Document:

EXECUTION COPY

                                  AMTRAN, INC.

                            AMERICAN TRANS AIR, INC.

                                       and

                            WILMINGTON TRUST COMPANY

                                   as Trustee

                          PASS THROUGH TRUST AGREEMENT

                          Dated as of December 23, 1997

                 American Trans Air 1997-1B-S Pass Through Trust
          7.19% American Trans Air 1997-1B-S Pass Through Certificates

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page

ARTICLE I  DEFINITIONS.........................................................2
         Section 1.01. Definitions.............................................2
         Section 1.02. Compliance Certificates and Opinions...................13
         Section 1.03. Form of Documents Delivered to Trustee.................14

         Section 1.04. Acts of Certificateholders.............................14

ARTICLE II  ACQUISITION OF TRUST PROPERTY.....................................16
         Section 2.01. [Intentionally omitted]................................16
         Section 2.02. Acquisition of Trust Property..........................16
         Section 2.03.  Acceptance by Trustee.................................16

         Section 2.04. Limitation of Powers...................................17

ARTICLE III THE CERTIFICATES..................................................17
         Section 3.01. Title, Form, Denomination and Execution of Certificates17
         Section 3.02. Restrictive Legends....................................18

         Section 3.03. Authentication of Certificates.........................20

         Section 3.04. Transfer and Exchange..................................20

         Section 3.05. Book-Entry Provisions for U.S. Global Certificate and
                       Offshore Global Certificates...........................21
         Section 3.06. Special Transfer Provisions............................23

         Section 3.07. Mutilated, Destroyed, Lost or Stolen Certificates......25

         Section 3.08. Persons Deemed Owners..................................26

         Section 3.09. Cancellation...........................................26

         Section 3.10. Limitation of Liability for Payments...................26

         Section 3.11. Temporary Certificates.................................26

ARTICLE IV  DISTRIBUTIONS; STATEMENTS TO......................................27
         Section 4.01. Certificate Account and Special Payments Account.......27

         Section 4.02. Distributions from Certificate Account and Special
                       Payments Account.......................................27
         Section 4.0..........................................................29

         Section 4.04. Investment of Special Payment Moneys...................30

ARTICLE V  THE COMPANY........................................................31
         Section 5.01. Maintenance of Corporate Existence.....................31

         Section 5.02. Consolidation, Merger, Etc.............................31

         Section 5.03.  Rule 144A(d)(4) Information...........................32

ARTICLE VI  DEFAULT...........................................................33
         Section 6.01. Events of Default......................................33

         Section 6.02. Incidents of Sale of Equipment Notes...................35

         Section 6.03. Judicial Proceedings Instituted by Trustee; Trustee May
                       Bring Suit.............................................36
         Section 6............................................................36

         Section 6.05. Waiver of Past Defaults................................36

         Section 6.06. Right of Certificateholders to Receive Payments Not to Be
                        Impaired..............................................37
         Section 6.07. Certificateholders May Not Bring Suit Except Under
                       Certain Conditions.....................................37
         Section 6.08. Remedies Cumulative....................................38

         Section 6.09. Undertaking for Costs..................................38

ARTICLE VII  THE TRUSTEE......................................................38
         Section 7.01. Notice of Defaults.....................................38

         Section 7.02. Certain Rights of Trustee..............................39

         Section 7.03. Not Responsible for Recitals or Issuance of
                        Certificates..........................................40
         Section 7.04. May Hold Certificates..................................40

         Section 7.05. Money Held in Trust....................................40

         Section 7.06. Compensation and Reimbursement.........................41

         Section 7.07. Corporate Trustee Required, Eligibility................42

         Section 7.08. Resignation and Removal: Appointment of Successor......42

         Section 7.09. Acceptance of Appointment by Successor.................44

         Section 7.10.  Merger, Conversion, Consolidation or Succession to
                        Business..............................................44
         Section 7.11. Maintenance of Agencies................................45

         Section 7.12. Money for Certificate Payments to Be Held in Trust.....46

         Section 7.13. Registration of Equipment Notes in Name of Subordination
                       Agent..................................................46
         Section 7.14. Representations and Warranties of Trustee..............46

         Section 7.15. Withholding Taxes, Information Reporting...............48

         Section 7.16. Trustee's Liens........................................48

         Section 7.17. Preferential Collection of Claims......................49

ARTICLE VIII  CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE................49
         Section 8.01. The Company to Furnish Trustee with Names and Addresses
                       of Certificateholders..................................49
         Section 8.02. Preservation of Information; Communications to
                       Certificateholders.....................................49
         Section 8.03. Reports by Trustee.....................................49

         Section 8.04. Reports by the Guarantor and Company...................49

ARTICLE IX  SUPPLEMENTAL AGREEMENTS...........................................50
         Section 9.01. Supplemental Agreements Without Consent of
                       Certificateholders.....................................50
         Section 9.02. Supplemental Agreements with Consent of
                       Certificateholders.....................................52
         Section 9.03. Documents Affecting Immunity or Indemnity..............53

         Section 9.04. Execution of Supplemental Agreements...................53

         Section 9.05. Effect of Supplemental Agreements......................53

         Section 9.06. Conformity with Trust Indenture Act....................53

         Section 9.07. Reference in Certificates to Supplemental Agreements...53

ARTICLE X  AMENDMENTS TO INDENTURES AND NOTE DOCUMENTS........................54
         Section 10.01. Amendments and Supplements to Indentures and Other Note
                        Documents.............................................54

ARTICLE XI  TERMINATION OF TRUSTS.............................................55
         Section 11.01. Termination of the Trust..............................55

ARTICLE XII  MISCELLANEOUS PROVISIONS.........................................56
         Section 12.01. Limitation on Rights of Certificateholders............56

         Section 12.02. Liabilities of Certificateholders.....................56

         Section 12.03. Certificates Nonassessable and Fully Paid.............56

         Section 12.04. [Intentionally omitted]...............................56
         Section 12.05. Notices...............................................56

         Section 12.06. Governing Law.........................................57

         Section 12.07. Severability of Provisions............................58

         Section 12.08. [Intentionally omitted]...............................58
         Section 12.09. Effect of Headings and Table of Contents..............58

         Section 12.10. Successors and Assigns................................58

         Section 12.11. Benefits of Agreement.................................58

         Section 12.12. Legal Holidays........................................58

         Section 12.13. Counterparts..........................................58

         Section 12.14. Communication by Certificateholders with Other
                         Certificateholders...................................58
         Section 12.15.    Intention of Parties...............................59

Exhibit A - Form of  Certificate  to be Delivered in Connection  with  Transfers
            Pursuant to Regulation S

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

<PAGE>

                  This PASS THROUGH  TRUST  AGREEMENT,  dated as of December 23,
1997, among AMTRAN,  INC., an Indiana  corporation (the  "Guarantor"),  AMERICAN
TRANS AIR, INC., an Indiana  corporation (the  "Company"),  and WILMINGTON TRUST
COMPANY, a Delaware banking corporation, as Trustee, is made with respect to the
formation of the  American  Trans Air  1997-1B-S  Pass  Through  Trust,  and the
issuance  of 7.19%  American  Trans  Air  1997-1B-S  Pass  Through  Certificates
representing fractional undivided interests in the Trust.

                                   WITNESSETH:

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

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

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

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

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

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

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

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

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

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

                                    ARTICLE I

                                   DEFINITIONS

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

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

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

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

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

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

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

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

     Agent Members: Has the meaning specified in Section 3.05(a).

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

     Assignment  and Assumption  Agreement:  Means the assignment and assumption
agreement  substantially  in the form of Exhibit D to the Related  Pass  Through
Trust Agreement executed and delivered in accordance with Section 11.01 thereto.

     Authorized Agent: Means any Paying Agent or Registrar for the Certificates.

     Avoidable  Tax:  Has the  meaning  specified  in  Section  7.08(e)  hereof.

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

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

     Cedel: Means Cedel Bank societe anonyme.

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

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

     Certificateholder  or Holder:  Means the Person in whose name a Certificate
is registered in the Register.

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

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

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

     Controlling Party: Means the Person entitled to act as such pursuant to the
terms of the Intercreditor Agreement.

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

     Delivery Period  Termination  Date: Has the meaning specified in Annex A to
the Note Purchase Agreement.

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

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

     Deposits: Has the meaning specified in the Deposit Agreement.

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

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

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

     Equipment  Note:  Means  the  "Secured  Certificates"  as  defined  in  the
Indentures.

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

     Escrow Agent: Means, initially,  First Security Bank, National Association,
and any replacement or successortherefor appointed in accordance with the Escrow
Agreement.

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

     Escrow  Paying  Agent:  Means the Person  acting as paying  agent under the
Escrow Agreement.

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

     Euroclear: Means the Euroclear System.

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

     Final  Withdrawal:  Has the  meaning  specified  in the  Escrow  Agreement.

     Final Withdrawal Date: Has the meaning  specified in the Escrow  Agreement.

     Fractional  Undivided Interest:  Means the fractional undivided interest in
the Trust that is evidenced by aCertificate.

     Global Certificates: Has the meaning assigned to such term in Section 3.01.

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

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

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

     Initial  Purchasers:  Means  Salomon  Brothers  Inc and  Furman  Selz  LLC,
collectively.

     Initial Regular  Distribution  Date:  Means the first Regular  Distribution
Date on which a Scheduled Payment is to be made.

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

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

     Issuance  Date:  Means  the  date  of the  issuance  of  the  Certificates.

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

     Leased  Aircraft:  Has the meaning  specified in the second recital to this
Agreement.

