<PAGE>



                                                                   Exhibit 10.1
                                                                 EXECUTION COPY

================================================================================

             FOURTH AMENDED AND RESTATED PURCHASE AND SALE AGREEMENT

                                      among

                      RAYTHEON AIRCRAFT CREDIT CORPORATION,
                                   as Servicer,

                    RAYTHEON AIRCRAFT RECEIVABLES CORPORATION,
                                    as Seller,

                        THE PURCHASERS REFERRED TO HEREIN,

                              BANK OF AMERICA, N.A.,
               as Managing Facility Agent and Documentation Agent,

                               JPMORGAN CHASE BANK,
                                       and
                              BANK OF AMERICA, N.A.,
                           as Co-Administrative Agents,

                           J.P. MORGAN SECURITIES INC.,
                                       and
                         BANC OF AMERICA SECURITIES LLC,
                                 as Co-Arrangers
                                       and
                                Joint Bookrunners,

                           J.P. MORGAN SECURITIES INC.,
                              as Syndication Agent,

                                 CITIBANK, N.A.,
                            CREDIT SUISSE FIRST BOSTON
                                       and
                              FLEET SECURITIES, INC.
                           as Co-Documentation Agents,

                                       and

                   EACH ADMINISTRATIVE AGENT REFERRED TO HEREIN

                            Dated as of March 8, 2002

================================================================================

<PAGE>



                                Table of Contents
<TABLE>
<CAPTION>
                                                                                                           Page

<S>         <C>
SECTION 1.    DEFINITIONS.....................................................................................2
     1.1    Defined Terms.....................................................................................2
     1.2    Other Definitional Provisions....................................................................41

SECTION 2.    AMOUNT AND TERMS OF COMMITMENTS................................................................42
     2.1    Agreement to Purchase and Sell; Special Purpose Purchasers; Initial Utilization
            and Pro Ration...................................................................................42
     2.2    Procedures for Making Purchases..................................................................42
     2.3    Special Settlement Dates.........................................................................43
     2.4    Participated Receivables.........................................................................43
     2.5    Extended Term Receivables........................................................................44
     2.6    Certain Actions Following a Rating Event and a Discount Event....................................45
     2.6A.   Certain Actions Following a Discount Event......................................................47
     2.7    Concentration Limits.............................................................................47
     2.8    Term of Revolving Period.........................................................................49
     2.9    Termination or Reduction of Commitments..........................................................51
     2.10    Defaulted Receivables; Application of Lease Security Deposits...................................52
     2.10A    Delinquent Receivables.........................................................................53
     2.11   Ineligible Receivables...........................................................................54
     2.12   Rebated Receivables..............................................................................55
     2.13   Substitution of Receivables......................................................................55
     2.14   Accounts.........................................................................................58
     2.15   Remittance and Allocation of Collections.........................................................61
     2.16   Distribution and Application of Collections......................................................62
     2.17   Interest and Fees................................................................................64
     2.18   Yield Adjustment.................................................................................65
     2.19   Computations and Payments........................................................................65
     2.20   Pro Rata Treatment...............................................................................66
     2.21   Illegality.......................................................................................67
     2.22   Requirements of Law..............................................................................67
     2.23   Taxes............................................................................................68
     2.24   Reemployment Costs...............................................................................69
     2.25   Seller's Obligations Absolute and Unconditional..................................................69
     2.26   Mitigation Obligations; Replacement of Purchaser.................................................70
     2.27   Designation of Affiliate Receivables and Foreign Receivables.....................................70

SECTION 3.    THE SERVICER AND SERVICING OF PURCHASED RECEIVABLES............................................76
     3.1    Designation of Servicer; Removal.................................................................76
     3.2    Duties of Servicer...............................................................................77
     3.3    Servicer Reports.................................................................................77
     3.4    Servicing Fee....................................................................................78
     3.5    Merger or Consolidation of, or Assumption of the Obligations of, the Servicer....................78
     3.6    Limitation on Liability of the Servicer and Others...............................................79
</TABLE>

<PAGE>

<TABLE>
<S>         <C>
     3.7    Indemnification of the Seller, the Managing Facility Agent, the Administrative Agent, the
            Co-Administrative Agents and each Purchaser......................................................79
     3.8    The Servicer Not to Resign.......................................................................80
     3.9    Access to Certain Documentation and Information Regarding the Contracts..........................80
     3.10    Marking of Records..............................................................................80
     3.11    Additional Covenants of the Servicer............................................................80
              (a)   Contract Files...........................................................................80
                   ---------------
              (b)   Compliance with Law......................................................................81
                   --------------------
              (c)   Preservation of Security Interest........................................................81
                   ----------------------------------
              (d)   Obligations with Respect to Contracts; Modifications.....................................81
                   -----------------------------------------------------
              (e)   No Bankruptcy Petition...................................................................81
                   -----------------------

SECTION 4.    REPRESENTATIONS AND WARRANTIES.................................................................82
     4.1    Representations and Warranties Relating to the Seller............................................82
              (a)   Corporate Existence; Compliance with Law.................................................82
                   -----------------------------------------
              (b)   Corporate Power; Authorization; Enforceable Obligations..................................82
                   --------------------------------------------------------
              (c)   No Legal Bar.............................................................................83
                   -------------
              (d)   No Material Litigation...................................................................83
                   -----------------------
              (e)   No Default...............................................................................83
                   -----------
              (f)   Federal Regulations......................................................................83
                   --------------------
              (g)   ERISA....................................................................................83
                   ------
              (h)   Investment Company Act; Other Regulations................................................84
                   ------------------------------------------
              (i)   Place of Business........................................................................84
                   ------------------
              (j)   Information..............................................................................84
                   ------------
     4.2    Representations and Warranties Relating to the Receivables.......................................84
              (a)   Eligible Receivables.....................................................................84
                   ---------------------
              (b)   Ownership or Perfected First Security Interest...........................................85
                   -----------------------------------------------
              (c)   Assignment...............................................................................85
                   -----------
              (d)   No Material Adverse Change...............................................................85
                   ---------------------------
              (e)   Substituted Receivables..................................................................86
                   ------------------------
              (f)   No Violation.............................................................................86
                   -------------
              (g)   Entitlement to Section 1110 Benefits.....................................................86
                   -------------------------------------
              (h)   Stipulated Aircraft Value................................................................86
                   --------------------------
              (i)   Finance Charge Collections...............................................................86
                   ---------------------------
     4.3    Representations and Warranties Relating to the Servicer..........................................86
              (a)   Corporate Existence; Compliance with Law.................................................87
                   -----------------------------------------
              (b)   Corporate Power; Authorization; Enforceable Obligations..................................87
                   --------------------------------------------------------
              (c)   No Legal Bar.............................................................................87
                   -------------
              (d)   No Material Litigation...................................................................88
                   -----------------------
              (e)   No Default...............................................................................88
                   -----------
              (f)   ERISA....................................................................................88
                   ------
              (g)   Investment Company Act; Other Regulations................................................88
                   ------------------------------------------
              (h)   Place of Business........................................................................88
                   ------------------
              (i)   Information..............................................................................89
                   ------------

SECTION 5.    CONDITIONS PRECEDENT...........................................................................89
     5.1    Conditions to Effectiveness......................................................................89
</TABLE>

                                      -ii-

<PAGE>

<TABLE>
<S>                <C>

              (a)   Purchase and Other Documents.............................................................89
                   -----------------------------
              (b)   Corporate Proceedings and Contracts......................................................89
                   ------------------------------------
              (c)   Corporate Documents; Good Standing Certificates..........................................89
                   ------------------------------------------------
              (d)   Evidence of Incumbency...................................................................90
                   -----------------------
              (e)   Officer's Certificates...................................................................90
                   -----------------------
              (f)   Legal Opinions...........................................................................90
                   ---------------
              (g)   Fees.....................................................................................91
                   -----
              (h)   Amendment to the Intercompany Purchase Agreement.........................................91
                   -------------------------------------------------
     5.2    Conditions to Each Purchase or Substitution......................................................91
              (a)   Representations and Warranties...........................................................91
                   -------------------------------
              (b)   Amortization Event.......................................................................92
                   -------------------
              (c)   Settlement Statement.....................................................................92
                   ---------------------
              (d)   Assignments..............................................................................92
                   ------------
              (e)   Perfection Matters.......................................................................92
                   -------------------
              (f)   Certificates.............................................................................94
                   -------------
              (g)   Marking Records..........................................................................94
                   ----------------
              (h)   L/C Receivables..........................................................................94
                   ----------------
              (i)   Refinanced Aircraft......................................................................94
                   --------------------
              (j)   Purchase Report..........................................................................94
                   ----------------
              (k)   Additional Documents.....................................................................94
                   ---------------------
              (l)   Additional Matters.......................................................................94
                   -------------------
     5.3    Reallocation of Commitments; Addition of New Purchasers..........................................95

SECTION 6.    AFFIRMATIVE COVENANTS..........................................................................96
     6.1    Affirmative Covenants of the Seller..............................................................96
              (a)   Reporting Requirements...................................................................96
                   -----------------------
              (b)   Compliance with Laws, Etc................................................................98
                   --------------------------
              (c)   Conduct of Business and Maintenance of Existence.........................................98
                   -------------------------------------------------
              (d)   Maintenance of Property; Insurance.......................................................98
                   -----------------------------------
              (e)   Keeping of Records and Books of Account..................................................98
                   ----------------------------------------
              (f)   Location of Records......................................................................99
                   --------------------
              (g)   Access...................................................................................99
                   -------
              (h)   Marking of Records.......................................................................99
                   -------------------
              (i)   Credit and Collection Policy............................................................100
                   -----------------------------
              (j)   Performance and Compliance with Receivables and Contracts...............................100
                   ----------------------------------------------------------
              (k)   [Intentionally omitted.]................................................................100
              (l)   Further Action Evidencing Interests of Administrative Agent and Purchasers..............100
                   ---------------------------------------------------------------------------
              (m)   Separate Corporate Existence............................................................101
                   -----------------------------
              (n)   Existing Receivables Perfection Matters.................................................101
                   ----------------------------------------
     6.2    Affirmative Covenants of the Servicer...........................................................102
              (a)   Compliance with Laws, Etc...............................................................102
                   --------------------------
              (b)   Conduct of Business and Maintenance of Existence........................................102
                   -------------------------------------------------
              (c)   Maintenance of Property; Insurance......................................................102
                   -----------------------------------
              (d)   Keeping of Records and Books of Account.................................................103
                   ----------------------------------------
              (e)   Location of Records.....................................................................103
                   --------------------
              (f)   Access..................................................................................103
                   -------
</TABLE>


                                      -iii-

<PAGE>

<TABLE>
<S>          <C>
              (g)   Credit and Collection Policy............................................................104
                   -----------------------------
              (h)   Ownership of Affiliate Obligors.........................................................104
                   --------------------------------

SECTION 7.    NEGATIVE COVENANTS............................................................................104
     7.1    Negative Covenants of the Seller................................................................104
              (a)   Sales, Liens, Etc.......................................................................104
                   ------------------
              (b)   Extension or Amendment of Purchased Receivables.........................................104
                   ------------------------------------------------
              (c)   Change in Business or Credit and Collection Policy......................................106
                   ---------------------------------------------------
              (d)   No Actions against Obligors.............................................................106
                   ----------------------------
              (e)   Security Interest to Remain in Force....................................................106
                   -------------------------------------
              (f)   Limitations on Fundamental Changes......................................................107
                   -----------------------------------
              (g)   Transactions with Affiliates............................................................107
                   -----------------------------
              (h)   Fiscal Year.............................................................................107
                   ------------
              (i)   Assignment of Contracts.................................................................107
                   ------------------------
              (j)   Substitution of Engines.................................................................107
                   ------------------------
              (k)   Indebtedness............................................................................107
                   -------------
              (l)   Guarantees..............................................................................108
                   -----------
              (m)   Investments.............................................................................108
                   ------------
              (n)   Distributions...........................................................................108
                   --------------
              (o)   Agreements..............................................................................108
                   -----------
              (p)   Intercompany Purchase Agreement.........................................................108
                   --------------------------------
     7.2    Negative Covenants of the Servicer..............................................................109
              (a)   No Actions against Obligors.............................................................109
                   ----------------------------
              (b)   Security Interest to Remain in Force....................................................109
                   -------------------------------------
              (c)   Limitations on Fundamental Changes......................................................109
                   -----------------------------------
              (d)   Transactions with Affiliates............................................................109
                   -----------------------------
              (e)   Assignment of Contracts.................................................................109
                   ------------------------
              (f)   Change in Credit and Collection Policy..................................................109
                   ---------------------------------------

SECTION 8.    AMORTIZATION EVENTS...........................................................................110
     8.1    Amortization Events.............................................................................110
     8.2    Rights and Remedies.............................................................................113
     8.3    Waivers.........................................................................................115

SECTION 9.    INDEMNIFICATIONS..............................................................................115
     9.1    Indemnities of the Seller.......................................................................115
     9.2    Limitations of Seller's Liability...............................................................117
     9.3    Proceedings against Indemnified Person..........................................................118

SECTION 10.    THE MANAGING FACILITY AGENT AND ADMINISTRATIVE AGENT.........................................119
     10.1   Appointment.....................................................................................119
     10.2   Delegation of Duties............................................................................119
     10.3   Exculpatory Provisions..........................................................................120
     10.4   Reliance by Managing Facility Agent and Administrative Agent....................................120
     10.5   Notice of Certain Events........................................................................121
     10.6   Non-Reliance on Managing Facility Agent, the Administrative Agent, the Co-Administrative
            Agents and the Purchasers.......................................................................121
</TABLE>

                                      -iv-

<PAGE>

<TABLE>

<S>        <C>
     10.7   Indemnification.................................................................................122
     10.8   Managing Facility Agent and Administrative Agent in Their Individual Capacities.................122
     10.9   Successor Managing Facility Agent or Administrative Agent.......................................122

SECTION 11.    MISCELLANEOUS................................................................................123
     11.1   Amendments and Waivers..........................................................................123
     11.2   Notices.........................................................................................124
     11.3   No Waiver; Cumulative Remedies..................................................................125
     11.4   Survival of Representations and Warranties......................................................126
     11.5   Payment of Expenses and Taxes...................................................................126
     11.6   Successors and Assigns; Participations; Purchasing Parties......................................126
     11.7   Adjustments; Set-off............................................................................129
     11.8   Responsibilities of the Seller..................................................................130
     11.9   Optional Repurchase.............................................................................130
     11.10   Reassignments..................................................................................131
     11.11   Intention of the Parties;  Lien on Intercompany Purchase Agreement.............................132
     11.12   Leases; Grant of Security Interest.............................................................134
     11.13   Power of Attorney..............................................................................136
     11.14   Counterparts...................................................................................137
     11.15   Severability; Headings.........................................................................138
     11.16   Integration....................................................................................138
     11.17   GOVERNING LAW..................................................................................138
     11.18   Submission To Jurisdiction; Waivers............................................................138
     11.19   Acknowledgements...............................................................................139
     11.20   WAIVERS OF JURY TRIAL..........................................................................139
     11.21   Bankruptcy Petition............................................................................139
     11.22   Confidentiality................................................................................140
     11.23   Claims Against SPCs............................................................................140
     11.24   Resales........................................................................................141
     11.25   Repurchase of Delinquent Receivables...........................................................142
     11.26   Amendment to Repurchase Agreement..............................................................142
</TABLE>

                                      -v-

<PAGE>

SCHEDULES AND EXHIBITS

<TABLE>
<S>                  <C>
Schedule I           Commitments and Purchaser Information
Schedule II          UCC Filing Locations
Schedule III         Prohibited Foreign Jurisdictions
Schedule IV          Specified Resales

Exhibit A-1          Form of Assignment
Exhibit A-2          Form of FAA Assignment (Used on the Closing Date - Loans)
Exhibit A-3          Form of FAA Assignment (To Be Used on Settlement Dates after the Effective Date -
                     Loans)
Exhibit A-4          Form of FAA Assignment (Used on Closing Date - Leases)
Exhibit A-5          Form of FAA Assignment (To Be Used on Settlement Dates after the Effective Date -
                     Leases)
Exhibit B-1          Form of Amended and Restated Guarantee
Exhibit B-2          Form of Guarantee Reaffirmation
Exhibit C            Form of Settlement Statement
Exhibit D            Form of Transfer Supplement
Exhibit E-1          Form of Legal Opinion of General Counsel to RAC
Exhibit E-2          Form of Legal Opinion of General Counsel to the Seller and Raytheon Credit
Exhibit E-3          Form of Legal Opinion of General Counsel of Raytheon
Exhibit E-4          Form of Legal Opinion of Special Counsel to the Seller and Raytheon Credit
Exhibit E-5          Form of Legal Opinion of Bingham Dana LLP, Special Counsel to
                     Raytheon Credit
Exhibit F-1          Form of Bailment Agreement
Exhibit F-2          Form of Bailment Agreement
Exhibit G            Form of Second Amended and Restated Repurchase Agreement
Exhibit H            Form of Special Settlement Date Notice
Exhibit I            Form of Purchase Report
Exhibit J            Form of Amendment to Intercompany Purchase Agreement
Exhibit K            Form of Agreed Upon Procedures Relating to Settlement Statements and Receivables Files
</TABLE>

<PAGE>



                  FOURTH AMENDED AND RESTATED PURCHASE AND SALE AGREEMENT, dated
as of March 8, 2002, among RAYTHEON AIRCRAFT RECEIVABLES CORPORATION, a Kansas
corporation (the "Seller"), RAYTHEON AIRCRAFT CREDIT CORPORATION ("Raytheon
                  ------                                           --------
Credit"), as Servicer (as defined herein), the financial institutions and
------
special purpose corporations from time to time parties to this Agreement (the
"Purchasers"), BANK OF AMERICA, N.A., as Managing Facility Agent for the
 ----------
Purchasers (in such capacity, the "Managing Facility Agent"), JPMORGAN CHASE
                                   -----------------------
BANK and BANK OF AMERICA, N.A., as Co-Administrative Agents for the Purchasers
(in such capacity, a "Co-Administrative Agent"), J.P. MORGAN SECURITIES INC. and
                      -----------------------
BANC OF AMERICA SECURITIES LLC, as Co-Arrangers and Joint Bookrunners, J.P.
MORGAN SECURITIES INC., as Syndication Agent (in such capacity, the "Syndication
                                                                     -----------
Agent"), CITIBANK, N.A., CREDIT SUISSE FIRST BOSTON and FLEET SECURITIES, INC.,
-----
as Co-Documentation Agents (in such capacity, a "Co-Documentation Agent"), and
                                                 ----------------------
each Administrative Agent referred to herein.

                              W I T N E S S E T H :

                  WHEREAS, the Seller, Raytheon Credit and certain of the
Purchasers herein are parties to the Third Amended and Restated Purchase and
Sale Agreement, dated as of March 9, 2001 (as heretofore amended, supplemented
or otherwise modified, the "2001 Agreement") pursuant to which such Purchasers
                            --------------
have agreed to purchase, and have purchased, certain Receivables from the
Seller;

                  WHEREAS, the parties hereto desire to amend the 2001 Agreement
to, among other things, permit certain resales of receivables as described
herein, modify the Commitment Fee, the Applicable Margin, the Aggregate
Repurchase Obligation and certain of the Concentration Limits provided in the
2001 Agreement and extend the Expiration Date;

                  WHEREAS, certain of the Purchasers under the 2001 Agreement
(the "Withdrawing Purchasers") desire to sell their undivided interests in the
      ----------------------
Receivables purchased thereunder and to terminate their respective Commitments
under the 2001 Agreement on the Amendment Effective Date;

                  WHEREAS, the Purchasers under the 2001 Agreement other than
the Withdrawing Purchasers (the "Extending Purchasers") desire to extend the
                                 --------------------
Expiration Date;

                  WHEREAS, certain new financial institutions and special
purpose corporations (such other financial institutions and corporations, the
"New Purchasers") desire to become "Purchasers" under the 2001 Agreement as
 --------------
amended and restated hereby;

                  WHEREAS, each of the Extending Purchasers and the New
Purchasers desires to extend, increase or decrease its Commitment such that, on
the Amendment Effective Date, the Commitment of each such Purchaser will be as
shown on Annex A hereto opposite the name of such Purchaser; and

                  WHEREAS, the parties hereto desire to restate the 2001
Agreement as so amended, modified and supplemented, in its entirety;

<PAGE>


                                                                              2

                  NOW THEREFORE, in consideration of the premises and mutual
covenants herein contained, the parties hereto hereby agree as follows:

                            SECTION 1.   DEFINITIONS

                  1.1  Defined Terms. As used in this Agreement, the following
                       -------------
terms shall have the following meanings:

                  "Acceptable L/C Issuer": a financial institution whose senior
                   ---------------------
         long-term unsecured debt is rated at least A and A2 by S&P and Moody's,
         respectively, if rated by both such agencies, or at least A or A2 by
         S&P or Moody's respectively, if rated by only one such agency, or if
         such senior, long-term, unsecured debt is not rated, is issued by a
         bank whose long-term deposits are rated at least A+ and A1 by S&P and
         Moody's, respectively, if rated by both such agencies, or A+ or A1 by
         S&P or Moody's, respectively, if rated by only one such agency.

                  "Accrual Period": (i) with respect to any Settlement Date, the
                   --------------
         period from and including the preceding Settlement Date (or, with
         respect to the initial Accrual Period, from the Closing Date) to but
         excluding such Settlement Date and (ii) a Special Settlement Date
         Accrual Period.

                  "Administrative Agent": the collective reference to the
                   --------------------
         Managing Facility Agent and the Old Administrative Agent, each in its
         role as administrative agent hereunder.

                  "Affiliate": as to any Person, (a) any other Person which,
                   ---------
         directly or indirectly, is in control of, is controlled by, or is under
         common control with, such Person or (b) any other Person who is a
         director, officer, partner or shareholder of such Person who, in the
         case of partners and shareholders, owns, directly or indirectly, 10% or
         more of the voting securities (i) of such Person, (ii) of any
         Subsidiary of such Person or (iii) of any Person described in the
         preceding clause (a). For purposes of this definition, "control" of a
         Person means the power, directly or indirectly, either to (i) vote 10%
         or more of the securities having ordinary voting power for the election
         of directors of such Person or (ii) direct or cause the direction of
         the management and policies of such Person, whether by contract or
         otherwise.

                  "Affiliate Obligor": each Affiliate of Raytheon Credit
                   -----------------
         obligated to make payments in respect of a Receivable; provided that,
         such Affiliate is a special purpose entity created solely for the
         purpose of entering into Applicable Leases and does not and is not
         expected to own any assets or incur any liabilities except in
         connection with the performance of its obligations under the Contracts
         pursuant to which it acquires Aircraft and the Applicable Leases of
         such Aircraft.

                  "Affiliate Receivable": a Receivable created pursuant to a
                   --------------------
         Contract (as described in clause (i) of the definition thereof) between
         Raytheon Credit and an Affiliate Obligor located (within the meaning of
         Section 9-307 of the New York UCC) within the United States which
         Receivable (i) is created in connection with the acquisition by such
         Affiliate Obligor of an Aircraft which is leased by such Affiliate
         Obligor, as lessor, to an

<PAGE>

                                                                              3

         Unaffiliated Foreign Lessee pursuant to an Applicable Lease and (ii) is
         secured by a Lien upon (x) such Aircraft and (y) such Unaffiliated
         Foreign Lessee's obligations under such Applicable Lease. In accordance
         with subsection 2.27, Affiliate Receivables may be categorized as
         Certified Foreign Receivables or Uncertified Foreign Receivables.

                  "Aggregate Exposure":
                   ------------------

                       (a)  at any time during the Revolving Period, an
                  aggregate amount equal to the Commitments in effect at such
                  time and each Dissenting Purchaser's Outstanding Purchase
                  Price at such time; and

                       (b)  at any time during the Amortization Period, an
                  aggregate amount equal to the Outstanding Purchase Price of
                  each Purchaser (including each Dissenting Purchaser) at such
                  time.

                  "Aggregate Repurchase Obligation": at any time, the sum of the
                   -------------------------------
         RARC Repurchase Obligation and the RAC Repurchase Obligation.
         "Agreement": this Fourth Amended and Restated Purchase and Sale
          ---------
         Agreement, as amended, supplemented or otherwise modified from time to
         time.

                  "Aircraft": the collective reference to Commuter Aircraft and
                   --------
         General Aviation Aircraft. When used in connection with a Travel Air
         Receivable, "Aircraft" shall mean the related Obligor's undivided
         interest in the applicable Aircraft.

                  "Aircraft Accessories": any of the items listed in clause (ii)
                   --------------------
         of the definition of Commuter Aircraft and General Aviation Aircraft,
         as applicable.

                  "Amendment Effective Date": as defined in Section 5.1.
                   ------------------------

                  "Amortization Adjustment": the adjustment set forth below for
                   -----------------------
         the number of days since (i) for each Purchaser that is not a
         Dissenting Purchaser, the commencement of the Amortization Period or
         (ii) for each Dissenting Purchaser, the commencement of amortization of
         such Dissenting Purchaser's Outstanding Purchase Price pursuant to
         Section 2.8(b):

Days                          Adjustment
----                          ----------

1 through 180                 0.25% per annum

181 through 360               0.50% per annum

Thereafter                    1.00% per annum

                  "Amortization Event": any of the events described in
                   ------------------
         subsection 8.1, whether or not any of the actions referred to in
         subsection 8.2 have been taken.

<PAGE>

                                                                              4

                  "Amortization Period": the period beginning on the first day
                   -------------------
         after the termination of the Revolving Period and ending on the earlier
         of (i) the day the Outstanding Purchase Price is reduced to zero as a
         result of the application of Collections and other payments and (ii)
         the day on which the Principal Balance of all Purchased Receivables has
         been reduced to zero as a result of Collections and Net Recoveries.

                  "Applicable Lease": with respect to any Affiliate Receivable,
                   ----------------
         a lease contract (substantially in the form described in clause (ii) of
         the definition of Contract and which lease contract contains an option
         to purchase the related Financed Aircraft by the Unaffiliated Foreign
         Lessee prior to the expiration of such lease contract) between the
         Affiliate Obligor and the Unaffiliated Foreign Lessee, a Lien upon
         which secures the repayment of such Affiliate Receivable.

                  "Applicable Margin": (a) for each Purchaser for any
                   -----------------
         Settlement Period, the rate per annum set forth below for Raytheon's
         applicable Debt Rating:

Debt Rating                                             Applicable Margin
-----------                                             -----------------

BBB+ or the equivalent thereof or above                       0.875%

BBB or the equivalent thereof                                 1.000%

BBB- or the equivalent thereof                                1.250%

BB+ or the equivalent thereof                                 1.625%

below BB+ or the equivalent thereof                           2.125%

                  (b) For purposes of this definition, changes to the Debt
         Rating will be effective for all Settlement Periods commencing on the
         Settlement Date next succeeding any such change.

                  "Applicable Settlement Date": as defined in the definition of
                   --------------------------
         "Ineligible Receivable."

                  "Assignment": an assignment, substantially in the form of
                   ----------
         Exhibit A-1 with appropriate insertions and attachments, executed by
         the Seller or an Affiliate Obligor, as the case may be, and delivered
         to the Managing Facility Agent or the Seller, as the case may be, with
         respect to each purchase or substitution.

                  "Available Commitment": as to any Purchaser at any time, an
                   --------------------
         amount equal to the excess, if any, of (a) the amount of such
         Purchaser's Commitment over (b) the product of such Purchaser's
         Available Commitment Percentage multiplied by the aggregate Outstanding
         Purchase Price (excluding any Dissenting Purchaser's Outstanding
         Purchase Price at such time).

<PAGE>

                                                                              5

                  "Available Commitment Percentage": as to any Purchaser at any
                   -------------------------------
         time, a fraction the numerator of which is the Commitment of such
         Purchaser at such time and the denominator of which is the aggregate
         Commitments at such time.

                  "Aviation Act": the Federal Aviation Act of 1958, as amended,
                   ------------
         and all applicable rules and regulations thereunder.

                  "Bailee": any Person (other than the Administrative Agent and
                   ------
         the Seller) which enters a Bailment Agreement.

                  "Bailment Agreement": each agreement, substantially in the
                   ------------------
         form of Exhibit F-1 or F-2 with such changes thereto as are reasonably
         satisfactory in form and substance to the Managing Facility Agent,
         among an Administrative Agent, the Seller and the Person therein
         designated, which Person shall be acceptable to the Managing Facility
         Agent in its reasonable discretion, to maintain custody, as the bailee
         of the Administrative Agent and the Purchasers, of the letter of credit
         related to each L/C Receivable sold or substituted hereunder on the
         terms and subject to the conditions set forth therein, as any of the
         same may be amended, supplemented or otherwise modified from time to
         time.

                  "Base Rate": for any day, the higher of (a) 0.50% per annum
                   ---------
         above the latest Federal Funds Rate and (b) the rate of interest in
         effect for such day as publicly announced from time to time by Bank of
         America, N.A. in Charlotte, North Carolina, as its "reference rate".
         The "reference rate" is a rate set by Bank of America, N.A. based upon
         various factors including Bank of America, N.A.'s costs and desired
         return, general economic conditions and other factors, and is used as a
         reference point for pricing some loans, which may be priced at, above,
         or below such announced rate. Any change in the reference rate
         announced by Bank of America, N.A. shall take effect at the opening of
         business on the day specified in the public announcement of such
         change.

                  "Benefitted Purchaser": as defined in subsection 11.7(a).
                   --------------------

                  "Business Day": a day other than a Saturday, Sunday or other
                   ------------
         day on which commercial banks in New York, New York, Wichita, Kansas,
         Boston, Massachusetts, or San Francisco, California are authorized or
         required by law to close.

                  "Buyout Amount": as defined in subsection 2.8(b)(iii).
                   -------------

                  "Cash Collateral Account": as defined in subsection 2.14(c)
                   -----------------------
         (i).

                  "Cash Equivalents": (a) securities issued or directly and
                   ----------------
         fully guaranteed or insured by the United States Government or any
         agency or instrumentality thereof having maturities not later than the
         Settlement Date following the date of acquisition, (b) certificates of
         deposit and eurodollar time deposits with maturities not later than the
         Settlement Date following the date of acquisition, bankers' acceptances
         with maturities not later than the Settlement Date following the date
         on which such investment is made and overnight bank deposits, in each
         case, with any commercial bank (i) the short-term indebtedness of which
         is rated at least A-1 or P-1 by S&P or Moody's, respectively, and

<PAGE>

                                                                              6

         (ii) with capital and surplus in excess of $500,000,000, (c)
         repurchase obligations with a term of not more than seven days for
         underlying securities of the types described in clauses (a) and (b)
         entered into with any financial institution meeting the
         qualifications specified in clause (b) above, and (d) commercial
         paper rated at least A-1 or P-1 by S&P or Moody's, respectively, and
         in each case with maturities not later than the Settlement Date
         following the date of acquisition.

                  "Cash Flow Cutoff Date": as of any Settlement Date and with
                   ---------------------
         respect to any Extended Term Receivable, (i) so long as no Rating Event
         has occurred and is continuing, the date which is thirteen years after
         such Settlement Date and (ii) during the continuation of a Rating
         Event, the date which is ten years after such Settlement Date.

                  "Certified Foreign Receivable": each Affiliate Receivable and
                   ----------------------------
         each Foreign Receivable (i) in the case of a Foreign Receivable which
         is not a Lease Receivable, (x) in respect of which the obligations of
         the related Obligor are secured by a Lien on the related Contract and
         Financed Aircraft in compliance with subsections 5.2(e)(ii) and (vii),
         (y) which has been so designated as a Certified Foreign Receivable in
         compliance with subsection 2.27 and (z) in respect of which the Seller
         has satisfied the conditions specified in subsection 5.2 (including
         subsection 5.2(e)), (ii) in the case of a Foreign Receivable which is a
         Lease Receivable (including a Registerable Lease Receivable with a
         Foreign Obligor) (x) in respect of which the obligations of the related
         Obligor are secured by a Lien on the related Contract and Financed
         Aircraft in compliance with subsections 5.2(e)(iii), (iv) and (vii),
         (y) which has been so designated as a Certified Foreign Receivable in
         compliance with subsection 2.27 and (z) in respect of which the Seller
         has satisfied the conditions specified in subsection 5.2 (including
         subsection 5.2(e)) and (iii) in the case of an Affiliate Receivable (x)
         in respect of which the obligations of the related Obligor are secured
         by a Lien on the related Contract and Financed Aircraft in compliance
         with subsections 5.2(e)(vi) and (vii), (y) which has been so designated
         as a Certified Foreign Receivable in compliance with subsection 2.27
         and (z) in respect of which the Seller has satisfied the conditions
         specified in subsection 5.2 (including subsection 5.2(e)).

                  "Certified Opinion Delivery Date": as defined in subsection
                   -------------------------------
         2.27(c).

                  "Closing Date": March 24, 1997.
                   ------------

                  "Code": the Internal Revenue Code of 1986, as amended from
                   ----
         time to time.

                  "Collateral": as defined in subsection 11.11(b).
                   ----------

                  "Collection Account": as defined in subsection 2.14(a).
                   ------------------

                  "Collections": with respect to any Purchased Receivable, all
                   -----------
         cash collections (including, without limitation, Principal Collections,
         Finance Charge Collections and other payments (including penalties, if
         any)), rent paid under any Contract (whether as Principal Collections
         or Finance Charge Collections), all security deposits (including,
         without limitation, any engine reserve account), any payments pursuant
         to guarantees and

<PAGE>

                                                                              7

         all amounts paid by any Obligor or Unaffiliated Foreign Lessee upon the
         exercise of any purchase option under any Contract (including any
         amounts financed by the Seller), the amount of drawings under a
         letter of credit related to such Purchased Receivable, any insurance
         paid in respect of an Exim Bank Receivable, any curtailment payments
         made by an Obligor in respect of a Wholesale Receivable, and any
         other cash proceeds of any Purchased Receivable or proceeds of such
         Purchased Receivable, including, without limitation, any proceeds
         from realization upon collateral (including, without limitation, any
         Financed Aircraft, Applicable Lease, insurance proceeds, letters of
         credit, security deposits, curtailment payments, indemnity payments
         or any other cash payments under or with respect to the related
         Contract) and any amounts withdrawn from the Cash Collateral Account
         pursuant to subsection 2.14(c).

                  "Commitment": as to any Purchaser, the obligation of such
                   ----------
         Purchaser to purchase undivided interests in Eligible Receivables from
         the Seller in an amount at any one time outstanding not to exceed the
         amount set forth opposite such Purchaser's name on Schedule I, as
         reduced from time to time in accordance with the terms hereof; as to
         all the Purchasers on the Amendment Effective Date, not to exceed an
         aggregate amount of $1,400,000,000.

                  "Commitment Fee": as defined in subsection 2.17(d).
                   --------------

                  "Commitment Percentage":
                   ---------------------

                       (a)  at any time during the Revolving Period and as to
                  any Purchaser other than a Dissenting Purchaser, a fraction,
                  the numerator of which is the Commitment of such Purchaser
                  in effect at such time and the denominator of which is equal
                  to the Aggregate Exposure at such time;

                       (b)  at any time during the Revolving Period and as to a
                  Dissenting Purchaser, a fraction, the numerator of which is
                  the Outstanding Purchase Price of such Dissenting Purchaser
                  at such time and the denominator of which is equal to the
                  Aggregate Exposure at such time; and

                       (c)  at any time during the Amortization Period and as to
                  any Purchaser, including a Dissenting Purchaser, a fraction
                  the numerator of which is equal to the Outstanding Purchase
                  Price of such Purchaser at such time and the denominator of
                  which is equal to the Aggregate Exposure at such time.

                  "Commitment Transfer Supplement": a Commitment Transfer
                   ------------------------------
         Supplement, substantially in the form of Exhibit D.

                  "Commonly Controlled Entity": with respect to a Person, an
                   --------------------------
         entity, whether or not incorporated, which is under common control with
         such Person within the meaning of Section 4001 of ERISA or is part of a
         group which includes such Person and which is treated as a single
         employer under Section 414 of the Code.

<PAGE>

                                                                              8

                  "Commuter Aircraft": the Models 1300, 1900 and 99 Beechcraft
                   -----------------
         manufactured by RAC and comparable general aviation aircraft used for
         commuter airline purposes manufactured by any other Person including,
         in all cases, without limitation, (i) any and all airframes, engines,
         (including, without limitation, any replacement or substituted engines)
         and avionics, equipment and accessories at any time attached to,
         connected with or located in any such aircraft and, to the extent
         covered by the recording system of the Aviation Act, all logs, manuals
         and maintenance records with respect thereto and (ii) any and all
         avionics, equipment and accessories removed from any Aircraft and, to
         the extent not covered by the recording system of the Aviation Act, all
         logs, manuals and maintenance records.

                  "Commuter Receivable": a Receivable the Obligor of which owns
                   -------------------
         and operates a commuter airline.

                  "Concentration Account": as defined in subsection 2.14(b).
                   ---------------------

                  "Concentration Receivables": as defined in subsection 2.7(b).
                   -------------------------

                  "Consolidated Capitalization": at a particular date, the sum
                   ---------------------------
         of Consolidated Debt, Mandatorily Redeemable Equity Securities and
         Consolidated Net Worth at such date.

                  "Consolidated Debt": at a particular date, all amounts which
                   -----------------
         would be included as indebtedness (including capitalized leases) on a
         consolidated balance sheet of Raytheon and its consolidated
         Subsidiaries, determined in accordance with GAAP.

                  "Consolidated EBITDA": for any period, the sum of (a)
                   -------------------
         Consolidated Net Income for such period and (b) the aggregate amounts
         deducted in determining Consolidated Net Income in respect of (i)
         Consolidated Net Interest Expense for such period, (ii) income taxes,
         depreciation and amortization of Raytheon and its consolidated
         Subsidiaries for such period determined in accordance with GAAP and
         (iii) write-offs of goodwill as required, or as would be required in
         the next succeeding fiscal year of Raytheon, by Statement of Financial
         Accounting Standards No. 142, Goodwill and Other Intangible Assets.

                  "Consolidated Net Income": for any period, the consolidated
                   -----------------------
         net income (or deficit) of Raytheon and its consolidated Subsidiaries
         for such period, determined in accordance with GAAP; provided that (i)
                                                              --------
         for the fiscal quarter of Raytheon and its consolidated Subsidiaries
         ending April 1, 2001, such Consolidated Net Income shall be increased
         by $325,000,000 representing one-time charges recorded in connection
         with the discontinued operations of Raytheon Engineers and
         Constructors, (ii) for the fiscal quarter of Raytheon and its
         consolidated Subsidiaries ending July 1, 2001, such Consolidated Net
         Income shall be increased by an aggregate amount not to exceed
         $272,000,000 for such fiscal quarter, representing additional one-time
         charges to the extent recorded in connection with the discontinued
         operations of Raytheon Engineers and Constructors during such fiscal
         quarter and (iii) for the fiscal quarter of Raytheon and its
         consolidated Subsidiaries ending September 30, 2001, such Consolidated
         Net Income shall be increased by an aggregate amount not to exceed
         $750,000,000 representing one-

<PAGE>

                                                                              9

         time charges recorded in connection with the inventory write-down and
         valuation reserve related to various aircraft.

                  "Consolidated Net Interest Expense": for any period, net
                   ---------------------------------
         interest expense of Raytheon and its consolidated Subsidiaries for
         such period, determined in accordance with GAAP.

                  "Consolidated Net Worth": at a particular date, all amounts
                   ----------------------
         which would, in conformity with GAAP, be included under stockholders'
         equity on a consolidated balance sheet of Raytheon and its
         consolidated Subsidiaries at such date.

                  "Contract": with respect to a Receivable, the collective
                   --------
         reference to (a) the promissory notes, security agreements, leases,
         financing and security agreements, contracts, documents and instruments
         between the Seller and the Obligor thereon on the Seller's standard
         form therefor (as in effect on the Closing Date) or such other forms as
         shall contain substantially similar provisions to such standard forms,
         pursuant to which the Seller has (i) lent the Obligor funds to purchase
         an Aircraft or, in the case of the Travel Air Receivables, an undivided
         interest therein, and the Obligor has agreed to make installment
         payments in respect of such purchase, or (ii) leased an aircraft or, in
         the case of the Travel Air Receivables, an undivided interest therein;
         to the Obligor, in each case, as amended, supplemented or otherwise
         modified from time to time and (b) upon the occurrence of an event of
         the type described in subsection 8.1(j) affecting the Seller, each and
         every promissory note, security agreement, lease, financing and
         security agreement, contract, document and instrument executed in
         replacement or supersession of another Contract described in clause (a)
         with the same Obligor, or executed upon extension, modification or
         amendment of such Contract, whether in connection with an agreement
         pursuant to Section 1110 of the Bankruptcy Code (11 USC [sec] 1110) or
         otherwise. Whenever used in connection with any Purchased Receivables,
         unless the context otherwise requires "Contract" shall include any
         Applicable Lease securing the obligations of the Affiliate Obligor
         under such Purchased Receivable.

                  "Contractual Obligation": as to any Person, any provision of
                   ----------------------
         any security issued by such Person or of any agreement, instrument or
         other undertaking to which such Person is a party or by which it or
         any of its property is bound.

                  "Credit and Collection Policy": those credit and collection
                   ----------------------------
         policies and practices of the Seller and the Servicer existing on the
         Closing Date relating to the Receivables (including, without
         limitation, policies relating to writeoffs of Receivables and policies
         and practices maintained by the Seller's or the Servicer's computer
         system and policies set forth in the form previously delivered to the
         Purchasers, as modified from time to time in accordance with subsection
         7.1(c).

                  "Dealer": any independent dealer or Affiliate of Raytheon
                   ------
         Credit which markets and sells Aircraft.

                  "Debt Rating": at any date of determination, Raytheon's
                   -----------
         long-term unsecured senior debt rating, determined in accordance with
         the following:

<PAGE>

                                                                              10

                       (a) for purposes of determining a Debt Rating as used in
                  the definition of "Applicable Margin" and as used in
                  calculating the Commitment Fee pursuant to Section 2.17(d), if
                  on any date on which a Debt Rating is to be determined,
                  Moody's and S&P are providing long-term unsecured senior debt
                  ratings for Raytheon, the Debt Rating will be the lower of
                  such ratings; provided that (i) if Raytheon's long-term
                                --------
                  unsecured senior debt is rated at least BBB- or the equivalent
                  thereof by both Moody's and S&P and (ii) the differential
                  between the Moody's and S&P rating is more than one ratings
                  level (i.e. the difference between A and A+ being one ratings
                  level), then the Debt Rating will equal the lower of such
                  ratings plus one ratings level; and

                       (b) for all other purposes, if on any date on which a
                  Debt Rating is to be determined, either one or both of Moody's
                  and S&P are providing long-term unsecured senior debt ratings
                  for Raytheon, the Debt Rating will be the higher of the
                  ratings (or the rating, in the case of a rating by only one of
                  Moody's and S&P) so provided.

         A debt rating shall be deemed to be in effect on the date of
         announcement or publication by the applicable rating agency. References
         in this Agreement to alphabetical rating classifications are references
         to the S&P ratings. Notwithstanding the foregoing, the Seller and the
         Purchasers may at any time and from time to time agree to utilize a
         rating agency other than Moody's or S&P to determine the Debt Rating,
         in which case the Debt Rating shall be such levels as quoted by such
         rating agencies as, in each case, the Seller and the Purchasers, by
         unanimous consent, shall agree.

                  "Debt Ratio": at a particular date, the ratio of Consolidated
                   ----------
         Debt at such date to Consolidated Capitalization at such date.

                  "Default Rate": as defined in subsection 2.17(c).
                   ------------

                  "Defaulted Applicable Lease": an Applicable Lease (i) as to
                   --------------------------
         which any payment thereon or part thereof remains unpaid by the
         Unaffiliated Foreign Lessee thereon for (x) 120 days in the case of a
         GA Receivable or (y) 150 days in the case of a Commuter Receivable,
         from, in each case, the original due date for such payment by such
         Unaffiliated Foreign Lessee, (ii) as to which the Unaffiliated Foreign
         Lessee thereof has taken or suffered any action of the type described
         in subsection 8.1(j) with respect to such Person or (iii) which,
         consistent with the Credit and Collection Policy, would be written off
         the Seller's books as uncollectible.

                  "Defaulted Receivable": a Receivable, (i) in the case of a GA
                   --------------------
         Receivable or a Travel Air Receivable, as to which any payment on such
         Receivable or part thereof remains unpaid by the Obligor thereon for
         120 days from the original due date for such payment by such Obligor,
         (ii) in the case of a Commuter Receivable, as to which any payment on
         such Receivable or part thereof remains unpaid by the Obligor thereon
         for 150 days from the original due date for such payment by such
         Obligor, (iii) in the case of a Wholesale Receivable, as to which any
         payment on such Receivable or part thereof remains unpaid by the
         Obligor thereon for 60 days from the original due date for such

<PAGE>

                                                                              11

         payment by such Obligor, (iv) in the case of an Affiliate Receivable,
         as to which the Applicable Lease related thereto is a Defaulted
         Applicable Lease or (v) any Receivable as to which the Obligor thereof
         has taken or suffered any action of the type described in subsection
         8.1(j) with respect to such Obligor or which, consistent with the
         Credit and Collection Policy, would be written off the Seller's books
         as uncollectible.

                  "Delinquent Receivable": an Eligible Receivable a payment
                   ---------------------
         under which is more than 90 days past due from the original due date
         therefor, but which is not otherwise a Defaulted Receivable.

                  "Discount Amount": as of the date of the first occurrence of a
                   ---------------
         Discount Event (which is not also a Rating Event), the product of the
         Outstanding Purchase Price (as of the Settlement Date preceding such
         date of occurrence, or, if such date of occurrence is a Settlement
         Date, then such Settlement Date) multiplied by the Purchase Discount
         applicable on such date of occurrence.

                  "Discount Event": any time on or prior to the Expiration Date
                   --------------
         when Raytheon's Debt Rating is lower than BBB- or the equivalent
         thereof.

                  "Dissenting Purchaser": as defined in subsection 2.8(b).
                   --------------------

                  "Domestic Wholesale Receivable": a Receivable arising under a
                   -----------------------------
         wholesale financing arrangement between Raytheon Credit and, as Obligor
         thereunder, a Dealer which is located (within the meaning of Section
         9-307 of the New York UCC) in the United States.

                  "Effective Date": as defined in Section 5.1 of the 1997
                   --------------
         Agreement.

                  "Eligible Applicable Lease": (x) with respect to each
                   -------------------------
         Affiliate Receivable other than an Existing Affiliate Receivable, at
         the time of purchase or substitution of such Affiliate Receivable
         pursuant to this Agreement, an Applicable Lease related thereto:

                       (a) the Unaffiliated Foreign Lessee of which (i) is not
                  an Affiliate of Raytheon Credit or the Servicer, (ii) is not
                  located in a Prohibited Jurisdiction, (iii) is not, except to
                  the extent permitted under subsection 2.7, a Governmental
                  Authority unless the Affiliate Obligor, Raytheon Credit and
                  the Seller have complied with the requirements of each
                  applicable Requirement of Law pertaining to the assignment of
                  accounts receivable the obligor of which is a Governmental
                  Authority, all in a manner satisfactory to the Managing
                  Facility Agent and the Required Purchasers in their reasonable
                  discretion and (iv) is not the Unaffiliated Foreign Lessee or
                  the Obligor, or an Affiliate of an Obligor or Unaffiliated
                  Foreign Lessee, on any Receivable or Applicable Lease which is
                  a Defaulted Receivable or Defaulted Applicable Lease, as
                  appropriate;

                       (b) which is neither more than 30 days past due from the
                  original due date therefor nor otherwise a Defaulted
                  Applicable Lease;

<PAGE>

                                                                              12

                       (c) which arose in the ordinary course of Raytheon
                  Credit's business from financing the retail purchase or lease
                  financing of an Aircraft and relates to an Aircraft which will
                  be used for general aviation purposes or with respect to the
                  ownership and operation of a commuter airline, but not for
                  military purposes;

                       (d) which is subject only to adjustment for changes in
                  payments in accordance with the terms thereof resulting from
                  changes in the interest rates thereunder and the payment terms
                  of which are identical to the payment terms set forth in the
                  related Affiliate Receivable;

                       (e) which is an "account" or a "general intangible" or
                  which constitutes "chattel paper" within the meaning of the
                  UCC of the State of Kansas or the law of the state where the
                  Seller or the Servicer maintains the books, records and
                  documents with respect to such Receivable;

                       (f) which is denominated and payable only in United
                  States dollars in the United States;

                       (g) which (i) has been duly authorized by each party
                  thereto (or, if any such party is an individual, such party
                  has the capacity to enter into) and each of the parties
                  thereto is in compliance therewith in all material respects,
                  (ii) was not originated with any conduct constituting fraud or
                  a material misrepresentation on the part of the Affiliate
                  Obligor, Raytheon Credit or the Seller, (iii) was not
                  originated with any conduct constituting fraud or a material
                  misrepresentation by the Unaffiliated Foreign Lessee party
                  thereto of which Raytheon Credit, the Seller or the Affiliate
                  Obligor thereto knew or should have known based on the
                  exercise of reasonable care, (iv) constitutes the legal, valid
                  and binding obligation of the Unaffiliated Foreign Lessee
                  thereof enforceable against such Unaffiliated Foreign Lessee
                  in accordance with its terms, except as enforceability may be
                  limited by applicable bankruptcy, insolvency, reorganization,
                  moratorium or similar laws affecting the enforcement of
                  creditors' rights generally and by general equitable
                  principles (whether enforcement is sought by proceedings in
                  equity or at law), (v) contains enforceable provisions such
                  that the rights and remedies of the holder of the security
                  interest created therein are adequate for the realization of
                  the benefits of such security interest against the related
                  Unaffiliated Foreign Lessee and the other collateral therefor
                  and (vi) if the engine for the related Financed Aircraft has
                  750 or more rated takeoff horsepower (or the equivalent of
                  such horsepower), accurately describes the engines of such
                  Financed Aircraft as provided for in such Applicable Lease;

                       (h) which is not subject to any existing material
                  dispute, offset, counterclaim or defense whatsoever
                  (including, but not limited to, breach of warranty) of which
                  Raytheon Credit, the Seller or the Servicer knows or should
                  have known;

                       (i) which does not, or at the time of lease of the
                  Financed Aircraft did not, contravene any Requirements of Law
                  applicable thereto in any material respect

<PAGE>

                                                                              13

                  (including, without limitation, laws, rules and regulations
                  relating to truth in lending, fair credit billing, fair credit
                  reporting, equal credit opportunity, fair debt collection
                  practices and privacy) and with respect to which no party
                  thereto is in violation of any such Requirement of Law in any
                  material respect;

                       (j) which was originated in accordance with the Credit
                  and Collection Policy and satisfied all requirements thereof;

                       (k) on which either at least one payment or a down
                  payment (including a trade-in) has been made prior to the
                  Closing Date or the Settlement Date on which the related
                  Affiliate Receivable is purchased or substituted;

                       (l) the payment terms of which have not been modified
                  other than (i) in accordance with the Credit and Collection
                  Policy and (ii) to an extent and in an amount not in excess of
                  the limitations specified in subsection 7.1(b)(iv)(x); and

                       (m) of which the Affiliate Obligor, at the time of
                  transfer of the related Affiliate Receivable to the
                  Purchasers, has good and marketable title, free and clear of
                  any Lien other than any Permitted Receivable Lien; and

         (y) with respect to any Existing Affiliate Receivable, at the date of
         its purchase or substitution under the Existing Agreement pursuant to
         which such Receivable was sold to the Old Administrative Agent, the
         Applicable Lease related thereto was an "Eligible Applicable Lease" (as
         defined in such applicable Existing Agreement) at such date.

