Document:

EXHIBIT 4.20

                         AMBAC ASSURANCE CORPORATION,
                              as Policy Provider,

                           AMERICAN TRANS AIR, INC.

                                      and
                           WILMINGTON TRUST COMPANY,
       not in its individual capacity but solely as Subordination Agent

                       INSURANCE AND INDEMNITY AGREEMENT

                           AMERICAN TRANS AIR, INC.

                          PASS THROUGH CERTIFICATES,
                                SERIES 2000-1G

                         Dated as of February 15, 2000

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          (This Table of Contents is for convenience of reference only and
shall not be deemed to be part of this Agreement. All capitalized terms used
in this Agreement and not otherwise defined shall have the meanings set forth
in Article I of this Agreement.)

                               TABLE OF CONTENTS

                                                                           Page

                                   ARTICLE I

                                  DEFINITIONS

Section 1.01  Defined Terms...................................................2
Section 1.02  Other Definitional Provisions...................................6

                                  ARTICLE II

                   REPRESENTATIONS, WARRANTIES AND COVENANTS

Section 2.01  Representations and Warranties of ATA...........................6
Section 2.02  Covenants of ATA................................................9
Section 2.03  Covenants of WTC and Subordination Agent.......................11
Section 2.04  Representations, Warranties and Covenants
              of the Policy Provider.........................................11

                                  ARTICLE III

                  THE POLICY; REIMBURSEMENT; INDEMNIFICATION

Section 3.01  Issuance of the Policy.........................................13
Section 3.02  Payment of Fees and Premium....................................15
Section 3.03  Reimbursement Obligation.......................................15
Section 3.04  [Reserved.]....................................................16
Section 3.05  Procedure for Payment of Fees and Premiums.....................16

                                  ARTICLE IV

                              FURTHER AGREEMENTS

Section 4.01  Effective Date; Term of the Insurance Agreement.................16
Section 4.02  Further Assurances and Corrective Instruments...................17
Section 4.03  Obligations Absolute............................................17
Section 4.04  Assignments; Reinsurance; Third-Party Rights....................18
Section 4.05  Liability of the Policy Provider................................19

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                                   ARTICLE V

                                 MISCELLANEOUS

Section 5.01  Amendments, Etc................................................19
Section 5.02  Notices .......................................................19
Section 5.03  Severability...................................................20
Section 5.04  Governing Law..................................................21
Section 5.05  Consent to Jurisdiction........................................21
Section 5.06  Consent of the Policy Provider.................................21
Section 5.07  Counterparts...................................................22
Section 5.08  Headings.......................................................22
Section 5.09  Trial by Jury Waived...........................................22
Section 5.10  Limited Liability..............................................22
Section 5.11  Entire Agreement...............................................22

                                     -ii-

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          INSURANCE AND INDEMNITY AGREEMENT (as may be amended, modified or
supplemented from time to time, this "Insurance Agreement"), dated as of
February 15, 2000, by and among AMBAC ASSURANCE CORPORATION, as Policy
Provider, AMERICAN TRANS AIR, INC. ("ATA") and WILMINGTON TRUST COMPANY, not
in its individual capacity but solely as Subordination Agent (the
"Subordination Agent").

                             W I T N E S S E T H :

          WHEREAS, ATA intends to finance (or refinance) the acquisition of up
to seven Aircraft either (i) through separate leveraged lease Transactions in
which ATA will lease the Leased Aircraft or (ii) through separate secured loan
Transactions in which ATA will own the Owned Aircraft;

          WHEREAS, in the case of each Leased Aircraft, the Owner Trustee
acting on behalf of a corresponding Owner Participant, will issue pursuant to
an Indenture, on a non-recourse basis, two or more series of Equipment Notes
in order to finance (or refinance) a portion of its purchase price of such
Leased Aircraft;

          WHEREAS, in the case of each Owned Aircraft, ATA will issue pursuant
to an Indenture, on a recourse basis, two or more series of Equipment Notes to
finance a portion of the purchase price of such Owned Aircraft;

          WHEREAS, WTC, not in its individual capacity but as Trustee under
each of the Trust Agreements, will create the Trusts, which will acquire the
Equipment Notes under the Note Purchase Agreement;

          WHEREAS, (i) Citibank, N.A., as Liquidity Provider, has entered into
two Liquidity Facilities, one for the benefit of the Class G
Certificateholders and one for the benefit of the Class C Certificateholders,
with WTC, as the Trustee on behalf of each Trust, and (ii) WTC, as Trustee of
each Trust, the Liquidity Provider, the Policy Provider and the Subordination
Agent have entered into the Intercreditor Agreement;

          WHEREAS, pursuant to each Trust Agreement, a separate Trust has been
created to facilitate the sale of the Certificates;

          WHEREAS, the Policy Provider has issued the Policy in respect of the
Class G Certificates, pursuant to which it has agreed to guarantee the payment
of interest to the Subordination Agent for the benefit of the Class G Trustee
and Class G Certificateholders, and the payment of principal of the Class G
Certificates on the Final Distribution Date for the Class G Certificates and
as otherwise provided herein;

          WHEREAS, the Policy Provider shall be paid the Premium as set forth
herein; and

                                     S-1

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          WHEREAS, each of ATA and the Subordination Agent has agreed to
undertake certain obligations in consideration for the Policy Provider's
issuance of the Policy;

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

                                   ARTICLE I

                                  DEFINITIONS

          Section 1.01 Defined Terms. Unless the context clearly requires
otherwise, all capitalized terms used but not defined herein shall have the
respective meanings assigned to them in the Intercreditor Agreement or, if not
defined therein, in the Policy described below. For purposes of this Insurance
Agreement, the following terms shall have the following meanings:

          "Act" means Part A of subtitle VII of title 49, United States Code.

          "Aircraft" means any aircraft which is or will be part of the
Collateral.

          "Airframe" means any airframe which is or will be part of the
Collateral.

          "Bankruptcy Code" means the United States Bankruptcy Code, 11 U.S.C.
Section 101 et seq.

          "Citizen of the United States" is defined in Section 40102(a)(15) of
the Act and in the FAA Regulations.

          "Collateral" with respect to each Aircraft has the meaning given
such term in Annex A to the related Participation Agreement.

          "Delivery Date" means with respect to each Participation Agreement,
the "Closing Date" as defined or to be defined in each such
Participation Agreement.

          "Engine" means any engine which is or will be part of the
Collateral.

          "Exchange Offer Registration Statement" has the meaning given such
term in the Trust Agreement.

          "Expenses" means any and all liabilities, obligations, losses,
damages, settlements, penalties, claims, actions, suits, costs,
expenses and disbursements (including, without limitation, reasonable fees and
disbursements of legal counsel, accountants, appraisers, inspectors or other
professionals, and costs of investigation).

          "Event of Loss" means any Event of Loss defined or to be defined in
any Participation Agreement.

                                      -2-

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          "FAA" means the Federal Aviation Administration of the United States
of America --- or any Government Entity succeeding to the functions of the
Federal Aviation Administration.

          "FAA Filed Documents" with respect to each Aircraft has the meaning
given such term in Annex A to the related Participation
Agreement.

          "Final Dissolution Date" means, following the occurrence of a
Triggering Event, the Distribution Date next succeeding the date of receipt by
the Subordination Agent of the proceeds of the last Aircraft (or the related
Equipment Notes) then subject to the Lien of any Indenture.

          "Final Distribution Date" means the date which is the earlier of (i)
the Final Legal Distribution Date or (ii) the Final Dissolution Date.

          "Final Legal Distribution Date" means the Regular Distribution Date
in July 2017.

          "Financing Statements" means collectively, UCC-1 (and, where
appropriate, UCC-3) financing statements covering (A) in respect of each Owned
Aircraft, the related Collateral, executed by Owner, as debtor, showing
Mortgagee as secured party, for filing in Indiana and each other jurisdiction
in which such filing is made on or before the related Delivery Date and (B)
with respect to each Leased Aircraft (a) the related Collateral, executed by
the related Owner Trustee as debtor, showing Mortgagee as secured party, for
filing in the Trust Company Jurisdiction (as defined in Schedule 3 to the
related Participation Agreement) and each other jurisdiction that, in the
opinion of Mortgagee, is necessary to perfect its Lien on the related
Collateral and (b) the related Lease and the Aircraft, as a precautionary
matter, executed by Lessee, as lessee, showing Owner Trustee as lessor and
Mortgagee as assignee of Owner Trustee, for filing in Indiana.