     Letter of  Representations:  Means the  agreement  dated the Issuance  Date
among  the  Company,  the  Trustee  and  the initial
Clearing Agency.

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

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

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

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

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

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

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

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

     Offshore  Global  Certificates:  Has the  meaning  assigned to such term in
Section 3.01.

     Offshore  Physical  Certificates:  Has the meaning assigned to such term in
Section 3.01.

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

     Other  Pass  Through  Trust  Agreement:  Means (i) the  American  Trans Air
1997-1A-S  Pass  Through  Trust  Agreement  relating to the  American  Trans Air
1997-1A-S  Pass Through  Trust,  and (ii) the American  Trans Air 1997-1C-S Pass
Through  Trust  Agreement  relating to the  American  Trans Air  1997-1C-S  Pass
Through  Trust,  each  dated the date  hereof;  and  Other  Pass  Through  Trust
Agreements means all such agreements.

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

     Other Trusts: Means the American Trans Air 1997-1A-S Pass Through Trust and
the American Trans Air 1997-1C-S Pass Through Trust.

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

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

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

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

     Owned  Aircraft:  Has the meaning  specified in the second  recital to this
Agreement.

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

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

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

     Paying  Agent:  Means the paying agent  maintained  and  appointed  for the
Certificates pursuant to Section 7.11.

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

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

     Physical   Certificates:   Has  the  meaning  specified  in  Section  3.01.

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

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

     Private  Placement  Legend:  Has the  meaning  specified  in Section  3.02.

     PTC Event of Default:  Means any failure to pay within 10 Business  Days of
the due date thereof:  (i) the outstanding Pool Balance on June 15, 2013 or (ii)
interest  due  on  the  Certificates  on  any  Distribution   Date  (unless  the
Subordination  Agent  shall have made an  Interest  Drawing  (as  defined in the
Intercreditor  Agreement) or a withdrawal or withdrawals  from a cash collateral
account pursuant to Section 3.6(f) of the Intercreditor Agreement,  with respect
thereto in an amount  sufficient to pay such interest and shall have distributed
such amount to the Certificateholders).

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

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

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

     Register and  Registrar:  Mean the register  maintained  and the  registrar
appointed pursuant to Sections 3.04 and 7.11.

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

     Regulation S Restricted Date: Means the date 40-days after the later of the
commencement of the initial offering of the Certificates and the date of initial
issuance thereof.

     Regulated  Other Pass  Through  Trust  Agreements:  Means the  "Other  Pass
Through  Trust  Agreements"  as  defined  in  the  Related  Pass  Through  Trust
Agreement.

     Related Other Trustee: Means the "Other Trustees" as defined in the Related
Pass Through Trust Agreement.

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

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

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

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

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

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

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

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

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

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

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

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

     Special  Payments  Account:  Means the  account  or  accounts  created  and
     maintained pursuant to Section 4.01(b).

     Special  Redemption  Premium:  Means the  premium,  if any,  payable by the
Company  in  respect  of the  Final  Withdrawal  pursuant  to the Note  Purchase
Agreement.

     Subordination  Agent:  Shall have the  meaning  specified  therefor  in the
Intercreditor Agreement.

     Substitute  Aircraft:  Has  the  meaning  specified  in the  Note  Purchase
Agreement.

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

     Transfer Date  Certificates:  Has the arrears  meaning in the definition of
"Certificates".

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

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

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

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

     U.S.  Global  Certificate:  Has the  meaning  specified  in  Section  3.01.

     U.S.  Physical  Certificates:  Has the meaning  specified in Section  3.01.

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

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

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

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

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

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

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

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

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

                  Section 1.04. Acts of Certificateholders.
                                --------------------------

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

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

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

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

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

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

                                   ARTICLE II

                          ACQUISITION OF TRUST PROPERTY

                  Section 2.01. [Intentionally omitted].

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

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

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

                                   ARTICLE III
                                THE CERTIFICATES

     Section 3.01.  Title,  Form,  Denomination  and Execution of  Certificates.

                  (a) The   Certificates  shall  be  known  as  the  "7.19%
1997-1B-S  Pass  Through  Certificates"  of the  Trust.  Each  Certificate  will
represent  a   fractional   undivided   interest  in  the  Trust  and  shall  be
substantially  in the form set forth as Exhibit A to the  Related  Pass  Through
Trust Agreement, with such appropriate insertions, omissions,  substitutions and
other  variations as are required or permitted by the Related Pass Through Trust
Agreement  or this  Agreement,  as the case may be, or as the  Trustee  may deem
appropriate to reflect the fact that the Certificates are being issued hereunder
as  opposed to the  Related  Pass  Through  Trust  Agreement,  and may have such
letters,   numbers  or  other  marks  of  identification  and  such  legends  or
endorsements  placed  thereon as may be required to comply with the rules of any
securities  exchange or as may,  consistently  herewith,  be  determined  by the
officers  executing such  Certificates,  as evidenced by their  execution of the
Certificates. Any portion of the text of any Certificate may be set forth on the
reverse  thereof,  with an  appropriate  reference  thereto  on the  face of the
Certificate.  At the Escrow  Agent's  request  under the Escrow  Agreement,  the
Trustee shall affix the corresponding  Escrow Receipt to any Certificate  issued
hereunder.  Any  transfer  or exchange  of any  Certificate  shall also effect a
transfer  or  exchange  of the  related  Escrow  Receipt.  Prior  to  the  Final
Withdrawal  Date, no transfer or exchange of any Certificate  shall be permitted
unless the  corresponding  Escrow  Receipt is  attached  thereto  and also is so
transferred  or exchanged.  By acceptance of any  Certificate to which an Escrow
Receipt is attached,  each Holder of such  Certificate  acknowledges and accepts
the  restrictions  on transfer of the Escrow Receipt set forth herein and in the
Escrow Agreement.

                  (b) The  Certificates  shall  be  issued  only  in  fully
registered  form  without  coupons  and only in  denominations  of  $100,000  or
integral multiples of $1,000 in excess thereof,  except that one Certificate may
be issued in a denomination  of less than $100,000.  Each  Certificate  shall be
dated  the  date  of its  authentication.  The  aggregate  Fractional  Undivided
Interest of Certificates shall not at any time exceed $26,333,000.

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

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

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

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

                  Section 3.02. Restrictive Legends.
                                -------------------

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

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

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

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

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

                  Section 3.04. Transfer and Exchange.
                                ---------------------

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

       Section 3.05. Book-Entry Provisions for U.S. Global Certificate and
                     Offshore Global Certificates.

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

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

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

     (d)[Intentionally omitted].

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

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

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

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

     Section 3.06. Special Transfer  Provisions.  The following provisions shall
apply to the Certificates:

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

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

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

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

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

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

     (c) [Intentionally omitted].

     (d) Transfers  of Interests in the Offshore  Global  Certificate on or
after the  Regulation  S  Restricted  Date.  The  Registrar  shall  register any
transfer  of  interests  in the  Offshore  Global  Certificate  on or after  the
Regulation S Restricted Date without requiring any additional certification.

     (e) Transfers to Non-U.S.  Persons at Any Time.  The  following  provisions
shall apply with respect to any registration of any transfer of a Certificate to
a Non-U.S. Person:

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

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

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

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

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

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

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

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

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

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

                                   ARTICLE IV

                          DISTRIBUTIONS; STATEMENTS TO
                               CERTIFICATEHOLDERS

                 Section 4.01. Certificate Account and Special Payments Account.
                                ------------------------------------------------

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

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

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

     Section 4.02.  Distributions from Certificate  Account and Special Payments
Account.

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

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

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

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

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

     (iii) the reason for the Special Payment, and

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

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

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

                  Section 4.03. Statements to Certificateholders.
                                --------------------------------

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

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

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

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

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

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

     (vi) the Pool Balance and the Pool Factor.

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

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

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

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

                                    ARTICLE V

                                   THE COMPANY

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

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

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

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

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

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

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

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

                                   ARTICLE VI

                                     DEFAULT

                  Section 6.01. Events of Default.
                                -----------------

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

                  (b)      Purchase Rights of Certificateholders.
                           -------------------------------------

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

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

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

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

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

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

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

                  (3)  Application  of Moneys  Received  upon  Sale.  Any moneys
         collected  by the Trustee  upon any sale made either under the power of
         sale given by this  Agreement or otherwise for the  enforcement of this
         Agreement shall be applied as provided in Section 4.02.

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

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

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

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

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

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

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

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

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

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

                  Section 6.06. Right of  Certificateholders to Receive Payments
Not to Be Impaired.  Anything in this Agreement to the contrary notwithstanding,
including,  without  limitation,   Section  6.07  hereof,  but  subject  to  the
Intercreditor   Agreement,   the  right  of  any  Certificateholder  to  receive
distributions  of  payments  required  pursuant  to Section  4.02  hereof on the
Certificates  when due, or to  institute  suit for the  enforcement  of any such
payment  on or  after  the  applicable  Regular  Distribution  Date  or  Special
Distribution Date, shall not be impaired or affected without the consent of such
Certificateholder.

