  enforceable  against it in  accordance  with their
respective terms,  provided that enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
rights of creditors generally and (ii) general principles of equity.

                  Section 7.15. WITHHOLDING TAXES,  INFORMATION  REPORTING.  (a)
The Trustee,  as trustee of the grantor trust created by this  Agreement,  shall
exclude and withhold from each distribution of principal,  premium,  if any, and
interest and other  amounts due under this  Agreement or under the  Certificates
any and all withholding taxes applicable thereto as required by law. The Trustee
agrees to act as such withholding agent and, in connection  therewith,  whenever
any taxes or similar  charges are  required to be withheld  with  respect to any
amounts paid by or on behalf of the Trustee in respect of the  Certificates,  to
withhold  such  amounts and timely pay the same to the  authority in the name of
and on  behalf  of the  Certificateholders,  that it  will  file  any  necessary
withholding  tax  returns or  statements  when due,  and that,  as  promptly  as
possible   after  the   payment   thereof,   it  will   deliver   to  each  such
Certificateholder  necessary documentation showing the payment thereof, together
with  such  additional  documentary  evidence  as  such  Certificateholders  may
reasonably  request  from  time to time.  The  Trustee  agrees to file any other
information reports as it may be required to file under United States law.

                  (b) The Trustee may satisfy  certain of its  obligations  with
respect to this Agreement by retaining, at the expense of the Company, a firm of
independent   public  accountants  (the   "Accountants")   which  shall  (i)  be
responsible for all tax filing  requirements and (ii) perform the obligations of
the Trustee in respect of tax filing  requirements.  The Trustee shall be deemed
to have  discharged  its tax filing  obligations  under this  Agreement upon its
retention of the  Accountants,  and, if the Trustee  shall have  selected in the
Accountants  in good faith and without gross  negligence,  the Trustee shall not
have any liability with respect to the default or misconduct of the Accountants.

                  (c) The Trustee, at the request of the Company, will make such
United  States  federal  income tax elections as may be necessary to prevent the
Trust from being  classified  for federal  income tax purposes as an association
taxable as a corporation.

                  Section 7.16.  TRUSTEE'S  LIENS. The Trustee in its individual
capacity  agrees  that it will at its own cost  and  expense  promptly  take any
action as may be necessary to duly  discharge  and satisfy in full any mortgage,
pledge,  lien,  charge,  encumbrance,  security  interest  or claim  ("Trustee's
Liens") on or with respect to the Trust  Property which is  attributable  to the
Trustee  either (i) in its  individual  capacity  and which is  unrelated to the
transactions  contemplated by this Agreement,  the Intercreditor  Agreement, the
Participation Agreements,  the Note Purchase Agreement or the Note Documents, or
(ii) as Trustee hereunder or in its individual  capacity and which arises out of
acts or omissions which are not contemplated by this Agreement.

                  Section 7.17.  PREFERENTIAL  COLLECTION OF CLAIMS. The Trustee
shall comply with  Section  311(a) of the Trust  Indenture  Act,  excluding  any
creditor  relationship  listed in Section 311(b) of the Trust  Indenture Act. If
the  Trustee  shall  resign or be  removed  as  Trustee,  it shall be subject to
Section 311(a) of the Trust Indenture Act to the extent provided therein.



                                  ARTICLE VIII

                CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE

                  Section  8.01.  THE COMPANY TO FURNISH  TRUSTEE WITH NAMES AND
ADDRESSES  OF  CERTIFICATEHOLDERS.  The  Company  will  furnish  or  cause to be
furnished to the Trustee within 15 days after each Record Date with respect to a
Scheduled  Payment,  and at such  other  times as the  Trustee  may  request  in
writing,  within 30 days after  receipt by the  Company of any such  request,  a
list, in such form as the Trustee may reasonably  require, of all information in
the  possession  or control of the Company as to the names and  addresses of the
Certificateholders, in each case as of a date not more than 15 days prior to the
time such list is furnished;  PROVIDED,  HOWEVER, that so long as the Trustee is
the sole  Registrar,  no such  list need be  furnished;  and  provided  FURTHER,
HOWEVER,  that  no such  list  need  be  furnished  for so long as a copy of the
Register is being furnished to the Trustee pursuant to Section 7.11.

                  Section 8.02.  PRESERVATION OF INFORMATION;  COMMUNICATIONS TO
CERTIFICATEHOLDERS.  The  Trustee  shall  preserve,  in as  current a form as is
reasonably practicable,  the names and addresses of Certificateholders contained
in the most recent list  furnished to the Trustee as provided in Section 7.11 or
Section   8.01,   as  the  case  may  be,  and  the  names  and   addresses   of
Certificateholders  received by the Trustee in its capacity as Registrar,  if so
acting.  The Trustee may destroy any list furnished to it as provided in Section
7.11 or  Section  8.01,  as the  case  may be,  upon  receipt  of a new  list so
furnished.

                  Section 8.03. REPORTS BY TRUSTEE.  Within 60 days after May 15
of each year commencing with the first full year following the date hereof,  the
Trustee shall transmit to the Certificateholders,  as provided in Section 313(c)
of the Trust  Indenture Act, a brief report dated as of such May 15, if required
by Section 313(a) of the Trust Indenture Act.

     Section 8.04.  REPORTS BY THE GUARANTOR AND COMPANY.  The Guarantor and the
Company each shall:

                  (a) file with the Trustee,  within 30 days after the Guarantor
         or the Company is required to file the same with the SEC, copies of the
         annual reports and of the information,  documents and other reports (or
         copies of such  portions  of any of the  foregoing  as the SEC may from
         time to time by rules and regulations prescribe) which the Guarantor or
         the Company is required to file with the SEC  pursuant to section 13 or
         section 15(d) of the Securities  Exchange Act of 1934, as amended;  or,
         if the  Guarantor or the Company is not  required to file  information,
         documents or reports pursuant to either of such sections,  then to file
         with the Trustee and the SEC, in accordance  with rules and regulations
         prescribed  by  the  SEC,  such  of  the   supplementary  and  periodic
         information,  documents and reports  which may be required  pursuant to
         section 13 of the  Securities  Exchange  Act of 1934,  as  amended,  in
         respect of a security  listed and  registered on a national  securities
         exchange as may be prescribed in such rules and regulations;