          "GAAP" means generally accepted accounting principles as set forth
in the statements of financial accounting standards issued by the
Financial Accounting Standards Board of the American Institute of Certified
Public Accountants, as such principles may at any time or from time to time be
varied by any applicable financial accounting rules or regulations issued by
the SEC and, with respect to any Person, shall mean such principles applied on
a basis consistent with prior periods except as may be disclosed in such
Person's financial statements.

          "Government Entity" means (a) any federal, state, provincial or
similar government, and any body, board, department,commission, court,
tribunal, authority, agency or other instrumentality of any such government or
otherwise exercising any executive, legislative, judicial, administrative or
regulatory functions of such government or (b) any other government entity
having jurisdiction over any matter contemplated by the Operative Agreements
or relating to the observance or performance of the obligations of any of the
parties to the Operative Agreements.

          "Holder" has the meaning given such term in the Policy.

          "Initial Purchasers" means Salomon Smith Barney, Inc., Morgan
Stanley & Co. Incorporated, Chase Securities Inc., and Banc
One Capital Markets, Inc.

                                      -3-

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          "Insurance Agreement" has the meaning given such term in the initial
paragraph hereof.

          "Intercreditor Agreement" means the Intercreditor Agreement
(2000-1), dated as the date hereof by and among WTC, as Trustee under each of
the Class G Trust and the Class C Trust, the Liquidity Provider, the Policy
Provider and the Subordination Agent.

          "Investment Company Act" means the Investment Company Act of 1940,
including, unless the context otherwise requires, the rules and regulations
thereunder, as amended from time to time.

          "Lease Default" means, with respect to any Lease, any Event of
Default (as such term is defined in the Lease).

          "Lien" means any mortgage, pledge, lien, charge, encumbrance or
security interest affecting the title to or any interest in property.

          "Material Adverse Change" means, in respect of any Person as at any
date, a material adverse change in the ability of such Person to perform its
obligations under any of the Operative Agreements to which it is a party as of
such date, including any material adverse change in the business, financial
condition, results of operations or properties of such Person on a
consolidated basis with its subsidiaries which might have such effect.

          "Moody's" means Moody's Investors Service, Inc., and any successor
thereto.

          "Mortgagee" with respect to each Aircraft means WTC in its capacity
as Loan Trustee under the related Indentures.

          "Offering Document" means the Offering Memorandum dated February 8,
2000, any supplemental Offering Memorandum relating to the Class G
Certificates, the Exchange Offer Registration Statement and any amendment or
supplement to any of the foregoing.

          "Operative Agreements" (i) means this Insurance Agreement, the
Intercreditor Agreement, each Participation Agreement,the Note Purchase
Agreement, each Indenture, the Series G Equipment Notes, the Class G
Certificates, the Liquidity Facilities, the Class G Trust Agreement, the
Purchase Agreement, the Leases and the Policy Fee Letter, together with all
exhibits and schedules included with any of the foregoing.

          "Owner" means, with respect to a Leased Aircraft, the related Owner
Trustee, and with respect to an Owned Aircraft, ATA.

          "Person" means an individual, joint stock company, trust,
unincorporated association,  joint venture, corporation, business or
owner trust, partnership or other organization or entity (whether governmental
or private).

                                      -4-

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          "Policy" means the Certificate Guaranty Insurance Policy No.
AB0336BE, together with all endorsements thereto, issued by the Policy
Provider in favor of the Subordination Agent for the benefit of the Class G
Certificateholders.

          "Policy Fee Letter" means the fee letter, dated as of February 15,
2000 between the Policy Provider and ATA setting forth the
Premium and certain other amounts payable in respect of the Policy.

          "Policy Provider" means Ambac Assurance Corporation, or any
successor thereto, as issuer of the Policy.

          "Policy Provider Information" means the information set forth under
the caption  "Description of the Policy Provider"
in the Offering Document.

          "Pool Balance" means with respect to the Class G Trust or the Class
G Certificates, as of any date, (i) the original aggregate face amount of the
Class G Certificates less (ii) the aggregate amount of all payments made in
respect of the Class G Certificates or in respect of Class G Deposits other
than payments made in respect of interest or premium thereon or reimbursement
of any costs and expenses in connection therewith. The Pool Balance for the
Class G Trust or the Class G Certificates as of any Distribution Date shall be
computed after giving effect to any special distribution with respect to
unused Class G Deposits, payment of principal of the Equipment Notes or
payment with respect to other Trust Property (as such term is defined in each
Trust Agreement) held in such Trust and the distribution thereof to be made on
that date.

          "Premium" means the premium payable in respect of the Policy on the
Closing Date and on each Distribution Date thereafter in an amount equal to
1/4 of the product of (i) the Premium Percentage and (ii) with respect to the
payment to be made on the Closing Date, the Pool Balance of the Class G
Certificates on the Closing Date, or with respect to the payments to be made
on each Distribution Date, the Pool Balance of the Class G Certificates on
such Distribution Date after giving effect to any distributions to be made on
such Distribution Date; provided, however, the fee payable on the Closing Date
shall be pro rated from the Closing Date to the first Distribution Date (based
upon a 360 day year of twelve 30 day months).

          "Premium Percentage" shall have the meaning set forth in the Policy
Fee Letter.

          "Purchase Agreement" means the Purchase Agreement, dated February 8,
2000, among ATA, Amtran, Salomon Smith Barney, Inc., Morgan Stanley & Co.
Incorporated, Chase Securities Inc., and Banc One Capital Markets, Inc., with
respect to the Certificates, as may be amended, modified or supplemented from
time to time.

          "Registration Rights Agreement" has the meaning given such term in
the Purchase Agreement.

          "S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., and any successor thereto.

                                      -5-

<PAGE>

          "SEC" means the Securities and Exchange Commission of the United
States of America, or any successor thereto.

          "Section 1110" means 11 U.S.C.ss.1110 of the Bankruptcy Code or any
successor or analogous section of the federal bankruptcy law in
effect from time to time.

          "Securities Act" means the Securities Act of 1933, including, unless
the context otherwise requires, the rules and regulations thereunder, as
amended from time to time.

          "Security" means a "security" as defined in Section 2(1) of the
Securities Act.

          "Series G Equipment Notes" means the 8.039% Series G Equipment Notes
issued pursuant to any Indenture by the related Owner Trustee or ATA, as the
case may be, and authenticated by the Loan Trustee thereunder, and any
Equipment Notes issued in exchange therefor or replacement thereof pursuant to
the terms of such Indenture.

          "Transactions" means the Transactions contemplated by the Operative
Agreements, including the Transactions described in the Offering
Document.

          "UCC" means the Uniform Commercial Code as in effect in any
applicable jurisdiction.

          "U.S. Air Carrier" means any United States air carrier that is a
Citizen of the United States holding an air carrier operating certificate
issued by the Secretary of Transportation pursuant to the Act for aircraft
capable of carrying 10 or more individuals or 6000 pounds or more of cargo,
and as to which there is in force an air carrier operating certificate issued
pursuant to Part 121 of the FAA Regulations, or which may operate as an air
carrier by certification or otherwise under any successor or substitute
provisions therefor or in the absence thereof.

          "WTC" means Wilmington Trust Company, a Delaware banking
corporation.

          Section 1.02 Other Definitional Provisions. The words "hereof,"
"herein" and "hereunder" and words of similar import when used in this
Insurance Agreement shall refer to this Insurance Agreement as a whole and not
to any particular provision of this Insurance Agreement. Section, subsection,
Schedule and Exhibit references are to this Insurance Agreement unless
otherwise specified. The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms. The
words "include" and "including" shall be deemed to be followed by the phrase
"without limitation."

                                      -6-

<PAGE>

                                  ARTICLE II

                   REPRESENTATIONS, WARRANTIES AND COVENANTS

          Section 2.01 Representations and Warranties of ATA. ATA represents
and warrants as of the Closing Date and as of each Delivery Date as follows:

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

          (b) Corporate Authorization. ATA has taken, or caused to be taken,
all necessary corporate action (including, without limitation, the obtaining
of any consent or approval of stockholders required by its articles of
incorporation or by-laws) to authorize the execution and delivery of each of
the Operative Agreements to which it is a party as of such date, and the
performance of its obligations thereunder.