                  Section  6.07.  Certificateholders  May Not Bring Suit  Except
Under  Certain  Conditions.  A  Certificateholder  shall  not have the  right to
institute any suit,  action or proceeding at law or in equity or otherwise  with
respect  to  this  Agreement,  for  the  appointment  of a  receiver  or for the
enforcement of any other remedy under this Agreement, unless:

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

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

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

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

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

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

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

                                   ARTICLE VII

                                   THE TRUSTEE

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

     Section  7.02.  Certain  Rights of Trustee.  Subject to the  provisions  of
Section 315 of the Trust Indenture Act:

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

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

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

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

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

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

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

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

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

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

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

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

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

     Section 7.06. Compensation and Reimbursement. The Company agrees:

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

                  (2)  except  as  otherwise   expressly   provided   herein  to
         reimburse, or cause to be reimbursed,  the Trustee upon its request for
         all  reasonable  out-of-pocket  expenses,  disbursements  and  advances
         incurred or made by the Trustee in  accordance  with any  provision  of
         this Agreement or the Intercreditor Agreement (including the reasonable
         compensation  and the  expenses  and  disbursements  of its  agents and
         counsel),  except any such expense,  disbursement  or advance as may be
         attributable to its negligence,  willful  misconduct or bad faith or as
         may be incurred due to the Trustee's breach of its  representations and
         warranties set forth in Section 7.14;

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

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

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

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

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

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

                Section 7.08. Resignation and Removal: Appointment of Successor.
                              -------------------------------------------------

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

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

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

                  (d)      If at any time:

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

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

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

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

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

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

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

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

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

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

                  Section 7.11. Maintenance of Agencies.
                                -----------------------

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

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

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

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

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

                  Section  7.12.  Money for  Certificate  Payments to Be Held in
Trust. All moneys deposited with any Paying Agent for the purpose of any payment
on  Certificates  shall be  deposited  and held in trust for the  benefit of the
Certificateholders  entitled to such payment,  subject to the provisions of this
Section. Moneys so deposited and held in trust shall constitute a separate trust
fund for the benefit of the Certificateholders  with respect to which such money
was deposited.

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

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

     Section 7.14. Representations and Warranties of Trustee. The Trustee hereby
represents and warrants on the Transfer

Date that:

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

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

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

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

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

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

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

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

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

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

                                  ARTICLE VIII

                CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE

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

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

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

     Section 8.04.  Reports by the Guarantor and Company.  The Guarantor and the
Company each shall:

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

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

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

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

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

                                   ARTICLE IX

                             SUPPLEMENTAL AGREEMENTS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                  Section  9.06.  Conformity  with Trust  Indenture  Act.  Every
supplemental  agreement  executed  pursuant to this Article shall conform to the
requirements of the Trust Indenture Act as then in effect.

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

                                    ARTICLE X

                   AMENDMENTS TO INDENTURES AND NOTE DOCUMENTS

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

                                   ARTICLE XI

                              TERMINATION OF TRUSTS

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

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

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

                                   ARTICLE XII

                            MISCELLANEOUS PROVISIONS

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

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

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

                  Section 12.04. [Intentionally omitted].

                  Section 12.05. Notices.
                                 -------

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

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

        Attention:        Executive Vice President and Chief Financial Officer
        Facsimile:     (317) 240-7087

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

        Attention:        Corporate Trust Administration
        Facsimile:        (302) 651-8882

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

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

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

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

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

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

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

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

                  Section 12.08. [Intentionally omitted].

                  Section 12.09.  Effect of Headings and Table of Contents.  The
Article  and  Section  headings  herein  and  the  Table  of  Contents  are  for
convenience only and shall not affect the construction hereof.

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

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

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

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

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

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

<PAGE>

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

 AMTRAN, INC.

President and
Chief Financial Officer

AMERICAN TRANS AIR, INC.

Chief Financial Officer

WILMINGTON TRUST COMPANY, as Trustee

Title:

<PAGE>

                                                                            Page

                                                                       EXHIBIT A

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

                                                                          [date]

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

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

Sirs:

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

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

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

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

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

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

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

                                                     Very truly yours,

                                                     [Name of Transferor]

                                                     Authorized Signature

<PAGE>

                                                                       EXHIBIT B

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

                                                                          [date]

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

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

Dear Sirs:

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

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

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

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

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

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

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

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

                                                     Very truly yours,

                                                     [Name of Transferee]

                                                      Authorized Signature

<PAGE>

                                                                       EXHIBIT C

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

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

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

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

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

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

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

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

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

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

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

     6. Representations and Warranties. (a) The Assignee represents and warrants
to the Assignor and each of the

Beneficiaries that:

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

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

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

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

             (ii) the  execution  and delivery by it of this  Agreement  and the
         performance  by  it  of  its  obligations   hereunder  have  been  duly
         authorized  by it and will not violate its articles of  association  or
         by-laws or the provisions of any indenture, mortgage, contract or other
         agreement to which it is a party or by which it is bound; and

            (iii)  this  Agreement  constitutes  the  legal,  valid and  binding
         obligations of it enforceable  against it in accordance with its terms,
         except as the same may be limited by applicable bankruptcy, insolvency,
         reorganization,  moratorium  or similar  laws  affecting  the rights of
         creditors  generally  and by  general  principles  of  equity,  whether
         considered in a proceeding at law or in equity.

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

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

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

<PAGE>

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

                          ASSIGNOR:

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

                         By:___________________________
                                     Title:

                         ASSIGNEE:

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

                          By:__________________________
                                     Title:

<PAGE>

                                                                            Page

                                                                           C - 1

                                                                      Schedule I

                         Schedule of Assigned Documents

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

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

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

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

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

                                                                     Schedule II

                            Schedule of Beneficiaries

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

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

ING Bank, as Liquidity Provider

Amtran, Inc.

American Trans Air, Inc.

Salomon Brothers Inc, as Initial Purchaser

Furman Selz LLC, as Initial Purchaser

First Security Bank, National Association, as Escrow Agent

Each of the other parties to the Assigned Documents

<PAGE>

                                                                       EXHIBIT D

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

                                                                          [date]

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

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

Sirs:

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

Date:                                                [Name of Transferor
      ------------                                   -------------------

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

Signature Guarantee:

TO BE COMPLETED BY PURCHASER:

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

Dated:
      -------------

                               NOTE:    To be executed by an executive officer.EXECUTION COPY

                                  AMTRAN, INC.

                            AMERICAN TRANS AIR, INC.

                                       and

                            WILMINGTON TRUST COMPANY

                                   as Trustee

                          PASS THROUGH TRUST AGREEMENT

                          Dated as of December 23, 1997

                 American Trans Air 1997-1C-O Pass Through Trust
          7.46% American Trans Air 1997-1C-O Pass Through Certificates

<PAGE>

                                TABLE OF CONTENTS

ARTICLE I  DEFINITIONS.........................................................3
         Section 1.01. Definitions.............................................3
         Section 1.02. COMPLIANCE CERTIFICATES AND OPINIONS...................13
         Section 1.03. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.................14
         Section 1.04. ACTS OF CERTIFICATEHOLDERS.............................14

ARTICLE II  ORIGINAL ISSUANCE OF CERTIFICATES;................................16
         Section 2.01. [Intentionally omitted]................................16
         Section 2.02. ISSUANCE OF CERTIFICATES; ACQUISITION OF
         EQUIPMENT NOTES......................................................16
         Section 2.03.  WITHDRAWAL OF DEPOSITS................................17
         Section 2.04.  ACCEPTANCE BY TRUSTEE.................................17
         Section 2.05. LIMITATION OF POWERS...................................17

ARTICLE III THE CERTIFICATES..................................................18
         Section 3.01. TITLE, FORM, DENOMINATION AND EXECUTION OF
         CERTIFICATES...................................18
         Section 3.02. RESTRICTIVE LEGENDS....................................19
         Section 3.03. AUTHENTICATION OF CERTIFICATES.........................21
         Section 3.04. TRANSFER AND EXCHANGE..................................21
         Section 3.05. BOOK-ENTRY   PROVISIONS  FOR  U.S.  GLOBAL
                       CERTIFICATE  AND  OFFSHORE  GLOBAL  CERTICIATES........22
         Section 3.06. SPECIAL TRANSFER PROVISIONS............................23
         Section 3.07. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES......26
         Section 3.08. PERSONS DEEMED OWNERS..................................26
         Section 3.09. CANCELLATION...........................................26
         Section 3.10. LIMITATION OF LIABILITY FOR PAYMENTS...................26
         Section 3.11. TEMPORARY CERTIFICATES.................................27

ARTICLE IV  DISTRIBUTIONS; STATEMENTS TO......................................27
         Section 4.01. CERTIFICATE ACCOUNT AND SPECIAL PAYMENTS ACCOUNT.......27
         Section 4.02. DISTRIBUTIONS FROM CERTIFICATE ACCOUNT AND SPECIAL
         PAYMENTS ACCOUNT.....................................................28
         Section 4.03. STATEMENTS TO CERTIFICATEHOLDERS.......................29
         Section 4.04. INVESTMENT OF SPECIAL PAYMENT MONEYS...................31

ARTICLE V  THE COMPANY........................................................31
         Section 5.01. MAINTENANCE OF CORPORATE EXISTENCE.....................31
         Section 5.02. CONSOLIDATION, MERGER, ETC.............................31
         Section 5.03.  RULE 144A(D)(4) INFORMATION...........................33

ARTICLE VI  DEFAULT...........................................................33
         Section 6.01. EVENTS OF DEFAULT......................................33
         Section 6.02. INCIDENTS OF SALE OF EQUIPMENT NOTES...................34
         Section 6.03. JUDICIAL PROCEEDINGS INSTITUTED BY TRUSTEE; TRUSTEE
         MAY BRING SUIT.......................................................34
         Section 6.04. CONTROL BY CERTIFICATEHOLDERS..........................35
         Section 6.05. WAIVER OF PAST DEFAULTS................................35
         Section 6.06. RIGHT OF CERTIFICATEHOLDERS TO RECEIVE PAYMENTS NOT
         TO BE IMPAIRED.......................................................36
         Section 6.07. CERTIFICATEHOLDERS MAY NOT BRING SUIT EXCEPT UNDER
         CERTAIN CONDITIONS...................................................36
         Section 6.08. REMEDIES CUMULATIVE....................................37
         Section 6.09. UNDERTAKING FOR COSTS..................................37