                  "Eligible Receivable": (x) with respect to each Receivable
                   -------------------
         other than an Existing Receivable, at the time of purchase or
         substitution pursuant to this Agreement, a Receivable:

                       (a) except with respect to an Affiliate Receivable, the
                  Obligor of which is not an Affiliate of Raytheon Credit, the
                  Seller or the Servicer;

                       (b) except with respect to a Foreign Receivable, the
                  Obligor of which is located (within the meaning of Section
                  9-307 of the New York UCC) within the United States and is a
                  Citizen of the United States (as defined in the Aviation Act);
                  and, with respect to a Foreign Receivable, the Obligor of
                  which is not located in a Prohibited Jurisdiction;

                       (c) except with respect to an ExIm Bank Receivable and
                  except as otherwise permitted in subsection 2.7(a)(xii), the
                  Obligor of which is not a Governmental Authority unless each
                  of Raytheon Credit and the Seller has complied with the
                  requirements of the Federal Assignment of Claims Act or any
                  other applicable Requirement of Law pertaining to the
                  assignment of accounts receivable the Obligor of which is a
                  Governmental Authority, all in a manner satisfactory to the
                  Managing Facility Agent and the Required Purchasers in their
                  reasonable discretion; provided that if a Rating Event has
                                         --------
                  occurred and is continuing, any Affiliate Receivable in
                  respect of which the Unaffiliated Foreign

<PAGE>

                                                                              14

                  Lessee under the related Applicable Lease is any Governmental
                  Authority other than a United States Federal Governmental
                  Authority shall not be eligible for purchase or substitution
                  under this Agreement regardless of any action taken by
                  Raytheon Credit or the Seller with respect to the assignment
                  of such Applicable Lease;

                       (d) the Obligor of which is not the Obligor or an
                  Affiliate of an Obligor on any other Receivable which is a
                  Defaulted Receivable;

                       (e) which is neither more than 30 days past due from the
                  original due date therefor nor otherwise a Defaulted
                  Receivable;

                       (f) which arose in the ordinary course of Raytheon
                  Credit's business from financing the retail purchase or lease
                  or, in the case of a Wholesale Receivable, the wholesale
                  purchase of an Aircraft and relates to an Aircraft which will
                  be used for general aviation purposes or in connection with
                  commuter airline operations, but not for military purposes,
                  and which was purchased by the Seller from Raytheon Credit
                  pursuant to the Intercompany Purchase Agreement in the
                  ordinary course of the Seller's business;

                       (g) with respect to GA Receivables, subject only to
                  adjustment for changes in payments in accordance with the
                  related Contract resulting from changes in the interest rates
                  thereunder, (i) which, except as set forth in clause (ii)
                  below, is required to be paid in consecutive monthly
                  installments or is a Quarterly Receivable or a Semi-Annual
                  Receivable or (ii) which (A) is a Nonstandard Receivable or
                  (B) has a maturity within six months from the date such
                  Receivable becomes a Purchased Receivable, provided that no
                  such Receivable will have a maturity later than six months
                  after the invoice date for such Receivable;

                       (h) which is an "account" or a "general intangible" or
                  which constitutes "chattel paper" within the meaning of the
                  UCC of the State of Kansas or the law of the state where the
                  Seller or the Servicer maintains the books, records and
                  documents with respect to such Receivable;

                       (i) which is denominated and payable only in United
                  States dollars in the United States;

                       (j) which arises under a Contract which (i) has been duly
                  authorized by each party thereto (or, if any such party is an
                  individual, such party has the capacity to enter into) and
                  each party thereto is in compliance therewith in all material
                  respects, (ii) was not originated with any conduct
                  constituting fraud or a material misrepresentation on the part
                  of the Seller or Dealer (if different from the Obligor
                  thereto), (iii) was not originated with any conduct
                  constituting fraud or a material misrepresentation by an
                  Obligor party thereto of which the Seller or Dealer (if
                  different from the Obligor) knew or should have known based on
                  the exercise of reasonable care, (iv) constitutes the legal,
                  valid and binding obligation of the Obligor thereof
                  enforceable against such Obligor in accordance with its

<PAGE>

                                                                              15

                  terms, except as enforceability may be limited by applicable
                  bankruptcy, insolvency, reorganization, moratorium or similar
                  laws affecting the enforcement of creditors' rights generally
                  and by general equitable principles (whether enforcement is
                  sought by proceedings in equity or at law), (v) except with
                  respect to each L/C Receivable, contains enforceable
                  provisions such that the rights and remedies of the holder of
                  the security interest created thereby are adequate for the
                  realization of the benefits of such security interest against
                  the related Financed Aircraft and the other collateral
                  therefor and (vi) accurately describes the engines, if any, of
                  the related Financed Aircraft having 750 or more rated takeoff
                  horsepower (or the equivalent of such horsepower) as provided
                  for in such Contract;

                       (k) (i) except with respect to a L/C Receivable, a Lease
                  Receivable, a Travel Air Receivable and an Unsecured
                  Receivable, which is secured by a valid and perfected first
                  priority security interest in favor of the Seller in the
                  Financed Aircraft related thereto (other than, in the case of
                  GA Receivables, any engines having less than 750 or more rated
                  takeoff horsepower, or its equivalent) and, with respect to an
                  Affiliate Receivable, in the related Applicable Lease, (ii)
                  with respect to a Registerable Lease Receivable and with
                  respect to an ExIm Bank Receivable, the related Financed
                  Aircraft of which is registered with the FAA Registry in the
                  name of the Seller and relates to a Financed Aircraft in which
                  the Seller has a valid ownership interest, (iii) with respect
                  to a Lease Receivable which is not a Registerable Lease
                  Receivable, the related Financed Aircraft of which is
                  registered in the name of the Seller in each jurisdiction
                  necessary to evidence the valid ownership interest of the
                  Seller in the Financed Aircraft related thereto and (iv) with
                  respect to a Travel Air Receivable, which is secured by a
                  valid and perfected first priority security interest in favor
                  of the Seller in the Obligor's undivided interest in the
                  Financed Aircraft and Travel Air Contracts related thereto;

                       (l) except with respect to a L/C Receivable and an
                  Unsecured Receivable, the security or ownership interest, as
                  the case may be, of Raytheon Credit in the Financed Aircraft
                  related thereto is assignable by Raytheon Credit and, except
                  as permitted under subsection 2.7(a)(x), has been so assigned
                  as a first priority security interest to the Seller and by the
                  Seller to the Administrative Agent for the ratable benefit of
                  the Purchasers to secure the obligations under the related
                  Receivable and which Financed Aircraft is subject to no other
                  Liens other than Permitted Aircraft Liens; including (i)
                  except with respect to a Foreign Receivable (other than a
                  Registerable Lease Receivable with a Foreign Obligor), of
                  which the security interest granted by the Obligor in favor of
                  Raytheon Credit and assigned to the Seller and/or, in the case
                  of a Lease Receivable, by the Seller in favor of the
                  Administrative Agent (including, with respect to a
                  Registerable Lease Receivable, the security interest in the
                  Financed Aircraft in favor of the Administrative Agent)
                  encumbering the related Financed Aircraft (other than, for GA
                  Receivables, Aircraft Accessories with respect thereto and
                  engines of such Financed Aircraft, if any, having a rated
                  takeoff power of 750 horsepower or its

<PAGE>

                                                                              16

                  equivalent) has been duly registered and recorded with the FAA
                  Registry, (ii) with respect to a Foreign Receivable (other
                  than a L/C Receivable and a Lease Receivable with a Foreign
                  Obligor) of which the security interest encumbering the
                  related Financed Aircraft has been duly filed, registered or
                  recorded with each office in each jurisdiction in which such
                  filing, registration or recordation is necessary to perfect
                  the security interest therein granted (x) by the Obligor
                  thereon in favor of Raytheon Credit, (y) by Raytheon Credit in
                  favor of the Seller and (z) by the Seller in favor of the
                  Administrative Agent for the ratable benefit of the Purchasers
                  and (iii) with respect to a Lease Receivable with a Foreign
                  Obligor (other than a Registerable Lease Receivable with a
                  Foreign Obligor) of which the security interest encumbering
                  the related Financed Aircraft has been duly filed, registered
                  or recorded with each office in each jurisdiction in which
                  such filing, registration or recordation is necessary to
                  perfect the security interest therein granted by the Seller in
                  favor of the Administrative Agent for the ratable benefit of
                  the Purchasers;

                       (m) as to which, upon the transfer of such Receivable
                  pursuant to this Agreement, either (i) the Purchasers have a
                  perfected, valid and enforceable first priority ownership
                  interest in such Receivable or (ii) the Administrative Agent
                  for the ratable benefit of the Purchasers has a valid,
                  perfected and first priority security interest in such
                  Receivable, in each case free and clear of all Liens other
                  than Permitted Receivable Liens;

                       (n) of which (i) with respect to each Receivable other
                  than a Lease Receivable and a Travel Air Receivable, the
                  related Financed Aircraft is owned by the Obligor on the
                  related Contract, (ii) with respect to each Lease Receivable,
                  except as permitted under subsection 2.7(a)(x), the related
                  Financed Aircraft is owned by the Seller and (iii) with
                  respect to each Travel Air Receivable, an undivided interest
                  in the related Financed Aircraft is owned by the related
                  Obligor;

                       (o) of which the related Financed Aircraft is (i) with
                  respect to each Financed Aircraft registered in the name of
                  the Seller, Raytheon Credit, Travel Air or the related Obligor
                  with the FAA, duly certified by the FAA as to type and
                  airworthiness and (ii) in all other cases, duly certified by
                  the appropriate governmental authorities in the applicable
                  foreign jurisdiction as to type and airworthiness;

                       (p) which is not subject to any existing material
                  dispute, offset, counterclaim or defense whatsoever
                  (including, but not limited to, breach of warranty) of which
                  Raytheon Credit, the Seller or the Servicer knows or should
                  have known;

                       (q) which, together with the Contract and the Financed
                  Aircraft related thereto, does not, or at the time of sale (or
                  lease, as the case may be) of the Financed Aircraft did
                  not, contravene any Requirements of Law applicable thereto in
                  any material respect (including, without limitation, laws,
                  rules and

<PAGE>

                                                                              17

                  regulations relating to truth in lending, fair credit billing,
                  fair credit reporting, equal credit opportunity, fair debt
                  collection practices and privacy) and with respect to which no
                  party to the Contract related thereto is in violation of any
                  such Requirement of Law in any material respect;

                       (r) which was originated in accordance with the Credit
                  and Collection Policy and satisfied all requirements thereof
                  and of the related Contract;

                       (s) which, except for an Extended Term Receivable, has a
                  Final Payment Date not later than (i) so long as no Rating
                  Event has occurred and is continuing, thirteen years after the
                  Settlement Date on which such Receivable is purchased or
                  substituted and (ii) during the continuance of a Rating Event,
                  ten years after the Settlement Date on which such Receivable
                  is purchased or substituted;

                       (t) (i) for Receivables other than those Receivables
                  referred to in clause (g)(ii)(B) of this definition, the
                  related Financed Aircraft has been delivered to the Obligor
                  (x) so long as Raytheon's Debt Rating is no lower than BBB- or
                  the equivalent thereof, no later than the second Settlement
                  Date following the Settlement Date on which undivided
                  interests in such Receivable are sold to the Purchasers and
                  (y) in all other cases, no later than the Settlement Date on
                  which undivided interests in such Receivable are sold to the
                  Purchasers or (ii) for those Receivables referred to in clause
                  (g)(ii)(B) of this definition, the related Financed Aircraft
                  has been delivered to the Obligor no later than six months
                  after the invoice date for such Receivable;

                       (u) except with respect to a Wholesale Receivable, on
                  which either at least one payment or a down payment (including
                  a trade-in) has been made prior to the Settlement Date on
                  which it is purchased or substituted;

                       (v) the payment terms of which have not been modified
                  other than (i) in accordance with the Credit and Collection
                  Policy and (ii) to an extent and in an amount not in excess of
                  the limitations specified in subsection 7.1(b)(iv)(x);

                       (w) of which the related Financed Aircraft is insured
                  against loss, damage, theft, hull and such other casualties as
                  may be required pursuant to the related Contract, including
                  without limitation passenger legal liability, public legal
                  liability and property damages legal liability, the policy or
                  policies of which shall (i) provide that Raytheon Credit or
                  any Affiliate Obligor, as the case may be, is named thereunder
                  as loss payee and is entitled to receive 30 days prior notice
                  of cancellation thereof, (ii) contain a breach of warranty
                  endorsement in favor of Raytheon Credit or any Affiliate
                  Obligor as the case may be, (iii) provide for insurance in an
                  amount, after calculation of any deductible, at least equal to
                  the outstanding principal of the Contract at any time and (iv)
                  be maintained with financially sound and reputable insurance
                  companies;

                       (x) if a Lease Receivable (i) prior to the Settlement
                  Date on which such Lease Receivable is purchased or
                  substituted, with respect to which all actions

<PAGE>

                                                                              18

                  required under the related lease to assign to the
                  Administrative Agent on behalf of the Purchasers the Seller's
                  and Raytheon Credit's respective rights thereunder (including,
                  without limitation, any notice to, consent of or acceptance by
                  the lessee party thereto) shall have been duly performed, (ii)
                  prior to the Settlement Date on which such Lease Receivable is
                  purchased or substituted, a determination shall have been made
                  if such Receivable is a Registerable Lease Receivable in
                  accordance with the definition of such term, (iii) on the
                  Settlement Date on which such Lease Receivable is purchased or
                  substituted, no Rating Event shall have occurred and be
                  continuing and (iv) such Lease Receivable is carried on the
                  books of the Seller as a "sale" under GAAP;

                       (y) if a L/C Receivable, with respect to which the
                  related letter of credit (i) either (A) is issued by an
                  Acceptable L/C Issuer or (B) if the issuer of the related
                  letter of credit is not an Acceptable L/C Issuer, at the time
                  of purchase or substitution no Rating Event has occurred and
                  is continuing, (ii) is issued or confirmed by a financial
                  institution located in the United States or which otherwise
                  provides that drawings thereunder may be made in the United
                  States, (iii) is an irrevocable standby letter of credit
                  providing for drawings upon the occurrence of a default under
                  the related Contract on sight or upon presentation of
                  certificates specified therein, (iv) at any date of
                  determination has an available amount equal to the then
                  outstanding Principal Balance of such Receivable, (v) is in
                  full force and effect and (vi) either (A) has an expiration
                  date which is at least five Business Days following the last
                  scheduled payment date under the related Contract or (B)
                  provides for automatic extensions without amendment, notice or
                  other act by or to any Person or permits the Seller to draw
                  the aggregate amount then available to be drawn thereunder if
                  not extended;

                       (z) which is not an Operating Lease Receivable;

                       (aa) if an ExIm Bank Receivable, (i) at least 85% of the
                  Principal Balance of which is insured by the related insurance
                  policy and such insurance policy is in full force and effect
                  and all premiums have been paid in full, (ii) the related
                  Contract of which requires the Obligor to purchase the
                  Aircraft at the end of the term thereof, (iii) at the time of
                  purchase or substitution of which no Rating Event has occurred
                  and is continuing and (iv) prior to the Settlement Date on
                  which such ExIm Bank Receivable is purchased or substituted,
                  all actions required to assign to the Administrative Agent on
                  behalf of the Purchasers the Seller's and Raytheon Credit's
                  respective rights to amounts payable under the related
                  insurance policy and the Seller's rights under any lease of
                  the related Aircraft by an Obligor on such ExIm Bank
                  Receivable (including, without limitation, any notice to,
                  consent of or acceptance by the insurer or lessee thereunder)
                  shall have been duly performed;

                       (bb) if a Wholesale Receivable, (i) the Principal Balance
                  of which (together with interest thereon) is payable in
                  accordance with the original terms thereof no later than 180
                  days after the original date of the Contract related

<PAGE>

                                                                              19

                  thereto, and (ii) the original maturity date thereof has not
                  been extended more than twice;

                       (cc) if a Domestic Wholesale Receivable, the related
                  Financed Aircraft of which has not been sold more than once or
                  to more than one other independent Dealer (exclusive of
                  Dealers owned by Raytheon Credit or RAC);

                       (dd) if a Nonstandard Receivable, a Rating Event shall
                  not have occurred and be continuing;

                       (ee) if an Affiliate Receivable, (x) prior to the
                  Settlement Date on which such Affiliate Receivable is
                  purchased or substituted, all actions required to assign (1)
                  to Raytheon Credit, and from Raytheon Credit to the Seller,
                  the Affiliate Obligor's rights under the Applicable Lease and
                  Financed Aircraft and (2) to the Administrative Agent, the
                  Seller's rights under the Financed Aircraft and the Applicable
                  Lease (including, without limitation, in case of clauses (1)
                  and (2), any notice to, consent of or acceptance by the
                  Unaffiliated Foreign Lessee party thereto) shall have been
                  duly performed and the Administrative Agent, for the ratable
                  benefit of the Purchasers, shall have a valid, perfected and
                  first priority security interest in such Financed Aircraft and
                  Applicable Lease as collateral security for the Affiliate
                  Obligor's obligations under such Affiliate Receivable, free
                  and clear of all Liens other than (i) the Lien created in
                  favor of Raytheon Credit and the Seller, (ii) the Lien created
                  under this Agreement in favor of the Administrative Agent for
                  the ratable benefit of the Purchasers and (iii) any Permitted
                  Receivable Lien, (y) on the Settlement Date on which such
                  Affiliate Receivable is purchased or substituted, no Rating
                  Event shall have occurred and be continuing and (z) the
                  Applicable Lease related thereto is an Eligible Applicable
                  Lease;

                       (ff) which is an "Eligible Receivable" under and as
                  defined in the Intercompany Purchase Agreement; and

                       (gg) with respect to a Receivable that has previously
                  been a Defaulted Receivable or Delinquent Receivable that was
                  repurchased or for which a substitution has been made, such
                  Receivable was repurchased at least 6 months prior to its
                  resale to the Purchasers and in respect of which the
                  applicable Obligor has been in full compliance with its
                  payment obligations thereunder for at least 3 consecutive
                  months;

         (y) with respect to any Existing Receivable, at the date of its
         purchase or substitution under the Existing Agreement pursuant to which
         it was sold to the Old Administrative Agent, such Receivable which was
         an "Eligible Receivable" (as defined in such applicable Existing
         Agreement) at such date.

         Notwithstanding any provision set forth in this definition of "Eligible
         Receivable" (except clause (x)(ff)), any Receivable which otherwise
         qualifies to be an "Eligible Receivable" and for which the Financed
         Aircraft related thereto receives a conveyance

<PAGE>

                                                                              20

         number from the FAA on or prior to the Applicable Settlement Date after
         the sale or substitution of such Receivable shall be deemed to be an
         "Eligible Receivable. Further, a Receivable (other than an Existing
         Receivable) created pursuant to a Contract under which (at the time of
         purchase or substitution thereof) the amount scheduled to be
         outstanding on any annual anniversary of the execution date of such
         Contract (assuming all scheduled payments have been made prior to such
         date) is greater than the amount which would have been so outstanding
         on such date if payments on such Contract prior to such anniversary had
         been made on a thirteen year mortgage-type amortization method,
         assuming a balloon payment of 30% of the original sales price scheduled
         for repayment at the end of the thirteenth year, shall not be an
         "Eligible Receivable."

                  "ERISA": the Employee Retirement Income Security Act of 1974,
                   -----
         as amended from time to time.

                  "Excess Mesa Receivables": as of any date of determination,
                   -----------------------
         the Principal Balances of all Purchased Receivables in respect of Mesa
         and all of its respective Affiliates to the extent such aggregate
         Principal Balances exceed an amount equal to 10% of the Outstanding
         Purchase Price on such date of determination (calculated after giving
         effect to all proposed purchases and substitutions on such date but
         excluding the Outstanding Purchase Price of Wholesale Receivables).

                  "Excess Spread":  as defined in subsection 2.16(b)(vi).
                   -------------

                  "Excluded Taxes" means, with respect to the Managing Facility
                   --------------
         Agent, the Administrative Agent, either Co-Administrative Agent, any
         Purchaser or any other recipient of any payment to be made by or on
         account of any obligation of the Seller hereunder, (a) income or
         franchise taxes imposed on (or measured by) its net income by the
         United States of America or by the jurisdiction under the laws of which
         such recipient is organized or in which its principal office is located
         or, in the case of any Purchaser, in which its applicable purchasing
         office is located, (b) any branch profits taxes imposed by the United
         States of America or any similar tax imposed by any other jurisdiction
         in which the Seller is located and (c) in the case of a Foreign
         Purchaser (other than an assignee pursuant to a request by the Seller
         under subsection 2.26(b)), any withholding tax that is imposed on
         amounts payable to such Foreign Purchaser at the time such Foreign
         Purchaser becomes a party to this Agreement or is attributable to such
         Foreign Purchaser's failure or inability to comply with Section
         2.23(e), except to the extent that such Foreign Purchaser's assignor
         (if any) was entitled, at the time of assignment, to receive additional
         amounts from the Seller with respect to such withholding tax pursuant
         to Section 2.23(a).

                  "ExIm Bank": the Export-Import Bank of the United States and
                   ---------
         any successor thereto.

                  "ExIm Bank Receivable": a Receivable, the payments of which
                   --------------------
         are insured by the ExIm Bank.

<PAGE>

                                                                              21

                  "Existing Agreements": the collective reference to the
                   -------------------
         Existing Commuter Agreement and the Existing GA Agreement.

                  "Existing Affiliate Receivable": each Existing Receivable
                   -----------------------------
         which, on and as of the Effective Date, is an "Affiliate Receivable"
         under and as defined in the Existing Agreement pursuant to which the
         Old Administrative Agent purchased such Receivable.

                  "Existing Certified Receivable": each Existing Receivable
                   -----------------------------
         which, on and as of the Effective Date, is a "Certified Foreign
         Receivable" under and as defined in the Existing Agreement pursuant to
         which the Old Administrative Agent purchased such Receivable.

                  "Existing Commuter Agreement": the Amended and Restated
                   ---------------------------
         Purchase and Sale Agreement dated as of March 8, 1996 among Raytheon
         Credit, the purchasers referred to therein, Swiss Bank Corporation, New
         York Branch, as administrative agent, Bank of America NT&SA, as
         documentation agent and co-agent, and Swiss Bank Corporation, New York
         Branch, as co-agent, as amended, supplemented or otherwise modified
         from time to time.

                  "Existing GA Agreement": the Second Amended and Restated
                   ---------------------
         Purchase and Sale Agreement dated as of March 8, 1996 among Raytheon
         Credit, the purchasers referred to therein and Swiss Bank Corporation,
         New York Branch, as agent, as amended, supplemented or otherwise
         modified from time to time.

                  "Existing Outstanding Balance": as of any date of
                   ----------------------------
         determination for any Existing Receivable, the "Outstanding Balance"
         thereof as determined under the Existing Agreement pursuant to which
         such Existing Receivable was purchased prior to the Effective Date.

                  "Existing Outstanding Purchase Price": as of any date of
                   -----------------------------------
         determination for any Purchaser, the sum of such Purchaser's
         "Outstanding Purchase Price", if any, under each of the Existing
         Agreements.

                  "Existing Principal Balance": as of any date of determination
                   --------------------------
         for any Existing Receivable, the "Principal Balance" thereof as
         determined under the Existing Agreement pursuant to which such Existing
         Receivable was purchased by the administrative agent or agent under
         such Existing Agreement.

                  "Existing Receivables": on the Effective Date, the collective
                   --------------------
         reference to the outstanding "Purchased Receivables" under and as
         defined in the Existing Agreements.

                  "Existing Registerable Lease Receivables": on the Effective
                   ---------------------------------------
         Date, the collective reference to the outstanding "Registerable Lease
         Receivables" under and as defined in the Existing Agreements.

                  "Existing Uncertified Foreign Receivables": on the Effective
                   ----------------------------------------
         Date, the collective reference to the outstanding "Foreign Uncertified
         Receivables" under and as defined in the Existing Agreements.

<PAGE>

                                                                              22

                  "Expense Amounts": the collective reference to amounts
                   ---------------
         required to be paid pursuant to (i) subsections 2.17(a), 2.17(b),
         2.17(c) and 2.17(d) and (ii) subsections 2.22, 2.23, 2.24 and 11.5 (to
         the extent that the Managing Facility Agent, the Administrative Agent
         or a Purchaser has made a demand therefor).

                  "Expiration Date": March 7, 2003 or, if the Revolving Period
                   ---------------
         is extended pursuant to subsection 2.8, 364 days after the date of the
         Expiration Date in effect at the time of such extension.

                  "Extended Term Receivable": as of any Settlement Date, any
                   ------------------------
         Receivable the Final Payment Date of which is later than (i) so long as
         no Rating Event has occurred and is continuing, thirteen years after
         such Settlement Date and (ii) during the continuance of a Rating Event,
         ten years after such Settlement Date, and, for purposes of subsection
         2.15, any Receivable the Final Payment Date of which is extended
         pursuant to subsection 7.1(b)(iv) to such later date.

                  "FAA":  the Federal Aviation Administration or any successor
                   ---
         thereto.

                  "FAA Assignment": the assignment, certificate or other
                   --------------
         document to be filed with the FAA Registry on or before the Closing
         Date or any Settlement Date with respect to a Financed Aircraft related
         to an Eligible Receivable to be purchased on the Closing Date or
         purchased or substituted on such Settlement Date, substantially in the
         form of (i) in the case of an assignment by the Seller of a security
         interest in a Financed Aircraft granted by an Obligor in favor of the
         Seller, Exhibit A-2 (for filing on the Closing Date) or Exhibit A-3
         (for filing on each Settlement Date) or, (ii) with respect to a
         Registerable Lease Receivable or an ExIm Bank Receivable, if the
         Financed Aircraft related thereto is (or the lessee under the related
         lease agrees will be) registered under the Aviation Act, in the case of
         the grant by the Seller in favor of the Administrative Agent for the
         ratable benefit of the Purchasers of a security interest in a Financed
         Aircraft and amounts payable under the related lease entered into with
         respect to such Lease Receivable or ExIm Bank Receivable, substantially
         in the form of Exhibit A-4 (for filing on the Closing Date) or Exhibit
         A-5 (for filing on a Settlement Date); in each case, with appropriate
         modifications which may be required as a result of changes in any
         Requirements of Law after the Closing Date pertaining to filings and
         recordings with the FAA Registry.

                  "FAA Filing Date": as defined in subsection 6.1(n)(ii).
                   ---------------

                  "FAA Registry": the FAA Aircraft Registry maintained on the
                   ------------
         Closing Date at the office of the FAA located in Oklahoma City,
         Oklahoma.

                  "Final Payment Date": with respect to a Purchased Receivable,
                   ------------------
         the scheduled final maturity date (which, with respect to a Lease
         Receivable, shall be the final scheduled rent payment date under the
         related Contract) of such Receivable.

                  "Finance Charge Collections": (i) with respect to Purchased
                   --------------------------
         Receivables constituting Lease Receivables a portion of the Collections
         thereunder representing the interest component of such lease, such
         interest component reflecting the interest rate as

<PAGE>

                                                                              23

         set forth in such lease and such portion being calculated in accordance
         with Credit and Collection Policy, (ii) with respect to all other
         Purchased Receivables, Collections on account of accrued finance
         charges, late fees and similar items in respect of such Purchased
         Receivables calculated, in each case, in accordance with the Credit and
         Collection Policy and (iii) Collections deemed by the Managing Facility
         Agent to be Finance Charge Collections pursuant to Section 2.16(a).

                  "Financed Aircraft": the Aircraft, together with all
                   -----------------
         accessions thereto, securing an Obligor's indebtedness under a
         Contract; provided that, the term "Financed Aircraft" when used herein
                   --------
         or in any other document, instrument or certificate delivered pursuant
         hereto shall mean or refer to, with respect to a Lease Receivable or an
         ExIm Bank Receivable, the Aircraft leased under the Contract pursuant
         to which such Lease Receivable was created, together with all
         accessions thereto.

                  "Foreign Assignment": with respect to each Foreign Receivable
                   ------------------
         (other than a L/C Receivable) and each Affiliate Receivable, each
         document, instrument, agreement (whether an assignment, security
         agreement, mortgage or otherwise) and certificate appropriate for
         filing in the applicable office in the applicable jurisdiction and
         necessary to evidence (i) in the case of Affiliate Receivables and of
         Foreign Receivables which are not Lease Receivables, the Lien in the
         related Financed Aircraft granted by the Obligor thereon in favor of
         Raytheon Credit and the assignment thereof by Raytheon Credit to the
         Seller and (ii) in the case of all such Foreign Receivables and all
         Affiliate Receivables, the Lien in the related Financed Aircraft
         granted by the Seller (or, as applicable, the Lien thereon assigned by
         the Seller) in favor of the Administrative Agent for the ratable
         benefit of the Purchasers; and all other filings and recordings
         necessary to perfect the Purchasers' first priority ownership or
         security interests in and to the Foreign Receivables or the Affiliate
         Receivables, as the case may be, and the related Contracts (including
         Applicable Leases) and Financed Aircraft.

                  "Foreign Obligor": an Obligor which is not located (within the
                   ---------------
         meaning of Section 9-307 of the New York UCC) within the United States
         and is not a citizen of the United States (as defined in the Aviation
         Act).

                  "Foreign Purchaser" means any Purchaser that is not organized
                   -----------------
         under the laws of the United States of America or a state thereof.

                  "Foreign Receivable": a Receivable the Obligor of which is a
                   ------------------
         Foreign Obligor.

                  "Foreign Wholesale Receivable": a Receivable arising under a
                   ----------------------------
         wholesale financing arrangement entered into by Raytheon Credit and, as
         Obligor thereunder, a Dealer located (within the meaning of Section
         9-307 of the New York UCC) outside the United States.

                  "Frozen Pool": as defined in subsection 2.8(b)(ii).
                   -----------

                  "GAAP":  generally accepted accounting principles applied on a
                   ----
         consistent basis.

<PAGE>

                                                                              24

                  "GA Receivable": a Receivable as to which the related Aircraft
                   -------------
         is a General Aviation Aircraft and the Obligor of which does not own
         and operate a commuter airline.

                  "General Aviation Aircraft": the collective reference to any
                   -------------------------
         aircraft manufactured (including sub-assembly) by RAC for general
         aviation purposes, and comparable general aviation aircraft
         manufactured by any other Person including, in all cases, without
         limitation, (i) any airframe, engines (whether or not any such engine
         has 750 or more rated takeoff horsepower or the equivalent of such
         horsepower, and including any replacement or substituted engine), and
         avionics, equipment and accessories at any time attached to, connected
         with or located in any such aircraft and, to the extent covered by the
         recording system of the Aviation Act, all logs, manuals and maintenance
         records with respect thereto and (ii) any avionics, equipment and
         accessories removed from any Aircraft and, to the extent not covered by
         the recording system of the Aviation Act, all logs, manuals and
         maintenance records.

                  "Governmental Authority": any nation or government, any state
                   ----------------------
         or other political subdivision thereof and any entity exercising
         executive, legislative, judicial, regulatory or administrative
         functions of or pertaining to government.

                  "Guarantee": the Amended and Restated Guarantee, substantially
                   ---------
         in the form of Exhibit B, to be made by Raytheon in favor of the
         Managing Facility Agent and the Purchasers, as the same may be amended,
         supplemented or otherwise modified from time to time.

                  "Guarantee Reaffirmation": the Reaffirmation, executed by the
                   -----------------------
         Guarantor and dated the Amendment Effective Date, consenting to the
         execution of this Agreement by the Seller and the Servicer and
         reaffirming the Guarantor's obligations under the Guarantee.

                  "Guarantor": Raytheon.
                   ---------

                  "Increasing Purchaser": as defined in Section 5.3.
                   --------------------

                  "Indebtedness": with respect to any Person at any date, (a)
                   ------------
         all indebtedness of such Person for borrowed money or for the deferred
         purchase price of property or services (other than current liabilities
         incurred in the ordinary course of business and payable in accordance
         with customary trade practices) or which is evidenced by a note, bond,
         debenture or similar instrument, (b) all obligations of such Person
         under capital leases, (c) all obligations of such Person in respect of
         acceptances issued or created for the account of such Person and (d)
         all liabilities secured by any Lien on any property owned by such
         Person even though such Person has not assumed or otherwise become
         liable for the payment thereof.

                  "Indemnified Amounts": as defined in subsection 9.1(a).
                   -------------------

                  "Indemnified Person": as defined in subsection 9.1(a).
                   ------------------

                  "Indemnified Taxes": Taxes other than Excluded Taxes.
                   -----------------

<PAGE>

                                                                              25

                  "Indemnitee": as defined in subsection 11.5(c).
                   ----------

                  "Ineligibility Event": with respect to any Purchased
                   -------------------
         Receivable, any event of the type specified in (1) clauses (i), (ii) or
         (iii) of subsection 2.11 or (2) clauses (vi) or (xii) of subsection
         9.1(a).

                  "Ineligible Receivable": (a) with respect to any Purchased
                   ---------------------
         Receivable other than an Existing Receivable, such Receivable, (i) at
         the date of its purchase or substitution, was not an Eligible
         Receivable at such date, (ii) relates to a Financed Aircraft which did
         not receive a conveyance number from the FAA on or prior to the third
         Settlement Date (or if Raytheon's Debt Rating is no lower than A/A2,
         the fourth Settlement Date; the third or fourth Settlement Date, as
         applicable, the "Applicable Settlement Date") following the date of its
                          --------------------------
         purchase or substitution or (iii) relates to a Financed Aircraft which
         becomes a Remarketed Aircraft; and

                  (b)  with respect to any Existing Receivable, such Receivable

                  (x)(i) at the date of its purchase or substitution under the
                  Existing Agreement pursuant to which it was sold to the
                  administrative agent or agent under such Existing Agreement,
                  was not an "Eligible Receivable" (as defined in such
                  applicable Existing Agreement) at such date or (ii) relates to
                  a Financed Aircraft which did not receive a conveyance number
                  from the FAA on or prior to the third Settlement Date (or if
                  Raytheon's Debt Rating is no lower than A/A2, the fourth
                  Settlement Date following the date of its purchase or
                  substitution under the applicable Existing Agreement; or

                  (y) relates to a Financed Aircraft which becomes a Remarketed
                  Aircraft; or

                  (z) on and as of the Closing Date (after giving effect to the
                  transactions contemplated under the Intercompany Purchase
                  Agreement on such date) such Receivable did not satisfy the
                  criteria specified in the following clauses under the
                  definition of "Eligible Receivable" herein (assuming for
                  purposes hereof, that such clauses are applicable to the
                  Existing Receivables): clauses (c), (h), (k), (l) (other than
                  any requirement that the related Financed Aircraft be free and
                  clear of Liens on such Effective Date), (m) (other than any
                  requirement that such Receivable be free and clear of Liens on
                  such Effective Date), (n)(ii), (o)(i), (x)(i), (y)(vi)(B),
                  (aa)(iv) or (ee)(x) except, that, (1) with respect to Existing
                                      ------  ----
                  Certified Receivables, prior to the Certified Opinion Delivery
                  Date, and with respect to all Existing Registerable Lease
                  Receivables, prior to the FAA Filing Date, any such Existing
                  Registerable Lease Receivable which does not satisfy any of
                  the criteria specified in such clauses (to the extent such
                  clauses are applicable to Existing Registerable Lease
                  Receivables) solely as a result of the failure to make any of
                  the filings, if any, required by subsection 6.1(n) shall not
                  be an Ineligible Receivable and (2) with respect to Existing
                  Uncertified Foreign Receivables, any such Existing Receivable
                  which does not satisfy any of the criteria specified in such
                  clauses (to the extent such clauses are applicable to such
                  type of Existing Receivable) solely as a result of the failure
                  to make any filing, if any, necessary to

<PAGE>

                                                                              26

                  (x) continue the Lien, if any, of the Administrative Agent, on
                  behalf of the Purchasers, in such Receivables, related
                  Financed Aircraft and Applicable Leases (if applicable) and
                  Collections thereon with the same priority thereon as in
                  effect immediately prior to the Effective Date or (y) perfect
                  the transfer by Raytheon Credit of such Receivables, the
                  related Financed Aircraft and Applicable Leases (if
                  applicable) and Collections thereon to the Seller pursuant to
                  the Intercompany Purchase Agreement shall not be an Ineligible
                  Receivable.

                  "Interbank Rate": for any Special Settlement Date Accrual
                   --------------
         Period, the sum of (i) the rate of interest per annum (rounded upward
         to the next 1/16th of 1%) determined by the Managing Facility Agent as
         follows:

                                       IBOR
                      ----------------------------------------
                        1.00 - Eurodollar Reserve Percentage

         plus (ii) the Applicable Margin;

         Where,

         Eurodollar Reserve Percentage means for any day for any Special
         Settlement Date Accrual Period, the maximum reserve percentage
         (expressed as a decimal, rounded upward to the next 1/100th of 1%) in
         effect on such day (whether or not applicable to any Purchaser) under
         regulations issued from time to time by the Board of Governors of the
         Federal Reserve System for determining the maximum reserve requirement
         (including any emergency, supplemental or other marginal reserve
         requirement) with respect to Eurocurrency funding (currently referred
         to as "Eurocurrency liabilities"); and

         IBOR means the rate of interest per annum determined by the Managing
         Facility Agent as the rate at which dollar deposits in the approximate
         amount of the Managing Facility Agent's Purchase amount for such
         Special Settlement Date Accrual Period, would be offered by Bank of
         America, N.A.'s Grand Cayman Branch, Grand Cayman B.W.I. (or by Bank of
         America, N.A.), to major banks in the offshore dollar interbank market
         at their request at approximately 11:00 a.m. (New York City time) two
         Business Days prior to the commencement of such Special Settlement Date
         Accrual Period.

                  "Intercompany Purchase Agreement": the Intercompany Purchase
                   -------------------------------
         and Contribution Agreement, dated as of March 20, 1997, between
         Raytheon Credit and the Seller, as amended, supplemented or otherwise
         modified from time to time.

                  "Interest Coverage Ratio": for any period, the ratio of
                   -----------------------
         Consolidated EBITDA for such period to Consolidated Net Interest
         Expense for such period.

                  "L/C Receivable": a Foreign Receivable which at any time is
                   --------------
         supported by a standby letter of credit in an amount at least equal to
         the outstanding Principal Balance on such Receivable issued in favor of
         the Seller and otherwise satisfying the requirements of clause (y) of
         the definition of "Eligible Receivables".

                  "Lease Collateral": as defined in subsection 11.12(a).
                   ----------------

<PAGE>

                                                                              27

                  "Lease Obligations": as defined in subsection 11.12(a).
                   -----------------

                  "Lease Receivable": any Receivable (other than an ExIm Bank
                   ----------------
         Receivable) created pursuant to a Contract which is a lease between
         Raytheon Credit, as lessor, and the Obligor thereunder, as lessee, with
         respect to the Aircraft described therein, other than any such
         Receivable which is also a L/C Receivable.

                  "LIBO Rate": for any Accrual Period (other than a Special
                   ---------
         Settlement Date Accrual Period), (A) the per annum rate (carried to the
         fifth decimal place) equal to (i) the rate determined by the Managing
         Facility Agent to be the offered rate that appears on the page of the
         Telerate Screen that displays an average British Bankers Association
         Interest Settlement Rate (such page currently being page number 3750)
         for deposits (for delivery on the Settlement Date which is the first
         day of such Accrual Period) with a term approximately equivalent to
         such Accrual Period, determined as of approximately 11:00 a.m. (London,
         England time) two Working Days prior to the Settlement Date which is
         the first day of such Accrual Period or (ii) in the event the rate
         referenced in the preceding clause does not appear on such page or
         service if such page or service shall cease to be available, the rate
         determined by the Managing Facility Agent to be the offered rate on
         such other page or other service that displays an average British
         Bankers Association Interest Settlement Rate for deposits (for delivery
         on the Settlement Date which is the first day of such Accrual Period)
         with a term approximately equivalent to such Accrual Period, determined
         as of approximately 11:00 a.m. (London, England time) two Working Days
         prior to the Settlement Date which is the first day of such Accrual
         Period, (B) if such rate cannot be calculated in accordance with clause
         (A), the "LIBO Rate" for that Accrual Period will be the rate per annum
         equal to the average (rounded upward to the nearest 1/16th of 1%) of
         the respective rates notified to the Managing Facility Agent by each
         Reference Bank as the rate at which such Reference Bank is offered U.S.
         dollar deposits in the London interbank eurodollar market for a period
         comparable in length to such Accrual Period, at or about 11:00 a.m.
         (London, England time) two Working Days prior to such Settlement Date
         and in an amount comparable to such Reference Bank's pro rata share of
         the Outstanding Purchase Price; or (C) if the LIBO Rate is not able to
         be determined pursuant to clauses (A) or (B), the rate per annum
         determined by the Managing Facility Agent in good faith, after
         consultation with the Purchasers, as reasonably reflecting the
         aggregate funding costs of the Purchasers.

                  "Lien": any mortgage, pledge, hypothecation, assignment,
                   ----
         deposit arrangement, encumbrance, lien (statutory or other), or
         preference, priority or other security agreement or preferential
         arrangement of any kind or nature whatsoever (including, without
         limitation, any conditional sale or other title retention agreement or
         any financing lease having substantially the same economic effect as
         any of the foregoing, and the filing of any financing statement under
         the UCC or comparable law of any jurisdiction in respect of any of the
         foregoing).

                  "Liquidity Bank": for any SPC, at any date of determination,
                   --------------
         the collective reference to the financial institutions which at such
         date are providing liquidity and/or credit facilities to or for the
         account of such SPC to fund such SPC's obligations

<PAGE>

                                                                              28

         hereunder or to support the securities (if any) issued by such SPC to
         fund such obligations.

                  "Low Wholesale Value": of any Aircraft at any date of
                   -------------------
         determination, the low wholesale value shown in the Aircraft Blue Book
         Price Digest most recently published prior to such date of
         determination for aircraft of substantially similar age and with
         comparable features as such Aircraft.

                  "Majority Purchasers": at any time, Purchasers the Commitment
                   -------------------
         Percentages of which aggregate at least 51%; provided that the
                                                      --------
         Commitment Percentage of any Dissenting Purchaser shall not be included
         in determinations of Majority Purchasers with respect to purchases or
         substitutions of Receivables or other matters not otherwise affecting
         Dissenting Purchasers; provided, further, that any action taken by the
                                --------  -------
         Managing Facility Agent and the Purchasers under subsection 8.2 (with
         the exception of subsection 8.2(b)) shall be deemed to affect a
         Dissenting Purchaser.

                  "Managing Facility Agent": as defined in the preamble to this
                   -----------------------
         Agreement.

                  "Mandatorily Redeemable Equity Securities" shall mean the
                   ----------------------------------------
         17,250,000 equity security units, including any remarketed securities,
         issued by Raytheon in May 2001. Each equity security unit consists of a
         contract to purchase shares of Raytheon's common stock on May 15, 2004,
         and a mandatorily redeemable equity security, with a stated liquidation
         amount of $50.00 due on May 15, 2004. The mandatorily redeemable equity
         security represents an undivided interest in the assets of RC Trust I,
         a Delaware business trust, formed for the purpose of issuing these
         securities and whose assets consist solely of subordinated notes issued
         by Raytheon.

                  "Material Adverse Effect": (i) with respect to the Seller, a
                   -----------------------
         material adverse effect on (a) the Purchased Receivables taken as a
         whole, (b) the ability of the Seller to perform its obligations under
         this Agreement, (c) the validity or enforceability of this Agreement or
         the rights or remedies of the Managing Facility Agent or the Purchasers
         under any Purchase Document or (d) the business, assets, properties or
         condition (financial or other) of the Seller and (ii) with respect to
         the Servicer, a material adverse effect on (a) the Purchased
         Receivables taken as a whole, (b) the ability of the Servicer to
         perform its obligations under this Agreement, (c) the validity or
         enforceability of this Agreement or the rights or remedies of the
         Managing Facility Agent or the Purchasers under any Purchase Document
         or (d) the business, assets, properties or condition (financial or
         other) of the Servicer.

                  "Mesa": Mesa Airlines, Inc., a New Mexico corporation.
                   ----

                  "Moody's": Moody's Investors Service, Inc.
                   -------

                  "Multiemployer Plan": a Plan which is a multiemployer plan as
                   ------------------
         defined in Section 4001(a)(3) of ERISA.

<PAGE>

                                                                              29

                  "Net Recoveries": all monies collected by the Seller, the
                   --------------
         Servicer or any other Person (from whatever source, including, without
         limitation, from the refinancing of the related Financed Aircraft) on
         account of a Defaulted Receivable (including, without limitation, from
         the sale or other disposition of the Financed Aircraft) net of any
         expenses incurred by the Seller, the Servicer or such Person in
         connection with the collection on such Defaulted Receivable and the
         refurbishment, disposition or disposal of the related Financed
         Aircraft.

                  "1997 Agreement": the Purchase and Sale Agreement, dated as of
                   --------------
         March 20, 1997, among the Seller, the Servicer, the financial
         institutions from time to time parties thereto (the "1997 Purchasers"),
                                                              ---------------
         The First National Bank of Boston, Bank of Montreal, The First National
         Bank of Chicago, Fleet National Bank, The Fuji Bank, Limited, New York
         Branch, The Sanwa Bank Limited, New York Branch and Westdeustche
         Landesbank Girozentrale, New York Branch, as co-agents for the 1997
         Purchasers, Swiss Bank Corporation, New York Branch, Bank of America
         National Trust and Savings Association, Canadian Imperial Bank of
         Commerce, New York Agency, The Chase Manhattan Bank, Citibank, N.A.,
         Credit Suisse First Boston, New York Branch, The Industrial Bank of
         Japan, Limited, Morgan Guaranty Trust Company of New York, and Wachovia
         Bank of Georgia, N.A., as agents for the 1997 Purchasers, and Swiss
         Bank Corporation, New York Branch, as administrative agent for the 1997
         Purchasers.

                  "90% Repurchase Receivables": at any date of determination,
                   --------------------------
         the collective reference to the following types of Receivables:

                       (a) L/C Receivables, the related letters of credit of
                  which are not issued by commercial banks which qualify as
                  Acceptable L/C Issuers at such date, it being understood that
                  an L/C Receivable shall be a 25% Repurchase Receivable if the
                  issuer of the related letter of credit does not qualify as an
                  Acceptable L/C Issuer at the time such Receivable is purchased
                  or substituted hereunder but does so qualify on such date of
                  determination;

                       (b) Uncertified Foreign Receivables (including Affiliate
                  Receivables which are Uncertified Foreign Receivables) which
                  are not L/C Receivables;

                       (c) Foreign Wholesale Receivables;

                       (d) Receivables which have not received conveyance
                  numbers from the FAA on or prior to the Applicable Settlement
                  Date after the sale or substitution of such Receivable;
                  provided, however, that (i) any such Receivable shall be
                  --------
                  repurchased by the Seller on such Applicable Settlement Date
                  and (ii) Receivables which are subject to this paragraph (d)
                  that are so repurchased by the Seller shall not be subject to
                  subsection 2.7(a)(viii);

                       (e) Excess Mesa Receivables; and

                       (f) all other Receivables which are not 25% Repurchase
                  Receivables or 75% Repurchase Receivables.

<PAGE>

                                                                              30

                  "Nonstandard Receivable": a Receivable (other than a Wholesale
                   ----------------------
         Receivable or a Receivable which has Mesa as the Obligor) created
         pursuant to a Contract under which (at the time of purchase or
         substitution thereof) the amount scheduled to be outstanding on any
         annual anniversary of the execution date of such Contract (assuming all
         scheduled payments have been made prior to such date) is greater than
         the amount which would have been so outstanding on such date if
         payments on such Contract prior to such anniversary had been made on a
         thirteen year mortgage-type amortization method, assuming a balloon
         payment of 20% (in the case of both a GA Receivable or a Commuter
         Receivable) of the original sales price scheduled for repayment at the
         end of the thirteenth year.

                  "Note Rate": with respect to any Accrual Period, a rate per
                   ---------
         annum equal to the LIBO Rate plus the Applicable Margin and the
         Amortization Adjustment, if any, calculated in accordance with this
         Agreement.

                  "Note Rate Amortization Event": an Amortization Event of the
                   ----------------------------
         type described in subsection 8.1(b), (c), (d), (e), (f), (g), (h), (i),
         (j), (l), (m) or (n).

                  "Obligations": as defined in the Guarantee.
                   -----------

                  "Obligor": each Person obligated to make payments in respect
                   -------
         of a Receivable, including each Affiliate Obligor under an Affiliate
         Receivable.

                  "Occurrence": as defined in subsection 10.5.
                   ----------

                  "Old Administrative Agent": UBS AG, Stamford Branch, as
                   ------------------------
         successor to Swiss Bank Corporation, Stamford Branch, as successor to
         Swiss Bank Corporation, New York Branch.

                  "Operating Lease Receivables": Lease Receivables which are
                   ---------------------------
         carried on the books of Raytheon Credit or the Seller as operating
         leases.

                  "Other Taxes" means any and all present or future stamp or
                   -----------
         documentary taxes or any other excise or property taxes, charges or
         similar levies arising from any payment made hereunder or from the
         execution, delivery or enforcement of, or otherwise with respect to,
         this Agreement or any other Purchase Document.

                  "Outstanding Balance": with respect to any Receivable at any
                   -------------------
         date of determination, the Purchase Price paid with respect to such
         Receivable less all Principal Collections and any reductions pursuant
         to subsection 2.6A applied to such Receivable on and prior to such date
         of determination.

                  "Outstanding Purchase Price": (a) as to all the Purchasers at
                   --------------------------
         any date of determination, the aggregate Purchase Prices which at such
         date have been paid to purchase Purchased Receivables (or portions
         thereof) in accordance with this Agreement minus the amount of
                                                    -----
         Principal Collections which have been received by the Purchasers
         (including, without limitation, Principal Collections which have been
         used to purchase additional Eligible Receivables pursuant to subsection
         2.15(b)) minus the amount, if any,
                  -----

<PAGE>

                                                                             31

         of Excess Spread which has been paid to the Purchasers pursuant to
         subsection 2.16(b)(vi)(2) minus the amount, if any, of reductions in
                                   -----
         the Outstanding Purchase Price pursuant to subsection 2.6A and (b) as
         to any Purchaser, its pro rata share of the Outstanding Purchase Price,
                               --- ----
         as determined pursuant to clause (a) above.

                  "Participant": as defined in subsection 11.6(b).
                   -----------

                  "Participated Receivable": a Receivable in which the Seller
                   -----------------------
         has a Seller's Interest pursuant to subsection 2.4(a).

                  "Permitted Aircraft Lien": with respect to any Financed
                   -----------------------
         Aircraft which is related to a Purchased Receivable, (A) any
         materialman's, mechanic's, workman's, repairman's or other like Lien
         which (i) arises in favor of a Person contracted by and on behalf of
         the Obligor or the Unaffiliated Foreign Lessee on the related Contract,
         (ii) arises in the ordinary course of business and (iii) (X) has been
         released or bonded against (or other credit assurances provided) in
         favor of the Administrative Agent and the Purchasers in an amount at
         least equal to the obligations secured by such Lien and otherwise in a
         manner reasonably satisfactory to the Managing Facility Agent and the
         Required Purchasers not more than 90 days after the earliest date on
         which the Seller, the Servicer or RAC knew of such Lien or (Y) secures
         obligations which are being contested in good faith by appropriate
         proceedings, so long as such proceedings do not involve any material
         danger of the sale, forfeiture or loss of such Financed Aircraft or any
         interest therein, or (B) any Lien which (i) is involuntary in nature,
         (ii) secures either (X) state taxes not yet due by the Obligor on the
         related Contract or which are being contested in good faith by
         appropriate proceedings by the Obligor or (Y) any judgment or decree
         entered against such Obligor, (iii) secures obligations which are
         immaterial in amount in relation to such Purchased Receivable and (iv)
         does not involve any material danger of the sale, forfeiture or loss of
         such Financed Aircraft, or (C) solely with respect to a Lease
         Receivable, a Lien on the Financed Aircraft related thereto arising
         under the related lease if the obligations of the lessee thereunder
         are, in accordance with GAAP, required to be capitalized on such
         lessee's balance sheet or (D) solely with respect to a Travel Air
         Receivable, Liens on the undivided interest(s) in the related Financed
         Aircraft which are not owned by the Seller, any affiliate of the
         Seller, or any Obligor under such Travel Air Receivable.