          (c) No Violation. The execution and delivery by ATA of the Operative
Agreements to which it is a party as of such date, the performance by ATA of
its obligations thereunder and the consummation by ATA of the Transactions
contemplated thereby, do not and will not (a) violate any provision of the
certificate of incorporation or by-laws of ATA, (b) violate any law,
regulation, rule or order applicable to or binding on ATA or (c) violate or
constitute any default under (other than any violation or default that would
not result in a Material Adverse Change to ATA), or result in the creation of
any Lien (other than as permitted under the related Lease or as created by the
related Indenture) upon the Aircraft under, any indenture, mortgage, chattel
mortgage, deed of trust, conditional sales contract, lease, loan or other
material agreement, instrument or document to which ATA is a party or by which
it or any of its properties is bound.

          (d) Approvals. The execution and delivery by ATA of the Operative
Agreements to which it is a party as of such date, the performance by ATA of
its obligations thereunder and the consummation by ATA of the Transactions
contemplated thereby do not and will not require the consent or approval of,
or the giving of notice to, or the registration with, or the recording or
filing of any documents with, or the taking of any other action in respect of,
(a) any trustee or other creditor of ATA and (b) any Government Entity, other
than the filing of (w) the FAA Filed Documents and the Financing Statements
(and continuation statements periodically), (x) filings, recordings, notices
or other ministerial actions pursuant to any routine recording, contractual or
regulatory requirements applicable to it, (y) filings, recordings, notices or
other actions contemplated by the Operative Agreements in connection with the
subleasing or reregistration of

                                      -7-

<PAGE>

the Aircraft and (z) filings, recordings, notices or other actions relating to
the Securities Act as contemplated by the Registration Rights Agreement.

          (e) Valid and Binding Agreements. The Operative Agreements executed
and delivered by ATA on or prior to such date have been duly executed and
delivered by ATA and, assuming the due authorization, execution and delivery
thereof by the other party or parties thereto, constitute the legal, valid and
binding obligations of ATA and are enforceable against ATA in accordance with
the respective terms thereof, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, receivership, moratorium and other
similar laws affecting the rights of creditors generally and general
principles of equity, whether considered in a proceeding at law or in equity
and subject to principles of public policy limiting the right to enforce the
indemnification provisions contained herein, insofar as such provisions relate
to indemnification for liabilities arising under federal securities laws.

          (f) Litigation. Except as set forth in the most recent Annual Report
on Form 10-K,as amended, of Amtran, Inc. ("Amtran"), the parent of ATA, filed by
Amtran with the SEC on or prior to the Closing Date or such Delivery Date, as
the case may be, or in any Quarterly Report on Form 10-Q or Current Report on
Form 8-K filed by Amtran with the SEC subsequent to such Form 10-K, no action,
claim or proceeding is now pending or, to the actual knowledge of ATA,
threatened, against ATA or Amtran, before any court, governmental body,
arbitration board, tribunal or administrative agency, which is reasonably
likely to be determined adversely to ATA or Amtran and if determined adversely
to ATA or Amtran is reasonably likely to result in a Material Adverse Change.

          (g) Financial Condition. The audited consolidated balance sheet of
Amtran with respect to Amtran's most recent fiscal year included in Amtran's
most recent Annual Report on Form 10-K, as amended, filed by Amtran with the
SEC, and the related consolidated statements of operations and cash flows for
the period then ended have been prepared in conformity with GAAP and present
fairly in all material respects the financial condition of Amtran and its
consolidated subsidiaries as of such date and the results of its operations
and cash flows for such period, and since the date of such balance sheet,
there has been no material adverse change in such financial condition or
operations of Amtran, except for matters disclosed in (a) the financial
statements referred to above or (b) any subsequent Quarterly Report on Form
10-Q or Current Report on Form 8-K filed by Amtran with the SEC on or prior to
the Closing Date or such Delivery Date, as the case may be.

          (h) Registration and Recordation. Except for (a) the registration of
the Aircraft with the FAA pursuant to the Act in the name of Owner Trustee in
respect of a Leased Aircraft and ATA in respect of an Owned Aircraft, (b) the
filing for recordation of the FAA Filed Documents, (c) the filing of the
Financing Statements (and continuation statements relating thereto at periodic
intervals), (d) the taking of possession and retention by Mortgagee of the
original counterparts of the related Lease with respect to the Leased
Aircraft, (e) the affixation of the nameplates referred to in Section 7.1.3 of
the Lease in respect of a Leased Aircraft, and Section 4.02(d) of the related
Indenture, with respect to Owned Aircraft, at the Delivery Date with respect
to each Aircraft, no further action, including any filing or recording of any
document (including any financing statement

                                      -8-

<PAGE>

in respect thereof under Article 9 of the UCC) is necessary in order to
establish and perfect (i) in respect of a Leased Aircraft, the right, title or
interest of Owner Trustee, and the Mortgagee's first priority perfected
security interest in such Aircraft and in the related Lease (subject only to
Permitted Liens as defined in Annex A to the related Participation Agreement),
and (ii) in respect of an Owned Aircraft, the Mortgagee's first priority
perfected security interest in such Aircraft (subject only to Permitted Liens
as defined in Annex A to the related Participation Agreement), as against ATA
and any other Person, in each case, in any applicable jurisdictions in the
United States.

          (i) Chief Executive Office. The chief executive office (as such term
is defined in Article 9 of the UCC) of ATA is located at 7337 West Washington
Street, Indianapolis, Indiana 46231.

          (j) No Default. On each Delivery Date, no event exists that in
respect of a Leased Aircraft delivered on such date constitutes a Lease
Default (as defined in the Lease for such Aircraft), and no event exists that
in respect of an Owned Aircraft delivered on such date would constitute an
Event of Default (as defined in the Indenture for such Aircraft).

          (k) No Event of Loss. With respect to each Delivery Date, no Event
of Loss has occurred with respect to the Airframe or any Engine which is
Collateral under the Indenture executed as of such Delivery Date, and to the
actual knowledge of ATA, no circumstance, condition, act or event has occurred
that, with the giving of notice or lapse of time or both gives rise to or
constitutes an Event of Loss with respect to such Airframe or any such Engine.

          (l) Compliance with Laws.

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

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

          (c) ATA 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.

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

                                      -9-

:
<PAGE>

          (n) Section 1110. With respect to each Leased Aircraft delivered on
such Delivery Date, the Owner Trustee, as lessor under the related Lease and
the Mortgagee, as assignee under the related Indenture, and with respect to
each Owned Aircraft delivered on such Delivery Date, the related Mortgagee, is
entitled to the benefits of Section 1110 (as in effect on such date) in the
event of a case under Chapter 11 of the Bankruptcy Code in which ATA is a
debtor.

          (o) Accuracy of Information. Neither the Operative Agreements to
which it is a party as of such date nor other material information relating to
the Aircraft or the operations or financial condition of ATA furnished to the
Policy Provider contains any statement of a material fact which was untrue or
misleading in any material respect when made. Except as disclosed in the
Offering Document under the caption "Risk Factors - Risk Factors Relating to
AmTran," ATA has no knowledge of any circumstances that could reasonably be
expected to cause a Material Adverse Change with respect to ATA.

          Section 2.02 Covenants of ATA. ATA covenants and agrees with the
Policy Provider as follows:

          (a) Without the prior written consent of the Policy Provider (which
may be granted or withheld in its sole discretion), each Participation
Agreement and the other Financing Agreements (as defined in the Note Purchase
Agreement) to be entered into pursuant to such Participation Agreement, will
not vary the Mandatory Economic Terms and will contain the Mandatory Document
Terms in the form attached to the Note Purchase Agreement without modification
in any adverse respect (without regard to the materiality thereof) as regards
the interests, rights and remedies of the Policy Provider, notwithstanding the
provisions in the Note Purchase Agreement permitting such modifications to be
made if the effect thereof is not materially adverse to certain parties.

          (b) Notwithstanding the provisions of any Lease or any other
Operative Agreement and in addition to and not in limitation of any other
right which the Policy Provider may have under any other Operative Agreement,
ATA agrees that the Policy Provider and its representatives may at least once
in every five year period following the issuance of the Class G Certificates,
at their expense, inspect any Aircraft or Aircraft Document (as defined in
Annex A to the related Participation Agreement) , and may otherwise meet with
the relevant officers and managers of ATA (at any time) to discuss the
affairs, finances and accounts of ATA, upon reasonable request by the Policy
Provider; provided that (i) each such inspection or meeting shall be conducted
during the business hours of ATA, (ii) each such inspection or meeting shall
not be conducted in any manner so as to be unreasonably disruptive to the day
to day operations of ATA, (iii) the Policy Provider shall give ATA at least
thirty (30) days notice of its intention to inspect any Aircraft or Aircraft
Document (as defined in Annex A to the related Participation Agreement), and
(iv) any inspection of the Aircraft hereunder shall be limited to a visual,
walk-around inspection, and shall not include the opening of any panels, bays,
or other components of the Aircraft. ATA will reasonably cooperate with the
Policy Provider in response to each such request by the Policy Provider.

                                     -10-

<PAGE>

          (c) It shall not, and shall not suffer any of its Affiliates to,
purchase or otherwise acquire any of the Class G Certificates. The Policy
Provider hereby appoints and designates the Subordination Agent as collateral
agent for the Policy Provider hereunder and hereby authorizes and instructs
the Subordination Agent to perform such acts required of the collateral agent,
on its behalf as set forth herein. The Subordination Agent hereby accepts such
appointment and designation. ATA hereby acknowledges the Policy Provider's
appointment of the Subordination Agent as collateral agent and the powers
granted thereto under this Insurance Agreement. ATA pledges, assigns and
grants a continuing security interest in all of its right, title and interest
in and to the following property (collectively, the "Certificate Collateral")
to the Subordination Agent for the benefit of the Policy Provider:

               (i) all Class G Certificates in which ATA or any of its
               Affiliates has a legal or beneficial interest;

               (ii) all payments of principal and interest and other amounts
               payable on, and all rights with respect to, such Class G
               Certificates;

               (iii) all proceeds of any of the foregoing.

          This Section 2.02(d) of this Insurance Agreement shall constitute a
pledge agreement and shall secure the payment in full of all obligations of
ATA under this Insurance Agreement or under any of the Operative Agreements.
The security interest granted hereby shall be perfected by (A) delivery to the
Subordination Agent accompanied by duly executed instruments of transfer or
assignment in blank or, (B) if delivery is not possible, by a written
entitlement order, delivered by ATA to the applicable securities
intermediaries on whose records ownership of such Class G Certificates is
reflected, directing such securities intermediaries to (x) credit all such
Class G Certificates to an account in the name of the Subordination Agent
maintained with such securities intermediaries, and (y) to deliver to the
Subordination Agent a written confirmation of each such credit simultaneously
with each acquisition of a legal or beneficial interest in Class G
Certificates by ATA or any of its Affiliates. With respect to any Class G
Certificates described in clause (A) above, ATA shall hold in trust for the
benefit of the Subordination Agent, segregated from the other property or
funds of ATA, any interest, Pool Balance reduction, premium, redemption price
or other payment thereon and shall immediately deliver to the Subordination
Agent all such amounts received. The Subordination Agent shall promptly notify
the Policy Provider of the amounts received in respect of Class G Certificates
described in clause (B) above and amounts delivered to the Subordination Agent
pursuant to the preceding sentence. Thereafter, the Policy Provider shall
promptly notify the Subordination Agent of the amount, if any, due to the
Policy Provider in respect of this Insurance Agreement or the Operative
Agreements. If any amounts are so due, the Subordination Agent will pay to the
Policy Provider the amounts received up to the amounts due. If no amounts are
due, the Subordination Agent shall pay amounts received to ATA.

          (d) Anything in the Note Purchase Agreement to the contrary
notwithstanding, without the consent of the Policy Provider, ATA agrees that
with respect to each Aircraft to be financed under the Note Purchase
Agreement, the maximum unpaid principal amount of the related

                                     -11-

<PAGE>

Class G Equipment Note as of the last day of each quarterly period may not
exceed the amount set forth for such day in the schedule contained in Exhibit
B attached hereto for such Aircraft, in the column in such schedule labeled
"Owned Aircraft" or "Leased Aircraft," depending on whether such Aircraft is
on such date an Owned Aircraft or a Leased Aircraft.

          Section 2.03 Covenants of WTC and Subordination Agent. WTC and
Subordination Agent shall perform and observe, in all material respects, all
of its covenants, obligations and agreements in any Operative Agreement to
which it is a party to be observed or performed by it.

          Section 2.04 Representations, Warranties and Covenants of the Policy
Provider. The Policy Provider represents, warrants and covenants to ATA and
the Subordination Agent as follows:

          (a) Organization and Licensing. The Policy Provider is duly
organized, validly existing and in good standing as a Wisconsin-domiciled
stock insurance company duly qualified to conduct an insurance business in
every jurisdiction where qualification may be necessary to accomplish the
Transactions.

          (b) Corporate Power. The Policy Provider has the corporate power and
authority to issue the Policy, to execute and deliver this Insurance Agreement
and the other Operative Agreements to which it is a party and to perform all
of its obligations hereunder and thereunder.

          (c) Authorization; Approvals. Proceedings legally required for the
issuance and execution of the Policy and the execution, delivery and
performance of this Insurance Agreement have been taken and licenses, orders,
consents or other authorizations or approvals of any governmental boards or
bodies legally required for the enforceability of the Policy have been
obtained; any proceedings not taken and any licenses, authorizations or
approvals not obtained are not material to the enforceability of the Policy.

          (d) Enforceability. This Insurance Agreement constitutes, and the
Policy, when issued, will constitute, a legal, valid and binding obligation of
the Policy Provider, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium, receivership and other
similar laws affecting creditors' rights generally and to general principles
of equity and subject to principles of public policy limiting the right to
enforce the indemnification provisions contained herein, insofar as such
provisions relate to indemnification for liabilities arising under federal
securities laws.

          (e) Financial Information. The balance sheet of the Policy Provider
as of December 31, 1998 and the related statements of income, stockholders'
equity and cash flows for the three fiscal years ended December 31, 1998, and
the accompanying footnotes, together with an opinion thereon dated January 27,
1999 of KPMG LLP, independent certified public accountants, a copy of which is
incorporated by reference into the Offering Document, fairly present in all
material respects the financial condition of the Policy Provider as of such
dates and for the periods covered by such statements in accordance with
generally accepted accounting principles consistently applied. The balance
sheet of the Policy Provider as of September 30, 1999 and the related

                                     -12-

<PAGE>

statements of operations, stockholders' equity and cash flows for the
three-month period ended September 30, 1999 and the accompanying footnotes, a
copy of which is incorporated by reference into the Offering Document, present
fairly in all material respects the financial condition of the Policy Provider
as of such date and for such three-month period in accordance with generally
accepted accounting principles consistently applied. Since September 30, 1999,
there has been no material change in such financial condition of the Policy
Provider that would materially and adversely affect its ability to perform its
obligations under the Policy.

          (f) Policy Provider Information. The Policy Provider Information is
true and correct in all material respects and does not contain any untrue
statement of a material fact.

          (g) No Litigation. There are no actions, suits, proceedings or
investigations pending or, to the best of the Policy Provider's knowledge,
threatened against it at law or in equity or before or by any court,
governmental agency, board or commission or any arbitrator which, if decided
adversely, would materially and adversely affect its ability to perform its
obligations under the Policy or this Insurance Agreement.

          (h)Compliance with Law, Etc. No practice, procedure or policy
employed, or proposed to be employed, by the Policy Provider in the conduct of
its business violates any law, regulation, judgment, agreement, order or
decree applicable to the Policy Provider that, if enforced, could result in a
Material Adverse Change with respect to the Policy Provider.

                                  ARTICLE III

                  THE POLICY; REIMBURSEMENT; INDEMNIFICATION

          Section 3.01 Issuance of the Policy. The Policy Provider agrees to
issue the Policy on the Closing Date subject to satisfaction of the conditions
precedent set forth below on or prior to the Closing Date:

          (a) Operative Agreements. The Policy Provider shall have received a
copy of (i) each of the Operative Agreements to be executed and delivered on
or prior to the Closing Date, in form and substance reasonably satisfactory to
the Policy Provider, duly authorized, executed and delivered by each party
thereto and (ii) a copy of the Offering Document;

          (b) Certified Documents and Resolutions. The Policy Provider shall
have received (i) a copy of the articles of incorporation and by-laws of ATA
and (ii) a certificate of the Secretary or Assistant Secretary of ATA dated
the Closing Date stating that attached thereto is a true, complete and correct
copy of resolutions duly adopted by the Board of Directors of ATA authorizing
the execution, delivery and performance by ATA of the Operative Agreements to
which it is a party and the consummation of the Transactions and that such
applicable organizational documents and resolutions are in full force and
effect without amendment or modification on the Closing Date;

                                     -13-

<PAGE>

          (c) Incumbency Certificate. The Policy Provider shall have received
a certificate of the Secretary or an Assistant Secretary of each of ATA and
the Subordination Agent certifying the names and signatures of the officers of
ATA and the Subordination Agent authorized to execute and deliver the
Operative Agreements to which it is a party on or prior to Closing Date and
that, with respect to ATA, shareholder consent to the execution and delivery
of such documents by ATA, is not necessary or has been obtained;

          (d) Representations and Warranties. The representations and
warranties of ATA and the Subordination Agent dated the Closing Date set forth
or incorporated by reference in this Insurance Agreement shall be true and
correct on and as of the Closing Date;

          (e) Documentation. The Policy Provider shall have received a copy of
each document, instrument, certificate and opinion delivered on or before the
Closing Date pursuant to the Operative Agreement, including each opinion of
counsel addressed to any of Moody's, S&P, the Trustee, ATA, the Subordination
Agent and the Initial Purchasers (except for the opinion of counsel to the
Initial Purchasers addressed only to the Initial Purchasers), in respect of
ATA and the Subordination Agent or any of the other parties to the Operative
Agreements and the Transactions dated the Closing Date in form and substance
reasonably satisfactory to the Policy Provider, addressed to the Policy
Provider (or accompanied by a letter from the counsel rendering such opinion
to the effect that the Policy Provider is entitled to rely on such opinion as
of its date as if it were addressed to the Policy Provider) and addressing
such matters as the Policy Provider may reasonably request, and the counsel
providing each such opinion shall have been instructed by its client to
deliver such opinion to the addressees thereof;

          (f) Approvals, Etc. The Policy Provider shall have received true and
correct copies of all approvals, licenses and consents, if any, including any
required approval of the shareholders of ATA, required in connection with the
Transactions;

          (g) No Litigation, Etc. No suit, action or other proceeding,
investigation or injunction, or final judgment relating thereto, shall be
pending or threatened before any court, governmental or administrative agency
or arbitrator in which it is sought to restrain or prohibit or to obtain
damages or other relief in connection with any of the Operative Agreements or
the consummation of the Transactions;

          (h) Legality. No statute, rule, regulation or order shall have been
enacted, entered or deemed applicable by any government or governmental or
administrative agency or court that would make the Transactions illegal or
otherwise prevent the consummation thereof;

          (i) Issuance of Ratings. The Policy Provider shall have received
confirmation that the risk secured by the Policy is rated no lower than "A-"
by S&P and "Baa2" by Moody's, the Class G Certificates, when issued, will be
rated "AAA" by S&P and "Aaa" by Moody's and that the Class C Certificates,
when issued, will be rated "BBB" by S&P and "Ba2" by Moody's, and shall have
received the confirmation from S&P of a capital charge acceptable to the
Policy Provider;

                                     -14-

<PAGE>

          (j) Satisfactory Documentation. The Policy Provider and its counsel
shall have reasonably determined that all documents, certificates and opinions
to be delivered in connection with the Certificates conform to the terms of
the related Trust Agreement, the Offering Document, this Insurance Agreement
and the Intercreditor Agreement.

          (k) Filings. The Policy Provider shall have received evidence that
there shall have been made and shall be in full force and effect, all filings,
recordings and registrations, and there shall have been given or taken any
notice or similar action as is necessary in order to establish, perfect,
protect and preserve the right, title and interest of the Policy Provider
created by the Operative Agreements executed and delivered on or prior to the
Closing Date;

          (l) Conditions Precedent. All conditions precedent to the issuance
of the Certificates under the Trust Agreements shall have been satisfied, or
waived with the consent of the Policy Provider. All conditions precedent to
the effectiveness of the Liquidity Facilities shall have been satisfied or
waived and all conditions precedent to the purchases of the Certificates by
the Initial Purchasers under the Purchase Agreement shall have been satisfied
or waived by the Initial Purchasers;

          (m) Expenses. The Policy Provider shall have received payment in
full of all amounts required to be paid to or for account of the Policy
Provider on or prior to the Closing Date; and

          (n) Guarantee. The Policy Provider shall have received the guarantee
of Amtran (the "Guarantee") of the obligations to be performed by ATA
hereunder, substantially in the form attached hereto as Exhibit A, together
with such ancillary documentation and further assurances as are required by
the Policy Provider in connection therewith.

          Section 3.02 Payment of Fees and Premium.

          (a) Legal Fees. On the Closing Date, ATA shall pay or cause to be
paid to, or as directed by, the Policy Provider, legal fees, disbursements and
charges incurred by the Policy Provider in connection with the issuance of the
Policy and this Agreement in accordance with the Policy Fee Letter. Any
additional fees of the Policy Provider's counsel or auditors payable in
respect of any amendment or supplement to the Offering Document or the
preparation of the Exchange Offering Registration Statement requested by ATA
and incurred after the Closing Date shall be paid by ATA promptly following
receipt of documentation thereof.

          (b) Rating Agency Fees. ATA shall promptly pay the initial fees of
S&P and Moody's with respect to the Certificates and the Transactions
following receipt of a statement with respect thereto. All periodic and
subsequent fees of S&P or Moody's with respect to, and directly allocable to,
the Certificates shall be for the account of, and shall be billed to, ATA. The
fees for any other rating agency shall be paid by the party requesting such
other agency's rating unless such other agency is a substitute for S&P or
Moody's in the event that S&P or Moody's is no longer rating the Certificates,
in which case the fees for such agency shall be paid by ATA.

                                     -15-

<PAGE>

          (c) Appraisal Fees. ATA shall pay as directed by the Policy Provider
on the Closing Date the cost of appraisals of the Aircraft performed by
[Morten Beyer and Agnew, Inc.] for the Policy Provider, not to exceed $3,500
per Aircraft.

          (d) Premium.

               (i) In consideration of the issuance by the Policy Provider of
           the Policy, ATA shall pay or cause to be paid to the Policy
           Provider, the Premium, provided, however, such requirement
           shall not be duplicative of any payments in respect of Premiums
           made in accordance with Section 6(b) of the Note Purchase
           Agreement and the provisions of each Lease and each Owned
           Aircraft Indenture. ATA shall also pay any additional amounts,
           as and when due, to be paid by it under the Policy Fee Letter.

               (ii) No portion of the Premium paid shall berefundable, without
          regard to whether the Policy Provider makes any payment under the
          Policy or any other circumstances relatingto the Class G Certificates
          or provision being made for payment of the Class G Certificates prior
          to maturity.

          Section 3.03 Reimbursement Obligation.

          (a) As and when due in accordance with and from the funds specified
in Sections 2.4(b), 3.2 and 3.3 of the Intercreditor Agreement, the Policy
Provider shall be entitled to reimbursement for any payment made by the Policy
Provider under the Policy or to the Liquidity Provider under Sections 2.6(c)
or 3.7(c) of the Intercreditor Agreement, which reimbursement shall be due and
payable on the date provided in such Sections, in an amount equal to the
amount to be so paid and all amounts previously paid that remain unreimbursed.
In addition, to the extent that any such payment by the Policy Provider shall
have been made as a result of a default by a Liquidity Provider in its
obligation to make an Advance, as provided in the Intercreditor Agreement, the
Policy Provider shall be entitled to the payment of interest on such amounts
to the extent, at the time and in the priority that the Liquidity Provider
would have been paid pursuant to the Intercreditor Agreement had the Liquidity
Provider made such Advance.

          (b) After the distribution to the Policy Provider of all amounts
distributable to it under the Intercreditor Agreement, ATA agrees to reimburse
the Policy Provider immediately, upon demand, to the extent of any payment
made under the Policy or to the Liquidity Provider under Sections 2.6(c) or
3.7(c) of the Intercreditor Agreement, less any amount in respect of such
payment paid to and received by the Policy Provider pursuant to the Operative
Agreements.

          (c) ATA agrees to pay to the Policy Provider any and all charges,
fees, costs and expenses that the Policy Provider may reasonably pay or incur,
including reasonable attorneys' and accountants' fees and expenses (without
duplication of amounts paid to the Policy Provider in respect of the Operative
Agreements), in connection with (i) the enforcement, defense or preservation
of any rights in respect of this Insurance Agreement, including defending,
monitoring or participating in any litigation or proceeding and (ii) any
amendment, waiver or other action requested by ATA with respect to, or related
to, any Operative Agreements or to any form document

                                     -16-

<PAGE>

attached to any Operative Agreement as an exhibit, schedule or annex thereto,
whether or not executed or completed. Provided that three Business Days'
written notice of the intended payment or incurrence shall have been given to
ATA by the Policy Provider, such reimbursement shall be due on the dates on
which such charges, fees, costs or expenses are paid or incurred by the Policy
Provider.

          Section 3.04 [Reserved.]

          Section 3.05 Procedure for Payment of Fees and Premiums. All
payments to be made to the Policy Provider under this Insurance Agreement
shall be made to the Policy Provider in lawful currency of the United States
of America in immediately available funds at the notice address for the Policy
Provider as specified in the Intercreditor Agreement on the date when due or
as the Policy Provider shall otherwise direct by written notice to the other
parties hereto. In the event that the date of any payment to the Policy
Provider or the expiration of any time period hereunder occurs on a day that
is not a Business Day, then such payment shall be made, or such expiration of
time period shall occur, on the next succeeding Business Day with the same
force and effect as if such payment was made or time period expired on the
scheduled date of payment or expiration date, as applicable.

                                  ARTICLE IV

                              FURTHER AGREEMENTS

          Section 4.01 Effective Date; Term of the Insurance Agreement. This
Insurance Agreement shall take effect on the Closing Date and shall remain in
effect until the later of (a) such time as the Policy Provider is no longer
subject to a claim under the Policy and the Policy shall have been surrendered
to the Policy Provider for cancellation and (b) all amounts payable to the
Policy Provider by ATA or the Subordination Agent hereunder or from any other
source hereunder or under the Operative Agreements and all amounts payable
under the Class G Certificates have been paid in full.

          Section 4.02 Further Assurances and Corrective Instruments.

          (a) Neither ATA nor the Subordination Agent shall grant any waiver
of rights or agree to any amendment or modification to any of the Operative
Agreements to which either of them is a party, which waiver, amendment, or
modification would have an adverse effect on the rights or remedies of the
Policy Provider, without the prior written consent of the Policy Provider so
long as the Policy Provider shall be the Controlling Party, and any such
waiver without prior written consent of the Policy Provider shall be null and
void and of no force or effect.

          (b) To the extent permitted by law, each of ATA and the
Subordination Agent agrees that it will, from time to time, execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
such supplements hereto and such further instruments as the Policy

                                     -17-

<PAGE>

Provider may reasonably request and as may be required in the Policy
Provider's reasonable judgment to effectuate the intention of or facilitate
the performance of this Insurance Agreement.

          Section 4.03 Obligations Absolute.

          (a) So long as no Policy Provider Default shall have occurred and be
continuing beyond any grace period applicable thereto, the obligations of ATA
hereunder shall be absolute and unconditional and shall be paid or performed
strictly in accordance with this Insurance Agreement under all circumstances
irrespective of:

          (i) any lack of validity or enforceability of, or any amendment or
     other modifications of, or waiver, with respect to any of the Operative
     Agreements or the Certificates;

          (ii) any exchange or release of any other obligations hereunder;

          (iii) the existence of any claim, setoff, defense, reduction,
     abatement or other right that ATA may have at any time against the Policy
     Provider or any other Person;

          (iv) any document presented in connection with the Policy proving to
     be forged, fraudulent, invalid or insufficient in any respect or any
     statement therein being untrue or inaccurate in any respect (unless the
     Policy Provider shall have actual knowledge thereof);

          (v) any payment by the Policy Provider under the Policy against
     presentation of a certificate or other document that does not strictly
     comply with the terms of the Policy;

          (vi) any failure of ATA to receive the proceeds from the sale of the
     Certificates; and

          (vii) any other circumstances, other than payment in full, that
     might otherwise constitute a defense available to, or discharge of, ATA
     in respect of any Operative Agreements.

          (b) So long as no Policy Provider Default shall have occurred and be
continuing beyond any period of cure applicable thereto and except as
expressly provided herein or in any Operative Agreement, ATA renounces the
right to assert as a defense to the performance of its obligations each of the
following: (i) to the extent permitted by law, any and all redemption and
exemption rights and the benefit of all valuation and appraisement privileges
against the indebtedness and obligations evidenced by any Operative Agreements
or by any extension or renewal thereof; (ii) presentment and demand for
payment, notices of nonpayment and of dishonor, protest of dishonor and notice
of protest; (iii) all notices in connection with the delivery and acceptance
hereof and all other notices in connection with the performance, default or
enforcement of any payment hereunder, except as required by the Operative
Agreements; and (iv) all rights of

                                     -18-

<PAGE>

abatement, diminution, postponement or deduction, and all rights of setoff or
recoupment arising out of any breach under any of the Operative Agreements, by
any party thereto or any beneficiary thereof, or out of any obligation at any
time owing to ATA.

          (c) ATA (i) agrees that any consent, waiver or forbearance hereunder
with respect to an event shall operate only for such event and not for any
subsequent event; (ii) consents to any and all extensions of time that may be
granted by the Policy Provider with respect to any payment hereunder or other
provisions hereof and to the release of any security at any time given for any
payment hereunder, or any part thereof, with or without substitution, and to
the release of any Person or entity liable for any such payment; and (iii)
consents to the addition of any and all other makers, endorsers, guarantors
and other obligors for any payment hereunder, and to the acceptance of any and
all other security for any payment hereunder, and agrees that the addition of
any such obligors or security shall not affect the liability of ATA for any
payment hereunder.

          (d) No failure by the Policy Provider to exercise, and no delay by
the Policy Provider in exercising, any right hereunder shall operate as a
waiver thereof. The exercise by the Policy Provider of any right hereunder
shall not preclude the exercise of any other right, and the remedies provided
herein to the Policy Provider are declared in every case to be cumulative and
not exclusive of any remedies provided by law or equity.

          (e) Nothing herein shall be construed as prohibiting ATA from
pursuing any rights or remedies it may have against any Person in a separate
legal proceeding.

          Section 4.04 Assignments; Reinsurance; Third-Party Rights.

          (a) This Insurance Agreement shall be a continuing obligation of the
parties hereto and shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. The
Subordination Agent, and except for any transaction expressly permitted by
Section 5.02 of the Class G Trust Agreement, ATA, may not assign their
respective rights under this Insurance Agreement, or delegate any of their
duties hereunder, without the prior written consent of the other parties
hereto. Any assignments made in violation of this Insurance Agreement shall be
null and void.

          (b) The Policy Provider shall have the right to grant participations
in its rights under this Insurance Agreement and to enter into contracts of
reinsurance with respect to the Policy upon such terms and conditions as the
Policy Provider may in its discretion determine; provided, however, that no
such participation or reinsurance agreement or arrangement shall relieve the
Policy Provider of any of its obligations hereunder or under the Policy or
grant to any participant or reinsurer any rights hereunder or under any
Operative Agreement.

          (c) Except as provided herein with respect to participants and
reinsurers, nothing in this Insurance Agreement shall confer any right, remedy
or claim, express or implied, upon any Person, including, particularly, any
Holder, other than upon the Policy Provider against ATA, or upon ATA against
the Policy Provider, and all the terms, covenants, conditions, promises and
agreements contained herein shall be for the sole and exclusive benefit of the
parties hereto and their

                                     -19-

<PAGE>

successors and permitted assigns. Neither the Trustee nor any Holder shall
have any right to payment from the Premium paid or payable hereunder or from
any amounts paid by ATA pursuant to Sections 3.02 or 3.03.

          Section 4.05 Liability of the Policy Provider. Neither the Policy
Provider nor any of its officers, directors or employees shall be liable or
responsible for: (a) the use that may be made of the Policy by the
Subordination Agent or for any acts or omissions of the Subordination Agent in
connection therewith; or (b) the validity, sufficiency, accuracy or
genuineness of documents delivered to the Policy Provider in connection with
any claim under the Policy, or of any signatures thereon, even if such
documents or signatures should in fact prove to be in any or all respects
invalid, insufficient, fraudulent or forged (unless the Policy Provider shall
have actual knowledge thereof). In furtherance and not in limitation of the
foregoing, the Policy Provider may accept documents that appear on their face
to be in order, without responsibility for further investigation.