ARTICLE VII  THE TRUSTEE......................................................37
         Section 7.01. NOTICE OF DEFAULTS.....................................37
         Section 7.02. CERTAIN RIGHTS OF TRUSTEE..............................37
         Section 7.03. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
         CERTIFICATES..................................39
         Section 7.04. MAY HOLD CERTIFICATES..................................39
         Section 7.05. MONEY HELD IN TRUST....................................39
         Section 7.06. COMPENSATION AND REIMBURSEMENT.........................39
         Section 7.07. CORPORATE TRUSTEE REQUIRED, ELIGIBILITY................41
         Section 7.08. RESIGNATION AND REMOVAL: APPOINTMENT OF SUCCESSOR......41
         Section 7.09. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.................43
         Section 7.10.  MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION
         TO BUSINESS..........................................................43
         Section 7.11. MAINTENANCE OF AGENCIES................................43
         Section 7.12. MONEY FOR CERTIFICATE PAYMENTS TO BE HELD IN TRUST.....45
         Section 7.13. REGISTRATION OF EQUIPMENT NOTES IN NAME OF
         SUBORDINATION AGENT..................................................45
         Section 7.14. REPRESENTATIONS AND WARRANTIES OF TRUSTEE..............45
         Section 7.15. WITHHOLDING TAXES, INFORMATION REPORTING...............46
         Section 7.16. TRUSTEE'S LIENS........................................47
         Section 7.17. PREFERENTIAL COLLECTION OF CLAIMS......................47

ARTICLE VIII  CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE................47
         Section 8.01. THE COMPANY TO FURNISH TRUSTEE WITH NAMES AND
         ADDRESSES OF CERTIFICATEHOLDERS......................................47
         Section 8.02. PRESERVATION OF INFORMATION; COMMUNICATIONS TO
         CERTIFICATEHOLDERS...................................................47
         Section 8.03. REPORTS BY TRUSTEE.....................................48
         Section 8.04. REPORTS BY THE GUARANTOR AND COMPANY...................48

ARTICLE IX  SUPPLEMENTAL AGREEMENTS...........................................49
         Section 9.01. SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF
         CERTIFICATEHOLDERS...................................................49
         Section 9.02. SUPPLEMENTAL AGREEMENTS WITH CONSENT OF
         CERTIFICATEHOLDERS...................................................50
         Section 9.03. DOCUMENTS AFFECTING IMMUNITY OR INDEMNITY..............51
         Section 9.04. EXECUTION OF SUPPLEMENTAL AGREEMENTS...................51
         Section 9.05. EFFECT OF SUPPLEMENTAL AGREEMENTS......................51
         Section 9.06. CONFORMITY WITH TRUST INDENTURE ACT....................52
         Section 9.07. REFERENCE IN CERTIFICATES TO SUPPLEMENTAL AGREEMENTS...52

ARTICLE X  AMENDMENTS TO INDENTURES AND NOTE DOCUMENTS........................52
         Section 10.01. AMENDMENTS AND SUPPLEMENTS TO INDENTURES AND OTHER
         NOTE DOCUMENTS.......................................................52

ARTICLE XI  TERMINATION OF TRUSTS.............................................53
         Section 11.01. TERMINATION OF THE TRUST..............................53

ARTICLE XII  MISCELLANEOUS PROVISIONS.........................................56
         Section 12.01. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS............56
         Section 12.02. LIABILITIES OF CERTIFICATEHOLDERS.....................56
         Section 12.03. CERTIFICATES NONASSESSABLE AND FULLY PAID.............56
         Section 12.04. [Intentionally omitted]...............................56
         Section 12.05. NOTICES...............................................56
         Section 12.06. GOVERNING LAW.........................................57
         Section 12.07. SEVERABILITY OF PROVISIONS............................58
         Section 12.08. [Intentionally omitted]...............................58
         Section 12.09. EFFECT OF HEADINGS AND TABLE OF CONTENTS..............58
         Section 12.10. SUCCESSORS AND ASSIGNS................................58
         Section 12.11. BENEFITS OF AGREEMENT.................................58
         Section 12.12. LEGAL HOLIDAYS........................................58
         Section 12.13. COUNTERPARTS..........................................58
         Section 12.14. COMMUNICATION BY CERTIFICATEHOLDERS WITH OTHER
         CERTIFICATEHOLDERS........................59
         Section 12.15. INTENTION OF PARTIES..................................59

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

<PAGE>

     This PASS THROUGH  TRUST  AGREEMENT,  dated as of December 23, 1997,  among
AMTRAN,  INC., an Indiana  corporation  (the  "Guarantor"),  AMERICAN TRANS AIR,
INC., an Indiana  corporation (the "Company"),  and WILMINGTON TRUST COMPANY,  a
Delaware banking corporation,  as Trustee, is made with respect to the formation
of the American  Trans Air  1997-1C-O  Pass Through  Trust,  and the issuance of
7.46%  American  Trans Air  1997-1C-O  Pass  Through  Certificates  representing
fractional undivided interests in the Trust.

                                   WITNESSETH:

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

     .........WHEREAS,  the Company  intends to finance the  acquisition of each
such Aircraft either (i) through separate  leveraged lease transactions in which
the Company will lease such aircraft  (collectively,  the "LEASED  AIRCRAFT") or
(ii) through  separate  secured loan  transactions in which the Company will own
such Aircraft (collectively, the "OWNED AIRCRAFT");

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

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

     .........WHEREAS,   the  Trustee,  upon  execution  and  delivery  of  this
Agreement,  hereby declares the creation of this Trust (the  "1997-1C-O  Trust")
for the benefit of the Certificateholders,  and the initial  Certificateholders,
as the grantors of the 1997-1C-O Trust, by their  respective  acceptances of the
Certificates, join in the creation of this 1997-1C-O Trust with the Trustee;

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

     .........WHEREAS,   the  Escrow  Agent  and  the  Initial  Purchasers  have
contemporaneously  herewith  entered  into an Escrow  Agreement  with the Escrow
Paying  Agent  pursuant to which the Initial  Purchasers  have  delivered to the
Escrow Agent the proceeds from the sale of the Certificates and have irrevocably
instructed  the Escrow Agent to withdraw and pay funds from such  proceeds  upon
request and proper  certification by the Trustee to purchase  Equipment Notes at
the  times at which the  Aircraft  are  delivered  as  contemplated  by the Note
Purchase  Agreement from time to time prior to the Delivery  Period  Termination
Date  (other  than  the  delivery  of an  Aircraft  on  the  Issuance  Date,  if
applicable);

     .........WHEREAS,  the Escrow Agent on behalf of the Certificateholders has
contemporaneously  herewith entered into a Deposit Agreement with the Depositary
under which the  Deposits  referred  to therein  will be made and from which the
Escrow  Agent will  withdraw  funds to allow the Trustee to  purchase  Equipment
Notes from time to time prior to the  Delivery  Period  Termination  Date (other
than with respect to Equipment  Notes  relating to an Aircraft  delivered on the
Issuance Date, if applicable);

     .........WHEREAS,  pursuant to the terms and  conditions of this  Agreement
and the Note Purchase  Agreement,  upon or shortly  following the delivery of an
Aircraft  (other than delivery of an Aircraft on or prior to the Issuance  Date,
if  applicable),  the  Trustee on behalf of the  Trust,  using  funds  withdrawn
pursuant to the Escrow Agreement, shall (subject to certain conditions) purchase
an Equipment  Note having the same interest rate as, and final maturity date not
later  than the final  Regular  Distribution  Date of, the  Certificates  issued
hereunder  and shall hold such  Equipment  Note in trust for the  benefit of the
Certificateholders;

     .........WHEREAS,  pursuant to the terms and  conditions of this  Agreement
and the  Note  Purchase  Agreement,  upon the  delivery  of an  Aircraft  on the
Issuance  Date, if applicable,  the Trustee on behalf of the Trust,  using funds
from the  proceeds of the sale of the  Certificates,  shall  (subject to certain
conditions)  purchase an Equipment  Note having the same  interest  rate as, and
final maturity date not later than the final Regular  Distribution  Date of, the
Certificates  issued  hereunder and shall hold such  Equipment Note in trust for
the benefit of the Certificateholders;

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

         .........WHEREAS, to facilitate the sale of Equipment Notes to, and the
purchase of Equipment  Notes by, the Trustee on behalf of the  1997-1C-O  Trust,
(i) the  Company  as the  "issuer",  as such term is  defined  in and solely for
purposes of the Securities Act of 1933, as amended,  of the  Certificates  to be
issued  pursuant  hereto,  and as the "obligor",  as such term is defined in and
solely for purposes of the Trust Indenture Act of 1939, as amended, and (ii) the
Guarantor have each duly authorized the execution and delivery of this Agreement
with respect to all such  Certificates  and are  undertaking to perform  certain
administrative  and ministerial duties hereunder and are also undertaking to pay
the fees and expenses of the Trustee;

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

                                    ARTICLE I

                                   DEFINITIONS

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

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

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

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

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

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

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

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

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

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

     APPLICABLE DELIVERY DATE: Has the meaning specified in Section 2.01(b).

     APPLICABLE  PARTICIPATION  AGREEMENT:  Has the meaning specified in Section
2.01(b).

     ASSIGNMENT  AND ASSUMPTION  AGREEMENT:  Means the assignment and assumption
agreement  substantially  in the form of Exhibit D hereto executed and delivered
in accordance with Section 11.01.