                  "Permitted Receivable Lien": with respect to any Purchased
                   -------------------------
         Receivable, if for any reason the Purchased Receivables are held to be
         the property of the Seller or the Affiliate Obligor, as the case may
         be, or if for any other reason this Agreement and the Assignments are
         held or deemed not to effect an absolute sale of the Purchased
         Receivables, any Lien which (i) is involuntary in nature, (ii) secures
         either (A) state taxes not yet due by the Seller or which are being
         contested in good faith by appropriate proceedings by the Seller or any
         of its Affiliates (so long as adequate reserves with respect thereto
         are maintained on the books of the Seller or such Affiliate in
         conformity with GAAP) or (B) any judgment or decree entered against the
         Seller or, with respect to an Affiliate Receivable, the related
         Affiliate Obligor, (iii) secures obligations which are immaterial in
         amount in relation to the Purchased Receivables taken as a whole and
         the related Contracts and Financed Aircraft and (iv) does not involve
         any material danger of the sale, forfeiture or loss of any Purchased
         Receivable, the Collections with respect

<PAGE>

                                                                              32

         thereto and the related Contract (including any Applicable Lease), and
         Financed Aircraft or any other Material Adverse Effect.

                  "Person": an individual, partnership, limited liability
                   ------
         company, corporation, business trust, joint stock company, trust,
         unincorporated association, joint venture, Governmental Authority or
         other entity of whatever nature.

                  "Plan": with respect to a Person, at a particular time, any
                   ----
         employee benefit plan which is covered by ERISA and in respect of which
         such Person or a Commonly Controlled Entity is (or, if such plan were
         terminated at such time, would under Section 4069 of ERISA be deemed to
         be) an "employer" as defined in Section 3(5) of ERISA.

                  "Principal Balance": at any date of determination, whether
                   -----------------
         before or after the occurrence and continuance of a Rating Event, the
         actual unpaid principal balance (or with respect to a Lease Receivable
         the aggregate amount of unpaid lease payments discounted at the
         lessor's implicit interest rate for the respective lease Contract) of a
         Receivable at such date of determination; provided that (i) the
                                                   --------
         Principal Balance of any Participated Receivable or Extended Term
         Receivable shall be a reference only to that portion of the actual
         unpaid principal balance of such Participated Receivable or Extended
         Term Receivable sold to the Purchasers hereunder at such date of
         determination and (ii) the Principal Balance of any Purchased
         Receivable on account of which a portion of the Discount Amount has
         been distributed pursuant to subsection 2.6A shall be a reference only
         to that portion of the actual unpaid principal balance of such
         Purchased Receivable held by the Purchasers hereunder and not
         constituting the Seller's Interest pursuant to subsection 2.6A at such
         date of determination.

                  "Principal Collections": with respect to each Purchased
                   ---------------------
         Receivable during any Settlement Period, Collections on account of such
         Purchased Receivable received during such Settlement Period minus the
         amount of Finance Charge Collections for such Purchased Receivable for
         such Settlement Period. Principal Collections shall include, without
         limitation, payments by the Seller in respect of repurchases of
         Purchased Receivables pursuant to subsections 2.7(b), 2.10, 2.10A,
         2.11, 2.12, the first sentence of subsection 2.13 and subsection
         7.1(b)(iv) and after the occurrence and continuance of a Rating Event,
         the portion of Net Recoveries allocated as Principal Collections
         pursuant to subsection 2.15(d).

                  "Pro Rata Credit":  as defined in subsection 2.1(d)(iii).
                   ---------------

                  "Pro Rata Debit":  as defined in subsection 2.1(d)(iii).
                   --------------

                  "Prohibited Jurisdiction": each jurisdiction listed on
                   -----------------------
         Schedule III and any jurisdiction notified from time to time to the
         Seller and the Servicer by the Managing Facility Agent, on behalf of
         the Purchasers, as a jurisdiction in which any Purchaser (an "Affected
                                                                       --------
         Purchaser") is prohibited, as a result of any conflict with a
         ---------
         Requirement of Law or with any policy of such Affected Purchaser, from
         making loans or other extensions of credit.

<PAGE>

                                                                              33

                  "Purchase Discount": during the continuance of a Discount
                   -----------------
         Event, with respect to all Receivables, 25%.

                  "Purchase Documents": the collective reference to this
                   ------------------
         Agreement, the Intercompany Purchase Agreement, each Assignment, each
         FAA Assignment, each Foreign Assignment, the Repurchase Agreement and
         the Guarantee.

                  "Purchase Price": (a) with respect to any Receivable to be
                   --------------
         purchased from the Seller or substituted by the Seller on any
         Settlement Date, an amount equal to the Principal Balance of such
         Receivable on the last day of the Settlement Period preceding such
         Settlement Date on which such Receivable is purchased or substituted,
         and

                  (b) with respect to a Substituted Lease Receivable substituted
         pursuant to subsection 2.13(e), the amount equal to the Principal
         Balance of such Receivable on the date on which such Substituted Lease
         Receivable is substituted;

         provided that, (x) if a Rating Event has occurred and is continuing as
         -------- ----
         of such Settlement Date, the Purchase Price for a Wholesale Receivable
         purchased or substituted shall be reduced by the amount of the security
         or other deposit made by the Obligor thereon and (y) if a Discount
         Event has occurred and is continuing as of such Settlement Date, the
         Purchase Price for each Receivable purchased shall be the Principal
         Balance thereof multiplied by a percentage equal to 100% less the
         Purchase Discount (and less amounts referred to in clause (x), if
         applicable).

                  "Purchase Report": each purchase report, substantially in the
                   ---------------
         form of Exhibit I, to be delivered by the Seller on each Settlement
         Date.

                  "Purchased Receivable": a Receivable (or a portion thereof in
                   --------------------
         the case of a Participated Receivable or an Extended Term Receivable)
         which is purchased or substituted pursuant to Section 2 (including,
         without limitation, subsection 2.3).

                  "Purchasers": as defined in the preamble of this Agreement.
                   ----------

                  "Purchasing Party": as defined in subsection 11.6(c).
                   ----------------

                  "Quarterly Receivable": any Receivable which is required to be
                   --------------------
         paid in quarterly installments.

                  "RAC": Raytheon Aircraft Company, a Kansas corporation and an
                   ---
         Affiliate of Raytheon Credit.

                  "RAC Repurchase Obligation": as defined in the Repurchase
                   -------------------------
         Agreement.

                  "RARC Repurchase Obligation": as defined in subsection
                   --------------------------
         2.10(b).

                  "RARC Repurchase Percentage": means 10%.
                   --------------------------

<PAGE>

                                                                              34

                  "Rating Event": any time when (a) Raytheon's Debt Rating is
                   ------------
         below BB+ or the equivalent thereof, or if for any reason Raytheon's
         long-term senior unsecured debt is not rated (whether by reason of
         suspension or withdrawal of a rating, or otherwise), (b) an
         Amortization Event described in subsection 8.1(o) shall have occurred
         and be continuing or (c) a Discount Event (which is not otherwise also
         a Rating Event) occurs and the Seller elects not to exercise its option
         to pay the Discount Amount pursuant to subsection 2.6A.

                  "Raytheon": Raytheon Company, a Delaware corporation and
                   --------
         indirect parent of the Seller, and its successors and assigns (as
         permitted by the Guarantee).

                  "Raytheon Credit": as defined in the preamble of this
                   ---------------
         Agreement.

                  "Raytheon Authorized Officers": the Chairman of the Board of
                   ----------------------------
         Directors, the President, the Executive Vice President-Chief Financial
         Officer and the Senior Vice President-Treasurer of Raytheon.

                  "Receivable": the right to receive all amounts (including fees
                   ----------
         and premiums if any) payable by the Obligor under a Contract including
         without limitation any amounts payable by the Obligor or an
         Unaffiliated Foreign Lessee upon the exercise of a purchase option or a
         prepayment option under any Contract, security deposits, engine reserve
         accounts and all other right, title and interest of the Seller under
         and with respect to a Contract, including, without limitation, all
         amounts from time to time payable and all rights to damages and to
         exercise remedies thereunder (including fees and premiums, if any), all
         collateral security therefor (including, without limitation, any
         Applicable Lease related thereto, and the related Financed Aircraft),
         guarantees thereof (whether by the Obligor, RAC or any of such Person's
         Affiliates or by any financial institution pursuant to a letter of
         credit issued in favor of the Seller or any of its Affiliates), rights
         to payment (whether by the Obligor thereon, any insurer or letter of
         credit issuer with respect thereto or any other Person) with respect
         thereto and all agreements or inducements made by or on behalf of RAC
         with respect to such related Contract or Financed Aircraft and all
         proceeds of the foregoing.

                  "Reference Banks": JPMorgan Chase Bank and Bank of America,
                   ---------------
         N.A.

                  "Refinanced Aircraft": except with respect to a new Aircraft
                   -------------------
         related to a Domestic Wholesale Receivable sold or substituted
         hereunder which has been sold to more than one Dealer, any Financed
         Aircraft (i) manufactured (including subassembly) by RAC, the related
         Obligor or Unaffiliated Foreign Lessee of which is not the initial
         purchaser or lessee thereof (including any Person who has assumed the
         obligations of an Obligor or Unaffiliated Foreign Lessee under a
         Contract in connection with the transfer of the related Aircraft, but
         excluding any Obligor or Unaffiliated Foreign Lessee who is a
         wholly-owned Affiliate of such initial purchaser) or (ii) manufactured
         by any other Person the acquisition of which has been financed or
         refinanced by Raytheon Credit.

                  "Register":  as defined in subsection 11.6(d).
                   --------

<PAGE>

                                                                              35

                  "Registerable Lease Receivable": any Lease Receivable the
                   -----------------------------
         related Financed Aircraft of which is determined to be property
         registerable in accordance with the Aviation Act in the Seller's name
         with the FAA Registry, such determination to be made by either (i) an
         opinion of counsel of the FAA or (ii) an opinion of Crowe & Dunlevy (or
         any other law firm acceptable to the Managing Facility Agent in its
         reasonable discretion) issued, in each case, as a result of a review of
         the related lease prior to filing thereof in accordance with this
         Agreement.

                  "Regulation U": Regulation U of the Board of Governors of the
                   ------------
         Federal Reserve System.

                  "Reimbursable Obligations":  as defined in subsection 2.14(c)
                   ------------------------
         (iii).

                  "Remarketed Aircraft": any Financed Aircraft which Raytheon
                   -------------------
         Credit or any of its Affiliates, at the request of the Obligor or
         Unaffiliated Foreign Lessee on the related Contract, has agreed to
         market and sell on behalf of such Person after such Person has notified
         the Seller or any of its Affiliates (in writing or otherwise) that it
         is or will be on the date its next scheduled payment is due unable to
         continue to meet its obligations under the related Contract. A Financed
         Aircraft shall be deemed to be a Remarketed Aircraft on the date
         Raytheon Credit or any of its Affiliates agrees to market such Financed
         Aircraft on such Person's behalf.

                  "Remittance Event": any time Raytheon's Debt Rating is below
                   ----------------
         BBB- or the equivalent thereof, or if for any reason Raytheon's
         long-term senior unsecured debt is not rated (whether by reason of
         suspension or withdrawal of a rating, or otherwise).

                  "Removed Receivable": as defined in subsection 2.13(a).
                   ------------------

                  "Replaced Lease Receivable": as defined in subsection 2.13(e).
                   -------------------------

                  "Reporting Date": with respect to a Settlement Period, the
                   --------------
         fifth Business Day following the last day of such Settlement Period,
         with the first such Reporting Date occurring hereunder on April 5,
         2002.

                  "Repurchase Agreement": that certain Second Amended and
                   --------------------
         Restated Repurchase Agreement, substantially in the form of Exhibit G,
         dated as of the Amendment Effective Date, between RAC and the Managing
         Facility Agent on behalf of the Purchasers, as amended, supplemented or
         otherwise modified from time to time.

                  "Repurchase Price":
                   ----------------

                  (a) with respect to a repurchase of or substitution for any
         Ineligible Receivable, an amount equal to the Principal Balance of such
         Ineligible Receivable on the last day of the Settlement Period
         preceding the Settlement Date on which such repurchase or substitution
         is to be made (as shown from the Settlement Statement delivered for
         such Settlement Period) less, if such Ineligible Receivable was
                                 ----
         purchased after the occurrence of a Discount Event at a discount
         pursuant to subsection 2.6, an amount equal to such Principal Balance
         at such last day times the Purchase Discount in effect on the
         Settlement

<PAGE>

                                                                              36

         Date such Ineligible Receivable was purchased plus, after a Trigger
         Amortization Event, accrued interest;

                  (b) with respect to a repurchase of or substitution for any
         Purchased Receivable which becomes a Defaulted Receivable during the
         Revolving Period, an amount equal to the Principal Balance of such
         Defaulted Receivable on the last day of the Settlement Period preceding
         the Settlement Date on which such repurchase or substitution is to be
         made (as shown from the Settlement Statement delivered for such
         Settlement Period) less, if such Defaulted Receivable was purchased
                            ----
         after the occurrence of a Discount Event at a discount pursuant to
         subsection 2.6, an amount equal to such Principal Balance at such last
         day times the Purchase Discount in effect on the Settlement Date such
         Defaulted Receivable was purchased; and

                  (c) with respect to a repurchase of or substitution for any
         Purchased Receivable which becomes a Defaulted Receivable during the
         Amortization Period, an amount equal to the Principal Balance of such
         Defaulted Receivable on the last day of the Settlement Period preceding
         the Settlement Date on which such repurchase or substitution is to be
         made (as shown from the Settlement Statement delivered for such
         Settlement Period).

                  "Required Purchasers": at any time, Purchasers the Commitment
                   -------------------
         Percentages of which aggregate at least 67%; provided that the
                                                      --------
         Commitment Percentage of any Dissenting Purchaser shall not be included
         in determinations of Required Purchasers with respect to purchases or
         substitutions of Receivables or other matters not otherwise affecting
         Dissenting Purchasers; provided, further, that any action taken by the
                                --------  -------
         Managing Facility Agent and the Purchasers under subsection 8.2 (with
         the exception of subsection 8.2(b)) shall be deemed to affect a
         Dissenting Purchaser.

                  "Requirement of Law": as to any Person, any law, treaty, rule
                   ------------------
         or regulation or final determination (after exhaustion of all appeals)
         of an arbitrator or a court or other Governmental Authority, in each
         case applicable to or binding upon such Person or any of its property
         or to which such Person or any of its property is subject.

                  "Resale": as defined in subsection 11.24.
                   ------

                  "Resale Purchase Price": as defined in subsection 11.24.
                   ---------------------

                  "Resold Receivable": as defined in subsection 11.24.
                   -----------------

                  "Responsible Officer": the president or chief credit officer
                   -------------------
         of the Seller.

                  "Revolving Period": the period from and including the
                   ----------------
         Amendment Effective Date to and including the earlier of (i) the
         Expiration Date and (ii) the date on which the Revolving Period is
         terminated pursuant to subsection 8.2(b) as a result of the occurrence
         of an Amortization Event.

                  "S&P": Standard & Poor's Ratings Services.
                   ---

<PAGE>

                                                                              37

                  "Secured Lease Receivables": the collective reference to (i)
                   -------------------------
         each Receivable which is a Lease Receivable purchased after the date
         hereof and in respect of which the filings referred to in subsection
         5.2(e) have been made and (ii) each Existing Receivable which is a
         "Registerable Lease Receivable" under the Existing Agreement pursuant
         to which such Receivable was purchased by the Old Administrative Agent
         and with respect to which all filings required under subsection
         6.1(n)(ii) have been made.

                  "Security Interest Leases": as defined in subsection 11.12.
                   ------------------------

                  "Seller": as defined in the preamble of this Agreement.
                   ------

                  "Seller's Interest": an amount equal to the subordinated
                   -----------------
         participating interest in the Purchased Receivables purchased by the
         Seller (i) pursuant to subsection 2.4(a) and subject to the terms of
         subsection 2.4(b), (ii) pursuant to subsection 2.5(a) and subject to
         the terms of subsection 2.5(b) and (iii) after the occurrence of a
         Discount Event, pursuant to subsection 2.6(b) and subject to the terms
         of subsection 2.6(c), and/or upon the occurrence of a Discount Event
         (which is not also a Rating Event) pursuant to subsection 2.6A and
         subject to the terms thereof.

                  "Semi-Annual Receivable": any Receivable which is required to
                   ----------------------
         be paid in semi-annual payments.

                  "Servicer": the Person appointed as servicer of the Purchased
                   --------
         Receivables pursuant to subsection 3.1.

                  "Servicer Letter of Credit": an irrevocable standby letter of
                   -------------------------
         credit issued in favor of the Managing Facility Agent and the
         Purchasers which:

                       (a) supports the obligations of the Servicer under this
                  Agreement;

                       (b) provides for drawings on sight or upon presentation
                  of certificates specified therein;

                       (c) is issued by a commercial bank, the short term
                  unsecured indebtedness of which, at the date the Servicer
                  Letter of Credit is issued and at all times thereafter, is
                  rated at least A-1 and P-1 by S&P and Moody's, respectively;

                       (d) at any date of determination, has an expiration date
                  which is not earlier than the second succeeding Settlement
                  Date after such date of determination;

                       (e) at any date of determination, has an available amount
                  equal to the aggregate amount of Principal Collections and
                  Finance Charge Collections for the three Settlement Periods
                  preceding such date of determination; and

                       (f) is otherwise in form and substance satisfactory to
                  the Managing Facility Agent and the Majority Purchasers.

<PAGE>

                                                                              38

                  "Servicing Fee": the fee which the Servicer is entitled to
                   -------------
         receive pursuant to subsection 3.4.

                  "Settlement Date": (i) with respect to a Settlement Period,
                   ---------------
         the tenth Working Day following the last day of such Settlement Period,
         with the first such Settlement Date under this Agreement occurring on
         March 8, 2002 and (ii) each Special Settlement Date.

                  "Settlement Period": each fiscal monthly period of the Seller
                   -----------------
         during each of its fiscal years during the term of this Agreement.

                  "Settlement Statement": a Settlement Statement delivered by
                   --------------------
         the Seller pursuant to this Agreement, substantially in the form of
         Exhibit C for delivery during the Revolving Period and with appropriate
         modifications thereto for delivery during the Amortization Period, in
         each case with appropriate insertions.

                  "75% Repurchase Receivables": at any date of determination,
                   --------------------------
         the collective reference to the following types of Receivables:

                       (a) Commuter Receivables the Obligor under which is
                  located (within the meaning of Section 9-307 of the New York
                  UCC) in the United States;

                       (b) Certified Foreign Receivables (including Affiliate
                  Receivables which are Certified Foreign Receivables); and

                       (c) the Travel Air Receivables.

                  "Solvent": as to any Person at any time, that (a) the fair
                   -------
         value of the property of such Person is greater than the amount of such
         Person's liabilities (including disputed, contingent and unliquidated
         liabilities) as such value is established and liabilities evaluated for
         purposes of Section 101(31) of the Bankruptcy Code (11 USC ss.
         101(31)); (b) the present fair saleable value of the property of such
         Person in an orderly liquidation of such Person is not less than the
         amount that will be required to pay the probable liability of such
         Person on its debts as they become absolute and matured; (c) such
         Person is able to realize upon its property and pay its debts and other
         liabilities (including disputed, contingent and unliquidated
         liabilities) as they mature in the normal course of business; (d) such
         Person does not intend to, and does not believe that it will, incur
         debts or liabilities beyond such Person's ability to pay as such debts
         and liabilities mature; and (e) such Person is not engaged in business
         or a transaction, and is not about to engage in a business or a
         transaction, for which such Person's property would constitute
         unreasonably small capital.

                  "SPC": each Purchaser which is a special purpose corporation
                   ---
         identified as such on the signature pages hereto next to the caption
         "SPC" and each special purpose corporation identified as such in a
         Commitment Transfer Supplement or a Transfer Notice.

                  "SPC Bank": each Purchaser which is identified as such on the
                   --------
         signature pages hereto next to the caption "SPC Bank" and immediately
         below the signature of its SPC.

<PAGE>

                                                                              39

                  "Special Settlement Date": each of March 29, 2002, June 28,
                   -----------------------
         2002, September 27, 2002 and December 31, 2002.

                  "Special Settlement Date Accrual Period": with respect to any
                   --------------------------------------
         Special Settlement Date, the period beginning on the third Working Day
         after such Special Settlement Date and ending on the next Settlement
         Date; provided that, if the notice provided for in Section 2.3 is
               -------- ----
         delivered to the Managing Facility Agent at least three Working Days
         before any Special Settlement Date, the Special Settlement Date Accrual
         Period with respect to such Special Settlement Date shall begin on such
         Special Settlement Date.

                  "Specified Amortization Event": (i) an Amortization Event of
                   ----------------------------
         the type described in subsection 8.1(a), (b), (e), (f), (j) (unless
         applicable to the Servicer which is neither Raytheon Credit nor an
         Affiliate of Raytheon Credit), (m), (n) or (o), or (ii) an Amortization
         Event of the type described in subsection 8.1(d) if such Amortization
         Event could reasonably be expected to have a Material Adverse Effect.

                  "Specified Resales":  as defined in subsection 11.24(a).
                   -----------------

                  "Stipulated Aircraft Value":  the Stipulated Aircraft Value as
                   -------------------------
         set forth in any lease Contract with respect to the related Financed
         Aircraft.

                  "Subsidiary": as to any Person, a corporation, partnership or
                   ----------
         other entity of which shares of stock or other ownership interests
         having ordinary voting power (other than stock or such other ownership
         interests having such power only by reason of the happening of a
         contingency) to elect a majority of the board of directors or other
         managers of such corporation, partnership or other entity are at the
         time owned, or the management of which is otherwise controlled,
         directly or indirectly through one or more intermediaries, or both, by
         such Person.

                  "Substituted Receivable": as defined in subsection 2.13(a).
                   ----------------------

                  "Substituted Lease Receivable": as defined in subsection
                   ----------------------------
         2.13(e).

                  "Syndication Materials": the collective reference to (i) the
                   ---------------------
         document dated February 2002 furnished on behalf of the Seller to the
         Purchasers with respect to the transactions contemplated by the
         Purchase Documents and (ii) those materials relating to the Receivables
         and related Contracts and Financed Aircraft and the business and
         operations of the Seller, RAC, Raytheon Credit and Raytheon.

                  "Taxes": means any and all present or future taxes, levies,
                   -----
         imposts, duties, deductions, charges or withholdings imposed by any
         Governmental Authority.

                  "Third Party Buyer": as defined in subsection 11.24.
                   -----------------

                  "Transferee": as defined in subsection 11.6(f).
                   ----------

                  "Transfer Notice": as defined in subsection 11.6(c).
                   ---------------

<PAGE>

                                                                              40

                  "Transferred Property": as defined in subsection 11.13(a)(i).
                   --------------------

                  "Travel Air": Raytheon Travel Air Company, a Kansas
                   ----------
         corporation.
                  "Travel Air Aircraft": Aircraft the undivided interests in
                   -------------------
         which are sold to Obligors pursuant to Travel Air Contracts.

                  "Travel Air Contracts": those purchase, management and other
                   --------------------
         agreements, substantially in the form of Exhibit I hereto, pursuant to
         which Travel Air has sold to an Obligor an undivided interest in an
         aircraft and agreed to the management (including interchange
         arrangements) with respect thereto.

                  "Travel Air Receivables": the collective reference to each
                   ----------------------
         Receivable secured by the applicable Obligor's rights and interests in
         and to the Travel Air Aircraft and the Travel Air Contracts.

                  "Trigger Amortization Event": any Amortization Event which
                   --------------------------
         occurs during, or which pursuant to subsection 8.2(b) results in the
         commencement of, the Amortization Period.

                  "25% Repurchase Receivables": at any date of determination,
                   --------------------------
         the collective reference to the following types of Receivables:

                       (a) Receivables arising from the financing of General
                  Aviation Aircraft, the Obligor under which is located (within
                  the meaning of Section 9-307 of the New York UCC) in the
                  United States;

                       (b) ExIm Bank Receivables; and

                       (c) L/C Receivables with a letter of credit issued by an
                  Acceptable L/C Issuer and held by the Bailee under the
                  Bailment Agreement.

                  "UCC": with respect to a specified jurisdiction, the Uniform
                   ---
         Commercial Code as from time to time in effect in such jurisdiction.

                  "Unadjusted Outstanding Balance": with respect to any
                   ------------------------------
         Receivable at any date of determination, the Purchase Price of such
         Receivable (without giving effect to any reduction of the Principal
         Balance, and thus the Purchase Price, on account of the payment of any
         Discount Amount with regard to such Receivable), plus any Purchase
         Discount attributable to such Receivable if purchased or substituted
         when a Discount Event shall exist, less all Principal Collections
         applied to such Receivable on and prior to such date of determination.

                  "Unaffiliated Foreign Lessee": with respect to any Affiliated
                   ---------------------------
         Receivable, the lessee under the related Applicable Lease.

                  "Uncertified Foreign Receivables": Foreign Receivables and
                   -------------------------------
         Affiliate Receivables which are not Certified Foreign Receivables.

<PAGE>

                                                                              41

                  "Unsecured Foreign Receivable": a Receivable arising from the
                   ----------------------------
         purchase of an Aircraft by an Obligor not located (within the meaning
         of Section 9-307 of the New York UCC) within the United States, the
         Principal Balance of which is less than $500,000 at the time of
         purchase or substitution hereunder.

                  "Uncertified Lease Receivables": A Foreign Receivable which is
                   -----------------------------
         a Lease Receivable with a Foreign Obligor for which a Lien on the
         Financed Aircraft has not been granted by the Seller to the
         Administrative Agent under Sections 2.27(a)(iii)(A) and
         2.27(a)(iii)(B).

                  "Unsecured Receivables": the collective reference to each
                   ---------------------
         Receivable which is (i) an Unsecured Foreign Receivable, (ii) an
         Existing Certified Receivable with respect to which the requirements of
         subsection 6.1(n)(i) have not been satisfied, (iii) an Existing
         Receivable which is an "Uncertified Foreign Receivable" under and as
         defined in the Existing Agreement pursuant to which such Receivable was
         purchased, (iv) an Existing Receivable which is a "Registerable Lease
         Receivable" under the Existing Agreement pursuant to which such
         Receivable was purchased and with respect to which the requirements of
         subsection 6.1(n)(ii) have not been satisfied and (v) an Uncertified
         Lease Receivable.

                  "Wholesale Receivable": a Domestic Wholesale Receivable or a
                   --------------------
         Foreign Wholesale Receivable.

                  "Working Day": any Business Day on which dealings in foreign
                   -----------
         currencies and exchange between banks may be carried on in London,
         England.

                  1.2 Other Definitional Provisions. (a) Unless otherwise
                      -----------------------------
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto.

                  (b) As used herein and in any certificate or other document
made or delivered pursuant hereto, accounting terms relating to the Seller and
its Subsidiaries not defined in subsection 1.1 and accounting terms partly
defined in subsection 1.1, to the extent not defined, shall have the respective
meanings given to them under GAAP.

                  (c) When used in this Agreement, "purchase" and its
correlative meanings shall refer to purchases of Eligible Receivables by the
Purchasers pursuant to and subject to the terms and conditions of, this
Agreement.

                  (d) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.

                  (e) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.

<PAGE>

                                                                              42

                  SECTION 2.  AMOUNT AND TERMS OF COMMITMENTS

                  2.1 Agreement to Purchase and Sell; Special Purpose
                      -----------------------------------------------
Purchasers; Initial Utilization and Pro Ration. (a) Subject to the terms and
----------------------------------------------
conditions hereof, the Seller agrees to sell to each Purchaser, and each
Purchaser severally agrees to purchase from the Seller from time to time during
the Revolving Period, undivided interests in Receivables with an Outstanding
Purchase Price at any one time as to such Purchaser not to exceed the amount of
such Purchaser's Commitment. The Outstanding Purchase Price of all Purchased
Receivables (exclusive of the interests of Dissenting Purchasers) at any one
time shall not exceed the aggregate Commitments then in effect. Each purchase
and sale of Receivables shall, subject to the terms and conditions hereof, take
place on the Closing Date or on any Settlement Date during the Revolving Period.
Each Purchaser's Available Commitment Percentage of the Purchase Price for the
Receivables being purchased on the Closing Date or such Settlement Date shall
not exceed such Purchaser's Available Commitment at such date (calculated before
giving effect to any such purchase). Upon the expiration of the Revolving
Period, the Commitments will be canceled, the Purchasers will have no further
commitment to purchase Receivables hereunder and Collections on the Purchased
Receivables will continue to be applied in respect of the Outstanding Purchase
Price in accordance with the terms of this Agreement.

                  (b) In consideration of the agreements set forth herein, upon
each purchase of Receivables hereunder, the Seller will sell, assign and
transfer to the Purchasers all of its right, title and interest in and to the
Receivables, the related Contracts (including any Applicable Leases) and
Financed Aircraft.

                  (c) Except for Three Rivers Funding Corporation, nothing
contained herein shall constitute a commitment by an SPC to make purchases. For
any Purchaser which is an SPC Bank, any purchase to be made by such Purchaser
may from time to time be made by the related SPC in its sole discretion and
nothing herein contained shall constitute a commitment to make purchases by such
SPC; provided that if any SPC elects not to make a purchase, its SPC Bank agrees
     --------
it will make such purchase pursuant to the terms hereof. Any purchase by an SPC
shall constitute a utilization of the Commitment of the SPC Bank.

                  (d) It is expressly agreed that on the Closing Date,
immediately following the purchases and sales provided for above in subsection
2.1(d) of the 1997 Agreement, each Existing Agreement was deemed amended and
restated by the 1997 Agreement.

                  2.2 Procedures for Making Purchases. The Seller shall give the
                      -------------------------------
Managing Facility Agent irrevocable notice, which notice must be received by the
Managing Facility Agent prior to 10:00 a.m., New York City time, on the
Reporting Date prior to the Settlement Date (other than a Special Settlement
Date) on which the Seller wishes to sell Eligible Receivables hereunder (or, in
the case of the initial purchase, three Working Days prior to the Closing Date).
Each such notice of a proposed purchase shall specify the date of purchase
(which shall be the Closing Date or the Settlement Date next succeeding such
Reporting Date), the aggregate Outstanding Purchase Price of the Purchased
Receivables prior to such proposed purchase (after giving effect to the
application of Collections on the related Settlement Date), the Principal
Balance and the Purchase Price for each Receivable which the Seller proposes to
sell on the Closing Date or such Settlement Date and any other information which
the Managing Facility

<PAGE>

                                                                              43

Agent, in its reasonable discretion, may require prior to the Closing Date or
such Settlement Date. Upon receipt of any such notice from the Seller, the
Managing Facility Agent shall promptly notify each Purchaser thereof. Prior to
11:00 a.m., New York City time, on each such Settlement Date on which a purchase
has been requested to be made, each Purchaser shall make available to the
Managing Facility Agent, in immediately available funds at the Managing Facility
Agent's office specified in subsection 11.2, the amount of such Purchaser's pro
                                                                            ---
rata share of such aggregate Purchase Price for all Receivables being purchased
----
on such Settlement Date. Subject to the terms and conditions hereof, the
proceeds of such purchase will then be made available (or deemed made available
if subsection 2.15 is applicable) to the Seller by the Managing Facility Agent
crediting the account of the Seller on the books of such office with the
aggregate of the amounts made available to the Managing Facility Agent by the
Purchasers and in like funds as received by the Managing Facility Agent.

                  2.3 Special Settlement Dates. On each Special Settlement Date,
                      ------------------------
the Seller will be permitted to sell Eligible Receivables to the Purchasers. In
connection with any purchase of Eligible Receivables on any Special Settlement
Date, the Seller shall give the Managing Facility Agent irrevocable notice,
which notice must be received by the Managing Facility Agent prior to 10:00
a.m., New York City time on the day which is one Business Day prior to such
Special Settlement Date. Each such notice, which shall be in the form of Exhibit
H, shall specify (i) the aggregate Outstanding Purchase Price of the Purchased
Receivables prior to such proposed purchase, (ii) the Principal Balance and the
Purchase Price for each Receivable which the Seller proposes to sell on such
Special Settlement Date and (iii) the amount of 90% Repurchase Receivables, 75%
Repurchase Receivables and 25% Repurchase Receivables, respectively, included in
the Receivables which the Seller proposes to sell on such Special Settlement
Date. Upon receipt of any notice from the Seller, the Managing Facility Agent
shall promptly notify each Purchaser thereof. Prior to 11:00 a.m., New York City
time, on such Special Settlement Date, each Purchaser shall make available to
the Managing Facility Agent, in immediately available funds at the Managing
Facility Agent's office specified in Section 11.2, the amount of such
Purchaser's pro rata share of the aggregate Purchase Price for all Receivables
            --- ----
being purchased on such Special Settlement Date. Subject to the terms and
conditions hereof, the proceeds of such purchase will then be made available to
the Seller by the Managing Facility Agent crediting the account of the Seller on
the books of such office with the aggregate of the amounts made available to the
Managing Facility Agent by the Purchasers and in like funds as received by
Managing Facility Agent.

                  2.4 Participated Receivables. (a) In the event that on any
                      ------------------------
Settlement Date the aggregate Available Commitments are less than the aggregate
Purchase Price of Eligible Receivables the Seller proposes to sell on such
Settlement Date, and so long as no Rating Event has occurred and is continuing,
the Purchasers agree, subject to the terms and conditions in this Agreement, to
purchase an interest in each such Receivable, the Purchase Price of which would
otherwise exceed the amount of the Available Commitments, up to the aggregate
Available Commitments then in effect. The Purchase Price for each such
Receivable shall be deemed to be the Principal Balance able to be purchased
under the Available Commitments; provided that the Available Commitments shall
                                 --------
first be applied to purchase Receivables other than Participated Receivables to
the fullest extent available and next to purchase Participated Receivables. The
portion of each such Receivable not available to be purchased by the Purchasers
shall be an

<PAGE>

                                                                              44

interest of the Seller in such Receivable and shall represent the Seller's
Interest in such Participated Receivable. The Seller's Interest in each
Participated Receivable shall be subordinated and junior to the rights of the
Purchasers in accordance with the terms and conditions of subsection 2.4(b). The
portion of any Participated Receivable representing the Seller's Interest
therein shall be, subject to the terms and conditions of this Agreement,
available as a Receivable for purchase by the Purchasers on subsequent
Settlement Dates.

                  (b) The Seller's Interest in and to each Participated
Receivable shall be subordinate and junior in right of payment and all other
rights to the rights of the Purchasers with respect to such Participated
Receivable, including, but not limited to, the rights of the Purchasers to
receive all Principal Collections and Finance Charge Collections on such
Participated Receivable. Such subordination shall be in effect until the
Principal Balance purchased by the Purchasers of the Participated Receivable,
after application of Principal Collections received on account of such
Participated Receivable, has been reduced to zero and, accordingly, the Seller
shall not (except as provided in subsection 2.16(b)) be entitled to receive any
amounts with respect to a Participated Receivable on account of the Seller's
Interest therein until such time. If the Seller receives any payment on account
of the Seller's Interest in any Participated Receivable prior to the time at
which it is entitled to retain such payment pursuant to this subsection 2.4(b),
the Seller shall hold such payment in trust for the Managing Facility Agent and
the Purchasers and shall immediately deposit such payment into the Concentration
Account.

                  2.5 Extended Term Receivables. (a) The Purchasers agree,
                      -------------------------
subject to the terms and conditions of this Agreement, on the Closing Date and
any Settlement Date to purchase Extended Term Receivables, up to each
Purchaser's Available Commitment, for a Purchase Price equal to (a) the actual
unpaid Principal Balance of such Receivable on the last day of the Settlement
Period preceding the date of purchase less (b) the aggregate amount of principal
payments scheduled to be made thereon after the Cash Flow Cutoff Date for such
Extended Term Receivable. The portion of each such Receivable not available to
be purchased by the Purchasers shall be an interest of the Seller in such
Receivable and shall represent the Seller's Interest in such Extended Term
Receivable. The Seller's Interest in each Extended Term Receivable shall be
subordinated and junior to the rights of the Purchasers in accordance with the
terms and conditions of subsection 2.5(b). The portion of the actual unpaid
principal balance of any Extended Term Receivable representing the Seller's
Interest therein shall be, subject to the terms and conditions hereof
(including, without limitation, that principal payments scheduled to be made
after the applicable Cash Flow Cutoff Date at any date of determination are not
available for purchase under this Agreement), available for purchase by the
Purchasers on subsequent Settlement Dates.

                  (b) The Seller's Interest in and to each Extended Term
Receivable shall be subordinate and junior in right of payment and all other
rights to the rights of the Purchasers with respect to such Extended Term
Receivable, including, but not limited to, the rights of the Purchasers to
receive all Principal Collections and Finance Charge Collections on such
Extended Term Receivable. Such subordination shall be in effect until the
Principal Balance purchased by the Purchasers of the Extended Term Receivable,
after application of Principal Collections received on account of such Extended
Term Receivable, has been reduced to zero and, accordingly, the Seller shall not
be entitled to receive any amounts with respect to a Extended Term Receivable on
account of the Seller's Interest therein until such time. If the Seller receives

<PAGE>

                                                                              45

any payment on account of the Seller's Interest in any Extended Term Receivable
prior to the time at which it is entitled to retain such payment pursuant to
this subsection 2.5(b), the Seller shall hold such payment in trust for the
Managing Facility Agent and the Purchasers and shall immediately deposit such
payment into the Concentration Account.

                  2.6 Certain Actions Following a Rating Event and a Discount
                      -------------------------------------------------------
Event. (a) If a Rating Event shall occur, then no later than the 20th Business
-----
Day following such occurrence (provided such Rating Event shall then be
continuing) the Seller shall deposit cash into the Cash Collateral Account in an
amount equal to the RARC Repurchase Obligation (as of the Settlement Date
preceding such date of deposit). As long as any Rating Event continues, (i) the
Seller shall deposit cash into the Cash Collateral Account in an amount equal to
any incremental increase in the RARC Repurchase Obligation resulting from
purchases of Receivables after the occurrence of such Rating Event immediately
after such incremental increase and (ii) any amounts deposited in the Cash
Collateral Account shall be applied from time to time in accordance with
subsection 2.14(c). If such Rating Event shall cease to continue, the Managing
Facility Agent shall, upon written request of the Seller, withdraw amounts so
deposited in the Cash Collateral Account and deliver such amounts to the Seller
(or upon its order).

                  (b) On each Settlement Date after the occurrence and during
the continuance of a Discount Event, each purchase of Eligible Receivables in
accordance with the terms and conditions specified in this Agreement shall be at
a discount as specified in the proviso contained in the definition of "Purchase
                               -------
Price" and the portion of such Receivable's Principal Balance equal to the sum
of the reductions and discounts required pursuant to such proviso clause shall
                                                          -------
be an interest of the Seller in such Receivable and shall constitute the
Seller's Interest; as necessary to evidence such interest, Assignments in
substantially the form attached hereto and reflecting applicable changes shall
be executed and delivered. The Seller's Interest in each Purchased Receivable
created pursuant to this clause (b) shall be subordinated and junior to the
rights of the Purchasers in accordance with the terms and conditions of
subsection 2.6(c). If a Discount Event is no longer continuing, the portion of
any Receivable representing the Seller's Interest created therein pursuant to
this clause (b) shall, subject to the terms and conditions of this Agreement, be
deemed to be available as a Receivable for purchase by the Purchasers on
subsequent Settlement Dates.

                  (c) The Seller's Interest in and to each Purchased Receivable
a portion of which is an interest of the Seller pursuant to subsection 2.6(b)
shall be subordinate and junior in right of payment and all other rights to the
rights of the Purchasers with respect to the Purchased Receivables, including,
but not limited to, the rights of the Purchasers to receive all Principal
Collections and Finance Charge Collections on the Purchased Receivables until
the Outstanding Purchase Price has been reduced to zero and all other amounts
owing to the Managing Facility Agent or any Purchaser under any Purchase
Document have been paid in full and, accordingly, the Seller shall not (except
as provided in subsection 2.16(b)) be entitled to receive any amounts on account
of the Seller's Interest in such Purchased Receivables until the Outstanding
Purchase Price has been reduced to zero and all other amounts owing to the
Managing Facility Agent or any Purchaser under any Purchase Document have been
paid in full, provided that during the Revolving Period, the Seller shall have a
              --------
right to receive Principal Collections in respect of such Seller's Interest in
accordance with subsection 2.16(a).

<PAGE>

                                                                              46

                  (d) If a Rating Event shall occur and be continuing, Lease
Receivables, 90% Repurchase Receivables, Unsecured Foreign Receivables,
Nonstandard Receivables, ExIm Bank Receivables, Affiliate Receivables and
Receivables (other than Wholesale Receivables) the payments of which are not
required to be made at least monthly and Receivables the Obligor of which is a
Governmental Authority (other than a United States Federal Governmental
Authority) will not be eligible for purchase or substitution hereunder
(including Lease Receivables under subsection 2.13(e)).

                  (e) If a Rating Event shall occur and be continuing and the
Servicer makes a drawing under any letter of credit related to a L/C Receivable
pursuant to subsection 3.2(a), the Servicer shall deposit the amount of such
drawing in the Collection Account on the date deposits are required to be made
hereunder pursuant to subsection 2.14(a).

                  (f) [Intentionally Omitted.]

                  (g) If a Rating Event shall occur or be continuing, the other
provisions of this Agreement regarding such event including, without limitation,
those specified in clause (k) of the definition of "Eligible Applicable Lease",
clauses (c), (x), (y), (aa), (dd) and (ee) of the definition of "Eligible
Receivable", the definition of "Purchase Price", and subsections 2.4, 2.5, 2.10,
2.11, 2.14, 2.15, 2.16, 11.1 and 11.7 hereof, shall apply.

                  2.6A. Certain Actions Following a Discount Event. (a) Upon the
                        ------------------------------------------
first occurrence of a Discount Event (which is not also a Rating Event), the
Seller shall have the option to either (i) deem such Discount Event to be also a
Rating Event or (ii) determine and pay the Discount Amount in accordance with
paragraph (b) below.

                  (b) If, upon the first occurrence of a Discount Event (which
is not also a Rating Event), the Seller elects to exercise its option in clause
(ii) above to determine and pay the Discount Amount, then not later than the 5th
Business Day following such occurrence, the Seller shall pay or shall cause to
be paid to the Managing Facility Agent, for the ratable benefit of the
Purchasers in immediately available funds, the Discount Amount, determined as of
the date of such Discount Event. Upon such payment, the Managing Facility Agent
shall distribute the Discount Amount pro rata to the Purchasers in accordance
with each Purchaser's Outstanding Purchase Price, and, without duplication, the
then Outstanding Purchase Price shall be reduced by an amount equal to such
distribution and the Outstanding Balance and the Principal Balance of each
Purchased Receivable then existing shall be reduced by its pro rata share of
such distribution. The interest in the Purchased Receivables allocable to the
Discount Amount shall be an interest of the Seller in such Receivables and shall
constitute the Seller's Interest; as necessary to evidence such interest,
Assignments in substantially the form attached hereto and reflecting applicable
changes shall be executed and delivered by the Administrative Agent on behalf of
the Purchasers in favor of the Seller and each of the Purchasers hereby
authorizes the Administrative Agent to execute and deliver on behalf of such
Purchaser any such Assignments. The Seller's Interest in and to each Purchased
Receivable created pursuant to this subsection 2.6A(b) shall be subordinate and
junior in right of payment and all other rights to the rights of the Purchasers
with respect to the Purchased Receivables, including, but not limited to, the
rights of the Purchasers to receive all Principal Collections and Finance Charge
Collections on the Purchased Receivables until the Outstanding Purchase Price
has been reduced to zero and all

<PAGE>

                                                                              47

other amounts owing to the Managing Facility Agent or any Purchaser under any
Purchase Document have been paid in full and, accordingly, the Seller shall not
be entitled to receive any amounts on account of the Seller's Interest in such
Purchased Receivables until the Outstanding Purchase Price has been reduced to
zero and all other amounts owing to the Managing Facility Agent or any Purchaser
under any Purchase Document have been paid in full, provided that during the
Revolving Period, the Seller shall have a right to receive Principal Collections
in respect of such Seller's Interest in accordance with subsection 2.16(a). If
such Discount Event is no longer continuing, the portion of any Receivable
representing the Seller's Interest created therein pursuant to this subsection
2.6A(b) shall, subject to the terms and conditions of this Agreement, be deemed
to be available as a Receivable for purchase by the Purchasers on subsequent
Settlement Dates.

                  2.7 Concentration Limits. (a) The Seller shall not sell or
                      --------------------
substitute Eligible Receivables on any Settlement Date if, and to the extent
that, after giving effect to such sales and substitutions on such date (unless
the Managing Facility Agent and all of the Purchasers otherwise agree with
respect to clauses (i) and (ii) below and unless the Managing Facility Agent and
the Required Purchasers otherwise agree with respect to clauses (iii) through
(xvi) below):

                       (i)     the aggregate outstanding Principal Balances of
                  all Purchased Receivables in respect of a single Obligor and
                  all of its Affiliates or a single Unaffiliated Foreign Lessee
                  and all of its Affiliates would exceed an amount equal to 10%
                  of the Outstanding Purchase Price on such Settlement Date,
                  provided, that (x) if no Amortization Event has occurred and
                  --------
                  is continuing, the Servicer may request that the 10%
                  concentration limit with respect to any Obligor be waived and
                  such waiver may be granted with the unanimous written consent
                  of the Purchasers; and (y) the 10% concentration limit is
                  hereby waived with respect to Mesa, and a 13% concentration
                  limit shall be applicable to Mesa;

                       (ii)    the aggregate outstanding Principal Balances of
                  Purchased Receivables of the five Obligors and all of their
                  Affiliates with the largest aggregate outstanding Principal
                  Balances would exceed an amount equal to 35% of the
                  Outstanding Purchase Price on such Settlement Date. For
                  purposes of this subsection 2.7(a)(ii), the Obligor under an
                  Affiliate Receivable shall be deemed to be the Unaffiliated
                  Foreign Lessee thereunder;

                       (iii)   the aggregate outstanding Principal Balances of
                  Purchased Receivables created in connection with the financing
                  or refinancing of Refinanced Aircraft would constitute more
                  than 50% of the Outstanding Purchase Price paid for all
                  Receivables (other than Wholesale Receivables) on such
                  Settlement Date;

                       (iv)    the aggregate outstanding Principal Balances of
                  all Nonstandard Receivables would exceed an amount equal to
                  35% of the Outstanding Purchase Price on such Settlement Date;

                       (v)     the aggregate outstanding Principal Balances of
                  all Secured Lease Receivables would exceed an amount equal to
                  45% of the Outstanding Purchase Price on such Settlement Date;

<PAGE>

                                                                              48

                       (vi)    the aggregate outstanding Principal Balances of
                  all Uncertified Foreign Receivables (other than L/C
                  Receivables and Foreign Wholesale Receivables) would exceed an
                  amount equal to 40% of the Outstanding Purchase Price on such
                  Settlement Date;

                       (vii)   the aggregate outstanding Principal Balances of
                  all Purchased Receivables which are not required to be paid in
                  consecutive monthly installments (including, without
                  limitation, Quarterly Receivables and Semi-Annual Receivables
                  but excluding those Receivables referred to in clause
                  (g)(ii)(B) of the definition of "Eligible Receivables") would
                  exceed 20% of the Outstanding Purchase Price on such
                  Settlement Date;

                       (viii)  the aggregate outstanding Principal Balances of
                  all Purchased Receivables with respect to which the FAA
                  Assignment for the Financed Aircraft related thereto (if
                  required by subsection 5.2(e) hereof) is without a conveyance
                  number from the FAA on such Settlement Date would exceed 20%
                  of the Outstanding Purchase Price on such Settlement Date;
                  provided that if Raytheon's Debt Rating is below BBB- or the
                  --------
                  equivalent thereof, the concentration limit shall be 0%;

                       (ix)    with respect to each foreign jurisdiction (other
                  than Brazil, Turkey and Venezuela) whose long-term foreign
                  currency debt rating is rated below BBB- or the equivalent
                  thereof, the aggregate outstanding Principal Balances of all
                  Purchased Receivables which are Foreign Receivables having a
                  Foreign Obligor located in such jurisdiction would exceed an
                  amount equal to 5% or, in the case of each of Brazil, Turkey
                  and Venezuela, 10% of the Outstanding Purchase Price on such
                  Settlement Date. For purposes of this clause (ix), the Obligor
                  under an Affiliate Receivable shall be deemed to be the
                  Unaffiliated Foreign Lessee thereunder;

                       (x)     the aggregate outstanding Principal Balances of
                  all Unsecured Receivables on any Settlement Date would exceed
                  an amount equal to 30% of the Outstanding Purchase Price on
                  such Settlement Date;

                       (xi)    the aggregate outstanding Principal Balances of
                  all Wholesale Receivables would exceed an amount equal to 20%
                  of the Outstanding Purchase Price on such Settlement Date;

                       (xii)   the aggregate outstanding Principal Balances of
                  all Unsecured Foreign Receivables the Obligor of which is a
                  Governmental Authority would exceed an amount equal to 2% of
                  the Outstanding Purchase Price on such Settlement Date;

                       (xiii)  the aggregate outstanding Principal Balances of
                  all Extended Term Receivables would exceed an amount equal to
                  50% of the Outstanding Purchase Price on such Settlement Date;

<PAGE>

                                                                              49

                       (xiv)   the aggregate outstanding Principal Balances of
                  all Purchased Receivables with respect to Aircraft
                  manufactured by any Person other than RAC would exceed an
                  amount equal to 5% of the Outstanding Purchase Price on such
                  Settlement Date;

                       (xv)    [Intentionally omitted];

                       (xvi)   [Intentionally omitted];

                       (xvii)  the aggregate outstanding Principal Balances of
                  all Travel Air Receivables on any Settlement Date would exceed
                  an amount equal to 15% of the Outstanding Purchase Price on
                  such Settlement Date; or

                       (xviii) the aggregate outstanding Principal Balances of
                  Receivables referred to in clause (g)(ii)(B) of the definition
                  of "Eligible Receivable" that are not Wholesale Receivables
                  would exceed $75,000,000 on such Settlement Date.

                  (b) If any such sale or substitution on any Settlement Date
shall cause a breach of any of the limitations specified in subsections
2.7(a)(i) through 2.7(a)(xvii), the Seller shall, subject to subsection 2.13,
repurchase from the Purchasers, on the Settlement Date immediately following the
date the Managing Facility Agent notifies the Seller of such breach, the fewest
number of Receivables necessary such that after such repurchase such breach
shall have been remedied (each Receivable required to be so repurchased, a
"Concentration Receivable"). The Seller shall effect such repurchase by
 ------------------------
depositing into the Concentration Account on such Settlement Date cash in an
amount equal to the aggregate Outstanding Balances of the Concentration
Receivables plus, if a Trigger Amortization Event has occurred and is
continuing, accrued and unpaid interest thereon at the rate under the related
Contract except to the extent (without duplication) of any payment made pursuant
to subsection 2.18 for the Settlement Period during which such interest accrued
and was not paid by the related Obligor. The amount of any such deposit shall be
applied and distributed in accordance with subsections 2.15 and 2.16.

                  2.8 Term of Revolving Period. (a) So long as no Amortization
                      ------------------------
Event has occurred and is continuing, no more than 60 and no less than 45 days
prior to the applicable Expiration Date, the Seller may request, through the
Managing Facility Agent, that each Purchaser extend the Revolving Period, which
decision will be made by each Purchaser in its sole discretion. Such request by
the Seller shall be accompanied by an amortization schedule of Purchased
Receivables in form and substance satisfactory to the Managing Facility Agent
and the Purchasers. Upon receipt of any such request, the Managing Facility
Agent shall promptly notify each Purchaser thereof. At least 30 but not more
than 45 days prior to the applicable Expiration Date, each Purchaser shall
notify the Managing Facility Agent of such Purchaser's willingness to extend the
Revolving Period, and the Managing Facility Agent shall notify the Seller of
such willingness by the Purchasers on such 30th day. The approval of the
Managing Facility Agent and at least the Majority Purchasers (calculated as to
Purchasers which are not Dissenting Purchasers prior to the applicable
Expiration Date) shall be required to extend such Expiration Date.