                  (b) file with the Trustee and the SEC, in accordance  with the
         rules  and   regulations   prescribed  by  the  SEC,  such   additional
         information,  documents  and reports with respect to  compliance by the
         Guarantor  and the Company  with the  conditions  and  covenants of the
         Guarantor  and the Company  provided for in this  Agreement,  as may be
         required  by such  rules  and  regulations,  including,  in the case of
         annual reports, if required by such rules and regulations, certificates
         or  opinions  of  independent  public  accountants,  conforming  to the
         requirements of Section 1.02;

                  (c) transmit to all  Certificateholders,  in the manner and to
         the extent  provided in Section 313(c) of the Trust Indenture Act, such
         summaries  of any  information,  documents  and reports  required to be
         filed by the Guarantor and the Company  pursuant to subsections (a) and
         (b) of this  Section  8.04 as may be required by rules and  regulations
         prescribed by the SEC;

                  (d) furnish to the Trustee,  not less often than  annually,  a
         brief  certificate  from the  principal  executive  officer,  principal
         financial  officer  or  principal  accounting  officer as to his or her
         knowledge of the  Guarantor's  and the  Company's  compliance  with all
         conditions and covenants under this Agreement (it being understood that
         for purposes of this paragraph (d), such compliance shall be determined
         without regard to any period of grace or requirement of notice provided
         under this Agreement); and

                  (e) make available to any Certificateholder, upon request, the
         annual  audited and  quarterly  unaudited  financial  statements of the
         Guarantor which are provided to the Trustee.



                                   ARTICLE IX

                             SUPPLEMENTAL AGREEMENTS

                  Section  9.01.  SUPPLEMENTAL  AGREEMENTS  WITHOUT  CONSENT  OF
CERTIFICATEHOLDERS. Without the consent of the Certificateholders, the Guarantor
and the Company may,  and the Trustee  (subject to Section  9.03) shall,  at any
time  and from  time to time,  enter  into one or more  agreements  supplemental
hereto  or, if  applicable,  to the  Indenture,  the  Lease,  the  Participation
Agreement,  Intercreditor  Agreement,  the Escrow  Agreement,  the Note Purchase
Agreement,  the Deposit Agreement or the Liquidity Facility in form satisfactory
to the Trustee, for any of the following purposes:

                  (1) to evidence the  succession of another  corporation to the
         Company or the  Guarantor and the  assumption by any such  successor of
         the  covenants of the Company or the Guarantor  contained  herein or in
         each of the other  related  documents to which Company or the Guarantor
         is a party; or

                  (2) to add to the  covenants  of the  Guarantor or the Company
         for the benefit of the Certificateholders, or to surrender any right or
         power in this Agreement, the Note Purchase Agreement, the Intercreditor
         Agreement or any Liquidity Facility conferred upon the Guarantor or the
         Company; or

                  (3) to correct or supplement any provision in this  Agreement,
         the Intercreditor  Agreement,  the Escrow Agreement,  the Note Purchase
         Agreement, the Deposit Agreement or the Liquidity Facility which may be
         defective or inconsistent with any other provision herein or therein or
         to modify any other  provisions  with  respect to matters or  questions
         arising under this Agreement,  the Intercreditor  Agreement, the Escrow
         Agreement,  the Note Purchase  Agreement,  the Deposit Agreement or the
         Liquidity  Facility,  provided that any such action shall not adversely
         affect  the  interests  of  the  Certificateholders;  or  to  cure  any
         ambiguity or correct any mistake in such  documents,  or as provided in
         the  Intercreditor  Agreement,  to  give  effect  to or  provide  for a
         Replacement   Liquidity  Facility  (as  defined  in  the  Intercreditor
         Agreement); or

                  (4) to comply with any  requirement of the SEC, any applicable
         law, rules or regulations of any exchange or quotation  system on which
         the Certificates are listed, or any regulatory body; or

                  (5) to  modify,  eliminate  or add to the  provisions  of this
         Agreement  to such  extent  as  shall  be  necessary  to  continue  the
         qualification of this Agreement (including any supplemental  agreement)
         under the Trust  Indenture  Act, or under any similar  Federal  statute
         hereafter  enacted,  and to add to this Agreement such other provisions
         as may be expressly  permitted by the Trust  Indenture Act,  excluding,
         however,  the provisions  referred to in Section 316(a)(2) of the Trust
         Indenture Act as in effect at the date as of which this  instrument was
         executed or any corresponding  provision in any similar Federal statute
         hereafter enacted; or

                  (6) to evidence and provide for the  acceptance of appointment
         under this  Agreement by the Trustee of a successor  Trustee and to add
         to or  change  any of the  provisions  of this  Agreement  as  shall be
         necessary to provide for or facilitate the administration of the Trust,
         pursuant to the requirements of Section 7.09; or

                  (7) if with respect to any Owned  Aircraft the Company  issues
         "class D" pass through certificates, to modify, eliminate or add to the
         provisions of this Agreement to the extent necessary to provide for the
         subordination  of such  "class  D"  pass  through  certificates  to the
         Certificates;

PROVIDED  that no such action  described in this  Section 9.01 shall  materially
adversely affect the interests of the Certificateholders.