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

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

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

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

     CEDEL: Means Cedel Bank societe anonyme.

     CERTIFICATE:  Means any one of the certificates  executed and authenticated
by the Trustee, substantially in the form of Exhibit A hereto.

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

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

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

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

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

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

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

     CUT-OFF DATE: Means the earlier of (a) the Delivery Period Termination Date
and (b) the date on which a Triggering Event occurs.

     DELIVERY  DATE:  Has the  meaning  specified  in  Section  1(b) of the Note
Purchase Agreement.

     DELIVERY NOTICE:  Has the meaning specified in Annex A to the Note Purchase
Agreement.

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

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

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

     DEPOSITS: Has the meaning specified in the Deposit Agreement.

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

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

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

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

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

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

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

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

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

     EUROCLEAR: Means the Euroclear System.

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

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

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

     FINAL WITHDRAWAL NOTICE: Has the meaning specified in Section 2.03.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     NOTE  PURCHASE  AGREEMENT:  Means the Note Purchase  Agreement  dated as of
December 23, 1997 among the Trustee, the Other Trustees, the Company, the Escrow
Agent, the Escrow Paying Agent and the Subordination Agent, providing for, among
other  things,  the purchase of Equipment  Notes by the Trustee on behalf of the
Trust, as the same may be amended,  supplemented or otherwise modified from time
to time, in accordance with its terms.

     NOTICE OF PURCHASE  WITHDRAWAL:  Has the meaning  specified  in the Deposit
Agreement.

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

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

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

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

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

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

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

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

     OUTSTANDING:  With  respect  to  Certificates,  means,  as of the  date  of
determination,  all Certificates  theretofore  authenticated and delivered under
this Agreement, except:

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

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

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

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

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

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

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

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

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

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

     PHYSICAL CERTIFICATES: Has the meaning specified in Section 3.01.

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

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

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

     PTC EVENT OF DEFAULT:  Means any failure to pay within 10 Business  Days of
the due date thereof:  (i) the outstanding Pool Balance on June 15, 2009 or (ii)
interest  due  on  the  Certificates  on  any  Distribution   Date  (unless  the
Subordination  Agent  shall have made an  Interest  Drawing  (as  defined in the
Intercreditor  Agreement) or a withdrawal or withdrawals  from a cash collateral
account pursuant to Section 3.6(f) of the Intercreditor Agreement,  with respect
thereto in an amount  sufficient to pay such interest and shall have distributed
such amount to the Certificateholders).

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

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

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

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

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

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

     RELATED  PASS  THROUGH  TRUST  AGREEMENT:  Means  the  American  Trans  Air
1997-1C-S  Pass  Through  Trust  Agreement  relating to the  American  Trans Air
1997-1C-S Pass Through Trust, dated the date hereof, entered into by the Company
and the  institution  acting as  trustee  thereunder,  which  agreement  becomes
effective  upon the  execution  and delivery of the  Assignment  and  Assumption
Agreement pursuant to Section 11.01.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     TRANSFER DATE: Has the meaning specified in Section 11.01.

     TRIGGERING  EVENT:  Shall  have  the  meaning  specified  therefor  in  the
Intercreditor Agreement.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                   ARTICLE II

                       ORIGINAL ISSUANCE OF CERTIFICATES;
                         ACQUISITION OF EQUIPMENT NOTES

                  Section 2.01. [Intentionally omitted].

     Section 2.02. ISSUANCE OF CERTIFICATES; ACQUISITION OF EQUIPMENT NOTES.
            --------------------------------------------------------

                  (a) On or prior to the Issuance Date of the Certificates,  the
Trustee  shall  execute  and  deliver the  Intercreditor  Agreement,  the Escrow
Agreement and the Note  Purchase  Agreement,  each in the form  delivered to the
Trustee by the Company.  Upon the oral or written  request of the Company or the
 Company's counsel acting on behalf of the Company and the satisfaction of the
closing  conditions  specified in the  Purchase  Agreement,  the Trustee  shall,
execute,  deliver and authenticate  Certificates  equalling in the aggregate the
amount set forth,  with  respect to the  Trust,  in  Schedule A to the  Purchase
Agreement,  and evidencing  the entire  ownership  interest in the Trust,  which
amount equals the maximum  aggregate  principal  amount of Equipment Notes which
may be purchased by the Trustee pursuant to the Note Purchase Agreement.

           (b) On or after the Issuance Date, the Company may deliver
from  time to time to the  Trustee a  Delivery  Notice  relating  to one or more
Aircraft.  After receipt of a Delivery  Notice and in any case no later than one
Business Day prior to a Delivery Date as to which such Delivery  Notice  relates
(the  "APPLICABLE  DELIVERY  DATE") (or, if the Issuance  Date is an  Applicable
Delivery Date, on the Issuance  Date),  the Trustee shall (as and when specified
in the  Delivery  Notice)  instruct  the  Escrow  Agent to  provide  a Notice of
Purchase  Withdrawal to the  Depositary  requesting (i) the withdrawal of one or
more Deposits on the  Applicable  Delivery  Date in  accordance  with and to the
extent permitted by the terms of the Escrow Agreement and the Deposit  Agreement
and (ii) the payment of all, or a portion,  of such Deposit or  Deposits,  in an
aggregate  amount equal to the purchase price of the Equipment Notes relating to
the Aircraft to be delivered on such  Applicable  Delivery Date, to or on behalf
of the Owner Trustee or the Company,  as the case may be, issuing such Equipment
Notes, all as shall be described in the Delivery  Notice;  PROVIDED that, if the
Issuance Date is an Applicable  Delivery Date, such purchase price shall be paid
from a portion of the  proceeds  of the sale of the  Certificates.  The  Trustee
shall (as and when specified in such Delivery Notice), subject to the conditions
set forth in  Sections 1 and 2 of the Note  Purchase  Agreement,  enter into and
perform its  obligations  under the  Participation  Agreement  specified in such
Delivery  Notice  (the  "APPLICABLE  PARTICIPATION  AGREEMENT")  and cause  such
certificates,  documents and legal  opinions  relating to the Trustee to be duly
delivered as required by the Applicable  Participation Agreement. If at any time
prior to the  Applicable  Delivery  Date,  the  Trustee  receives  a  notice  of
postponement  pursuant to Section 1(d) or 1(e) of the Note  Purchase  Agreement,
then the Trustee shall give the  Depositary  (with a copy to the Escrow Agent) a
notice of  cancellation of such Notice of Purchase  Withdrawal  relating to such
Deposit or Deposits on such Applicable  Delivery Date. Upon  satisfaction of the
conditions   specified  in  the  Note  Purchase  Agreement  and  the  Applicable
Participation  Agreement,  the Trustee shall purchase the  applicable  Equipment
Notes with the proceeds of the  withdrawals  of one or more Deposits made on the
Applicable  Delivery Date in accordance with the terms of the Deposit  Agreement
and the Escrow  Agreement (or, if the Issuance Date is the  Applicable  Delivery
Date with respect to such Applicable Participation Agreement,  from a portion of
the  proceeds  of the  sale of the  Certificates).  The  purchase  price of such
Equipment  Notes  shall  equal the  principal  amount of such  Equipment  Notes.
Amounts  withdrawn from such Deposit or Deposits in excess of the purchase price
of the Equipment  Notes or to the extent not applied on the Applicable  Delivery
Date to the purchase price of the Equipment Notes,  shall be re-deposited by the
Trustee with the Depositary on the Applicable  Delivery Date in accordance  with
the terms of the Deposit Agreement.

                  Section 2.03.  WITHDRAWAL OF DEPOSITS.  If any Deposits remain
outstanding  on the  Business  Day next  succeeding  the Cut-Off  Date,  (i) the
  Trustee shall give the Escrow Agent notice that the Trustee's obligation to
purchase  Equipment  Notes under the Note Purchase  Agreement has terminated and
instruct  the  Escrow  Agent to  provide  a notice  of Final  Withdrawal  to the
Depositary  substantially in the form of Exhibit B to the Deposit Agreement (the
"FINAL  WITHDRAWAL  NOTICE")  and (ii) the  Trustee  will make a demand upon the
Company  under the Note  Purchase  Agreement  for an amount equal to the Special
Redemption Premium, such payment to be made on the Final Withdrawal Date.

                  Section  2.04.  ACCEPTANCE BY TRUSTEE.  The Trustee,  upon the
  execution and delivery of this Agreement, acknowledges its acceptance of all
right,  title,  and interest in and to the Trust  Property and declares that the
Trustee holds and will hold such right,  title,  and interest for the benefit of
all then  present  and future  Certificateholders,  upon the  trusts  herein set
forth. By its payment for and acceptance of each Certificate  issued to it under
this Agreement,  each initial  Certificateholder as grantor of the Trust thereby
joins in the creation and declaration of the Trust.

                  Section 2.05.  LIMITATION OF POWERS.  The Trust is constituted
solely for the purpose of making the  investment  in the Equipment  Notes,  and,
except as set forth herein, the Trustee shall not be authorized or empowered to
acquire  any  other  investments  or  engage in any  other  activities  and,  in
particular, the Trustee shall not be authorized or empowered to do anything that
would  cause such Trust to fail to  qualify  as a  "grantor  trust" for  federal
income tax purposes  (including  as subject to this  restrictions  acquiring the
Aircraft  (as defined in the  respective  related  Indentures)  by bidding  such
Equipment  Notes or  otherwise,  or taking any action  with  respect to any such
Aircraft once acquired).

                                   ARTICLE III
                                THE CERTIFICATES

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

     (a) The  Certificates  shall be known as the "7.46%  1997-1C-O Pass Through
Certificates"  of the  Trust.  Each  Certificate  will  represent  a  fractional
undivided interest in the Trust and shall be substantially in the form set forth
as Exhibit A hereto, with such appropriate insertions, omissions,  substitutions
and other variations as are required or permitted by this Agreement and may have
such  letters,  numbers or other  marks of  identification  and such  legends or
endorsements  placed  thereon as may be required to comply with the rules of any
securities  exchange or as may,  consistently  herewith,  be  determined  by the
officers  executing such  Certificates,  as evidenced by their  execution of the
Certificates. Any portion of the text of any Certificate may be set forth on the
reverse  thereof,  with an  appropriate  reference  thereto  on the  face of the
Certificate.  At the Escrow  Agent's  request  under the Escrow  Agreement,  the
Trustee shall affix the corresponding  Escrow Receipt to each  Certificate.  Any
transfer or exchange of any Certificate shall also effect a transfer or exchange
of the related Escrow Receipt.  Prior to the Final  Withdrawal Date, no transfer
or exchange  of any  Certificate  shall be  permitted  unless the  corresponding
Escrow Receipt is attached  thereto and also is so transferred or exchanged.  By
acceptance  of any  Certificate  to which an Escrow  Receipt is  attached,  each
Holder of such Certificate acknowledges and accepts the restrictions on transfer
of the Escrow Receipt set forth herein and in the Escrow Agreement.

     (b) The Certificates  shall be issued only in fully registered form without
coupons and only in denominations of $100,000 or integral multiples of $1,000 in
excess  thereof,  except that one Certificate may be issued in a denomination of
less  than  $100,000.   Each  Certificate   shall  be  dated  the  date  of  its
authentication.  The aggregate  Fractional  Undivided  Interest of  Certificates
shall not at any time exceed $18,153,000.

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

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

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

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

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

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

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

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

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

                  Section 3.03. AUTHENTICATION OF CERTIFICATES.
                                ------------------------------

     (a) The Trustee shall duly execute,  authenticate and deliver  Certificates
in  authorized  denominations  equalling in the  aggregate the amount set forth,
with  respect  to the  Trust,  in  Schedule  A to the  Purchase  Agreement,  and
evidencing the entire ownership  interest of the Trust,  which amount equals the
maximum  aggregate  principal  amount of Equipment  Notes to be purchased by the
Trustee pursuant to the Note Purchase Agreement.

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

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

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

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

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

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

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

     (d) [Intentionally omitted].

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

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

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

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

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

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

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

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

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

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

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

                  (c)      [Intentionally omitted].

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

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

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

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

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

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

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

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

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

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

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

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

                                   ARTICLE IV

                          DISTRIBUTIONS; STATEMENTS TO
                               CERTIFICATEHOLDERS

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

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

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

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

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

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

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

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

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

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

                  (iii)    the reason for the Special Payment, and

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

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

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

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

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

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

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

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

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

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

     (vi) the Pool Balance and the Pool Factor.

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

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

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

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

                                    ARTICLE V

                                   THE COMPANY

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

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

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

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

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

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

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

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

                                   ARTICLE VI

                                     DEFAULT

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

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

                  (b) PURCHASE RIGHTS OF  CERTIFICATEHOLDERS.  At any time after
the  occurrence  and  during  the  continuation  of  a  Triggering  Event,  each
Certificateholder shall have the right (which shall not expire upon any purchase
of the Class A Certificates pursuant to the Class B Trust Agreement) to purchase
all,  but not  less  than  all,  of the  Class A  Certificates  and the  Class B
Certificates  upon ten days' written notice to the Class A Trustee,  the Class B
Trustee and each other Certificateholder,  PROVIDED that (A) if prior to the end
of such ten-day  period any other  Certificateholder  notifies  such  purchasing
Certificateholder that such other Certificateholder wants to participate in such
purchase,  then  such  other  Certificateholder  may join  with  the  purchasing
Certificateholder  to  purchase  all,  but not less  than  all,  of the  Class A
Certificates  and the  Class B  Certificates  pro rata  based on the  Fractional
Undivided Interest in the Trust held by each such  Certificateholder  and (B) if
prior to the end of such  ten-day  period any other  Certificateholder  fails to
notify the purchasing Certificateholder of such other Certificateholder's desire
to participate in such a purchase,  then such other Certificateholder shall lose
its right to  purchase  the Class A  Certificates  and the Class B  Certificates
pursuant to this Section 6.01(b).

                  No such purchase of the Class A  Certificates  and the Class B
Certificates  shall be effective unless the purchaser shall certify to the Other
Trustees  of each such Class that  contemporaneously  with such  purchase,  such
purchaser is  purchasing,  pursuant to the terms of this Agreement and the Other
Pass  Through  Trust  Agreements,  the  Class A  Certificates  and  the  Class B
Certificates. Each payment of the purchase price of the Class A Certificates and
the  Class  B  Certificates  as  determined  in the  Other  Pass  Through  Trust
Agreements  shall be made to an account or  accounts  designated  by the Trustee
under such Other Pass Through Trust  Agreements  and each such purchase shall be
subject to the terms of this Section.  The Class A Certificates  and the Class B
Certificates  will be deemed to be purchased on the date payment of the purchase
price is made  notwithstanding the failure of the  Certificateholders  of either
Class to deliver any Certificates  (whether in the form of Physical Certificates
or beneficial interests in Global  Certificates) and, upon such a purchase,  (i)
the  only  rights  of the  Certificateholders  will be to  deliver  the  Class A
Certificates or the Class B  Certificates,  as the case may be, to the purchaser
and receive the purchase  price for the  Certificates  and (ii) if the purchaser
shall so request such  Certificateholder  will comply with all of the provisions
of Section  3.04 of the Other Pass  Through  Trust  Agreement  for such Class to
enable new  Certificates to be issued to the purchaser in such  denominations as
it shall  request.  All charges and expenses in connection  with the issuance of
any such new Certificates shall be borne by the purchaser thereof.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                   ARTICLE VII

                                   THE TRUSTEE

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                  (2)  except  as  otherwise   expressly   provided   herein  to
         reimburse, or cause to be reimbursed,  the Trustee upon its request for
         all  reasonable  out-of-pocket  expenses,  disbursements  and  advances
         incurred or made by the Trustee in  accordance  with any  provision  of
         this Agreement or the Intercreditor Agreement (including the reasonable
         compensation  and the  expenses  and  disbursements  of its  agents and
         counsel),  except any such expense,  disbursement  or advance as may be
         attributable to its negligence,  willful  misconduct or bad faith or as
         may be incurred due to the Trustee's breach of its  representations and
         warranties set forth in Section 7.14;

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

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

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

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

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

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

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

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

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

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

                  (d)      If at any time:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     (b) the  Trustee  has full  power,  authority  and legal  right to execute,
deliver and perform this  Agreement,  the  Intercreditor  Agreement,  the Escrow
Agreement,  the Note Purchase  Agreement and the Note Documents to which it is a
party and has taken all necessary  action to authorize the  execution,  delivery
and performance by it of this Agreement, the Intercreditor Agreement, the Escrow
Agreement,  the Note Purchase  Agreement and the Note Documents to which it is a
party;

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

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

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

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

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

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

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

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

                                  ARTICLE VIII

                CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE

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

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

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

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

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

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

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

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

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

                                   ARTICLE IX

                             SUPPLEMENTAL AGREEMENTS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                    ARTICLE X

                   AMENDMENTS TO INDENTURES AND NOTE DOCUMENTS

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

                                   ARTICLE XI

                              TERMINATION OF TRUSTS

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

                  Upon the  earlier  of (i) the  first  Business  Day  following
January 31, 1999,  or, if later,  the fifth  Business Day following the Delivery
Period  Termination  Date and (ii) the fifth  Business Day following the date on
which a Triggering Event occurs (such date, the "Transfer  Date"),  or, if later
the date on which all of the conditions set forth in the  immediately  following
sentence have been satisfied,  the Trustee is hereby  directed  (subject only to
the  immediately  following  sentence)  to,  and the  Company  shall  direct the
institution  that will  serve as the  Related  Trustee  under the  Related  Pass
Through Trust  Agreement to,  execute and deliver the  Assignment and Assumption
Agreement,  pursuant to which the Trustee shall assign, transfer and deliver all
of the Trustee's right,  title and interest to the Trust Property to the Related
Trustee  under the Related Pass  Through  Trust  Agreement.  The Trustee and the
Related  Trustee  shall  execute  and  deliver  the  Assignment  and  Assumption
Agreement upon the satisfaction of the following conditions:

                  (i) The  Trustee,  the Related  Trustee and each of the Rating
         Agencies (as defined in the  Intercreditor  Agreement)  then rating the
         Certificates  shall  have  received  an  Officer's  Certificate  and an
         Opinion  of Counsel  dated the date of the  Assignment  and  Assumption
         Agreement and each satisfying the  requirements of Section 1.02,  which
         Opinion of Counsel shall be substantially to the effect set forth below
         and  may  be  relied  upon  by the  Beneficiaries  (as  defined  in the
         Assignment and Assumption Agreement):

     (a) upon the  execution  and  delivery  thereof by the  parties  thereto in
accordance  with the terms of this  Agreement and the Related Pass Through Trust
Agreement, the Assignment and Assumption Agreement will constitute the valid and
binding obligation of each of the parties thereto  enforceable against each such
party  in  accordance   with  its  terms  (subject  to  applicable   bankruptcy,
insolvency,  reorganization,  moratorium  or similar laws  affecting  creditor's
rights generally and to general principles of equity);

     (b) upon the  execution  and  delivery  of the  Assignment  and  Assumption
Agreement in  accordance  with the terms of this  Agreement and the Related Pass
Through Trust  Agreement,  each of the  Certificates  then  Outstanding  will be
entitled to the benefits of the Related Pass Through Trust Agreement;

     (c) the Related  Trust is not required to be  registered  as an  investment
company under the Investment Company Act of 1940, as amended;

     (d) the Related  Pass Through  Trust  Agreement  constitutes  the valid and
binding obligation of the Company  enforceable against the Company in accordance
with its terms (subject to applicable  bankruptcy,  insolvency,  reorganization,
moratorium or similar laws affecting  creditor's rights generally and to general
principles of equity); and

     (e) neither the execution  and delivery of the  Assignment  and  Assumption
Agreement in  accordance  with the terms of this  Agreement and the Related Pass
Through Trust  Agreement,  nor the  consummation  by the parties  thereto of the
transactions contemplated to be consummated thereunder on the date thereof, will
violate any law or  governmental  rule or regulation of the State of New York or
the United  States of America  known to such  counsel  to be  applicable  to the
transactions contemplated by the Assignment and Assumption Agreement.

             (ii) The Trustee and the Company  shall have received (x) a copy of
         the  articles  of  incorporation  and  bylaws  of the  Related  Trustee
         certified  as of the  Transfer  Date  by  the  Secretary  or  Assistant
         Secretary of such  institution and (y) a copy of the filing  (including
         all attachments thereto) made by the institution serving as the Related
         Trustee  with  the  Office  of the  Superintendent,  State  of New York
         Banking  Department for the  qualification of the Related Trustee under
         Section 131(3) of the New York Banking Law.

Upon the execution of the  Assignment  and  Assumption  Agreement by the parties
thereto,  the Trust shall be terminated,  the  Certificateholders  shall receive
beneficial interests in the Related Trust in exchange for their interests in the
Trust  equal to their  respective  beneficial  interests  in the Trust,  and the
Outstanding  Certificates  representing  Fractional  Undivided  Interests in the
Trust shall be deemed for all  purposes of this  Agreement  and the Related Pass
Through Trust  Agreement,  without  further  signature or action of any party or
Certificateholder, to be certificates representing the same fractional undivided
interests in the Related  Trust and its trust  property.  By  acceptance  of its
Certificate,  each Certificateholder  consents to such assignment,  transfer and
delivery of the Trust  Property  to the  trustee of the  Related  Trust upon the
execution and delivery of the Assignment and Assumption Agreement.

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

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

                                   ARTICLE XII

                            MISCELLANEOUS PROVISIONS

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

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

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

                  Section 12.04. [Intentionally omitted].

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                  Section 12.08. [Intentionally omitted].

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

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

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

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

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

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

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

<PAGE>

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

                                      AMTRAN, INC.

By:
   ------
                                           President and
                                           Chief Financial Officer

                                      AMERICAN TRANS AIR, INC.

By:
   ------
                                           Chief Financial Officer

                                      WILMINGTON TRUST COMPANY,
                                      as Trustee

By:
   ------
                                                                   Title:

<PAGE>

                                   EXHIBIT A

                               FORM OF CERTIFICATE

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

                  [UNLESS  THIS   CERTIFICATE  IS  PRESENTED  BY  AN  AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION  ("DTC"),
TO THE TRUSTEE OR ITS AGENT FOR  REGISTRATION OF TRANSFER,  EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IN EXCHANGE FOR THIS CERTIFICATE IS REGISTERED IN THE
NAME OF CEDE & CO.  OR IN SUCH  OTHER  NAME  AS IS  REQUESTED  BY AN  AUTHORIZED
REPRESENTATIVE  OF DTC (AND ANY PAYMENT  HEREON IS MADE TO CEDE & CO. OR TO SUCH
OTHER  ENTITY AS IS  REQUESTED  BY AN  AUTHORIZED  REPRESENTATIVE  OF DTC),  ANY
TRANSFER,  PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

                  TRANSFERS  OF THIS  GLOBAL  CERTIFICATE  SHALL BE  LIMITED  TO
TRANSFERS  IN  WHOLE,  BUT NOT IN PART,  TO  NOMINEES  OF DTC OR TO A  SUCCESSOR
THEREOF OR SUCH  SUCCESSOR'S  NOMINEE AND  TRANSFERS  OF PORTIONS OF THIS GLOBAL
CERTIFICATE   SHALL  BE  LIMITED  TO  TRANSFERS  MADE  IN  ACCORDANCE  WITH  THE
RESTRICTIONS  SET  FORTH IN  SECTIONS  3.05 AND 3.06 OF THE PASS  THROUGH  TRUST
AGREEMENT REFERRED TO HEREIN .]2

<PAGE>

              AMERICAN TRANS AIR, INC. 1997-1C-O PASS THROUGH TRUST

                                  Pass Through
                          Certificate, Series 1997-1C-O

Issuance Date:

Final Legal Distribution Date:

         Evidencing a Fractional  Undivided Interest in the 1997-1C-O Trust, the
         Property of Which  Includes  Certain  Equipment  Notes each  secured by
         Aircraft leased to American Trans Air, Inc.

Certificate
No.            $        Fractional Undivided Interest representing      % of the
    ---------   -------                                            -----
Trust per $1,000 of Reference Principal Amount

                  THIS  CERTIFIES THAT , for value  received,  is the registered
owner of a  Fractional  Undivided  Interest  in the  amount of Dollars ($ ) (the
"Reference  Principal  Amount") in the American Trans Air 1997-1C-O Pass Through
Trust (the "Trust") created by Wilmington  Trust Company,  not in its individual
capacity but solely as trustee (the "Trustee"), pursuant to a Pass Through Trust
Agreement  dated as of  December , 1997 (the  "Agreement"),  among the  Trustee,
Amtran,  Inc., a corporation  incorporated  under Indiana law (the "Guarantor"),
and American Trans Air, Inc., a corporation  incorporated under Indiana law (the
"Company"),  a summary of certain of the  pertinent  provisions  of which is set
forth below. To the extent not otherwise  defined herein,  the capitalized terms
used  herein  have  the  meanings  assigned  to  them  in  the  Agreement.  This
Certificate  is one of the  duly  authorized  Certificates  designated  as "Pass
Through Certificates, Series 1997-1C-O" (herein called the "Certificates"). This
Certificate  is issued  under  and is  subject  to the  terms,  provisions,  and
conditions of the Agreement and the Intercreditor Agreement, to which agreements
the  Certificateholder  of this  Certificate by virtue of the acceptance  hereof
assents and by which such  Certificateholder is bound. The property of the Trust
includes  certain  Equipment  Notes and all rights of the Trust to  receive  any
payments  under the  Intercreditor  Agreement  and the  Liquidity  Facility (the
"Trust  Property").  Each issue of the Equipment  Notes is secured by a security
interest in The Aircraft leased to the Company.

                  Each of the  Certificates  represents a  fractional  undivided
interest  in the Trust and the Trust  Property,  and has no rights,  benefits or
interest in respect of any assets or property other than the Trust Property. The
undivided  percentage  interest  in  the  Trust  represented  by  each  of  this
Certificate (as specified above) and the other Pass Through Certificates, Series
1997-1C-O,  was  determined  on the basis of (x) the  aggregate of the Reference
Principal  Amount of this Certificate (as specified above) and of the other Pass
Through Certificates,  Series 1997-1C-O and (y) the aggregate original principal
amounts of the Equipment Notes constituting the Trust Property.

                  Subject to and in  accordance  with the terms of the Agreement
and the Intercreditor Agreement, from funds then available to the Trustee, there
will be  distributed  on each  January  15,  April 15, July 15 and October 15 (a
"Regular  Distribution  Date"),  commencing  January 15, 1998,  to the Person in
whose name this  Certificate  is registered at the close of business on the 15th
day  preceding  the  Regular  Distribution  Date,  an amount in  respect  of the
Scheduled Payments on the Equipment Notes due on such Regular Distribution Date,
the receipt of which has been confirmed by the Trustee,  equal to the product of
the percentage interest in the Trust evidenced by this Certificate and an amount
equal to the sum of such Scheduled  Payments.  Subject to and in accordance with
the terms of the Agreement and the  Intercreditor  Agreement,  in the event that
Special Payments on the Equipment Notes are received by the Trustee,  from funds
then  available to the Trustee,  there shall be  distributed  on the  applicable
Special  Distribution  Date,  to the  Person in whose name this  Certificate  is
registered  at the  close of  business  on the 15th day  preceding  the  Special
Distribution  Date,  an  amount  in  respect  of such  Special  Payments  on the
Equipment Notes,  the receipt of which has been confirmed by the Trustee,  equal
to the  product  of the  percentage  interest  in the  Trust  evidenced  by this
Certificate and an amount equal to the sum of such Special Payments so received.
If a Regular  Distribution  Date or Special  Distribution Date is not a Business
Day,  distribution shall be made on the immediately  following Business Day with
the same  force  and  effect  as if made on such  Regular  Distribution  Date or
Special  Distribution  Date and no interest shall accrue during the  intervening
period.  The Trustee  shall mail notice of each Special  Payment and the Special
Distribution Date therefor to the Certificateholder of this Certificate.

                  Distributions  on this Certificate will be made by the Trustee
by check mailed to the Person  entitled  thereto,  without the  presentation  or
surrender of this  Certificate or the making of any notation  hereon.  Except as
otherwise  provided in the Agreement and  notwithstanding  the above,  the final
distribution on this Certificate will be made after notice mailed by the Trustee
of the pendency of such distribution and only upon presentation and surrender of
this  Certificate  at the  office  or agency of the  Trustee  specified  in such
notice.

                  The  Certificates do not represent a direct  obligation of, or
an obligation  guaranteed by, or an interest in, the  Guarantor,  the Company or
the Trustee or any affiliate  thereof.  The Certificates are limited in right of
payment,  all as more  specifically  set  forth  on the face  hereof  and in the
Agreement.  All payments or distributions made to  Certificateholders  under the
Agreement shall be made only from the Trust Property and only to the extent that
the Trustee shall have sufficient  income or proceeds from the Trust Property to
make  such  payments  in  accordance  with  the  terms  of the  Agreement.  Each
Certificateholder of this Certificate,  by its acceptance hereof, agrees that it
will look  solely to the  income and  proceeds  from the Trust  Property  to the
extent available for distribution to such  Certificateholder  as provided in the
Agreement.  This  Certificate  does not purport to summarize  the  Agreement and
reference  is  made  to  the  Agreement  for  information  with  respect  to the
interests, rights, benefits, obligations, proceeds, and duties evidenced hereby.
A copy of the Agreement  may be examined  during  normal  business  hours at the
principal office of the Trustee, and at such other places, if any, designated by
the Trustee, by any Certificateholder upon request.

                  The  Agreement   permits,   with  certain  exceptions  therein
provided,  the  amendment  thereof  and  the  modification  of  the  rights  and
obligations  of the Company and the rights of the  Certificateholders  under the
Agreement  at any time by the  Guarantor,  the Company and the Trustee  with the
consent of the  Certificateholders  holding Certificates  evidencing  Fractional
Undivided  Interests  aggregating  not less than a majority  in  interest in the
Trust. Any such consent by the  Certificateholder  of this Certificate  shall be
conclusive   and  binding  on  such   Certificateholder   and  upon  all  future
Certificateholders  of this  Certificate and of any Certificate  issued upon the
transfer  hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent is made upon this  Certificate.  The Agreement  also permits the
amendment thereof, in certain limited circumstances,  without the consent of the
Certificateholders of any of the Certificates.

                  As   provided  in  the   Agreement   and  subject  to  certain
limitations  set forth,  the transfer of this  Certificate is registrable in the
Register upon surrender of this  Certificate for registration of transfer at the
offices or agencies  maintained by the Trustee in its capacity as Registrar,  or
by any successor  Registrar duly endorsed or accompanied by a written instrument
of transfer in form satisfactory to the Trustee and the Registrar, duly executed
by the  Certificateholder  hereof  or  such  Certificateholder's  attorney  duly
authorized in writing,  and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate Fractional Undivided Interest in the
Trust will be issued to the designated transferee or transferees.

                  The Certificates are issuable only as registered  Certificates
without  coupons in  minimum  denominations  of  $100,000  Fractional  Undivided
Interest and  integral  multiples  of $1,000 in excess  thereof  except that one
Certificate  may be in a  denomination  of  less  than  $100,000  that  is not a
multiple  of  $1,000.  As  provided  in the  Agreement  and  subject  to certain
limitations  therein  set  forth,  the  Certificates  are  exchangeable  for new
Certificates   of  authorized   denominations   evidencing  the  same  aggregate
Fractional   Undivided   Interest   in   the   Trust,   as   requested   by  the
Certificateholder surrendering the same.

                  No service  charge will be made for any such  registration  of
transfer or exchange,  but the Trustee shall require payment of a sum sufficient
to cover any tax or governmental charge payable in connection therewith.

                  The Trustee,  the  Registrar,  and any agent of the Trustee or
the Registrar may treat the person in whose name this  Certificate is registered
as the owner hereof for all purposes,  and neither the Trustee,  the  Registrar,
nor any such agent shall be affected by any notice to the contrary.

                  The obligations and responsibilities  created by the Agreement
and  the  Trust  created  thereby  shall  terminate  upon  the  distribution  to
Certificateholders of all amounts required to be distributed to them pursuant to
the  Agreement  and the  disposition  of all property  held as part of the Trust
Property.

                  Any person  acquiring  or  accepting  this  Certificate  or an
interest  herein will,  by such  acquisition  or  acceptance,  be deemed to have
represented  and warranted to and for the benefit of each Owner  Participant and
the Company that either:  (i) the assets of an employee  benefit plan subject to
Title I of the  Employment  Retirement  Income  Security Act of 1974, as amended
("ERISA"),  or of a plan subject to Section 4975 of the Internal Revenue Code of
1986, as amended (the "CODE"),  have not been used to purchase this  Certificate
or interest  herein are exempt from the prohibited  transaction  restrictions of
ERISA and the Code pursuant to one or more  prohibited  transaction or statutory
exemptions.

                  THE  AGREEMENT AND THIS  CERTIFICATE  SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES.

                  Unless  the  certificate  of  authentication  hereon  has been
executed by the Trustee,  by manual  signature,  this  Certificate  shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

<PAGE>

                  IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.

                                                     AMERICAN TRANS AIR, INC.

                 By:      WILMINGTON TRUST COMPANY, not in its individual
                          capacity but solely as Trustee

                 By:
                     -----------------------------------------------------
                                                              Title:

Dated:
      ----------

<PAGE>

              [FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]

                    This is one of the Certificates referred
                      to in the within-mentioned Agreement.

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

By:
   ------
                                              Authorized Officer

<PAGE>

                             FORM OF TRANSFER NOTICE

     FOR VALUE  RECEIVED  the  undersigned  registered  holder  hereby  sell(s),
assign(s) and transfer(s) unto

INSERT TAXPAYER IDENTIFICATION NO.
---------------------------------

please print or typewrite name and address including zip code of assignee

     the  within  Certificate  and all  rights  thereunder,  hereby  irrevocably
constituting and appointing

attorney  to transfer  said  Certificate  on the books of the Trustee  with full
power of substitution in the premises.

                     [THE FOLLOWING PROVISION TO BE INCLUDED
                       ON ALL U.S. PHYSICAL CERTIFICATES]

         In connection with any transfer of this Certificate  occurring prior to
the date that is the earlier of the date of an effective  Registration Statement
or December __, 1999,  the  undersigned  confirms  that  without  utilizing  any
general solicitation or general advertising that:

                                   [CHECK ONE]

[                 ] (a) this Certificate is being transferred in compliance with
                  the exemption  from  registration  under the Securities Act of
                  1933, as amended, provided by Rule 144A thereunder.

                                       OR

[                 ] (b) this  Certificate  is being  transferred  other  than in
                  accordance  with (a) above and documents  are being  furnished
                  that comply with the  conditions of transfer set forth in this
                  Certificate and the Agreement.

If neither of the  foregoing  boxes is checked,  the Trustee or other  Registrar
shall not be obligated to register  this  Certificate  in the name of any Person
other  than the  Holder  hereof  unless  and  until the  conditions  to any such
transfer of  registration  set forth herein and in Section 3.06 of the Agreement
shall have been satisfied.

Date:                                           [NAME OF TRANSFEROR]
      ------------                              --------------------

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

Signature Guarantee:

TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.

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

                                                        [Name of Transferee]

Dated:
      -------------

                                NOTE:    To be executed by an executive officer.

<PAGE>

                                    EXHIBIT B

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

                                                                      [date]

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

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

Sirs:

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

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

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

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

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

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

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

                                                     Very truly yours,

                                                     [Name of Transferor]

By:
   ------
                                                          Authorized Signature

<PAGE>

                                    EXHIBIT C

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

                                                                        [date]

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

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

Dear Sirs:

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

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

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

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

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

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

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

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

                                                     Very truly yours,

                                                     [Name of Transferee]

By:
   ------
                                                      Authorized Signature

<PAGE>

                                    EXHIBIT D

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

             (ii) the  execution  and delivery by it of this  Agreement  and the
         performance  by  it  of  its  obligations   hereunder  have  been  duly
         authorized  by it and will not violate its articles of  association  or
         by-laws or the provisions of any indenture, mortgage, contract or other
         agreement to which it is a party or by which it is bound; and

            (iii)  this  Agreement  constitutes  the  legal,  valid and  binding
         obligations of it enforceable  against it in accordance with its terms,
         except as the same may be limited by applicable bankruptcy, insolvency,
         reorganization,  moratorium  or similar  laws  affecting  the rights of
         creditors  generally  and by  general  principles  of  equity,  whether
         considered in a proceeding at law or in equity.

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

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

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

<PAGE>

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

                                    ASSIGNOR:

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

                                                  By:___________________________
                                                           Title:

                                    ASSIGNEE:

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

                                                  By:__________________________
                                                           Title:

<PAGE>

                                   Schedule I

                         Schedule of Assigned Documents

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

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

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

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

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

<PAGE>

                                   Schedule II

                            Schedule of Beneficiaries

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

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

ING Bank, as Liquidity Provider

Amtran, Inc.

American Trans Air, Inc.

Salomon Brothers Inc, as Initial Purchaser

Furman Selz LLC, as Initial Purchaser

First Security Bank, National Association, as Escrow Agent

Each of the other parties to the Assigned Documents

<PAGE>

                                    EXHIBIT E

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

                                                                         [date]

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

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

Sirs:

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

Date:                                                      [NAME OF TRANSFEROR
      ------------                                         -------------------

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

Signature Guarantee:

TO BE COMPLETED BY PURCHASER:

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

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

                               NOTE:    To be executed by an executive officer.

1Not to be included on the face of the Offshore  Global  Certificate or any
Offshore  Physical  Certificates.
2To be  included  on the face of each  Global Certificate.

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