<PAGE>

                                                                              50

                  (b) (i) Any Purchaser not wishing to extend the Revolving
Period (a "Dissenting Purchaser") may in its sole discretion elect to terminate
           --------------------
its Commitment on the Expiration Date in effect prior to any such extension of
the Revolving Period. The Dissenting Purchaser shall give the Managing Facility
Agent notice of such election at least 30 days prior to the applicable
Expiration Date, provided that failure to expressly notify the Managing Facility
                 --------
Agent of a willingness to extend the Expiration Date in accordance with
subsection 2.8(a) shall be deemed an election by such Purchaser to terminate its
Commitment on the Expiration Date. Upon receipt of any notice the Managing
Facility Agent shall promptly notify each other Purchaser and the Seller
thereof. The Seller, by notice to the Managing Facility Agent, may (but shall
not be required to) request one or more other Purchasers, or seek another
financial institution acceptable to the Managing Facility Agent and the Seller,
in their reasonable discretion, to acquire the Commitment of the Dissenting
Purchaser and all amounts payable to it hereunder in accordance with subsection
11.6(c). Unless otherwise specified in connection with a transfer made pursuant
to subsection 11.6(c), a Purchaser shall become a Dissenting Purchaser pursuant
to this subsection 2.8(b) on the first day following the Expiration Date on
which its Commitment is terminated.

                  (ii) If any Dissenting Purchaser's Commitment is not acquired
pursuant to subsection 11.6(c), such Dissenting Purchaser shall, on each
Settlement Date after the Expiration Date on which its Commitment terminates,
(A) be paid such Dissenting Purchaser's pro rata share of Principal Collections
                                        --- ----
received after such Expiration Date solely (except as provided in subsection
2.13(c)) on account of Eligible Receivables purchased or substituted on or
before such Expiration Date (based on such Dissenting Purchaser's Commitment
Percentage at the time its Commitment terminated) (as to such Dissenting
Purchaser, its "Frozen Pool"), (B) not purchase any additional Receivables after
                -----------
such Expiration Date and (C) be paid interest in accordance with subsection 2.17
in respect of its Outstanding Purchase Price.

                  (iii) So long as the Revolving Period has not expired or
terminated, if on any Settlement Date after a Purchaser becomes a Dissenting
Purchaser its Outstanding Purchase Price is less than 10% (after giving effect
to the application of Collections on such Settlement Date) of such Dissenting
Purchaser's maximum Outstanding Purchase Price at any time prior to the date
such Purchaser became a Dissenting Purchaser, then the Seller may give the
Managing Facility Agent irrevocable notice, which must be received by the
Managing Facility Agent by 10:00 a.m., New York City time, on the Reporting Date
prior to the next succeeding Settlement Date, (A) requesting that each other
Purchaser purchase a pro rata share (based on such other Purchaser's Available
                     --- ----
Commitment Percentage as in effect on such next succeeding Settlement Date) of
such Dissenting Purchaser's Outstanding Purchase Price (the "Buyout Amount")
                                                             -------------
subject to the approval of the Managing Facility Agent and the Majority
Purchasers or (B) stating that the Seller or an Affiliate of the Seller will
repurchase all the Dissenting Purchaser's interests in and to the Receivables in
the Frozen Pool by payment of the Buyout Amount on such next succeeding
Settlement Date; provided that no such purchase by the Purchasers shall be made
                 --------
if the Buyout Amount to be paid by such Purchasers exceeds the aggregate
Available Commitments in effect on such next succeeding Settlement Date (after
giving effect to purchases from the Seller on such date). Any such purchase of
the Buyout Amount by the Purchasers shall be subject to, and shall be made upon
satisfaction of, the conditions set forth in subsection 5.2 and, in connection
therewith, the Seller shall be deemed to have made the representations and

<PAGE>

                                                                              51

warranties set forth in subsection 4.2 with respect to the Receivables
constituting the Frozen Pool as if such Receivables were being sold to the
Purchasers on such Settlement Date. Payment for the purchase by the Purchasers
or the repurchase by the Seller of the Frozen Pool, as the case may be, shall be
made to the Managing Facility Agent for the account of such Dissenting Purchaser
on such Settlement Date by deposit into the Concentration Account on the
Settlement Date required by this subsection 2.8(b)(iii).

                  2.9 Termination or Reduction of Commitments. (a) On any
                      ---------------------------------------
Settlement Date, the Seller shall have the right to terminate the Commitments or
reduce the amount thereof by notice to the Managing Facility Agent on the
preceding Reporting Date; provided that no such termination or reduction shall
                          --------
be permitted if, after giving effect thereto and to any distributions on account
of the Outstanding Purchase Price made on such Settlement Date, the then
Outstanding Purchase Price (exclusive of the interests of Dissenting Purchasers)
would exceed the Commitments then in effect. Any such reduction shall be in an
amount equal to $50,000,000 or a multiple of $1,000,000 in excess thereof and
shall permanently reduce the Commitments then in effect.

                  (b) On each Settlement Date the aggregate Commitment of the
Purchasers shall be reduced by increments of $25,000,000 to the extent such
reductions shall not exceed an amount equal to (i) the aggregate amount of
Specified Resales which occurred prior to or during the related Settlement
Period pursuant to clause (x) of subsection 11.24(a) less (ii) the aggregate
amount of any prior reduction of the aggregate Commitment of the Purchasers
pursuant to this subsection 2.9(b), provided that the first such reduction made
                                    --------
after the Amendment Effective Date must be in an aggregate amount equal to
$50,000,000 or $25,000,000 increments in excess thereof.

                  (c) If on any date, the Debt Rating shall be equal to or less
than BB+, the Seller shall reduce the amount of the Commitments by an aggregate
amount of $200,000,000. Such reduction of the Commitments shall be accompanied
by prepayment of the Outstanding Purchase Price to the extent, if any, that the
Outstanding Purchase Price exceeds the amount of the Commitments as so reduced.

                  (d) Each Purchaser's Commitment shall terminate upon the
expiration of the Revolving Period as to such Purchaser.

                  2.10 Defaulted Receivables; Application of Lease Security
                       ----------------------------------------------------
Deposits. (a) (i) On each Settlement Date (other than a Special Settlement Date)
--------
the Seller agrees to repurchase from the Purchasers, up to the RARC Repurchase
Obligation, all Receivables which became Defaulted Receivables during each
preceding Settlement Period with respect to which the Seller has not substituted
an Eligible Receivable pursuant to subsection 2.13, as indicated on the
Settlement Statement delivered on the related Reporting Date. Subject to
subsections 2.10(b), 2.13, 2.15(b) and clause sixth of subsection 2.16(b), the
                                              -----
Seller shall repurchase such Defaulted Receivables by depositing into the
Concentration Account on such Settlement Date cash in an amount equal to the
aggregate Outstanding Balances of the Defaulted Receivables plus, if a Trigger
Amortization Event has occurred and is continuing, accrued and unpaid interest
thereon at the rate under the related Contract except to the extent (without
duplication) of any payment made pursuant to subsection 2.18 for the Settlement
Period during which such interest accrued and was not paid by

<PAGE>

                                                                              52

the Obligor under such Contract. The amount of any such deposit shall be applied
and distributed in accordance with subsections 2.15 and 2.16. If on any
Settlement Date the Repurchase Price to be paid by the Seller for any Defaulted
Receivable would cause the RARC Repurchase Obligation then in effect (determined
on such Settlement Date) to be exceeded, the Seller shall be deemed to acquire
only a fractional interest in each Defaulted Receivable repurchased on such
Settlement Date. The numerator of such fraction shall be the RARC Repurchase
Obligation then in effect determined on such Settlement Date and the denominator
thereof shall be the aggregate Repurchase Price for all Defaulted Receivables on
such Settlement Date. Upon any repurchase of a Defaulted Receivable with respect
to which there exists a Seller's Interest pursuant to this subsection or the
Repurchase Agreement, the Seller's Interest shall be reduced by an amount equal
to the Purchase Discount times the Principal Balance of such Defaulted
Receivable on the last day of the Settlement Period preceding the Settlement
Date on which such repurchase is made. Any Purchased Receivable related to a
Remarketed Aircraft which is repurchased or substituted for in accordance with
subsection 2.11 or 2.13, respectively, shall not be deemed to be a Defaulted
Receivable.

                  (ii) In the event that a Rating Event occurs and is
continuing, any Net Recoveries received by the Seller on account of any
Defaulted Receivable which none of the Seller, RAC nor the Guarantor has
repurchased, shall be deposited into the Cash Collateral Account. In the event
that the Amortization Period ends pursuant to clause (ii) of the definition of
such term, any Net Recoveries received by the Seller after such time on account
of any Defaulted Receivable which none of the Seller, RAC nor the Guarantor has
repurchased, shall be deposited into the Cash Collateral Account. The Seller
shall make any deposit required to be made by this subsection 2.10(a)(ii) within
two Business Days after the Seller's receipt of such Net Recoveries and such
deposits shall be applied in accordance with subsections 2.15 and 2.16. The
obligation of the Seller to deposit such Net Recoveries shall survive the
termination of this Agreement.

                  (iii) The Seller agrees that, to the extent it has received a
security deposit in respect of any Lease Receivable, at the time the Seller
applies any or all of such security deposit or any or all of such security
deposit is applied (in each case pursuant to the related Contract or otherwise)
against the amounts owed in respect of a Receivable, on the next succeeding
Settlement Date the Seller shall be obligated to pay the Purchasers their pro
rata share of the amount of such application in the same manner as if such
applied funds actually were Collections. The Seller shall pay such obligation by
depositing into the Concentration Account on such Settlement Date cash in an
amount equal to such application. The amount of any such deposit shall be
applied and distributed in accordance with subsections 2.15 and 2.16.

                  (b) The maximum repurchase obligation of the Seller with
respect to Defaulted Receivables (the "RARC Repurchase Obligation") shall be
                                       --------------------------
equal to (a) at any time during the Revolving Period, an amount equal to the
RARC Repurchase Percentage of the excess of (A) the sum of (i) 25% of the
aggregate Unadjusted Outstanding Balances of the 25% Repurchase Receivables,
(ii) 75% of the aggregate Unadjusted Outstanding Balances of the 75% Repurchase
Receivables and (iii) 90% of the aggregate Unadjusted Outstanding Balances of
the 90% Repurchase Receivables over (B) the amount of any Discount Amount paid
                               ----
and the amount of any Purchase Discount resulting from the purchase or
substitution of Receivables during the existence of a Discount Event, in each
case at the time the RARC Repurchase Obligation is calculated;

<PAGE>

                                                                              53

         provided that,
         --------

                       (i)     the RARC Repurchase Obligation shall not at any
                  time decrease below an amount equal to the RARC Repurchase
                  Percentage of (x) with respect to any Purchaser other than a
                  Dissenting Purchaser, an amount equal to the greater of such
                  Purchaser's share of (1) 15% of the maximum aggregate
                  Outstanding Balances of the Purchased Receivables which
                  existed at any time during the Revolving Period and (2) the
                  sum of the Outstanding Balances on the last day of the
                  Revolving Period of the three Obligors (and all of their
                  Affiliates) of Purchased Receivables with the largest
                  aggregate outstanding Principal Balances and (y) with respect
                  to any Dissenting Purchaser, an amount equal to the greater of
                  such Purchaser's share of (1) 15% of the maximum aggregate
                  Outstanding Balances of the sum of the Purchased Receivables
                  which existed at any time prior to the date such Purchaser
                  became a Dissenting Purchaser and (2) the sum of the
                  Outstanding Balances on the day on which such Purchaser became
                  a Dissenting Purchaser of the three Obligors (and all of their
                  Affiliates) of Purchased Receivables with the largest
                  aggregate outstanding Principal Balances, minus, in each such
                  case, to the extent not already deducted in calculating such
                  Outstanding Balances, such Purchaser's allocated share of the
                  amount of any Discount Amount paid and the amount of any
                  Purchase Discount resulting from the purchase or substitution
                  of Receivables during the existence of a Discount Event and

                       (ii)    notwithstanding clause (i) immediately above, the
                  RARC Repurchase Obligation shall not at any time exceed an
                  amount equal to the RARC Repurchase Percentage of the
                  Outstanding Purchase Price

         or (b) during the Amortization Period, (A) the RARC Repurchase
         Obligation, as calculated in accordance with clause (a) above, in
         effect on the last Settlement Date prior to the commencement of the
         Amortization Period minus (B) the aggregate Repurchase Prices of
                             -----
         Defaulted Receivables which were repurchased by the Seller pursuant to
         subsection 2.10(a) since the beginning of the Amortization Period minus
                                                                           -----
         (C) amounts deposited by the Seller into the Cash Collateral Account
         pursuant to subsection 2.14(c)(ii) plus (D) all Net Recoveries received
                                            ----
         by the Seller with respect to such Defaulted Receivables (or portion
         thereof) so repurchased by the Seller since the beginning of the
         Amortization Period and not required to be deposited into the Cash
         Collateral Account pursuant to subsection 2.10(a)(ii).

                  2.10A Delinquent Receivables. If on any Settlement Date the
                        ----------------------
outstanding balance of Delinquent Receivables shall cause an Amortization Event
of the type described in subsection 8.1(p), below, the Seller may either
substitute Eligible Receivables for such Delinquent Receivables pursuant to
Section 2.13 or repurchase from the Purchasers sufficient Delinquent
Receivables, in each case, with the consent of the Managing Facility Agent,
beginning with those Delinquent Receivables with the oldest outstanding balance,
such that after such repurchase or substitution such Amortization Event shall
have been cured. Seller shall repurchase such Delinquent Receivables being
repurchased on such Settlement Date by depositing into the Concentration Account
on such Settlement Date cash in an amount equal to

<PAGE>

                                                                              54

the Outstanding Balance of such Delinquent Receivables. Any amounts received by
the Administrative Agent, or deposited into the Concentration Account, in
respect of Delinquent Receivables sold pursuant to this Section 2.10A shall be
applied and distributed in accordance with subsections 2.15 and 2.16.

                  2.11 Ineligible Receivables. The Seller agrees to repurchase
                       ----------------------
on each Settlement Date, and the Purchasers agree to sell to the Seller on such
date and in accordance with the terms hereof, any Purchased Receivable if such
Receivable is (i) an Ineligible Receivable, (ii) an Existing Certified
Receivable in respect of which the Old Administrative Agent shall not have
received on or prior to the Certified Opinion Delivery Date (x) an opinion of
foreign counsel satisfying the requirements of subsection 2.27(c) or (y)
evidence of the filings, if any, referred to in subsection 6.1(n)(i) or (iii) an
Existing Receivable in respect of which the Old Administrative Agent shall not
have received on or prior to the FAA Filing Date evidence of the filings, if
any, referred to in subsection 6.1(n)(ii) provided that, during the Amortization
                                          --------
Period, the Purchasers, by unanimous consent, in their sole discretion may
choose not to sell any Receivable referred to in clauses (i), (ii) or (iii) to
the Seller. The Seller shall make such repurchase on the Settlement Date first
succeeding the earlier of (x) the date on which the Seller becomes aware of
facts and circumstances giving rise to such event of ineligibility or (y) the
date on which the Managing Facility Agent notifies the Seller that such event of
ineligibility has occurred and is continuing. Subject to subsections 2.13 and
2.15(b), the Seller shall make such repurchase by depositing in the
Concentration Account cash in an amount equal to the Repurchase Price for such
Ineligible Receivable at the date such deposit is made, except to the extent
(without duplication) of any payment made pursuant to subsection 2.18, for the
Settlement Period during which such interest accrued and was not paid by the
Obligor under such Contract. The amount of any such deposit shall be applied and
distributed in accordance with subsections 2.15 and 2.16. Except as provided in
subsection 9.1, the sole obligation of the Seller with respect to an Ineligible
Receivable of the type described in clause (i) of this subsection 2.11 shall be
the requirement to repurchase or substitute for such Receivable pursuant to this
subsection 2.11 or subsection 2.13, respectively.

                  2.12 Rebated Receivables. If on any date the Principal Balance
                       -------------------
of any Purchased Receivable is, or is deemed to be, reduced or adjusted or no
longer payable as a result of any rebate, discount, refund or other adjustment
of such Purchased Receivable, or any other reduction or adjustment of any
payment under any Purchased Receivable, other than any such rebate, discount
refund or adjustment permitted under subsection 7.1(b)(iv)(x), the Seller shall
be deemed to have received on such day a Collection in respect of such Purchased
Receivable in the amount of such reduction or adjustment or in the amount no
longer payable (as applicable) and shall, subject to subsection 2.15(b), deposit
cash into the Concentration Account on the next succeeding Settlement Date in an
amount equal to such reduction or adjustment or such amount no longer payable
(as applicable) plus if a Trigger Amortization Event has occurred and is
continuing, accrued and unpaid interest thereon at the rate under the related
Contract except to the extent (without duplication) of any payment made pursuant
to subsection 2.18 for the Settlement Period during which such interest accrued
and was not paid by the Obligor under such Contract. The amount of any such
deposit shall be applied and distributed in accordance with subsections 2.15 and
2.16.

<PAGE>

                                                                              55

                  2.13 Substitution of Receivables. (a) Whenever the Seller is
                       ---------------------------
required or permitted in accordance with the terms of this Agreement to
repurchase Concentration Receivables, Defaulted Receivables, Delinquent
Receivables or Ineligible Receivables pursuant to subsection 2.7(b), 2.10, 2.10A
or 2.11, respectively, the Seller may, subject to the terms hereof, in lieu of
making such repurchase, substitute one or more Eligible Receivables (each, a
"Substituted Receivable") therefor on the Settlement Date on which the
 ----------------------
repurchase is required to be made; provided that the Settlement Statement
                                   --------
delivered on the Reporting Date prior to such Settlement Date shall contain the
information required thereby with respect to such proposed substitution. The
option of the Seller to substitute one or more Substituted Receivables for any
Receivables as aforesaid is subject to the following conditions precedent: (i)
no Trigger Amortization Event has occurred and is then continuing, (ii) if such
substitution occurs during the Amortization Period, and provided that no Trigger
Amortization Event has occurred and is then continuing, the Majority Purchasers
have approved such substitution, (iii) if the substitution is of a Delinquent
Receivable pursuant to Section 2.10A, the Managing Facility Agent has consented
to such substitution and (iv) either the Substituted Receivable has a Final
Payment Date which is not after the Final Payment Date of the replaced
Receivable (each, replaced Receivable, a "Removed Receivable"), or if the Final
                                          ------------------
Payment Date of the Substituted Receivable is after that of the Removed
Receivable, then only that portion of the Principal Balance of such proposed
Substituted Receivable which is scheduled to be paid on or prior to the Final
Payment Date of the Removed Receivable shall be included as a Substituted
Receivable. All Defaulted Receivables, then all Delinquent Receivables, shall be
replaced with Substituted Receivables prior to replacement of Ineligible
Receivables or Concentration Receivables with Substituted Receivables and, in
each case, shall be replaced with Substituted Receivables in the following order
of priority: (i) first, with Substituted Receivables which are 25% Repurchase
                 -----
Receivables, (ii) second, with Substituted Receivables which are 75% Repurchase
                  ------
Receivables, and (iii) third, with Substituted Receivables which are 90%
                       -----
Repurchase Receivables. The making of such substitution shall be subject to the
satisfaction of the conditions set forth in paragraphs subsection 5.2,
including, without limitation, the delivery of an Assignment and, if applicable,
an FAA Assignment or Foreign Assignment.

                  (b) If the Repurchase Price of the Removed Receivable proposed
to be replaced by one or more Substituted Receivables is greater than the
aggregate Principal Balances of such Substituted Receivables, the Seller shall
deposit cash into the Concentration Account in an amount equal to such excess.
Alternatively, if the Repurchase Price of such Removed Receivable is less than
the aggregate Principal Balances of the corresponding Substituted Receivable or
Receivables, during the Revolving Period the Seller may, so long as no
Amortization Event has occurred and is continuing, request the Purchasers to
purchase such excess, to the extent of the Available Commitments, pursuant to
subsection 2.2. If such excess is not purchased for any reason set forth in this
Agreement, then each Substituted Receivable able to be substituted to the
fullest extent shall first be substituted and any remaining Substituted
Receivable shall be a Participated Receivable subject to the provisions of
subsection 2.4. During the Revolving Period, if any Substituted Receivable is an
Extended Term Receivable, then such Substituted Receivable shall be subject to
subsection 2.5 and the Cash Flow Cutoff Date for such Substituted Receivable
shall be deemed to be, initially, (i) so long as no Rating Event has occurred
and is continuing, thirteen years after the date of substitution of such
Substituted Receivable and (ii) during the continuance of a Rating Event, ten
years after the date of

<PAGE>

                                                                              56

substitution of such Substituted Receivable. Substitution for a Defaulted
Receivable shall not reduce the Aggregate Repurchase Obligation.

                  (c) If a Dissenting Purchaser holds an undivided interest in
any Removed Receivable then:

                  (i) if such Removed Receivable is an Ineligible Receivable, a
Delinquent Receivable or a Concentration Receivable, the Seller shall pay to the
Managing Facility Agent for the account of such Dissenting Purchaser an amount
equal to the sum of (A) the product of such Dissenting Purchaser's Commitment
Percentage (determined at the time such Dissenting Purchaser's Commitment
terminated) times the Outstanding Balance for such Removed Receivable and (B) if
            -----
a Trigger Amortization Event has occurred and is continuing, the Dissenting
Purchaser's pro rata share (determined at the time such Dissenting Purchaser's
            --- ----
commitment terminated) of accrued and unpaid interest on such Removed Receivable
at the rate under the related Contract except to the extent (without
duplication) of any payment made pursuant to subsection 2.18 for the Settlement
Period during which such interest accrued and was not paid by the Obligor under
such Contract; and

                  (ii) if such Removed Receivable is a Defaulted Receivable, (A)
and if the aggregate Available Commitments in effect on the Settlement Date on
which such substitution is to be made exceed an amount equal to (x) the
Dissenting Purchaser's Commitment Percentage (determined at the time such
Dissenting Purchaser's Commitment terminated) times (y) the Outstanding Balance
                                              -----
for such Removed Receivable (the "Dissenting Purchaser's Share"), each Purchaser
                                  ----------------------------
other than a Dissenting Purchaser shall be deemed to purchase its Commitment
Percentage of the Dissenting Purchaser's Share by making funds therefor
available to the Managing Facility Agent for the account of such Dissenting
Purchaser on the Settlement Date on which such substitution is proposed to be
made; provided that such purchases shall be subject to the satisfaction of the
      --------
conditions set forth in subsection 5.2 and, in connection therewith, the Seller
shall be deemed to have made the representations and warranties set forth in
subsection 4.2 with respect to the Purchased Receivables constituting the
Dissenting Purchaser's Share as if the Seller were selling such Receivables to
the Purchasers on such Settlement Date; or (B) if for any reason a purchase
cannot be made pursuant to the foregoing clause (A), the Seller shall
repurchase, up to the amount of the RARC Repurchase Obligation on the date of
such purchase, such Dissenting Purchaser's Share on such Settlement Date up to
such Dissenting Purchaser's Commitment Percentage (determined at the time such
Dissenting Purchaser's Commitment terminated) of the Aggregate Repurchase
Obligation in effect on such Settlement Date (in each case after giving effect
to purchases, substitutions and repurchases on such Settlement Date) plus, if a
Trigger Amortization Event has occurred and is continuing, the Dissenting
Purchaser's pro rata share (determined at the time such Dissenting Purchaser's
            --- ----
Commitment terminated) of accrued and unpaid interest on such Removed Receivable
at the rate under the related Contract except to the extent (without
duplication) of any payment made pursuant to subsection 2.18 for the Settlement
Period during which such interest accrued and was not paid by the Obligor under
such Contract. It is understood that determinations of the RARC Repurchase
Obligation with respect to a Dissenting Purchaser pursuant to this subsection
2.13(c)(ii) shall be, with respect to a L/C Receivable, made on the Settlement
Date on which such determination is made in accordance with the definitions of
the terms "90% Repurchase Receivable" and "25% Repurchase Receivable" and the
status of such L/C Receivable at such Settlement Date.

<PAGE>

                                                                              57

                  (d) Any repurchases of Receivables made pursuant to subsection
2.13(c) shall be made on the Settlement Date on which the related substitution
of Receivables is to be made.

                  (e) On any Settlement Date (other than a Special Settlement
Date) the Seller may, with the consent of the Managing Facility Agent,
substitute a Lease Receivable which is an Eligible Receivable (a "Substituted
                                                                  -----------
Lease Receivable") for a Lease Receivable (other than a Lease Receivable which
----------------
is a Defaulted Receivable, a Delinquent Receivable, a Concentration Receivable
or an Ineligible Receivable) which was previously sold or substituted hereunder
(a "Replaced Lease Receivable") if the Seller, in the ordinary course of
    -------------------------
business and in accordance with the Credit and Collection Policy, is entering
into a new Contract with the same Person which is the Obligor under the Contract
related to such Replaced Lease Receivable (or an Affiliate of such Person);
provided that during the Amortization Period the prior consent of the Majority
--------
Purchasers shall be required to effect any such substitution; provided, further,
                                                              --------  -------
that if a Remittance Event has occurred and is continuing and if the Principal
Balance of a Substituted Lease Receivable is less than the Principal Balance of
the Replaced Lease Receivable such substitution shall occur only on a Settlement
Date and within two Business Days after such substitution is made, the Seller
shall deposit into the Concentration Account an amount equal to the difference
between the Outstanding Balance of the Replaced Lease Receivable and the
Purchase Price of the Substituted Lease Receivable. The Settlement Statement
with respect to the Settlement Period in which such substitution occurs (or the
Settlement Statement delivered with respect to the Settlement Date on which such
substitution occurs, in the case of substitutions made on a Settlement Date in
accordance with the final proviso of the preceding sentence) shall contain the
information required thereby with respect to such substitution. Upon such
substitution, the Principal Balance of the Replaced Lease Receivable shall be
deemed to be reduced to zero. The provisions of subsection 2.13(b) (except for
the first sentence thereof) shall apply as if a Replaced Lease Receivable and a
Substituted Lease Receivable are, respectively, a Removed Receivable and a
Substituted Receivable and the provisions of subsection 2.13(c)(i) (A) (without
regard to clause (B) of subsection 2.13(c)(i)) shall apply as if a Replaced
Lease Receivable is a Removed Receivable; provided that, in accordance with
                                          --------
subsection 2.13(d) and notwithstanding the date of substitution of a Substituted
Lease Receivable in accordance with this subsection 2.13(e), payments shall be
made to the Dissenting Purchaser with respect to a Substituted Lease Receivable
on the Settlement Date related to the Settlement Statement which contains
information with respect to such substitution. The making of such substitution
shall be subject to the satisfaction of the conditions set forth in subsection
5.2, including in each case, without limitation, the delivery of an Assignment
and FAA Assignment or a Foreign Assignment, as applicable, with respect to each
such Substituted Lease Receivable on or before the Business Day such Substituted
Lease Receivable is substituted.

                  2.14 Accounts. (a) On or before the Closing Date the Seller
                       --------
shall establish in its name a segregated account with a commercial bank
satisfactory to the Managing Facility Agent (the "Collection Account"). Upon the
                                                  ------------------
occurrence and during the continuance of a Remittance Event, and unless the
Servicer has provided a Servicer Letter of Credit in accordance with subsection
2.15(a), the Seller or the Servicer shall within two Business Days after its
receipt, (i) deposit all Collections received by it directly into the Collection
Account and (ii) transfer or cause to be transferred to the Concentration
Account any Collections so deposited. Any amounts received by the Seller and not
related to the Purchased Receivables or the related Contracts or

<PAGE>

                                                                              58

Financed Aircraft shall not be deposited into the Collection Account. Any
amounts at any time on deposit in the Collection Account shall be transferred
only to the Concentration Account and to no other deposit or other account
(including, but not limited to, any account or sub-account maintained pursuant
to Raytheon's cash management system). The Seller hereby grants to the Managing
Facility Agent for the ratable benefit of the Purchasers a security interest in
the Collection Account and all amounts from time to time on deposit therein to
secure the Obligations. The Seller shall have no right to withdraw any amounts
on deposit in the Collection Account.

                  (b) On or before the Closing Date there shall be established
with and in the name of the Managing Facility Agent a segregated account (the
"Concentration Account") which shall be maintained as a cash collateral account
 ---------------------
subject to the exclusive dominion and control of the Managing Facility Agent for
the ratable benefit of the Purchasers. The Seller hereby grants to the Managing
Facility Agent for the ratable benefit of the Purchasers a security interest in
any of its right, title and interest in the Concentration Account and all
amounts from time to time on deposit therein and all income from the investment
of such amounts to secure, in each case, the Obligations. Funds on deposit from
time to time in the Concentration Account shall bear interest at the then
prevailing rate paid by the Managing Facility Agent for deposit accounts with
similar amounts on deposit from time to time. If at any time funds on deposit in
the Concentration Account are greater than $100,000, the Managing Facility Agent
may, but shall not be required to, unless it receives a request from the Seller
or Raytheon, invest such funds in Cash Equivalents with maturities not later
than the next succeeding Settlement Date, to the extent such requested Cash
Equivalents are available for investment. Any investment request by the Seller
or Raytheon shall be given to the Managing Facility Agent one Business Day prior
to the day the investment is to be made (which shall be a Business Day in New
York, New York and San Francisco, California) and shall specify the particular
Cash Equivalents and maturities thereof. Any interest or investment earnings on
amounts in the Concentration Account on related investments shall be retained in
the Concentration Account to be withdrawn in accordance with this subsection
2.14(b). The Managing Facility Agent shall have the right to withdraw amounts
from the Concentration Account to make the payments required to be made
hereunder from Collections. Neither the Managing Facility Agent nor any
Purchaser shall have any responsibility for any such investment and the Managing
Facility Agent shall be permitted to liquidate any such investment, without
liability for any loss occurring by reason of such liquidation, to the extent
necessary to make payments and distributions under this Agreement. The Seller
shall have no right to withdraw amounts on deposit from time to time in the
Concentration Account.

                  (c) (i) On or before the Closing Date there shall be
established with and in the name of the Managing Facility Agent a segregated
trust account comprised of two segregated sub-accounts, the Seller cash
collateral sub-account (the "Seller Cash Collateral Sub-Account") and the RAC
                             ----------------------------------
cash collateral sub-account (the "RAC Cash Collateral Sub-Account," the Seller
                                  -------------------------------
Cash Collateral Sub-Account and the RAC Cash Collateral Sub-Account being
referred to collectively as the "Cash Collateral Account") which shall be
                                 -----------------------
maintained as a cash collateral account subject to the exclusive dominion and
control of the Managing Facility Agent for the ratable benefit of the
Purchasers. The Seller hereby grants to the Managing Facility Agent for the
ratable benefit of the Purchasers a first priority security interest in the Cash
Collateral

<PAGE>

                                                                              59

Account and all amounts on deposit from time to time therein and all income from
the investment of such amounts to secure, in each case, the Obligations. Funds
on deposit from time to time in the Seller Cash Collateral Sub-Account shall
bear interest at the then prevailing rate paid by the Managing Facility Agent
for deposit accounts with similar amounts on deposit from time to time. If at
any time funds on deposit in the Seller Cash Collateral Sub-Account are greater
than $100,000, the Managing Facility Agent may, but shall not be required to,
unless it receives a request from the Seller, invest funds on deposit in the
Seller Cash Collateral Sub-Account in Cash Equivalents with maturities not later
than the next succeeding Settlement Date (or such other maturities as the Seller
shall request and the Managing Facility Agent shall approve), to the extent such
requested Cash Equivalents are available for investment. Any investment request
by the Seller shall be given to the Managing Facility Agent one Business Day
prior to the day the investment is to be made (which shall be a Business Day in
New York, New York and San Francisco, California) and shall specify the
particular Cash Equivalents and maturities thereof. Any interest or investment
earnings on amounts in the Seller Cash Collateral Sub-Account or related
investments shall be retained in the Seller Cash Collateral Sub-Account to be
withdrawn in accordance with paragraphs (ii), (iii) and (iv) of this subsection
2.14(c). Neither the Managing Facility Agent nor any Purchaser shall have any
responsibility for any such investment and the Managing Facility Agent shall be
permitted to liquidate any such investment, without liability for any loss
occurring by reason of such liquidation, to the extent necessary to make
payments and distributions under this Agreement. The Seller shall have no right
to withdraw amounts on deposit from time to time in the Cash Collateral Account.

                  (ii) If on any Settlement Date on which the Seller is required
to repurchase Defaulted Receivables pursuant to subsection 2.10 and fails for
any reason to repurchase such Defaulted Receivables or substitute for such
Defaulted Receivables pursuant to subsection 2.13, whether or not RAC fails to
repurchase such Defaulted Receivables under the Repurchase Agreement, the
Managing Facility Agent may withdraw from amounts on deposit in the Seller Cash
Collateral Sub-Account on account of such Defaulted Receivable an amount equal
to the lesser of (A) the Repurchase Price for such Defaulted Receivable plus any
accrued and unpaid interest thereon required to be paid by subsection 2.10 and
(B) the amount then on deposit in the Seller Cash Collateral Sub-Account. It is
specifically understood and agreed that amounts on deposit in the Seller Cash
Collateral Sub-Account, whether on account of 25% Repurchase Receivables, 75%
Repurchase Receivables or 90% Repurchase Receivables, may be withdrawn as
aforesaid on account of any Defaulted Receivable, regardless of the RARC
Repurchase Percentage associated therewith or whether the RAC Repurchase
Obligation shall be outstanding. Any amounts so withdrawn shall be deposited
into the Concentration Account and allocated and distributed pursuant to
subsections 2.15 and 2.16, respectively. The Seller agrees with the Managing
Facility Agent and the Purchasers to deposit into the Seller Cash Collateral
Sub-Account, without any requirement for notice or demand therefor, the lesser
of the amount withdrawn therefrom or the sum of the RARC Repurchase Obligation
then in effect on the date such withdrawal is made, plus interest thereon at a
rate per annum equal to the Default Rate for the period from such date of
withdrawal to such date of deposit. Deposit of amounts into the Seller Cash
Collateral Sub-Account pursuant to the preceding sentence shall, to the extent
of such deposit, satisfy the Seller's obligation to repurchase such Defaulted
Receivable pursuant to subsection 2.10.

<PAGE>

                                                                              60

                  (iii) If the Seller or the Servicer (if then Raytheon Credit
or any Affiliate thereof) shall fail to make any deposit, payment or transfer of
funds required to be made by the Seller or the Servicer under this Agreement or
any other document executed and delivered in connection herewith, including,
without limitation, any payment, deposit or transfer of funds or payment of any
indemnity required to be made pursuant to subsection 2.7(b), 2.10, 2.10A, 2.11,
2.12, 2.18 or 9.1 (each such payment, deposit or transfer, a "Reimbursable
                                                              ------------
Obligation"), then the Managing Facility Agent with the consent of the Majority
----------
Purchasers may, in addition to any similar rights in favor of the Managing
Facility Agent under the Repurchase Agreement, withdraw from the Seller Cash
Collateral Sub-Account on the date such Reimbursable Obligation is due hereunder
an amount equal to the lesser of (A) such Reimbursable Obligation and (B) the
amount then on deposit in the Seller Cash Collateral Sub-Account. The Seller
agrees with the Managing Facility Agent and the Purchasers to deposit in the
Seller Cash Collateral Sub-Account, without any requirement for notice or demand
therefor, the amount withdrawn on the date such withdrawal is made, plus
interest thereon at a rate per annum equal to the Default Rate for the period
from such date of withdrawal to such date of deposit.

                  (iv) No amounts on deposit in the Seller Cash Collateral Sub-
Account (including interest or investment earnings) shall be released to the
Seller until the Outstanding Purchase Price is reduced to zero and all other
amounts owing to the Managing Facility Agent or any Purchaser hereunder are paid
in full, provided, that,
         --------  ----

                  (x) on each Settlement Date (other than a Special Settlement
         Date) occurring during the continuance of a Rating Event, after giving
         effect to all collections and distributions on such date, the amounts
         on deposit in the Cash Collateral Account in excess of the Aggregate
         Repurchase Obligation on such Settlement Date shall be released pro
                                                                         ---
         rata based upon their respective repurchase obligations, to the Seller
         ----
         and to RAC;

                  (y) on each Settlement Date occurring during the continuance
         of a Rating Event following a Settlement Period during which Finance
         Charges on Wholesale Receivables which are Quarterly Receivables have
         been paid, the excess of (A) amounts which were on previous Settlement
         Dates, pursuant to subsection 2.16(b)(vi), deposited into the Cash
         Collateral Account as accrued Finance Charge Collections on such
         Quarterly Receivables, over (B) any portion of such amounts so
         previously deposited which are on such Settlement Date withdrawn from
         the Cash Collateral Account by the Managing Facility Agent and applied
         pursuant to subsection 2.14(c) shall be released to the Seller; and

                  (z) on the Business Day after the date on which the
         Outstanding Purchase Price is reduced to zero and all other amounts
         owing to the Managing Facility Agent and the Purchasers hereunder have
         been paid in full, all amounts on deposit in the Seller Cash Collateral
         Sub-Account shall be released to the Seller.

                  2.15 Remittance and Allocation of Collections. (a) The Seller
                       ----------------------------------------
or the Servicer shall, subject to subsection 2.14(a), deposit into or transfer
to the Concentration Account all Collections within two Business Days following
receipt thereof; provided that so long as (i) a Remittance Event has not
                 --------
occurred and is continuing or (ii) following the occurrence and during the
continuance of a Remittance Event, the Servicer has provided a Servicer Letter
of Credit, the

<PAGE>

                                                                              61

Seller or the Servicer shall make such deposit in or transfer to the
Concentration Account not later than the Settlement Date following the
Settlement Period during which such Collections were received; provided,
                                                               --------
further, that after the occurrence and during the continuance of a Rating Event,
-------
the Seller or the Servicer shall, at the times required by and otherwise in
accordance with this subsection 2.15(a), also deposit into or transfer to the
Concentration Account interest payments made by RAC on behalf of an Obligor
under a Wholesale Receivable. It is understood and agreed that until Collections
are required to be transferred to the Concentration Account in accordance with
the foregoing provisions, these funds may be commingled with other funds of
Raytheon and its Subsidiaries in connection with Raytheon's integrated cash
management program.

                  (b) On each Reporting Date the Servicer shall allocate all
Collections received on account of the Purchased Receivables during the
preceding Settlement Period between Principal Collections and Finance Charge
Collections. All Finance Charge Collections shall be deposited in the
Concentration Account in accordance with subsection 2.15(a) and distributed
pursuant to subsection 2.16(b). All Principal Collections shall be deposited in
the Concentration Account in accordance with subsection 2.15(a) and applied in
accordance with subsection 2.16(a); provided that (i) if on any Settlement Date
                                    --------
during the Revolving Period the aggregate Purchase Price to be paid for
purchases to be made on such Settlement Date exceeds amounts deposited or to be
deposited into the Concentration Account by the Seller or the Servicer, as the
case may be, on or during the Settlement Period prior to such Settlement Date on
account of Principal Collections, the Seller may retain such Principal
Collections, or to the extent previously deposited into the Concentration
Account shall make payments therefrom, as application for such aggregate
Purchase Price to be paid to the Seller on such Settlement Date and amounts so
retained by or paid to the Seller shall be treated as a payment (in whole or in
part, as applicable) for such Purchase Price and (ii) to the extent the amount
of such Principal Collections exceeds the aggregate Purchase Price of Eligible
Receivables available to be purchased on such Settlement Date, the Seller or the
Servicer, as the case may be, shall deposit, to the extent not previously
deposited, such excess in the Concentration Account on or prior to such
Settlement Date for distribution in accordance with subsection 2.16. Any
purchases made pursuant to the foregoing clause (i) shall be subject to the
satisfaction of the conditions set forth in paragraphs (a) through (h) of
subsection 5.2. During the Amortization Period, all Principal Collections shall
be deposited into the Concentration Account in accordance with subsection
2.15(a) and, on the Settlement Date on or following such date of deposit, shall
be distributed in accordance with subsection 2.16. The portion of any deposit
to be made into the Concentration Account required to be made pursuant to
subsections 2.10, 2.10A, 2.11 or 2.12 or the first sentence of 2.13(b)
(including, without limitation, on account of a Substituted Lease Receivable)
representing the Repurchase Price for any Receivable shall be subject to the
provisions of this subsection 2.15(b).

                  (c) Any Principal Collections received on account of an
Extended Term Receivable during the Revolving Period shall, subject to the
satisfaction of the conditions set forth in paragraphs (a) through (h) of
subsection 5.2, be applied to purchase the next succeeding monthly payments of
such Receivable which have not been purchased and which are payable prior to the
Cash Flow Cutoff Date then applicable to such Receivable.

                  (d) All Net Recoveries required to be deposited in accordance
with subsection 2.10(a)(ii) shall be deposited into the Concentration Account as
Collections. On the Reporting

<PAGE>

                                                                              62

Date following the Settlement Period in which such deposit is made, such Net
Recoveries shall be allocated by the Managing Facility Agent as Principal
Collections and Finance Charge Collections and the Managing Facility Agent shall
notify the Servicer of such allocation the Business Day following such Reporting
Date. Such allocation shall be conclusive in the absence of manifest error or
unless the Managing Facility Agent receives notice from the Servicer of any
error made in such allocation on or before the third Business Day after such
notice is given to the Servicer and, in the event of any dispute between the
Managing Facility Agent and the Servicer with respect to such allocation, the
allocation of such Net Recoveries shall be conclusively made by the Managing
Facility Agent's independent certified public accountants prior to the next
succeeding Reporting Date. Such Net Recoveries shall be distributed pursuant to
subsection 2.16.

                  2.16 Distribution and Application of Collections. (a)
                       -------------------------------------------
Principal Collections. Principal Collections on Purchased Receivables shall be
---------------------
payable to the Purchasers up to the amount of the Outstanding Purchase Price
from time to time as specified herein. On each Settlement Date during the
Revolving Period (i) Principal Collections received during the prior Settlement
Period that are allocable to Purchased Receivables in which a Seller's Interest
has been created pursuant to subsections 2.6 or 2.6A shall be paid 25% to the
Seller in respect of such Seller's Interest, with the remaining 75% of such
Principal Collections allocated together with all other Principal Collections in
accordance with clause (ii) hereof and (ii) Principal Collections received
during the prior Settlement Period and not allocated to the Seller pursuant to
clause (i) hereof shall be first, applied to the aggregate Purchase Price of
                           -----
Eligible Receivables purchased on such Settlement Date in accordance with the
terms and conditions of this Agreement and second, paid to the Purchasers on
                                           ------
such Settlement Date and applied in respect of the Outstanding Purchase Price.
On each Settlement Date during the Amortization Period, Principal Collections
received during the prior Settlement Period shall be paid to the Purchasers on
such Settlement Date and applied in respect of the Outstanding Purchase Price.
Following an Amortization Event, Principal Collections on account of the
Purchase Discount applied to the Purchase Price of Receivables purchased during
a Discount Event may, at the discretion of the Managing Facility Agent, be
deemed Finance Charge Collections available to be distributed pursuant to
subsections 2.16(b)(ii) and (b)(iii).

                  (b) Finance Charge Collections. On each Settlement Date (other
                      --------------------------
than a Special Settlement Date) funds on deposit in the Concentration Account
representing Finance Charge Collections in respect of the preceding Settlement
Period shall be distributed by the Managing Facility Agent as follows, to the
extent of funds available therefor:

                       (i)     first, to the Servicer as payment of the
                               -----
                  Servicing Fee for the preceding Settlement Period;

                       (ii)    second, to the Purchasers pro rata as payment of
                               ------                    --- ----
                  all interest due pursuant to subsection 2.17(a) and (c) for
                  the preceding Accrual Period;

                       (iii)   third, to the Managing Facility Agent and each
                               -----
                  Purchaser which has made a demand prior to the Reporting Date
                  preceding such Settlement Date, to costs payable pursuant to
                  subsections 2.22, 2.23, 2.24 and 11.5;

<PAGE>

                                                                              63

                       (iv)    fourth, to the Purchasers pro rata as payment of
                               ------
                  the Commitment Fees for the preceding Accrual Period pursuant
                  to subsection 2.17(d) and second, to the Managing Facility
                                            ------
                  Agent as payment of the fees referred to in subsection 2.17(e)
                  to the extent such fees have not been paid directly by the
                  Seller;

                       (v)     fifth, if a Rating Event has occurred and is
                               -----
                  continuing, to the extent of funds available therefor, to the
                  Managing Facility Agent for deposit into the Cash Collateral
                  Account an amount equal to Finance Charges on those Wholesale
                  Receivables which are Quarterly Receivables which Finance
                  Charges have accrued during the preceding Settlement Period
                  and are payable under the related Contract on a subsequent
                  Settlement Date; and

                       (vi)    sixth, any remaining Finance Charge Collections
                               -----
                  (such remainder, "Excess Spread") shall be distributed as
                                    -------------
                  follows: (1) so long as no Trigger Amortization Event has
                  occurred and is continuing, to the Seller or its designees and
                  (2) in all other cases, 100% thereof shall be paid to the
                  Purchasers pro rata as payment in respect of the Outstanding
                  Purchase Price.

                  (c) All Collections received from an Obligor of any Purchased
Receivable shall be applied to Purchased Receivables of such Obligor in the
order of the age of such Purchased Receivables, starting with the oldest
outstanding amount of such Purchased Receivable (i.e., the most delinquent of
                                                 ---
such Purchased Receivables), except if the payment is designated by such Obligor
for application to specific Receivables. All Principal Collections received on
account of any Extended Term Receivable and not used to purchase monthly
payments of such Receivable payable after its most recent Cash Flow Cutoff Date
shall be applied in the direct order of maturity thereof. Payments made by an
Obligor on account of a Receivable shall, except as otherwise specified by such
Obligor or otherwise required by contract or law and unless otherwise instructed
by the Managing Facility Agent and the Required Purchasers, be applied as a
Collection of any Purchased Receivable of such Obligor to the extent of any
amounts then due and payable thereunder before being applied to any other
indebtedness of such Obligor to the Seller or Raytheon Credit.

                  2.17 Interest and Fees. (a) Except as provided in paragraph
                       -----------------
(b) below, each Purchaser's Outstanding Purchase Price shall bear interest for
each day during an Accrual Period at a rate per annum equal to the Note Rate for
such Purchaser and shall be payable on each Settlement Date (other than a
Special Settlement Date) for the immediately preceding Accrual Period. To the
extent that the Outstanding Purchase Price has not been reduced to zero on the
date the Amortization Period ends pursuant to clause (ii) of the definition of
such term, interest shall accrue pursuant to this subsection 2.17(a) regardless
of whether the Seller shall be obligated to pay Expense Amounts under subsection
2.18.

                  (b) The Outstanding Purchase Price for Receivables purchased
on a Special Settlement Date shall bear interest (i) at a rate per annum equal
to the Base Rate for the first three Working Days following such Special
Settlement Date and (ii) thereafter at a rate per annum equal to the Interbank
Rate for each day of the Special Settlement Date Accrual Period; provided that,
if the Seller provides the Managing Facility Agent with the notice provided for
in Section 2.3 at least three Working Days prior to the applicable Special
Settlement Date, then

<PAGE>

                                                                             64

interest shall be calculated in accordance with clause (ii) from such Special
Settlement Date until the end of the related Special Settlement Date Accrual
Period. Interest payable under this Section 2.17(b) shall be payable on the next
Settlement Date. Beginning with the first Settlement Date after any Special
Settlement Date, interest with respect to the Receivables purchased on such
Special Settlement Date shall be calculated in accordance with paragraph (a)
above.

                  (c) If all or any portion of any amount (including interest)
payable by the Seller hereunder shall not be paid when due, such overdue amount
shall bear interest at a rate per annum equal to the Note Rate plus 1% (the
                                                               ----
"Default Rate") from the date of such non-payment until such amount is paid in
 ------------
full (after as well as before judgment). The Outstanding Purchase Price shall
bear interest pursuant to, and at the times specified in, subsection 8.2(a) for
each day during an Accrual Period at a rate per annum equal to the Default Rate
until the Outstanding Purchase Price is reduced to zero (after as well as before
judgment). Any amount payable pursuant to this subsection 2.17(c) shall be
payable on each Settlement Date (other than a Special Settlement Date), or on
demand after any judgment. To the extent that the Outstanding Purchase Price has
not been reduced to zero on the date the Amortization Period ends pursuant to
clause (ii) of the definition of such term, interest shall accrue pursuant to
this subsection 2.17(c) regardless of whether the Seller shall be obligated to
pay Expense Amounts under subsection 2.18. Interest accruing pursuant to this
subsection 2.17(c) shall be payable from time to time on demand.

                  (d) During the period from and including the Amendment
Effective Date to the date on which the Revolving Period ends, a commitment fee
(a "Commitment Fee") shall be payable to the Managing Facility Agent for the
    --------------
account of each Purchaser, payable monthly in arrears on each Settlement Date
(other than a Special Settlement Date) and computed at the rate per annum based
on Raytheon's Debt Rating in effect on such day, as set forth under the relevant
column heading below, on the actual daily amount of the Available Commitment of
such Purchaser during each Accrual Period ending prior to the Settlement Date on
which the Commitment Fee is paid, commencing on the first such Settlement Date
to occur after the Amendment Effective Date:

            Debt Rating                             Commitment Fee
            -----------                             --------------
BBB+ or the equivalent thereof or above                      0.125%
BBB or the equivalent thereof                                0.150%
BBB- or the equivalent thereof                               0.175%
BB+ or the equivalent thereof                                0.225%
Below BB+ or the equivalent thereof                          0.375%

                  (e) The Seller agrees to pay (i) to the Managing Facility
Agent for its account the fees set forth in the Fee Letter, dated March 8, 2002,
among the Managing Facility Agent, the Seller and the Guarantor in the amounts
and on the dates set forth therein and (ii) to the Syndication Agent for its
account the fees set forth in the Fee Letter, dated February 7, 2002, among the
Syndication Agent, the Seller and the Guarantor in the amounts and on the dates
set forth therein.

<PAGE>

                                                                              65

                  (f) Interest and fees required to be paid under this
subsection 2.17 shall be payable regardless of whether sufficient Finance Charge
Collections therefore are on deposit in the Concentration Account on the date or
dates such interest or fees are required to be paid.

                  2.18 Yield Adjustment. If on any Settlement Date (other than a
                       ----------------
Special Settlement Date) any Expense Amount is not paid in full on such
Settlement Date, then on such Settlement Date the Seller will pay to the
Managing Facility Agent for the account of each Purchaser the amounts required
to pay all such Expense Amounts in full provided, that the Seller's obligation
                                        --------
under this subsection 2.18 in favor of any Purchaser in any calendar year shall
not exceed an amount equal to the product of the applicable Note Rate as of such
date times such Purchaser's Outstanding Purchase Price as of such date. The
Seller shall not be obligated to pay pursuant to this subsection 2.18 any
Expense Amounts which accrue after the date the Amortization Period ends;
provided that the Seller shall remain obligated to pay any Expense Amount which
--------
accrued prior to such date (whether or not claimed prior to such date) so long
as a claim for such Expense Amount is made prior to the times set forth in the
subsection hereof governing such Expense Amount.

                  2.19 Computations and Payments. (a) All amounts to be paid or
                       -------------------------
deposited by or on behalf of the Seller hereunder shall be paid or deposited in
accordance with the terms hereof no later than 11:00 a.m., New York City time,
on the day when due in lawful money of the United States of America and in
immediately available funds. All computations of Commitment Fees, interest and
other fees and amounts payable hereunder shall be made on the basis of a year of
360 days for the actual number of days elapsed (including the first but
excluding the last day). The Managing Facility Agent shall as soon as
practicable notify the Seller and the Purchasers of each determination of a LIBO
Rate or an Interbank Rate.