                                   ARTICLE V

                                 MISCELLANEOUS

          Section 5.01 Amendments, Etc. This Insurance Agreement may be
amended,  modified, supplemented or terminated only by written
instrument or written instruments signed by the parties hereto; provided that
if such amendment, modification, supplement or termination would have a
material adverse affect on the interests of the Subordination Agent, a Pass
Through Trustee or any Certificateholder, Ratings Confirmation shall also be
obtained prior to such amendment, modification, supplement or termination
being effective. ATA agrees to provide a copy of any amendment to this
Insurance Agreement promptly to the Subordination Agent and the rating
agencies maintaining a rating on the Class G Certificates. No act or course of
dealing shall be deemed to constitute an amendment, modification, supplement
or termination hereof.

          Section 5.02 Notices. All demands, notices and other communications
to be given hereunder shall be in writing (except as otherwise
specifically provided herein) and shall be mailed by registered mail or
personally delivered and telecopied to the recipient as follows:

                                     -20-

<PAGE>

          (a) To the Policy Provider:

          Ambac Assurance Corporation
          One State Street Plaza
          New York, New York 10004
          Attention: Surveillance Department
          Facsimile: (212) 363-1459
          Confirmation: (212) 668-0340

          In each case in which notice or other communication to the Policy
Provider refers to an event of default under any Operative Agreement, a claim
on the Policy or with respect to which failure on the part of the Policy
Provider to respond shall be deemed to constitute consent or acceptance, then
a copy of such notice or other communication should also be sent to the
attention of the general counsel of each of ATA and the Subordination Agent
and, in all cases, both any original and all copies shall be marked to
indicate "URGENT MATERIAL ENCLOSED.")

          (b) To ATA:

          American Trans Air, Inc.
          7337 West Washington Street
          Indianapolis, Indiana 46231
          Attention: Kenneth K. Wolff
          Facsimile: (317) 240-7091
          Confirmation: (317) 240-7087

         (c) To the Subordination Agent:

             Wilmington Trust Company
             Rodney Square North
             1100 North Market Street
             Wilmington, DE 19890-0001
             Attention:  Corporate Trust Administration
             Facsimile:  302-651-8882.

          A party may specify an additional or different address or addresses
by writing mailed or delivered to the other parties as aforesaid. All such
notices and other communications shall be effective upon receipt unless
received after business hours on any day, in which case on the opening of
business on the next Business Day.

          Section 5.03 Severability. In the event that any provision of this
Insurance Agreement shall be held invalid or unenforceable by any
court of competent jurisdiction, the parties hereto agree that such holding
shall not invalidate or render unenforceable any other provision hereof. The
parties hereto further agree that the holding by any court of competent
jurisdiction that any remedy pursued by any party hereto is unavailable or
unenforceable shall not affect in any way the ability of such party to pursue
any other remedy available to it.

                                     -21-

<PAGE>

          Section 5.04 Governing Law. This Insurance Agreement shall be
governed by and construed in accordance with the laws of the
State of New York, including all matters of construction, validity and
performance. This Agreement is being delivered in New York.

          Section 5.05 Consent to Jurisdiction.

          (a) The parties hereto hereby irrevocably submit to the
non-exclusive jurisdiction of the United States District Court for the
Southern District of New York and any court of appropriate jurisdiction in the
State of New York located in the City and County of New York, and any
appellate court from any thereof, in any action, suit or proceeding brought
against it and to or in connection with any of the Operative Agreements or the
Transactions or for recognition or enforcement of any judgment, and the
parties hereto hereby irrevocably and unconditionally agree that all claims in
respect of any such action or proceeding may be heard or determined in such
New York state court or, to the extent permitted by law, in such federal
court. The parties hereto agree that a final unappealable judgment in any such
action, suit or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
To the extent permitted by applicable law, the parties hereto hereby waive and
agree not to assert by way of motion, as a defense or otherwise in any such
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of such courts, that the suit, action or proceeding is brought in
an inconvenient forum, that the venue of the suit, action or proceeding is
improper or that the related documents or the subject matter thereof may not
be litigated in or by such courts.

          (b) To the extent permitted by applicable law, the parties hereto
shall not seek and hereby waive the right to any review of the judgment of any
such court by any court of any other nation or jurisdiction which may be
called upon to grant an enforcement of such judgment.

          (c) Service on ATA may be made by delivering, by U.S. registered
mail or otherwise, copies of the summons and complaint and other process which
may be served in any suit, action or proceeding to ATA addressed to its street
address shown in Section 5.02(b), Attention: General Counsel, and such service
shall be effective service of process for any litigation brought against ATA
in any court. Such address may be changed by ATA by written notice to the
other parties hereto.

          (d) Nothing contained in this Insurance Agreement shall limit or
affect any party's right to serve process in any other manner permitted by law
or to start legal proceedings relating to any of the Operative Agreements
against any other party or its properties in the courts of any jurisdiction.

          Section 5.06 Consent of the Policy Provider. No disclosure relating
to the Policy or the Policy Provider contained in the Exchange Offer
Registration Statement, which disclosure modifies, alters, changes, amends or
supplements the disclosure relating to the Policy or the Policy Provider
contained in the Offering Memorandum, shall be made without the Policy
Provider's prior written consent. In the event that the consent of the Policy
Provider is required under any of the Operative Agreements, the determination
whether to grant or withhold such consent shall be made

                                     -22-

<PAGE>

by the Policy Provider in its sole discretion without any implied duty towards
any other Person, except as otherwise expressly provided therein.

          Section 5.07 Counterparts. This Insurance Agreement may be executed
in counterparts by the parties hereto, and all such counterparts
shall constitute one and the same instrument.

          Section 5.08 Headings. The headings of Articles and Sections and the
Table of Contents contained in this Insurance Agreement are provided
for convenience only. They form no part of this Insurance Agreement and shall
not affect its construction or interpretation.

          Section 5.09 Trial by Jury Waived. Each party hereby waives, to the
fullest extent permitted by law, any right to a trial by jury in respect of
any litigation arising directly or indirectly out of, under or in connection
with this Insurance Agreement or any of the other Operative Agreements or any
of the Transactions contemplated hereunder or thereunder. Each party hereto
(A) certifies that no representative, agent or attorney of any party hereto
has represented, expressly or otherwise, that it would not, in the event of
litigation, seek to enforce the foregoing waiver and (B) acknowledges that it
has been induced to enter into the Operative Agreements to which it is a party
by, among other things, this waiver.

          Section 5.10 Limited Liability. No recourse under any Operative
Agreement shall be had against, and no personal liability shall attach to, any
officer, employee, director, affiliate or shareholder of any party hereto, as
such, by the enforcement of any assessment or by any legal or equitable
proceeding, by virtue of any statute or otherwise in respect of any of the
Operative Agreements, the Certificates or the Policy, it being expressly
agreed and understood that each Operative Agreement is solely an obligation of
each party hereto, and that any and all personal liability, either at common
law or in equity, or by statute or constitution, of every such officer,
employee, director, affiliate or shareholder for breaches of any party hereto
of any obligations under any Operative Agreement is hereby expressly waived as
a condition of and in consideration for the execution and delivery of this
Insurance Agreement.

          Section 5.11 Entire Agreement. This Insurance Agreement, the Policy,
the Policy Fee letter and the other Operative Agreements set forth the entire
agreement between the parties with respect to the subject matter hereof and
thereof, and supersede and replace any agreement or understanding that may
have existed between the parties prior to the date hereof in respect of such
subject matter.

                 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                     -23-

<PAGE>

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
all as of the day and year first above mentioned.

                                    AMBAC ASSURANCE CORPORATION,
                                          as Policy Provider

                                    By:
                                          Name:  David B. Nemschoff
                                          Title:  First Vice President

                                    WILMINGTON TRUST COMPANY,
                                     not in its individual capacity but solely
                                        as Subordination Agent

                                    By:
                                          Name:
                                          Title:

                                    AMERICAN TRANS AIR, INC.

                                    By:
                                          Name:
                                          Title:

                                     -24-

<PAGE>

                                   Exhibit A

                           GUARANTEE OF AMTRAN, INC.