                  Section  9.02.   SUPPLEMENTAL   AGREEMENTS   WITH  CONSENT  OF
CERTIFICATEHOLDERS.   With  the  consent  of  the   Certificateholders   holding
Certificates evidencing Fractional Undivided Interests aggregating not less than
a majority in interest of the Trust, by Act of said Certificateholders delivered
to the Guarantor, the Company and the Trustee, the Guarantor and the Company may
(with the consent of the Owner  Trustees,  if any,  which  consent  shall not be
unreasonably  withheld),  and the Trustee (subject to Section 9.03) shall, enter
into an agreement or  agreements  supplemental  hereto for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement,  the Intercreditor  Agreement, the Escrow Agreement, the Note
Purchase  Agreement,  the Deposit  Agreement  or the  Liquidity  Facility to the
extent applicable to such  Certificateholders  or of modifying in any manner the
rights and  obligations of such  Certificateholders  under this  Agreement,  the
Intercreditor  Agreement,  any Liquidity  Facility,  the Escrow  Agreement,  the
Deposit Agreement or the Note Purchase  Agreement;  PROVIDED,  HOWEVER,  that no
such supplemental  agreement shall, without the consent of the Certificateholder
of each Outstanding Certificate affected thereby:

     (1) reduce in any manner the amount of, or delay the timing of, any receipt
by the Trustee (or, with respect to the  Deposits,  the  Certificateholders)  of
payments on the Equipment Notes held in the Trust or under the Deposit Agreement
or  distributions  that are  required to be made herein on any  Certificate,  or
change  any date of payment  of any  Certificate  or change the place of payment
where, or the coin or currency in which,  any Certificate is payable,  or impair
the  right  to  institute  suit  for the  enforcement  of any  such  payment  or
distribution on or after the Regular  Distribution Date or Special  Distribution
Date applicable thereto; or

     (2) permit the  disposition  of any  Equipment  Note  included in the Trust
Property  except as  permitted  by this  Agreement,  or  otherwise  deprive such
Certificateholder  of the benefit of the ownership of the Equipment Notes in the
Trust; or

     (3) alter the  priority of  distributions  specified  in the  Intercreditor
Agreement; or

     (4) modify any of the provisions of this Section or Section 6.05, except to
increase any such percentage or to provide that certain other provisions of this
Agreement   cannot  be   modified   or  waived   without   the  consent  of  the
Certificateholder of each Certificate affected thereby; or

     (5)  adversely  affect  the  status of any Trust as a grantor  trust  under
Subpart E, Part I of  Subchapter  J of Chapter 1 of  Subtitle A of the  Internal
Revenue Code of 1986, as amended, for U.S. federal income tax purposes.

                  It shall not be  necessary  for any Act of  Certificateholders
under this Section to approve the particular  form of any proposed  supplemental
agreement  but it shall be  sufficient  if such Act shall  approve the substance
thereof.

                  Section 9.03. DOCUMENTS AFFECTING IMMUNITY OR INDEMNITY. If in
the opinion of the Trustee any  document  required to be executed by it pursuant
to the terms of Section 9.01 or 9.02 affects any interest, right, duty, immunity
or indemnity in favor of the Trustee  under this  Agreement,  the Trustee may in
its discretion decline to execute such document.

                  Section  9.04.  EXECUTION  OF  SUPPLEMENTAL   AGREEMENTS.   In
executing,  or accepting  the  additional  trusts  created by, any  supplemental
agreement  permitted by this Article or the  modifications  thereby of the trust
created by this Agreement,  the Trustee shall be entitled to receive,  and shall
be fully  protected in relying upon,  written advice of counsel or an Opinion of
Counsel stating that the execution of such supplemental  agreement is authorized
or permitted by this Agreement.

                  Section  9.05.  EFFECT OF  SUPPLEMENTAL  AGREEMENTS.  Upon the
execution of any supplemental agreement under this Article, this Agreement shall
be modified in accordance therewith,  and such supplemental agreement shall form
a  part  of  this  Agreement  for  all  purposes;  and  every  Certificateholder
theretofore or thereafter  authenticated and delivered  hereunder shall be bound
thereby.

                  Section  9.06.  CONFORMITY  WITH TRUST  INDENTURE  ACT.  Every
supplemental  agreement  executed  pursuant to this Article shall conform to the
requirements of the Trust Indenture Act as then in effect.

                  Section  9.07.   REFERENCE  IN  CERTIFICATES  TO  SUPPLEMENTAL
AGREEMENTS.  Certificates authenticated and delivered after the execution of any
supplemental  agreement  pursuant  to this  Article  may bear a notation in form
approved  by the  Trustee as to any  matter  provided  for in such  supplemental
agreement;  and, in such case,  suitable  notation may be made upon  Outstanding
Certificates after proper presentation and demand.



                                    ARTICLE X

                   AMENDMENTS TO INDENTURES AND NOTE DOCUMENTS

                  Section 10.01.  AMENDMENTS  AND  SUPPLEMENTS TO INDENTURES AND
OTHER NOTE  DOCUMENTS.  In the event that the Trustee,  as holder (or beneficial
owner through the  Subordination  Agent) of any Equipment  Note in trust for the
benefit  of  the   Certificateholders   or  as   Controlling   Party  under  the
Intercreditor   Agreement,   receives   (directly  or  indirectly   through  the
Subordination  Agent) a request  for a consent to any  amendment,  modification,
waiver or supplement under any Indenture, any other Note Document, any Equipment
Note,  the Note Purchase  Agreement or any other related  document,  the Trustee
shall forthwith send a notice of such proposed amendment,  modification,  waiver
or  supplement  to each  Certificateholder  registered on the Register as of the
date of such notice.  The Trustee  shall request from the  Certificateholders  a
Direction as to (a) whether or not to take or refrain from taking (or direct the
Subordination Agent to take or refrain from taking) any action which a holder of
such  Equipment  Note has the  option to direct,  (b)  whether or not to give or
execute  (or direct the  Subordination  Agent to give or execute)  any  waivers,
consents, amendments, modifications or supplements as a holder of such Equipment
Note or a  Controlling  Party and (c) how to vote (or direct  the  Subordination
Agent to vote) any  Equipment  Note if a vote has been  called for with  respect
thereto. Provided such a request for Certificateholder Direction shall have been
made,  in directing  any action or casting any vote or giving any consent as the
holder of any Equipment Note (or in directing the Subordination  Agent in any of
the foregoing),  (i) other than as Controlling Party, the Trustee shall vote for
or give  consent to any such action with respect to such  Equipment  Note in the
same  proportion as that of (A) the aggregate  face amounts of all  Certificates
actually  voted  in  favor  of or for  giving  consent  to such  action  by such
Direction  of  Certificateholders  to  (B)  the  aggregate  face  amount  of all
Outstanding  Certificates and (ii) as Controlling  Party, the Trustee shall vote
as  directed  in  such  Certificateholder  Direction  by the  Certificateholders
evidencing a Fractional  Undivided Interest aggregating not less than a majority
in interest in the Trust. For purposes of the immediately  preceding sentence, a
Certificate  shall have been "actually  voted" if the Holder of such Certificate
has delivered to the Trustee an instrument  evidencing such Holder's  consent to
such Direction prior to two Business Days before the Trustee directs such action
or casts such vote or gives such consent.  Notwithstanding  the  foregoing,  but
subject to Section 6.04 and the Intercreditor Agreement, the Trustee may, in its
own discretion  and at its own  direction,  consent and notify the relevant Loan
Trustee of such consent (or direct the Subordination Agent to consent and notify
the Loan  Trustee of such  consent) to any  amendment,  modification,  waiver or
supplement under the relevant Indenture,  any other Note Document, any Equipment
Note, the Note Purchase Agreement or any other related document,  if an Event of
Default  hereunder shall have occurred and be continuing,  or if such amendment,
modification,  waiver or supplement  will not  materially  adversely  affect the
interests of the Certificateholders.