                  (b) Each determination of the Note Rate, the Interbank Rate or
the Default Rate by the Managing Facility Agent pursuant to any provision of
this Agreement shall be conclusive and binding on the Seller and the Purchasers
in the absence of manifest error. The Managing Facility Agent shall, at the
request of the Seller, deliver to the Seller a statement showing the quotations
used by the Managing Facility Agent in determining the Note Rate for any Accrual
Period.

                  (c) If any Reference Bank's Commitment shall terminate for any
reason whatsoever, such Reference Bank shall thereupon cease to be a Reference
Bank, and if, as a result of the foregoing, there shall only be one Reference
Bank remaining, the Managing Facility Agent (after consultation with the Seller
and the Purchasers) shall, by notice to the Seller and the Purchasers, designate
another Purchaser as a Reference Bank so that there shall at all times be at
least two Reference Banks.

                  (d) Each Reference Bank shall use its best efforts to furnish
quotations of rates to the Managing Facility Agent to the extent contemplated by
the definition of "LIBO Rate". If any Reference Bank shall be unable or shall
otherwise fail to supply such rates to the Managing Facility Agent upon its
request, the LIBO Rate shall be determined on the basis of the quotations of the
remaining Reference Banks or Reference Bank.

<PAGE>

                                                                              66

                  2.20 Pro Rata Treatment. (a) Except with respect to payments
                       ------------------
to a Dissenting Purchaser pursuant to subsection 2.8(b)(ii) or 2.13(c), (i) each
purchase by the Purchasers hereunder, each payment by the Seller in respect of
the Commitment Fees and any reduction of the Commitments shall be made pro rata
                                                                       --- ----
according to the respective Available Commitment Percentages of the Purchasers
and (ii) each payment by the Seller in respect of the Outstanding Purchase Price
and interest thereon and any repurchase of Receivables shall be made pro rata
                                                                     --- ----
according to the respective Commitment Percentages of the Purchasers. The
Managing Facility Agent shall distribute payments received by or on behalf of
the Seller to the Purchasers promptly upon receipt in like funds as received.

                  (b) Unless the Managing Facility Agent shall have been
notified in writing by any Purchaser prior to a Settlement Date that such
Purchaser will not make available to the Managing Facility Agent the amount that
would constitute its Available Commitment Percentage of the aggregate Purchase
Price to be paid on such date, the Managing Facility Agent may assume that such
Purchaser has made such amount available to the Managing Facility Agent on such
Settlement Date, and the Managing Facility Agent may, in reliance upon such
assumption, make available to the Seller a corresponding amount. If such amount
is made available to the Managing Facility Agent on a date after such Settlement
Date, such Purchaser shall pay to the Managing Facility Agent on demand an
amount equal to the product of (i) the daily average Federal funds rate during
such period as quoted by the Managing Facility Agent, times (ii) the amount of
such Purchaser's Available Commitment Percentage of such aggregate Purchase
Price, times (iii) a fraction the numerator of which is the number of days that
elapse from and including such Settlement Date to the date on which such
Purchaser's Available Commitment Percentage of such aggregate Purchase Price
shall have become immediately available to the Managing Facility Agent and the
denominator of which is 360. A certificate of the Managing Facility Agent
submitted to any Purchaser with respect to any amounts owing under this
subsection shall be conclusive in the absence of manifest error. If such
Purchaser's Available Commitment Percentage of such aggregate Purchase Price is
not in fact made available to the Managing Facility Agent by such Purchaser
within three Business Days after such Settlement Date, then on the fourth
Business Day after such Settlement Date the Seller shall be deemed to have
repurchased participating interests in the Receivables in an amount equal to
such Purchaser's Available Commitment Percentage of the aggregate Purchase Price
paid on such Settlement Date, together with interest on such amount at the rate
per annum equal to the LIBO Rate, such repurchase to be made by a cash payment
to the Managing Facility Agent for its own account; provided that such
                                                    --------
repurchase shall not limit the rights of the Seller against the Purchaser which
failed to make available its Available Commitment Percentage of such aggregate
Purchase Price.

                  2.21 Illegality. Notwithstanding any other provision herein,
                       ----------
if any change in any Requirement of Law or in the interpretation or application
thereof shall make it unlawful for any Purchaser to make or maintain its
proportionate share of the Outstanding Purchase Price based on the LIBO Rate as
contemplated by this Agreement, (a) the Commitment of such Purchaser hereunder
to make purchases shall forthwith be canceled and (b) the Outstanding Purchase
Price of such Purchaser shall be paid on each Settlement Date thereafter as if
such Purchaser were a Dissenting Purchaser under subsection 2.8.

<PAGE>

                                                                              67

                  2.22 Requirements of Law. (a) In the event that any change in
                       -------------------
any Requirement of Law or in the interpretation or application thereof or
compliance by any Purchaser with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority (each, a
"Change in Law") made subsequent to the date hereof (or with respect to a
 -------------
Purchasing Party which becomes a party hereto pursuant to subsection 11.6(c),
made subsequent to the date such Purchasing Party became a party hereto) shall:

                       (i)     impose, modify or deem applicable any reserve,
                  special deposit or similar requirement against assets of,
                  deposits with or for the account of, or credit extended by,
                  any Purchaser (except any such reserve requirement reflected
                  in the LIBO Rate); or

                       (ii)    impose on any Purchaser or the London interbank
                  market any other condition affecting this Agreement or the
                  making of purchases or the maintaining of a proportionate
                  share of the Outstanding Purchase Price by such Purchaser;

and the result of any of the foregoing shall be to increase the cost to such
Purchaser of making purchases or maintaining its proportionate share of the
Outstanding Purchase Price (or of maintaining its obligation to do any of the
foregoing) or to reduce the amount of any sum received or receivable by such
Purchaser hereunder (whether of principal, interest or otherwise), then the
Seller will pay to such Purchaser such additional amount or amounts as will
compensate such Purchaser for such additional costs incurred or reduction
suffered.

                  (b) If any Purchaser determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on such Purchaser's capital or on the capital of such Purchaser's
holding company, if any, as a consequence of this Agreement or such Purchaser's
obligations hereunder, to a level below that which such Purchaser or such
Purchaser's holding company could have achieved but for such Change in Law
(taking into consideration such Purchaser's policies and the policies of such
Purchaser's holding company with respect to capital adequacy), then from time to
time the Seller will pay to such Purchaser such additional amount or amounts as
will compensate such Purchaser or such Purchaser's holding company for any such
reduction suffered.

                  (c) A certificate of a Purchaser setting forth the amount or
amounts necessary to compensate such Purchaser or its holding company, as the
case may be, as specified in paragraph (a) or (b) of this subsection shall be
delivered to the Seller and shall be conclusive absent manifest error. The
Seller shall pay such Purchaser the amount shown as due on any such certificate
within 10 days after receipt thereof.

                  (d) Failure or delay on the part of any Purchaser to demand
compensation pursuant to this subsection shall not constitute a waiver of such
Purchaser's right to demand such compensation; provided that the Seller shall
                                               --------
not be required to compensate a Purchaser pursuant to this subsection for any
increased costs or reductions incurred more than six months prior to the date
that such Purchaser notifies the Seller of the Change in Law giving rise to such
increased costs or reductions and of such Purchaser's intention to claim
compensation therefor; provided further that, if the Change in Law giving rise
                       -------- -------
to such increased costs or reductions is retroactive,

<PAGE>

                                                                              68

then the six-month period referred to above shall be extended to include the
period of retroactive effect thereof.

                  2.23 Taxes. (a) Any and all payments by or an account of any
                       -----
obligation of the Seller hereunder shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided that if the Seller
shall be required to deduct any Indemnified Taxes or Other Taxes from such
payments, then (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this subsection) the Managing Facility Agent,
Co-Administrative Agent or Purchaser (as the case may be) receives an amount
equal to the sum it would have received had no such deductions been made, (ii)
the Seller shall make such deductions and (iii) the Seller shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.

                  (b) In addition, the Seller shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.

                  (c) The Seller shall indemnify the Managing Facility Agent,
each Co-Administrative Agent and each Purchaser, within 10 days after written
demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this subsection) paid by the Managing
Facility Agent, such Co-Administrative Agent or such Purchaser, as the case may
be, and any penalties, interest and reasonable expenses arising therefrom or
with respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to the
Seller by a Purchaser, or by the Managing Facility Agent on its own behalf or on
behalf of a Purchaser or a Co-Administrative Agent shall be conclusive absent
manifest error.

                  (d) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Seller to a Governmental Authority, the Seller shall
deliver to the Managing Facility Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Managing Facility Agent.

                  (e) Any Foreign Purchaser that is entitled to an exemption
from or reduction of withholding tax under the law of the jurisdiction in which
the Seller is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Seller (with a
copy to the Managing Facility Agent), at the time or times prescribed by
applicable law or reasonably requested by the Seller, such properly completed
and executed documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate.

                  2.24 Reemployment Costs. The Seller agrees to indemnify each
                       ------------------
Purchaser and to hold each Purchaser harmless from any loss or expense
(including, but not limited to, any such loss or expense arising from interest
or fees payable by a Purchaser to lenders of funds obtained by it or them to
purchase or maintain an interest in the Purchased Receivables with respect to

<PAGE>

                                                                              69

which the Note Rate is determined by reference to the LIBO Rate) as a
consequence of (a) default by the Seller in the performance of its obligations
hereunder, (b) any reduction in the Outstanding Purchase Price prior to the last
day of any Settlement Period, (c) the failure of the Seller or the Servicer to
make any amounts available to the Managing Facility Agent when due hereunder or
(d) any expenses (excluding legal expenses) incurred by any Purchaser pursuant
to subsection 2.21. A certificate of such Purchaser submitted to the Seller
certifying, in reasonably specific detail, the basis for, calculation of and
amounts of such additional costs shall be conclusive in the absence of manifest
error. This covenant shall survive for a period of two years following the date
on which the Amortization Period ends.

                  2.25 Seller's Obligations Absolute and Unconditional. The
                       -----------------------------------------------
Seller's obligations under this Section 2 to make payments, deposits and
repurchases shall be absolute and unconditional and shall be performed without
regard to any set-off which the Seller at any time may have available to it.

                  2.26 Mitigation Obligations; Replacement of Purchaser. (a) If
                       ------------------------------------------------
any Purchaser requests compensation under subsection 2.22, or if the Seller is
required to pay any additional amount to any Purchaser or any Governmental
Authority for the account of any Purchaser pursuant to subsection 2.23, then
such Purchaser shall use reasonable efforts to designate a different lending
office for funding or booking its purchases hereunder or to assign its rights
and obligations hereunder to another of its offices, branches or affiliates, if,
in the judgment of such Purchaser, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to subsection 2.22 or 2.23, as the
case may be, in the future and (ii) would not subject such Purchaser to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Purchaser. The Seller hereby agrees to pay all reasonable costs and expenses
incurred by any Purchaser in connection with any such designation or assignment.

                  (b) If any Purchaser requests compensation under subsection
2.22, or if the Seller is required to pay any additional amount to any Purchaser
or any Governmental Authority for the account of any Purchaser pursuant to
subsection 2.23, or if any Purchaser defaults in its obligation hereunder to
make purchases or maintain its proportionate share of the Outstanding Purchase
Price or if at any time after the Effective Date any Purchaser shall cause the
Managing Facility Agent to notify the Seller and the Servicer of a Prohibited
Jurisdiction, then the Seller may, at its sole expense and effort, upon notice
to such Purchaser and the Managing Facility Agent, require such Purchaser to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in subsection 11.6), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Purchaser, if a Purchaser accepts
such assignment); provided that (i) the Seller shall have received the prior
                  --------
written consent of the Managing Facility Agent, which consent shall not
unreasonably be withheld, (ii) such Purchaser shall have received payment of an
amount equal to such Purchaser's Outstanding Purchase Price, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Seller (in the case of all other amounts), (iii) in the case of any
such assignment resulting from a claim for compensation under subsection 2.22 or
payments required to be made pursuant to subsection 2.23, such assignment will
result in a reduction in such compensation or payments and (iv) in the case of
any such assignment resulting from a request to add an additional Prohibited
Jurisdiction, such assignee will not request that such

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                                                                              70

jurisdiction be so categorized. A Purchaser shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Purchaser or otherwise, the circumstances entitling the Seller to require
such assignment and delegation cease to apply.

                  2.27 Designation of Affiliate Receivables and Foreign
                       ------------------------------------------------
Receivables. (a) Each Affiliate Receivable and each Foreign Receivable (other
-----------
than L/C Receivables, Unsecured Foreign Receivables and Existing Receivables)
shall be designated as a Certified Foreign Receivable or an Uncertified Foreign
Receivable in accordance with this subsection 2.27.

                  Except as provided in subsections 2.27(c) and (d) below, no
less than 45 days prior to the Settlement Date on which the Seller proposes to
sell or substitute an Affiliate Receivable or Foreign Receivable (other than a
L/C Receivable), the Seller shall deliver to the Servicer the following:

                       (i)     with respect to each such Foreign Receivable
                  other than a Lease Receivable with a Foreign Obligor,

                       (A)     the form(s) of Foreign Assignment(s) with respect
                  to the Financed Aircraft related to such Receivable, which
                  Foreign Assignment(s) shall be effective to perfect (A) the
                  Lien granted by the Obligor thereon in favor of Raytheon
                  Credit, (B) the assignment thereof by Raytheon Credit in favor
                  of the Seller and (C) the assignment of such Lien by the
                  Seller in favor of the Administrative Agent, in each case, in
                  all respects reasonably satisfactory in form and substance to
                  the Managing Facility Agent and its counsel,

                       (B)     the forms of all other filings and recordings
                  (including, without limitation, any UCC filings with filing
                  offices in the jurisdictions listed on Schedule II) necessary
                  or advisable, in the opinion of the Managing Facility Agent
                  after consultation with its counsel or the Servicer, to
                  perfect the Purchasers' first priority ownership or security
                  interests in and to such Foreign Receivable and the related
                  Contracts and Financed Aircraft and the Collections with
                  respect thereto, and

                       (C)     (x) a form of legal opinion of counsel (a copy of
                  which shall be delivered to the Managing Facility Agent)
                  admitted to practice in the foreign jurisdiction in which the
                  related Foreign Obligor is located (within the meaning of
                  Section 9-307 of the New York UCC), addressed to the Managing
                  Facility Agent, the Co-Administrative Agents and the
                  Purchasers (1) to the effect that (x) the Lien granted by the
                  Obligor in favor of Raytheon Credit in the related Financed
                  Aircraft constitutes a duly perfected, first priority Lien
                  thereon, (y) each of the assignment of such Lien by Raytheon
                  Credit to the Seller and by the Seller in favor of the
                  Administrative Agent (for the ratable benefit of the
                  Purchasers) in the related Financed Aircraft constitutes (as
                  of its effectiveness) a duly perfected, first priority Lien
                  thereon (except as set forth in paragraph (l) of the
                  definition of "Eligible Receivables") and (z) the assignment
                  of such Foreign Receivable by Raytheon Credit to the Seller
                  and by the Seller in favor of the Administrative Agent (for
                  the ratable benefit of the Purchasers) constitutes (as of its

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                                                                              71

                  effectiveness) a duly perfected, first priority Lien thereon
                  (except for Permitted Receivables Liens) and (2) covering such
                  other matters as the Managing Facility Agent shall reasonably
                  request, and in all respects satisfactory in form and
                  substance to the Managing Facility Agent and its counsel, or

                  (y) if the Obligor of such Receivable is located (within the
                  meaning of Section 9-307 of the New York UCC) in a
                  jurisdiction covered by a previously delivered and accepted
                  (by the Managing Facility Agent on behalf of the Purchasers)
                  legal opinion, a form of certificate of a Responsible Officer
                  of the Seller which represents and warrants to the Managing
                  Facility Agent, for the benefit of the Purchasers, that the
                  Seller has taken all actions specified in such previously
                  delivered opinion and all other actions known to the Seller to
                  ensure that the Liens referenced in clause (A) of this
                  paragraph (i) are enforceable and have been duly perfected to
                  the same extent as set forth in such previously delivered and
                  accepted legal opinion;

                       (ii)    with respect to each such Foreign Receivable
                  which is a Registerable Lease Receivable with a Foreign
                  Obligor,

                       (A)     the form of FAA Assignment with respect to the
                  Financed Aircraft related to such Receivable, which FAA
                  Assignment shall be effective to perfect the Lien granted by
                  the Seller thereon in favor of the Administrative Agent, in
                  each case, in all respects reasonably satisfactory in form and
                  substance to the Managing Facility Agent and its counsel,

                       (B)     the forms of all other filings and recordings
                  (including, without limitation, any UCC filings with filing
                  offices in the jurisdictions listed on Schedule II) necessary
                  or advisable, in the opinion of the Managing Facility Agent
                  after consultation with its counsel or the Servicer, to
                  perfect the Purchasers' first priority ownership or security
                  interests in and to such Foreign Receivable and the related
                  Contracts and Financed Aircraft and the Collections with
                  respect thereto, and

                       (C)     (x)(1) a form of legal opinion of special FAA
                  counsel to the Seller to the effect that (A) the Lien granted
                  by the Seller in favor of the Administrative Agent (for the
                  ratable benefit of the Purchasers) in the related Financed
                  Aircraft constitutes a duly perfected, first priority Lien
                  thereon (except as set forth in paragraph (l) of the
                  definition of "Eligible Receivables") and (B) the assignment
                  of such Foreign Receivable by the Seller in favor of the
                  Administrative Agent (for the ratable benefit of the
                  Purchasers) constitutes a duly perfected, first priority Lien
                  thereon (except for Permitted Receivables Liens) and (2) a
                  form of legal opinion of counsel (a copy of which shall be
                  delivered to the Managing Facility Agent) admitted to practice
                  in the foreign jurisdiction in which the related Foreign
                  Obligor is located (within the meaning of Section 9-307 of the
                  New York UCC), addressed to the Managing Facility Agent, the
                  Co-Administrative Agents and the Purchasers to the effect that
                  the assignment of such Foreign Receivable by the Seller in
                  favor of the Administrative Agent (for the ratable benefit of
                  the

<PAGE>

                                                                              72

                  Purchasers) constitutes a duly perfected, first priority Lien
                  thereon (except for Permitted Receivables Liens); each such
                  opinion shall also cover such other matters as the Managing
                  Facility Agent shall reasonably request, and shall be in all
                  respects satisfactory in form and substance to the Managing
                  Facility Agent and its counsel, or

                  (y) if the Foreign Obligor of such Foreign Receivable is so
                  located in a jurisdiction covered by a previously delivered
                  and accepted (by the Managing Facility Agent on behalf of the
                  Purchasers) legal opinion of foreign counsel (as described in
                  clause (C)(x) above), a form of certificate of a Responsible
                  Officer of the Seller which represents and warrants to the
                  Managing Facility Agent, for the benefit of the Purchasers,
                  that the Seller has taken all actions specified in such
                  previously delivered opinion and all other actions known to
                  the Seller to ensure that the assignment of the Foreign
                  Receivable is enforceable and has been duly perfected to the
                  same extent as set forth in such previously delivered and
                  accepted legal opinion;

                       (iii)     with respect to each such Foreign Receivable
                  which is a Lease Receivable with a Foreign Obligor, but is not
                  a Registerable Lease Receivable,

                       (A)     the form of Foreign Assignment with respect to
                  the Financed Aircraft related to such Receivable, which
                  Foreign Assignment shall be effective to perfect the Lien
                  granted thereon by the Seller in favor of the Administrative
                  Agent for the ratable benefit of the Purchasers, in each case,
                  in all respects reasonably satisfactory in form and substance
                  to the Managing Facility Agent and its counsel,

                       (B)     the forms of all other filings and recordings
                  (including, without limitation, any UCC filings with filing
                  offices in the jurisdictions listed on Schedule II) necessary
                  or advisable, in the opinion of the Managing Facility Agent
                  after consultation with its counsel or the Servicer, to
                  perfect the Purchasers' first priority ownership or security
                  interests in and to such Foreign Receivable and the related
                  Contracts and Financed Aircraft and the Collections with
                  respect thereto, and

                       (C)     (x) a form of legal opinion of counsel (a copy of
                  which shall be delivered to the Managing Facility Agent)
                  admitted to practice in the foreign jurisdiction in which the
                  related Foreign Obligor is located (within the meaning of
                  Section 9-307 of the New York UCC), addressed to the Managing
                  Facility Agent, the Co-Administrative Agents and the
                  Purchasers (1) to the effect that (A) the Lien granted by the
                  Seller in favor of the Administrative Agent (for the ratable
                  benefit of the Purchasers) in the related Financed Aircraft
                  constitutes a duly perfected, first priority Lien thereon
                  (except as set forth in paragraph (l) of the definition of
                  "Eligible Receivables"), (B) the assignment by the Seller in
                  favor of the Administrative Agent (for the ratable benefit of
                  the Purchasers) of such Receivable constitutes a duly
                  perfected, first priority Lien thereon (except for Permitted
                  Receivables Liens) and (2) covering such other matters as the

<PAGE>

                                                                             73

                  Managing Facility Agent shall reasonably request, and in all
                  respects satisfactory in form and substance to the Managing
                  Facility Agent and its counsel, or

                  (y) if the Foreign Obligor of such Foreign Receivable is so
                  located in a jurisdiction covered by a previously delivered
                  and accepted (by the Managing Facility Agent on behalf of the
                  Purchasers) legal opinion, a form of certificate of a
                  Responsible Officer of the Seller which represents and
                  warrants to the Managing Facility Agent, for the benefit of
                  the Purchasers, that the Seller has taken all actions
                  specified in such previously delivered opinion and all other
                  actions known to the Seller to ensure that the Liens
                  referenced in clause (C)(x)(1)(A) and (B) of this paragraph
                  (iii) are enforceable and have been duly perfected to the same
                  extent as set forth in such previously delivered and accepted
                  legal opinion;

provided, however, that notwithstanding the provisions of this subsection
--------
2.27(a)(iii), the Seller may, at its option, decline to perform any of the
requirements of this subsection 2.27(a)(iii) with respect to any Uncertified
Lease Receivable; and

                       (iv)     with respect to each Affiliate Receivable,

                       (A)     the form(s) of Foreign Assignment(s) with
                  respect to the Financed Aircraft related to such Receivable,
                  which Foreign Assignment(s) shall be effective to perfect (A)
                  the Lien granted thereon by the Affiliate Obligor in favor of
                  Raytheon Credit, (B) an assignment of such Lien by Raytheon
                  Credit in favor of the Seller and (B) an assignment of such
                  Lien by the Seller in favor of the Administrative Agent for
                  the ratable benefit of the Purchasers, in each case, in all
                  respects reasonably satisfactory in form and substance to the
                  Managing Facility Agent and its counsel,

                       (B)     the forms of all other filings and recordings
                  (including, without limitation, any UCC filings with filing
                  offices in the jurisdictions listed on Schedule II) necessary
                  or advisable, in the opinion of the Managing Facility Agent
                  after consultation with its counsel or the Servicer, to
                  perfect (A) Raytheon Credit's first priority perfected
                  interest in the Applicable Lease related thereto, the Financed
                  Aircraft and the Collections with respect thereto, (B) the
                  assignment by Raytheon Credit of such Affiliate Receivable and
                  Raytheon Credit's interest in the Applicable Lease related
                  thereto, the Financed Aircraft and the Collections with
                  respect thereto to the Seller and (C) the Purchasers' first
                  priority ownership or security interests in and to such
                  Affiliate Receivable and the related Contracts and Financed
                  Aircraft and the Collections with respect thereto, and

                       (C)     (x) a form of legal opinion of counsel (a copy of
                  which shall be delivered to the Managing Facility Agent)
                  admitted to practice in the foreign jurisdiction in which the
                  related Unaffiliated Foreign Lessee is located (within the
                  meaning of Section 9-307 of the New York UCC), addressed to
                  the Managing Facility Agent, the Co-Administrative Agents and
                  the Purchasers (1) to the effect that (A) the Lien in favor of
                  Raytheon Credit in the related Financed Aircraft constitutes a
                  duly perfected, first priority Lien thereon (except as set
                  forth in

<PAGE>

                                                                             74

                  paragraph (l) of the definition of "Eligible Receivables"),
                  (B) the assignment by Raytheon Credit in favor of the Seller
                  of such Affiliate Receivable and Raytheon Credit's interest in
                  the Applicable Lease related thereto, the Financed Aircraft
                  and the Collections with respect thereto constitutes a duly
                  perfected assignment thereof and (C) the assignment thereof by
                  the Seller in favor of the Administrative Agent, for the
                  ratable benefit of the Purchasers of such Affiliate
                  Receivable, constitutes a duly perfected, first priority Lien
                  thereon (except for Permitted Receivables Liens and except as
                  set forth in paragraph (l) of the definition of "Eligible
                  Receivables") and (2) covering such other matters as the
                  Managing Facility Agent shall reasonably request, and in all
                  respects satisfactory in form and substance to the Managing
                  Facility Agent and its counsel, or

                  (y) if the Unaffiliated Foreign Lessee of such Affiliate
                  Receivable is so located in a jurisdiction covered by a
                  previously delivered and accepted (by the Managing Facility
                  Agent on behalf of the Purchasers) legal opinion, a form of
                  certificate of a Responsible Officer of the Seller which
                  represents and warrants to the Managing Facility Agent, for
                  the benefit of the Purchasers, that the Seller has taken all
                  actions specified in such previously delivered opinion and all
                  other actions known to the Seller to ensure that the Liens
                  referenced in clause (C)(x)(1)(A), (B) and (C) of this
                  paragraph (iv) are enforceable and have been duly perfected to
                  the same extent as set forth in such previously delivered and
                  accepted legal opinion.

                  (b) Except as provided in subsection 2.27(c) below, within 30
days of receipt of such forms of assignment, legal opinions and other specified
documents, the Servicer shall notify the Seller whether or not the related
Affiliate Receivables and Foreign Receivables will, subject to the satisfaction
of the conditions specified in subsection 5.2(e), constitute Certified Foreign
Receivables, Uncertified Foreign Receivables or Ineligible Receivables. Subject
to the satisfaction of the conditions specified in subsection 5.2(e), such
designation will be applied from and after the date of such notification. In the
absence of such notification, such Receivable shall constitute an Uncertified
Foreign Receivable, provided, however, that at any time thereafter, the Seller
                    --------  -------
may request that the Servicer determine whether any Uncertified Foreign
Receivable due to a change of circumstance is eligible to qualify as a Certified
Foreign Receivable. Within 45 days of receipt of such request (or such shorter
period as shall be reasonably practicable) the Servicer shall determine the
eligibility of the Uncertified Foreign Receivable referred to above to qualify
as a Certified Foreign Receivable in accordance with the provisions of this
subsection 2.27 and notify the Seller.

                  (c) Notwithstanding the foregoing, but subject to the further
provisions of this subsection 2.27(c) and the provisions of subsection 2.27(d),
on the Closing Date Existing Certified Receivables shall be designated Certified
Foreign Receivables hereunder. Within 180 days of the Closing Date (such date,
the "Certified Opinion Delivery Date"), the Seller shall deliver to the Old
    --------------------------------
Administrative Agent, with respect to each Existing Certified Receivable, a form
of legal opinion of counsel (satisfactory to the Old Administrative Agent)
admitted to practice in the foreign jurisdiction in which the related
Unaffiliated Foreign Lessee is located (within the meaning of Section 9-103 of
the New York UCC as in effect at such time), addressed to the Old Administrative
Agent and the Purchasers (x) to the effect that no further action need be taken
in order to (1) perfect the transfer by Raytheon Credit to the Seller of such
Existing

<PAGE>

                                                                             75

Certified Receivable, the related Financed Aircraft and Applicable Lease (if
applicable) and Collections thereon in accordance with the Intercompany Purchase
Agreement and (2) continue the Lien in favor of the Administrative Agent of such
Existing Certified Receivable, the related Financed Aircraft and Applicable
Lease (if applicable) and Collections thereon as a duly perfected Lien having
the same priority as in effect immediately prior to the Effective Date and (y)
if any actions had been required in order to render the opinions set forth in
clause (x), setting forth such actions and (z) covering such other matters as
the Old Administrative Agent shall reasonably request, which opinion shall be in
all respects satisfactory in form and substance to the Old Administrative Agent
and its counsel.

                  (d) On the first Settlement Date (other than a Special
Settlement Date) following the Certified Opinion Delivery Date, the Seller shall
repurchase from the Purchasers and the Purchasers agree to sell to the Seller on
such date in accordance with the terms hereof, each Existing Certified
Receivable and each Existing GA Receivable (the Foreign Obligor of which is
located in Canada, France or Australia) as to which the Purchasers shall not
have received a legal opinion to the effect set forth in subsection 2.27(c)
hereof. Subject to subsections 2.13 and 2.15(b), the Seller shall make such
repurchase by depositing in the Concentration Account cash an amount for each
such Receivable equal to the amount set forth in clause (a) of the definition of
"Repurchase Price", calculated at the date such deposit is made, except to the
extent (without duplication) of any payment made pursuant to subsection 2.18,
for the Settlement Period during which such interest accrued and was not paid by
the Foreign Obligor under the related Contract. The amount of any such deposit
shall be applied and distributed in accordance with subsections 2.15 and 2.16.
Except as provided in subsection 9.1, the sole obligation of the Seller with
respect to a Receivable of the type described in this subsection 2.27(d) shall
be the requirement to repurchase or substitute for such Receivable pursuant to
this subsection 2.27(d).

     SECTION 3.  THE SERVICER AND SERVICING OF PURCHASED RECEIVABLES

                  3.1 Designation of Servicer; Removal. (a) The servicing,
                      ---------------------------------
administering and collection of Purchased Receivables shall be conducted by such
Person (the "Servicer") so designated from time to time in accordance with this
             --------
subsection 3.1. Until the Required Purchasers give notice to the Seller of the
designation of a new Servicer pursuant to subsection 3.1(b), Raytheon Credit is
hereby designated as, and hereby agrees to perform the duties and obligations
of, the Servicer for the Purchased Receivables sold hereunder. The Servicer may,
with the prior consent of the Required Purchasers, subcontract with any other
Person to perform, in accordance with applicable laws, the servicing,
administering or collecting of Purchased Receivables, provided that the Servicer
                                                      --------
shall remain liable for the performance of the duties and obligations of the
Servicer pursuant to the terms hereof. With respect to the Existing Receivables,
the capacity of the Servicer shall be a continuation by Raytheon Credit of its
capacity as Servicer under and as defined in each of the Existing Agreements.

                  (b) At any time after the occurrence and during the
continuance of a Specified Amortization Event, the Required Purchasers may
remove Raytheon Credit (or any successor Servicer) as the Servicer and appoint
as a successor Servicer any Person to succeed Raytheon Credit (or any successor
Servicer) as Servicer, on the condition that such successor Servicer agrees to
perform the duties and obligations of the Servicer pursuant to the terms hereof.
Any such removal of Raytheon Credit (or any successor Servicer) as the Servicer
shall not become

<PAGE>

                                                                             76

effective until such successor Servicer accepts its appointment and agrees to be
bound by the terms and conditions of this Agreement with respect to the Servicer
in a writing satisfactory in form and substance to the Managing Facility Agent
and the Required Purchasers. The Servicer agrees to cooperate with the Managing
Facility Agent, the Purchasers and any successor Servicer if the Servicer is
terminated under this Agreement, including transferring to the successor
Servicer all cash amounts or documents or instruments relating to the Purchased
Receivables held by the Servicer at the time of its removal.

                  (c) The authorization of the Servicer under this Agreement
shall terminate when all the obligations under this Agreement have been paid in
full.

                  3.2 Duties of Servicer. (a) The Servicer shall take or cause
                      ------------------
to be taken all such actions as may be necessary or advisable to administer,
service and collect each Purchased Receivable from time to time, all in
accordance with applicable laws, rules and regulations, with reasonable care and
diligence, and solely in accordance with the Credit and Collection Policy. The
Seller, the Managing Facility Agent and each Purchaser each agrees that the
Servicer may enforce its rights and interests in and under the Purchased
Receivables and the Contracts and with respect to the Financed Aircraft. The
Servicer shall remit Collections in accordance with subsections 2.14 and 2.15(a)
and until such remittances are made, in the circumstance described in Section
2.15(a), without regard to the proviso, shall hold such Collections in trust for
the account of the Purchasers. The Servicer may not extend, amend or otherwise
modify the terms of any Purchased Receivable, or amend, modify or waive any term
or condition of any Contract related thereto, or extend, amend or otherwise
modify the rights of the Seller except (i) in accordance with subsection 7.1(b)
and (ii) if the Servicer is not then Raytheon Credit, with the Seller's prior
consent. No Servicer (if not Raytheon Credit) may commence or settle any legal
action to enforce collection of any Purchased Receivable without the prior
consent of the Required Purchasers. The Seller shall deliver to the Servicer (if
not the Seller) all computer tapes or disks and, upon the Managing Facility
Agent's request, all documents, instruments or other records which evidence or
relate to Purchased Receivables (the foregoing, the "Contract Files").

                  (b) The Servicer (if not Raytheon Credit) shall as soon as
practicable following receipt turn over to the Seller or any other party
entitled thereto the Collections on any Receivable which is not a Purchased
Receivable less all reasonable and appropriate out-of-pocket costs and expenses
of the Servicer of servicing, collecting and administering such Receivable to
the extent not covered by the Servicing Fee received by it. The Servicer, if
other than the Seller, shall as soon as practicable upon demand deliver to the
Seller all documents, instruments and records in its possession which evidence
or relate to Receivables other than Purchased Receivables, and copies of
documents, instruments and records in its possession which evidence or relate to
Receivables other than Purchased Receivables. The Servicer unconditionally and
absolutely agrees to take any and all action requested by the Managing Facility
Agent in connection with the exercise by the Managing Facility Agent and the
Purchasers of their rights under subsection 8.2, 11.11, 11.12 or 11.13.

                  (c) With respect to any L/C Receivable the related letter of
credit of which expires on the last date of the Contract related thereto, the
Servicer shall prepare any drawing request required under such letter of credit
and, if the payment due under such Contract is not

<PAGE>

                                                                             77

made by the drawing deadline under such letter of credit, the Servicer shall
make a drawing thereunder. Further, if the expiration date of any letter of
credit related to any L/C Receivable is not extended when a Principal Balance of
such Receivable remains outstanding, the Servicer shall, or shall cause the
Seller or Raytheon Credit to, draw the aggregate available amount under such
letter of credit prior to the expiration thereof.

                  3.3     Servicer Reports. The Servicer shall deliver to the
                          ----------------
Managing Facility Agent, with sufficient copies for each Purchaser:

                  (a) Within 45 days after the end of each of the first three
fiscal quarters of the Servicer, beginning with the first such quarter to end
after the Closing Date, a report with respect to such fiscal quarter, certified
by a Responsible Officer (if the Seller is then the Servicer) or by the
president or officer responsible for financial affairs of the Servicer, to the
effect that the Servicer has reviewed its servicing, administration and
collection of Purchased Receivables, Collections with respect thereto and the
related Contracts and Financed Aircraft, that no errors and irregularities were
detected with respect to such servicing, administration and collection and that
such servicing, collection and administration was conducted in compliance with
the applicable provisions of this Agreement; and

                  (b) Within 90 days after the last day of each fiscal year of
the Servicer, a report of a firm of nationally recognized independent public
accountants (which may also render other services to the Servicer, the Seller or
Raytheon or any Affiliate thereof) to the effect that (i) such firm has made an
examination, in accordance with attestation standards established by the
American Institute of Certified Public Accountants, of management's assertion
that the Servicer's Receivables Administration Department maintained effective
internal control over financial reporting as of the most recent fiscal year
based on criteria established in Internal Control - Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)
and (ii) such firm has performed the procedures set out in Exhibit K (agreed
upon procedures relating to Settlement Statements and receivables files).

                  3.4 Servicing Fee. As compensation for its servicing
                      -------------
activities hereunder and reimbursement for its reasonable fees, disbursements
and expenses incurred in connection with its activities hereunder, the Servicer
shall be entitled to receive a per annum servicing fee of .85% of the
Outstanding Purchase Price, payable monthly in arrears on each Settlement Date
(other than a Special Settlement Date) in respect of the Outstanding Purchase
Price at the end of the Accrual Period preceding the Settlement Date on which
the Servicing Fee is paid. The Servicing Fee shall be calculated on the basis
of a 360-day year for the actual number of days elapsed during such Accrual
Period.

                  3.5 Merger or Consolidation of, or Assumption of the
                      ------------------------------------------------
Obligations of, the Servicer. The Servicer shall not consolidate with or merge
----------------------------
into any other Person or convey or transfer its properties and assets
substantially as an entirety to any Person, unless:

                       (i)     the Person formed by such consolidation or into
                  which the Servicer is merged or the Person which acquires by
                  conveyance or transfer the properties and assets of the
                  Servicer substantially as an entirety shall be, if the
                  Servicer is not the surviving entity, organized and existing
                  under the laws of the United States of

<PAGE>

                                                                             78

                  America or any State or the District of Columbia and shall
                  expressly assume, by an agreement in form reasonably
                  satisfactory to the Managing Facility Agent and the Required
                  Purchasers, the performance of every covenant and obligation
                  of the Servicer hereunder, and shall benefit from all the
                  rights granted to the Servicer, as applicable hereunder;

                       (ii)     the Servicer has delivered to the Managing
                  Facility Agent a certificate of the Chief Financial Officer or
                  President thereof and an opinion of counsel (which counsel
                  shall be reasonably satisfactory to the Managing Facility
                  Agent) each stating that such consolidation, merger,
                  conveyance or transfer and such agreement comply with this
                  Section 3.5 and that all conditions precedent herein provided
                  for relating to such transaction have been complied with and,
                  in the case of the opinion of counsel, that such agreement is
                  legal, valid and binding with respect to the Servicer; and

                       (iii) after giving effect thereto, no Amortization Event
                  shall have occurred and be continuing.

                  3.6 Limitation on Liability of the Servicer and Others.
                      ---------------------------------------------------
Neither the Servicer (except as otherwise provided herein) nor any of the
directors or officers or employees or agents of the Servicer shall be under any
liability to the Managing Facility Agent, the Co-Administrative Agents or the
Purchasers or any other Person for any action taken or for refraining from the
taking of any action pursuant to this Agreement whether arising from express or
implied duties under this Agreement; provided, however, that this provision
                                     --------  -------
shall not protect the Servicer against any liability which would otherwise be
imposed by reason of its willful misfeasance, bad faith or gross negligence in
the performance of duties or by reason of its willful misconduct hereunder or by
reason of Section 3.7. The Servicer and any director or officer or employee or
agent of the Servicer may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder.

                  3.7 Indemnification of the Seller, the Managing Facility
                      ----------------------------------------------------
Agent, the Administrative Agent, the Co-Administrative Agents and each
----------------------------------------------------------------------
Purchaser. The Servicer shall indemnify and hold harmless the Seller, the
---------
Managing Facility Agent, the Administrative Agent and each Purchaser from and
against any loss, liability, expense, damage or injury suffered or sustained by
reason of any acts, omissions or alleged acts or omissions of the Servicer with
respect to activities of the Seller or the Purchasers for which the Servicer is
responsible pursuant to this Agreement, including those arising from acts or
omissions of the Servicer pursuant to this Agreement, including, but not limited
to any judgment, award, settlement, reasonable attorneys' fees and other costs
or expenses incurred in connection with the defense of any actual or threatened
action, proceeding or claim. Notwithstanding the foregoing, (i) the Servicer
shall not indemnify the Seller, the Managing Facility Agent, the Administrative
Agent, any Co-Administrative Agent or any Purchaser if such acts, omissions or
alleged acts constitute fraud, gross negligence or breach of fiduciary duty by
such Person; (ii) the Servicer shall not indemnify the Seller, the Managing
Facility Agent, the Administrative Agent, the Co-Administrative Agents or any
Purchaser for any liabilities, costs or expenses with respect to any action
taken by or at the request of any Purchasers, the Managing Facility Agent, the
Administrative Agent, any Co-Administrative Agent, any Co-Agent or any Agent;
(iii) the Servicer shall not indemnify the

<PAGE>

                                                                             79

Seller, the Managing Facility Agent, the Administrative Agent, the
Co-Administrative Agents or any Purchaser as to any losses, claims or damages
incurred by any of them in their capacities as investors, including without
limitation losses incurred as a result of Defaulted Receivables which are
written off as uncollectible; and (iv) the Servicer shall not indemnify the
Seller, the Managing Facility Agent, the Administrative Agent, the
Co-Administrative Agents or any Purchaser for any liabilities, costs or expenses
of any such Person arising under any tax law, including without limitation any
federal, state or local income or franchise taxes or any other tax imposed on or
measured by income (or any interest or penalties with respect thereto or arising
from a failure to comply therewith) required to be paid by any such Person in
connection herewith to any taxing authority. The provisions of this indemnity
shall run directly to and be enforceable by an injured party subject to the
limitations hereof.

                  The obligations of the Servicer under this subsection 3.7
shall survive the payment in full of the obligations hereunder.

                  3.8 The Servicer Not to Resign. The Servicer shall not resign
                      --------------------------
from the obligations and duties hereby imposed on it except upon determination
that (i) the performance of its duties hereunder is or becomes impermissible
under applicable law and (ii) there is no reasonable action which the Servicer
could take to make the performance of its duties hereunder permissible under
applicable law. Any such determination permitting the resignation of the
Servicer shall be evidenced as to clause (i) above by an opinion of counsel
(satisfactory to the Managing Facility Agent and its counsel) to such effect
delivered to the Managing Facility Agent. No such resignation shall become
effective until a successor Servicer shall have assumed the responsibilities and
obligations of the Servicer hereunder. Any delegation of duties permitted under
subsection 3.1 shall not relieve the Servicer of its liability and
responsibility with respect to such duties, and shall not constitute a
resignation within the meaning of this subsection 3.8.

                  3.9 Access to Certain Documentation and Information Regarding
                      ---------------------------------------------------------
the Contracts. The Servicer shall provide to the Managing Facility Agent access
-------------
to the documentation regarding the Purchased Receivables (including the
Contracts) and the related Financed Aircraft, such access being afforded without
charge but only (i) upon reasonable request, (ii) during normal business hours,
(iii) subject to the Servicer's normal security and confidentiality procedures
and (iv) at offices designated by the Servicer.

                  3.10 Marking of Records. The Servicer shall mark the Contract
                       ------------------
files with a legend (or, in the case of computer tapes and disks, other
appropriate electronic mark or tag) that such Purchased Receivables have been
sold to the Managing Facility Agent and each Purchaser.

                  3.11 Additional Covenants of the Servicer. The Servicer hereby
                       ------------------------------------
covenants that:

                  (a)      Contract Files. The Servicer will, at its own cost
                           --------------
         and expense, maintain all Contract files in its possession in trust for
         the Seller, the Managing Facility Agent and the Purchasers and in
         accordance with the Credit and Collection Policy and customary
         standards in the aircraft finance industry. Without limiting the
         generality of the preceding sentence, the Servicer will not dispose of
         any such items in any manner which is inconsistent with the performance
         of its obligations as the Servicer pursuant to this

<PAGE>

                                                                             80

         Agreement and will not dispose of any Contract except as contemplated
         by this Agreement.

                  (b) Compliance with Law. The Servicer will comply, in all
                      -------------------
         material respects, with all laws and regulations of any Governmental
         Authority applicable to the Servicer, the Contracts related to the
         Purchased Receivables, the related Financed Aircraft and the Contract
         Files or any part thereof; provided that the Servicer may contest any
                                    --------
         such law or regulation in any reasonable manner which will not
         materially and adversely affect the value of (or the rights of the
         Managing Facility Agent or the Purchasers, with respect to) the
         Purchased Receivables and related Financed Aircraft.

                  (c) Preservation of Security Interest. The Servicer will
                      ---------------------------------
         execute and file such financing and continuation statements and any
         other documents reasonably requested by the Managing Facility Agent to
         be filed or which may be required by any law or regulation of any
         Governmental Authority to preserve and protect fully the interest of
         the Managing Facility Agent and the Purchasers in, to and under the
         Purchased Receivables and related Financed Aircraft (in each case as
         contemplated by the other provisions of this Agreement).

                  (d) Obligations with Respect to Contracts; Modifications. The
                      ----------------------------------------------------
         Servicer will duly fulfill and comply with, in all material respects,
         all obligations on the part of the Seller to be fulfilled or complied
         with under or in connection with each Contract related to Purchased
         Receivables and will do nothing to impair the rights of the
         Administrative Agent or the Purchasers in, to and under the Purchased
         Receivables and the related Financed Aircraft. The Servicer will
         perform such obligations under the Contracts and will not change or
         modify the Contracts, except as otherwise provided in subsection
         7.1(b)(iv) of this Agreement.

                  (e) No Bankruptcy Petition. Prior to the date that is one year
                      ----------------------
         and one day after the payment in full of all amounts owing hereunder,
         the Servicer will not institute against the Seller, or join any other
         Person in instituting against the Seller, any bankruptcy,
         reorganization, arrangement, insolvency or liquidation proceedings or
         other similar proceedings under the laws of the United States or any
         state of the United States. This Section 3.11(e) will survive the
         termination of this Agreement.

                    SECTION 4.  REPRESENTATIONS AND WARRANTIES

                  4.1 Representations and Warranties Relating to the Seller. To
                      -----------------------------------------------------
induce the Purchasers to enter into this Agreement and to purchase the
Receivables the Seller hereby represents and warrants to the Managing Facility
Agent and each Purchaser on the date hereof, on the Amendment Effective Date and
(except as provided in subsection 4.1(j)) on each Settlement Date (including
each Special Settlement Date) on which a purchase or substitution is made that:

                  (a)     Corporate Existence; Compliance with Law. The Seller
                          ----------------------------------------
         (i) is duly organized, validly existing and in good standing under the
         laws of the jurisdiction of its organization, (ii) has the corporate
         power and authority, and the legal right, to own and

<PAGE>

                                                                             81

         operate its property, to lease the property it operates as lessee and
         to conduct the business in which it is currently engaged, (iii) is duly
         qualified and in good standing under the laws of each jurisdiction
         where its ownership, lease or operation of property or the conduct of
         its business requires such qualification except to the extent that
         failure so to qualify could not reasonably be expected to have a
         Material Adverse Effect and (iv) is in compliance with all Requirements
         of Law (whether or not the determination of any arbitrator, court or
         other Governmental Authority has been appealed and is final) except to
         the extent that the failure to comply therewith could not, in the
         aggregate, reasonably be expected to have a Material Adverse Effect.

                  (b)     Corporate Power; Authorization; Enforceable
                          -------------------------------------------
         Obligations. The Seller has the corporate power and authority, and the
         -----------
         legal right, to execute and deliver, and to perform its obligations
         under, this Agreement, each Assignment, each FAA Assignment and each
         Foreign Assignment and to sell or substitute the Receivables hereunder,
         to grant and assign the Liens as contemplated herein and has taken all
         necessary corporate action to authorize the sales, purchases and
         substitutions and the granting and assigning of Liens in connection
         therewith on the terms and conditions of this Agreement and to
         authorize the execution, delivery and performance of this Agreement and
         each other Purchase Document to which it is a party. No consent or
         authorization of, filing with or other act by or in respect of, any
         Governmental Authority or any other Person is required in connection
         with the sales, purchases and substitutions to be made hereunder, the
         granting and assignment of Liens in connection therewith or with the
         execution, delivery, performance, validity or enforceability of this
         Agreement or any other Purchase Document to which it is a party. This
         Agreement has been, and each Assignment, FAA Assignment and Foreign
         Assignment will be, duly executed and delivered on behalf of the
         Seller. This Agreement constitutes, and each Assignment, FAA Assignment
         and Foreign Assignment when executed and delivered will constitute, a
         legal, valid and binding obligation of the Seller enforceable against
         the Seller in accordance with its terms, except as enforceability may
         be limited by applicable bankruptcy, insolvency, reorganization,
         moratorium or similar laws affecting the enforcement of creditors'
         rights generally and by general equitable principles (whether
         enforcement is sought by proceedings in equity or at law).

                  (c)     No Legal Bar. Each sale and purchase and each
                          ------------
         substitution to be made hereunder, the use of the proceeds of any such
         purchase and sale, each granting or assigning of the Liens in
         connection with any such purchase and sale or substitution and the
         execution, delivery and performance of this Agreement and each other
         Purchase Document to which it is a party will not violate the Seller's
         certificate of incorporation or by-laws or any Requirement of Law
         (including, but not limited to, bulk transfer or similar statutory
         provisions in effect in any applicable jurisdiction) or Contractual
         Obligation of the Seller and will not result in, or require, the
         creation or imposition of any Lien on any of its properties or revenues
         pursuant to the Seller's certificate of incorporation or by-laws or any
         such Requirement of Law or Contractual Obligation, other than the Liens
         in favor of the Administrative Agent and the Purchasers created hereby.

                  (d)     No Material Litigation. No litigation, investigation
                          ----------------------
         or proceeding of or before any arbitrator or Governmental Authority is
         pending by or against the Seller or, to the

<PAGE>

                                                                             82

         Seller's knowledge, pending against RAC, or threatened by or against
         the Seller or RAC, or against any of their respective properties or
         revenues (i) with respect to this Agreement or any other Purchase
         Document to which the Seller is a party or any of the transactions
         contemplated hereby or thereby or (ii) which could reasonably be
         expected to have a Material Adverse Effect.

                  (e)     No Default. Neither the Seller nor, to the Seller's
                          ----------
         knowledge, RAC is in default under or with respect to any of its
         Contractual Obligations in any respect which could reasonably be
         expected to have a Material Adverse Effect.

                  (f)     Federal Regulations. No part of the proceeds of any
                          -------------------
         purchase will be used for "purchasing" or "carrying" any "margin stock"
         within the respective meanings of each of the quoted terms under
         Regulation U of the Board of Governors of the Federal Reserve System as
         now and from time to time hereafter in effect or for any purpose which
         violates the provisions of the Regulations of such Board of Governors.
         If requested by any Purchaser or the Managing Facility Agent, the
         Seller will furnish to the Managing Facility Agent and each Purchaser a
         statement to the foregoing effect in conformity with the requirements
         of FR Form U-1 referred to in said Regulation U.

                  (g)     ERISA. During the five-year period prior to the date
                          -----
         on which this representation is made or deemed made with respect to any
         Plan, each Plan has complied in all material respects with the
         applicable provisions of ERISA and the Code and neither the Seller nor
         any Commonly Controlled Entity has incurred any liability with respect
         to any Plan (other than contributions and payments required to be made
         in a timely fashion under the terms of such Plan which were so made),
         where a failure to comply or such liability could reasonably be
         expected to have a Material Adverse Effect. Neither the Seller nor any
         Commonly Controlled Entity would become subject to any liability under
         ERISA if the Seller or any such Commonly Controlled Entity were to
         withdraw completely from all Multiemployer Plans as of the valuation
         date most closely preceding the date on which this representation is
         made or deemed made which could reasonably be expected to have a
         Material Adverse Effect.

                  (h)     Investment Company Act; Other Regulations. The Seller
                          -----------------------------------------
         is not an "investment company", or a company "controlled" by an
         "investment company", within the meaning of the Investment Company Act
         of 1940, as amended. The Seller is not subject to regulation under any
         Federal or State statute or regulation which limits its ability to
         incur indebtedness.

                  (i)     Place of Business. The Seller is organized under the
                          -----------------
         laws of the State of Kansas. The chief place of business and chief
         executive office of the Seller and the offices where the Seller keeps
         all its books, records and documents evidencing the Purchased
         Receivables and the related Contracts are located at the address of the
         Seller referred to in subsection 11.2 (or, in the case of books,
         records and documents evidencing the Purchased Receivables, at such
         other locations, notified to the Managing Facility Agent in accordance
         with subsection 11.2, in jurisdictions where all action required by
         subsection 6.1(l) has been taken and completed).