          FOR VALUE RECEIVED, receipt of which is hereby acknowledged, AMTRAN,
INC., a corporation duly organized and existing under the laws of the state of
Indiana ("Amtran"), hereby unconditionally guarantees as primary obligor and
not merely as surety to Ambac Assurance Corporation, a Wisconsin-domiciled
stock insurance company (the "Company"), the due and punctual payment in full
of any and all amounts payable by American Trans Air, Inc., a corporation
organized under the laws of the State of Indiana ("ATA"), under the terms of
the Insurance and Indemnity Agreement among the Company, ATA and Wilmington
Trust Company, as subordination agent, dated as of February 15, 2000
("Agreement") when and as the same shall become due and payable, whether on
the scheduled payment dates, at maturity, upon declaration of termination or
otherwise, according to the terms thereof. In case of the failure of ATA
punctually to make any such payment, Amtran hereby agrees to make such
payment, or cause such payment to be made, promptly upon demand made by the
Company to Amtran; provided, however that delay by the Company in giving such
notice shall in no event affect the obligations of Amtran under this
Guarantee. This Guarantee shall remain in full force and effect or shall be
reinstated (as the case may be) if at any time any payment guaranteed
hereunder, in whole or in part, is rescinded or must otherwise be returned by
the Company upon the insolvency, bankruptcy or reorganization of ATA or
otherwise, all as though such payment had not been made.

          Amtran hereby agrees that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of
the Agreement; the absence of any action to enforce the same; any variation
extension, waiver, compromise or release of any or all obligations of ATA
under the Agreement or of any security from time to time thereof; the
rendering of any judgment against ATA or any action to enforce the same; or
any other circumstances that might otherwise constitute a legal or equitable
discharge of a guarantor or a defense of a guarantor. This is a continuing
guarantee and a guarantee of payment (not merely of collection), and it shall
remain in full force and effect until all amounts payable by ATA under the
Agreement have been validly, finally and irrevocably paid in full and shall
not be affected in any way by the absence of any action to obtain those
amounts from ATA. This Guarantee shall not be affected by the occurrence of
any event of default, by the existence of any bankruptcy, insolvency,
reorganization or similar proceedings involving ATA, by any change in the
laws, rules or regulations of any jurisdiction or by any present or future
action of any governmental authority or court amending, varying, reducing or
otherwise affecting, or purporting to amend, vary, reduce or otherwise affect,
any of the obligations of ATA under the Agreement or of Amtran under this
Guarantee or by any other circumstance (other than complete, irrevocable
payment) that might otherwise constitute a legal or equitable discharge or
defense of a surety or a guarantor. Amtran covenants that this Guarantee will
not be discharged except by complete payment of the amounts payable under the
Agreement. This Guarantee shall

                                     -25-

<PAGE>

continue to be effective if ATA merges or consolidates with or into another
entity, loses its separate legal identity or ceases to exist.

          Amtran hereby agrees that so long as any amount payable by ATA under
the Agreement is overdue and unpaid, Amtran shall not (i) exercise any right
of subrogation or indemnity, or similar right or remedy, against ATA or any of
its assets or property in respect of any amount paid by Amtran under this
Guarantee or (ii) file a proof of claim in competition with the Company for
any amount owing to Amtran by ATA on any account whatsoever in the event of
the bankruptcy, insolvency or liquidation of ATA. If at any time when any such
amount is overdue and unpaid Amtran receives any amount as a result of any
action against ATA or any of its property or assets or otherwise or on account
of any payment made by Amtran under this Guarantee, Amtran shall forthwith pay
that amount received by it to the Company, to be credited and applied against
the amount so payable by ATA.

          Amtran hereby waives diligence, presentment, protest, notice of
protest, acceleration, and dishonor; filing of claims with a court in the
event of insolvency or bankruptcy of ATA; all demands whatsoever, except as
noted in the first paragraph hereof; and any right to require a proceeding
first against ATA.

          Amtran hereby certifies and warrants that this Guarantee constitutes
the valid and legally binding obligation of Amtran and complies with all
applicable laws. This Guarantee shall inure to the benefit of the Company and
its successors and permitted assigns (if any).

          Notices. All demands, notices and other communications to be given
to Amtran hereunder shall be in writing and shall be delivered by U.S.
registered mail or otherwise (including by telecopy) to the recipient as
follows:

                        To ATA:

                            Amtran, Inc.
                            7337 West Washington Street
                            Indianapolis, Indiana 46231
                            Attention:  General Counsel
                            Facsimile:  (317) 240-7091
                            Confirmation:  (317) 240-7006

          Amtran may specify an additional or different address or addresses
by writing mailed or delivered to the Company. All such notices and other
communications shall be effective upon receipt unless received after business
hours on any day, in which case on the opening of business on the next
business day.

          Consent to Jurisdiction. Amtran hereby irrevocably submits to the
non-exclusive jurisdiction of the United States District Court for the
Southern District of New York and any court of general jurisdiction in the
State of New York located in the City and County of New

                                     -26-

<PAGE>

York, and any appellate court from any thereof, in any action, suit or
proceeding brought against it and to or in connection with this Guarantee or
for recognition or enforcement of any judgment, and Amtran hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard or determined in such New York state court or, to the
extent permitted by law, in such federal court. Amtran agrees that a final
unappealable judgment in any such action, suit or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. To the extent permitted by applicable
law, Amtran hereby waives and agrees not to assert by way of motion, as a
defense or otherwise in any such suit, action or proceeding, any claim that it
is not personally subject to the jurisdiction of such courts, that the suit,
action or proceeding is brought in an inconvenient forum, that the venue of
the suit, action or proceeding is improper or that the related documents or
the subject matter thereof may not be litigated in or by such courts.

          To the extent permitted by applicable law, Amtran shall not seek and
hereby waives the right to any de novo review of the final nonappealable
judgment of any such court by any court of any other nation or jurisdiction
which may be called upon to grant an enforcement of such judgment.

          Service on Amtran may be made by delivering, by U.S. registered mail
or otherwise, copies of the summons and complaint and other process which may
be served in any suit, action or proceeding to Amtran addressed to its street
address shown above, Attention: General Counsel, and such service shall be
effective service of process for any litigation brought against Amtran in any
court. Such address may be changed by Amtran by written notice to the Company.

          Nothing contained in this Guarantee shall limit or affect the
Company's right to serve process in any other manner permitted by law or to
start legal proceedings relating to this Guarantee against Amtran or its
properties in the courts of any jurisdiction.

          Trial by Jury Waived. Amtran hereby waives, to the fullest extent
permitted by law, any right to a trial by jury in respect of any litigation
arising directly or indirectly out of, under or in connection with this
Guarantee. Amtran (A) certifies that no representative, agent or attorney of
the Company has represented, expressly or otherwise, that it would not, in the
event of litigation, seek to enforce the foregoing waiver and (B) acknowledges
that the Company has been induced to enter into the Agreement by, among other
things, this waiver.

          This Guarantee shall be governed by, and construed in accordance
with, the laws of the State of New York.

          This Guarantee becomes effective concurrent with the effectiveness
of the Agreement according to its terms.

                                     -27-

<PAGE>

          IN WITNESS WHEREOF, Amtran has caused this Guarantee to be executed
in its corporate name by its duly authorized representative.

                                             AMTRAN, INC.

                                              By:
                                                   Name:
                                                   Title:

                                              Date:

                                     B-1

<PAGE>

                                   Exhibit B

          [TABLE OF CLASS G EQUIPMENT NOTE MAXIMUM AMOUNTS - TO COME]

Quarterly

Period      Maximum Principal Amount of Class G  Maximum Principal Amount of
Ending On:  Equipment Note (Owned Aircraft)      ClassG Equipment Note (Leased
                                                 Aircraft)

                                     B-1

<PAGE>SECRETARY'S CERTIFICATE
                             -----------------------

         The undersigned Secretary of Pharmaceutical Product Development, Inc.
(hereinafter referred to as the "Corporation") hereby certifies that the
following resolution to amend the Pharmaceutical Product Development, Inc.
Employee Stock Purchase Plan was duly adopted by the shareholders of the
Corporation at the Annual Meeting of Shareholders held on May 16, 2000:

         "Increase in Employee Stock Purchase Plan Shares. The number of shares
         of the Corporation's common stock reserved for issuance under the
         Corporation's Employee Stock Purchase Plan is increased from 500,000 to
         1,250,000 shares effective this 16th day of May, 2000."

WITNESS the hand of the undersigned Secretary and the seal of the Corporation as
of this 16th day of May, 2000.

                                                 /s/ Fred B. Davenport, Jr.
                                                 --------------------------
                                                 Fred B. Davenport, Jr.

                                                 [Corporate Seal]

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