                                   ARTICLE XI

                              TERMINATION OF TRUSTS

                  Section  11.01.  TERMINATION  OF  THE  TRUST.  The  respective
obligations and  responsibilities of the Company,  the Guarantor and the Trustee
with respect to the Trust shall  terminate upon the  distribution to all Holders
of the Certificates and the Trustee of all amounts required to be distributed to
them pursuant to this Agreement and the disposition of all property held as part
of the  Trust  Property;  PROVIDED,  HOWEVER,  that in no event  shall the Trust
continue  beyond one hundred ten (110) years  following the date of the earliest
execution of this Agreement.

                  Notice of any termination, specifying the Regular Distribution
Date  (or  Special  Distribution  Date,  as the  case  may be)  upon  which  the
Certificateholders  may surrender their  Certificates to the Trustee for payment
of the final  distribution  and  cancellation,  shall be mailed  promptly by the
Trustee to  Certificateholders  not earlier than the 60th day and not later than
the 20th day next preceding such final  distribution  specifying (A) the Regular
Distribution Date (or Special  Distribution Date, as the case may be) upon which
the proposed final payment of the  Certificates  will be made upon  presentation
and  surrender of  Certificates  at the office or agency of the Trustee  therein
specified,  (B) the amount of any such proposed final payment,  and (C) that the
Record Date otherwise  applicable to such Regular  Distribution Date (or Special
Distribution  Date, as the case may be) is not  applicable,  payments being made
only upon presentation and surrender of the Certificates at the office or agency
of the Trustee  therein  specified.  The  Trustee  shall give such notice to the
Registrar  at  the  time  such  notice  is  given  to  Certificateholders.  Upon
presentation  and surrender of the  Certificates,  the Trustee shall cause to be
distributed  to   Certificateholders   amounts  distributable  on  such  Regular
Distribution Date (or Special Distribution Date, as the case may be) pursuant to
Section 4.02.

                  In the  event  that all of the  Certificateholders  shall  not
surrender their  Certificates for cancellation  within six months after the date
specified in the above-mentioned written notice, the Trustee shall give a second
written  notice  to  the  remaining   Certificateholders   to  surrender   their
Certificates for cancellation  and receive the final  distribution  with respect
thereto.  No  additional  interest  shall accrue on the  Certificates  after the
Regular Distribution Date (or Special Distribution Date, as the case may be). In
the event that any money held by the Trustee for the payment of distributions on
the  Certificates  shall remain  unclaimed for two years (or such lesser time as
the Trustee  shall be satisfied,  after sixty days' notice from the Company,  is
one month prior to the escheat period  provided under  applicable law) after the
final distribution date with respect thereto, the Trustee shall pay to each Loan
Trustee the appropriate  amount of money relating to such Loan Trustee and shall
give written notice thereof to the related Owner Trustees and the Company.



                                   ARTICLE XII

                            MISCELLANEOUS PROVISIONS

                  Section 12.01. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS. The
death or incapacity of any Certificateholder shall not operate to terminate this
Agreement,   or  the  Trust,   nor  entitle   such   Certificateholder's   legal
representatives  or  heirs  to claim an  accounting  or to take  any  action  or
commence any proceeding in any court for a partition or winding up of the Trust,
nor otherwise  affect the rights,  obligations,  and  liabilities of the parties
hereto or any of them.

                  Section 12.02. LIABILITIES OF CERTIFICATEHOLDERS.  Neither the
existence  of the Trust nor any  provision  in this  Agreement is intended to or
shall limit the liability the  Certificateholders  would  otherwise incur if the
Certificateholders   owned  Trust   Property  as  co-owners,   or  incurred  any
obligations of the Trust, directly rather than through the Trust.

                  Section  12.03.  CERTIFICATES  NONASSESSABLE  AND FULLY  PAID.
Subject to Section 12.02,  Certificateholders shall not be personally liable for
obligations of the Trust, the Fractional Undivided Interests  represented by the
Certificates  shall be nonassessable  for any losses or expenses of the Trust or
for any reason whatsoever,  and Certificates upon authentication  thereof by the
Trustee  pursuant  to  Section  3.03 are and  shall be  deemed  fully  paid.  No
Certificateholder  shall have any right (except as expressly provided herein) to
vote or in any manner  otherwise  control the  operation  and  management of the
Trust Property,  the Trust, or the obligations of the parties hereto,  nor shall
anything set forth  herein,  or contained in the terms of the  Certificates,  be
construed  so as to  constitute  the  Certificateholders  from  time  to time as
partners or members of an association.

                  Section 12.04. [Intentionally omitted].