<PAGE>

                                                                             83

                  (j)     Information. All information set forth in the
                          -----------
         Syndication Materials is accurate in all material respects on and as of
         the Amendment Effective Date and does not contain any untrue statement
         of a material fact or omit to state any material fact of which the
         Seller knows or should have known which is necessary to make the
         statements herein or therein, in light of the circumstances in which
         they were made, not misleading.

                  4.2 Representations and Warranties Relating to the
                      ----------------------------------------------
Receivables. To induce the Purchasers to purchase the Receivables the Seller
-----------
hereby represents and warrants to the Managing Facility Agent and each Purchaser
with respect to Receivables being purchased or substituted on each Settlement
Date (including each Special Settlement Date) or the Closing Date that:

                  (a)     Eligible Receivables. Each Purchased Receivable is on
                          --------------------
         its date of purchase or substitution hereunder an Eligible Receivable.

                  (b)     Ownership or Perfected First Security Interest. Upon
                          ----------------------------------------------
         each purchase or substitution, the Purchasers will acquire a valid and
         perfected first priority ownership or security interest in each
         Purchased Receivable, the Collections with respect thereto and each
         related Contract and, except with respect to any Unsecured Receivable
         described in clause (i), (iii) or (v) of the definition of "Unsecured
         Receivable", the related Financed Aircraft, free and clear of any Lien
         other than (i) with respect to such Purchased Receivable and the
         related Contracts, the Lien in favor of the Administrative Agent for
         the ratable benefit of the Purchasers and any Permitted Receivable Lien
         on such Purchased Receivable and related Contracts, (ii) solely with
         respect to a Financed Aircraft, (u) the Lien created by the Obligor
         (including an Affiliate Obligor) in favor of Raytheon Credit and
         assigned to the Seller, (v) with respect to Existing Certified
         Receivables, prior to the Certified Opinion Delivery Date, the Lien
         created by the Obligor in favor of Raytheon Credit (but solely to the
         extent a filing is required in a foreign jurisdiction to transfer such
         Lien to the Seller and such filing has not been made), (w) with respect
         to all Existing Receivables, prior to the FAA Filing Date, the Lien
         created by the Obligor in favor of Raytheon Credit (but solely to the
         extent a filing is required with the FAA to transfer such Lien to the
         Seller and such filing has not been made), (x) the assignment of each
         such Lien by the Seller in favor of the Administrative Agent for the
         ratable benefit of the Purchasers or (y) solely with respect to a Lease
         Receivable, the Lien created by the Seller in favor of the
         Administrative Agent for the ratable benefit of the Purchasers, and
         (iii) any Permitted Aircraft Lien on such Financed Aircraft; and no
         effective document or instrument covering any Purchased Receivable or
         Collections with respect thereto or the related Contract(s) or Financed
         Aircraft is on file or of record in any recording office (including,
         but not limited to, the FAA Registry or the comparable registry with
         respect to any Foreign Receivable (excluding any L/C Receivable))
         except (1) the filings with the appropriate foreign registry with
         respect to Affiliate Receivables in order to perfect the Lien in favor
         of the Seller in the Applicable Leases and Financed Aircraft related to
         such Affiliate Receivables and (2) the filing with the FAA Registry or
         the comparable registry with respect to any Foreign Receivable or any
         Affiliate Receivable (excluding any L/C Receivable) in order to perfect
         the Lien encumbering a Financed Aircraft and any related Applicable
         Leases which was granted by the related Obligor in favor of the Seller
         and (3) as may be filed in favor of the

<PAGE>

                                                                             84

         Administrative Agent for the ratable benefit of the Purchasers in
         accordance with this Agreement.

                  (c)     Assignment. The information set forth on Annex I to an
                          ----------
         Assignment, with respect to Eligible Receivables to be purchased or
         substituted on a Settlement Date or purchased on the Closing Date, is
         true and correct on and as of such Settlement Date or the Closing Date.

                  (d)     No Material Adverse Change. Since the date of the last
                          --------------------------
         Settlement Statement, there has been no material adverse change in the
         collectibility of the Purchased Receivables taken as a whole.

                  (e)     Substituted Receivables. If on any Settlement Date the
                          -----------------------
         Seller sells or substitutes less than substantially all the Eligible
         Receivables available for purchase or substitution on such Settlement
         Date, the Seller or the Servicer has not utilized any selection
         procedure intended to result in a selection of Purchased Receivables to
         be purchased or substituted on such Settlement Date which could be
         materially adverse to the rights of the Managing Facility Agent and
         the Purchasers as of such Settlement Date.

                  (f)     No Violation. Immediately following each purchase or
                          ------------
         substitution, the Seller will not have violated the limitations
         contained in subsection 2.7.

                  (g)     Entitlement to Section 1110 Benefits. With respect to
                          ------------------------------------
         each Purchased Receivable which is a Commuter Receivable (other than a
         Foreign Receivable and an Affiliate Receivable), Raytheon Credit or the
         Seller shall be entitled to the benefits of Section 1110 of the
         Bankruptcy Code (11 USC [sec]. 1110) with respect to each Contract and
         repossession of the related Financed Aircraft under which each such
         Purchased Receivable arises, and the Administrative Agent, for the
         ratable benefit of the Purchasers, pursuant to subsection 11.13, shall
         be entitled to such Section 1110 benefits of Raytheon Credit and the
         Seller after the occurrence and during the continuance of a Specified
         Amortization Event or in connection with any action taken pursuant to
         subsection 11.11(c) or subsection 11.12(b).

                  (h)     Stipulated Aircraft Value. The Stipulated Aircraft
                          -------------------------
         Value with respect to any Financed Aircraft as set forth in any lease
         Contract related to a Receivable at any time is equal to or greater
         than the Outstanding Balance of such Receivable at such time assuming
         all current payments are made.

                  (i)     Finance Charge Collections. The Finance Charge
                          --------------------------
         Collections have been calculated in compliance with the Credit and
         Collection Policy.

                  4.3 Representations and Warranties Relating to the Servicer.
                      --------------------------------------------------------
To induce the Purchasers to enter into this Agreement and to purchase the
Receivables the Servicer hereby represents and warrants to the Managing Facility
Agent and each Purchaser on the date hereof, on the Amendment Effective Date and
(except as provided in subsection 4.3(i)) on each Settlement Date (including
each Special Settlement Date) on which a purchase or substitution is made that:

<PAGE>

                                                                             85

                  (a)     Corporate Existence; Compliance with Law. The
                          ----------------------------------------
         Servicer (i) is duly organized, validly existing and in good standing
         under the laws of the jurisdiction of its organization, (ii) has the
         corporate power and authority, and the legal right, to own and operate
         its property, to lease the property it operates as lessee and to
         conduct the business in which it is currently engaged, (iii) is duly
         qualified and in good standing under the laws of each jurisdiction
         where its ownership, lease or operation of property or the conduct of
         its business requires such qualification except to the extent that
         failure so to qualify could not reasonably be expected to have a
         Material Adverse Effect and (iv) is in compliance with all Requirements
         of Law (whether or not the determination of any arbitrator, court or
         other Governmental Authority has been appealed and is final) except to
         the extent that the failure to comply therewith could not, in the
         aggregate, reasonably be expected to have a Material Adverse Effect.

                  (b)     Corporate Power; Authorization; Enforceable
                          -------------------------------------------
         Obligations. The Servicer has the corporate power and authority, and
         ------------
         the legal right, to execute and deliver, and to perform its obligations
         under, this Agreement and each other Purchase Document to which it is a
         party and has taken all necessary corporate action to authorize the
         execution, delivery and performance of this Agreement and each other
         Purchase Document to which it is a party. No consent or authorization
         of, filing with or other act by or in respect of, any Governmental
         Authority or any other Person is required in connection with the
         execution, delivery, performance, validity or enforceability of this
         Agreement or any other Purchase Document to which it is a party. This
         Agreement has been duly executed and delivered on behalf of the
         Servicer. This Agreement constitutes, and each other Purchase Document
         to which it is a party, when executed and delivered by it, will
         constitute, a legal, valid and binding obligation of the Servicer
         enforceable against the Servicer in accordance with its terms, except
         as enforceability may be limited by applicable bankruptcy, insolvency,
         reorganization, moratorium or similar laws affecting the enforcement of
         creditors' rights generally and by general equitable principles
         (whether enforcement is sought by proceedings in equity or at law).

                  (c)     No Legal Bar. The execution, delivery and performance
                          ------------
         of this Agreement and each other Purchase Document to which it is a
         party will not violate the Servicer's certificate of incorporation or
         by-laws or any Requirement of Law (including, but not limited to, bulk
         transfer or similar statutory provisions in effect in any applicable
         jurisdiction) or Contractual Obligation of the Servicer and will not
         result in, or require, the creation or imposition of any Lien on any of
         its properties or revenues pursuant to the Servicer's certificate of
         incorporation or by-laws or any such Requirement of Law or Contractual
         Obligation.

                  (d)     No Material Litigation. No litigation, investigation
                          ----------------------
         or proceeding of or before any arbitrator or Governmental Authority is
         pending by or against the Servicer or, to the Servicer's knowledge,
         pending against RAC, or threatened by or against the Servicer or RAC,
         or against any of their respective properties or revenues (i) with
         respect to this Agreement or any other Purchase Document to which the
         Servicer is a party or any of the transactions contemplated hereby or
         thereby or (ii) which could reasonably be expected to have a Material
         Adverse Effect.

<PAGE>

                                                                             86

                  (e)     No Default. Neither the Servicer nor, to the
                          ----------
         Servicer's knowledge, RAC is in default under or with respect to any of
         its Contractual Obligations in any respect which could reasonably be
         expected to have a Material Adverse Effect.

                  (f)     ERISA. During the five-year period prior to the date
                          -----
         on which this representation is made or deemed made with respect to any
         Plan, each Plan has complied in all material respects with the
         applicable provisions of ERISA and the Code and neither the Servicer
         nor any Commonly Controlled Entity has incurred any liability with
         respect to any Plan (other than contributions and payments required to
         be made in a timely fashion under the terms of such Plan which were so
         made), where a failure to comply or such liability could reasonably be
         expected to have a Material Adverse Effect. Neither the Servicer nor
         any Commonly Controlled Entity would become subject to any liability
         under ERISA if the Servicer or any such Commonly Controlled Entity were
         to withdraw completely from all Multiemployer Plans as of the valuation
         date most closely preceding the date on which this representation is
         made or deemed made which could reasonably be expected to have a
         Material Adverse Effect.

                  (g)     Investment Company Act; Other Regulations. The
                          -----------------------------------------
         Servicer is not an "investment company", or a company "controlled" by
         an "investment company", within the meaning of the Investment Company
         Act of 1940, as amended. The Servicer is not subject to regulation
         under any Federal or State statute or regulation which limits its
         ability to incur indebtedness.

                  (h)     Place of Business. The "location" (as such term is
                          -----------------
         defined in Section 9-307 of the New York UCC), chief place of business
         and chief executive office of the Servicer and the offices where the
         Servicer keeps all its books, records and documents evidencing the
         Purchased Receivables and the related Contracts are located at the
         address of the Servicer referred to in subsection 11.2 (or, in the case
         of books, records and documents evidencing the Purchased Receivables,
         at such other locations, notified to the Managing Facility Agent in
         accordance with subsection 11.2, in jurisdictions where all action
         required by subsection 6.1(l) has been taken and completed).

                  (i)     Information. All information set forth in the
                          -----------
         Syndication Materials is accurate in all material respects on and as of
         the Amendment Effective Date and does not contain any untrue statement
         of a material fact or omit to state any material fact of which the
         Servicer knows or should have known which is necessary to make the
         statements herein or therein, in light of the circumstances in which
         they were made, not misleading.

                  SECTION 5.  CONDITIONS PRECEDENT

                  5.1 Conditions to Effectiveness. The effectiveness of this
                      ---------------------------
Agreement is subject to the satisfaction, of the following conditions precedent
(the first date on which such conditions are satisfied, which shall be a
Business Day, being herein called the "Amendment Effective Date"):
                                       ------------------------

                  (a)     Purchase and Other Documents. The Managing Facility
                          ----------------------------
         Agent shall have received, with a copy for each Purchaser, (i) this
         Agreement executed and delivered by a

<PAGE>

                                                                             87

         duly authorized officer of each party hereto and (ii) the Repurchase
         Agreement executed and delivered by a duly authorized officer of RAC
         and (iii) the Guarantee Reaffirmation executed and delivered by a duly
         authorized officer of Raytheon.

                  (b)     Corporate Proceedings and Contracts. The Managing
                          -----------------------------------
         Facility Agent shall have received, with a counterpart for each
         Purchaser, a copy of the resolutions, in form and substance
         satisfactory to the Managing Facility Agent, of the Boards of Directors
         of the Seller, Raytheon Credit, RAC and Raytheon authorizing, (i) in
         the case of the Seller, the execution, delivery and performance of this
         Agreement, (ii) in the case of Raytheon Credit, authorizing the
         execution and delivery of this Agreement, (iii) in the case of RAC,
         authorizing the execution and delivery of the Repurchase Agreement and
         (iv), in the case of Raytheon, acknowledging the execution and delivery
         of this Agreement and authorizing the execution and delivery of the
         Guarantee Reaffirmation, certified by the Secretary or an Assistant
         Secretary of the Seller, Raytheon Credit, RAC or Raytheon, as the case
         may be, as of the Amendment Effective Date, which certificate shall
         state that the resolutions thereby certified have not been amended,
         modified, revoked or rescinded and shall be in form and substance
         satisfactory to the Managing Facility Agent.

                  (c)     Corporate Documents; Good Standing Certificates. The
                          -----------------------------------------------
         Managing Facility Agent shall have received, with a copy for each
         Purchaser, (i) true and complete copies of the certificate of
         incorporation and by-laws of each of the Seller, Raytheon Credit, RAC
         and Raytheon, certified by the Secretary or Assistant Secretary thereof
         as of the Amendment Effective Date as complete and correct copies
         thereof and (ii) good standing certificates with respect to Raytheon
         from the Secretary of State of the State of Delaware, with respect to
         Raytheon Credit from the Secretary of State of the State of Kansas,
         with respect to RAC from the Secretary of State of the State of Kansas
         and with respect to the Seller from the Secretary of State of the State
         of Kansas.

                  (d)     Evidence of Incumbency. The Managing Facility Agent
                          ----------------------
         shall have received, with a counterpart for each Purchaser, a
         certificate, in form and substance satisfactory to the Managing
         Facility Agent, of the Secretary or Assistant Secretary of each of the
         Seller, Raytheon Credit, RAC and Raytheon certifying as to the names
         and true signatures of the officers authorized on such Person's behalf
         to sign any of this Agreement, the Repurchase Agreement and the
         Guarantee Reaffirmation to which it is a party.

                  (e)     Officer's Certificates. The Managing Facility Agent
                          ----------------------
         shall have received, with a counterpart for each Purchaser, (i)
         certificates, in form and substance satisfactory to the Managing
         Facility Agent, of a vice president of each of the Seller, Raytheon,
         RAC and Raytheon Credit that the representations and warranties made by
         such Person in the Purchase Documents to which it is a party are true
         and correct on and as of the Amendment Effective Date as though made on
         and as of the Amendment Effective Date and (ii) a certificate of the
         Vice President and Treasurer of Raytheon setting forth in the
         certificate delivered on behalf of Raytheon the Debt Ratio on the last
         day of its fiscal quarter ending December 31, 2001, the Interest
         Coverage Ratio for the period of four consecutive fiscal quarters
         ending December 31, 2001 and calculations thereof in reasonable
         detail.

<PAGE>

                                                                             88

                  (f)     Legal Opinions. The Managing Facility Agent shall have
                          --------------
         received, with a counterpart for each Purchaser, the following executed
         legal opinions, each dated the Amendment Effective Date and each
         addressed to the Managing Facility Agent and the Purchasers:

                       (i)     the executed legal opinion of Wayne Wallace,
                  General Counsel to RAC, substantially in the form of Exhibit
                  E-1;

                       (ii)    the executed legal opinion of David A. Williams,
                  General Counsel to Raytheon Credit and the Seller,
                  substantially in the form of Exhibit E-2;

                       (iii)   the executed legal opinion of an in-house
                  attorney of Raytheon who is satisfactory to the Managing
                  Facility Agent, substantially in the form of Exhibit E-3

                       (iv)    the executed legal opinion of special counsel to
                  the Seller and Raytheon Credit regarding UCC matters and such
                  other matters as the Managing Facility Agent may reasonably
                  request, substantially in the form of Exhibit E-4; and

                       (v)     the executed legal opinion of Bingham Dana LLP,
                  special counsel to Raytheon Credit, regarding bankruptcy
                  matters, substantially in the form of Exhibit E-4.

         Each such legal opinion shall cover such other matters incident to the
         transactions contemplated by the Purchase Documents as the Managing
         Facility Agent may reasonably require. Furthermore, not later than 30
         days after the Amendment Effective Date the Managing Facility Agent
         shall have received an executed legal opinion of special Kansas counsel
         to the Seller and Raytheon Credit regarding priority of perfection
         under the Kansas UCC, in form and substance acceptable to the Managing
         Facility Agent; non-delivery of such opinion within such time shall
         constitute an Amortization Event.

                  (g)     Fees. (i) The Seller shall have paid to the
                          ----
         Syndication Agent and the Managing Facility Agent for their respective
         accounts the fees set forth in their respective fee letters with the
         Seller required to be paid on or prior to the Amendment Effective Date.

                       (ii)     The Seller shall have paid to the Managing
                  Facility Agent, for the account of each Purchaser, an upfront
                  fee in an amount agreed to by such Purchaser.

                  (h)     Amendment to the Intercompany Purchase Agreement. The
                          ------------------------------------------------
         Managing Facility Agent shall have received counterparts of the
         Amendment to the Intercompany Purchase Agreement duly executed by the
         Servicer and the Seller, substantially in the form of Exhibit J hereto.

<PAGE>

                                                                             89

                  5.2 Conditions to Each Purchase or Substitution. The agreement
                      -------------------------------------------
of each Purchaser to make any purchase requested to be made by it on the Closing
Date or any Settlement Date (including, without limitation, its initial purchase
and any other purchase the Purchase Price for which is netted from Collections
pursuant to subsections 2.15 and 2.16(a) but excluding the purchases among the
Purchasers contemplated by subsection 2.1(d)) and the right of the Seller to
substitute Receivables pursuant to subsection 2.13 are each subject to the
satisfaction of the following conditions precedent:

                  (a)     Representations and Warranties. The representations
                          ------------------------------
         and warranties made by each of the Seller, Raytheon Credit, RAC and
         Raytheon in or pursuant to the Purchase Documents to which it is a
         party shall be true and correct in all material respects on and as of
         such date as if made on and as of such date and the Seller, if
         applicable, shall have made the representations and warranties required
         by subsection 5.2(f).

                  (b)     Amortization Event. No Amortization Event shall have
                          ------------------
         occurred and be continuing on such date or after giving effect to the
         purchases or substitutions to be made on such date.

                  (c)     Settlement Statement. The Managing Facility Agent
                          --------------------
         shall have received the Settlement Statement most recently due.

                  (d)     Assignments. On or prior to such date, the Managing
                          -----------
         Facility Agent shall have received an Assignment with respect to
         Receivables to be purchased or substituted on such date, dated such
         date and executed and delivered by a duly authorized Responsible
         Officer.

                  (e)     Perfection Matters. The Servicer shall have received
                          ------------------
         the following:

                       (i)     with respect to Eligible Receivables other than
                  Affiliate Receivables, Foreign Receivables and Registerable
                  Lease Receivables, evidence that each FAA Assignment (in the
                  appropriate form for filing on the Closing Date or such
                  Settlement Date) with respect to the Financed Aircraft related
                  to such Eligible Receivables to be purchased on the Closing
                  Date or purchased or substituted on such Settlement Date,
                  shall have been filed with the FAA Registry,

                       (ii)    with respect to Eligible Receivables which are
                  Foreign Receivables (other than Foreign Receivables which are
                  Lease Receivables with a Foreign Obligor), evidence that each
                  Foreign Assignment (in the appropriate form for filing on the
                  Closing Date or such Settlement Date) with respect to the
                  Financed Aircraft related to such Eligible Receivables to be
                  purchased on the Closing Date or purchased or substituted on
                  such Settlement Date, shall have been filed in each office in
                  each jurisdiction necessary to perfect (A) the Lien granted by
                  the Obligor thereon in favor of Raytheon Credit, (B) the
                  transfer of such Lien by Raytheon Credit to the Seller and (C)
                  the assignment of such Lien by the Seller in favor of the
                  Administrative Agent for the ratable benefit of the
                  Purchasers,

<PAGE>

                                                                              90

                       (iii)     with respect to Eligible Receivables which are
                  Foreign Receivables which are Lease Receivables with a Foreign
                  Obligor (other than any such Receivable which is a
                  Registerable Lease Receivable with a Foreign Obligor or an
                  Uncertified Lease Receivable), evidence that each Foreign
                  Assignment (in the appropriate form for filing on the Closing
                  Date or such Settlement Date) with respect to the Financed
                  Aircraft related to such Eligible Receivables to be purchased
                  on the Closing Date or purchased or substituted on such
                  Settlement Date, shall have been filed in each office in each
                  jurisdiction necessary to perfect (x) the transfer by Raytheon
                  Credit of its ownership interest therein to the Seller and (y)
                  the Lien granted thereon by the Seller in favor of the
                  Administrative Agent for the ratable benefit of the
                  Purchasers,

                       (iv)      with respect to Eligible Receivables which are
                  Registerable Lease Receivables, evidence that each FAA
                  Assignment (in the appropriate form for filing on the Closing
                  Date or such Settlement Date) with respect to the Financed
                  Aircraft related to such Eligible Receivables to be purchased
                  on the Closing Date or purchased or substituted on such
                  Settlement Date, shall have been filed with the FAA Registry
                  in a manner satisfactory to perfect (x) the transfer by
                  Raytheon Credit of its ownership interest therein to the
                  Seller and (y) the Lien granted thereon by the Seller in favor
                  of the Administrative Agent for the ratable benefit of the
                  Purchasers,

                       (v)       with respect to each L/C Receivable, an
                  acknowledgement, substantially in the form of Schedule I to
                  the Bailment Agreement, by the Bailee of its receipt of the
                  related letters of credit,

                       (vi)     with respect to Eligible Receivables which are
                  Affiliate Receivables, evidence that each Foreign Assignment
                  (in the appropriate form for filing on such Settlement Date)
                  with respect to the Financed Aircraft related to such Eligible
                  Receivables to be purchased or substituted on such Settlement
                  Date, shall have been filed in each office in each
                  jurisdiction necessary to perfect (x) the Lien thereon granted
                  by the Affiliate Obligor in favor of Raytheon Credit, (y) the
                  transfer of such Lien by Raytheon Credit to the Seller and (z)
                  the Lien granted thereon by the Seller in favor of the
                  Administrative Agent for the ratable benefit of the
                  Purchasers, and

                       (vii)     with respect to each of the foregoing Eligible
                  Receivables, evidence that all other filings and recordings
                  (including, without limitation, any UCC filings with filing
                  offices in the jurisdictions listed on Schedule II, filings
                  with the FAA Registry and filings in other jurisdictions as
                  applicable) and all other actions necessary or advisable to
                  perfect (x) the Purchasers' first priority ownership or
                  security interests in and to such Eligible Receivables to be
                  sold or substituted on such date and (y) the Purchasers' first
                  priority security interest and, in the case of an Affiliate
                  Receivable, the Affiliate Obligor's first priority ownership
                  interest or the Seller's ownership or security interest, as
                  applicable, in and to the related Contracts and, with respect
                  to any Travel Air Receivables, the

<PAGE>

                                                                              91

                  Travel Air Contracts and, if required pursuant to the
                  foregoing, Financed Aircraft and the Collections with respect
                  thereto shall have been duly taken or made.

         From and after the Amendment Effective Date, all filings, assignments
         and other similar documents required to perfect a Lien hereunder with
         respect to Receivables (and related Aircraft) purchased after such
         date, which names the Administrative Agent shall be made in the name of
         Bank of America, N.A., as Administrative Agent.

                  (f) Certificates. With respect to each Certified Foreign
                      ------------
         Receivable, the Servicer shall have received an executed certificate
         from a Responsible Officer of the Seller to the Managing Facility
         Agent, dated the date of such proposed sale and in the form approved by
         the Managing Facility Agent pursuant to subsection 2.27.

                  (g) Marking Records. The Seller shall have, or shall have
                      ---------------
         caused the Servicer to have, marked its books and records with respect
         to the Purchased Receivables to be sold or substituted on such date in
         accordance with subsection 6.1(h).

                  (h) L/C Receivables. On or prior to the related Reporting
                      ---------------
         Date, a letter of credit shall have been issued in connection with each
         L/C Receivable to be purchased or substituted on such Settlement Date
         and each such letter of credit shall meet the eligibility criteria set
         forth herein.

                  (i) Refinanced Aircraft. If the Receivable proposed to be
                      -------------------
         purchased (including, without limitation, a purchase the Purchase Price
         for which is netted from Collections pursuant to subsections 2.15 and
         2.16(a)) or substituted has been or will be created in connection with
         the financing or refinancing of a Refinanced Aircraft, the Seller shall
         have caused a Lien search to be made with the FAA Registry with respect
         to such Refinanced Aircraft and at the date of such purchase or
         substitution, no Lien shall have been recorded at the FAA Registry with
         respect to such Refinanced Aircraft other than any Permitted Aircraft
         Lien or the Lien created in favor of Raytheon Credit and transferred to
         the Seller and assigned to the Administrative Agent for the ratable
         benefit of the Purchasers.

                  (j) Purchase Report. The Managing Facility Agent, with
                      ---------------
         sufficient copies for each Purchaser, shall have received from the
         Seller a Purchase Report in the form of Exhibit I.

                  (k) Additional Documents. The Managing Facility Agent, with
                      --------------------
         sufficient copies for each Purchaser, shall have received each
         additional document, instrument, legal opinion or item of information
         reasonably requested by it.

                  (l) Additional Matters. All corporate and other proceedings,
                      ------------------
         and all documents, instruments and other legal matters in connection
         with the transactions contemplated by this Agreement shall be
         reasonably satisfactory in form and substance to the Managing Facility
         Agent, and the Managing Facility Agent shall have received such other
         documents and legal opinions in respect of any aspect or consequence
         of the transactions contemplated hereby or thereby as it shall
         reasonably request.

<PAGE>

                                                                              92

Each purchase (including, without limitation, a purchase the Purchase Price for
which is netted from the Collections pursuant to subsections 2.15 and 2.16(a))
and each substitution of Receivables hereunder shall constitute a representation
and warranty by the Seller as of the Closing Date or the Settlement Date
(including a Special Settlement Date, if applicable) on which such purchase or
substitution is made that the conditions contained in paragraphs (a) through (i)
of this subsection 5.2 have been satisfied.

                  5.3 Reallocation of Commitments; Addition of New Purchasers.
                      -------------------------------------------------------
On the Amendment Effective Date, any SPC may assign to its SPC Bank all or any
portion of such SPC's undivided interest in the Purchased Receivables, and any
SPC Bank may assign to its SPC all or any portion of such SPC Bank's undivided
interest in the Purchased Receivables. Such assignments may be evidenced by such
documents as shall be agreeable between the SPC and its SPC Bank. Each SPC Bank
participating in any such assignments shall advise the Managing Facility Agent
of such assignment, the amount thereof and certain administrative information
requested by the Managing Facility Agent. The following allocations and payments
shall be made following the foregoing assignments.

                  On the Amendment Effective Date each entity identified on the
signature pages hereto as a "New Purchaser" shall be and become a Purchaser
hereunder having a Commitment equal to the amount set forth opposite such New
Purchaser's name on Schedule I hereto and each entity identified on the
signature pages hereto as a "Withdrawing Purchaser" shall cease to be a
Purchaser except to the extent expressly provided otherwise herein.

                  On the Amendment Effective Date, immediately following the
addition referred to in the immediately preceding paragraph, but subject to the
terms and conditions hereof, each Purchaser shall sell and assign to each other
Purchaser, and each Purchaser shall purchase from each other Purchaser,
undivided interests in each then outstanding Purchased Receivable to the extent
necessary so that, after giving effect to such purchases and sales, each
Purchaser's undivided interest in each Purchased Receivable will equal its
Commitment Percentage (as defined in clause (a) of the definition thereof and
utilizing the Commitments set forth on Schedule I hereto) thereof. Other than
the representation and warranty that each of them is the legal and beneficial
owner of the respective interest being assigned hereby free and clear of any
adverse claim, the selling Purchasers make no representation or warranty to the
purchasing Purchasers and assume no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any instrument or document furnished
pursuant thereto. The amounts payable to each Purchaser whose undivided
interests are being reduced (each, a "Reducing Purchaser") in accordance with
                                      ------------------
the foregoing (such amount for each such Purchaser, its "Pro Rata Credit"); the
                                                         ---------------
amounts payable by each Purchaser whose undivided interests are being increased
or created (each, an "Increasing Purchaser") in accordance with the foregoing
                      --------------------
(such amount for each such Purchaser, its "Pro Rata Debit"), in each case as a
                                           --------------
result of the foregoing sales and purchases; and the amount of each Purchaser's
Outstanding Purchase Price immediately after giving effect to the foregoing
sales and purchases shall be set forth in a letter from the Managing Facility
Agent dated the Amendment Effective Date and satisfactory to each Purchaser.
Prior to 11:00 a.m., New York City time, on the Amendment Effective Date each
Increasing Purchaser shall make available to the Managing Facility Agent, in
immediately available funds at the Managing Facility Agent's

<PAGE>

                                                                              93

office specified in subsection 11.2 hereto, the amount of such Purchaser's Pro
Rata Debit. Promptly after receipt of the aggregate amount of Pro Rata Debits,
the Managing Facility Agent will transfer to each Reducing Purchaser the amount
of such Purchaser's Pro Rata Credit. Such sales and purchases shall be effective
on the Amendment Effective Date without further act of assignment.

                  Notwithstanding any contrary provision of this Agreement, on
the Amendment Effective Date, the Managing Facility Agent shall pay to each
Purchaser, including each Withdrawing Purchaser, from funds received from the
Seller pursuant to subsection 2.17, interest on such Purchaser's Outstanding
Purchase Price for the Accrual Period ending on the Amendment Effective Date.

                        SECTION 6.  AFFIRMATIVE COVENANTS

                  6.1 Affirmative Covenants of the Seller. The Seller hereby
                      -----------------------------------
agrees that, so long as the Commitments remain in effect, the Outstanding
Purchase Price has not been reduced to zero or any other amount is owing to any
Purchaser or the Managing Facility Agent hereunder, the Seller shall:

                  (a) Reporting Requirements. (i) Settlement Statements. On or
                      ----------------------      ---------------------
before each Reporting Date, furnish or cause the Servicer to furnish to the
Managing Facility Agent, with sufficient copies for each Purchaser, a Settlement
Statement in the form of Exhibit C for the preceding Settlement Period, setting
forth:

                  (x) information and calculations with respect to (A) the
         Purchased Receivables, Collections thereon, the related Contracts and
         Financed Aircraft and any Remarketed Aircraft, (B) the Outstanding
         Purchase Price (separately identifying the portion thereof representing
         the Purchase Price, if any, of Receivables purchased on the most recent
         Special Settlement Date), the Note Rate, the Default Rate (if any), the
         Interbank Rate (if applicable) and Commitment Fees for the related
         Accrual Period, (C) purchases of specified Eligible Receivables
         requested to be made on the succeeding Settlement Date (including a
         specific reference to any new Foreign Obligors), (D) Defaulted
         Receivables, Ineligible Receivables, Substituted Receivables and
         adjustments of Receivables made under subsection 2.12, (E) any
         Permitted Receivable Liens and Permitted Aircraft Liens, (F) the
         concentration limits as described in subsection 2.7, (G) any
         Receivables of which the scheduled principal payments are being
         deferred pursuant to subsection 7.1(b)(iv)(x), (H) the total amount of
         the Participated Receivables, (I) the total amount of the Extended Term
         Receivables and (J) Net Recoveries; and

                  (y) such other information with respect to the Receivables
         from the Seller and the Servicer as the Managing Facility Agent or any
         other Purchaser may from time to time request;

each Settlement Statement shall be certified by a Responsible Officer of the
Servicer as being true and correct;

<PAGE>

                                                                              94

                  (ii) Officer's Certificate. Within 45 days after the end of
                       ---------------------
each fiscal quarter of the Seller, deliver to the Managing Facility Agent, with
sufficient copies for each Purchaser, a certificate of a Responsible Officer of
the Seller stating that, to the best of such officer's knowledge, after due and
diligent inquiry, the Seller during such period has observed or performed all of
its covenants and other agreements, and satisfied every condition, contained in
this Agreement and that such officer, after due and diligent inquiry, has
obtained no knowledge of any Amortization Event, Discount Event, Rating Event,
Remittance Event or Ineligibility Event or any errors in any amounts or other
information set forth in any Settlement Statement or any Assignment, FAA
Assignment or Foreign Assignment delivered with respect to any Settlement Period
occurring during such fiscal quarter except as specified in such certificate;

                  (iii) Servicer Reports. Cause the Servicer to deliver the
                        ----------------
reports required by subsection 3.3 in accordance with the terms thereof;

                  (iv) Credit and Collection Policy. Deliver to the Managing
                       ----------------------------
Facility Agent, with sufficient copies for each Purchaser, promptly after
adoption thereof, any change in the Credit and Collection Policy;

                  (v) Financing Programs. Concurrently with the distribution or
                      ------------------
publication to any of Raytheon Credit's Affiliates or Dealers, deliver to the
Managing Facility Agent, with sufficient copies for each Purchaser, a copy of
each report setting forth Raytheon Credit's retail financing programs;

                  (vi) Additional Information. Furnish to the Managing Facility
                       ----------------------
Agent and each Purchaser, promptly, such additional financial and other
information, documents, records or reports with respect to the Seller, the
Servicer (if Raytheon Credit or an Affiliate of Raytheon Credit is then the
Servicer) or RAC, any Purchased Receivable or the Contract, Obligor,
Unaffiliated Foreign Lessee or Financed Aircraft with respect thereto, or the
business, operations, property or condition (financial or otherwise) of the
Seller, as the Managing Facility Agent or any Purchaser may from time to time
reasonably request; and

                  (vii) Notices. Promptly give notice to the Managing Facility
                        -------
Agent and each Purchaser, after the Seller knows or should have known, of: (1)
the occurrence of any Amortization Event, Discount Event, Rating Event,
Remittance Event or Ineligibility Event; (2) any Lien (other than the security
interest created hereunder in favor of the Administrative Agent and the
Purchasers) on or claim asserted against any Purchased Receivable, the
Collections with respect thereto or the related Contract or material claim
asserted with respect to the related Financed Aircraft; (3) a development or
event which has had a Material Adverse Effect; (4) any loss of a Financed
Aircraft or of the use thereof due to theft, destruction, damage beyond repair
or damage to an extent which makes repair uneconomical, or the confiscation or
seizure of any material portion thereof, or requisition of title to or for the
use thereof by any Governmental Authority; and (5) any litigation, investigation
or proceeding which may exist at any time between the Seller, Raytheon Credit,
RAC or any Person which, in either case, could reasonably be expected to have a
Material Adverse Effect. Each notice pursuant to this subsection shall be
accompanied by a statement of a Responsible Officer setting forth details of the
occurrence referred to therein and stating what action the Seller proposes to
take with respect thereto.

<PAGE>

                                                                              95

                  (viii) Fiscal Months. No later than December 15 of each
                         -------------
calendar year the Seller shall send the Managing Facility Agent written
notification of each of the Seller's fiscal monthly periods for the immediately
following calendar year.

                  (b) Compliance with Laws, Etc. Comply, and cause each
                      -------------------------
Affiliate Obligor to comply, in all respects with all applicable Requirements of
Law and all Contractual Obligations with respect to it, its business and
properties and all Purchased Receivables and the related Contracts and Financed
Aircraft except to the extent that failure to comply therewith could not
reasonably be expected to have a Material Adverse Effect.

                  (c) Conduct of Business and Maintenance of Existence. Continue
                      ------------------------------------------------
to engage in business of the same general type as now conducted by it and
preserve, renew and keep in full force and effect its corporate existence and
take all reasonable actions to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business except where the
failure to preserve and maintain such existence, rights, franchises, privileges
and qualification could not reasonably be expected to have a Material Adverse
Effect.

                  (d) Maintenance of Property; Insurance. Keep all property
                      ----------------------------------
useful and necessary in its business in good working order and condition;
maintain with financially sound and reputable insurance companies insurance on
all its property in at least such amounts and against at least such risks as are
considered reasonable and prudent by the Seller; cause each Financed Aircraft
(including, without limitation, any Financed Aircraft repossessed by the Seller
or the Servicer) related to a Purchased Receivable to be covered by insurance
meeting the requirements of paragraph (w) of the definition of "Eligible
Receivable"; and furnish to each Purchaser, upon request, full information as to
the insurance carried.

                  (e) Keeping of Records and Books of Account. Maintain and
                      ---------------------------------------
implement administrative and operating procedures (including, without
limitation, maintaining the ability to recreate records evidencing Purchased
Receivables in the event of the destruction of the originals thereof), and keep
and maintain all documents, books (with true and correct entries in conformity
with generally accepted accounting principles as in effect from time to time and
all material Requirements of Law), records and other information reasonably
necessary or advisable for the administration, servicing and collection of all
Purchased Receivables and the monitoring of the Contracts, the related Obligors
and Unaffiliated Foreign Lessees and Financed Aircraft (including, without
limitation, records adequate to permit the daily identification of all
Collections of and adjustments to each Purchased Receivable).

                  (f) Location of Records. Keep its "location" (as such term is
                      -------------------
defined in Section 9-307 of the New York UCC), chief place of business and chief
executive office, and the offices where it keeps its records concerning the
Purchased Receivables and all Contracts related thereto (and all original
documents relating thereto), at its address referred to in subsection 11.2 or,
upon 30 days' prior written notice to the Managing Facility Agent, at such other
locations in jurisdictions where all actions required by subsection 6.1(l) shall
have been taken and completed.

                  (g) Access. From time to time during regular business hours
                      ------
upon reasonable prior notice, permit the Managing Facility Agent or any
Purchaser, or their respective agents or representatives (a) to examine and make
copies of and abstracts from all books, records and

<PAGE>

                                                                              96

documents (including, without limitation, computer tapes and disks) in the
possession or under the control of the Seller or its Affiliates relating to
Purchased Receivables, including, without limitation, the related Contracts and
Financed Aircraft and (b) to visit the offices and properties of the Seller, its
Affiliates or its independent certified public accountants for the purpose of
examining such materials described in clause (a) above, and to discuss matters
relating to Purchased Receivables, the Contracts and the Financed Aircraft or
the Seller's or Servicer's (if Raytheon Credit or an Affiliate of Raytheon
Credit is then the Servicer) performance hereunder with any of the officers or
employees of the Seller or its Affiliates having knowledge of such matters and
to discuss the business, operations, properties and financial and other
condition of the Seller with such officers and with its independent certified
public accountants; provided that any information, records and materials
                    --------
obtained by the Managing Facility Agent or any Purchaser pursuant to this
subsection 6.1(g) shall be used by the Managing Facility Agent or such Purchaser
solely in connection with its participation in the transactions contemplated by
the Purchase Documents (including pursuant to subsections 11.6(b) and (c)) and
shall be treated as confidential by the Managing Facility Agent or such
Purchaser in accordance with subsection 11.22.

                  (h) Marking of Records. At its expense, mark (or cause the
                      ------------------
Servicer to mark) the computer files evidencing the Purchased Receivables and
related Contracts with a legend evidencing that such Purchased Receivables and
related Contracts have been sold in accordance with this Agreement and deliver
evidence satisfactory thereto in form and substance to the Managing Facility
Agent in accordance with subsection 5.2(g).

                  (i) Credit and Collection Policy. Comply in all material
                      ----------------------------
respects with the Credit and Collection Policy with respect to each Purchased
Receivable (including but not limited to the calculation of the Finance Charge
Collections) and the related Contract and Financed Aircraft.

                  (j) Performance and Compliance with Receivables and Contracts.
                      ---------------------------------------------------------
At its own expense, timely and fully perform and comply with, and enforce and
defend, or, with respect to Affiliate Receivables, cause the related Affiliate
Obligor to perform and comply with and enforce and defend, all material
provisions, covenants and other promises (which promises are required to be
observed by it) under the Contracts (other than the payment by such Affiliate
Obligor of the principal of and interest on the promissory note included in such
Contract) and any policy of insurance issued in connection with an ExIm Bank
Receivable and with respect to the Financed Aircraft related to the Purchased
Receivables in accordance with the Credit and Collection Policy; and defend the
right, title and interest of the Administrative Agent and each Purchaser in and
to such Purchased Receivable, the Collections with respect thereto and the
related Contract and Financed Aircraft against the claims and demands of any
Persons whomsoever (other than of the Administrative Agent or any Purchaser).

                  (k) [Intentionally omitted.]

                  (l) Further Action Evidencing Interests of Administrative
                      -----------------------------------------------------
Agent and Purchasers. At any time and from time to time, upon the request of
--------------------
the Managing Facility Agent or the request of the Managing Facility Agent as
directed by the Majority Purchasers and at the sole expense of the Seller,
promptly execute and deliver and cause each Affiliate Obligor to execute and
deliver all further instruments and documents and take all further actions and
cause each

<PAGE>

                                                                              97

Affiliate Obligor to take all further actions that the Managing Facility Agent
or the Managing Facility Agent as directed by the Majority Purchasers may
request in order to perfect, protect or more fully evidence the ownership or
security interests of the Administrative Agent and the Purchasers in the
Purchased Receivables, the Collections with respect thereto and the related
Contracts and Financed Aircraft, or to enable any of them or the Administrative
Agent to exercise or enforce any of their respective rights with respect
thereto, including, but not limited to: (a) execute and file such financing or
continuation statements, or amendments thereto or assignments thereof, and such
other instruments or notices, as may be necessary or appropriate; and (b) mark
conspicuously each invoice evidencing each Purchased Receivable and the related
Contract with a legend, in a form acceptable to the Managing Facility Agent,
evidencing that such Contract has been assigned to the Administrative Agent for
the ratable benefit of the Purchasers and, in connection therewith, the Seller
hereby (x) authorizes the Administrative Agent to file one or more financing or
continuation statements, and amendments thereto and assignments thereof,
relative to all or any of the Purchased Receivables now existing or hereafter
arising without the signature of the Seller or any of its Affiliates where
permitted by law and (y) agrees that if the Seller fails to perform any of its
agreements or obligations under this Agreement, the Managing Facility Agent may
(but shall not be required to) itself perform, or cause performance of, such
agreement or obligation, and the expenses of the Managing Facility Agent
incurred in connection therewith shall be payable by the Seller as provided in
subsection 11.5.

                  (m) Separate Corporate Existence. (i) Maintain its own deposit
                      ----------------------------
account or accounts, separate from those of any Affiliate, with commercial
banking institutions. The funds of the Seller will not be diverted to any other
Person or for other than corporate uses of the Seller.

                  (ii) Ensure that, to the extent that it shares the same
officers or other employees as any of its stockholders or Affiliates, the
salaries of and the expenses related to providing benefits to such officers and
other employees shall be fairly allocated among such entities, and each such
entity shall bear its fair share of the salary and benefit costs associated with
all such common officers and employees.

                  (iii) Ensure that, to the extent that it jointly contracts
with any of its stockholders or Affiliates to do business with vendors or
service providers or to share overhead expenses, the costs incurred in so doing
shall be allocated fairly among such entities, and each such entity shall bear
its fair share of such costs. To the extent that the Seller contracts or does
business with vendors or service providers when the goods and services provided
are partially for the benefit of any other Person, the costs incurred in so
doing shall be fairly allocated to or among such entities for whose benefit the
goods and services are provided, and each such entity shall bear its fair share
of such costs. All material transactions between Seller and any of its
Affiliates shall be only on an arm's length basis.

                  (iv) Maintain a principal executive and administrative office
through which its business is conducted separate from those of its Affiliates.
To the extent that Seller and any of its stockholders or Affiliates have offices
in the same location, there shall be a fair and appropriate allocation of
overhead costs among them, and each such entity shall bear its fair share of
such expenses.

<PAGE>

                                                                              98

                  (v) Conduct its affairs strictly in accordance with its
Certificate of Incorporation and observe all necessary, appropriate and
customary corporate formalities, including, but not limited to, holding all
regular and special stockholders' and directors' meetings appropriate to
authorize all corporate action, keeping separate and accurate minutes of its
meetings, passing all resolutions or consents necessary to authorize actions
taken or to be taken, and maintaining accurate and separate books, records and
accounts, including, but not limited to, payroll and intercompany transaction
accounts.

                  (vi) Take or refrain from taking, as applicable, each of the
activities specified in the "non-substantive consolidation" opinions of each of
Sullivan & Worcester LLP, delivered on the Effective Date, and Bingham Dana LLP,
delivered on the Amendment Effective Date, upon which the conclusions expressed
therein are based.

                  (n) Existing Receivables Perfection Matters. Deliver to the
                      ---------------------------------------
         Managing Facility Agent the following:

                       (i)       with respect to Existing Certified Receivables,
                  no later than the Certified Opinion Delivery Date, a
                  certificate of a Responsible Officer certifying that all
                  actions set forth in the legal opinions described in
                  subsection 2.27(c) and necessary in order to perfect the Liens
                  and assignments of such Receivables, the related Financed
                  Aircraft and Applicable Leases (if applicable) and Collections
                  thereon, to the extent set forth in such subsection, shall
                  have been taken; and

                       (ii)      with respect to all Existing Receivables, no
                  later than 90 days after the Effective Date (the "FAA Filing
                                                                    ----------
                  Date"), a certificate of a Responsible Officer certifying that
                  ----
                  all filings, if any, to be made with the FAA as described in
                  the opinion of special FAA counsel delivered pursuant to
                  subsection 5.1(g)(iv) of the 1997 Agreement and necessary to
                  (x) continue the Lien of the Old Administrative Agent, on
                  behalf of the Purchasers, in the Existing Receivables, the
                  related Financed Aircraft and Applicable Leases (if
                  applicable) and Collections thereon with the same priority
                  thereon as in effect immediately prior to the Effective Date
                  and (y) perfect the transfer by Raytheon Credit of the
                  Existing Receivables, the related Financed Aircraft and
                  Applicable Leases (if applicable) and Collections thereon to
                  the Seller pursuant to the Intercompany Purchase Agreement
                  shall have been taken.

                  6.2 Affirmative Covenants of the Servicer. The Servicer (so
                      -------------------------------------
long as it is Raytheon Credit) hereby agrees that, so long as the Commitments
remain in effect, the Outstanding Purchase Price has not been reduced to zero or
any other amount is owing to any Purchaser or the Managing Facility Agent
hereunder, the Servicer shall:

                  (a) Compliance with Laws, Etc. Comply in all respects with all
                      -------------------------
         applicable Requirements of Law and all Contractual Obligations with
         respect to it, its business and properties and all Purchased
         Receivables and the related Contracts and Financed Aircraft except to
         the extent that failure to comply therewith could not reasonably be
         expected to have a Material Adverse Effect.

<PAGE>

                                                                              99

                  (b) Conduct of Business and Maintenance of Existence. Continue
                      ------------------------------------------------
         to engage in business of the same general type as now conducted by it
         and preserve, renew and keep in full force and effect its corporate
         existence and take all reasonable actions to maintain all rights,
         privileges and franchises necessary or desirable in the normal conduct
         of its business except where the failure to preserve and maintain such
         existence, rights, franchises, privileges and qualification could not
         reasonably be expected to have a Material Adverse Effect.

                  (c) Maintenance of Property; Insurance. Keep all property
                      ----------------------------------
         useful and necessary in its business in good working order and
         condition; maintain with financially sound and reputable insurance
         companies insurance on all its property in at least such amounts and
         against at least such risks as are considered reasonable and prudent
         by the Servicer; cause each Financed Aircraft (including, without
         limitation, any Financed Aircraft repossessed by the Servicer) related
         to a Purchased Receivable to be covered by insurance meeting the
         requirements of paragraph (w) of the definition of "Eligible
         Receivable"; and furnish to each Purchaser, upon request, full
         information as to the insurance carried.

                  (d) Keeping of Records and Books of Account. Maintain and
                      ---------------------------------------
         implement administrative and operating procedures (including, without
         limitation, maintaining the ability to recreate records evidencing
         Purchased Receivables in the event of the destruction of the originals
         thereof), and keep and maintain all documents, books (with true and
         correct entries in conformity with generally accepted accounting
         principles as in effect from time to time and all material
         Requirements of Law), records and other information reasonably
         necessary or advisable for the administration, servicing and
         collection of all Purchased Receivables and the monitoring of the
         Contracts, the related Obligors and Unaffiliated Foreign Lessees and
         Financed Aircraft (including, without limitation, records adequate to
         permit the daily identification of all Collections of and adjustments
         to each Purchased Receivable).

                  (e) Location of Records. Keep its "location" (as such term is
                      -------------------
         defined in Section 9-307 of the New York UCC), chief place of business
         and chief executive office, and the offices where it keeps its records
         concerning the Purchased Receivables and all Contracts related thereto
         (and all original documents relating thereto), at its address referred
         to in subsection 11.2 or, upon 30 days' prior written notice to the
         Managing Facility Agent, at such other locations in jurisdictions
         where all actions required by subsection 6.1(l) shall have been taken
         and completed.

                  (f) Access. From time to time during regular business hours
                      ------
         upon reasonable prior notice, permit the Managing Facility Agent or
         any Purchaser, or their respective agents or representatives (i) to
         examine and make copies of and abstracts from all books, records and
         documents (including, without limitation, computer tapes and disks) in
         the possession or under the control of the Servicer or its Affiliates
         relating to Purchased Receivables, including, without limitation, the
         related Contracts and Financed Aircraft and (ii) to visit the offices
         and properties of the Servicer, its Affiliates or its independent
         certified public accountants for the purpose of examining such
         materials described in clause (i) above, and to discuss matters
         relating to Purchased Receivables, the Contracts and the Financed
         Aircraft or the Servicer's performance hereunder with any of the

<PAGE>

                                                                             100

         officers or employees of the Servicer or its Affiliates having
         knowledge of such matters and to discuss the business, operations,
         properties and financial and other condition of the Servicer with such
         officers and with its independent certified public accountants;
         provided that any information, records and materials obtained by the
         --------
         Managing Facility Agent or any Purchaser pursuant to this
         subsection 6.2(f) shall be used by the Managing Facility Agent or such
         Purchaser solely in connection with its participation in the
         transactions contemplated by the Purchase Documents (including
         pursuant to subsections 11.6(b) and (c)) and shall be treated as
         confidential by the Managing Facility Agent or such Purchaser in
         accordance with subsection 11.22. The Servicer hereby consents to the
         disclosure of any non-public information with respect to it as related
         to this transaction and the assets sold hereunder by any SPC to any
         rating agency, commercial paper dealer, or provider of a surety,
         guaranty or credit or liquidity enhancement to that SPC.

                  (g) Credit and Collection Policy. Comply in all material
                      ----------------------------
         respects with the Credit and Collection Policy with respect
         to each Purchased Receivable (including but not limited to the
         calculation of the Finance Charge Collections) and the related
         Contract and Financed Aircraft.

                  (h) Ownership of Affiliate Obligors. The Servicer shall at
                      -------------------------------
         all times beneficially own, directly or indirectly, 100% of each
         Affiliate Obligor.

                        SECTION 7.  NEGATIVE COVENANTS

                  7.1 Negative Covenants of the Seller. The Seller hereby agrees
                      --------------------------------
that, so long as the Commitments remain in effect, the Outstanding Purchase
Price has not been reduced to zero or any other amount is owing to any Purchaser
or the Managing Facility Agent hereunder, the Seller shall not:

                  (a) Sales, Liens, Etc. Sell, assign (by operation of law or
                      -----------------
         otherwise) or otherwise dispose of, or create or suffer to
         exist any Lien (other than Permitted Receivable Liens and other than,
         but solely with respect to a Financed Aircraft, Permitted Aircraft
         Liens), upon or with respect to, the Purchased Receivables, the
         related Contracts and Financed Aircraft or the Collections with
         respect thereto, or assign any right to receive payments in respect
         thereof other than to the Managing Facility Agent and the Purchasers
         pursuant to this Agreement.

                  (b) Extension or Amendment of Purchased Receivables. Extend,
                      -----------------------------------------------
         amend or otherwise modify the terms of any Purchased
         Receivable, or amend, modify or waive any term or condition of any
         Contract related thereto or permit the Servicer (if the Seller or an
         Affiliate of the Seller is then the Servicer) to do any of the
         foregoing except in the normal course of the Seller's business and in
         accordance with the Credit and Collection Policy or pursuant to
         subsection 7.1(b)(iv)(x) (each, a "Modification"); provided that:
                                            ------------    --------

                       (i)       any Modification made pursuant to this
                  subsection 7.1(b) shall be subject to the provisions of
                  subsection 2.12;

<PAGE>

                                                                             101

                       (ii)      if an Amortization Event shall have occurred
                  and be continuing, no Modification shall be made without the
                  prior consent of the Required Purchasers if the effect thereof
                  would be to extend the then average life of the Purchased
                  Receivables taken as a whole, to reduce or increase the
                  Principal Balance of any Purchased Receivable or to reduce the
                  amount or rate of interest thereon or to cause the Stipulated
                  Aircraft Value under a Contract to be less than the
                  Outstanding Balance of the Receivable with respect to such
                  Contract;

                       (iii)     if an Amortization Event shall have occurred

                  and be continuing, no Modification shall be made without the
                  prior consent of each Purchaser if the effect thereof would be
                  to extend the Final Payment Date of a Receivable beyond the
                  then latest Final Payment Date of all Purchased Receivables;

                       (iv)      the Seller shall not modify the payment terms
                  of any Purchased Receivable except (x) in accordance with the
                  Credit and Collection Policy, except that, (A) with respect to
                  any GA Receivable, the Seller shall not modify the payment
                  terms of any such Purchased Receivable more than once after
                  the Closing Date or Settlement Date on which such Receivable
                  is sold or substituted pursuant to this Agreement or an
                  Existing Agreement, and (B) with respect to a Commuter
                  Receivable, (1) no more than an aggregate of 12 monthly
                  principal payments may be deferred during the term of any
                  Contract and (2) subject to the immediately following
                  sentence, the Final Payment Date may not be extended by more
                  than three years and, (y) so long as no Amortization Event has
                  occurred and is continuing, the Servicer may when necessary to
                  prevent a possible default by the Obligor under any Contract
                  or in order to enhance the collectibility of any Receivable,
                  defer any scheduled payment of principal, in part or in whole,
                  to a later scheduled payment date under such Contract. If,
                  after giving effect to the extension of the Final Payment Date
                  of a Purchased Receivable pursuant to clause (iv)(x)(B)(2) of
                  the foregoing proviso, such extended Final Payment Date
                  exceeds, (I) so long as no Rating Event has occurred and is
                  continuing, 13 years from the date of such extension and, (II)
                  during the continuance of a Rating Event, 10 years from the
                  date of such extension, then on the immediately following
                  Settlement Date (or if such date is a Settlement Date, then on
                  such date) the Seller shall deposit in the Concentration
                  Account an amount equal to the aggregate Principal Collections
                  then scheduled to be paid after such 13th year or 10th year,
                  as the case may be, plus, if a Trigger Amortization Event has
                  occurred and is continuing, accrued and unpaid interest on the
                  amount so deposited at the rate under the related Contract
                  except to the extent (without duplication) of any payment made
                  pursuant to subsection 2.18 for the Settlement Period during
                  which such interest accrued and was not paid by the Obligor
                  under such Contract. The amount of any such deposit shall be
                  applied and distributed in accordance with subsections 2.15
                  and 2.16 provided, however, that any Purchased Receivable so
                           --------  -------
                  modified shall be deemed an Extended Term Receivable for
                  purposes of subsection 2.15;

<PAGE>

                                                                             102

                       (v)       any Modification made in accordance with this
                  subsection 7.1(b) shall not cause the Principal Balance of the
                  applicable Purchased Receivable to exceed 50% of the Low
                  Wholesale Value of the related Financed Aircraft; and

                       (vi)      the Seller shall not make any Modification
                  which permits the transfer of registered ownership in any
                  Financed Aircraft without the consent of the Required
                  Purchasers, unless after giving effect to such transfer (and
                  any payments made under the Contract at the time of transfer)
                  the related Receivable would satisfy on the date of transfer
                  the criteria contained in the definition of Eligible
                  Receivable; provided that the provisions of this subsection
                              --------
                  7.1(b)(vi) shall not apply to a transfer by an Obligor to a
                  wholly-owned Affiliate of such Obligor.

                  (c) Change in Business or Credit and Collection Policy. Make
                      --------------------------------------------------
         any material change in the character of its business or,
         without the prior written consent of the Required Purchasers, notify
         any Obligor to remit payments to a location other than that to which
         such payment would be remitted on the Closing Date; make any change in
         the Credit and Collection Policy without prior notice to the Managing
         Facility Agent and each Purchaser; provided that, without the prior
                                            --------
         consent of the Required Purchasers, the Seller shall not make or
         permit to be made any such change to the Credit and Collection Policy
         if such change could reasonably be expected to materially adversely
         affect the collectibility or maturity of any Purchased Receivable or
         the interests of the Administrative Agent and the Purchasers in any
         Purchased Receivable, the related Contract and Financed Aircraft or
         the Collections with respect thereto.

                  (d) No Actions against Obligors. Except in accordance with
                      ---------------------------
         the Credit and Collection Policy, commence or settle any legal action
         to enforce collection of any Purchased Receivable.

                  (e) Security Interest to Remain in Force. Release, in whole
                      ------------------------------------
         or in part, any Financed Aircraft, or any other collateral securing or
         guarantee of the related Contract (including, but not limited to, any
         letter of credit related thereto issued in favor of the Seller), from
         the security interest granted by such Contract except, that, the
                                                        ------  ----
         Seller may or may permit the Servicer to, at its or the Servicer's own
         expense, (x) substitute engines in accordance with subsection 7.1(j)
         and (y) substitute other parts (other than airframes) for any of the
         parts on any Financed Aircraft as Seller or Servicer may deem
         desirable in the proper conduct of its business; provided, however,
                                                          --------  -------
         that for purposes of this clause (y), (i) no such substitution(s),
         individually or in the aggregate, shall diminish the utility or
         remaining useful life of such Financed Aircraft, or materially
         diminish the value, or impair the condition or airworthiness, thereof,
         below the utility, remaining useful life, condition, airworthiness, or
         value thereof immediately prior to such substitution, (ii) no such
         substitution shall affect adversely the Lien on such Financed Aircraft
         (other than the removed avionics) in favor of the Administrative Agent
         for the benefit of the Purchasers (as such Lien was in effect
         immediately prior to such substitution), (iii) the Administrative
         Agent shall have a Lien on the substitute parts with a priority no
         less than the priority of the Lien in favor of the Administrative
         Agent on the removed parts and (iv) the new part shall not be subject
         to any Liens other than Permitted Aircraft Liens.

<PAGE>

                                                                             103

         Upon substitution of any engine or other parts on any Financed
         Aircraft, the Lien thereon of the Administrative Agent on behalf of
         the Purchasers shall, without the requirement for any further act, be
         automatically released.

                  (f) Limitations on Fundamental Changes. Enter into any merger,
                      ----------------------------------
         consolidation or amalgamation, or liquidate, wind up or dissolve
         itself (or suffer any liquidation or dissolution), or convey, sell,
         lease, assign, transfer or otherwise dispose of, all or substantially
         all of its property, business or assets (except for sales and
         substitutions of Purchased Receivables pursuant to this Agreement).

                  (g) Transactions with Affiliates. Enter into any transaction,
                      ----------------------------
         including, without limitation, any purchase, sale, lease or exchange
         of property or the rendering of any service, relating to the
         administration, servicing and collection of the Purchased Receivables,
         the Collections with respect thereto and the related Contracts and
         Financed Aircraft, with any Affiliate unless such transaction is
         otherwise permitted under this Agreement, is in the ordinary course of
         the Seller's business and is upon fair and reasonable terms no less
         favorable to the Seller than it would obtain in a comparable arm's
         length transaction with a Person not an Affiliate.

                  (h) Fiscal Year. Permit the fiscal year of the Seller to end
                      -----------
         on a day other than December 31 without 60 days' prior notice thereof
         to the Managing Facility Agent.

                  (i) Assignment of Contracts. Permit any assignment of any
                      -----------------------
         Contract by either the Seller or Obligor (except for an assignment to
         the Guarantor) without the prior written consent of the Required
         Purchasers, provided that such consent shall not be unreasonably
         withheld to the extent the Contract so provides.

                  (j) Substitution of Engines. Permit any engine to be
                      -----------------------
         substituted for an engine originally annexed to any Financed Aircraft
         related to a Purchased Receivable unless such engine is of the same
         model number and of the same or improved utility, performance and
         efficiency, of equivalent age and equivalent or greater value as the
         replaced engine.

                  (k) Indebtedness. Create, incur, assume or suffer to exist any
                      ------------
         Indebtedness or other liability whatsoever, except (i) Indebtedness
         owing from time to time to Raytheon Credit and incurred to finance a
         portion of the Purchase Price (as defined in the Intercompany Purchase
         Agreement) of Receivables, the payment of which Indebtedness is
         subordinated to the prior payment in full of all amounts owing to the
         Purchasers, (ii) obligations incurred under this Agreement and (iii)
         other liabilities incurred in the ordinary course of business.

                  (l) Guarantees. Become or remain liable, directly or
                      ----------
         contingently, in connection with any Indebtedness or other liability
         of any other Person, whether by guarantee, endorsement (other than
         endorsements of negotiable instruments for deposit or collection in
         the ordinary course of business), agreement to purchase or repurchase,
         agreement to supply or advance funds, or otherwise.

<PAGE>

                                                                             104

                  (m) Investments. Make or suffer to exist any loans or advances
                      -----------
         to, or extend any credit to, or make any investments (by way of
         transfer of property, contributions to capital, purchase of stock or
         securities or evidences of indebtedness, acquisition of the business
         or assets, or otherwise) in, any Person except (i) for purchases of
         Receivables pursuant to the Intercompany Purchase Agreement, (ii) for
         investments in Cash Equivalents in accordance with the terms of this
         Agreement and (iii) the holding of the demand note made by RAC or
         Raytheon Credit in favor of the Seller.

                  (n) Distributions. Declare or pay, directly or indirectly, any
                      -------------
         dividend or make any other distribution (whether in cash or other
         property) with respect to the profits, assets or capital of the Seller
         or any Person's interest therein, or purchase, redeem or otherwise
         acquire for value any of its capital stock now or hereafter
         outstanding, except that so long as the Seller would continue to be
         Solvent as a result thereof and after giving effect thereto and no
         Amortization Event is continuing or would result therefrom, the Seller
         may declare and pay dividends on its capital stock.

                  (o) Agreements. Become a party to, or permit any of its
                      ----------
         properties to be bound by, any indenture, mortgage, instrument,
         contract, agreement, lease or other undertaking, except the Contracts,
         this Agreement and the Intercompany Purchase Agreement or amend or
         modify the provisions of its Certificate of Incorporation or issue any
         power of attorney except to the Managing Facility Agent or the
         Servicer.

                  (p) Intercompany Purchase Agreement. Give any material
                      -------------------------------
         consent or fail to exercise in any material respect any right or
         privilege under the Intercompany Purchase Agreement.

                  7.2 Negative Covenants of the Servicer. The Servicer (so long
                      ----------------------------------
as it is Raytheon Credit) hereby agrees that, so long as the Commitments remain
in effect, the Outstanding Purchase Price has not been reduced to zero or any
other amount is owing to any Purchaser or the Managing Facility Agent hereunder,
the Servicer shall not:

                  (a) No Actions against Obligors. Except in accordance with
                      ---------------------------
         the Credit and Collection Policy, commence or settle any legal action
         to enforce collection of any Purchased Receivable.

                  (b) Security Interest to Remain in Force. Except to the extent
                      ------------------------------------
         permitted in subsection 7.1(e), release, in whole or in part, any
         Financed Aircraft, or any other collateral securing or guaranteeing
         the related Contract (including, but not limited to, any letter of
         credit related thereto issued in favor of the Seller), from the
         security interest granted by such Contract.

                  (c) Limitations on Fundamental Changes. Enter into any merger,
                      ----------------------------------
         consolidation or amalgamation, or liquidate, wind up or dissolve
         itself (or suffer any liquidation or dissolution), or convey, sell,
         lease, assign, transfer or otherwise dispose of, all or substantially
         all of its property, business or assets (except for sales and
         substitutions of Receivables pursuant to the Intercompany Purchase
         Agreement), except that any

<PAGE>

                                                                             105

         Subsidiary of the Servicer may be merged or consolidated with or into
         the Servicer (so long as the Servicer is the surviving or continuing
         corporation).

                  (d) Transactions with Affiliates. Enter into any transaction,
                      ----------------------------
         including, without limitation, any purchase, sale, lease or exchange
         of property or the rendering of any service, relating to the
         administration, servicing and collection of the Purchased Receivables,
         the Collections with respect thereto and the related Contracts and
         Financed Aircraft, with any Affiliate unless such transaction is
         otherwise permitted under this Agreement, is in the ordinary course of
         the Servicer's business and is upon fair and reasonable terms no less
         favorable to the Servicer than it would obtain in a comparable arm's
         length transaction with a Person not an Affiliate.

                  (e) Assignment of Contracts. Permit any assignment of any
                      -----------------------
         Contract by either the Seller or Obligor (except for an assignment to
         the Guarantor or RAC) without the prior written consent of the
         Required Purchasers, provided that such consent shall not be
         unreasonably withheld to the extent the Contract so provides.

                  (f) Change in Credit and Collection Policy. Without the prior
                      --------------------------------------
         written consent of the Required Purchasers, notify any Obligor to
         remit payments to a location other than that to which such payment
         would be remitted on the Closing Date; make any change in the Credit
         and Collection Policy without prior notice to the Managing Facility
         Agent and each Purchaser; provided that, without the prior consent of
                                   --------
         the Required Purchasers, the Servicer shall not make or permit to be
         made any such change to the Credit and Collection Policy if such
         change could reasonably be expected to materially adversely affect the
         collectibility or maturity of any Purchased Receivable or the
         interests of the Administrative Agent and the Purchasers in any
         Purchased Receivable, the related Contract and Financed Aircraft or
         the Collections with respect thereto.

                        SECTION 8.  AMORTIZATION EVENTS

                  8.1 Amortization Events. Any of the following shall
                      -------------------
constitute an Amortization Event (whether it occurs before or during the
Amortization Period) hereunder:

                  (a) The Seller or the Servicer shall fail to make any deposit
or payment (including any payment of interest) required to be made by the Seller
or the Servicer, as the case may be, under this Agreement or any other document
executed and delivered in connection herewith, including, without limitation,
any payment or deposit required to be made pursuant to subsection 2.6(a),
2.7(b), 2.10, 2.10A, 2.11, 2.12, 2.14(c)(iii), 2.18 or 7.1(b), or the Seller or
the Servicer (if an Affiliate of the Seller is then the Servicer) shall fail to
deliver the Settlement Statement, or the Seller or the Servicer (if an Affiliate
of the Seller is then the Servicer) shall fail to take any action required or
requested to be taken pursuant to this Agreement after an Amortization Event has
occurred and is continuing, in each case within five days after any such
deposit, payment or delivery is required to be made or any such action is
requested to be taken hereunder; or

<PAGE>

                                                                             106

                  (b) Raytheon shall fail to make any payment required under the
Guarantee or RAC shall fail to make any payment required under the Repurchase
Agreement within, in each case, five days after any such payment is required to
be made; or

                  (c) [Intentionally Omitted]; or

                  (d) Any representation or warranty made or deemed made by the
Seller, the Servicer (if an Affiliate of the Seller is then the Servicer) or
Raytheon in any Purchase Document to which it is a party or which is contained
in any certificate, document or financial or other statement furnished at any
time under or in connection with this Agreement shall prove to have been
incorrect in any material respect on or as of the date made or deemed made by
the Seller, the Servicer (if an Affiliate of the Seller is then the Servicer) or
Raytheon, and shall have continued to be incorrect in such material respect for
a period of 30 days after such representation or warranty was initially made
(other than any representation and warranty with respect to a Receivable which
has been repurchased or substituted pursuant to subsection 2.7(b), 2.10, 2.10A,
2.11 or 2.13); or

                  (e) (i) The Seller shall default in the observance or
performance of, or Raytheon shall default under the Guarantee in causing the
Seller to observe or perform, any agreement contained in Section 7.1 or (ii) the
Servicer shall default in the observance or performance of, or Raytheon shall
default under the Guarantee in causing the Servicer to observe or perform, any
agreement contained in subsection 7.2; or

                  (f) Either of the Seller or the Servicer (if an Affiliate of
the Seller is then the Servicer) shall default in the observance or performance
of any other agreement (other than subsection 6.1(n), the remedy for which is
contained in subsection 2.11) contained in this Agreement in any material
respect or Raytheon shall default in the observance or performance of any
agreement contained in the Guarantee in any material respect or RAC shall
default in the observance or performance of any agreement contained in the
Repurchase Agreement in any material respect (other than as provided in
paragraphs (a) through (e) of this subsection 8.1), and such default shall
continue unremedied for a period of 30 days after the earlier of (i) notice of
such default from the Managing Facility Agent or the Majority Purchasers or (ii)
knowledge by the Seller, the Servicer (if an Affiliate of the Seller is then the
Servicer) or Raytheon of any such default, or

                  (g) The Debt Ratio of Raytheon shall be greater than 0.55 to
1.0 on the last day of any fiscal quarter of Raytheon;

                  (h) The Interest Coverage Ratio for any period of four
consecutive fiscal quarters shall be less than 2.5 to 1.0; or

                  (i) Raytheon, RAC, Raytheon Credit or the Seller shall default
in any payment of principal of or interest of any indebtedness for borrowed
money (or any guarantee thereof) (other than under the Guarantee or the
Repurchase Agreement) with a principal amount in excess of $50,000,000 when due
(whether by acceleration, upon maturity or otherwise), beyond the period of
grace (not to exceed 30 days), if any, provided in the instrument or agreement
under which such indebtedness (or guarantee) was created; or

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                                                                             107

                  (j) (i) Raytheon, RAC, Raytheon Credit or the Seller shall
commence any case, proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it as bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian or other
similar official for it or for all or any substantial part of its assets; or
(ii) there shall be commenced against Raytheon, RAC, Raytheon Credit or the
Seller any case, proceeding or other action of a nature referred to in clause
(i) above which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or unbonded
for a period of 60 days from the entry thereof; or (iii) there shall be
commenced against Raytheon, RAC, Raytheon Credit or the Seller any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its assets which results in the entry of an order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending appeal
within 60 days from the entry thereof; or (iv) Raytheon, RAC, Raytheon Credit or
the Seller shall take any action in furtherance of, or indicating its consent
to, approval of, or acquiescence in, any of the acts set forth in clause (i),
(ii), or (iii) above; or (v) Raytheon, RAC, Raytheon Credit or the Seller shall
make a general assignment for the benefit of its creditors or shall generally
not, or shall be unable to, or shall admit in writing its inability to, pay its
debts as they become due; or

                  (k) Any event or condition shall occur or exist with respect
to a Plan that, together with all other such events or conditions, if any, could
reasonably be expected to subject Raytheon or any Commonly Controlled Entity to
any tax, penalty or other liabilities which in the aggregate could reasonably be
expected to have a Material Adverse Effect or a material adverse effect on the
business, assets, property or condition (financial or other) of Raytheon and its
Subsidiaries taken as a whole; or

                  (l) One or more judgments or decrees shall be entered against
Raytheon, RAC, Raytheon Credit or the Seller involving in the aggregate a
liability (not paid or fully covered by insurance) of $25,000,000 or more and
all such judgments or decrees shall not have been vacated, discharged,
satisfied, stayed or bonded pending appeal within 60 days from the entry
thereof; provided that no Amortization Event shall be deemed to occur if any
         --------
such judgment or decree is being contested in good faith by appropriate
proceedings and with respect to which no enforcement proceedings to collect any
such judgment or enforce any such decree have been commenced which could
reasonably be expected to have a Material Adverse Effect; or

                  (m) The Guarantee shall cease to be in full force and effect
or Raytheon shall so assert in writing or the Repurchase Agreement shall cease
to be in full force and effect or RAC shall so assert in writing or;

                  (n) The ownership or security interests created under this
Agreement or any Assignment (including to the extent applicable, each Foreign
Assignment) shall cease to be in full force and effect or the Seller or any of
its Affiliates shall so assert in writing, or this Agreement or any Assignment
(including to the extent applicable, each Foreign Assignment) shall cease, for
any reason other than acts or omissions of the Managing Facility Agent or any

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                                                                             108

Purchaser, to be effective to grant a perfected first-priority ownership or
security interest in the Purchased Receivables, the related Contracts and
Financed Aircraft free and clear of any Lien except (i) to the extent any of the
foregoing are violated prior to the dates set forth in subsection 6.1(n) as a
result of the failure to make the filings referred to therein and required to be
made by such dates, (ii) to the extent a Lien of the first priority on the
related Financed Aircraft is not perfected with respect to L/C Receivables,
Unsecured Foreign Receivables and Existing Uncertified Foreign Receivables,
(iii) solely with respect to a Purchased Receivable, to the extent the Lien
thereon is subject to a Permitted Receivable Lien, (iv) solely with respect to a
Financed Aircraft, to the extent the Lien thereon is subject to Permitted
Aircraft Liens or (v) to the extent provided in subsection 4.2(b); or

                  (o) (i) Raytheon shall cease to own, directly or indirectly,
100% of the issued and outstanding voting stock of RAC, the Seller or Raytheon
Credit or (ii) Raytheon Credit shall cease to own 100% of the issued and
outstanding voting stock of the Seller; or

                  (p) On any Settlement Date on which Raytheon's Debt Rating is
less than A-/A3, after giving effect to any sales pursuant to subsection 11.25,
the ratio, expressed as a percentage, of the aggregate Outstanding Purchase
Price of all Delinquent Receivables to the Outstanding Purchase Price of all
Receivables shall be greater than 7.5%; or

                  (q) Raytheon's Debt Rating shall be less than BB+ or the
equivalent thereof or Raytheon's long-term unsecured senior debt shall not be
rated by both S&P and Moody's or, if the Seller and the Required Purchasers
shall have agreed to use a rating agency other than Moody's or S&P to determine
the Debt Rating, such Debt Rating shall be less than such level as the Seller
and the Purchasers, by unanimous consent, shall have agreed.

                  8.2 Rights and Remedies. If an Amortization Event should occur
                      -------------------
and be continuing, the Managing Facility Agent and the Purchasers shall have
available the following rights and remedies (unless such Amortization Event is
waived pursuant to subsection 11.1) in addition to any other rights and remedies
available under applicable law, such rights and remedies being cumulative and
not exclusive:

                  (a) each Purchaser's Outstanding Purchase Price shall bear
interest for the Accrual Period in which such Amortization Event occurs, payable
on demand, at the Default Rate for such Purchaser (i) if such event is an
Amortization Event specified in subsection 8.1(a), commencing on the date such
Amortization Event occurs and (ii) if such Amortization Event is a Note Rate
Amortization Event, commencing on the date the Revolving Period and the
Commitments are terminated pursuant to subsection 8.2(b) or, if later, on the
date such Note Rate Amortization Event occurs; or

                  (b) with the consent of the Majority Purchasers, the Managing
Facility Agent may, or upon the request of the Majority Purchasers, the Managing
Facility Agent shall, by notice to the Seller declare the Revolving Period and
the Commitments to be terminated forthwith, whereupon the Revolving Period and
the Commitments shall immediately terminate; provided that if such event is an
                                             --------
Amortization Event specified in clause (i) or (ii) of subsection 8.1(j),
automatically the Revolving Period and the Commitments shall immediately
terminate; or

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                                                                             109

                  (c) if such event is a Specified Amortization Event and the
Revolving Period and the Commitments have been terminated pursuant to subsection
8.2(b), the Majority Purchasers may in their sole discretion terminate the
appointment of Raytheon Credit as the Servicer in accordance with subsection
3.1; or

                  (d) if such event is a Specified Amortization Event and the
Revolving Period and the Commitments have been terminated pursuant to subsection
8.2(b), upon five Business Days' notice to the Seller and the Servicer and at
the Seller's expense, the Managing Facility Agent may, or upon the request of
the Majority Purchasers the Managing Facility Agent shall, notify, or direct the
Seller or the Servicer, as the case may be, to notify, the Obligors of Purchased
Receivables, or any of them, of the ownership of the Purchased Receivables by
the Purchasers; or

                  (e) if such event is a Specified Amortization Event and the
Revolving Period and the Commitments have been terminated pursuant to subsection
8.2(b), the Managing Facility Agent may, or upon the request of the Majority
Purchasers the Managing Facility Agent shall, direct or request the Seller or
the Servicer, as the case may be, to direct the Obligors of Purchased
Receivables, or any of them, that payment of all amounts payable under any such
Purchased Receivable be made directly to the Managing Facility Agent or its
designee for the account of the Purchasers; or

                  (f) if the Revolving Period and the Commitments have been
terminated pursuant to subsection 8.2(b), the Managing Facility Agent may, or
upon the request of the Majority Purchasers the Managing Facility Agent shall,
direct the Seller or the Servicer, as the case may be, to segregate all cash,
checks and other instruments received by it from time to time constituting
Collections on account of any Purchased Receivable in a manner acceptable to the
Managing Facility Agent and to remit promptly upon receipt all such cash, checks
and instruments, duly endorsed or with duly executed instruments of transfer, to
the Managing Facility Agent or its designee for the account of the Purchasers;
or

                  (g) if the Revolving Period and the Commitments have been
terminated pursuant to subsection 8.2(b), the Managing Facility Agent may, or
upon the request of the Majority Purchasers the Managing Facility Agent shall,
direct the Seller or the Servicer, as the case may be, to assemble the
documents, instruments and other records (including, without limitation,
computer tapes and disks) which evidence the Purchased Receivables, the related
Contracts and the related Financed Aircraft, or which are otherwise necessary or
desirable to collect the Purchased Receivables, and to make the same available
to the Managing Facility Agent at a place selected by the Managing Facility
Agent or its designee; or

                  (h) if the Revolving Period and the Commitments have been
terminated pursuant to subsection 8.2(b), the Managing Facility Agent may, or
upon the request of the Majority Purchasers the Managing Facility Agent shall,
direct the Seller or the Servicer to convert the Collection Account to a lockbox
account into which payments on account of the Purchased Receivables are remitted
or deposited directly and, in connection therewith, the Seller or the Servicer
shall execute and file such documents and take such actions to transfer to the
Managing Facility Agent or its agent all post office boxes, deposit and other
accounts into which

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                                                                            110

Collections are remitted or deposited and to grant to the Managing
Facility Agent and the Purchasers perfected first-priority security and/or
ownership interests therein; or

                  (i)     if the Revolving Period and the Commitments have been
terminated pursuant to subsection 8.2(b), the Managing Facility Agent may, or
upon the request of the Majority Purchasers the Managing Facility Agent shall,
direct the Seller or the Servicer to take any and all steps in the name of the
Seller or the Servicer and on behalf of the Managing Facility Agent and the
Purchasers which may be necessary or desirable, in the determination of the
Managing Facility Agent (or the Managing Facility Agent and the Majority
Purchasers, if the Managing Facility Agent is acting at the request of the
Majority Purchasers), to collect all amounts due under any and all Purchased
Receivables and the related Contracts and Financed Aircraft, including, without
limitation, endorsing the name of the Seller on checks and other instruments
representing Collections in respect of such Purchased Receivables and enforcing
such Purchased Receivables and the related Contracts and Financed Aircraft; or

                  (j)     if the Revolving Period and the Commitments have been
terminated pursuant to subsection 8.2(b), the Managing Facility Agent may, or
upon the request of the Majority Purchasers the Managing Facility Agent shall,
take or direct the Seller to take any and all steps in the name of the Seller
and on behalf of the Managing Facility Agent and the Purchasers which may be
necessary or desirable, in the determination of the Managing Facility Agent (or
the Managing Facility Agent and the Majority Purchasers, if the Managing
Facility Agent is acting at the request of the Majority Purchasers), to enforce
and protect the rights and remedies of the Managing Facility Agent and the
Purchasers in, to and under the Intercompany Purchase Agreement.

                  8.3     Waivers. Except as expressly provided herein,
                          -------
presentment, demand, protest and all other notices of any kind are hereby
expressly waived by the Seller and the Servicer.

                        SECTION 9.   INDEMNIFICATIONS

                  9.1     Indemnities of the Seller. (a) Without limiting any
                          --------------------------
other rights which the Managing Facility Agent, any Purchaser or any Affiliate
thereof may have hereunder or under applicable law, the Seller hereby agrees,
subject to the limitations set forth in this Section 9, to indemnify the
Managing Facility Agent, each Administrative Agent, each Co-Administrative
Agent, each Purchaser and each Affiliate thereof (each, an "Indemnified
                                                            -----------
Person") from and against any and all damages, losses, claims, liabilities and
------
related costs and expenses, including reasonable attorneys' fees and
disbursements (all of the foregoing, collectively, "Indemnified Amounts")
                                                    -------------------
awarded against or incurred by any Indemnified Person which arise directly or
indirectly from:

                       (i)     any Purchased Receivable which is not an
                  Eligible Receivable at the date of its purchase or
                  substitution (which date shall be, for each Existing
                  Receivable, the date such Receivable was purchased or
                  substituted under the Existing Agreement applicable to such
                  Existing Receivable) or which is an Ineligible Receivable as
                  defined in clause (b)(z) of the definition of "Ineligible
                  Receivable";

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                                                                            111

                       (ii)    reliance on any representation or warranty made
                  by the Seller (or any of their respective officers) under or
                  in connection with this Agreement or any Settlement
                  Statement which shall have been false or incorrect in any
                  material respect when made or deemed made;

                       (iii)   the failure by the Seller, any Affiliate
                  Obligor or the Servicer to comply with any applicable
                  Requirement of Law in all material respects with respect to
                  any Purchased Receivable, the related Contract or Financed
                  Aircraft, or the nonconformity in any material respect of
                  any Purchased Receivable or the related Contract or Financed
                  Aircraft with any such applicable Requirement of Law;

                       (iv)    the failure (A) of the Administrative Agent to
                  have a valid, perfected and first priority security interest
                  in the Financed Aircraft (including the Aircraft
                  Accessories) other than with respect to a Registerable Lease
                  Receivable, Unsecured Foreign Receivable, Existing
                  Uncertified Foreign Receivable or L/C Receivable, (B) with
                  respect to a Registerable Lease Receivable, of the
                  Administrative Agent to have a valid, perfected and first
                  priority security interest in the Financed Aircraft
                  (including the Aircraft Accessories related thereto) or (C)
                  either (1) to vest and maintain in any Purchaser a
                  perfected, valid and enforceable first priority ownership
                  interest in any Purchased Receivable or (2) to create and
                  maintain in favor of the Administrative Agent for the
                  ratable benefit of the Purchasers a valid, perfected and
                  first priority security interest in such Receivable;

                       (v)     the failure to file or record any document or
                  instrument (including, without limitation, any FAA Assignment
                  or any Foreign Assignment) with respect to any Receivables
                  constituting, or purporting to constitute, Purchased
                  Receivables, the Contracts or the Financed Aircraft related
                  thereto (other than the Financed Aircraft related to the L/C
                  Receivables and the Unsecured Foreign Receivables), whether
                  at the time of any purchase or at any time thereafter;

                       (vi)    any dispute, claim, offset or defense (other
                  than discharge in bankruptcy of the Obligor) of the Obligor
                  to the payment of any Purchased Receivable or of the
                  Unaffiliated Foreign Lessee to the payment of any amount
                  under its Applicable Lease (including, without limitation, a
                  defense based on such Receivable or the related Contract not
                  being a legal, valid and binding obligation of such Obligor
                  or Unaffiliated Foreign Lessee enforceable against it in
                  accordance with its terms or any claims based on the related
                  Financed Aircraft not conforming to any express or implied
                  warranty);

                       (vii)   any failure of the Seller or the Servicer to
                  perform its duties or obligations in any capacity in
                  accordance with the provisions of this Agreement, including,
                  without limitation, the turnover of amounts pursuant to
                  subsection 2.14 or 2.15;

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                                                                            112

                       (viii)  any Lien against or with respect to Purchased
                  Receivables, the Collections with respect thereto or the
                  related Contract or Financed Aircraft, or any sale, pledge,
                  or assignment (by operation of law or otherwise) or other
                  disposition of Collections of Purchased Receivables by the
                  Seller or the Servicer;

                       (ix)    any failure by the Seller, any Affiliate Obligor
                  or the Servicer to comply (1) in any material respect with
                  any provision, covenant or other promise required to be
                  observed by any such Person under any Contract related to any
                  Purchased Receivable or (2), except as otherwise permitted by
                  this Agreement, with all provisions of the Credit and
                  Collection Policy in all material respects, which failure
                  reduces or impairs the rights of the Administrative Agent or
                  any Purchaser with respect to any Purchased Receivable or the
                  value of any Purchased Receivable including, but not limited
                  to, failure to comply with those provisions of the Credit and
                  Collection Policy relating to the cancellation, extension,
                  amendment, modification, compromise or settlement of any
                  Purchased Receivable or any term thereof, the extension,
                  amendment, modification or waiver of any term or condition of
                  any Contract related thereto, the sale, pledge or assignment
                  of, or grant of security interest in, any Purchased
                  Receivable or the Contract or Financed Aircraft related
                  thereto, any change in the character of its business or in
                  the Credit and Collection Policy or the commencement or
                  settlement of any legal action to enforce collection of any
                  Purchased Receivable;

                       (x)     any investigation, litigation, or proceeding
                  related to any use of the proceeds of any purchase;

                       (xi)    any casualty loss, property loss or product
                  liability related to (i) the Purchasers' ownership of the
                  Purchased Receivables or (ii) the Purchasers' security
                  interest in the related Financed Aircraft;

                       (xii)   the failure of any Purchased Receivable at any
                  time after its sale or substitution hereunder or, with
                  respect to the Existing Receivables, under the applicable
                  Existing Agreement to satisfy the criteria under clause (k)
                  or (l) (including, without limitation, the failure of a
                  Permitted Receivable Lien or a Permitted Aircraft Lien to be
                  released or bonded in accordance with the definition of each
                  such term) of the definition of "Eligible Receivable"
                  (notwithstanding that such criteria are required to be
                  satisfied pursuant to such definition on the date a Purchased
                  Receivable is sold or substituted); or

                       (xiii)  the execution, delivery, performance,
                  administration and enforcement of any of the Purchase
                  Documents.

                  (b)     Notwithstanding anything to the contrary contained in
subsection 9.1(a), and with respect to any event of the type described in clause
(vi) or (xii) of subsection 9.1(a), the Managing Facility Agent, the
Administrative Agent, the Co-Administrative Agents and the Purchasers shall be
deemed to have incurred Indemnified Amounts with respect to a Purchased
Receivable as a result of events described in such clause (vi) or (xii) on the
earlier of (1) the date on which the Seller becomes aware of the event or events
of the type described in either of such

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                                                                            113

clauses or (2) the date on which the Managing Facility Agent notifies the Seller
that the event described in either of such clauses has occurred.

                  (c)     Indemnification payments required to be made hereunder
shall be payable at any time on demand by the Managing Facility Agent at the
request of the applicable Indemnified Persons and shall be promptly deposited in
the Concentration Account and paid out to such Indemnified Persons pro rata with
                                                                   --- ----
respect to the Indemnified Amounts incurred and requested by such Indemnified
Persons.

                  (d)     The agreements in this Section 9 shall survive the
completion of the Amortization Period.

                  9.2     Limitations of Seller's Liability.  (a)  The Seller
                          ----------------------------------
shall not be required to indemnify an Person pursuant to subsection 9.1 for:

                             (i)     Indemnified Amounts to the extent resulting
                  from gross negligence or willful misconduct on the part of
                  such Indemnified Person; or

                             (ii)    recourse for non-payment by an Obligor
                  (except as otherwise provided in this Agreement) for Defaulted
                  Receivables; or

                             (iii)   any income, franchise or other similar
                  taxes imposed on any Indemnified Person as a result of any of
                  the indemnities provided in subsection 9.1(a) arising out of
                  or as a result of this Agreement or in respect of any
                  Receivables or any Contract; or

                             (iv)    Indemnified Amounts resulting from actions
                  taken or failed to be taken by a successor Servicer that is
                  not an Affiliate of the Seller appointed pursuant to
                  subsection 3.1(b).

                  (b)     Each of the Managing Facility Agent, each
Administrative Agent, each Co-Administrative Agent and each Purchaser hereby
waives, to the maximum extent not prohibited by law, any right it may have to
claim or recover as Indemnified Amounts under this Section 9 any special,
exemplary, punitive or consequential damages; provided that the waiver contained
                                              --------
in this subsection 9.2(b) shall not extend to, and the Managing Facility Agent,
each Administrative Agent, each Co-Administrative Agent and each Purchaser does
not waive, any right to claim or recover from the Seller any special, exemplary,
punitive or consequential damages for which an Indemnified Person is liable to
any Person (other than an Affiliate of such Indemnified Person).

                  9.3     Proceedings against Indemnified Person. (a) If any
                          --------------------------------------
action, suit or proceeding shall be brought against one or more of the
Indemnified Persons in respect of which indemnity may be sought against the
Seller, such Indemnified Person shall, promptly after receipt of notice of
commencement of such action, suit or proceeding, notify the Seller in writing,
enclosing a copy of all papers served upon such Indemnified Person; provided
                                                                    --------
that the failure so to notify the Seller shall not relieve it from any liability
which it may have under subsection 9.1 except to the extent that the Seller is
prejudiced by such failure. The Seller may, and upon such Indemnified Person's
request shall, at the Seller's expense, resist and defend such action, suit or
proceeding,

<PAGE>

                                                                            114

or cause the same to be resisted or defended by counsel selected by the Seller.
In the event of any failure by the Seller to resist and defend such suit, action
or proceeding or cause the same to be resisted or defended by counsel reasonably
satisfactory to such Indemnified Person, the Seller shall pay all reasonable
costs and expenses (including, without limitation, attorney's fees and
disbursements) incurred by such Indemnified Person in connection with such suit,
action or proceeding. In the event that the Seller does assume the defense of
such suit, action or proceeding, the Seller shall have the sole authority to
negotiate, compromise and settle such claim; provided that such Indemnified
                                             --------
Person shall have the right to employ counsel to represent it in connection with
any claim in respect of which indemnity may be sought by such Indemnified Person
against the Seller under such subsection 9.1 if, in the reasonable judgment of
such Indemnified Person, such Indemnified Person may have a conflict with the
Seller, such Indemnified Person shall be entitled to be represented by separate
counsel, and in that event the fees and expenses of such separate counsel shall
be paid by the Seller. In any event, the Indemnified Person shall retain the
right to employ its own counsel, but the Indemnified Person shall, except as
otherwise provided in this subsection 9.3, bear and shall be solely responsible
for its own costs and expenses.

                  (b)     The Seller shall be subrogated to an Indemnified
Person's rights in any matter with respect to which the Seller has actually
reimbursed such Indemnified Person for any amounts for which the Indemnified
Person claims indemnification hereunder after the Amortization Period ends.

       SECTION 10.  THE MANAGING FACILITY AGENT AND ADMINISTRATIVE AGENT

                  10.1    Appointment. Each Purchaser hereby irrevocably
                          -----------
designates and appoints Bank of America, N.A., as the Managing Facility Agent of
such Purchaser under this Agreement and the other Purchase Documents and each
such Purchaser irrevocably authorizes Bank of America, N.A., as the Managing
Facility Agent for such Purchaser, to take such action on its behalf under the
provisions of this Agreement and the other Purchase Documents and to exercise
such powers and perform such duties as are expressly delegated to the Managing
Facility Agent by the terms of this Agreement and the other Purchase Documents,
together with such other powers as are reasonably incidental thereto. Each
Purchaser hereby irrevocably designates and appoints each of Bank of America,
N.A. and UBS AG, Stamford Branch (as successor to Swiss Bank Corporation,
Stamford Branch, as successor to Swiss Bank Corporation, New York Branch) as
Administrative Agent under this Agreement and the other Purchase Documents and
to be, or continue to be, jointly or individually, the named party or the
secured party for the benefit of the Purchasers with respect to the Receivables
and the related Aircraft and in and on all presently existing or hereafter
executed financing statements, assignments and continuation statements, FAA
Assignments and other FAA filings and similar filings in foreign jurisdictions
and security interests granted under this Agreement or any predecessor agreement
(including pursuant to Sections 11.11 and 11.12) relating to the Receivables and
the related Aircraft. Each Administrative Agent shall act solely in accordance
with the instructions of the Managing Facility Agent (including pursuant to
Sections 11.10, 11.11 and 11.12) which in the case of the Old Administrative
Agent shall be deemed to include any action taken by the Managing Facility Agent
pursuant to a power of attorney granted by the Old Administrative Agent in favor
of the Managing Facility Agent. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Managing Facility Agent and each Administrative
Agent shall not have any

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                                                                            115

duties or responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Purchaser, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Purchase Document or otherwise exist against the Managing
Facility Agent or either Administrative Agent.

                  10.2    Delegation of Duties. The Managing Facility Agent and
                          --------------------
each Administrative Agent may execute any of its duties under this Agreement and
the other Purchase Documents by or through agents or attorneys-in-fact and shall
be entitled to advice of counsel concerning all matters pertaining to such
duties. The Managing Facility Agent and each Administrative Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.

                  10.3    Exculpatory Provisions. Neither the Managing Facility
                          -----------------------
Agent, each Administrative Agent, nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or Affiliates shall be (a)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Agreement or any other Purchase Document
(except for its or such Person's own gross negligence or willful misconduct) or
(b) responsible in any manner to any of the Purchasers for any recitals,
statements, representations or warranties made by the Seller, the Servicer or
Raytheon or any officer thereof contained in this Agreement or any other
Purchase Document or in any certificate, report, statement or other document
referred to or provided for in, or received by the Managing Facility Agent or
either Administrative Agent under or in connection with, this Agreement or any
other Purchase Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Purchase Document
or for any failure of the Seller, the Servicer or Raytheon to perform their
respective obligations hereunder or thereunder. The Managing Facility Agent and
each Administrative Agent shall not be under any obligation to any Purchaser to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of (except delivery to it of items
required by Section 5 hereof to be delivered to it), this Agreement or any other
Purchase Document, or to inspect the properties, books or records of the Seller,
the Servicer or Raytheon. Without limiting the foregoing, the Old Administrative
Agent shall not have any liability for (i) any action, or omission to act, which
is made in accordance with the instructions of the Managing Facility Agent or
(ii) the failure to act if it has not received any instructions from the
Managing Facility Agent.

                  10.4    Reliance by Managing Facility Agent and
                          ---------------------------------------
Administrative Agent. The Managing Facility Agent and each Administrative Agent
--------------------
shall be entitled to rely, and shall be fully protected in relying, upon any
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Seller, the Servicer or Raytheon), independent accountants and other experts
selected by the Managing Facility Agent or such Administrative Agent. The
Managing Facility Agent and each Administrative Agent shall be fully justified
in failing or refusing to take any action under this Agreement or any other
Purchase Document unless it shall first receive such advice or concurrence of
the Majority Purchasers as it deems appropriate or it shall first be indemnified
to its satisfaction by the Purchasers against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any

<PAGE>

                                                                            116

such action. The Managing Facility Agent and each Administrative Agent shall in
all cases be fully protected in acting, or in refraining from acting, under this
Agreement and the other Purchase Documents in accordance with a request of the
Required Purchasers or the Majority Purchasers, as appropriate, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
each Purchaser.

                  10.5    Notice of Certain Events. Neither the Managing
                          ------------------------
Facility Agent nor any Administrative Agent shall be deemed to have knowledge or
notice of the occurrence of an Amortization Event, Discount Event, Rating Event,
Remittance Event or Ineligibility Event (each, an "Occurrence") hereunder unless
                                                   ----------
the Managing Facility Agent has received notice from a Purchaser, the Seller,
the Servicer, RAC or Raytheon referring to this Agreement, describing such
Occurrence and stating that such notice is a notice thereof. In the event that
the Managing Facility Agent receives such a notice, the Managing Facility Agent
shall promptly give notice thereof to the Purchasers. The Managing Facility
Agent shall take such action with respect to any Amortization Event as shall be
reasonably directed by the Majority Purchasers; provided that unless and until
                                                --------
the Managing Facility Agent shall have received such directions, the Managing
Facility Agent may (but shall not be obligated to) take such action, or refrain
from taking such action, with respect to any such Amortization Event as it shall
deem advisable in the best interests of the Purchasers.

                  10.6    Non-Reliance on Managing Facility Agent, the
                          --------------------------------------------
Administrative Agent, the Co-Administrative Agents and the Purchasers. Each
---------------------------------------------------------------------
Purchaser expressly acknowledges that neither the Managing Facility Agent,
either Administrative Agent, the Co-Administrative Agents nor any of their
officers, directors, employees, agents, attorneys-in-fact or Affiliates has made
any representations or warranties to it and that no act by the Managing Facility
Agent, either Administrative Agent or the Co-Administrative Agents hereafter
taken, including any review of the affairs of the Seller, the Servicer or
Raytheon, shall be deemed to constitute any representation or warranty by the
Managing Facility Agent, either Administrative Agent or the Co-Administrative
Agents to any Purchaser. Each Purchaser represents to the Managing Facility
Agent, each Administrative Agent and the Co-Administrative Agents that it has,
independently and without reliance upon the Managing Facility Agent, either
Administrative Agent, the Co-Administrative Agents or any other Purchaser, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Seller, the Servicer
and Raytheon and made its own decision to make its purchases hereunder and enter
into this Agreement. Each Purchaser also represents that it will, independently
and without reliance upon the Managing Facility Agent, either Administrative
Agent or the Co-Administrative Agents or any Purchaser, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement and the other Purchase Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Seller, the Servicer and Raytheon. Except for notices, reports and other
documents expressly required to be furnished to the Purchasers by the Managing
Facility Agent hereunder, neither the Managing Facility Agent, either
Administrative Agent nor the Co-Administrative Agents shall have any duty or
responsibility to provide any Purchaser with any credit or other information
concerning the

<PAGE>

                                                                            117

business, operations, property, condition (financial or otherwise), prospects or
creditworthiness of the Seller or Raytheon which may come into the possession of
the Managing Facility Agent, either Administrative Agent or the
Co-Administrative Agents or any of their officers, directors, employees, agents,
attorneys-in-fact or Affiliates.

                  10.7    Indemnification. The Purchasers agree to indemnify
                          ---------------
the Managing Facility Agent and each Administrative Agent in its capacity as
such (to the extent not reimbursed by the Seller or Raytheon and without
limiting the obligation of the Seller or Raytheon to do so), ratably according
to the respective amounts of their Commitments, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time after the Outstanding Purchase Price
is reduced to zero) be imposed on, incurred by or asserted against the Managing
Facility Agent or either Administrative Agent in any way relating to or arising
out of this Agreement, any other Purchase Document or any documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by the Managing Facility Agent or either
Administrative Agent under or in connection with any of the foregoing; provided
                                                                       --------
that no Purchaser shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the Managing Facility
Agent's or either Administrative Agent's gross negligence or willful misconduct.
The agreements in this subsection shall survive the reduction of the Outstanding
Purchase Price to zero and payment of all other amounts payable hereunder.

                  10.8    Managing Facility Agent and Administrative Agent in
                          ---------------------------------------------------
Their Individual Capacities. The Managing Facility Agent and each Administrative
---------------------------
Agent and their respective Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Seller, the Servicer, RAC
and Raytheon and their Affiliates as though the Managing Facility Agent were not
the Managing Facility Agent, or such Administrative Agent was not an
Administrative Agent, hereunder and under the other Purchase Documents. With
respect to purchases made by it, the Managing Facility Agent and each
Administrative Agent shall have the same rights and powers under this Agreement
and the other Purchase Documents as any Purchaser and may exercise the same as
though it were not the Managing Facility Agent or an Administrative Agent, as
the case may be, and the terms "Purchaser" and "Purchasers" shall include the
Managing Facility Agent and each Administrative Agent, each in its individual
capacity.

                  10.9    Successor Managing Facility Agent or Administrative
                          ---------------------------------------------------
Agent. The Managing Facility Agent may resign as Managing Facility Agent upon 30
-----
days' notice to the Purchasers and such resignation shall be effective upon the
earlier of (i) the expiration of such 30 day notice period and (ii) the
appointment of a successor Managing Facility Agent pursuant to the provisions of
this Section 10.9.; provided that, if a successor Managing Facility Agent shall
                    -------- ----
not have been appointed prior to the end of such 30 day notice period, the
Managing Facility Agent shall remain the Administrative Agent until a successor
Managing Facility Agent is appointed in accordance with this Section 10.9. If
the Managing Facility Agent shall resign as Managing Facility Agent under this
Agreement and the other Purchase Documents, then the Required Purchasers shall
appoint from among the Purchasers a successor agent for the Purchasers, which
successor agent shall, subject to the consent of the Seller and Raytheon (which

<PAGE>

                                                                            118

consent shall not be unreasonably withheld), succeed to the rights, powers and
duties of the Managing Facility Agent including its rights powers and duties as
Administrative Agent hereunder, and the term "Managing Facility Agent" shall
mean such successor agent effective upon its appointment, and the former
Managing Facility Agent's rights, powers and duties as Managing Facility Agent
and as an Administrative Agent shall be terminated, without any other or further
act or deed on the part of such former Managing Facility Agent or any of the
parties to this Agreement or any holder of an Assignment. After any retiring
Managing Facility Agent's resignation as Managing Facility Agent, the provisions
of this subsection shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Managing Facility Agent under this Agreement and
the other Purchase Documents. The rights, obligations and duties of the Old
Administrative Agent shall be governed by the terms and provisions of the
letters, dated as of March 9, 2001 and March 8, 2002, among the Old
Administrative Agent, Raytheon, Raytheon Credit and the Managing Facility Agent.