                  Section 12.05. NOTICES.
                                 -------

                  (a) Unless otherwise specifically provided herein, all notices
required under the terms and  provisions of this  Agreement  shall be in English
and in writing,  and any such notice may be given by United States mail, courier
service, telegram, telemessage, telecopy, telefax, cable or facsimile (confirmed
by  telephone  or in  writing  in the case of notice by  telegram,  telemessage,
telecopy,  telefax,  cable  or  facsimile)  or  any  other  customary  means  of
communication,  and any such notice shall be  effective  when  delivered,  or if
mailed,  three days after deposit in the United States mail with proper  postage
for ordinary mail prepaid, if to the Company or the Guarantor, to:

         American Trans Air, Inc.
         7337 West Washington Street
         Indianapolis International Airport
         Indianapolis, Indiana 06927

         ATTENTION:        Executive Vice President and Chief Financial Officer
         ----------
         FACSIMILE:     (317) 240-7087
         ----------

         if to the Trustee, to:
         Wilmington Trust Company
         Rodney Square North
         1100 North Market Street
         Wilmington, Delaware 19890

         ATTENTION:        Corporate Trust Administration
         ----------
         FACSIMILE:        (302) 651-8882
         ----------

                  (b) The Company,  the  Guarantor or the Trustee,  by notice to
the other,  may  designate  additional  or different  addresses  for  subsequent
notices or communications.

                  (c) Any notice or communication to Certificateholders shall be
mailed by first-class mail to the addresses for Certificateholders  shown on the
Register kept by the Registrar and to addresses filed with the Trustee.  Failure
so to  mail  a  notice  or  communication  or  any  defect  in  such  notice  or
communication   shall  not  affect  its   sufficiency   with  respect  to  other
Certificateholders.

                  (d) If a notice  or  communication  is  mailed  in the  manner
provided above within the time prescribed,  it is conclusively  presumed to have
been duly given, whether or not the addressee receives it.

                  (e) If the  Company  mails a notice  or  communication  to the
Certificateholders, it shall mail a copy to the Trustee and to each Paying Agent
at the same time.

                  (f)  Notwithstanding  the  foregoing,  all  communications  or
notices  to the  Trustee  shall be deemed to be given  only when  received  by a
Responsible Officer of the Trustee.

                  (g) The Trustee shall promptly furnish the Company with a copy
of any demand, notice or written communication received by the Trustee hereunder
from any Certificateholder, Owner Trustee or Loan Trustee.

                  Section   12.06.   GOVERNING  LAW.  THIS  AGREEMENT  HAS  BEEN
DELIVERED IN THE STATE OF NEW YORK AND THIS AGREEMENT AND THE CERTIFICATES SHALL
BE GOVERNED BY AND  CONSTRUED  IN  ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO CONFLICT-OF-LAW PRINCIPLES.

                  Section 12.07.  SEVERABILITY OF PROVISIONS. If any one or more
of the covenants,  agreements,  provisions,  or terms of this Agreement shall be
for any  reason  whatsoever  held  invalid,  then  such  covenants,  agreements,
provisions,  or terms shall be deemed  severable  from the remaining  covenants,
agreements,  provisions,  or terms of this  Agreement and shall in no way affect
the validity or  enforceability of the other provisions of this Agreement or the
Trust or of the Certificates or the rights of the Certificateholders thereof.

                  Section 12.08. [Intentionally omitted].

                  Section 12.09.  EFFECT OF HEADINGS AND TABLE OF CONTENTS.  The
Article  and  Section  headings  herein  and  the  Table  of  Contents  are  for
convenience only and shall not affect the construction hereof.

                  Section  12.10.   SUCCESSORS   AND  ASSIGNS.   All  covenants,
agreements, representations and warranties in this Agreement by the Trustee, the
Guarantor and the Company shall bind and, to the extent permitted hereby,  shall
inure to the benefit of and be  enforceable by their  respective  successors and
assigns, whether so expressed or not.

                  Section  12.11.   BENEFITS  OF  AGREEMENT.   Nothing  in  this
Agreement or in the Certificates,  express or implied, shall give to any Person,
other  than  the  parties  hereto  and  their  successors  hereunder,   and  the
Certificateholders, any benefit or any legal or equitable right, remedy or claim
under this Agreement.

                  Section 12.12.  LEGAL HOLIDAYS.  In any case where any Regular
Distribution Date or Special Distribution Date relating to any Certificate shall
not be a  Business  Day,  then  (notwithstanding  any  other  provision  of this
Agreement)  payment  need not be made on such date,  but may be made on the next
succeeding  Business  Day with  the same  force  and  effect  as if made on such
Regular  Distribution Date or Special  Distribution  Date, and no interest shall
accrue during the intervening period.

                  Section 12.13.  COUNTERPARTS.  For the purpose of facilitating
the execution of this  Agreement and for other  purposes,  this Agreement may be
executed   simultaneously   in  any  number  of  counterparts,   each  of  which
counterparts  shall be deemed to be an original,  and all of which  counterparts
shall constitute but one and the same instrument.

                  Section 12.14.  COMMUNICATION BY CERTIFICATEHOLDERS WITH OTHER
CERTIFICATEHOLDERS.    Certificateholders    may    communicate    with    other
Certificateholders  with  respect to their  rights  under this  Agreement or the
Certificates  pursuant  to  Section  3.12(b)  of the Trust  Indenture  Act.  The
Company, the Guarantor,  the Trustee and any and all other persons benefitted by
this Agreement shall have the protection afforded by Section 312(c) of the Trust
Indenture Act.

                  Section 12.15. INTENTION OF PARTIES. The parties hereto intend
that the Trust be classified  for U.S.  federal income tax purposes as a grantor
trust under  Subpart E, Part I of  Subchapter J of the Internal  Revenue Code of
1986, as amended,  and not as a trust or association taxable as a corporation or
as a partnership.  Each Certificateholder,  by its acceptance of its Certificate
or a beneficial  interest therein,  agrees to treat the Trust as a grantor trust
for all U.S.  federal,  state and local income tax purposes.  The powers granted
and obligations  undertaken  pursuant to this Agreement shall be so construed so
as to further such intent.


<PAGE>


                  IN WITNESS WHEREOF, the Guarantor, the Company and the Trustee
have caused this Agreement to be duly executed by their respective officers, all
as of the day and year first above written.


                                        AMTRAN, INC.

                                        By /s/ Kenneth K. Wolff

                                        -----------------------------
                                        Title:  Executive Vice President and
                                                Chief Financial Officer


                                        AMERICAN TRANS AIR, INC.

   /                                    By /s/ Kenneth K. Wolff

                                        -----------------------------
                                        Title:  Chief Financial Officer


                                        WILMINGTON TRUST COMPANY, as Trustee
                                        By /s/ Patricia A. Evans

                                        -----------------------------
                                        Title: Financial Services Officer

<PAGE>









                                    EXHIBIT A


                FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
                     WITH TRANSFERS PURSUANT TO REGULATION S


                                                                         [date]



Wilmington Trust Company,
 not in its individual
 capacity but solely as Trustee
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention:  Corporate Trust Administration


     Re:  American Trans Air 1997-1A-S  Pass Through Trust (the "Trust"),  ____%
American   Trans  Air  Pass   Through   Certificates   Series   1997-1A-S   (the
"CERTIFICATES")
--------------------------------------------------------------------------------

Sirs:

         In connection with our proposed sale of $ Fractional Undivided Interest
of the Certificates, we confirm that such sale has been effected pursuant to and
in accordance  with  Regulation S under the  Securities Act of 1933, as amended,
and, accordingly, we represent that:

     (1) the offer of the  Certificates  was not made to a person in the  United
States;

     (2) either (a) at the time the buy order was originated, the transferee was
outside the United States or we and any person  acting on our behalf  reasonably
believed  that  the  transferee  was  outside  the  United  States  or  (b)  the
transaction  was  executed  in, on or through  the  facilities  of a  designated
off-shore  securities  market and neither we nor any person acting on our behalf
knows  that the  transaction  has been  pre-arranged  with a buyer in the United
States;

     (3) no  directed  selling  efforts  have been made in the United  States in
contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S,
as applicable; and

     (4)  the  transaction  is not  part  of a  plan  or  scheme  to  evade  the
registration requirements of the Securities Act.

                  In addition,  if the sale is made during a  restricted  period
and the  provisions  of Rule  903(c)(3) or Rule  904(c)(1)  of  Regulation S are
applicable  thereto,  we confirm that such sale has been made in accordance with
the applicable  provisions of Rule 903(c)(3) or Rule 904(c)(1),  as the case may
be.

                  You and  American  Trans Air,  Inc.  are entitled to rely upon
this  letter and are  irrevocably  authorized  to produce  this letter or a copy
hereof to any interested  party in any  administrative  or legal  proceedings or
official inquiry with respect to the matters covered hereby.  Terms used in this
certificate have the meanings set forth in Regulation S.

                                                     Very truly yours,

                                                     [Name of Transferor]



By:
   ------
                                                     Authorized Signature



<PAGE>









                                    EXHIBIT B

                            FORM OF CERTIFICATE TO BE
                          DELIVERED IN CONNECTION WITH
                    TRANSFERS TO NON-QIB ACCREDITED INVESTORS

                                                                    [date]

Wilmington Trust Company,
 not in its individual capacity
 but solely as Trustee
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention:  Corporate Trust Administration


     Re: American Trans Air 1997-1A-S  Pass-Through  Trust (the "Trust"),  ____%
American   Trans  Air  Pass   Through   Certificates   Series   1997-1A-S   (THE
"CERTIFICATES")
---------------------------------------------------------------------------

Dear Sirs:

     In connection with our proposed purchase of $ aggregate principal amount of
the Certificates, we confirm that:

                  1.  We  understand   that  any  subsequent   transfer  of  the
         Certificates  is subject to certain  restrictions  and  conditions  set
         forth in the Pass Through Trust Agreement dated as of December __, 1997
         relating to the Certificates  (the "Pass Through Trust  Agreement") and
         the  undersigned  agrees to be bound by, and not to  resell,  pledge or
         otherwise  transfer the  Certificates  except in compliance  with, such
         restrictions  and conditions and the Securities Act of 1933, as amended
         (the "Securities Act").

                  2.  We  are  purchasing   Certificates   having  an  aggregate
         principal  amount of not less than  $100,000  and each account (if any)
         for which we are  purchasing  Certificates  is purchasing  Certificates
         having an aggregate principal amount of not less than $100,000.

                  3.  We  understand  that  the   Certificates   have  not  been
         registered  under the Securities Act, and that the Certificates may not
         be offered or sold except as permitted in the  following  sentence.  We
         agree, on our own behalf and on behalf of any accounts for which we are
         acting as hereinafter  stated,  that if we should sell any Certificate,
         we  will  do so  only  (A) in  accordance  with  Rule  144A  under  the
         Securities  Act  to  a  "qualified  institutional  buyer"  (as  defined
         therein),  (B) to an  institutional  "accredited  investor" (as defined
         below)  that,  prior to such  transfer,  furnishes  to you and American
         Trans Air,  Inc.,  a signed  letter  substantially  in the form of this
         letter,  (C) outside the United States in  accordance  with Rule 904 of
         Regulation S under the  Securities  Act, (D) pursuant to the  exemption
         from registration provided by Rule 144 under the Securities Act, or (E)
         pursuant to an effective  registration  statement  under the Securities
         Act, and we further  agree to provide to any person  purchasing  any of
         the Certificates  from us a notice advising such purchaser that resales
         of the Notes are  restricted as stated  herein.  We further  understand
         that  the  Certificates  purchased  by us  will  bear a  legend  to the
         foregoing effect.

                  4.  We  understand   that,  on  any  proposed  resale  of  any
         Certificates,  we will be required to furnish to you and American Trans
         Air, Inc. such certifications,  legal opinions and other information as
         you and American Trans Air, Inc. may reasonably require to confirm that
         the proposed sale complies with the foregoing restrictions.  We further
         understand that the Certificates  purchased by us will bear a legend to
         the foregoing effect.

                  5. We are an institutional  "accredited  investor" (as defined
         in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
         Act) and have such  knowledge and  experience in financial and business
         matters  as to be  capable  of  evaluating  the merits and risks of our
         investment in the Certificates and we and any accounts for which we are
         acting  are  each  able  to  bear  the  economic  risk  of  our  or its
         investment.

                  6. We are acquiring the  Certificates  purchased by us for our
         own  account  or  for  one  or  more  accounts  (each  of  which  is an
         institutional  "accredited  investor")  as to each of which we exercise
         sole investment discretion.

                  You and  American  Trans Air,  Inc.  are entitled to rely upon
this  letter and are  irrevocably  authorized  to produce  this letter or a copy
hereof to any interested  party in any  administrative  or legal  proceedings or
official inquiry with respect to the matters covered hereby.

                                                     Very truly yours,

                                                     [Name of Transferee]



By:
   ------
                                                      Authorized Signature


<PAGE>









                                    EXHIBIT C

                   FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
                American Trans Air 1997-1[__] Pass Through Trust


                  ASSIGNMENT AND ASSUMPTION AGREEMENT, dated ____________,  199_
(the  "AGREEMENT"),   between  Wilmington  Trust  Company,  a  Delaware  banking
corporation ("WTC"), not in its individual capacity except as expressly provided
herein, but solely as trustee under the Pass Through Trust Agreement dated as of
December __, 1997 (as amended,  modified or otherwise  supplemented from time to
time,  the "PASS THROUGH TRUST  AGREEMENT") in respect of the American Trans Air
1997-1A-S Pass Through Trust (the "ASSIGNOR"),  and Wilmington Trust Company,  a
Delaware banking corporation, not in its individual capacity except as expressly
provided  herein,  but solely as trustee under the Pass Through Trust  Agreement
dated as of  December  __,  1997 (the "NEW PASS  THROUGH  TRUST  AGREEMENT")  in
respect of the American Trans Air 1997-1A-S Pass Through Trust (the "ASSIGNEE").

                                               W I T N E S S E T H:
                                               - - - - - - - - - -

                  WHEREAS,  the  parties  hereto  desire  to  effect on the date
hereof (the "TRANSFER DATE") (a) the transfer by the Assignor to the Assignee of
all of the right,  title and interest of the Assignor in, under and with respect
to, among other things,  the Trust Property and each of the documents  listed in
Schedule I hereto (the  "SCHEDULED  DOCUMENTS")  and (b) the  assumption  by the
Assignee of the  obligations  of the Assignor (i) under the Scheduled  Documents
and (ii) in respect of the  Certificates  issued  under the Pass  Through  Trust
Agreement; and

                  WHEREAS,  the  Scheduled  Documents  permit such transfer upon
satisfaction of certain  conditions  heretofore or  concurrently  herewith being
complied with;

                  NOW,  THEREFORE,  in  consideration of the premises and of the
mutual covenants and agreements herein  contained,  the parties hereto do hereby
agree as follows  (capitalized  terms used herein without  definition having the
meaning ascribed thereto in the Pass Through Trust Agreement):

     1. ASSIGNMENT.  The Assignor does hereby sell, assign, convey, transfer and
set over unto the Assignee as of the Transfer Date all of its present and future
right,  title and interest in, under and with respect to the Trust  Property and
the  Scheduled  Documents  and  each  other  contract,  agreement,  document  or
instrument relating to the Trust Property or the Scheduled Documents (such other
contracts,  agreements,  documents or  instruments,  together with the Scheduled
Documents,  to be referred to as the  "ASSIGNED  DOCUMENTS"),  and any  proceeds
therefrom,  together with all documents and  instruments  evidencing any of such
right, title and interest.

     2. ASSUMPTION.  The Assignee hereby assumes for the benefit of the Assignor
and  each of the  parties  listed  in  Schedule  II  hereto  (collectively,  the
"BENEFICIARIES")  all of the duties and  obligations  of the Assignor,  whenever
accrued, pursuant to the Assigned Documents and hereby confirms that it shall be
deemed a party to each of the  Assigned  Documents  to which the  Assignor  is a
party and shall be bound by all the terms thereof  (including the agreements and
obligations  of the  Assignor  set forth  therein)  as if  therein  named as the
Assignor.  Further,  the Assignee hereby assumes for the benefit of the Assignor
and the  Beneficiaries  all of the duties and  obligations of the Assignor under
the  Outstanding   Certificates   and  hereby  confirms  that  the  Certificates
representing  Fractional  Undivided  Interests  under  the  Pass  Through  Trust
Agreement  shall be deemed for all purposes of the Pass Through Trust  Agreement
and the New Pass Through Trust  Agreement to be  certificates  representing  the
same fractional  undivided  interests under the New Pass Through Trust Agreement
equal to their  respective  beneficial  interests in the trust created under the
Pass Through Trust Agreement.

     3. EFFECTIVENESS.  This Agreement shall be effective upon the execution and
delivery hereof by the parties hereto, and each Certificateholder,
by its acceptance of its Certificate or a beneficial interest therein, agrees to
be bound by the terms of this Agreement.

     4. PAYMENTS.  The Assignor  hereby  covenants and agrees to pay over to the
Assignee,  if and  when  received  following  the  Transfer  Date,  any  amounts
(including  any sums payable as interest in respect  thereof) paid to or for the
benefit of the Assignor that, under Section 1 hereof, belong to the Assignee.

                  5. FURTHER  ASSURANCES.  The Assignor  shall,  at any time and
from time to time,  upon the request of the Assignee,  promptly and duly execute
and deliver any and all such further  instruments  and  documents  and take such
further  action as the  Assignee  may  reasonably  request  to  obtain  the full
benefits  of this  Agreement  and of the right and powers  herein  granted.  The
Assignor agrees to deliver the Global Certificates,  and all Trust Property,  if
any, then in the physical possession of the Assignor, to the Assignee.

     6. REPRESENTATIONS AND WARRANTIES. (a) The Assignee represents and warrants
to the  Assignor  and each of the  Beneficiaries
that:

                  (i) it has all  requisite  power and authority and legal right
         to enter into and carry out the transactions contemplated hereby and to
         carry out and perform the  obligations  of the "Pass  Through  Trustee"
         under the Assigned Documents;

             (ii)  on  and  as of  the  date  hereof,  the  representations  and
         warranties  of the  Assignee  set forth in Section 7.14 of the New Pass
         Through Trust Agreement are true and correct.

     (b) The Assignor represents and warrants to the Assignee that:

                  (i) it is  duly  incorporated,  validly  existing  and in good
         standing under the laws of the State of Delaware and has the full trust
         power,  authority  and  legal  right  under  the  laws of the  State of
         Delaware and the United  States  pertaining  to its trust and fiduciary
         powers to execute and deliver this Agreement;

             (ii) the  execution  and delivery by it of this  Agreement  and the
         performance  by  it  of  its  obligations   hereunder  have  been  duly
         authorized  by it 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 it enforceable  against it in accordance with its terms,
         except as the same may be limited by applicable bankruptcy, insolvency,
         reorganization,  moratorium  or similar  laws  affecting  the rights of
         creditors  generally  and by  general  principles  of  equity,  whether
         considered in a proceeding at law or in equity.

     7.  GOVERNING  LAW.  THIS  AGREEMENT  SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE  WITH  THE  LAWS  OF THE  STATE  OF NEW  YORK  INCLUDING  MATTERS  OF
CONSTRUCTION,  VALIDITY AND PERFORMANCE,  WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAWS.

     8.  COUNTERPARTS.   This  Agreement  may  be  executed  in  any  number  of
counterparts,  all of which together  shall  constitute  a single
instrument.  It shall not be necessary  that any  counterpart  be signed by both
parties so long as each party shall sign at least one counterpart.

     9. THIRD PARTY  BENEFICIARIES.  The Assignee hereby agrees, for the benefit
of  the  Beneficiaries,  that  its  representations,  warranties  and  covenants
contained  herein are also  intended to be for the benefit of each  Beneficiary,
and each  Beneficiary  shall be deemed to be an express third party  beneficiary
with  respect  thereto,  entitled  to enforce  directly  and in its own name any
rights or claims it may have against such party as such beneficiary.


<PAGE>



                  IN  WITNESS  WHEREOF,   the  parties  hereto,   through  their
respective   officers  thereunto  duly  authorized,   have  duly  executed  this
Assignment as of the day and year first above written.

                                    ASSIGNOR:

                                                  WILMINGTON  TRUST  COMPANY,
                                                  not   in   its   individual
                                                  capacity      except     as
                                                  expressly  provided herein,
                                                  but solely as trustee under
                                                  the  Pass   Through   Trust
                                                  Agreement in respect of the
                                                  American      Trans     Air
                                                  1997-1A-S    Pass   Through
                                                  Trust


                                                  By:___________________________
                                                           Title:

                                    ASSIGNEE:

                                                  WILMINGTON  TRUST  COMPANY,
                                                  not   in   its   individual
                                                  capacity      except     as
                                                  expressly  provided herein,
                                                  but solely as trustee under
                                                  the  Pass   Through   Trust
                                                  Agreement in respect of the
                                                  American      Trans     Air
                                                  1997-1A-S    Pass   Through
                                                  Trust

                                                  By:__________________________
                                                           Title:



<PAGE>







                                   Schedule I

                         Schedule of Assigned Documents

     (1)  Intercreditor  Agreement  dated as of  December  23,  1997  among  the
Trustee, the Other Trustees,  the Liquidity Providers,  the liquidity providers,
if any,  relating to the  Certificates  issued under (and as defined in) each of
the Other Pass Through Trust Agreements and the Subordination Agent.

     (2) Escrow and Paying  Agent  Agreement  (Class A) dated as of December 23,
1997 among the Escrow Agent, the Initial Purchasers,  the Trustee and the Paying
Agent.

     (3) Note  Purchase  Agreement  dated as of  December  23,  1997  among  the
Company, the Trustee, the Other Trustees, the Depositary,  the Escrow Agent, the
Paying Agent and the Subordination Agent.

     (4) Deposit  Agreement  (Class A) dated as of December 23, 1997 between the
Escrow Agent and the Depositary.

     (5)  Each of the  Operative  Documents  (as  defined  in the  Participation
Agreement for each Aircraft) in effect as of the Transfer Date.


<PAGE>










                                   Schedule II

                            Schedule of Beneficiaries

Wilmington  Trust  Company,  not  in  its  individual  capacity  but  solely  as
         Subordination Agent.

Wilmington Trust Company, not in its individual capacity but
         solely as Paying Agent

ING Bank, as Liquidity Provider

Amtran, Inc.

American Trans Air, Inc.

Salomon Brothers Inc, as Initial Purchaser

Furman Selz LLC, as Initial Purchaser

First Security Bank, National Association, as Escrow Agent

Each of the other parties to the Assigned Documents





<PAGE>


                                    EXHIBIT D


                FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
                             WITH TRANSFERS TO QIBs


                                                                 [date]



Wilmington Trust Company,
 not in its individual
 capacity but solely as Trustee
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention:  Corporate Trust Administration


     Re:  American Trans Air 1997-1A-S  Pass Through Trust (the "Trust"),  ____%
American   Trans  Air  Pass   Through   Certificates   Series   1997-1A-S   (the
"CERTIFICATES")
--------------------------------------------------------------------------------

Sirs:

         In connection with our proposed sale of $ Fractional Undivided Interest
of the Certificates,  we confirm that without utilizing any general solicitation
or  general   advertising  that  such  Certificates  are  being  transferred  in
compliance  with the exemption  from  registration  under the  Securities Act of
1933, as amended, provided by Rule 144A thereunder.


Date:                                                       [NAME OF TRANSFEROR
      ------------                                           -------------------
                                                    NOTE:  The  signature  must
                                                     correspond with the name as
                                                     written  upon  the  face of
                                                     the        within-mentioned
                                                     Certificate     in    every
                                                     particular,         without
                                                     alteration  or  any  change
                                                     whatsoever.

Signature Guarantee:


TO BE COMPLETED BY PURCHASER:

         The  undersigned  represents  and warrants  that it is  purchasing  the
within-mentioned  Certificate  for its own account or an account with respect to
which it exercises sole  investment  discretion and that it and any such account
is a "qualified  institutional  buyer" within the meaning of Rule 144A under the
Securities  Act of 1933,  as amended,  and is aware that the sale to it is being
made in reliance on Rule 144A and has been  advised of the  applicable  transfer
restrictions  relating to the Certificates and acknowledges that it has received
such information regarding the Company as the undersigned has requested pursuant
to Rule 144A or has  determined not to request such  information  and that it is
aware  that  the  transferor  is  relying  upon  the   undersigned's   foregoing
representations  in order to claim the exemption from  registration  provided by
Rule 144A.


Dated:
      -------------
[Name of Transferee]

                               NOTE:    To be executed by an executive officer.