                           SECTION 11.  MISCELLANEOUS

                  11.1    Amendments and Waivers. Neither this Agreement nor
                          ----------------------
any other Purchase Document nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
subsection. Unless otherwise specifically provided herein, with the written
consent of the Majority Purchasers, the Managing Facility Agent, the Seller, the
Servicer, RAC and Raytheon may, from time to time, enter into written
amendments, supplements or modifications hereto and to the other Purchase
Documents for the purpose of adding or deleting any provisions to this Agreement
or the other Purchase Documents or changing in any manner the rights of the
Purchasers, the Seller, the Servicer, RAC, or Raytheon hereunder or thereunder
or waiving, on such terms and conditions as the Managing Facility Agent may
specify in such instrument, any of the requirements of this Agreement or the
other Purchase Documents; provided, however, that no such waiver and no such
                          --------  -------
amendment, supplement or modification shall (a) increase the Commitment of any
Purchaser or extend the Expiration Date or reduce the rate or amount of interest
or any fee payable to any Purchaser hereunder or extend (beyond the applicable
period of grace) the scheduled date for any payment or deposit by the Seller or
the Servicer (if not then the Seller) hereunder, in each case without the
consent of the Purchaser affected thereby, or (b) (i) amend, modify or waive any
provision of this subsection or reduce the percentage specified in or amend the
definitions of "Required Purchasers", or "Majority Purchasers", (ii) consent to
the assignment or transfer by the Seller of any rights and obligations under
this Agreement and the other Purchase Documents, (iii) take action with respect
to any Purchased Receivable pursuant to subsection 7.1(b)(iii), (iv) amend the
criteria set forth in the definition of "Eligible Receivable" or "Ineligible
Receivable" or any definition contained in either such definition if the effect
thereof is to decrease the Seller's or RAC's repurchase obligation, (v) after
the occurrence of a Rating Event release or reassign any material interest of
the Purchasers in the Financed Aircraft (except as provided in subsections
11.10, 11.24 or 11.25), (vi) release Raytheon as Guarantor under the Guarantee
or make any material modification or amendment to the Guarantee or release RAC
from its obligations under the Repurchase Agreement or make any material
modification or amendment to the Repurchase Agreement, (vii) release the
interest of the Purchasers in the Intercompany Purchase Agreement, (viii) amend
the definition of "Aggregate Repurchase Obligation" or amend subsection 2.10(b)
or any definition contained therein if the effect thereof is to decrease the
RARC Repurchase Obligation, (ix) amend, modify or waive any provision of
subsection 2.6, 2.18, 2.20(a) or

<PAGE>

                                                                            119

11.7(a), or (x) amend the definition of "Purchase Price", without, in each case
specified in this clause (b), the written consent of all the Purchasers, or (c)
amend, modify or waive any provision of Section 10 without the written consent
of the then Managing Facility Agent or (d) waive any Amortization Event
(including, any Trigger Amortization Event, any Specified Amortization Event or
any Note Rate Amortization Event) or its consequences without the written
consent of the Required Purchasers. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Purchasers and
shall be binding upon the Seller, the Servicer, the Purchasers and the Managing
Facility Agent. In the case of any waiver, the Seller, the Servicer, RAC,
Raytheon, the Purchasers and the Managing Facility Agent shall be restored to
their former position and rights hereunder and under any other Purchase
Documents, and any Amortization Event (including, any Trigger Amortization
Event, any Specified Amortization Event or any Note Rate Amortization Event)
waived shall be deemed to be cured and not continuing; but no such waiver shall
extend to any subsequent or other Amortization Event, Trigger Amortization
Event, Specified Amortization Event or Note Rate Amortization Event, or impair
any right consequent thereon.

                  Notwithstanding any of the provisions of this Section 11.1 no
provision of the Agreement which affects the rights or obligations of the Old
Administrative Agent shall be amended without the written consent of the Old
Administrative Agent.

                  11.2    Notices. (a) All notices, requests, demands and
                          -------
consents to or upon the respective parties hereto to be effective shall be in
writing (including by telecopy or telex), and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made when delivered
by hand, or three Business Days after being deposited in the mail, postage
prepaid, or, in the case of telecopy notice, when received, or, in the case of
telex notice, when sent, answerback received, addressed as follows in the case
of the Seller and the Managing Facility Agent, and as set forth in Schedule I in
the case of the Co-Administrative Agents and any Purchaser, or to such other
address as may be hereafter notified by the respective parties hereto:

<PAGE>

                                                                            120

         The Seller:                   Raytheon Aircraft Receivables Corporation
                                       9709 East Central
                                       Wichita, Kansas  67206
                                       Attention:  Andrew A. Mathews
                                       Telephone:  (316) 676-7166
                                       Telecopy:  (316) 676-6975

         The Servicer:                 Raytheon Aircraft Credit Corporation
                                       9709 East Central Avenue
                                       Wichita, Kansas  67206
                                       Attention:  Andrew A. Mathews
                                       Telephone:  (316) 676-7673
                                       Telecopy:  (316) 676-6975

         The Managing
         Facility Agent:               Bank of America, N.A.
                                       Agency Management 10831
                                       Mail Code:  CA5-701-05-19
                                       1455 Market Street, 5th Floor
                                       San Francisco, California  94103
                                       Attention:  Kathleen Carry
                                       Telephone:  (415) 436-4001
                                       Telecopy:  (415) 503-5001

         With a copy to:               Bank of America, N.A.
                                       Credit Services - West
                                       Mail Code:  CA4-706-05-09
                                       1850 Gateway Boulevard
                                       Concord, California  94520
                                       Attention:  Pamela Greer-Tillman
                                       Telephone:  (925) 675-8453
                                       Telecopy:   (925) 969-2815
                                       Account No.:  12335-16573;

provided that any notice, request or demand to or upon the Managing Facility
--------
Agent or the Purchasers pursuant to subsection 2.2, 2.3, 2.8 or 2.20 shall not
be effective until received.

                  (b)     The Managing Facility Agent agrees to promptly notify
the Purchasers of (i) each address of the Seller or the Servicer forwarded to
the Managing Facility Agent under subsection 6.1(f) or 6.2(e), respectively, and
(ii) any change in the fiscal year of the Seller under subsection 7.1(h).

                  11.3    No Waiver; Cumulative Remedies. No failure to
                          ------------------------------
exercise and no delay in exercising, on the part of the Managing Facility Agent,
either Administrative Agent or any Purchaser, any right, remedy, power or
privilege hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or

<PAGE>

                                                                            121

privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.

                  11.4    Survival of Representations and Warranties. All
                          ------------------------------------------
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this Agreement.

                  11.5    Payment of Expenses and Taxes. The Seller agrees (a)
                          -----------------------------
to pay or reimburse the Managing Facility Agent and each Administrative Agent
for all its out-of-pocket costs and expenses incurred in connection with the
development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement, the other Purchase Documents, any Commitment
Transfer Supplement executed and delivered pursuant to subsection 11.6 and any
other document prepared in connection herewith or therewith, and the
consummation and administration of the transactions contemplated hereby and
thereby, including, without limitation, the reasonable fees and disbursements of
counsel to the Managing Facility Agent and such Administrative Agent, (b) to pay
or reimburse each Purchaser, the Managing Facility Agent and each Administrative
Agent for all its respective costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Agreement, the other
Purchase Documents and any such other documents, including, without limitation,
reasonable fees and disbursements of counsel to the Managing Facility Agent,
such Administrative Agent and to the several Purchasers (including, but not
limited to, allocated costs of in-house counsel and costs incurred by counsel
with respect to the Foreign Receivables and the Affiliate Receivables), and (c)
to pay, indemnify, and hold each Purchaser, the Managing Facility Agent, each
Administrative Agent and each Co-Administrative Agent harmless from, any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other taxes, if any, which
may be payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, the other Purchase Documents
and any such other documents (all the foregoing, collectively, the "indemnified
                                                                    -----------
liabilities"), provided, that the Seller shall have no obligation hereunder to
-----------    --------
the Managing Facility Agent, either Administrative Agent or any Purchaser (each,
an "Indemnitee") with respect to indemnified liabilities arising from (i) the
    ----------
gross negligence or willful misconduct of such Indemnitee, (ii) legal
proceedings commenced against such Indemnitee by any security holder or creditor
thereof arising out of and based upon rights afforded any such security holder
or creditor solely in its capacity as such, or (iii) legal proceedings commenced
against such Indemnitee by any other Purchaser or by any Transferee. The
agreements in this subsection shall survive the completion of the Amortization
Period.

                  11.6    Successors and Assigns; Participations; Purchasing
                          --------------------------------------------------
Parties.
-------

                  (a)     This Agreement shall be binding upon and inure to the
benefit of the Seller, the Purchasers, the Co-Administrative Agents, the
Managing Facility Agent, the Administrative Agent and their respective
successors and assigns, except that (i) the Seller may not assign or transfer
any of its rights or obligations under this Agreement without the prior written
consent of the Managing Facility Agent, the Administrative Agent and each
Purchaser and (ii) certain governmental authorities in foreign jurisdictions may
require the completion of certain

<PAGE>

                                                                            122

procedures in order for any such assignment to be effective with respect to the
Foreign Receivables and the Affiliate Receivables.

                  (b)     Any Purchaser may, in the ordinary course of its
commercial banking business and in accordance with applicable law, at any time
sell to one or more banks or other entities ("Participants") participating
                                              ------------
interests in such Purchaser's Outstanding Purchase Price, the Commitment of such
Purchaser or any other interest of such Purchaser hereunder and under the other
Purchase Documents. In the event of any such sale by a Purchaser of
participating interests to a Participant, such Purchaser's obligations under
this Agreement to the other parties to this Agreement shall remain unchanged,
such Purchaser shall remain solely responsible for the performance thereof, such
Purchaser shall be the "Purchaser" for all purposes under this Agreement and the
other Purchase Documents, and the Seller and the Managing Facility Agent shall
continue to deal solely and directly with such Purchaser in connection with such
Purchaser's rights and obligations under this Agreement and the other Purchase
Documents. The Seller agrees that, upon the occurrence and continuance of a
Rating Event and an Amortization Event of the type described in subsection
8.1(a), (b), (i) or (j), each Participant shall be deemed to have the right of
setoff in respect of its participating interest in amounts owing under this
Agreement to the same extent as if the amount of its participating interest were
owing directly to it as a Purchaser under this Agreement; provided that such
                                                          --------
Participant shall only be entitled to such right of setoff pursuant to this
sentence if it shall have agreed in the agreement pursuant to which it shall
have acquired its participating interest to share with the Purchasers the
proceeds thereof as provided in subsection 11.7. The Seller also agrees that
each Participant shall be entitled to the benefits of subsections 2.22, 2.23 and
2.24 and 11.5 with respect to its participation in the Commitments and the
Outstanding Purchase Price; provided that no Participant shall be entitled to
                            --------
receive any greater amount pursuant to such subsections than the transferor
Purchaser would have been entitled to receive in respect of the amount of the
participation transferred by such transferor Purchaser to such Participant had
no such transfer occurred. Promptly after the sale of any such participation,
the selling Purchaser shall give the Managing Facility Agent, Servicer and
Seller notice of the amount sold and the identity of the Participant.

                  (c)     Any Purchaser may, in the ordinary course of its
commercial banking business and in accordance with applicable law, at any time
sell to any Purchaser or any affiliate thereof and, with the consent of the
Seller and the Managing Facility Agent (which in each case shall not be
unreasonably withheld), to one or more additional financial institutions (each,
a "Purchasing Party") all or any part of such Purchaser's Outstanding Purchase
   ----------------
Price, the Commitment of such Purchaser or any other interest of such Purchaser
hereunder and under the other Purchase Documents; provided that such assignment
                                                  --------
shall be in a minimum amount of $1,000,000 unless such assignment is to a
financial institution not then a party to this Agreement, in which case such
assignment shall be in a minimum amount of $10,000,000. Each such assignment
shall be made pursuant to a Commitment Transfer Supplement executed by such
Purchasing Party, such Transferor Purchaser and, in the case of a Purchasing
Party that is not then a Purchaser or an Affiliate thereof, by the Seller and
the Managing Facility Agent, and delivered to the Managing Facility Agent for
its acceptance and recording in the Register. Any SPC may, without obtaining
any consent hereunder, assign all or a portion of its interests in any Purchased
Receivable under this Agreement to its SPC Bank, its Liquidity Bank or another
SPC

<PAGE>

                                                                            123

managed by the same SPC Bank as such SPC or any other SPC Bank hereunder. Each
such assignment shall be made pursuant to written notice (a "Transfer Notice")
                                                             ---------------
delivered to the Managing Facility Agent for recording in the Register. Upon
the execution, delivery, acceptance (if required) and recording of any Transfer
Notice or Commitment Transfer Supplement, as the case may be, from and after the
Transfer Effective Date determined pursuant to such Commitment Transfer
Supplement (or after the effective date set forth in the Transfer Notice), (x)
the Purchasing Party thereunder shall be a party hereto and, to the extent
provided in such Commitment Transfer Supplement (or such Transfer Notice, as the
case may be), have the rights and obligations of a Purchaser hereunder with a
Commitment as set forth therein, and (y) the transferor Purchaser thereunder
shall, to the extent provided in such Commitment Transfer Supplement (or such
Transfer Notice, as the case may be), be released from its obligations under
this Agreement (and, in the case of a Commitment Transfer Supplement, or
Transfer Notice, as the case may be, covering all or the remaining portion of a
transferor Purchaser's rights and obligations under this Agreement, such
transferor Purchaser shall cease to be a party hereto). Such Commitment Transfer
Supplement (or such Transfer Notice, as the case may be) shall be deemed to
amend this Agreement to the extent, and only to the extent, necessary to reflect
the addition of such Purchasing Party and the resulting adjustment of Commitment
Percentages or Available Commitment Percentages arising from the purchase by
such Purchasing Party of all or a portion of the rights and obligations of such
transferor Purchaser under this Agreement.

                  (d)     The Managing Facility Agent shall maintain at its
address referred to in subsection 11.2 a copy of each Commitment Transfer
Supplement and each Transfer Notice delivered to it and a register (the
"Register") for the recordation of the names and addresses of the Purchasers and
 --------
the Commitment of, and proportionate share of the Outstanding Purchase Price
from time to time payable to, each Purchaser from time to time. The entries in
the Register shall be conclusive, in the absence of manifest error, and the
Seller, the Managing Facility Agent and the Purchasers may treat each Person
whose name is recorded in the Register as the holder of the Commitment recorded
therein for all purposes of this Agreement. The Register shall be available for
inspection by the Seller, the Servicer or any Purchaser at any reasonable time
and from time to time upon reasonable prior notice to the Managing Facility
Agent.

                  (e)     Upon its receipt of a Commitment Transfer Supplement
or a Transfer Notice executed by a transferor Purchaser and Purchasing Party
(and, in the case of a Purchasing Party that is not then a Purchaser or an
Affiliate thereof, by the Seller and the Managing Facility Agent) and, except in
the case of a transfer from an SPC to its Liquidity Bank, payment by the
transferor Purchaser or the Purchasing Party of a servicing fee of $3,500 to the
Managing Facility Agent, the Managing Facility Agent shall (i) promptly accept
such Commitment Transfer Supplement or Transfer Notice, as the case may be, and
(ii) on the Transfer Effective Date determined pursuant thereto record the
information contained therein in the Register and give notice of such acceptance
and recordation to the Seller, such transferor Purchaser and such Purchasing
Party.

                  (f)     The Seller authorizes each Purchaser to disclose to
any Participant or Purchasing Party (each, a "Transferee") and any prospective
                                              ----------
Transferee any and all financial information in such Purchaser's possession
concerning the Seller and its Affiliates which has been delivered to such
Purchaser by or on behalf of the Seller pursuant to this Agreement or which has
been delivered to such Purchaser by or on behalf of the Seller in connection
with such

<PAGE>

                                                                            124

Purchaser's credit evaluation of the Seller and its Affiliates prior to becoming
a party to this Agreement; provided that such Transferee or such prospective
                           --------
Transferee shall have agreed in writing to be bound by the same confidentiality
provisions as a Purchaser with respect to all information delivered hereunder.

                  (g)     If, pursuant to this subsection, any interest in this
Agreement is transferred to any Transferee which is organized under the laws of
any jurisdiction other than the United States or any state thereof, the
transferor Purchaser shall cause such Transferee, concurrently with the
effectiveness of such transfer, (i) to represent to the transferor Purchaser
(for the benefit of the transferor Purchaser, the Managing Facility Agent,
Raytheon, RAC, the Servicer and the Seller) that under applicable law and
treaties no taxes will be required to be withheld by the Managing Facility
Agent, the Seller, Raytheon, RAC, the Servicer or the transferor Purchaser with
respect to any payments to be made to such Transferee in respect of the
Outstanding Purchase Price, (ii) to furnish to the transferor Purchaser (and, in
the case of any Purchasing Party registered in the Register, the Managing
Facility Agent and the Seller) (A) either U.S. Internal Revenue Service Form
W-8BEN or U.S. Internal Revenue Service Form W-8ECI (wherein such Transferee
claims entitlement to complete exemption from U.S. federal withholding tax on
all interest payments hereunder) and (B) an Internal Revenue Service Form W-8 or
W-9 and (iii) to agree (for the benefit of the transferor Purchaser, the
Managing Facility Agent, Raytheon, RAC and the Seller) to provide the transferor
Purchaser (and, in the case of any Purchasing Party registered in the Register,
the Managing Facility Agent and the Seller) a new Form W-8BEN or Form W-8ECI, or
Form W-8 or W-9, if applicable, upon the expiration or obsolescence of any
previously delivered form and comparable statements in accordance with
applicable U.S. laws and regulations and amendments duly executed and completed
by such Transferee, and to comply from time to time with all applicable U.S.
laws and regulations with regard to such withholding tax exemption.

                  (h)     Nothing herein shall prohibit any Purchaser from
pledging or assigning its interests hereunder to any Federal Reserve Bank in
accordance with applicable law or prohibit any SPC from pledging or assigning
its interests hereunder to its SPC Bank.

                  11.7    Adjustments; Set-off.
                          --------------------

                  (a)     If any Purchaser (a "Benefitted Purchaser") shall at
                                               --------------------
any time receive any payment of all or part of its Outstanding Purchase Price,
or interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings of
the nature referred to in subsection 8.1(j) or pursuant to the Guarantee, the
Repurchase Agreement or otherwise), in a greater proportion than any such
payment to or collateral received by any other Purchaser, if any, in respect of
such other Purchaser's Outstanding Purchase Price, or interest payable thereon,
such Benefitted Purchaser shall purchase for cash from the other Purchasers such
portion of each such other Purchaser's Outstanding Purchase Price, or shall
provide such other Purchasers with the benefits of any such collateral, or the
proceeds thereof, as shall be necessary to cause such Benefitted Purchaser to
share the excess payment or benefits of such collateral or proceeds ratably with
each of the Purchasers; provided, however, that if all or any portion of such
                        --------  -------
excess payment or benefits is thereafter recovered from such Benefitted
Purchaser, such purchase shall be rescinded, and the Purchase Price and benefits
returned, to the extent of such recovery, but without interest. The Seller
agrees that each Purchaser so purchasing a portion of another Purchaser's
Outstanding

<PAGE>

                                                                            125

Purchase Price may exercise all rights of payment (including, without
limitation, rights of set-off) with respect to such portion as fully as if such
Purchaser were the direct holder of such portion.

                  (b)     In addition to any rights and remedies of the
Purchasers provided by law, each Purchaser shall have the right, without prior
notice to the Seller, any such notice being expressly waived by the Seller to
the extent permitted by applicable law, upon the occurrence and continuance of a
Rating Event or an Amortization Event of the type described in subsection
8.1(a), (b), (i) or (j), to set-off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Purchaser or any branch
or agency thereof to or for the credit or the account of the Seller. Each
Purchaser agrees promptly to notify the Seller and the Managing Facility Agent
after any such set-off and application made by such Purchaser, provided that the
                                                               --------
failure to give such notice shall not affect the validity of such set-off and
application.

                  11.8    Responsibilities of the Seller. Anything herein to
                          ------------------------------
the contrary notwithstanding:

                  (a)     the Seller shall perform all of its obligations under
         Contracts related to the Purchased Receivables to the same extent as
         if such Purchased Receivables had not been sold hereunder and the
         exercise by either Administrative Agent or the Managing Facility Agent
         or any Purchaser of any of their rights hereunder shall not relieve
         the Seller from such obligations or its obligations with respect to
         such Purchased Receivables; and

                  (b)     neither Administrative Agent, nor the Managing
         Facility Agent nor any Purchaser shall have any obligation or
         liability with respect to any Purchased Receivables or the related
         Contracts or Financed Aircraft, nor shall any of them be obligated to
         perform any of the obligations of the Seller thereunder.

                  11.9    Optional Repurchase. If the Outstanding Purchase
                          -------------------
Price at any time during the Amortization Period is less than 10% of the maximum
Outstanding Purchase Price at any time during the Revolving Period, then on any
Settlement Date thereafter the Seller may, by 10 days prior irrevocable notice
to the Managing Facility Agent, repurchase the ownership interests in the
Purchased Receivables by payment to the Managing Facility Agent for the account
of the Purchasers of an amount equal to the sum of (i) the Outstanding Purchase
Price on such Settlement Date, (ii) interest accrued to such Settlement Date and
(iii) all other amounts payable to the Managing Facility Agent and the
Purchasers under this Agreement.

                  11.10   Reassignments. (a) The Purchasers (or a Dissenting
                          -------------
Purchaser, as the case may be) shall assign (subject to the Purchasers' right to
receive Net Recoveries in certain circumstances as described herein) to the
Seller all their (or its) ownership interests in any Purchased Receivable (or
portion thereof) sold hereunder (i) which has been repurchased pursuant to
subsection 2.8(b) or 2.13(c) (in the case of repurchases from a Dissenting
Purchaser) or subsection 2.7(b), 2.10A, 2.10, 2.11, 2.12, or 11.9 (in all other
cases) or for which an indemnity in an amount satisfactory to the Managing
Facility Agent and the Purchasers has been

<PAGE>

                                                                            126

paid pursuant to subsection 9.1(a)(vi) or 9.1(a)(xii) or (ii) when the Principal
Balance of any such Purchased Receivable has been reduced to zero. In connection
with reassignments pursuant to this subsection 11.10(a), the Managing Facility
Agent, the Administrative Agent and the Purchasers shall promptly execute and
deliver to the Seller, at the Seller's expense, such documents and instruments
of reassignment as the Seller may reasonably request.

                  (b)     With respect to any Contract for which all amounts
outstanding thereunder (including accrued interest) are paid prior to the Final
Payment Date of such Contract, and upon receipt by the Managing Facility Agent
of certification by the Servicer of such prepayment in full, the Administrative
Agent agrees to execute such documents and instruments (including releases of
security interests) for recording and filing with the FAA Registry which are
necessary to release the Lien on the related Financed Aircraft as a result of
such prepayment in full. In order to facilitate the business operations of the
Seller and the Servicer, the Administrative Agent may provide the Servicer with
a limited number of executed releases; provided that, the Servicer shall not
                                       --------
file any such release without the written consent of the Managing Facility
Agent; provided further that, the Servicer shall promptly return all such
       -------- -------
releases to the Managing Facility Agent upon the occurrence of an Amortization
Event or if the Managing Facility Agent shall so request. With respect to any
substitution of Lease Receivables made pursuant to subsection 2.13(e), the
Administrative Agent agrees to execute such documents and instruments (including
releases of security interests) for recording and filing with the FAA Registry
which are necessary (i) to release the Lien on the lease related to the Replaced
Lease Receivable so long as, prior to or concurrently with the recording and
filing with the FAA Registry of any such document or instrument of release, the
conditions contained in subsection 5.2(e) with respect to the lease and the
Financed Aircraft related to the Substituted Lease Receivable substituted for
such Replaced Lease Receivable have been satisfied and (ii) if amounts are
required to be paid pursuant to subsection 2.13(e) because the Outstanding
Balance of the Replaced Lease Receivable is greater than the Purchase Price of
the Substituted Lease Receivable at the time the substitution occurs have been
so paid, to release the Financed Aircraft related to such Replaced Lease
Receivable. Each Purchaser authorizes the Administrative Agent to execute such
documents and instruments in accordance with this subsection 11.10(b) and with
respect to Foreign Receivables and Affiliate Receivables, except for Uncertified
Foreign Receivables, to take whatever action is necessary to release any Liens
in accordance with the intent of this subsection 11.10(b).

                  (c)     In connection with any Receivable not purchased by
the Purchasers hereunder for which an FAA Assignment was filed with respect to
the related Financed Aircraft, the Administrative Agent agrees to promptly
execute such documents and instruments for recording and filing with the FAA
Registry which are necessary to reassign to the Seller the interests covered by
such FAA Assignment in such Financed Aircraft and to take whatever actions with
respect to any Foreign Receivable and any Affiliate Receivables are necessary to
effect a reassignment in the applicable foreign jurisdictions.

                  (d)     The Purchasers shall assign (subject to the
Purchasers' right to receive Net Recoveries in certain circumstances as
described herein) to Raytheon all of their ownership interests in any Receivable
(or portion thereof) purchased by Raytheon pursuant to paragraph 2(e) of the
Guarantee. In addition, the Purchasers shall assign (subject to the Purchasers'
right to receive Net Recoveries in certain circumstances as described herein) to
RAC all of their

<PAGE>

                                                                            127

ownership interests in any Receivable (or portion thereof) purchased by RAC
pursuant to Section 2 of the Repurchase Agreement. In connection with
reassignments pursuant to this subsection 11.10(d), the Managing Facility Agent,
the Administrative Agent and the Purchasers shall promptly execute and deliver
to Raytheon or RAC, as appropriate, such documents and instruments of
reassignment as Raytheon or RAC, as the case may be, may reasonably request.

                  (e)     All reassignments by the Managing Facility Agent, the
Administrative Agent and the Purchasers pursuant to this Section 11.10 shall be
made without any recourse, representation or warranty whatsoever.

                  11.11   Intention of the Parties; Lien on Intercompany
                          ----------------------------------------------
Purchase Agreement. (a) It is expressly intended that each purchase hereunder
------------------
be, and be construed as, an absolute sale of the Purchased Receivables by the
Seller to the Purchasers conveying good title thereto free and clear of any
Lien, and that the Purchased Receivables not be part of the estate of the Seller
in the event of bankruptcy or insolvency of the Seller. It is further expressly
intended that such conveyance not be deemed a pledge of the Purchased Receivable
by the Seller to the Purchasers or the Administrative Agent for the ratable
benefit of the Purchasers to secure a debt or other obligation of the Seller.
However, in the event that the Purchased Receivables are held to be the property
of the Seller, or if for any other reason this Agreement is held or deemed not
to effect an absolute sale of the Purchased Receivables, then (i) the parties
hereto intend that the extensions of credit from the Purchasers to the Seller
shall be a loan in a principal amount equal to the then Outstanding Purchase
Price with interest payable thereon pursuant to subsection 2.17, (ii) the
parties hereto intend that this Agreement constitute a security agreement and
(iii) the Seller hereby grants to the Administrative Agent for the ratable
benefit of the Purchasers, as collateral security for all of the obligations of
the Seller and Raytheon Credit hereunder, a first priority security interest in
all of the right, title and interest of the Seller whether now owned or
hereafter acquired, in and to:

                          (A)     all accounts, contract rights, general
                  intangibles, chattel paper, instruments, documents, proceeds
                  of a letter of credit and money consisting of, arising from,
                  constituting or relating to the Purchased Receivables
                  (including, without limitation, amounts from time to time on
                  deposit in the Cash Collateral Account or the Concentration
                  Account);

                          (B)     all of the Seller's rights in, under and to
                  the Contracts and its interest in the related Financed
                  Aircraft, including any security interests in such Financed
                  Aircraft, and the Applicable Leases;

                          (C)     all accounts, contract rights, general
                  intangibles, chattel paper, instruments, documents and money
                  and other rights arising from or by virtue of or constituting
                  the Collections; and

                          (D)     all proceeds of the collateral described in
                  the foregoing clauses A, B and C (clauses A through D,
                  collectively, the "Receivables Collateral").
                                     ----------------------

                  (b)     In connection with the transfer of the Receivables
Collateral as aforesaid (whether or not such transfer constitutes a sale or the
grant of a Lien) the Seller hereby grants to

<PAGE>

                                                                            128

the Administrative Agent for the ratable benefit of the Purchasers, as
collateral security for all of the obligations of the Seller and Raytheon Credit
hereunder, a first priority security interest in all of the right, title and
interest of the Seller, whether now owned or hereafter acquired, in and to the
Intercompany Purchase Agreement, including, without limitation, the obligation
of Raytheon Credit to make repurchases thereunder (together with the Receivables
Collateral, the "Collateral").
                 ----------

                  (c)     In connection herewith, if this Agreement is held or
deemed not to effect on absolute sale of the Purchased Receivables to the
Purchasers, the Managing Facility Agent and each Purchaser shall have all the
rights and remedies of a secured party and a creditor under the UCC and all
other applicable laws in each relevant jurisdiction. Without limiting the
generality of the foregoing, upon the occurrence and during the continuance of a
Trigger Amortization Event, if this Agreement is held or deemed not to effect an
absolute sale of the Purchased Receivables to the Purchasers, with the consent
of the Required Purchasers the Managing Facility Agent may, or at the direction
of the Required Purchasers, the Managing Facility Agent shall, by notice to the
Seller, declare the Outstanding Purchase Price to be immediately due and
payable, whereupon such amount shall become immediately due and payable and, at
such time or at any time after such declaration, the Administrative Agent,
without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon the Seller or any other Person (all and each of which
demands, defenses, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker's
board or office of the Administrative Agent or any Purchaser or elsewhere upon
such terms and conditions as it may deem advisable and at such prices as it may
deem best, for cash or on credit or for future delivery without assumption of
any credit risk. The Administrative Agent or any Purchaser shall have the right
upon any such public sale or sales, and, to the extent permitted by law, upon
any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in the Seller,
which right or equity is hereby waived or released. The Seller further agrees,
at the Administrative Agent's request, to assemble the Collateral and make it
available to the Administrative Agent at places which the Administrative Agent
shall reasonably select, whether at the Seller's premises or elsewhere. The
Administrative Agent shall apply the net proceeds of any such collection,
recovery, receipt, appropriation, realization or sale, after deducting all
reasonable costs and expenses of every kind incurred therein or incidental to
the care or safekeeping of any of the Collateral or in any way relating to the
Collateral or the rights of the Administrative Agent and the Purchasers
hereunder, including, without limitation, reasonable attorneys' fees and
disbursements, to the payment in whole or in part of the Obligations, in such
order as the Administrative Agent in its reasonable discretion may elect, and
only after such application and after the payment by the Administrative Agent of
any other amount required by any provision of law, including, without
limitation, Section 9-610 of the UCC in the relevant jurisdiction, need the
Administrative Agent account for the surplus, if any, to the Seller. To the
extent permitted by applicable law, the Seller waives all claims, damages and
demands it may acquire against the Administrative Agent or any Purchaser arising
out of the exercise by them of any rights hereunder. If any notice of a proposed
sale or other disposition of

<PAGE>

                                                                            129

Collateral shall be required by law, such notice shall be deemed reasonable and
proper if given at least 10 days before such sale or other disposition. The
Seller shall remain liable for any deficiency if the proceeds of any sale or
other disposition of the Collateral are insufficient to pay the Obligations and
the fees and disbursements of any attorneys employed by the Administrative Agent
or any Purchaser to collect such deficiency. The Seller authorizes the
Administrative Agent and the Purchasers, at any time and from time to time, to
execute, in connection with the sale provided for in this subsection 11.11(c),
any endorsements, assignments or other instruments of conveyance or transfer
with respect to the Collateral.

                  (d)     Each Administrative Agent's sole duty with respect to
the custody, safekeeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the UCC in the relevant jurisdiction or
otherwise, shall be to deal with it in the same manner as such Administrative
Agent deals with similar property for its own account. Neither the Managing
Facility Agent, either Administrative Agent, any Co-Administrative Agent, any
Purchaser nor any of their respective directors, officers, employees or agents
shall be liable for failure to demand, collect or realize upon all or any part
of the Collateral or for any delay in doing so or shall be under any obligation
to sell or otherwise dispose of any Collateral upon the request of the Seller or
otherwise. Nothing in this subsection 11.11 shall be construed to prejudice any
rights the Purchasers have as purchasers or owners of the Purchased Receivables.

                  (e)     The foregoing transfer, assignment, set-over and
conveyance does not constitute and is not intended to result in the creation or
an assumption by either Administrative Agent or any Purchaser of any obligation
of the Seller, the Servicer or any other Person in connection with the Purchased
Receivables or any agreement or instrument relating thereto, including, without
limitation, any obligation to any Obligors or insurers, or in connection with
the Intercompany Purchase Agreement.

                  11.12   Leases; Grant of Security Interest. (a) The Seller
                          ----------------------------------
agrees to perform and to cause each Affiliate Obligor to perform all its
respective obligations under (other than the payment by such Affiliate Obligor
of the rent payable under such Lease), and not to terminate or to permit
(voluntarily or involuntarily, whether during a bankruptcy case involving the
Seller or such Affiliate Obligor or otherwise) the termination of, any
Applicable Lease or any lease related to a Lease Receivable (other than in
connection with substitutions of Lease Receivables in accordance with subsection
2.13(e)) or the lease by an Obligor on an ExIm Bank Receivable (such leases,
collectively, the "Security Interest Leases") sold or substituted hereunder;
                   ------------------------
provided that (i) if a Substituted Lease Receivable which is substituted on any
--------
day other than a Settlement Date in accordance with subsection 2.13(e) has a
Purchase Price less than the related Replaced Lease Receivable, the Seller
agrees to deposit into the Concentration Account on the Settlement Date
following such date of substitution (or, if a Remittance Event has occurred,
within two Business Days after such substitution) the difference between the
Outstanding Balance of such Replaced Lease Receivable and the Purchase Price of
such Substituted Lease Receivable and (ii) if such Security Interest Lease has
been declared to be in default, the Seller may terminate and may permit any
Affiliate Obligor to terminate, such Security Interest Lease if the Seller pays
on the date of termination to the Administrative Agent for the account of the
Purchasers an amount equal to the aggregate amount of rent payable for the
remaining term under such Lease (including any interest thereon on amounts past
due), up to the then Outstanding Balance of the related Receivable together with
interest on such Outstanding Balance at the rate set forth in such

<PAGE>

                                                                            130

Lease Receivable or Applicable Lease related to such Affiliate Receivable for
the period from the last date of payment on such Receivable (all of the
foregoing, including any damages resulting from a breach of the foregoing,
collectively, the "Lease Obligations"). As collateral security for (i) the
                   -----------------
prompt and complete payment and performance of the Lease Obligations and (ii)
the agreement of the Seller not to reject or permit an Affiliate Obligor to
reject pursuant to 11 U.S.C. ss.365 any Lease after the occurrence of a
bankruptcy case involving the Seller or such Affiliate Obligor (and all other
Obligations under this Agreement) the Seller does hereby grant, bargain, sell,
assign, transfer, convey, mortgage, pledge, grant a security interest in and
confirm unto the Administrative Agent for the ratable benefit of the Purchasers
the following:

                  (A)  each Financed Aircraft subject to a Security Interest
          Lease, the related Receivable of which is sold or substituted
          hereunder on the Closing Date or on any Settlement Date; and

                  (B)  all proceeds thereof (clauses A and B, collectively,
          the "Lease Collateral").
               ----------------

                  (b)  In connection with the foregoing grant, the
Administrative Agent and each Purchaser shall have all the rights and remedies
of a secured party and a creditor under the UCC and all other applicable laws in
each relevant jurisdiction. Without limiting the generality of the foregoing,
upon the occurrence and during the continuance of a Trigger Amortization Event,
the Administrative Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon the Seller or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances forthwith collect, receive, appropriate and
realize upon the Lease Collateral, or any part thereof, and/or may forthwith
sell, lease, assign, give option or options to purchase, or otherwise dispose of
and deliver the Lease Collateral or any part thereof (or contract to do any of
the foregoing), in one or more parcels at a public or private sale or sales, at
any exchange, broker's board or office of the Administrative Agent or any
Purchaser or elsewhere upon such terms and conditions as it may deem advisable
and at such prices as it may deem best, for cash or on credit or for future
delivery without assumption of any credit risk. The Administrative Agent or any
Purchaser shall have the right upon any such public sale or sales, and, to the
extent permitted by law, upon any such private sale or sales, to purchase the
whole or any part of the Lease Collateral so sold, free of any right or equity
of redemption in the Seller, which right or equity is hereby waived or released.
The Seller further agrees, at the Administrative Agent's request, to assemble
the Lease Collateral, to the extent available to the Seller under applicable
law, and make it available to the Administrative Agent at places which the
Administrative Agent shall reasonably select, whether at the Seller's premises
or elsewhere. The Administrative Agent shall apply the net proceeds of any such
collection, recovery, receipt, appropriation, realization or sale, after
deducting all reasonable costs and expenses of every kind incurred therein or
incidental to the care or safekeeping of any of the Lease Collateral or in any
way relating to the Lease Collateral or the rights of the Administrative Agent
and the Purchasers hereunder, including, without limitation, reasonable
attorneys' fees and disbursements, to the payment in whole or in part of the
Lease Obligations, in such order as the Administrative Agent in its reasonable
discretion may elect, and only after such application and after the payment by
the Administrative Agent of any other amount required by any provision of law,
including, without limitation, Section 9-610 of the

<PAGE>

                                                                            131

UCC in the relevant jurisdiction, need the Administrative Agent account for the
surplus, if any, to the Seller. To the extent permitted by applicable law, the
Seller waives all claims, damages and demands it may acquire against the
Administrative Agent or any Purchaser arising out of the exercise by them of any
rights hereunder. If any notice of a proposed sale or other disposition of Lease
Collateral shall be required by law, such notice shall be deemed reasonable and
proper if given at least 10 days before such sale or other disposition. The
Seller shall remain liable for any deficiency if the proceeds of any sale or
other disposition of the Lease Collateral are insufficient to pay the Lease
Obligations and the fees and disbursements of any attorneys employed by the
Administrative Agent or any Purchaser to collect such deficiency. The Seller
authorizes the Administrative Agent and the Purchasers, at any time and from
time to time, to execute, in connection with the sale provided for in this
subsection 11.12(b), any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Lease Collateral.

                  (c)  Each Administrative Agent's sole duty with respect to the
custody, safekeeping and physical preservation of the Lease Collateral in its
possession, under Section 9-207 of the UCC in the relevant jurisdiction or
otherwise, shall be to deal with it in the same manner as such Administrative
Agent deals with similar property for its own account. Neither the Managing
Facility Agent, any Administrative Agent, any Co-Administrative Agent or any
Purchaser nor any of their respective directors, officers, employees or agents
shall be liable for failure to demand, collect or realize upon all or any part
of the Lease Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Lease Collateral upon the request
of the Seller or otherwise.

                  11.13 Power of Attorney. (a) The Seller hereby irrevocably
                        -----------------
constitutes and appoints the Managing Facility Agent and any officer or agent
thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of the Seller and in the name of the Seller or in its own name, from time
to time after the occurrence and during the continuance of a Specified
Amortization Event or in connection with any action taken pursuant to subsection
11.11(c) or subsection 11.12(b) in the Managing Facility Agent's discretion, for
the purpose of carrying out the terms of this Agreement and obtaining the
benefit of the Purchased Receivables, the Collections with respect thereto and
the related Contracts and Financed Aircraft, to take any and all appropriate
action and to execute any and all documents and instruments which may be
necessary to perform the duties and obligations of the Seller or the Servicer
under this Agreement or desirable to accomplish the purposes of this Agreement,
including the power and right, on behalf of the Seller, without notice to or
assent by the Seller, to do the following after the occurrence and during the
continuance of a Specified Amortization Event or in connection with any action
taken pursuant to subsection 11.11(c) or subsection 11.12(b):

                       (i)     in the name of the Seller or its own name, or
                  otherwise, to take possession of and endorse and collect any
                  checks, drafts, notes, acceptances or other instruments for
                  the payment of moneys due under any Purchased Receivable or on
                  account of Collections with respect thereto or the related
                  Contract or Financed Aircraft (collectively, the "Transferred
                                                                    -----------
                  Property") and to file any claim or to take any other action
                  --------
                  or proceeding in any court of law or equity or otherwise
                  deemed appropriate by the Managing Facility Agent for the
                  purpose of

<PAGE>

                                                                            132

                  collecting any and all such moneys due under any Purchased
                  Receivable or with respect to any other Transferred Property
                  whenever payable;

                       (ii)    to pay or discharge taxes and Liens levied or
                  placed on or threatened against any of the Transferred
                  Property, to effect any repairs or any insurance called for by
                  the terms of this Agreement and to pay all or any part of the
                  premiums therefor and the costs thereof; and

                       (iii)   to file financing or continuation statements
                  under the UCC, or with respect to Foreign Receivables and
                  Affiliate Receivables, excluding Uncertified Foreign
                  Receivables, under the appropriate foreign statute, in any
                  relevant jurisdiction covering the interests of the
                  Administrative Agent, the Managing Facility Agent and the
                  Purchasers in the Transferred Property; and

                       (iv)    (A) to commence and prosecute any suits, actions
                  or proceedings at law or in equity in any court of competent
                  jurisdiction to collect any of the Transferred Property or any
                  thereof and to enforce any other right in respect of any
                  Transferred Property; (B) to defend any suit, action or
                  proceeding brought against the Seller with respect to any
                  Transferred Property; and (C) to settle, compromise or adjust
                  any suit, action or proceeding described in clause (B) above
                  and, in connection therewith, to give such discharges or
                  releases as the Managing Facility Agent may deem appropriate.

                  (b)  The Seller hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. This power of attorney is a
power coupled with an interest and shall be irrevocable.

                  11.14 Counterparts. This Agreement may be executed by one or
                        ------------
more of the parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Seller and the Managing Facility Agent.

                  11.15 Severability; Headings. Any provision of this Agreement
                        ----------------------
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. The section and
subsection headings used in this Agreement are for convenience of reference only
and are not to affect the construction hereof or to be taken into consideration
in the interpretation hereof.

                  11.16 Integration. This Agreement represents the agreement of
                        -----------
the Seller, the Servicer, the Managing Facility Agent, each Administrative
Agent, the Co-Administrative Agents and the Purchasers with respect to the
subject matter hereof, and there are no promises, undertakings, representations
or warranties by the Managing Facility Agent, either Administrative Agent, the
Co-Administrative Agents or any Purchaser relative to subject matter hereof not
expressly set forth or referred to herein.

<PAGE>

                                                                            133

                  11.17 GOVERNING LAW. THIS AGREEMENT, THE ASSIGNMENTS AND THE
                        -------------
RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.

                  11.18 Submission To Jurisdiction; Waivers. Each of the Seller
                        -----------------------------------
and the Servicer hereby irrevocably and unconditionally:

                  (a)  submits for itself and its property in any legal action
          or proceeding relating to this Agreement and the Assignments, or for
          recognition and enforcement of any judgement in respect thereof, to
          the non-exclusive general jurisdiction of the courts of the State of
          New York, the courts of the United States of America for the Southern
          District of New York, and appellate courts from any thereof;

                  (b)  consents that any such action or proceeding may be
          brought in such courts and waives any objection that it may now or
          thereafter have to the venue of any such action or proceeding in any
          such court or that such action or proceeding was brought in an
          inconvenient court and agrees not to plead or claim the same;

                  (c)  agrees that service of process in any such action or
          proceeding may be effected by mailing a copy thereof by registered or
          certified mail (or any substantially similar form of mail), postage
          prepaid, to such Person at its address set forth in subsection 11.2 or
          at such other address of which the Managing Facility Agent shall have
          been notified pursuant thereto;

                  (d)  agrees that nothing herein shall affect the right to
          effect service of process in any other manner permitted by law or
          shall limit the right to sue in any other jurisdiction; and

                  (e)  waives, to the maximum extent not prohibited by law, any
          right it may have to claim or recover in any legal action or
          proceeding referred to in this subsection any special, exemplary,
          punitive or consequential damages.

                  11.19 Acknowledgements.  (a)  The Seller hereby acknowledges
                        ----------------
with respect to the transactions contemplated by the Purchase Documents that:

                       (i)     it has been advised by counsel in the
                  negotiation, execution and delivery of this Agreement and the
                  other Purchase Documents;

                       (ii)    neither the Managing Facility Agent, either
                  Administrative Agent, any Co-Administrative Agent nor any
                  Purchaser has any fiduciary relationship to the Seller; and

                       (iii)   no joint venture exists among the Purchasers or
                  among the Seller and the Purchasers or among the Guarantor,
                  RAC, the Servicer, the Seller and the Purchasers.

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                                                                            134

                  (b) By execution of this Agreement, each Purchaser
acknowledges and agrees to be bound by the provisions of paragraph 18 of the
Guarantee and paragraph 18 of the Repurchase Agreement.

                  11.20 WAIVERS OF JURY TRIAL. THE SELLER, THE SERVICER, THE
                        ---------------------
MANAGING FACILITY AGENT, EACH ADMINISTRATIVE AGENT, EACH CO-ADMINISTRATIVE AGENT
AND EACH PURCHASER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER PURCHASE
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

                  11.21 Bankruptcy Petition. (a) Each of the Seller, the
                        -------------------
Servicer, the Managing Facility Agent, each Administrative Agent, each
Co-Administrative Agent and each Purchaser hereby covenants and agrees that,
prior to the date which is one year and one day after the payment in full of all
outstanding senior indebtedness of any SPC, it will not institute against, or
join any other Person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceeding under the laws of the United States or any state of the
United States.

                  (b)  Each of the Servicer, the Managing Facility Agent, each
Administrative Agent, each Co-Administrative Agent and each Purchaser hereby
covenants and agrees that, prior to the date that is one year and one day after
the payment in full of the Outstanding Purchase Price and all amounts owing with
respect thereto and hereunder, it will not institute against the Seller, or join
any other Person in instituting against the Seller, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceedings under the laws of the United States or any state of the
United States.

                  11.22 Confidentiality. Each of the Managing Facility Agent,
                        ---------------
the Co-Administrative Agent and the Purchasers agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates' directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this Agreement,
(e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or the enforcement of rights
hereunder, (f) subject to an agreement containing provisions substantially the
same as those of this subsection, to any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement, (g) with the consent of the Seller or (h) to the extent
such Information (i) becomes publicly available other than as a result of a
breach of this subsection by such Person or (ii) becomes available to the
Managing Facility Agent, any Co-Administrative Agent or any Purchaser on a
nonconfidential basis from a source other than Raytheon, RAC, Raytheon Credit or
the Seller. For the purposes of this Section, "Information" means all
                                               -----------
information received from Raytheon, RAC, Raytheon Credit or the Seller relating
to Raytheon, RAC, Raytheon Credit or the Seller or their business, other than
any such information that is available to the Managing Facility Agent, any
Co-Administrative or any Purchaser on a

<PAGE>

                                                                            135

nonconfidential basis prior to disclosure by Raytheon, RAC, Raytheon Credit or
the Seller; provided that, in the case of information received from the
            --------
Raytheon, RAC, Raytheon Credit or the Seller after the date hereof, such
information is clearly identified at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in
this subsection shall be considered to have complied with its obligation to do
so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information. The Seller and the Servicer hereby consent to the
disclosure of any non-public information with respect to either of them as
related to this transaction and the assets sold hereunder by any SPC to any
rating agency, commercial paper dealer, or provider of a surety, guaranty or
credit or liquidity enhancement to that SPC.

                  11.23 Claims Against SPCs. The obligations of each SPC under
                        -------------------
this Agreement and the other Purchase Documents are solely its corporate
obligations. No recourse shall be had for the payment of any amount owing by any
SPC under this Agreement or the other Purchase Documents or for the payment by
any SPC of any fee in respect of this Agreement or the other Purchase Documents
or any other obligations or claim of or against any SPC arising out of or based
upon this Agreement or the other Purchase Documents, against any of the SPC's
employees, officers, directors, incorporators or stockholders. It is further
agreed that each SPC shall be liable for any claims against such SPC in
connection with this Agreement and other Purchase Documents only to the extent
that such SPC has, on any date of determination, excess funds not required to
pay or provide for the payment of all commercial paper notes that such SPC has
outstanding. Any and all claims against any SPC in connection with this
Agreement and the other Purchase Documents shall be subordinate to the claims of
the holders of commercial paper notes issued by such SPC.

                  11.24 Resales. (a) The Administrative Agent is authorized to
                        -------
sell from time to time Purchased Receivables or 100% participations therein (the
"Resold Receivables") to either (i) a third party buyer (each, a "Third Party
 ------------------                                               -----------
Buyer") or (ii) the Seller for ultimate sale to a Third Party Buyer (each, a
-----
"Resale"); provided that:
 ------    --------

                  (x)  with respect to Resales made of the Receivables set forth
on Schedule IV (the "Specified Resales"), the proceeds of such Specified Resales
                     -----------------
shall reduce the aggregate Commitment of the Purchasers in accordance with
Section 2.9(b); and

                  (y)  with respect to Resales which are not Specified Resales,
the aggregate Principal Balance of Purchased Receivables so resold shall not
exceed $400,000,000.

The Principal Balance of a Resold Receivable will be determined at the time of
the applicable Resale.

                  (b)  The sale of any Resold Receivable by the Administrative
Agent is conditioned upon receipt by the Managing Facility Agent, prior to or
contemporaneously with such sale or on the next Settlement Date immediately
following such sale, as the case may be, of a purchase price in immediately
available funds (the "Resale Purchase Price") from the Third Party Buyer and/or
                      ---------------------
the Seller equal to the Outstanding Balance of such Resold Receivable. On each
Settlement Date, the Seller shall deposit into the Collection Account the
aggregate Resale Purchase Price of Receivables resold during the preceding
Settlement Period pursuant to clauses

<PAGE>

                                                                            136

(x) and (y) of Section 11.24(a), together with all amounts owing on the related
Outstanding Purchase Price on such Settlement Date, provided that if a
                                                    --------
Remittance Event shall occur and be continuing, the Resale Purchase Price of any
Resold Receivable shall be deposited into the Collection Account prior to or
contemporaneously with such sale and any amounts due to be deposited into the
Collection Account on the next Settlement Date on account of previously
consummated Resales shall be immediately deposited into the Collection Account.
Each Purchaser's Outstanding Purchase Price will only be reduced as a result of
Resales in accordance with the preceding sentence.

                  (c)  In connection with the Resales, the Administrative Agent
is authorized to execute, either directly or through a power of attorney
provided to a representative of the Seller or the Servicer, all documentation
requested by the Seller in order to transfer ownership of the Resold
Receivables, together with any interest held by the Administrative Agent in
collateral securing the Resold Receivables, to either the Third Party Buyer or
the Seller.

                  (d)  Any Resale, and any documentation executed in connection
with a Resale, shall be made without any representations or warranties from the
Purchasers, except for any representations or warranties from the Administrative
Agent made in such capacity as are agreed upon with the Seller and the
Servicer.

                  11.25 Repurchase of Delinquent Receivables. On any Settlement
                        ------------------------------------
Date, the Managing Facility Agent, at its discretion, may instruct the
Administrative Agent to sell, without any further consent or approval of any of
the Purchasers, any Delinquent Receivable for an amount not less than the
Outstanding Balance of such Delinquent Receivable on the last day of the
Settlement Period preceding such Settlement Date; provided that the Seller or,
                                                  --------
if the Seller elects not to repurchase such Delinquent Receivable, RAC, shall
have a right of first refusal to repurchase such Delinquent Receivable on such
Settlement Date by depositing into the Concentration Account cash in an amount
equal to the Outstanding Balance of such Delinquent Receivable. Any amounts
received by the Administrative Agent, or deposited into the Concentration
Account, in respect of Delinquent Receivables sold pursuant to this Subsection
11.25 shall be applied and distributed in accordance with Subsections 2.15 and
2.16.

                  11.26 Amendment to Repurchase Agreement. The Purchasers hereby
                        ---------------------------------
consent to the amendment and restatement of the Repurchase Agreement as set
forth in the Form of Second Amended and Restated Repurchase Agreement, attached
hereto as Exhibit G.

                                  (End of Page)

<PAGE>

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

                                   RAYTHEON AIRCRAFT RECEIVABLES CORPORATION,
                                   as Seller

                                   By:_________________________________________
                                      Name:
                                      Title:

                                   RAYTHEON AIRCRAFT CREDIT CORPORATION,
                                   as Servicer

                                   By:_________________________________________
                                      Name:
                                      Title:

                                   BANK OF AMERICA, N.A.
                                   as Managing Facility Agent,
                                   Co-Administrative Agent and Administrative
                                   Agent

                                   By:_________________________________________
                                      Name:
                                      Title:

                                   JPMORGAN CHASE BANK,
                                   as Co-Administrative Agent

                                   By:_________________________________________
                                      Name:
                                      Title:

<PAGE>

                                   J.P. MORGAN SECURITIES INC.,
                                   as Syndication Agent

                                   By:_________________________________________
                                      Name:
                                      Title:

                                   UBS AG, STAMFORD BRANCH,
                                   solely as Administrative Agent

                                   By:_________________________________________
                                      Name:
                                      Title:

                                   By:_________________________________________
                                      Name:
                                      Title: