Document:

FOURTH AMENDED AND RESTATED
                                CREDIT AGREEMENT
                           DATED AS OF APRIL 25, 2000
                                      AMONG
                                ATLAS AIR, INC.,
                                  as Borrower,
                           THE LENDERS LISTED HEREIN,
                                   as Lenders,
                                       and
                             BANKERS TRUST COMPANY,
                             as Administrative Agent
                                  ARRANGED BY:
                          DEUTSCHE BANK SECURITIES INC.
                                 ATLAS AIR, INC.

                           FOURTH AMENDED AND RESTATED

                                CREDIT AGREEMENT
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                                TABLE OF CONTENTS

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SECTION 1.        DEFINITIONS...............................................      2

     1.1          Certain Defined Terms.....................................      2

     1.2          Accounting Terms; Utilization of GAAP for Purposes of
                  Calculations Under Agreement..............................     27

     1.3          Other Definitional Provisions.............................     27

SECTION 2.        AMOUNTS AND TERMS OF COMMITMENTS AND LOANS................     27

     2.1          Commitments; Making of Loans; Notes; Register.............     27

     2.2          Interest on the Loans.....................................     31

     2.3          Fees......................................................     35

     2.4          Repayments, Prepayments and Reductions in Loans and
                  Revolving Loan Commitments; General Provisions Regarding
                  Payments..................................................     35

     2.5          Use of Proceeds...........................................     42

     2.6          Special Provisions Governing Eurodollar Rate Loans........     42

     2.7          Increased Costs; Taxes; Capital Adequacy..................     44

     2.8          Obligation of Lenders to Mitigate.........................     48

     2.9          Release of Collateral.....................................     49

SECTION 3.        CONDITIONS TO LOANS.......................................     49

     3.1          Conditions to Effectiveness and the Existing Aircraft
                  Extended Loans............................................     49

     3.2          Conditions to Loans to Finance Aircraft Acquisition.......     51

     3.3          Condition to Loans to Finance Cargo Conversion............     54

     3.4          Conditions to All Loans...................................     55

SECTION 4.        COMPANY'S REPRESENTATIONS AND WARRANTIES..................     57

     4.1          Organization, Powers, Qualification, Good Standing,
                  Business and Subsidiaries.................................     57

     4.2          Authorization of Borrowing, etc...........................     58
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     4.3          Financial Condition.......................................     59

     4.4          No Material Adverse Change; No Restricted Junior Payments.     59

     4.5          Title to Properties; Liens................................     59

     4.6          Litigation; Adverse Facts.................................     60

     4.7          Payment of Taxes..........................................     60

     4.8          Performance of Agreements; Materially Adverse Agreements..     60

     4.9          Governmental Regulation...................................     61

     4.10         Securities Activities.....................................     61

     4.11         Employee Benefit Plans....................................     61

     4.12         Certain Fees..............................................     61

     4.13         Environmental Protection..................................     61

     4.14         Employee Matters..........................................     62

     4.15         Solvency..................................................     62

     4.16         Disclosure................................................     62

SECTION 5.        COMPANY'S AFFIRMATIVE COVENANTS...........................     62

     5.1          Financial Statements and Other Reports....................     63

     5.2          Corporate Existence.......................................     67

     5.3          Payment of Taxes and Claims; Tax Consolidation............     67

     5.4          Maintenance of Properties; Insurance......................     68

     5.5          Inspection; Lender Meeting................................     68

     5.6          Compliance with Laws, etc.................................     68

     5.7          Environmental Indemnity...................................     69

     5.8          Company's Remedial Action Regarding Hazardous Materials...     69

     5.9          Further Assurances; New Subsidiaries; Holding Company.....     69

     5.10         Appraisals................................................     70

     5.11         Maintenance Contracts.....................................     70

     5.12         Employee Benefit Plans....................................     70

     5.13         Registration of Foreign Leased Aircraft with FAA..........     71

     5.14         Corporate Separateness....................................     71
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SECTION 6.        COMPANY'S NEGATIVE COVENANTS..............................     71

     6.1          Indebtedness..............................................     71

     6.2          Liens and Related Matters.................................     73

     6.3          Investments; Joint Ventures...............................     73

     6.4          Contingent Obligations....................................     74

     6.5          Restricted Junior Payments................................     75

     6.6          Financial Covenants.......................................     76

     6.7          Restriction on Fundamental Changes; Asset Sales and
                  Acquisitions; New Subsidiaries............................     78

     6.8          Amendments of Material Agreements.........................     80

     6.9          Restriction on Leases.....................................     81

     6.10         Sales and Lease-Backs.....................................     81

     6.11         Sale or Discount of Receivables...........................     81

     6.12         Transactions with Shareholders and Affiliates.............     82

     6.13         Disposal of Subsidiary Stock..............................     82

     6.14         Conduct of Business.......................................     82

SECTION 7.        EVENTS OF DEFAULT.........................................     83

     7.1          Failure to Make Payments When Due.........................     83

     7.2          Default in Other Agreements...............................     83

     7.3          Breach of Certain Covenants...............................     83

     7.4          Breach of Warranty........................................     83

     7.5          Other Defaults Under Loan Documents.......................     84

     7.6          Involuntary Bankruptcy; Appointment of Receiver, etc. ....     84

     7.7          Voluntary Bankruptcy; Appointment of Receiver, etc. ......     84

     7.8          Judgments and Attachments.................................     85

     7.9          Dissolution...............................................     85

     7.10         Change in Control.........................................     85

     7.11         Failure of Security.......................................     86

     7.12         Certificated as Air Carrier...............................     86
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     7.13         Material Agreements.......................................     86

     7.14         "Change of Control" Put Payments..........................     86

SECTION 8.        AGENT.....................................................     87

     8.1          Appointment...............................................     87

     8.2          Powers and Duties; General Immunity.......................     87

     8.3          Representations and Warranties; No Responsibility For
                  Appraisal of Creditworthiness.............................     89

     8.4          Right to Indemnity........................................     89

     8.5          Collateral Documents......................................     89

     8.6          Successor Administrative Agent............................     90

SECTION 9.        MISCELLANEOUS.............................................     90

     9.1          Assignments and Participations in Loans...................     90

     9.2          Expenses..................................................     92

     9.3          Indemnity.................................................     93

     9.4          Set-Off...................................................     93

     9.5          Ratable Sharing...........................................     94

     9.6          Amendments and Waivers....................................     94

     9.7          Independence of Covenants.................................     96

     9.8          Notices...................................................     96

     9.9          Survival of Representations, Warranties and Agreements....     96

     9.10         Failure or Indulgence Not Waiver; Remedies Cumulative.....     96

     9.11         Marshalling; Payments Set Aside...........................     96

     9.12         Severability..............................................     97

     9.13         Obligations Several; Independent Nature of Lenders'
                  Rights....................................................     97

     9.14         Headings..................................................     97

     9.15         Applicable Law............................................     97

     9.16         Successors and Assigns....................................     97

     9.17         Consent to Jurisdiction and Service of Process............     98

     9.18         Waiver of Jury Trial......................................     98
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     9.19         Confidentiality...........................................     99

     9.20         Counterparts; Effectiveness; Effect if Agreement Does Not
                  Become Effective..........................................     99

     9.21         Cooperation in Refinancing, Syndication and Assignment....     99

Signature pages ............................................................     S-1
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                                    EXHIBITS
                                                                 PAGE
                                                                 ----
I           FORM OF NOTICE OF BORROWING
II          FORM OF NOTICE OF CONVERSION/CONTINUATION
IIIA        FORM OF EXISTING AIRCRAFT EXTENSION NOTE
IIIB        FORM OF NEW AIRCRAFT NOTE
IV          FORM OF COMPLIANCE CERTIFICATE
VA          FORM OF OPINION OF CAHILL GORDON & REINDEL
VB          FORM OF SECTION 1110 OPINION
VC          FORM OF OPINION OF THOMAS G. SCOTT
VI          INTENTIONALLY OMITTED
VII         FORM OF ASSIGNMENT AGREEMENT
VIII        FORM OF CERTIFICATE RE NON-BANK STATUS
IX          FORM OF FINANCIAL CONDITION CERTIFICATE
X           FORM OF FIRST AIRCRAFT CHATTEL MORTGAGE
XI          FORM OF SECOND AIRCRAFT CHATTEL MORTGAGE

                                      -vi-
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                                    SCHEDULES
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1.1   EXISTING AIRCRAFT AND EXISTING AIRCRAFT LOAN EXTENSION AMOUNTS
2.1   LENDERS' COMMITMENTS AND PRO RATA SHARES
5.1   SUBSIDIARIES OF COMPANY
6.1   CERTAIN EXISTING INDEBTEDNESS
6.2   CERTAIN EXISTING LIENS
6.3   CERTAIN EXISTING INVESTMENTS
6.4   CERTAIN EXISTING CONTINGENT OBLIGATIONS

                                     -vii-
<PAGE>
                                 ATLAS AIR, INC.
                           FOURTH AMENDED AND RESTATED
                                CREDIT AGREEMENT

            This FOURTH AMENDED AND RESTATED CREDIT AGREEMENT is dated as of
April 25, 2000 and entered into by and among ATLAS AIR, INC., a Delaware
corporation ("Company"), THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE
PAGES HEREOF (each individually referred to herein as a "Lender" and
collectively as "Lenders"), and BANKERS TRUST COMPANY ("Bankers Trust"), as
administrative agent for Lenders (in such capacity, "Administrative Agent").

                                 R E C I T A L S

            WHEREAS, pursuant to that certain Third Amended and Restated Credit
Agreement dated as of September 5, 1997 as amended by the First Amendment
thereto dated as of July 8, 1998, as further amended by the Second Amendment
thereto dated as of August 14, 1998 and as further amended by the Third
Amendment thereto dated as of June 14, 1999, by and among Company, as Borrower,
the financial institutions listed on the signature pages thereof, Goldman Sachs
Credit Partners L.P., as Syndication Agent and Administrative Agent (the
"Existing Agreement"), Lenders have made certain credit facilities available to
Company for the purpose of acquisition and modification of certain aircraft to
be used in Company's air cargo business;

            WHEREAS, the parties of the Existing Agreement desire to amend and
restate the Existing Agreement in order to (i) extend the maturity of the Loans,
(ii) decrease the Revolving Loan Commitments by $25,000,000 to $175,000,000,
(iii) adjust the financial covenants, and (iv) make certain other amendments to
the Existing Agreement;

            WHEREAS, it is the intention of Company, Administrative Agent and
each of the Lenders that such amendment and restatement of the Existing
Agreement shall not constitute a refinancing of the Loans outstanding on the
Fourth Restatement Date and that, with respect to the Loans outstanding as of
the Fourth Restatement Date, the First Aircraft Chattel Mortgages shall continue
to constitute purchase-money security interests subject to Section 1110 of the
Bankruptcy Code; and

            WHEREAS, the Lenders identified on the signature pages hereof hold
all of the "Revolving Loans" and "Revolving Commitments" under the Existing
Agreement as identified on Schedule 2.1.

            NOW THEREFORE, in consideration of the premises and agreements,
provisions and covenants herein contained, Company, Lenders and Administrative
Agent hereby agree that the Existing Agreement shall be amended and restated in
its entirety as follows:
<PAGE>
                                   SECTION 1.
                                  DEFINITIONS.

1.1   CERTAIN DEFINED TERMS.

      The following terms used in this Agreement shall have the following
meanings:

            "ACMI CONTRACT" means (i) any contract entered into by Company
pursuant to which Company furnishes the aircraft, crew, maintenance and
insurance and customers bear all other operating expenses and (ii) any similar
contract in which the customer provides the flight crew, all in accordance with
Company's historical practices.

            "ACMI CONTRACTED AIRCRAFT" means an aircraft acquired by Company or
its Subsidiaries and dedicated to a new ACMI Contract entered into in connection
with the acquisition of such aircraft (which ACMI Contract shall not represent a
renewal or replacement of a prior ACMI Contract unless the aircraft dedicated to
such prior ACMI Contract was operated under an operating lease and returned to
the lessor) which is in effect on the date of calculation and has a remaining
term of one year or more on the date such aircraft was dedicated to such ACMI
Contract (subject to cancellation terms, which may include the right to cancel
on six months notice). When making any calculation on a Pro Forma Basis effect
shall be given to the acquisition of an ACMI Contracted Aircraft by adding to
the appropriate components of Consolidated Adjusted EBITDA (i) the net projected
annualized revenues from the operation of the ACMI Contracted Aircraft under
such ACMI Contract for that portion of the period for which Consolidated
Adjusted EBITDA is being calculated prior to the acquisition of such aircraft,
assuming operation for the minimum guaranteed number of block hours (less any
block hours subject to cancellation) at the minimum guaranteed rate under such
ACMI Contract less (ii) the projected annualized cash operating expenses from
such operation for the same period for which the related projected revenues are
determined in clause (i) above; provided that such projected cash operating
expenses shall not be less on a per block hour basis than the average historical
per block hour operating expenses of Company for the four full fiscal quarters
immediately preceding the date of calculation, and provided, further, that if
such aircraft is of a model other than a Boeing 747 freighter, such projected
cash operating expenses shall include maintenance costs which shall not be less
than the average for such aircraft type disclosed on the most recently available
DOT Forms 41 with respect to such aircraft type or any summary of such data as
reported in a nationally recognized industry publication. For purposes of this
definition, "ACMI CONTRACT" shall include contracts pursuant to which Company
does not pay any crew costs, in which event pro forma effect shall be given as
described above but excluding from the projected annualized cash operating
expenses all crew costs. Cash operating expenses means for purposes of this
definition consolidated operating expenses, less consolidated depreciation and
amortization and Consolidated Rental Payments, to the extent included in
computing consolidated operating expenses.

            "ADJUSTED CONSOLIDATED WORKING CAPITAL" means, as at any date of

                                      -2-
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determination, Consolidated Current Assets (excluding Cash and Cash Equivalents)
less Consolidated Current Liabilities.

            "ADJUSTED EURODOLLAR RATE" means, for any Interest Rate
Determination Date, (x) until such time as Reference Lenders are determined in
accordance with the definition thereof, the rate per annum obtained by dividing
the offered rate (expressed as a rate per annum and rounded upward to the
nearest 1/16 of one percent) appearing on the Dow Jones/Telerate Monitor on
Telerate Access Service Page 3750 (British Bankers Association Settlement Rate)
(or such other page as may, in the opinion of Administrative Agent, replace such
page on that system for the purpose of displaying such rate) at or about 11:00
a.m. (London time) on such Interest Rate Determination Date for U.S. dollar
deposits of amounts in same day funds comparable to the principal amount of the
Eurodollar Rate Loan for which the Adjusted Eurodollar Rate is then being
determined with maturities comparable to the Interest Period for which such
Adjusted Eurodollar Rate will apply by (ii) a percentage equal to 100% minus the
stated maximum rate of all reserve requirements (including, without limitation,
any marginal, emergency, supplemental, special or other reserves) applicable on
such Interest Rate Determination Date to any member bank of the Federal Reserve
System in respect of "Eurodollar liabilities" as defined in Regulation D (or any
successor category of liabilities under Regulation D) and (y) thereafter, the
rate per annum obtained by dividing (i) the arithmetic average (rounded upward
to the nearest 1/16 of one percent) of the offered quotation, if any, to first
class banks in the interbank Eurodollar market by each of the Reference Lenders
for U.S. dollar deposits of amounts in same day funds comparable to the
principal amount of the Eurodollar Rate Loan of that Reference Lender for which
the Adjusted Eurodollar Rate is then being determined with maturities comparable
to such Interest Period as of approximately 10:00 A.M. (New York time) on such
Interest Rate Determination Date by (ii) a percentage equal to 100% minus the
stated maximum rate of all reserve requirements (including, without limitation,
any marginal, emergency, supplemental, special or other reserves) applicable on
such Interest Rate Determination Date to any member bank of the Federal Reserve
System in respect of "Eurocurrency liabilities" as defined in Regulation D (or
any successor category of liabilities under Regulation D); provided that if any
Reference Lender fails to provide Administrative Agent with its aforementioned
quotation then the Adjusted Eurodollar Rate shall be determined based on the
quotation(s) provided to Administrative Agent by the other Reference Lender(s).

            "ADMINISTRATIVE AGENT" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to subsection 8.6.

            "AERONAUTICAL AUTHORITY" means, at any date, the Federal Aviation
Administration or other governmental airworthiness authority having jurisdiction
over any Eligible Aircraft or Airframe or Engine under the laws of the country
in which the Airframe is then registered.

                                      -3-
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            "AFFECTED LENDER" has the meaning assigned to that term in
subsection 2.6C.

            "AFFECTED LOANS" has the meaning assigned to that term in subsection
2.6C.

            "AFFILIATE" means, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.

            "AFL" means Atlas Freighter Leasing, Inc., a Delaware corporation,
whose common stock is wholly owned by Company.

            "AFL FINANCING AGREEMENT" means that certain Credit Agreement dated
as of May 29, 1997 by and among AFL, the lenders party thereto and Bankers Trust
Company, as Agent, as such agreement may be amended, modified or supplemented
from time to time in accordance with the terms thereof.

            "AFL II" means Atlas Freighter Leasing II, Inc., a Delaware
corporation, whose common stock is wholly owned by Company.

            "AFL II FINANCING AGREEMENT" means that certain Credit Agreement
dated as of September 5, 1997 by and among AFL II, the lenders party thereto,
Goldman Sachs Credit Partners L.P., as Syndication Agent, and Bankers Trust
Company, as Administrative Agent, as such agreement may be amended, modified or
supplemented from time to time in accordance with the terms thereof.

            "AFL III" means Atlas Freighter Leasing III, Inc., a Delaware
corporation, whose common stock is wholly owned by Company, the sole business of
which is the ownership of the AFL III Equipment and the leasing of the AFL III
Equipment to Company pursuant to the AFL III Leases and obtaining financing with
respect thereto.

            "AFL III EQUIPMENT" means (i) eleven Boeing 747-200 aircraft
(including the engines attached thereto) with registration numbers N505MC,
N507MC, N508MC, N509MC, N516MC, N517MC, N523MC, N524MC, N526MC, N527MC and
N528MC, (ii) nine General Electric CF6-50E2 engines and (iii) three General
Electric CF6-80C2 engines.

            "AFL III FINANCING" means indebtedness in an aggregate principal
amount of $300,000,000 incurred by AFL III as of April 25, 2000 pursuant to the
AFL III Financing Agreement.

            "AFL III FINANCING AGREEMENT" means that certain Credit Agreement
dated

                                      -4-
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as of April 25, 2000 by and among AFL III, the lenders party thereto and Bankers
Trust Company, as Agent, as such agreement may be amended, modified or
supplemented from time to time in accordance with the terms thereof.

            "AFL III LEASES" means one or more triple net leases by and between
Company and AFL III with respect to the AFL III Equipment providing for fair
market rental rates sufficient to provide for principal and interest payments
under the AFL III Financing Agreement and a market rate of return on the equity
interest of AFL III, as lessor thereunder, as such leases may be amended,
modified or supplemented from time to time in accordance with the provisions of
this Agreement.

            "AFL III RESTRUCTURING" means the following transactions which
occurred concurrently on the Fourth Restatement Date: (i) the contribution of
the AFL III Equipment to AFL III as a capital contribution, (ii) the incurrence
of indebtedness pursuant to the AFL III Financing Agreement and the simultaneous
repayment of amounts outstanding under the AFL Financing Agreement and the AFL
II Financing Agreement and the release of all Liens arising thereunder and (iii)
the entering into of the AFL III Leases.

            "AGREEMENT" means this Fourth Amended and Restated Credit Agreement
dated as of April 25, 2000, as it may be amended, supplemented or otherwise
modified from time to time.

            "AIRCRAFT CHATTEL MORTGAGE" means any or all of the First Aircraft
Chattel Mortgages and the Second Aircraft Chattel Mortgages.

            "AIRFRAME" means, as the context requires, an Airframe as defined in
a particular Aircraft Chattel Mortgage or all Airframes as defined in all
Aircraft Chattel Mortgages.

            "APPLICABLE MARGIN" has the meaning assigned to that term in
subsection 2.2A.

            "APPRAISED VALUE" means, with respect to any Financed Aircraft, the
average of the appraised value of such Financed Aircraft by two Approved
Appraisers as most recently determined pursuant to subsection 5.10.

            "APPROVED APPRAISER" means any of the following: AvSolutions, Inc.,
BK Associates, Jack B. Feir Associates, Morton Beyer & Agnew, Inc., Airclaims,
Ltd., Aircraft Information Services, Inc., Simat, Helleisen & Eichner, Inc. and
AVITAS, Inc.

            "APPROVED LEASE" means, with respect to any Financed Aircraft, any
lease designated as an Approved Lease by Administrative Agent in its sole
discretion; provided that, the term of any such lease shall not exceed 36
months.

                                      -5-
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            "ASSET SALE" means the sale (including any sale-leaseback
transaction other than sale-leaseback transactions permitted by subsections 6.9
and 6.10 hereof) by Company or any of its Subsidiaries to any other Person of
(i) any of the stock of any of Company's Subsidiaries, (ii) substantially all of
the assets of any division or line of business of Company or any of its
Subsidiaries, or (iii) any other assets (whether tangible or intangible) of
Company or any of its Subsidiaries outside of the ordinary course of business
excluding (A) any such other assets to the extent that the aggregate value of
such assets sold in any single transaction or related series of transactions is
equal to $5,000,000 or less, (B) transactions related to aircraft engines,
components, parts or spare parts pursuant to customary pooling, exchange or
similar arrangements, (C) asset swaps involving aircraft engines, components,
parts or spare parts (other than any engines encumbered pursuant to an Aircraft
Chattel Mortgage); provided that the assets received by the Company or any
Subsidiary have a fair market value at least equal to the assets transferred
(provided that with respect to any asset swap or series of related asset swaps
involving assets of Company or any Subsidiary with a fair market value exceeding
$10,000,000, such determination shall be made by the Board of Directors of
Company)), (D) asset sales involving obsolete, worn-out, excess or redundant
equipment as long as the proceeds therefrom are used to replace or to upgrade
the aircraft or the equipment installed thereon, (E) transactions permitted by
subsection 9.21 of the AFL III Financing Agreement and (F) the sale by AFL III
of a single aircraft pursuant to subsection 6.6(ii) of the AFL III Financing
Agreement.

            "ASSIGNEE NOTES" means any promissory notes issued by Company (i) at
the request of a Lender pursuant to subsection 2.1D hereof or (ii) pursuant to
the last sentence of subsection 9.1B(i) in connection with assignments of the
Commitments, Existing Aircraft Extended Loans or New Aircraft Loans of any
Lenders, substantially in the form of Exhibit IIIA or Exhibit IIIB annexed
hereto, as the case may be, as they may be amended, supplemented or otherwise
modified from time to time.

            "ASSIGNMENT AGREEMENT" means an Assignment Agreement in
substantially the form of Exhibit VII annexed hereto.

            "ATLAS ONE" means Atlas One, Inc., a Delaware corporation.

            "BANKERS TRUST" has the meaning assigned to that term in the
introduction to this Agreement.

            "BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.

            "BASE RATE" means, at any time, the higher of (x) the Prime Rate or
(y) the rate which is 1/2 of 1% in excess of the Federal Funds Effective Rate.

            "BASE RATE LOANS" means Loans bearing interest at rates determined
by reference to the Base Rate as provided in subsection 2.2A.

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<PAGE>
            "BFE AGREEMENT" means any agreement entered into by Company,
relating to buyer furnished equipment to be installed on any Financed Aircraft
in form and substance satisfactory to Administrative Agent, as amended,
restated, supplement or otherwise modified from time to time in accordance with
this Agreement.

            "BUSINESS DAY" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the States of New York or Colorado or
is a day on which banking institutions located in either such state are
authorized or required by law or other governmental action to close.

            "CAPITAL LEASE", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.

            "CASH" means money, currency or a credit balance in a Deposit
Account.

            "CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after such
date and having, at the time of the acquisition thereof, the highest rating
obtainable from either S&P or Moody's; (iii) commercial paper maturing no more
than one year from the date of creation thereof and having, at the time of the
acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia that (a) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator) and (b) has Tier 1 capital (as defined in such regulations) of not
less than $100,000,000; and (v) shares of any money market mutual fund that (a)
has at least 95% of its assets invested continuously in the types of investments
referred to in clauses (i) and (ii) above, (b) has net assets of not less than
$500,000,000, and (c) has the highest rating obtainable from either S&P or
Moody's.

            "CASH PROCEEDS" means, with respect to any Asset Sale, Cash payments
(including any Cash received by way of deferred payment pursuant to, or
monetization of, a note receivable or otherwise, but only as and when so
received) received from such Asset Sale.

            "CERTIFICATE RE NON-BANK STATUS" means a certificate substantially
in the form of Exhibit VIII annexed hereto delivered by a Lender to
Administrative Agent pursuant to subsection 2.7B(iii).

                                      -7-
<PAGE>
            "CERTIFICATED AIR CARRIER" means a United States "air carrier"
within the meaning of the Federal Aviation Act, operating pursuant to a
certificate issued under Section 401 of such Act, or a carrier of comparable
status under any successor law or provision.

            "COLLATERAL" means all of the properties and assets in which Liens
are purported to be granted by the Collateral Documents.

            "COLLATERAL DOCUMENTS" means each First Aircraft Chattel Mortgage
and each Second Aircraft Chattel Mortgage and any security agreement executed
pursuant to subsection 5.9.

            "COMMITMENTS" means the commitments of Lenders to maintain, make and
convert Loans as set forth in subsection 2.1A.

            "COMPANY" has the meaning assigned to that term in the introduction
to this Agreement.

            "COMPANY COMMON STOCK" means the common stock of Company, par value
$0.01 per share.

            "COMPLIANCE CERTIFICATE" means a certificate substantially in the
form of Exhibit IV annexed hereto delivered to Administrative Agent and Lenders
by Company pursuant to subsection 5.1(iv).

            "CONDEMNATION PROCEEDS" has the meaning assigned to that term in
subsection 2.4B(iii)(c).

            "CONSOLIDATED ADJUSTED EBITDA" means, for any period, the sum of the
amounts for such period of (i) Consolidated Net Income, (ii) Consolidated
Interest Expense, (iii) provisions for taxes based on income, (iv) total
depreciation expense, (v) total amortization expense, and (vi) other non-cash
items reducing Consolidated Net Income less other non-cash items increasing
Consolidated Net Income, all of the foregoing as determined on a consolidated
basis for Company and its Subsidiaries in conformity with GAAP.

            "CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the sum
of (i) the aggregate of all expenditures (whether paid in cash or other
consideration or accrued as a liability and including that portion of Capital
Leases which is capitalized on the consolidated balance sheet of Company and its
Subsidiaries) by Company and its Subsidiaries during that period that, in
conformity with GAAP, are included in "additions to property, plant or
equipment" or comparable items reflected in the consolidated statement of cash
flows of Company and its Subsidiaries plus (ii) to the extent not covered by
clause (i) of this definition, the aggregate of all expenditures by Company and
its Subsidiaries during that period to acquire (by purchase or otherwise) the
business, property or fixed assets of any Person, or the stock or other evidence
of beneficial ownership of any Person that, as a result of such

                                      -8-
<PAGE>
acquisition, becomes a Subsidiary of Company.

            "CONSOLIDATED CURRENT ASSETS" means, as at any date of
determination, the total assets of Company and its Subsidiaries on a
consolidated basis which may properly be classified as current assets in
conformity with GAAP.

            "CONSOLIDATED CURRENT LIABILITIES" means, as at any date of
determination, the total liabilities of Company and its Subsidiaries on a
consolidated basis which may properly be classified as current liabilities in
conformity with GAAP but excluding the current portion of any Indebtedness of
the Company which would otherwise be included therein.

            "CONSOLIDATED EXCESS CASH FLOW" means, for any Fiscal Year, an
amount equal to the sum of Consolidated Adjusted EBITDA for such Fiscal Year and
the Consolidated Working Capital Adjustment for such Fiscal Year, minus the sum
of the amounts for such Fiscal Year of (i) scheduled repayments of principal of
Indebtedness, mandatory prepayments of the principal of Indebtedness (other than
from the proceeds of Asset Sales), voluntary prepayments of the principal of
Indebtedness to the extent that such amount is not simultaneously reborrowed,
and other permanent reductions in the availability of revolving credit
facilities (ii) Consolidated Interest Expense, (iii) permitted Consolidated
Capital Expenditures (net of any proceeds of any related financing with respect
to such Consolidated Capital Expenditures) other than Consolidated Capital
Expenditures made pursuant to the reinvestment provisions of subsection
2.4B(iii)(a), and (iv) the portion of taxes based on income or revenues actually
paid in cash.

            "CONSOLIDATED INTEREST EXPENSE" means, for any period, total net
interest expense (to be computed by reducing interest expense by the amount of
interest income) (including that portion attributable to Capital Leases in
accordance with GAAP and capitalized interest) of Company and its Subsidiaries
on a consolidated basis with respect to all outstanding Indebtedness of Company
and its Subsidiaries, including, without limitation, all commissions, discounts
and other fees and charges owed with respect to letters of credit and bankers'
acceptance financing and net costs under Interest Rate Agreements and Currency
Agreements, but excluding, however, any amounts referred to in subsection 2.3
payable to Syndication Agent, Administrative Agent and/or Lenders on or before
the Fourth Restatement Date.

            "CONSOLIDATED NET INCOME" means, for any period, the net income (or
loss) of Company and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity with GAAP; provided
that there shall be excluded (i) the income (or loss) of any Person (other than
a Subsidiary of Company) in which any other Person (other than Company or any of
its Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to Company or any of its
Subsidiaries by such Person during such period, (ii) the income (or loss) of any
Person accrued prior to the date it becomes a Subsidiary of Company or is merged

                                      -9-
<PAGE>
into or consolidated with Company or any of its Subsidiaries or that Person's
assets are acquired by Company or any of its Subsidiaries, (iii) the income of
any Subsidiary of Company to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary, (iv) any after-tax gains or losses attributable
to Asset Sales or returned surplus assets of any pension plan, and (v) (to the
extent not included in clauses (i) through (iv) above) any net extraordinary
gains or net non-cash extraordinary losses.

            "CONSOLIDATED NET WORTH" means, as at any date of determination, the
sum of the capital stock and additional paid-in capital plus retained earnings
(or minus accumulated deficits) of Company and its Subsidiaries on a
consolidated basis determined in conformity with GAAP.

            "CONSOLIDATED RENTAL PAYMENTS" means, for any period, the aggregate
amount of all rents paid or payable by Company and its Subsidiaries on a
consolidated basis during that period under all Capital Leases and Operating
Leases to which Company or any of its Subsidiaries is a party as lessee (net of
sublease income other than income from ACMI Contracts). For the avoidance of
doubt, all rental payments to AFL III shall not be included in Consolidated
Rental Payments.

            "CONSOLIDATED TOTAL DEBT" means, as at any date of determination,
the aggregate stated balance sheet amount of all Indebtedness of Company and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP.

            "CONSOLIDATED WORKING CAPITAL ADJUSTMENT" means, for any Fiscal Year
on a consolidated basis, the amount (which may be a negative number) by which
the Adjusted Consolidated Working Capital of Company and its Subsidiaries as of
the beginning of the period exceeds (or is less than) the Adjusted Consolidated
Working Capital of Company and its Subsidiaries as of the end of such period.

            "CONTINGENT OBLIGATION" means, as applied to any Person, any direct
or indirect liability, contingent or otherwise, of that Person (i) with respect
to any Indebtedness, lease, dividend or other obligation of another if the
primary purpose or intent thereof by the Person incurring the Contingent
Obligation is to provide assurance to the obligee of such obligation of another
that such obligation of another will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected (in whole or in part) against loss in respect
thereof, (ii) with respect to any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for reimbursement of
drawings, or (iii) under Interest Rate Agreements and Currency Agreements.
Contingent Obligations shall include, without limitation, (a) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit in the
ordinary course

                                      -10-
<PAGE>
of business), co-making, discounting with recourse or sale with recourse by such
Person of the obligation of another, (b) the obligation to make take-or-pay or
similar payments if required regardless of non-performance by any other party or
parties to an agreement, and (c) any liability of such Person for the obligation
of another through any agreement (contingent or otherwise) (X) to purchase,
repurchase or otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation (whether in the
form of loans, advances, stock purchases, capital contributions or otherwise) or
(Y) to maintain the solvency or any balance sheet item, level of income or
financial condition of another if, in the case of any agreement described under
subclauses (X) or (Y) of this sentence, the primary purpose or intent thereof is
as described in the preceding sentence. The amount of any Contingent Obligation
shall be equal to the amount of the obligation so guaranteed or otherwise
supported or, if less, the amount to which such Contingent Obligation is
specifically limited.

            "CONTINUING DIRECTORS" shall mean the directors of a Person on the
Fourth Restatement Date and each other director, if such other director's
nomination for election to the Board of Directors of such Person is recommended
by a majority of the then Continuing Directors.

            "CONTRACTUAL OBLIGATION", as applied to any Person, means any
provision of any Security issued by that Person or of any material indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument to
which that Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject.

            "CURRENCY AGREEMENT" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement designed to protect Company or any of its
Subsidiaries against fluctuations in currency values.

            "DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.

            "DESIGNATED INDEBTEDNESS" means Indebtedness incurred pursuant to
the Pass Through Trust Documents, the FINOVA Agreement, the Senior Note
Documents, the NationsBanc/Bank of America Agreement, the AFL III Financing
Agreement, any Permitted Extension Indebtedness and any Other Permitted
Indebtedness.

            "DETERMINATION DATE" has the meaning assigned to that term in
subsection 6.1(vi).

            "DOLLARS" and the sign "$" mean the lawful money of the United
States of America.

                                      -11-
<PAGE>
            "ELIGIBLE AIRCRAFT" means a Boeing 747-200, 747-300, 747-400 or
MD-11 aircraft, including any engines installed thereon and any spare engines of
the same type and model, which (i) is in a cargo configuration capable of
immediate operation in the business of Company or is eligible for delivery under
any Modification Agreement with a delivery slot available within a six month
period (or is leased in accordance with the Collateral Documents for a period of
longer than six months until a delivery slot is available), and (ii) has a
maximum gross take-off weight ("MTOW") of at least 800,000 pounds, in the case
of any 747-200, 747-300, or 747-400 aircraft and 630,000 pounds in the case of
any MD-11 aircraft.

            "ELIGIBLE ASSIGNEE" means (A) (i) a commercial bank organized under
the laws of the United States or any state thereof; (ii) a savings and loan
association or savings bank organized under the laws of the United States or any
state thereof; (iii) a commercial bank organized under the laws of any other
country or a political subdivision thereof; provided that (x) such bank is
acting through a branch or agency located in the United States or (y) such bank
is organized under the laws of a country that is a member of the Organization
for Economic Cooperation and Development or a political subdivision of such
country; and (iv) any other entity which is an "accredited investor" (as defined
in Regulation D under the Securities Act) which extends credit or buys loans as
one of its businesses including, but not limited to, insurance companies, mutual
funds and lease financing companies, in each case (under clauses (i) through
(iv) above) that is reasonably acceptable to Administrative Agent; and (B) any
Lender and any Affiliate of any Lender; provided that no Affiliate of Company
shall be an Eligible Assignee.

            "EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as defined
in Section 3(3) of ERISA which is, or was at any time, maintained or contributed
to by Company or any of its ERISA Affiliates.

            "ENGINE" means, as the context requires, an Engine as defined in a
particular Aircraft Chattel Mortgage, Engines as defined in all Aircraft Chattel
Mortgages, a Replacement Engine, all Replacement Engines or all of any of the
foregoing.

            "ENVIRONMENTAL CLAIM" means any investigation, notice, claim, suit
or order, by any governmental authority or any Person arising in connection with
any alleged or actual violation of Environmental Laws or with any Hazardous
Material, or any actual or alleged damage, or harm to health, safety or the
environment.

            "ENVIRONMENTAL LAWS" means any and all current or future statutes,
ordinances, orders, rules, regulations, guidance documents, judgments,
governmental authorizations, or any other requirement of governmental
authorities relating to environmental matters, including, without limitation,
those relating to any Hazardous Materials Activity.

            "EQUITY PROCEEDS" means the cash proceeds (net of underwriting
discounts and commissions and other reasonable costs associated therewith) from
the issuance of any equity Securities of Company including, without limitation,
additional issuances of Company

                                      -12-
<PAGE>
Common Stock.

            "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor statute.

            "ERISA AFFILIATE" means, as applied to any Person, (i) any
corporation which is, or was at any time, a member of a controlled group of
corporations within the meaning of Section 414(b) of the Internal Revenue Code
of which that Person is, or was at any time, a member; (ii) any trade or
business (whether or not incorporated) which is, or was at any time, a member of
a group of trades or businesses under common control within the meaning of
Section 414(c) of the Internal Revenue Code of which that Person is, or was at
any time, a member; and (iii) any member of an affiliated service group within
the meaning of Section 414(m) or (o) of the Internal Revenue Code of which that
Person, any corporation described in clause (i) above or any trade or business
described in clause (ii) above is, or was at any time, a member.

            "EURODOLLAR RATE LOANS" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.

            "EVENT OF DEFAULT" means each of the events set forth in Section 7.

            "EVENT OF LOSS" shall mean any of the following events with respect
to any Financed Aircraft (whether the Airframe or an Engine of such Financed
Aircraft or Spare Engine or both): (A) loss of such Financed Aircraft or Spare
Engine or the use thereof due to theft or disappearance of such Financed
Aircraft or Spare Engine which shall result in the loss of possession thereof
for a period of 120 days (or for a shorter period ending on the date on which
there is an insurance settlement for a total loss on the basis of the theft or
disappearance of such Financed Aircraft or Spare Engine); (B) the destruction,
damage beyond repair or rendition of such Financed Aircraft or Spare Engine
permanently unfit for normal use for any reason whatsoever; (C) the
condemnation, confiscation or seizure of, or requisition of title to, or use or
possession (other than use by the United States Government if Company obtains
adequate compensation from the United States Government) of such Financed
Aircraft or Spare Engine; (D) as a result of any rule, regulation, order or
other action by the FAA or other governmental body having jurisdiction, the use
of such Financed Aircraft or Spare Engine in the normal course of interstate air
transportation of persons or cargo shall have been prohibited for a period of
more than nine consecutive months unless Company, prior to the expiration of
such nine month period, shall have undertaken and shall be diligently carrying
forward all steps which are necessary or desirable to permit the normal use of
such property by Company or, in any event, if such use shall have been
prohibited for a period of twelve consecutive months; (E) the operation or
location of such Financed Aircraft or Spare Engine, while under requisition for
use by the United States or any instrumentality or agency thereof, in any area
excluded from coverage by any insurance policy in effect with respect to such
Financed Aircraft or Spare Engine, if Company shall be unable to obtain
indemnity in lieu

                                      -13-
<PAGE>
thereof from the United States; (F) any damage which results in an insurance
settlement with respect to such Financed Aircraft or Spare Engine on the basis
of an actual or constructive total loss or (G) a divestiture of such Airframe or
Spare Engine as described in Section 4(d)(iii), Section 4(d)(vi), Section
4(d)(vii)(B) or Section 4(d)(viii)(B) of any Aircraft Chattel Mortgage. An Event
of Loss with respect to any Financed Aircraft shall be deemed to have occurred
if an Event of Loss occurs with respect to the Airframe of such Financed
Aircraft.

            "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.

            "EXISTING AGREEMENT" has the meaning assigned to that term in the
Recitals hereto.

            "EXISTING AIRCRAFT" means the aircraft identified on Schedule 1.1
annexed hereto.

            "EXISTING AIRCRAFT EXTENDED LOANS" means Loans deemed made by
Lenders to Company pursuant to subsection 2.1A(i).

            "EXISTING AIRCRAFT EXTENDED NOTES" means (i) the promissory notes of
Company issued pursuant to subsection 2.1D on the Fourth Restatement Date and
(ii) any promissory notes issued by Company pursuant to the last sentence of
subsection 9.1B(i) in connection with assignments of Existing Aircraft Extended
Loans of any Lenders, in each case substantially in the form of Exhibit IIIA
annexed hereto, as they may be amended, supplemented or otherwise modified from
time to time.

            "EXISTING AIRCRAFT LOAN EXTENSION AMOUNT" means, for each Existing
Aircraft, the amount shown on Schedule 1.1 annexed hereto.

            "EXISTING AIRCRAFT LOAN REPAYMENT AMOUNTS" means, for each Existing
Aircraft Loan Repayment Date for each Existing Aircraft Extended Loan, an amount
equal to 10% of the Existing Aircraft Loan Extension Amount.

            "EXISTING AIRCRAFT LOAN REPAYMENT DATE" means, for each Existing
Aircraft Extended Loan, the three-year anniversary date of the Fourth
Restatement Date and each 3-month anniversary date thereafter; provided that,
notwithstanding anything in the foregoing to the contrary, the unpaid amount of
all Existing Aircraft Extended Notes shall be due and payable on the Final
Scheduled Maturity Date.

            "FACILITIES" means any and all real property now, hereafter or
heretofore owned, leased, operated or used by Company or any of its
predecessors.

            "FEDERAL AVIATION ACT" means the Federal Aviation Act of 1958, as
amended

                                      -14-
<PAGE>
and as recodified in Title 49, United States Code, or any similar legislation of
the United States enacted to supersede, amend or supplement such Act and the
rules and regulations promulgated thereunder.

            "FEDERAL AVIATION ADMINISTRATION" or "FAA" means the United States
Federal Aviation Administration or any successor thereto administering the
functions of the Federal Aviation Administration under the Federal Aviation Act.

            "FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day on which is a Business Day, the average of the quotations for such day on
such transactions received by Administrative Agent from three Federal funds
brokers of recognized standing selected by Administrative Agent.

            "FINAL SCHEDULED MATURITY DATE" means the five-year anniversary date
of the Fourth Restatement Date.

            "FINANCED AIRCRAFT" means all Eligible Aircraft, including the
airframes and engines, purchased by Company with proceeds of Existing Aircraft
Extended Loans deemed made and New Aircraft Loans made under this Agreement and
with respect to which a First Aircraft Chattel Mortgage has been executed and
delivered.

            "FINOVA AGREEMENT" means that certain Secured Loan Agreement dated
as of April 11, 1996 between FINOVA and Company, as amended, restated,
supplemented or otherwise modified from time to time in accordance with this
Agreement.

            "FIRST AIRCRAFT CHATTEL MORTGAGE" means, with respect to each
Eligible Aircraft purchased with the proceeds of Loans, a Security Agreement and
Chattel Mortgage (Aircraft No. ___) substantially in the form of Exhibit X
annexed hereto granting to Administrative Agent for the benefit of Lenders a
purchase money first priority security interest in such Eligible Aircraft, as
such First Aircraft Chattel Mortgage may be amended, restated, supplemented or
otherwise modified from time to time in accordance with the terms hereof and
thereof.

            "FISCAL YEAR" means Company's fiscal year ending on December 31 of
each year.

            "FOREIGN LEASED AIRCRAFT" means a Leased Aircraft that is registered
in a country other than the United States during the term of the applicable
Approved Lease.

            "FOURTH RESTATEMENT DATE" means the date on or before April 25, 2000
on

                                      -15-
<PAGE>
which the conditions to effectiveness set forth in subsection 3.1 are satisfied
and the Existing Aircraft Extended Loans are deemed made.

            "FUNDING AND PAYMENT OFFICE" means the office of Administrative
Agent located at 130 Liberty Street, New York, New York 10006, Attention:
Marguerite Sutton.

            "FUNDING DATE" means the date of the funding of a Loan.

            "GAAP" means, subject to the limitations on the application thereof
set forth in subsection 1.2, generally accepted accounting principles set forth
in opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession. Financial statements and other information required
to be delivered by Company to Lenders pursuant to clauses (ii) and (iii) of
subsection 5.1 shall be prepared in accordance with GAAP as in effect at the
time of such preparation (and delivered together with the reconciliation
statements provided for in subsection 5.1(v)). Calculations in connection with
the definitions, covenants and other provisions of this Agreement shall utilize
accounting principles and policies in conformity with those used to prepare the
financial statements referred to in subsection 4.3.

            "GOVERNMENTAL AUTHORIZATION" means any permit, license,
authorization, plan, directive, consent order or consent decree of or from any
federal, state or local governmental authority, agency or court.

            "HAZARDOUS MATERIALS" means any chemical or other material or
substance, exposure to which is now or hereafter prohibited, limited or
regulated under any law.

            "HAZARDOUS MATERIALS ACTIVITY" means any past, current, proposed, or
threatened use, storage, release, generation, treatment, remediation or
transportation of any Hazardous Material (i) from, under, in, into or on the
Facilities or surrounding property; and (ii) caused by, or undertaken by or on
behalf of, Company.

            "HOLDING COMPANY" has the meaning assigned to such term in the
definition of "Holding Company Reorganization."

            "HOLDING COMPANY REORGANIZATION" means the acquisition, in one
transaction or a series of transactions, of all of the outstanding Securities of
Company that are entitled to vote in the election of directors other than
Securities having such power only by reason of the happening of a contingency
(and all other Securities convertible into such Securities) by another
corporation (the "Holding Company"); provided that the Holding Company
Reorganization may involve more than one Holding Company of Company so long as
the ultimate Holding Company directly or indirectly owns 100% of the Company;
provided further, in connection with the Holding Company Reorganization, the
Company and its

                                      -16-
<PAGE>
Subsidiaries shall not incur any material obligations or liabilities of any type
other than those permitted to be paid without causing an Event of Default under
subsection 7.14.

            "HOLDING COMPANY SUBSIDIARY" means any Subsidiary of a Holding
Company other than the Company and its Subsidiaries.

            "INDEBTEDNESS" means, as applied to any Person, (i) all indebtedness
for borrowed money, (ii) that portion of obligations with respect to Capital
Leases that is properly classified as a liability on a balance sheet in
conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money,
(iv) any obligation owed for all or any part of the deferred purchase price of
property or services (excluding any such obligations incurred under ERISA),
which purchase price is (a) due more than six months from the date of incurrence
of the obligation in respect thereof or (b) evidenced by a note or similar
written instrument, and (v) all indebtedness secured by any Lien on any property
or asset owned or held by that Person regardless of whether the indebtedness
secured thereby shall have been assumed by that Person or is nonrecourse to the
credit of that Person. Obligations under Interest Rate Agreements and Currency
Agreements constitute Contingent Obligations and not Indebtedness.

            "INDEMNITEE" has the meaning assigned to that term in subsection
9.3.

            "INITIAL CLOSING DATE" means the date on or before May 8, 1996 on
which the initial Loans were made.

            "INSURANCE PROCEEDS" has the meaning assigned to that term in
subsection 2.4B(iii)(c).

            "INTEREST PAYMENT DATE" means (i) with respect to any Base Rate
Loan, each March 31, June 30, September 30 and December 31 of each year,
commencing on the first such date to occur after the Fourth Restatement Date,
and (ii) with respect to any Eurodollar Rate Loan, the last day of each Interest
Period applicable to such Loan; provided that in the case of each Interest
Period of six months "Interest Payment Date" shall also include the date that is
three months after the commencement of such Interest Period.

            "INTEREST PERIOD" has the meaning assigned to that term in
subsection 2.2B.

            "INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement designed to protect Company or any of its Subsidiaries
against fluctuations in interest rates.

            "INTEREST RATE DETERMINATION DATE" means, with respect to any
Interest Period, the second Business Day prior to the first day of such Interest
Period.

            "INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as

                                      -17-
<PAGE>
amended to the date hereof and from time to time hereafter.

            "INVESTMENT" means (i) any direct or indirect purchase or other
acquisition by Company or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person, (ii) any direct or indirect
redemption, retirement, purchase or other acquisition for value, by any
Subsidiary of Company from any Person other than Company or any of its
Subsidiaries, of any equity Securities of such Subsidiary, or (iii) any direct
or indirect loan, advance (other than advances to employees for moving,
entertainment and travel expenses, drawing accounts and similar expenditures in
the ordinary course of business) or capital contribution by Company or any of
its Subsidiaries to any other Person (other than a wholly owned Subsidiary of
Company), including all indebtedness and accounts receivable from that other
Person that are not current assets or did not arise from sales to that other
Person in the ordinary course of business. The amount of any Investment shall be
the original cost of such Investment plus the cost of all additions thereto,
without any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment.

            "JOINT VENTURE" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; provided
that in no event shall any corporate Subsidiary of any Person be considered to
be a Joint Venture to which such Person is a party.

            "LEASED AIRCRAFT" means a Financed Aircraft subject to an Approved
Lease.

            "LENDER" and "LENDERS" means the persons identified as "Lenders" and
listed on the signature pages of this Agreement, together with their successors
and permitted assigns pursuant to subsection 9.1.

            "LEVERAGE RATIO" means, as of the last day of any fiscal quarter of
the Company, the ratio of (i) Consolidated Total Debt as of such date (less Cash
and Cash Equivalents held by Company in excess of $25 million as of such date)
plus seven times Consolidated Rental Payments (for the four fiscal quarter
period ending as of such date) to (ii) Consolidated Adjusted EBITDA plus
Consolidated Rental Payments for the four fiscal quarter period ending as of
such date.

            "LIEN" means any lien, mortgage, pledge, assignment, security
interest, charge, hypothecation, preference, priority, privilege, lease or
encumbrance of any kind (including any conditional sale or other title retention
agreement, any lease in the nature thereof, and any agreement to give any
security interest) and any option, trust or other preferential arrangement
having the practical effect of any of the foregoing.

            "LOAN" or "LOANS" means one or more of the Existing Aircraft
Extended Loans or New Aircraft Loans or any combination thereof.

            "LOAN DOCUMENTS" means this Agreement, the Notes, any guaranty
entered

                                      -18-
<PAGE>
into pursuant to subsection 5.9 and the Collateral Documents.

            "LOAN EXPOSURE" means, with respect to any Lender as of any date of
determination the sum of that Lender's Existing Aircraft Extended Loans, that
Lender's New Aircraft Loans and the unfunded portion of that Lender's Revolving
Loan Commitment.

            "LOAN PARTIES" means Company and any persons who enter into
guaranties pursuant to subsection 5.9.

            "MARGIN STOCK" has the meaning assigned to that term in Regulation U
of the Board of Governors of the Federal Reserve System as in effect from time
to time.

            "MATERIAL ADVERSE EFFECT" means (i) a material adverse effect upon
the business, operations, properties, assets, condition (financial or otherwise)
or prospects of Company or of Company and its Subsidiaries taken as a whole or
(ii) the impairment of the ability of any Loan Party to perform the Obligations,
or the impairment, as a result of actions or inaction by Company, of the ability
of Administrative Agent or Lenders to enforce the Obligations.

            "MATERIAL AGREEMENT" means any or all of the Pass Through Trust
Documents, the FINOVA Agreement, the Senior Note Documents, the NationsBanc/Bank
of America Agreement, each Purchase Agreement, any Modification Agreement, any
BFE Agreement, the AFL III Leases, each Approved Lease and agreements in respect
of Permitted Extension Indebtedness and Other Permitted Indebtedness.

            "MAXIMUM NOTE AMOUNT" means, with respect to any Eligible Aircraft,
80% of the Appraised Value of such Eligible Aircraft based on appraisals
obtained pursuant to subsection 5.10 of such Eligible Aircraft made within 30
days prior to the purchase thereof and giving effect to the proposed
modifications of such Eligible Aircraft pursuant to a Modification Agreement.

            "MODIFICATION AGREEMENT" means any modification agreement entered
into by Company with respect to the modification of any Financed Aircraft in
form and substance satisfactory to Administrative Agent.

            "MOODY'S" means Moody's Investors Service, Inc.

            "NATIONSBANC/BANK OF AMERICA AGREEMENT" means the Loan Agreement,
dated as of March 28, 1997, between Company, as Borrower and NationsBanc Leasing
Corporation, as Lender, as further amended, supplemented and modified in
accordance with this Agreement.

            "NET CASH PROCEEDS" means, with respect to any Asset Sale, Cash
Proceeds of such Asset Sale net of bona fide direct costs of sale including (i)
income taxes reasonably

                                      -19-
<PAGE>
estimated to be actually payable as a result of such Asset Sale within two years
of the date of such Asset Sale and (ii) payment of the outstanding principal
amount of, premium or penalty, if any, and interest on any Indebtedness (other
than the Loans) that is secured by a Lien on the stock or assets of Company and
that is required to be repaid under the terms thereof as a result of such Asset
Sale.

            "NEW AIRCRAFT" means a Financed Aircraft acquired by Company after
the Fourth Restatement Date.

            "NEW AIRCRAFT LOAN" means a New Aircraft Revolving Loan or a New
Aircraft Term Loan.

            "NEW AIRCRAFT LOAN CONVERSION DATE" means, with respect to New
Aircraft Revolving Loans in respect of a Related Aircraft, the three-year
anniversary of the date on which the initial New Aircraft Revolving Loans were
made with respect to that Related Aircraft.

            "NEW AIRCRAFT NOTES" means (i) the promissory notes of Company
issued pursuant to subsection 2.1D on the initial Funding Date of each New
Aircraft Revolving Loan and (ii) any promissory notes issued by Company pursuant
to the last sentence of subsection 9.1B(i) in connection with assignments of the
Revolving Loan Commitments and New Aircraft Loans of any Lenders, in each case
substantially in the form of Exhibit IIIA annexed hereto as they may be amended,
supplemented or otherwise modified from time to time.

            "NEW AIRCRAFT REVOLVING LOAN" means a Revolving Loan made after the
Fourth Restatement Date prior to the time such Loan is converted into a New
Aircraft Term Loan on its New Aircraft Loan Conversion Date.

            "NEW AIRCRAFT TERM LOAN" means a Loan made after the Fourth
Restatement Date after its conversion on its New Aircraft Loan Conversion Date.

            "NEW AIRCRAFT TERM LOAN REPAYMENT AMOUNT" means, for each New
Aircraft Loan Repayment Date for all New Aircraft Term Loans for each Related
Aircraft, an amount equal to 10% of the principal amount of all such New
Aircraft Term Loans outstanding on the New Aircraft Loan Conversion Date with
respect to that Related Aircraft.

            "NEW AIRCRAFT TERM LOAN REPAYMENT DATE" means, for New Aircraft Term
Loans made with respect to a New Aircraft, the three-year anniversary of the
date on which the initial New Aircraft Revolving Loans were made with respect to
such New Aircraft and each three-month anniversary date thereafter; provided
that, notwithstanding anything in the foregoing to the contrary, the unpaid
amount of all New Aircraft Term Loans shall be due and payable on the Final
Scheduled Maturity Date.

            "9-1/4% SENIOR NOTE DOCUMENTS" means the Indenture, dated as of
April 9,

                                      -20-
<PAGE>
1998 between Company and State Street Bank and Trust Company relating to the
9-1/4% Senior Notes and any and all related agreements, as the same may be
amended, restated, supplemented or otherwise modified from time to time in
accordance with this Agreement.

            "9-1/4% SENIOR NOTES" means the 9-1/4% Senior Notes due April 15,
2008 of Company issued pursuant to the 9-1/4% Senior Note Documents.

            "9-3/8% SENIOR NOTE DOCUMENTS" means the Indenture, dated as of
November 18, 1998 between Company and State Street Bank and Trust Company
relating to the 9-3/8% Senior Notes due and any and all related agreements, as
the same may be amended, restated, supplemented or otherwise modified from time
to time in accordance with this Agreement.

            "9-3/8% SENIOR NOTES" means the 9-3/8% Senior Notes due November 15,
2006 of Company issued pursuant to the 9-3/8% Senior Note Documents.

            "1998 PASS THROUGH TRUST DOCUMENTS" means that certain Pass Through
Trust Agreement dated as of February 9, 1998 between Atlas Air, Inc. and
Wilmington Trust Company, as Trustee (the "1998 PASS THROUGH TRUST AGREEMENT")
and any trust indenture and security agreements including any related trust
indenture and security agreement supplements which related to the equipment
notes to be held in trust pursuant to the 1998 Pass Through Trust Agreement and
all related agreements, as the same may be amended, restated, supplemented or
otherwise modified from time to time in accordance with this Agreement.

            "1999 PASS THROUGH TRUST DOCUMENTS" means that certain Pass Through
Trust Agreement dated as of April 13, 1999 between Atlas Air, Inc. and
Wilmington Trust Company, as Trustee (the "1999 PASS THROUGH TRUST AGREEMENT")
and any trust indenture and security agreements including any related trust
indenture and security agreement supplements which related to the equipment
notes to be held in trust pursuant to the 1999 Pass Through Trust Agreement and
all related agreements, as the same may be amended, restated, supplemented or
otherwise modified from time to time in accordance with this Agreement."

            "NON-US LENDER" has the meaning assigned to that term in subsection
2.7B(iii)(a).

            "NOTES" means one or more of the Existing Aircraft Extended Notes,
the New Aircraft Notes or the Assignee Notes, as the context requires.

            "NOTICE OF BORROWING" means a notice substantially in the form of
Exhibit I annexed hereto delivered by Company to Administrative Agent pursuant
to subsection 2.1B with respect to a proposed borrowing.

            "NOTICE OF CONVERSION/CONTINUATION" means a notice substantially in
the form of Exhibit II annexed hereto delivered by Company to Administrative
Agent pursuant to subsection 2.2D with respect to a proposed conversion or
continuation of the applicable basis

                                      -21-
<PAGE>
for determining the interest rate with respect to the Loans specified therein.

            "OBLIGATIONS" means all obligations of every nature of each Loan
Party from time to time owed to Administrative Agent, Lenders or any of them
under the Loan Documents, whether for principal, interest, fees, expenses,
indemnification or otherwise.

            "OFFICERS' CERTIFICATE" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its chairman of the board
(if an officer) or its president or one of its vice presidents and by its chief
financial officer or its treasurer; provided that every Officers' Certificate
with respect to the compliance with a condition precedent to the making of any
Loans hereunder shall include (i) a statement that the officer or officers
making or giving such Officers' Certificate have read such condition and any
definitions or other provisions contained in this Agreement relating thereto,
(ii) a statement that, in the opinion of the signers, they have made or have
caused to be made such examination or investigation as is necessary to enable
them to express an informed opinion as to whether or not such condition has been
complied with, and (iii) a statement as to whether, in the opinion of the
signers, such condition has been complied with.

            "OPERATING LEASE" means, as applied to any Person, any lease
(including, without limitation, leases that may be terminated by the lessee at
any time) of any property (whether real, personal or mixed) that is not a
Capital Lease other than any such lease under which that Person is the lessor.

            "OTHER PERMITTED INDEBTEDNESS" means Indebtedness incurred for the
purpose of financing the acquisition of aircraft so long as (i) any such
Indebtedness bears interest at a rate which does not exceed 15% per annum, (ii)
such Indebtedness has a final stated maturity later than the Final Scheduled
Maturity Date of the Notes and (iii) the amortization and the other terms,
provisions, conditions, covenants and events of default thereof taken as a whole
shall be no more onerous or restrictive from the perspective of Company and its
Subsidiaries or any less favorable, from the perspective of Lenders, than any
other Designated Indebtedness.

            "PART" means, as the context requires, a Part as defined in a
particular Aircraft Chattel Mortgage or Parts as defined in all Aircraft Chattel
Mortgages.

            "PASS THROUGH TRUST DOCUMENTS" means the 1998 Pass Through Trust
Agreement, the 1999 Pass Through Trust Agreement and the 2000 Pass Through Trust
Agreement (the "PASS THROUGH TRUST AGREEMENTS") and any trust indenture and
security agreements including any related trust indenture and security agreement
supplements which related to the equipment notes to be held in trust pursuant to
the Pass Through Trust Agreements and all related agreements, as the same may be
amended, restated, supplemented or otherwise modified from time to time in
accordance with this Agreement.

            "PERMITTED ENCUMBRANCES" means the following types of Liens (other
than

                                      -22-
<PAGE>
any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal
Revenue Code or by ERISA):

                  (i) Liens for taxes, assessments or governmental charges or
            claims the payment of which is not, at the time, required by
            subsection 5.3;

                  (ii) statutory Liens of landlords and Liens of carriers,
            warehousemen, mechanics and materialmen and other Liens imposed by
            law incurred in the ordinary course of business for sums not yet
            delinquent or being contested in good faith by appropriate
            proceedings that do not involve any danger of the sale, forfeiture
            or loss of any Collateral, if such reserve or other appropriate
            provision, if any, as shall be required by GAAP shall have been made
            therefor;

                  (iii) Liens incurred or deposits made in the ordinary course
            of business in connection with workers' compensation, unemployment
            insurance and other types of social security, or to secure the
            performance of tenders, statutory obligations, surety and appeal
            bonds, bids, leases, government contracts, trade contracts,
            performance and return-of-money bonds and other similar obligations
            (exclusive of obligations for the payment of borrowed money);

                  (iv) any attachment or judgment Lien not constituting an Event
            of Default under subsection 7.8;

                  (v) easements, rights-of-way, restrictions, minor defects,
            encroachments or irregularities in title and other similar charges
            or encumbrances not interfering in any material respect with the
            ordinary conduct of the business of Company or any of its
            Subsidiaries;

                  (vi) any (a) interest or title of a lessor or sublessor under
            any lease permitted by subsection 6.9, (b) restriction or
            encumbrance that the interest or title of such lessor or sublessor
            may be subject to, or (c) subordination of the interest of the
            lessee or sublessee under such lease to any restriction or
            encumbrance referred to in the preceding clause (b);

                  (vii) Liens arising from filing UCC financing statements
            relating solely to leases permitted by this Agreement;

                  (viii) Liens in favor of customs and revenue authorities
            arising as a matter of law to secure payment of customs duties in
            connection with the importation of goods;

                  (ix) the rights of others under agreements or arrangements to
            the extent expressly permitted by the terms of Sections 4(d) and
            4(e) of the First Aircraft Chattel Mortgages;

                  (x) Liens described in Schedule 6.2 annexed hereto;

                  (xi) Liens arising pursuant to the NationsBanc/Bank of America
            Agreement; provided that such Liens encumber only assets acquired or
            refinanced with the proceeds of Indebtedness incurred pursuant to
            the NationsBanc Agreement;

                                      -23-
<PAGE>
                  (xii) Liens arising pursuant to the AFL III Financing
            Agreement; provided that such Liens do not encumber any assets other
            than the AFL III Equipment and other assets of AFL III;

                  (xiii) Liens securing Indebtedness incurred in accordance with
            subsection 6.1(xii);

                  (xiv) The rights of others under agreements or arrangements to
            the extent expressly permitted by the terms of Sections 4(d) and
            4(e) of any aircraft chattel mortgages entered into in connection
            with the AFL III Financing Agreement

                  (xv) Liens granted pursuant to the Collateral Documents.

            "PERMITTED EXTENSION INDEBTEDNESS" means renewals, extensions,
substitutions, refinancings or replacements (each an "EXTENSION") by Company of
any Indebtedness of Company, including any such successive transactions by
Company, so long as (i) any such Indebtedness bears interest at a rate which
does not exceed 15% per annum, (ii) any such Permitted Extension Indebtedness
shall be in a principal amount that does not exceed the principal amount
immediately prior to such extension, plus the amount of any premium required to
be paid in connection with such extension pursuant to the terms of such
Indebtedness, plus the amount of expenses of Company reasonably incurred in
connection with such extension, (iii) in the case of any extension of
subordinated Indebtedness, such Permitted Extension Indebtedness is made
subordinate to the Obligations at least to the same extent as the Indebtedness
immediately prior to such extension, (iv) such Permitted Extension Indebtedness
has a final stated maturity later than the Final Stated Maturity Date of the
Notes and (v) the amortization and the other terms, provisions, conditions,
covenants and events of default thereof taken as a whole shall be no more
onerous or restrictive from the perspective of Company and its Subsidiaries or
any less favorable, from the perspective of Lenders than those contained in the
Indebtedness immediately prior to such extension.

            "PERMITTED HOLDERS" means Michael A. Chowdry, his spouse, his
descendant(s) or any entity controlled by any of the foregoing, or any trust
solely for the benefit of any of the foregoing.

            "PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, joint stock
companies, Joint Ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations, whether or not
legal entities, and governments and agencies and political subdivisions thereof.

            "POTENTIAL EVENT OF DEFAULT" means a condition or event that, after
notice or the expiration of any grace period or both, would constitute an Event
of Default.

            "PRICING CERTIFICATE" has the meaning assigned to that term in
subsection 5.1(xvi).

                                      -24-
<PAGE>
            "PRICING REDUCTION" means, if at any time Company's "Senior Secured
Debt Rating" or "Senior Secured Rating" as assigned by Moody's or S&P, as
applicable, are at the levels specified below, a pricing reduction equal to the
per annum percentage corresponding to the applicable rating set forth in the
chart below:

<TABLE>
<CAPTION>
       Rating                               Pricing Reduction
       ------                               -----------------
<S>                                         <C>
       Ba1 or higher by Moody's and              0.125%
       BB- or higher by S&P
       Ba1 or higher by Moody's and              0.250%
       BB or higher by S&P
</TABLE>

            The Pricing Reduction shall be determined with reference to the most
recent Pricing Certificate delivered by Company to Administrative Agent pursuant
to subsection 5.1(xvi). Any changes to the Pricing Reduction shall become
effective on the day following the delivery of the relevant Pricing Certificate
to Administrative Agent and shall remain in effect through the next date a
Pricing Certificate is required to be delivered. It is understood and agreed
that the Pricing Reduction percentages provided are not cumulative.
Notwithstanding anything to the contrary herein, at any time an Event of Default
shall have occurred and be continuing, the Pricing Reduction shall be zero.

            "PRIME RATE" means the rate that Administrative Agent announces from
time to time as its prime lending rate, as in effect from time to time. The
Prime Rate is a reference rate and does not necessarily represent the lowest or
best rate actually charged to any customer. Administrative Agent or any other
Lender may make commercial loans or other loans at rates of interest at, above
or below the Prime Rate.

            "PRO FORMA BASIS" means, with respect to compliance with any
covenant hereunder, compliance with such covenant after giving effect to any
proposed incurrence of Indebtedness by Company or any of its Subsidiaries and
the application of the proceeds thereof, the acquisition (whether by purchase,
merger or otherwise) or disposition (whether by sale, merger or otherwise) of
any company, entity or business or any asset (including any ACMI Contracted
Aircraft) by Company or any of its Subsidiaries or any other related action
which requires compliance on a Pro Forma Basis. In making any determination of
compliance on a Pro Forma Basis, such determination shall be performed after
good faith consultation with Administrative Agent using the consolidated
financial statements of Company and its Subsidiaries which shall be reformulated
as if any such incurrence of Indebtedness and the application of proceeds,
acquisition, disposition or other related action had been consummated at the
beginning of the period specified in the covenant with respect to which Pro
Forma Basis compliance is required.

            "PRO RATA SHARE" means, with respect to each Lender, the percentage
obtained by dividing the Loan Exposure of that Lender by the aggregate Loan
Exposure of all Lenders,

                                      -25-
<PAGE>
as such percentage may be adjusted by assignments permitted pursuant to
subsection 9.1. The Pro Rata Share of each Lender as of the date hereof is set
forth opposite the name of that Lender in Schedule 2.1 annexed hereto.

            "PROCEEDINGS" has the meaning assigned to that term in subsection
5.1(x).

            "PURCHASE AGREEMENT" means, with respect to the purchase of any
Eligible Aircraft to be financed with the proceeds of New Aircraft Loans, an
aircraft purchase agreement and any related bill of sale providing, among other
things, for the sale to Company of such Eligible Aircraft in form and substance
satisfactory to Administrative Agent.

            "REFERENCE LENDERS" means Bankers Trust and one or more other
Lenders designated by Administrative Agent and reasonably satisfactory to
Company.

            "REGISTER" has the meaning assigned to that term in subsection
2.1.E.

            "REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.

            "RELATED AIRCRAFT" means an Existing Aircraft or a New Aircraft in
respect of which Existing Aircraft Extended Loans are deemed made or New
Aircraft Loans are made, respectively.

            "RELEASE" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including, without limitation, the abandonment or disposal of any
barrels, containers or other closed receptacles containing any Hazardous
Materials), or into or out of any Facility, including the movement of any
Hazardous Material through the air, soil, surface water, groundwater or
property.

            "REPLACEMENT ENGINE" has the meaning assigned to that term in
subsection 9.22A.

            "REQUISITE LENDERS" means Lenders having or holding 50.1% or more of
the aggregate Loan Exposure of all Lenders.

            "RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Company now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock to the holders of that class, (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of stock of Company now or
hereafter outstanding, (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of Company now or hereafter outstanding, and (iv)
any payment or prepayment of principal of,

                                      -26-
<PAGE>
premium, if any, or interest on, or redemption, purchase, retirement, defeasance
(including in-substance or legal defeasance), sinking fund or similar payment
with respect to, any Designated Indebtedness.

            "REVOLVING LOAN COMMITMENT" means the commitment of a Lender to make
New Aircraft Revolving Loans and New Aircraft Term Loans to Company pursuant to
subsection 2.1A(ii), and "REVOLVING LOAN COMMITMENTS" means such commitments of
all Lenders in the aggregate.

            "REVOLVING LOAN COMMITMENT TERMINATION DATE" means the Final
Scheduled Maturity Date.

            "REVOLVING LOANS" means the Loans made by Lenders to Company
pursuant to subsection 2.1A(ii).

            "S&P" means Standard & Poor's Rating Services.

            "SECOND AIRCRAFT CHATTEL MORTGAGE" means with respect to each
Eligible Aircraft purchased with the proceeds of Loans, a Second Security
Agreement and Chattel Mortgage (Aircraft No. _____) and substantially in the
form of Exhibit XI annexed hereto, granting a security interest in such Eligible
Aircraft and Parts securing all Obligations that are not secured by the First
Chattel Mortgage entered into concurrently therewith, as such Second Aircraft
Chattel Mortgage may be amended, restated, supplemented or otherwise modified
from time to time in accordance with the terms hereof and thereof.

            "SECURITIES" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.

            "SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time, and any successor statute.

            "SENIOR NOTES" means the 10-3/4% Senior Notes, the 9-1/4% Senior
Notes and the 9-3/8% Senior Notes.

            "SENIOR NOTE DOCUMENTS" means the 10-3/4% Senior Note Documents, the
9-1/4% Senior Note Documents and the 9-3/8% Senior Note Documents.

            "SOLVENT" means, with respect to any Person, that as of the date of
determination both (A) (i) the then fair saleable value of the property of such
Person is

                                      -27-
<PAGE>
(y) greater than the total amount of liabilities (including contingent
liabilities) of such Person and (z) not less than the amount that will be
required to pay the probable liabilities on such Person's then existing debts as
they become absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person; (ii) such Person's
capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (iii) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due; and (B) such Person is
"solvent" within the meaning given that term and similar terms under applicable
laws relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.

            "SPARE ENGINE" means, as the context requires, a Spare Engine as
defined in a particular Aircraft Chattel Mortgage or all Spare Engines as
defined in all Aircraft Chattel Mortgages.

            "SPECIAL PURPOSE SUBSIDIARY" means (i) a Subsidiary of Company
formed solely for the purpose of refinancing Notes associated with a Financed
Aircraft or acquiring or refinancing other aircraft with Other Permitted
Indebtedness the only assets of which are such Financed Aircraft and
contributions to capital of such Subsidiary, which together with all other
contributions to capital made to other such Subsidiaries, are not in excess of
15% of the consolidated book value of the assets of the Company and its
Subsidiaries, and the only liability of which is the Permitted Extension
Indebtedness incurred to refinance such Notes; provided that Company
beneficially owns and controls at least 95% of the issued and outstanding
capital stock of such Subsidiary or (ii) a wholly owned Subsidiary formed
pursuant to subsection 9.21.

            "SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, association, joint venture or other business entity of which more
than 50% of the total voting power of shares of stock or other ownership
interests entitled (without regard to the occurrence of any contingency) to vote
in the election of the Person or Persons (whether directors, managers, trustees
or other Persons performing similar functions) having the power to direct or
cause the direction of the management and policies thereof is at the time owned
or controlled, directly or indirectly, by that Person or one or more of the
other Subsidiaries of that Person or a combination thereof.

            "SUPPLEMENTAL TYPE CERTIFICATES" has the meaning assigned to that
term in the First Aircraft Chattel Mortgage.

            "SYNDICATION AGENT" means Goldman Sachs Credit Partners L.P. in its
capacity as syndication agent under the Existing Agreement.

            "TAX" or "TAXES" means any present or future tax, levy, impost,
duty, charge,

                                      -28-
<PAGE>
fee, deduction or withholding of any nature and whatever called, by whomsoever,
on whomsoever and wherever imposed, levied, collected, withheld or assessed;
provided that "TAX ON THE OVERALL NET INCOME" of a Person shall be construed as
a reference to a tax imposed by the jurisdiction in which that Person's
principal office (and/or, in the case of a Lender, its lending office) is
located or in which that Person is deemed to be doing business on all or part of
the net income, profits or gains of that Person (whether worldwide, or only
insofar as such income, profits or gains are considered to arise in or to relate
to a particular jurisdiction, or otherwise).

            "10-3/4% SENIOR NOTES" means the 10-3/4% Senior Notes due 2005 of
Company issued pursuant to the 10-3/4% Senior Note Documents.

            "10-3/4% SENIOR NOTE DOCUMENTS" means the Indenture, dated as of
August 13, 1997 between Company and State Street Bank and Trust Company relating
to the 10-3/4% Senior Notes and any and all related agreements, as the same may
be amended, restated, supplemented or otherwise modified from time to time in
accordance with this Agreement.

            "2000 PASS THROUGH TRUST DOCUMENTS" means that certain Pass Through
Trust Agreement dated as of January 28, 2000 between Atlas Air, Inc. and
Wilmington Trust Company, as Trustee (the "2000 PASS THROUGH TRUST AGREEMENT")
and any trust indenture and security agreements including any related trust
indenture and security agreement supplements which related to the equipment
notes to be held in trust pursuant to the 2000 Pass Through Trust Agreement and
all related agreements, as the same may be amended, restated, supplemented or
otherwise modified from time to time in accordance with this Agreement."

            "UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any jurisdiction.

            "UNITED STATES CITIZEN" has the meaning assigned to that term in
subsection 4.1B.

1.2   ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS UNDER
      AGREEMENT.

            Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP.

1.3   OTHER DEFINITIONAL PROVISIONS.

            References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided. Any of the terms defined in subsection 1.1 may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference.

                                      -29-
<PAGE>
                                   SECTION 2.
                   AMOUNTS AND TERMS OF COMMITMENTS AND LOANS

2.1   COMMITMENTS; MAKING OF LOANS; NOTES; REGISTER.

      A. COMMITMENTS. Subject to the terms and conditions of this Agreement and
in reliance upon the representations and warranties of Company herein set forth,
each Lender hereby severally agrees to make the Loans described in this
subsection 2.1A.

            (i) Existing Aircraft Extended Loans. Prior to the date hereof,
      Lenders have made "Revolving Loans" under the Existing Agreement in the
      aggregate principal amount of $87,916,000, the proceeds of which were used
      to purchase and modify the Existing Aircraft. The principal amount of all
      "Revolving Loans" anticipated to be outstanding on the Fourth Restatement
      Date with respect to each Related Aircraft is set forth on Schedule 1.1
      annexed hereto and shown as the "Existing Aircraft Loan Extension Amount"
      for such Existing Aircraft and each such "Revolving Loan" shall be deemed
      to be an "Existing Aircraft Extended Loan" in such principal amount upon
      the satisfaction of the conditions set forth in subsection 3.1 and the
      effectiveness of this Agreement. From and after the Fourth Restatement
      Date, each Lender severally agrees, subject to the terms and conditions of
      this Agreement to maintain and extend its Pro Rata Share of Existing
      Aircraft Extended Loans and such Loans shall be repaid as provided in
      subsection 2.4A(i).

            (ii) New Aircraft Loans. Each Lender severally agrees, subject to
      the conditions set forth in Section 3 and subject to the limitations set
      forth below, to lend to Company from time to time during the period from
      the Fourth Restatement Date to but excluding the Revolving Loan Commitment
      Termination Date an aggregate amount, together with its Pro Rata Share of
      the aggregate principal amount of all Existing Aircraft Extended Loans
      outstanding, not exceeding its Pro Rata Share of the aggregate amount of
      the Revolving Loan Commitments to be used for the purposes identified in
      subsection 2.5B. The amount of each Lender's Revolving Loan Commitment is
      set forth on Schedule 2.1 annexed hereto and the aggregate amount of the
      Revolving Loan Commitments is $175,000,000; provided that, in no event
      shall the aggregate amount of all Existing Aircraft Extended Loans, New
      Aircraft Revolving Loans and New Aircraft Term Loans at any time
      outstanding exceed $175,000,000; provided further that the Revolving Loan
      Commitments of Lenders shall be adjusted to give effect to any assignments
      of the Revolving Loan Commitments pursuant to subsection 9.1B; and
      provided, still further that the amount of the Revolving Loan Commitments
      shall be reduced from time to time by the amount of any reductions thereto
      made pursuant to subsection 2.4B(ii). Each Loan made after the Fourth
      Restatement Date shall constitute a New Aircraft Loan and shall be made
      with respect to a Related Aircraft. New Aircraft Loans made with respect
      to a Related Aircraft may be made through but excluding the third
      anniversary of the first

                                      -30-
<PAGE>
      New Aircraft Loan made with respect to such Related Aircraft; provided,
      however, that no New Aircraft Loans may be made on or after the Revolving
      Loan Commitment Termination Date. New Aircraft Loans shall be repaid as
      provided in subsections 2.4A(ii) and 2.4A(iii).

            Anything to the contrary in this Agreement notwithstanding, the New
Aircraft Loans shall be subject to the limitation that in no event shall the
Lenders lend an amount in excess of (x) on the date of acquisition of a New
Aircraft the lesser of (i) an amount equal to the purchase price of such New
Aircraft and (ii) 80% of the Appraised Value of such New Aircraft as of the date
of acquisition (but without giving effect to the contemplated modifications) or
(y) on any date New Aircraft Loans are made to finance the modification of a New
Aircraft, the lesser of (i) 80% of the cost thereof as reflected in invoices
delivered to Administrative Agent pursuant to subsection 3.3A (or 100% of the
costs of modification associated with the final New Aircraft Loan to complete
the modification of such New Aircraft) and (ii) an amount which when added to
all other New Aircraft Loans made with respect to such New Aircraft does not
exceed 80% of the Appraised Value as set forth in appraisals delivered pursuant
to subsection 3.2 after giving effect to completion of modification. Further, in
no event shall the aggregate amount of all Existing Aircraft Extended Loans, New
Aircraft Revolving Loans and New Aircraft Term Loans at any time outstanding
exceed $175,000,000.

      B. BORROWING MECHANICS. Revolving Loans made on any Funding Date shall be
in an aggregate minimum amount of $1,500,000. Whenever Company desires that
Lenders make Revolving Loans it shall deliver to Administrative Agent a Notice
of Borrowing no later than 12:00 Noon (New York time) at least three Business
Days in advance of the proposed Funding Date (in the case of a Eurodollar Rate
Loan) or at least one Business Day in advance of the proposed Funding Date (in
the case of a Base Rate Loan). The Notice of Borrowing shall specify (i) the
proposed Funding Date (which shall be a Business Day), (ii) the amount of Loans
requested, (iii) whether such Loans shall be Base Rate Loans or Eurodollar Rate
Loans, (iv) in the case of any Loans requested to be made as Eurodollar Rate
Loans, the initial Interest Period requested therefor, (v) whether such Loans
are for the purpose of the purchase or the modification of an Eligible Aircraft
and (vi) the identification of the Related Aircraft. Revolving Loans and Term
Loans may be continued as or converted into Base Rate Loans and Eurodollar Rate
Loans in the manner provided in subsection 2.2D. In lieu of delivering the
above-described Notice of Borrowing, Company may give Administrative Agent
telephonic notice by the required time of any proposed borrowing under this
subsection 2.1B; provided that such notice shall be promptly confirmed in
writing by delivery of a Notice of Borrowing to Administrative Agent on or
before the applicable Funding Date.

      Neither Administrative Agent nor any Lender shall incur any liability to
Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of Company or
for otherwise acting in good faith under this subsection

                                      -31-
<PAGE>
2.1B, and upon funding of Loans by Lenders in accordance with this Agreement
pursuant to any such telephonic notice Company shall have effected Loans
hereunder.

      Company shall notify Administrative Agent prior to the funding of any
Loans in the event that any of the matters to which Company is required to
certify in the applicable Notice of Borrowing is no longer true and correct as
of the applicable Funding Date, and the acceptance by Company of the proceeds of
any Loans shall constitute a re-certification by Company, as of the applicable
Funding Date, as to the matters to which Company is required to certify in the
applicable Notice of Borrowing.

      Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice
of Borrowing for a Eurodollar Rate Loan (or telephonic notice in lieu thereof)
shall be irrevocable on and after the related Interest Rate Determination Date,
and Company shall be bound to make a borrowing in accordance therewith.

      C. DISBURSEMENT OF FUNDS. All Revolving Loans under this Agreement shall
be made by Lenders simultaneously and proportionately to their respective Pro
Rata Shares, it being understood that no Lender shall be responsible for any
default by any other Lender in that other Lender's obligation to make a Loan
requested hereunder nor shall the Commitment of any Lender to make the
particular type of Loan requested be increased or decreased as a result of a
default by any other Lender in that other Lender's obligation to make a Loan
requested hereunder. Promptly after receipt by Administrative Agent of a Notice
of Borrowing pursuant to subsection 2.1B (or telephonic notice in lieu thereof),
Administrative Agent shall notify each Lender of the proposed borrowing. Each
Lender shall make the amount of its Loan available to Administrative Agent not
later than 12:00 Noon (New York time) on the applicable Funding Date, in each
case in same day funds in Dollars, at the Funding and Payment Office.

      Unless Administrative Agent shall have been notified by any Lender prior
to the Funding Date for any Loans that such Lender does not intend to make
available to Administrative Agent the amount of such Lender's Loan requested on
such Funding Date, Administrative Agent may assume that such Lender has made
such amount available to Administrative Agent on such Funding Date and
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to Company a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Administrative Agent by
such Lender, Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding Date until the date such amount is paid to
Administrative Agent, at the customary rate set by Administrative Agent for the
correction of errors among banks for three Business Days and thereafter at the
Base Rate. If such Lender does not pay such corresponding amount forthwith upon
Administrative Agent's demand therefor, Administrative Agent shall promptly
notify Company and Company shall immediately pay such corresponding amount to
Administrative Agent together with interest thereon, for each

                                      -32-
<PAGE>
day from such Funding Date until the date such amount is paid to Administrative
Agent, at the rate payable under this Agreement for Base Rate Loans. Nothing in
this subsection 2.1C shall be deemed to relieve any Lender from its obligation
to fulfill its Commitments hereunder or to prejudice any rights that Company may
have against any Lender as a result of any default by such Lender hereunder.

      D.    NOTES.

            (i) Existing Aircraft Extended Notes. Each of the outstanding
      "Revolving Notes" under the Existing Agreement shall be deemed amended and
      restated on the Fourth Restatement Date to reflect the extension of the
      maturity from September 30, 2000 to the Final Scheduled Maturity Date.
      Company shall execute and deliver on the Fourth Restatement Date to each
      Lender (or to Administrative Agent for that Lender) Existing Aircraft
      Extension Notes substantially in the form of Exhibit IIIA annexed hereto
      to evidence that Lender's Existing Aircraft Extended Loans in respect of
      each Existing Aircraft and the amendment and restatement of such
      "Revolving Notes".

            (ii) New Aircraft Notes. Following the Fourth Restatement Date, on
      each date on which Company delivers a Notice of Borrowing pursuant to
      subsection 2.1B for the purpose of financing the purchase of a New
      Aircraft, Company shall execute and deliver on such date to each Lender
      (or to Administrative Agent for that Lender) with respect to such New
      Aircraft a New Aircraft Note substantially in the form of Exhibit IIIB
      annexed hereto to evidence that Lender's New Aircraft Revolving Loans and
      New Aircraft Term Loans in respect of such New Aircraft in such Lender's
      Pro Rata Share of the aggregate principal amount of such New Aircraft's
      Maximum Note Amount with other appropriate insertions.

      E.    THE REGISTER.

            (i) Administrative Agent shall maintain, at its address referred to
      in subsection 9.8, a register for the recordation of the names and
      addresses of Lenders and the Commitments and Loans of each Lender from
      time to time (the "REGISTER"). The Register shall be available for
      inspection by Company or any Lender at any reasonable time and from time
      to time upon reasonable prior notice.

            (ii) Administrative Agent shall record in the Register the Revolving
      Loan Commitment and the Existing Aircraft Extended Loans and New Aircraft
      Loans from time to time of each Lender and each repayment or prepayment in
      respect of the principal amount of the Existing Aircraft Extended Loans
      and New Aircraft Loans of each Lender. Any such recordation shall be
      conclusive and binding on Company and each Lender, absent manifest error;
      provided that failure to make any such recordation, or any error in such
      recordation, shall not affect Company's Obligations in respect of the
      applicable Loans.

                                      -33-
<PAGE>
            (iii) Each Lender shall record on its internal records (including,
      without limitation the Notes held by such Lender) the amount of each Loan
      made by it and each payment in respect thereof. Any such recordation shall
      be conclusive and binding on Company, absent manifest error; provided that
      failure to make any such recordation, or any error in such recordation,
      shall not affect Company's Obligations in respect of the applicable Loans;
      and provided, further, that in the event of any inconsistency between the
      Register and any Lender's records, the recordations in the Register shall
      govern.

            (iv) Company, Administrative Agent and Lenders shall deem and treat
      the Persons listed as Lenders in the Register as the holders and owners of
      the corresponding Commitments and Loans listed therein for all purposes
      hereof, and no assignment or transfer of any such Commitment or Loan shall
      be effective, in each case unless and until an Assignment Agreement
      effecting the assignment or transfer thereof shall have been accepted by
      Administrative Agent and recorded in the Register as provided in
      subsection 9.1B(ii). Prior to such recordation, all amounts owed with
      respect to the applicable Commitment or Loan shall be owed to the Lender
      listed in the Register as the owner thereof, and any request, authority or
      consent of any Person who, at the time of making such request or giving
      such authority or consent, is listed in the Register as a Lender shall be
      conclusive and binding on any subsequent holder, assignee or transferee of
      the corresponding Commitments or Loans.

            (v) Company hereby designates Administrative Agent to serve as
      Company's agent solely for purposes of maintaining the Register as
      provided in this subsection 2.1E, and Company hereby agrees that, to the
      extent Administrative Agent serves in such capacity, Administrative Agent
      and its officers, directors, employees, agents and affiliates shall
      constitute Indemnities for all purposes under subsection 9.3.

2.2   INTEREST ON THE LOANS.

      A. RATE OF INTEREST. Subject to the provisions of subsections 2.6 and 2.7,
each Loan shall bear interest on the unpaid principal amount thereof from the
date made through maturity (whether by acceleration or otherwise) at a rate
determined by reference to the Base Rate or the Adjusted Eurodollar Rate, as the
case may be. The applicable basis for determining the rate of interest with
respect to any Loan shall be selected by Company initially at the time a Notice
of Borrowing is given with respect to such Loan pursuant to subsection 2.1B. The
basis for determining the interest rate with respect to any Loan may be changed
from time to time pursuant to subsection 2.2D. If on any day a Loan is
outstanding with respect to which notice has not been delivered to
Administrative Agent in accordance with the terms of this Agreement specifying
the applicable basis for determining the rate of interest, then for that day
that Loan shall bear interest determined by reference to the Base Rate.

                                      -34-
<PAGE>
      Subject to the provisions of subsections 2.2E and 2.7, each Loan shall
bear interest through maturity as follows:

            (i) if a Base Rate Loan, then at the sum of the Base Rate plus the
      Applicable Margin per annum; or

            (ii) if a Eurodollar Rate Loan, then at the sum of the Adjusted
      Eurodollar Rate plus the Applicable Margin per annum.

      The "APPLICABLE MARGIN" for each Base Rate Loan and Eurodollar Rate Loan
shall be the percentage set forth below for that type of Loan for the periods
set forth below.

<TABLE>
<CAPTION>
       ======================================================
                                      APPLICABLE MARGIN
                                      -----------------------
       TIME PERIOD                    BASE RATE  EURODOLLAR
                                      LOAN       RATE LOAN
       ======================================================
<S>                                   <C>        <C>
       From the Second Amendment      1.00%      2.00%
       Effective Date through the
       Fourth Restatement Date
       ------------------------------------------------------
       From the Fourth Restatement    0.75%      1.75%
       Date and Thereafter
       ======================================================
</TABLE>

      Notwithstanding the foregoing, the Applicable Margin shall be reduced in
an amount equal to the applicable Pricing Reduction effective from the date
following the delivery by Company to Administrative Agent of a Pricing
Certificate through the date a subsequent Pricing Certificate is required to be
delivered. If Company fails to deliver a Pricing Certificate or delivers an
incorrect Pricing Certificate, no Pricing Reduction shall be effective until
Company delivers a correct Pricing Certificate.

      B. INTEREST PERIODS. In connection with each Eurodollar Rate Loan, Company
may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"INTEREST PERIOD") to be applicable to such Loan, which Interest Period shall
be, at Company's option, either a one, two, three or six month period; provided
that:

            (i) the initial Interest Period for any Eurodollar Rate Loan shall
      commence on the Funding Date in respect of such Loan, in the case of a
      Loan initially made as a Eurodollar Rate Loan, or on the date specified in
      the applicable Notice of Conversion/Continuation, in the case of a Loan
      converted to a Eurodollar Rate Loan;

            (ii) in the case of immediately successive Interest Periods
      applicable to a Eurodollar Rate Loan continued as such pursuant to a
      Notice of Conversion/Continuation, each successive Interest Period shall
      commence on the day

                                      -35-
<PAGE>
      on which the next preceding Interest Period expires;

            (iii) if an Interest Period would otherwise expire on a day that is
      not a Business Day, such Interest Period shall expire on the next
      succeeding Business Day; provided that, if any Interest Period would
      otherwise expire on a day that is not a Business Day but is a day of the
      month after which no further Business Day occurs in such month, such
      Interest Period shall expire on the next preceding Business Day;

            (iv) any Interest Period that begins on the last Business Day of a
      calendar month (or on a day for which there is no numerically
      corresponding day in the calendar month at the end of such Interest
      Period) shall, subject to clause (v) of this subsection 2.2B, end on the
      last Business Day of a calendar month;

            (v) no Interest Period with respect to any portion of the Loans
      shall extend beyond the Final Scheduled Maturity Date.

            (vi) no Interest Period with respect to any portion of the Loans
      shall extend beyond a date on which Company is required to make a
      scheduled payment of principal of the Loans unless the sum of (a) the
      aggregate principal amount of Loans that are Base Rate Loans plus (b) the
      aggregate principal amount of Loans that are Eurodollar Rate Loans with
      Interest Periods expiring on or before such date equals or exceeds the
      principal amount required to be paid on the Loans on such date;

            (vii) there shall be no more than twelve Interest Periods
      outstanding at any time;

            (viii) in the event Company fails to specify an Interest Period for
      any Eurodollar Rate Loan in the applicable Notice of Borrowing or Notice
      of Conversion/Continuation, Company shall be deemed to have selected an
      Interest Period of one month; and

            (ix) prior to the date that is three months from the Fourth
      Restatement Date, no Interest Period with respect to any portion of the
      Loans shall exceed one month.

      C. INTEREST PAYMENTS. Subject to the provisions of subsection 2.2E,
interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity).

      D. CONVERSION OR CONTINUATION. Subject to the provisions of subsection
2.6, Company shall have the option (i) to convert at any time all or any part of
its outstanding Loans equal to $3,000,000 and integral multiples of $100,000 in
excess of that amount from Loans bearing interest at a rate determined by
reference to one basis to Loans bearing interest at a rate determined by
reference to an alternative basis or (ii) upon the expiration of any

                                      -36-
<PAGE>
Interest Period applicable to a Eurodollar Rate Loan, to continue all or any
portion of such Loan equal to $3,000,000 and integral multiples of $100,000 in
excess of that amount as a Eurodollar Rate Loan; provided, however, that a
Eurodollar Rate Loan may only be converted into a Base Rate Loan on the
expiration date of an Interest Period applicable thereto.

      Company shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 12:00 Noon (New York time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). A Notice of Conversion/Continuation
shall specify (i) the proposed conversion/continuation date (which shall be a
Business Day), (ii) the amount and type of the Loan to be converted/continued,
(iii) the nature of the proposed conversion/continuation, (iv) in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan, the requested
Interest Period, and (v) in the case of a conversion to, or a continuation of, a
Eurodollar Rate Loan, that no Potential Event of Default or Event of Default has
occurred and is continuing. In lieu of delivering the above-described Notice of
Conversion/Continuation, Company may give Administrative Agent telephonic notice
by the required time of any proposed conversion/continuation under this
subsection 2.2D; provided that such notice shall be promptly confirmed in
writing by delivery of a Notice of Conversion/Continuation to Administrative
Agent on or before the proposed conversion/continuation date.

      Neither Administrative Agent nor any Lender shall incur any liability to
Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Company or for
otherwise acting in good faith under this subsection 2.2D, and upon conversion
or continuation of the applicable basis for determining the interest rate with
respect to any Loans in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected a conversion or continuation, as
the case may be, hereunder.

      Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice
of Conversion/Continuation for conversion to, or continuation of, a Eurodollar
Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable on and
after the related Interest Rate Determination Date, and Company shall be bound
to effect a conversion or continuation in accordance therewith.

      E. DEFAULT RATE. Upon the occurrence and during the continuation of any
Event of Default, the outstanding principal amount of all Loans and, to the
extent permitted by applicable law, any interest payments thereon not paid when
due and any fees and other amounts then due and payable hereunder, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable upon
demand at a rate that is 2% per annum in excess of the interest rate otherwise

                                      -37-
<PAGE>
payable under this Agreement with respect to the applicable Loans (or, in the
case of any such fees and other amounts, at a rate which is 2% per annum in
excess of the interest rate otherwise payable under this Agreement for Base Rate
Loans); provided that, in the case of Eurodollar Rate Loans, upon the
expiration of the Interest Period in effect at the time any such increase in
interest rate is effective such Eurodollar Rate Loans shall thereupon become
Base Rate Loans and shall thereafter bear interest payable upon demand at a rate
which is 2% per annum in excess of the interest rate otherwise payable under
this Agreement for Base Rate Loans. Payment or acceptance of the increased rates
of interest provided for in this subsection 2.2E is not a permitted alternative
to timely payment and shall not constitute a waiver of any Event of Default or
otherwise prejudice or limit any rights or remedies of Administrative Agent or
any Lender.

      F. COMPUTATION OF INTEREST. Interest on each Loan shall be computed on the
basis of a 360-day year, in each case for the actual number of days elapsed in
the period during which it accrues. In computing interest on any Loan, the date
of the making of such Loan or the first day of an Interest Period applicable to
such Loan or, with respect to a Base Rate Loan being converted from a Eurodollar
Rate Loan, the date of conversion of such Eurodollar Rate Loan to such Base Rate
Loan, as the case may be, shall be included, and the date of payment of such
Loan or the expiration date of an Interest Period applicable to such Loan or,
with respect to a Base Rate Loan being converted to a Eurodollar Rate Loan, the
date of conversion of such Base Rate Loan to such Eurodollar Rate Loan, as the
case may be, shall be excluded; provided that if a Loan is repaid on the same
day on which it is made, one day's interest shall be paid on that Loan.

2.3   FEES.

      A. COMMITMENT FEES. Company agrees to pay to Administrative Agent, for
distribution to each Lender in proportion to that Lender's Pro Rata Share,
commitment fees for the period from and including the Fourth Restatement Date to
and excluding the Revolving Loan Commitment Termination Date equal to the
average of the daily excess of the Revolving Loan Commitments over the aggregate
principal amount of Loans outstanding multiplied by (y) if a Pricing Reduction
is not then in effect, 0.50% per annum or (z) if a Pricing Reduction is then in
effect, 0.375% per annum, such commitment fees to be calculated on the basis of
a 360-day year and the actual number of days elapsed and to be payable quarterly
in arrears on March 31, June 30, September 30 and December 31 of each year,
commencing on the first such date to occur after the Fourth Restatement Date,
and on the Revolving Loan Commitment Termination Date.

      B. ADMINISTRATIVE FEE. Company agrees to pay to Administrative Agent, an
Administrative Agent's fee in the amount as from time to time agreed upon by
Company and Administrative Agent.

      C. OTHER FEES. Company agrees to pay to Administrative Agent such other
fees

                                      -38-
<PAGE>
in the amounts and at the times separately agreed upon between Company and
Administrative Agent.

2.4   REPAYMENTS, PREPAYMENTS AND REDUCTIONS IN LOANS AND REVOLVING LOAN
      COMMITMENTS; GENERAL PROVISIONS REGARDING PAYMENTS.

      A.    SCHEDULED REPAYMENTS

            (i) Scheduled Repayments of Existing Aircraft Extended Loans.
      Company shall make principal payments of the Existing Aircraft Extended
      Loans in installments on each Existing Aircraft Loan Repayment Date in an
      amount equal to the applicable Existing Aircraft Loan Repayment Amount;
      provided that such scheduled installments of principal of the Existing
      Aircraft Extended Loans shall be reduced in connection with voluntary or
      mandatory prepayments of the Existing Aircraft Extended Loans in
      accordance with subsection 2.4B; and provided, further that the Existing
      Aircraft Extended Loans and all other amounts owed hereunder with respect
      to the Existing Aircraft Extended Loans shall be paid in full no later
      than the Final Stated Maturity Date, and the final installment payable by
      Company in respect of the Existing Aircraft Extended Loans on such date
      shall be in an amount sufficient to repay all amounts owing by Company
      under this Agreement with respect to the Existing Aircraft Extended Loans.
      Any payment pursuant to this subsection 2.4A(i) will be applied ratably
      among the Existing Aircraft Extended Notes relating to all Existing
      Aircraft; provided that, at Administrative Agent's election, any
      prepayment may be deemed first to pay Existing Aircraft Extended Loans
      made to finance labor costs associated with conversion of the Financed
      Aircraft, if any, second to pay Existing Aircraft Extended Loans made to
      finance other costs of such conversion, and thereafter to all other
      Existing Aircraft Extended Loans.

            (ii) Scheduled Repayments of New Aircraft Term Loans. Company shall
      make principal payments of each New Aircraft Term Loan in installments on
      each New Aircraft Term Loan Repayment Date in an amount equal to the
      applicable New Aircraft Term Loan Repayment Amount for such New Aircraft
      Term Loan; provided that such scheduled installments of principal of the
      New Aircraft Term Loans shall be reduced in connection with voluntary or
      mandatory prepayments of the New Aircraft Term Loans in accordance with
      subsection 2.4B; and provided, further, that the New Aircraft Term Loans
      and all other amounts owed hereunder with respect to the New Aircraft Term
      Loans shall be paid in full no later than the Final Stated Maturity Date,
      and the final installment payable by Company in respect of the New
      Aircraft Term Loans on such date shall be in an amount sufficient to repay
      all amounts owing by Company under this Agreement with respect to the New
      Aircraft Term Loans. Any payment pursuant to this subsection 2.4A(ii) will
      be applied ratably among the New Aircraft Term Notes relating to the
      Related Aircraft; provided that, at Administrative Agent's election, any
      prepayment may be deemed first to pay New Aircraft Term

                                      -39-
<PAGE>
      Loans made to finance labor costs associated with conversion of such
      Related Aircraft, if any, second to pay New Aircraft Term Loans made to
      finance other costs of such conversion, and thereafter to all other New
      Aircraft Term Loans.

            (iii) Mandatory Repayments of New Aircraft Revolving Loans. Company
      shall make principal payments on the Final Stated Maturity Date of the
      full amount of all New Aircraft Revolving Loans. Any repayment pursuant to
      this subsection 2.4A(iii) will be applied ratably among the New Aircraft
      Notes relating to the Related Aircraft; provided that, at Administrative
      Agent's election, any prepayment may be deemed first to pay New Aircraft
      Revolving Loans made to finance labor costs associated with conversion of
      such Related Aircraft, if any, second to pay New Aircraft Revolving Loans
      made to finance other costs of such conversion, and thereafter to all
      other New Aircraft Revolving Loans.

      B.    PREPAYMENTS AND UNSCHEDULED REDUCTIONS IN REVOLVING LOAN
COMMITMENTS.

            (i) Voluntary Prepayments. Company may, upon not less than three
      Business Days' prior written or telephonic notice given to Administrative
      Agent by 12:00 Noon (New York time) on the date required and, if given by
      telephone, promptly confirmed in writing to Administrative Agent (which
      original written or telephonic notice Administrative Agent will promptly
      transmit by telefacsimile or telephone to each Lender), at any time and
      from time to time prepay, without premium or penalty (other than pursuant
      to subsection 2.6D), any Loans on any Business Day in whole or in part in
      an aggregate minimum amount of $3,000,000 and integral multiples of
      $100,000 in excess of that amount; provided, however, that a Eurodollar
      Rate Loan may only be prepaid on the expiration of the Interest Period
      applicable thereto. Notice of prepayment having been given as aforesaid,
      the principal amount of the Loans specified in such notice shall become
      due and payable on the prepayment date specified therein. Any such
      voluntary prepayment shall be applied as specified in subsection 2.4B(iv).

            (ii) Voluntary Reductions of Revolving Loan Commitments. Company
      may, upon not less than three Business Days' prior written or telephonic
      notice confirmed in writing to Administrative Agent (which original
      written or telephonic notice Administrative Agent will promptly transmit
      by telefacsimile or telephone to each Lender), at any time and from time
      to time terminate in whole or permanently reduce in part, without premium
      or penalty (other than pursuant to subsection 2.6D), the Revolving Loan
      Commitments in an amount up to the amount by which the Revolving Loan
      Commitments exceed the aggregate amount of all Existing Aircraft Extended
      Loans and New Aircraft Loans outstanding at the time of such proposed
      termination or reduction; provided that any such partial reduction of the
      Revolving Loan Commitments shall be in an aggregate minimum amount of
      $3,000,000 and

                                      -40-
<PAGE>
      integral multiples of $100,000 in excess of that amount. Company's notice
      to Administrative Agent shall designate the date (which shall be a
      Business Day) of such termination or reduction and the amount of any
      partial reduction, and such termination or reduction of the Revolving Loan
      Commitments shall be effective on the date specified in Company's notice
      and shall reduce the Revolving Loan Commitment of each Lender
      proportionately to its Pro Rata Share.

            (iii) Mandatory Prepayments and Mandatory Reductions of Revolving
      Loan Commitments.

                  (a) Prepayments and Reductions from Asset Sales. No later than
            the second Business Day following the date of receipt by Company or
            any of its Subsidiaries of Cash Proceeds of any Asset Sale, Company
            shall prepay, without premium or penalty (other than pursuant to
            subsection 2.6D), the Loans in an amount equal to the Net Cash
            Proceeds of such Asset Sale; provided that, with respect to Asset
            Sales which do not include the sale of a Financed Aircraft, so long
            as no Potential Event of Default or Event of Default has occurred
            and is continuing, (i) Company shall have the option to use the Net
            Cash Proceeds within one hundred eighty (180) days of receipt
            thereof for the purpose of making Consolidated Capital Expenditures
            otherwise permitted by this Agreement and (ii) to the extent such
            Net Cash Proceeds are not reinvested pursuant to clause (i), Company
            may retain Net Cash Proceeds in respect of such Asset Sales of up to
            $10 million in any Fiscal Year and $20 million in the aggregate;
            provided further that, with respect to any Asset Sale involving the
            sale of a Financed Aircraft, so long as no Potential Event of
            Default or Event of Default has occurred and is continuing, the
            Company may retain any Net Cash Proceeds in excess of the amount
            equal to the sum of (x) the amount required to repay all amounts
            outstanding under the Notes relating to such Financed Aircraft and
            (y) the amount required to prepay any remaining Loans to the extent
            necessary so that the outstanding principal amount of any Loans made
            to finance the acquisition or conversion of a Financed Aircraft
            shall not exceed 80% of the Appraised Value of such Financed
            Aircraft as determined by appraisals to be provided at the time of
            such mandatory prepayment by two Approved Appraisers. Concurrently
            with any prepayment of the Loans pursuant to this subsection
            2.4B(iii)(a), Company shall deliver to Administrative Agent an
            Officers' Certificate demonstrating the derivation of the Net Cash
            Proceeds of the correlative Asset Sale from the gross sales price
            thereof and the amount required to be prepaid pursuant to this
            subsection 2.4B(iii)(a). In the event that Company shall, at any
            time after receipt of Cash Proceeds of any Asset Sale requiring a
            prepayment pursuant to this subsection 2.4B(iii)(a), determine that
            the prepayments previously made in respect of such Asset Sale were
            in an aggregate amount less than that required by the terms of this
            subsection 2.4B(iii)(a), Company shall promptly make an additional

                                      -41-
<PAGE>
            prepayment of the Loans in the manner described above in an amount
            equal to the amount of any such deficit, and Company shall
            concurrently therewith deliver to Administrative Agent an Officers'
            Certificate demonstrating the derivation of the additional Net Cash
            Proceeds resulting in such deficit and the additional amount
            required to be prepaid pursuant to this subsection 2.4B(iii)(a). Any
            mandatory prepayments pursuant to this subsection 2.4B(iii)(a) shall
            be applied as specified in subsection 2.4B(iv). Notwithstanding the
            foregoing, so long as the AFL III Financing remains outstanding,
            Cash Proceeds from the sale or other disposition of the AFL III
            Equipment shall not be subject to the provisions of this subsection
            2.4(B)(iii)(a) to the extent that such Cash Proceeds are applied in
            accordance with the terms of the AFL III Financing Agreement.

                  (b) Prepayments and Reductions Due to Issuance of Certain
            Indebtedness. On the date of receipt by Company of the cash proceeds
            (net of underwriting discounts and commissions and other reasonable
            costs associated therewith) from the issuance of Permitted Extension
            Indebtedness with respect to a Financed Aircraft, Company shall
            prepay, without premium or penalty (other than pursuant to
            subsection 2.6D), the Loans in an amount equal to such net cash
            proceeds. Any such mandatory prepayments shall be applied as
            specified in subsection 2.4B(iv). Notwithstanding the foregoing, any
            such cash proceeds received pursuant to the AFL III Financing
            Agreement shall not be subject to the provisions of this subsection
            2.4(B)(iii)(b).

                  (c) Prepayments and Reductions Due to Insurance and
            Condemnation Proceeds. No later than the second Business Day
            following the date of receipt by Company or any of its Subsidiaries
            of any cash payments under any of the casualty insurance policies
            covering damage to or loss of property maintained pursuant to
            subsection 5.4 resulting from damage to or loss of all or any
            portion of the Collateral or any other tangible asset (net of actual
            and documented reasonable costs incurred by Company in connection
            with adjustment and settlement thereof, "INSURANCE PROCEEDS") or any
            proceeds resulting from the taking of assets by the power of eminent
            domain, condemnation or otherwise (net of actual and documented
            reasonable costs incurred by Company in connection with adjustment
            and settlement thereof, "CONDEMNATION PROCEEDS") (other than (x) the
            portion of such proceeds promptly applied to repair or replace the
            property in respect of which such proceeds were paid, (y) the
            portion of such proceeds required to be paid to Lien holders on
            aircraft other than Financed Aircraft or (z) proceeds applied
            pursuant to subsection 2.4B(iii)(d)), Company shall prepay, without
            premium or penalty (other than pursuant to subsection 2.6D), the
            Loans in an amount equal to such proceeds. Company shall, no later
            than 180 days after receipt of any such Insurance Proceeds or
            Condemnation Proceeds that have not

                                      -42-

<PAGE>
                  theretofore been applied to the Obligations, make an
                  additional prepayment of Loans, in the manner described above,
                  in the full amount of all such proceeds that have not then
                  been applied to repair or replace the property in respect of
                  which such proceeds were paid. Any such mandatory prepayments
                  shall be applied as specified in subsection 2.4B(iv).
                  Notwithstanding the foregoing so long as (i) the AFL III
                  Financing remains outstanding, Insurance Proceeds and
                  Condemnation Proceeds with respect to the AFL III Equipment
                  shall not be subject to the provisions of this subsection
                  2.4(B)(iii)(c) to the extent such proceeds are applied in
                  accordance with the terms of the AFL III Financing Agreement.

                           (d) Prepayments and Reductions Due to an Event of
                  Loss. No later than the earlier of (x) the second Business Day
                  following the date of receipt by Company or any of its
                  Subsidiaries of any Insurance Proceeds or Condemnation
                  Proceeds with respect to a Financed Aircraft or (y) 180 days
                  following an Event of Loss with respect to a Financed
                  Aircraft, Company shall prepay, without premium or penalty
                  (other than pursuant to subsection 2.6D), the Loans associated
                  with such Financed Aircraft; provided that Company and its
                  Subsidiaries shall not be required to make a prepayment
                  pursuant to this subsection 2.4B(iii)(d) with respect to any
                  proceeds applied pursuant to Section 4(f)(vi)(A) or
                  4(f)(vi)(B) of any Aircraft Chattel Mortgage.

                           (e) Prepayments and Reductions from Consolidated
                  Excess Cash Flow. In the event that there shall be
                  Consolidated Excess Cash Flow for any Fiscal Year, within 100
                  days after the last day of such Fiscal Year Company shall
                  prepay, without premium or penalty (other than pursuant to
                  subsection 2.6D), the Loans in an amount equal to 50% of such
                  Consolidated Excess Cash Flow; provided that, if as of the
                  last day of such Fiscal Year, the aggregate principal amount
                  of all Loans was less than 60% of the aggregate Appraised
                  Value of all Financed Aircraft, no prepayment will be required
                  under this subsection 2.4B(iii)(e). Any such mandatory
                  prepayments shall be applied as specified in subsection
                  2.4B(iv).

                           (f) Prepayments Due to Reductions in Appraised Value.
                  Company shall from time to time prepay, without premium or
                  penalty (other than pursuant to subsection 2.6D), the Loans to
                  the extent necessary so that the outstanding principal amount
                  of any Loans made to finance the acquisition or conversion of
                  a Financed Aircraft shall not at any time exceed 80% of the
                  Appraised Value of such Financed Aircraft as most recently
                  determined pursuant to subsection 5.10; provided that, in lieu
                  of making a prepayment hereunder, Company may provide
                  Administrative Agent for the benefit of Lenders with cash
                  collateral or a letter of credit in the amount of such
                  prepayment pursuant to arrangements in form and substance
                  satisfactory to

                                      -43-
<PAGE>
                  Administrative Agent.

                           (g) Prepayments Due to Failure to Register Aircraft
                  with the FAA. In the event that, with respect to any Financed
                  Aircraft, Administrative Agent's security interest in such
                  Financed Aircraft is not fully perfected within five (5)
                  Business Days of the funding of Loans with respect to such
                  Financed Aircraft, Company shall prepay the full amount of
                  such Loans.

                  (iv)     Application of Prepayments.

                           (a) Application of Voluntary Prepayments by Type of
                  Loans and Order of Maturity. Any voluntary prepayments
                  pursuant to subsection 2.4B(i) shall be applied ratably among
                  the Notes relating to all of the Financed Aircraft; provided
                  that, Company may elect to apply any such prepayment first to
                  the Loans made with respect to a specific Financed Aircraft so
                  long as no Event of Default has occurred and continuing;
                  provided further that, at Administrative Agent's election, any
                  prepayment may be deemed first to prepay Loans made to finance
                  labor costs associated with conversion, if any, second to
                  prepay Loans made to finance other costs of conversion of a
                  Financed Aircraft and thereafter to all other Loans. Any
                  voluntary prepayments of the Existing Aircraft Loans and the
                  New Aircraft Term Loans pursuant to subsection 2.4B(i) shall
                  be applied to reduce the scheduled installments of principal
                  of the Existing Aircraft Loans or the New Aircraft Term Loans,
                  as the case may be, in inverse order of maturity.

                           (b) Application of Mandatory Prepayments of Loans.
                  Any mandatory prepayments of the Loans pursuant to subsection
                  2.4B(iii) shall be applied ratably among the Notes relating to
                  all of the Financed Aircraft; provided that in the event a
                  prepayment pursuant to subsection 2.4B(iii)(a) relates to
                  Financed Aircraft, such prepayment shall be applied first to
                  the Notes relating to such Financed Aircraft, second to Notes
                  relating to the remaining Financed Aircraft as required to
                  reduce the amount of the Loans financing such Financed
                  Aircraft to no more that 80% of the Appraised Value of such
                  Financed Aircraft as determined by the Appraised as required
                  by subsection 2.4B(iii)(a) and third ratably among the Notes
                  relating to all remaining Financed Aircraft; provided further
                  that in the event a prepayment pursuant to subsection
                  2.4B(iii)(b), (c), (d), (f) or (g) relates to Financed
                  Aircraft, such prepayment shall be applied first to the Notes
                  relating to such Financed Aircraft and second ratably among
                  the Notes relating to all other Financed Aircraft; provided
                  further that, at Administrative Agent's election, any such
                  prepayment may be deemed first to prepay Loans made to finance
                  labor costs associated with conversion, if any, second to
                  prepay Loans made to finance other costs of conversion of a
                  Financed Aircraft and thereafter to all other

                                      -44-
<PAGE>
                  Loans. Any mandatory prepayments of the Existing Aircraft
                  Loans and the New Aircraft Term Loans pursuant to subsection
                  2.4B(iii) shall be applied to reduce the scheduled
                  installments of principal of the Existing Aircraft Loans or
                  the New Aircraft Term Loans, as the case may be, in inverse
                  order of maturity.

                           (c) Application of Prepayments to Base Rate Loans and
                  Eurodollar Rate Loans. Any prepayment of Loans shall be
                  applied first to Base Rate Loans to the full extent thereof
                  before application to Eurodollar Rate Loans, in each case in a
                  manner which minimizes the amount of any payments required to
                  be made by Company pursuant to subsection 2.6D.

         C.       GENERAL PROVISIONS REGARDING PAYMENTS.

                  (i) Manner and Time of Payment. All payments by Company of
         principal, interest, fees and other Obligations hereunder and under the
         Notes shall be made in Dollars in same day funds, without defense,
         set-off or counterclaim, free of any restriction or condition, and
         delivered to Administrative Agent not later than 12:00 Noon (New York
         time) on the date due at the Funding and Payment Office for the account
         of Lenders; funds received by Administrative Agent after that time on
         such due date shall be deemed to have been paid by Company on the next
         succeeding Business Day. Company hereby authorizes Administrative Agent
         to charge its accounts with Administrative Agent in order to cause
         timely payment to be made to Administrative Agent of all principal,
         interest, fees and expenses due hereunder (subject to sufficient funds
         being available in its accounts for that purpose).

                  (ii) Application of Payments to Principal and Interest. All
         payments in respect of the principal amount of any Loan shall include
         payment of accrued interest on the principal amount being repaid or
         prepaid, and all such payments shall be applied to the payment of
         interest before application to principal.

                  (iii) Apportionment of Payments. Aggregate principal and
         interest payments in respect of Loans shall be apportioned among all
         outstanding Loans to which such payments relate, in each case
         proportionately to Lenders' respective Pro Rata Shares. Administrative
         Agent shall promptly distribute to each Lender, at its primary address
         set forth below its name on the appropriate signature page hereof or at
         such other address as such Lender may request, its Pro Rata Share of
         all such payments received by Administrative Agent and the commitment
         fees of such Lender when received by Administrative Agent pursuant to
         subsection 2.3. Notwithstanding the foregoing provisions of this
         subsection 2.4C(iii), if, pursuant to the provisions of subsection
         2.6C, any Notice of Conversion/Continuation is withdrawn as to any
         Affected Lender or if any Affected Lender makes Base Rate Loans in lieu
         of its Pro Rata Share of any Eurodollar Rate Loans, Administrative
         Agent shall give effect thereto in apportioning payments received
         thereafter.

                                      -45-
<PAGE>
                  (iv) Payments on Business Days. Whenever any payment to be
         made hereunder shall be stated to be due on a day that is not a
         Business Day, such payment shall be made on the next succeeding
         Business Day and such extension of time shall be included in the
         computation of the payment of interest hereunder or of the commitment
         fees hereunder, as the case may be.

                  (v) Notation of Payment. Each Lender agrees that before
         disposing of any Note held by it, or any part thereof (other than by
         granting participations therein), that Lender will make a notation
         thereon of all Loans evidenced by that Note and all principal payments
         previously made thereon and of the date to which interest thereon has
         been paid; provided that the failure to make (or any error in the
         making of) a notation of any Loan made under such Note shall not limit
         or otherwise affect the obligations of Company hereunder or under such
         Note with respect to any Loan or any payments of principal or interest
         on such Note.

2.5      USE OF PROCEEDS.

         A. EXISTING AIRCRAFT EXTENDED LOANS. The proceeds of the Existing
Aircraft Extended Loans were used to finance the purchase and renovation of the
Existing Aircraft as shown on Schedule 1.1 annexed hereto.

         B. NEW AIRCRAFT LOANS. The proceeds of New Aircraft Loans shall be
applied to finance (i) the purchase of an Eligible Aircraft pursuant to a
Purchase Agreement in an amount up to the lesser of the purchase price of such
Eligible Aircraft and 80% of the Appraised Value of such Eligible Aircraft (but
without giving effect to any contemplated modifications) and/or (ii) the cost of
making a Financed Aircraft usable by Company as a cargo aircraft by paying for
those modifications identified in any Modification Agreement and any BFE
Agreement (but not for maintenance costs) in an amount that when added to the
amount financed in (i) does not exceed 80% the Appraised Value of such modified
Eligible Aircraft; provided that the final Revolving Loan to finance the
modification of such Eligible Aircraft may be in an amount equal to the lesser
of (x) 100% of the costs of modification associated with such final Revolving
Loan and (y) an amount which, when added to all other Revolving Loans made with
respect to such Eligible Aircraft, does not exceed 80% of the Appraised Value of
such Eligible Aircraft after giving effect to the completion of modification.

         C. MARGIN REGULATIONS. No portion of the proceeds of any borrowing
under this Agreement shall be used by Company or any of its Subsidiaries in any
manner that might cause the borrowing or the application of such proceeds to
violate Regulation U, Regulation T or Regulation X of the Board of Governors of
the Federal Reserve System or any other regulation of such Board or to violate
the Exchange Act, in each case as in effect on the date or dates of such
borrowing and such use of proceeds.

                                      -46-
<PAGE>
2.6      SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.

         Notwithstanding any other provision of this Agreement to the contrary,
the following provisions shall govern with respect to Eurodollar Rate Loans as
to the matters covered:

         A. DETERMINATION OF APPLICABLE INTEREST RATE. As soon as practicable
after 10:00 A.M. (New York time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the Eurodollar Rate Loans for which an interest rate is then
being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Company and
each Lender.

         B. INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the event that
Administrative Agent shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the interbank Eurodollar market adequate and fair means
do not exist for ascertaining the interest rate applicable to such Loans on the
basis provided for in the definition of Adjusted Eurodollar Rate, Administrative
Agent shall on such date give notice (by telefacsimile or by telephone confirmed
in writing) to Company and each Lender of such determination, whereupon (i) no
Loans may be made as, or converted to, Eurodollar Rate Loans until such time as
Administrative Agent notifies Company and Lenders that the circumstances giving
rise to such notice no longer exist and (ii) any Notice of Borrowing or Notice
of Conversion/Continuation given by Company with respect to the Loans in respect
of which such determination was made shall be deemed to be rescinded by Company.

         C. ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR RATE LOANS. In the
event that on any date any Lender shall have determined (which determination
shall be final and conclusive and binding upon all parties hereto but shall be
made only after consultation with Company and Administrative Agent) that the
making, maintaining or continuation of its Eurodollar Rate Loans (i) has become
unlawful as a result of compliance by such Lender in good faith with any law,
treaty, governmental rule, regulation, guideline or order (or would conflict
with any such treaty, governmental rule, regulation, guideline or order not
having the force of law even though the failure to comply therewith would not be
unlawful) or (ii) has become impracticable, or would cause such Lender material
hardship, as a result of contingencies occurring after the date of this
Agreement which materially and adversely affect the interbank Eurodollar market
or the position of such Lender in that market, then, and in any such event, such
Lender shall be an "AFFECTED LENDER" and it shall on that day give notice (by
telefacsimile or by telephone confirmed in writing) to Company and
Administrative Agent of such determination (which notice Agent shall promptly
transmit to each other Lender). Thereafter (a) the obligation of the Affected
Lender to make Loans as, or to convert Loans to, Eurodollar Rate Loans shall be
suspended until such notice shall be withdrawn by the

                                      -47-
<PAGE>
Affected Lender, (b) to the extent such determination by the Affected Lender
relates to a Eurodollar Rate Loan then being requested by Company pursuant to a
Notice of Borrowing or a Notice of Conversion/Continuation, the Affected Lender
shall make such Loan as (or convert such Loan to, as the case may be) a Base
Rate Loan, (c) the Affected Lender's obligation to maintain its outstanding
Eurodollar Rate Loans (the "AFFECTED LOANS") shall be terminated at the earlier
to occur of the expiration of the Interest Period then in effect with respect to
the Affected Loans or when required by law, and (d) the Affected Loans shall
automatically convert into Base Rate Loans on the date of such termination.
Notwithstanding the foregoing, to the extent a determination by an Affected
Lender as described above relates to a Eurodollar Rate Loan then being requested
by Company pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, Company shall have the option, subject to the
provisions of subsection 2.6D, to rescind such Notice of Borrowing or Notice of
Conversion/Continuation as to all Lenders by giving notice (by telefacsimile or
by telephone confirmed in writing) to Administrative Agent of such rescission on
the date on which the Affected Lender gives notice of its determination as
described above (which notice of rescission Administrative Agent shall promptly
transmit to each other Lender). Except as provided in the immediately preceding
sentence, nothing in this subsection 2.6C shall affect the obligation of any
Lender other than an Affected Lender to make or maintain Loans as, or to convert
Loans to, Eurodollar Rate Loans in accordance with the terms of this Agreement.

         D. COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST PERIODS.
Company shall compensate each Lender, upon written request by that Lender (which
request shall set forth the basis for requesting such amounts), for all
reasonable losses, expenses and liabilities (including, without limitation, any
interest paid by that Lender to lenders of funds borrowed by it to make or carry
its Eurodollar Rate Loans and any loss, expense or liability sustained by that
Lender in connection with the liquidation or re-employment of such funds) which
that Lender may sustain: (i) if for any reason (other than a default by that
Lender) a borrowing of any Eurodollar Rate Loan does not occur on a date
specified therefor in a Notice of Borrowing or a telephonic request for
borrowing, or a conversion to or continuation of any Eurodollar Rate Loan does
not occur on a date specified therefor in a Notice of Conversion/Continuation or
a telephonic request for conversion or continuation, (ii) if any prepayment or
other principal payment or any conversion of any of its Eurodollar Rate Loans
occurs on a date prior to the last day of an Interest Period applicable to that
Loan, (iii) if any prepayment of any of its Eurodollar Rate Loans is not made on
any date specified in a notice of prepayment given by Company, or (iv) as a
consequence of any other default by Company in the repayment of its Eurodollar
Rate Loans when required by the terms of this Agreement.

         E. BOOKING OF EURODOLLAR RATE LOANS. Any Lender may make, carry or
transfer Eurodollar Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of that Lender.

         F. ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE LOANS. Calculation
of all amounts payable to a Lender under this subsection 2.6 and under
subsection 2.7A shall

                                      -48-
<PAGE>
be made as though that Lender had actually funded each of its relevant
Eurodollar Rate Loans through the purchase of a Eurodollar deposit bearing
interest at the rate obtained pursuant to clause (i) of the definition of
Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar
Rate Loan and having a maturity comparable to the relevant Interest Period and
through the transfer of such Eurodollar deposit from an offshore office of that
Lender to a domestic office of that Lender in the United States of America;
provided, however, that each Lender may fund each of its Eurodollar Rate Loans
in any manner it sees fit and the foregoing assumptions shall be utilized only
for the purposes of calculating amounts payable under this subsection 2.6 and
under subsection 2.7A.

         G. EURODOLLAR RATE LOANS AFTER DEFAULT. After the occurrence of and
during the continuation of a Potential Event of Default or an Event of Default,
(i) Company may not elect to have a Loan be made or maintained as, or converted
to, a Eurodollar Rate Loan after the expiration of any Interest Period then in
effect for that Loan and (ii) subject to the provisions of subsection 2.6D, any
Notice of Borrowing or Notice of Conversion/Continuation given by Company with
respect to a requested borrowing or conversion/continuation that has not yet
occurred shall be deemed to be rescinded by Company.

2.7      INCREASED COSTS; TAXES; CAPITAL ADEQUACY.

         A. COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the
provisions of subsection 2.7B, in the event that any Lender shall determine
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto) that any law, treaty or governmental rule,
regulation or order, or any change therein or in the interpretation,
administration or application thereof (including the introduction of any new
law, treaty or governmental rule, regulation or order), or any determination of
a court or governmental authority, in each case that becomes effective after the
date hereof, or compliance by such Lender with any guideline, request or
directive issued or made after the date hereof by any central bank or other
governmental or quasi-governmental authority (whether or not having the force of
law):

                  (i) subjects such Lender (or its applicable lending office) to
         any additional Tax (other than any Tax on the overall net income of
         such Lender) with respect to this Agreement or any of its obligations
         hereunder or any payments to such Lender (or its applicable lending
         office) of principal, interest, fees or any other amount payable
         hereunder;

                  (ii) imposes, modifies or holds applicable any reserve
         (including without limitation any marginal, emergency, supplemental,
         special or other reserve), special deposit, compulsory loan, FDIC
         insurance or similar requirement against assets held by, or deposits or
         other liabilities in or for the account of, or advances or loans by, or
         other credit extended by, or any other acquisition of funds by, any
         office of such

                                      -49-
<PAGE>
         Lender (other than any such reserve or other requirements with respect
         to Eurodollar Rate Loans that are reflected in the definition of
         Adjusted Eurodollar Rate); or

                  (iii) imposes any other condition (other than with respect to
         a Tax matter) on or affecting such Lender (or its applicable lending
         office) or its obligations hereunder or the interbank Eurodollar
         market;

and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto; then, in any such case, Company shall promptly pay to such
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder. Such Lender shall deliver to Company (with a copy to Administrative
Agent) a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to such Lender under this subsection
2.7A, which statement shall be conclusive and binding upon all parties hereto
absent manifest error.

         B.       WITHHOLDING OF TAXES.

                  (i) Payments to Be Free and Clear. All sums payable by Company
         under this Agreement and the other Loan Documents shall be paid free
         and clear of and (except to the extent required by law) without any
         deduction or withholding on account of any Tax (other than a Tax on the
         overall net income of any Lender) imposed, levied, collected, withheld
         or assessed by or within the United States of America or any political
         subdivision in or of the United States of America or any other
         jurisdiction from or to which a payment is made by or on behalf of
         Company or by any federation or organization of which the United States
         of America or any such jurisdiction is a member at the time of payment.

                  (ii) Grossing-up of Payments. If Company or any other Person
         is required by law to make any deduction or withholding on account of
         any such Tax from any sum paid or payable by Company to Administrative
         Agent or any Lender under any of the Loan Documents:

                           (a) Company shall notify Administrative Agent of any
                  such requirement or any change in any such requirement as soon
                  as Company becomes aware of it;

                           (b) Company shall pay any such Tax before the date on
                  which penalties attach thereto, such payment to be made (if
                  the liability to pay is imposed on Company) for its own
                  account or (if that liability is imposed on

                                      -50-
<PAGE>
                  Administrative Agent or such Lender, as the case may be) on
                  behalf of and in the name of Administrative Agent or such
                  Lender;

                           (c) the sum payable by Company in respect of which
                  the relevant deduction, withholding or payment is required
                  shall be increased to the extent necessary to ensure that,
                  after the making of that deduction, withholding or payment,
                  Administrative Agent or such Lender, as the case may be,
                  receives on the due date a net sum equal to what it would have
                  received had no such deduction, withholding or payment been
                  required or made; and

                           (d) within 30 days after paying any sum from which it
                  is required by law to make any deduction or withholding, and
                  within 30 days after the due date of payment of any Tax which
                  it is required by clause (b) above to pay, Company shall
                  deliver to Administrative Agent evidence satisfactory to the
                  other affected parties of such deduction, withholding or
                  payment and of the remittance thereof to the relevant taxing
                  or other authority;

         provided that no such additional amount shall be required to be paid to
         any Lender under clause (c) above except to the extent that any change
         after the date hereof (in the case of each Lender listed on the
         signature pages hereof) or after the date of the Assignment Agreement
         pursuant to which such Lender became a Lender (in the case of each
         other Lender) in any such requirement for a deduction, withholding or
         payment as is mentioned therein shall result in an increase in the rate
         of such deduction, withholding or payment from that in effect at the
         date of this Agreement or at the date of such Assignment Agreement, as
         the case may be, in respect of payments to such Lender.

                  (iii)    Evidence of Exemption from U.S. Withholding Tax.

                           (a) Each Lender that is organized under the laws of
                  any jurisdiction other than the United States or any state or
                  other political subdivision thereof (for purposes of this
                  subsection 2.7B(iii), a "NON-US LENDER") shall deliver to
                  Administrative Agent for transmission to Company, on or prior
                  to the Fourth Restatement Date (in the case of each Lender
                  listed on the signature pages hereof) or on the date of the
                  Assignment Agreement pursuant to which it becomes a Lender (in
                  the case of each other Lender), and at such other times as may
                  be necessary in the determination of Company or Administrative
                  Agent (each in the reasonable exercise of its discretion), (1)
                  two original copies of Internal Revenue Service Form 1001 or
                  4224 (or any successor forms), properly completed and duly
                  executed by such Lender, together with any other certificate
                  or statement of exemption required under the Internal Revenue
                  Code or the regulations issued thereunder to establish that
                  such Lender is not subject to deduction or withholding of
                  United States federal income tax with respect to any payments
                  to such Lender of principal, interest, fees or other amounts

                                      -51-
<PAGE>
                  payable under any of the Loan Documents or (2) if such Lender
                  is not a "bank" or other Person described in Section 881(c)(3)
                  of the Internal Revenue Code and cannot deliver either
                  Internal Revenue Service Form 1001 or 4224 pursuant to clause
                  (1) above, a Certificate re Non-Bank Status together with two
                  original copies of Internal Revenue Service Form W-8 (or any
                  successor form), properly completed and duly executed by such
                  Lender, together with any other certificate or statement of
                  exemption required under the Internal Revenue Code or the
                  regulations issued thereunder to establish that such Lender is
                  not subject to deduction or withholding of United States
                  federal income tax with respect to any payments to such Lender
                  of interest payable under any of the Loan Documents.

                           (b) Each Lender required to deliver any forms,
                  certificates or other evidence with respect to United States
                  federal income tax withholding matters pursuant to subsection
                  2.7B(iii)(a) hereby agrees, from time to time after the
                  initial delivery by such Lender of such forms, certificates or
                  other evidence, whenever a lapse in time or change in
                  circumstances renders such forms, certificates or other
                  evidence obsolete or inaccurate in any material respect, such
                  Lender shall (1) deliver to Administrative Agent for
                  transmission to Company two new original copies of Internal
                  Revenue Service Form 1001 or 4224, or a Certificate re
                  Non-Bank Status and two original copies of Internal Revenue
                  Service Form W-8, as the case may be, properly completed and
                  duly executed by such Lender, together with any other
                  certificate or statement of exemption required in order to
                  confirm or establish that such Lender is not subject to
                  deduction or withholding of United States federal income tax
                  with respect to payments to such Lender under the Loan
                  Documents or (2) immediately notify Administrative Agent and
                  Company of its inability to deliver any such forms,
                  certificates or other evidence.

                           (c) Company shall not be required to pay any
                  additional amount to any Non-US Lender under clause (c) of
                  subsection 2.7B(ii) if such Lender shall have failed to
                  satisfy the requirements of subsection 2.7B(iii)(a); provided
                  that if such Lender shall have satisfied such requirements on
                  the Fourth Restatement Date (in the case of each Lender listed
                  on the signature pages hereof) or on the date of the
                  Assignment Agreement pursuant to which it became a Lender (in
                  the case of each other Lender), nothing in this subsection
                  2.7B(iii)(c) shall relieve Company of its obligation to pay
                  any additional amounts pursuant to clause (c) of subsection
                  2.7B(ii) in the event that, as a result of any change in any
                  applicable law, treaty or governmental rule, regulation or
                  order, or any change in the interpretation, administration or
                  application thereof, such Lender is no longer properly
                  entitled to deliver forms, certificates or other evidence at a
                  subsequent date establishing the fact that such Lender is not
                  subject to withholding as described in

                                      -52-
<PAGE>
                  subsection 2.7B(iii)(a).

         C. CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have determined
that the adoption, effectiveness, phase-in or applicability after the date
hereof of any law, rule or regulation (or any provision thereof) regarding
capital adequacy, or any change therein or in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its applicable lending office) with any guideline, request or
directive regarding capital adequacy (whether or not having the force of law) of
any such governmental authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on the capital of such Lender or
any corporation controlling such Lender as a consequence of, or with reference
to, such Lender's Loans or Commitments or other obligations hereunder to a level
below that which such Lender or such controlling corporation could have achieved
but for such adoption, effectiveness, phase-in, applicability, change or
compliance (taking into consideration the policies of such Lender or such
controlling corporation with regard to capital adequacy), then from time to
time, within five Business Days after receipt by Company from such Lender of the
statement referred to in the next sentence, Company shall pay to such Lender
such additional amount or amounts as will compensate such Lender or such
controlling corporation on an after-tax basis for such reduction. Such Lender
shall deliver to Company (with a copy to Administrative Agent) a written
statement, setting forth in reasonable detail the basis of the calculation of
such additional amounts, which statement shall be conclusive and binding upon
all parties hereto absent manifest error.

         D. SUBSTITUTE LENDERS. In the event Company is required under the
provisions of this subsection 2.7 to make payments in a material amount to any
Lender or in the event any Lender fails to lend to Company in accordance with
this Agreement, Company may, so long as no Event of Default or Potential Event
of Default shall have occurred and be continuing, elect to terminate such Lender
as a party to this Agreement; provided that, concurrently with such termination,
(i) Company shall pay that Lender all principal, interest and fees and other
amounts (including without limitation, amounts, if any, owed under this
subsection 2.7) owed to such Lender through such date of termination, (ii)
another financial institution satisfactory to Company and Administrative Agent
(or if Administrative Agent is also the Lender to be terminated, the successor
Administrative Agent) shall agree, as of such date, to become a Lender for all
purposes under this Agreement (whether by assignment or amendment) and to assume
all obligations of the Lender to be terminated as of such date, and (iii) all
documents and supporting materials necessary, in the judgment of Administrative
Agent (or if Administrative Agent is also the Lender to be terminated, the
successor Administrative Agent) to evidence the substitution of such Lender
shall have been received and approved by Administrative Agent as of such date.

                                      -53-
<PAGE>
2.8      OBLIGATION OF LENDERS TO MITIGATE.

         Each Lender agrees that, as promptly as practicable after the officer
of such Lender responsible for administering the Loans of such Lender becomes
aware of the occurrence of an event or the existence of a condition that would
cause such Lender to become an Affected Lender or that would entitle such Lender
to receive payments under subsection 2.7, it will, to the extent not
inconsistent with the internal policies of such Lender and any applicable legal
or regulatory restrictions, use reasonable efforts (i) to make, issue, fund or
maintain the Commitments of such Lender or the affected Loans of such Lender
through another lending office of such Lender, or (ii) take such other measures
as such Lender may deem reasonable, if as a result thereof the circumstances
which would cause such Lender to be an Affected Lender would cease to exist or
the additional amounts which would otherwise be required to be paid to such
Lender pursuant to subsection 2.7 would be materially reduced and if, as
determined by such Lender in its sole discretion, the making, issuing, funding
or maintaining of such Commitments or Loans through such other lending office or
in accordance with such other measures, as the case may be, would not otherwise
materially adversely affect such Commitments or Loans or the interests of such
Lender; provided that such Lender will not be obligated to utilize such other
lending office pursuant to this subsection 2.8 unless Company agrees to pay all
incremental expenses incurred by such Lender as a result of utilizing such other
lending office as described in clause (i) above. A certificate as to the amount
of any such expenses payable by Company pursuant to this subsection 2.8 (setting
forth in reasonable detail the basis for requesting such amount) submitted by
such Lender to Company (with a copy to Administrative Agent) shall be conclusive
absent manifest error.

2.9      RELEASE OF COLLATERAL.

         Upon the prepayment of all Loans made with respect to a specific
Financed Aircraft pursuant to subsection 2.4B(iv)(a) hereof, Administrative
Agent, at the reasonable expense of Company, agrees to execute and deliver to
Company such documents as shall be reasonably satisfactory to Company to
evidence the release of the Liens granted pursuant to the Collateral Documents
with respect to such Financed Aircraft and shall use its best efforts to return
the originals of all Notes representing such Loans to Company, marked "Paid."

                                   SECTION 3.
                               CONDITIONS TO LOANS

         The obligations of Administrative Agent and Lenders to make Loans
hereunder are subject to the satisfaction of the following conditions:

3.1      CONDITIONS TO EFFECTIVENESS AND THE EXISTING AIRCRAFT EXTENDED LOANS.

         The effectiveness of this Agreement and the obligation of the Lenders
to maintain the Existing Aircraft Extended Loans are subject to the satisfaction
of all of the following conditions:

                                      -54-
<PAGE>
                  (i)  each of the parties hereto shall have executed and
         delivered counterparts of this Agreement to Administrative Agent;

                  (ii) Company shall have delivered to Lenders (or to
         Administrative Agent for Lenders) executed originals of the Existing
         Aircraft Extended Notes, duly executed in accordance with subsection
         2.1D, drawn to the order of each Lender and with appropriate
         insertions;

                  (iii) Company shall have to delivered to Administrative Agent
         the following, each, unless otherwise noted, dated the Fourth
         Restatement Date:

                           (a) certified copies of the certificate of
                  incorporation of Company, together with a good standing
                  certificate from the Secretary of State of the State of
                  Delaware and each other state in which Company is qualified as
                  a foreign corporation to do business and, to the extent
                  generally available, a certificate or other evidence of good
                  standing as to payment of any applicable franchise or similar
                  taxes from the appropriate taxing authority of each of such
                  states, each dated a recent date prior to the Fourth
                  Restatement Date;

                           (b) copies of the bylaws of Company, certified as of
                  the Fourth Restatement Date by its corporate secretary or an
                  assistant secretary

                           (c) resolutions of the Board of Directors of Company
                  approving and authorizing the execution, delivery and
                  performance of this Agreement and the other Loan Documents
                  certified as of the Fourth Restatement Date by Company's
                  corporate secretary or assistant secretary as being in full
                  force and effect without modification or amendment;

                           (d) signature and incumbency certificate of the
                  officer of Company executing this Agreement and any other Loan
                  Documents; and

                           (e) such other document as Administrative Agent may
                  reasonably request.

                  (iv) Company shall have delivered to Administrative Agent a
         Financial Condition Certificate executed by its Chief Executive
         Officer, Chief Financial Officer or Executive Vice President
         --Strategic Planning and Treasurer and dated the Fourth Restatement
         Date, substantially in the form annexed hereto as Exhibit IX with
         appropriate attachments demonstrating that, after giving effect to the
         full amounts which will be available under this Agreement, Company and
         its Subsidiaries, taken as a whole, are Solvent;

                  (v) Lenders and their respective counsel shall have received
         (A) originally executed copies of one or more favorable written
         opinions of Cahill Gordon &

                                      -55-
<PAGE>
         Reindel, counsel for Company, in form and substance reasonably
         satisfactory to Administrative Agent and its counsel, dated as of the
         Fourth Restatement Date and setting forth substantially the matters in
         the opinions designated in Exhibit VA annexed hereto and as to such
         other matters as Administrative Agent acting on behalf of Lenders may
         reasonably request, (B) the opinion of Cahill Gordon & Reindel
         regarding Section 1110 of the Bankruptcy Code, dated the Fourth
         Restatement Date and setting forth substantially the matters in the
         opinions designated in Exhibit VB annexed hereto, and (C) evidence
         satisfactory to Administrative Agent that Company has requested such
         counsel to deliver such opinions to Lenders;

                  (vi) Lenders and their respective counsel shall have received
         executed copies of one or more favorable written opinions of David
         Brictson, Assistant General Counsel of Company, in form and substance
         reasonably satisfactory to Administrative Agent and its counsel, dated
         the Fourth Restatement Date, and setting forth substantially the
         matters in the opinions designated in Exhibit VC annexed hereto;

                  (vii) Company shall have delivered to Administrative Agent
         appraisals from two Approved Appraisers, in form and substance
         satisfactory to Administrative Agent demonstrating that the outstanding
         principal amount of each Existing Aircraft Extended Loan does not
         exceed 80% of the Appraised Value of the Related Aircraft as of the
         Fourth Restatement Date.

                  (viii) After giving effect to the transactions contemplated
         hereby (including the payment of, or taking reserves for, all
         transactions fees and expenses), Company shall not have less than $400
         million cash on its consolidated balance sheet;

                  (ix) Administrative Agent shall be satisfied with the capital,
         organization, ownership and management structure of Company and its
         Subsidiaries and with the form and substance of the ACMI Contracts, any
         Modification Agreements, any BFE Agreements, aircraft lease
         arrangements, Purchase Agreements, existing financing agreements and
         intercreditor arrangements (including, without limitation, the Senior
         Note Documents and the Pass Through Trust Documents);

                  (x) The AFL III Restructuring shall have been completed or
         shall be completed concurrently under terms and conditions reasonably
         satisfactory to Administrative Agent and Lenders; and

                  (xi) Company shall have taken such actions and delivered to
         Administrative Agent such documents as Administrative Agent may
         reasonably request and all such documents shall be in form and
         substance reasonably satisfactory to Administrative Agent.

                                      -56-
<PAGE>
3.2      CONDITIONS TO LOANS TO FINANCE AIRCRAFT ACQUISITION.

         The obligations of Lenders to make Loans to finance the acquisition of
an aircraft on any Funding Date are subject to the following conditions:

                  (i) Company shall deliver to Administrative Agent an Officer's
         Certificate and such supportive documents as may be requested by
         Administrative Agent, certifying that the aircraft to be acquired is an
         Eligible Aircraft;

                  (ii) as of the date of purchase of such Eligible Aircraft,
         Administrative Agent shall be reasonably satisfied that Company and its
         Subsidiaries have entered into binding ACMI Contracts sufficient to
         ensure the continued employment (consistent with past practices) of
         substantially all other aircraft owned and operated by Company and its
         Subsidiaries other than the new aircraft being acquired;

                  (iii) on the date of purchase of any such Eligible Aircraft,
         Administrative Agent, on behalf of Lenders, shall have been granted a
         first priority Lien on such Eligible Aircraft, spare parts and related
         assets (including, without limitation, the Purchase Agreement and any
         Modification Agreement) and the Purchase Agreement, any Modification
         Agreement and any BFE Agreements shall have been assigned to
         Administrative Agent and any Persons whose consent is necessary for an
         effective assignment of such agreements shall have so consented, in
         each case, pursuant to documentation and procedures acceptable to
         Administrative Agent;

                  (iv) Company shall have delivered to Administrative Agent
         appraisals from two Approved Appraisers, in form and substance
         satisfactory to Administrative Agent, demonstrating that the amount of
         the Revolving Loan requested does not exceed 80% of the Appraised Value
         of the Eligible Aircraft to be acquired as of the Funding Date and
         that, after giving effect to all proposed modifications of such
         Eligible Aircraft, the Maximum Note Amount shall not exceed 80% of the
         Appraised Value of such Eligible Aircraft as so modified;

                  (v) a First Aircraft Chattel Mortgage and a Second Aircraft
         Chattel Mortgage with respect to the Eligible Aircraft shall have been
         filed in such order for recordation with the FAA under the Federal
         Aviation Act;

                  (vi) Uniform Commercial Code Financing Statements naming
         Administrative Agent as the secured party covering such Eligible
         Aircraft and spare parts shall have been duly executed and delivered
         and duly filed in all jurisdictions necessary or desirable to perfect a
         security interest in the Collateral;

                  (vii) the FAA Bill of Sale shall have been delivered for
         recordation with the FAA pursuant to the Federal Aviation Act;

                                      -57-
<PAGE>
                  (viii) the Eligible Aircraft shall have been registered with
         the FAA in the name of Company or if not previously registered in the
         United States, an application for registration shall have been filed;

                  (ix) Administrative Agent shall have received originally
         executed copies of one or more favorable written opinions of counsel to
         Company in form and substance satisfactory to Administrative Agent
         dated as of the Funding Date and setting forth the matters designated
         in the opinions in Exhibits VA, VB and VC and such other matters as
         Administrative Agent may reasonably request.

                  (x) Administrative Agent shall have received originally
         executed copies of one or more favorable written opinions of FAA
         counsel or other counsel in form and substance satisfactory to
         Administrative Agent dated as of the Funding Date or the date such
         Eligible Aircraft is registered with the FAA if such registration
         occurs after the Funding Date and setting forth such matters related to
         the FAA or other Aeronautical Authority having jurisdiction over the
         Eligible Aircraft being acquired as Administrative Agent may reasonably
         request;

                  (xi) Administrative Agent shall have received evidence
         satisfactory to it to the effect that as of such Funding Date Company
         is an air carrier certificated under Sections 401 and 604(b) of the
         Federal Aviation Act; with respect to any Eligible Aircraft,
         certificates of airworthiness with respect to the Eligible Aircraft
         shall have been duly issued by the Aeronautical Authority pursuant to
         the Federal Aviation Act or, in the case of a Foreign Leased Aircraft,
         its foreign equivalent and shall be in full force and effect; and each
         Engine shall be in compliance with all airworthiness standards of such
         Aeronautical Authority or shall be maintained in accordance with a
         program approved by such Aeronautical Authority;

                  (xii) Company shall have good and marketable title to and a
         valid ownership interest in the Collateral free and clear of all Liens
         other than Liens permitted by subsection 6.2;

                  (xiii) no Event of Loss with respect to the Airframe or any
         Engine to be delivered shall have occurred and no event or condition
         which with the giving of notice or lapse of time or both, would result
         in any such Event of Loss shall have occurred and be continuing;

                  (xiv) Company shall have delivered to Administrative Agent
         certificates of insurance naming Administrative Agent on behalf of
         Administrative Agent and Lenders as loss payee under casualty insurance
         policies with respect to the Eligible Aircraft to be acquired and a
         broker's report evidencing compliance with the requirements of the
         First Aircraft Chattel Mortgage with respect to such Eligible Aircraft;

                                      -58-
<PAGE>
                  (xv) Company shall have delivered to Administrative Agent all
         documents executed in connection with the Purchase Agreement related to
         such aircraft and such documents shall be in form and substance
         satisfactory to Administrative Agent;

                  (xvi) any Revolving Loan made to finance the purchase of a
         Financed Aircraft shall be made no later than ten days after the later
         of Company's payment of the purchase price with respect to or
         acquisition of title to such Financed Aircraft; and

                  (xvii) Company shall have delivered to Administrative Agent
         such other documents as Administrative Agent may reasonably request and
         all such documents shall be in form and substance reasonably
         satisfactory to Administrative Agent.

                  (xviii) In addition to the foregoing conditions, with respect
         to the Loans made to finance the acquisition of a Leased Aircraft,
         Company shall have delivered to Administrative Agent a copy of the
         Approved Lease in form and substance satisfactory to Administrative
         Agent including, without limitation, provisions permitting the grant to
         Administrative Agent on behalf of Lenders of the Liens contemplated by
         subdivision (iii) of this subsection 3.2, and satisfaction of the
         requirements of subdivision (xiv) of this subsection 3.2. In addition,
         the form of Mortgages delivered with respect to a Leased Aircraft will
         permit such Approved Lease and include provisions granting security
         interests to the Administrative Agent, on behalf of Lenders, in the
         Approved Lease and all rights and privileges of Company thereunder and
         will require that ground and flight all-risk hull insurance be
         maintained on such Leased Aircraft in an amount equal to the greater of
         (x) 100% of the Appraised Value of such Leased Aircraft and (y) the
         purchase price of such Leased Aircraft. Finally, Company will not be
         required to enter into a Modification Agreement with respect to a
         Leased Aircraft or to assign such Modification Agreement to
         Administrative Agent for the benefit of Lenders; provided that, if such
         Leased Aircraft requires Conversion, Company will enter into a
         Modification Agreement with respect to such Leased Aircraft and will
         assign such Modification Agreement to Administrative Agent for the
         benefit of Lenders prior to or concurrently with the termination of
         such Approved Lease;

                  (xix) the aggregate amount of Revolving Loans made in respect
         of all Leased Aircraft shall not exceed 50% of the Revolving Loan
         Commitments; and

                  (xx) with respect to any Foreign Leased Aircraft,
         Administrative Agent shall have received originally executed copies of
         one or more favorable written opinions of counsel located in the
         jurisdiction where such Foreign Leased Aircraft is registered and
         setting forth such matters related to the Aeronautical Authority having
         jurisdiction over such Foreign Leased Aircraft as Administrative Agent
         may reasonably request.

         Notwithstanding the foregoing, Administrative Agent may (provided that
no Event of Default has occurred or is continuing) in its sole and absolute
discretion waive the conditions

                                      -59-
<PAGE>
set forth in clauses (iii), (v), (vii), (viii) and (x) to the extent necessary
by reason of the fact that Company is unable to obtain a deregistration
certificate with respect to the applicable Eligible Aircraft prior to the
purchase of such Eligible Aircraft; provided that, if Administrative Agent's
security interest in such Eligible Aircraft is not fully perfected within five
(5) Business Days of full funding of the Loans with respect to such Eligible
Aircraft, Company shall prepay such Loans in accordance with subsection
2.4B(iii)(g); provided further, that Administrative Agent may not waive such
conditions with respect to more than one Eligible Aircraft at any time; provided
further, that, notwithstanding anything to the contrary contained herein, the
conditions set forth in clauses (v), (vii) and (viii) above shall not apply to a
Foreign Leased Aircraft.

3.3      CONDITION TO LOANS TO FINANCE CARGO CONVERSION.

         The obligations of Lenders to make Loans to finance the costs of
conversion of a Financed Aircraft on any Funding Date are subject to the
additional conditions set forth below:

         A.       CONDITIONS TO EACH LOAN TO FINANCE THE COSTS OF CONVERSION.

                  (i) Administrative Agent shall have received an invoice and
         bill of sale with respect to any Parts delivered in connection with the
         modification of Financed Aircraft and with respect to any buyer
         furnished equipment, and an invoice for any services or other costs
         associated with the modification of such Financed Aircraft and/or such
         other information and materials as may be reasonably requested by
         Administrative Agent confirming the name of the vendor performing the
         service, the Parts or service to be financed by such Revolving Loan,
         the amount due from or previously paid by Company, the satisfactory
         completion of the services for which such Revolving Loan proceeds shall
         be applied and such other information regarding such service as
         Administrative Agent may request. To the extent practicable, each
         Revolving Loan made shall be allocated only to the costs of conversion
         other than labor costs associated with such conversion; and

                  (ii) with respect to any Revolving Loan to finance the
         purchase of a Part, such Revolving Loan shall be made no later than ten
         days after the later of Company's payment for or acquisition of title
         to such Part.

         B.       CONDITIONS TO THE FINAL LOAN TO FINANCE THE COST OF
                  CONVERSION.

                  (i) If there has been any material deviation from the terms of
         the Modification Agreement entered into by Company with respect to a
         Financed Aircraft after the date of the appraisals delivered pursuant
         to subsection 3.2(iv), Company shall have delivered to Administrative
         Agent appraisals demonstrating that the amount of the Revolving Loans
         requested when added to all previous Revolving Loans made with respect
         to the Financed Aircraft which has been converted as of the Funding
         Date

                                      -60-
<PAGE>
         does not exceed the lesser of (x) 100% of the remaining costs of
         conversion and (y) 80% of the Appraised Value of the Financed Aircraft;

                  (ii) Company shall deliver to Administrative Agent an
         Officer's Certificate (x) certifying that the conversion of the
         Financed Aircraft has been completed and that all obligations of
         Company with respect to the modifications of the Financed Aircraft
         under a Modification Agreement and any BFE Agreement have been
         satisfied and (y) stating the total cost of the purchase and
         modification of such Financed Aircraft, which shall not be less than
         all Loans made in respect of such Financed Aircraft.

                  (iii) Company shall deliver to Administrative Agent (a) a copy
         of the Aircraft re-delivery receipt and evidence of transfer of title
         to each Part included in the modification, (b) copies of any
         Supplemental Types Certificates issued by the FAA, and (c) copies of
         any FAA Form 337s to be filed in connection with such modification;

                  (iv) Administrative Agent shall have received evidence
         satisfactory to it to the effect that as of such Funding Date Company
         is an air carrier certificated under Sections 401 and 604(b) of the
         Federal Aviation Act; certificates of airworthiness with respect to the
         Eligible Aircraft shall have been duly issued pursuant to the Federal
         Aviation Act and shall be in full force and effect; and each Engine
         shall be in compliance with all airworthiness standards of the FAA or
         shall be maintained in accordance with an FAA approved program; and

                  (v) Company shall have delivered to Administrative Agent such
         other documents as Administrative Agent may reasonably request and all
         such documents shall be in form and substance reasonably satisfactory
         to Administrative Agent.

3.4      CONDITIONS TO ALL LOANS.

         The obligations of Lenders to make Loans on each Funding Date are
subject to the following further conditions precedent:

          A.       Administrative Agent shall have received before that Funding
          Date, in accordance with the provisions of subsection 2.1B, an
          originally executed Notice of Borrowing, in each case signed by the
          chief executive officer, the chief financial officer or the treasurer
          of Company or by any executive officer of Company designated by any of
          the above-described officers on behalf of Company in a writing
          delivered to Administrative Agent.

         B.       As of that Funding Date:

                  (i) the representations and warranties contained herein and in
         the other Loan Documents shall be true, correct and complete in all
         material respects on and as

                                      -61-
<PAGE>
         of that Funding Date to the same extent as though made on and as of
         that date, except to the extent such representations and warranties
         specifically relate to an earlier date, in which case such
         representations and warranties shall have been true, correct and
         complete in all material respects on and as of such earlier date;
         provided that, with respect to any Funding Date referred to in
         subsection 3.3, Company's representations and warranties shall be to
         its best knowledge;

                  (ii) no event shall have occurred and be continuing or would
         result from the consummation of the borrowing contemplated by such
         Notice of Borrowing that would constitute an Event of Default or a
         Potential Event of Default;

                  (iii) Company shall have performed in all material respects
         all agreements and satisfied all conditions which this Agreement
         provides shall be performed or satisfied by it on or before that
         Funding Date;

                  (iv) no order, judgment or decree of any court, arbitrator or
         governmental authority shall purport to enjoin or restrain any Lender
         from making the Loans to be made by it on that Funding Date;

                  (v) the making of the Loans requested on such Funding Date
         shall not violate any law including, without limitation, Regulation T,
         Regulation U or Regulation X of the Board of Governors of the Federal
         Reserve System; and

                  (vi) there shall not be pending or, to the knowledge of
         Company, threatened, any action, suit, proceeding, governmental
         investigation or arbitration against or affecting Company or any of its
         Subsidiaries or any property of Company or any of its Subsidiaries that
         has not been disclosed by Company in writing pursuant to subsection 4.6
         or 5.1(x) prior to the making of the last preceding Loans (or, in the
         case of the initial Loans, prior to the execution of this Agreement),
         and there shall have occurred no development not so disclosed in any
         such action, suit, proceeding, governmental investigation or
         arbitration so disclosed, that, in either event, in the opinion of
         Administrative Agent or of Requisite Lenders, would be expected to have
         a Material Adverse Effect; and no injunction or other restraining order
         shall have been issued and no hearing to cause an injunction or other
         restraining order to be issued shall be pending or noticed with respect
         to any action, suit or proceeding seeking to enjoin or otherwise
         prevent the consummation of, or to recover any damages or obtain relief
         as a result of, the transactions contemplated by this Agreement or the
         making of Loans hereunder.

         C. With respect to any Revolving Loans made on a Funding Date for the
purpose of reborrowing an amount equal to the amount of mandatory prepayments
made pursuant to subsection 2.4B(iii)(e), Administrative Agent shall have
received an opinion of Cahill Gordon & Reindel, or such other counsel as may be
acceptable to Administrative Agent, dated as of such Funding Date confirming the
applicability of Section 1110 of the Bankruptcy Code, to

                                      -62-
<PAGE>
such Revolving Loans made on such Funding Date, in form and substance
satisfactory to Administrative Agent.

         D. In the case of an initial Revolving Loan with respect to a New
Aircraft, Company shall have delivered to Lenders (or to Administrative Agent
for Lenders) executed originals of the New Aircraft Notes, duly executed in
accordance with subsection 2.1D, drawn to the order of each Lender and with
appropriate insertions.

                                   SECTION 4.
                    COMPANY'S REPRESENTATIONS AND WARRANTIES

         In order to induce Lenders to enter into this Agreement and to make the
Loans, Company represents and warrants to each Lender, on the date of this
Agreement and on each Funding Date, that the following statements are true,
correct and complete:

4.1      ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
         SUBSIDIARIES.

         A. ORGANIZATION AND POWERS. Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Company has all requisite corporate power and authority to own and operate its
properties, to carry on its business as now conducted and as proposed to be
conducted, to enter into the Loan Documents and to carry out the transactions
contemplated thereby.

         B. QUALIFICATION AND GOOD STANDING; AIR CARRIER CERTIFICATION. Company
is qualified to do business and in good standing in every jurisdiction where its
assets are located and wherever necessary to carry out its business and
operations, except in jurisdictions where the failure to be so qualified or in
good standing has not had and will not have a Material Adverse Effect. Company
is a "citizen of the United States" within the meaning of the Federal Aviation
Act (a "UNITED STATES CITIZEN") and holds an air carrier operating certificate
under the Federal Aviation Act for aircraft capable of carrying 10 or more
individuals or 6,000 pounds or more of cargo.

         C. SUBSIDIARIES. All of the Subsidiaries of Company as of the Fourth
Restatement Date are identified in Schedule 4.1 annexed hereto, as said Schedule
4.1 may be supplemented from time to time pursuant to the provisions of
subsection 5.1(xvii). The capital stock of each of the Subsidiaries of Company
identified in Schedule 4.1 annexed hereto (as so supplemented) is duly
authorized, validly issued, fully paid and nonassessable and none of such
capital stock constitutes Margin Stock. Each of the Subsidiaries of Company
identified in Schedule 4.1 annexed hereto (as so supplemented) is a corporation
duly organized, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation set forth therein, has all requisite
corporate power and authority to own and operate its properties and to carry on
its business as now conducted and as proposed to be conducted, and is qualified
to do business and in good standing in every jurisdiction where its assets are
located and wherever necessary to carry out its business and

                                      -63-
<PAGE>
operations, in each case except where failure to be so qualified or in good
standing or a lack of such corporate power and authority has not had and will
not have a Material Adverse Effect. Schedule 4.1 annexed hereto (as so
supplemented) correctly sets forth the ownership interest of Company and each of
its Subsidiaries in each of the Subsidiaries of Company identified therein.

         D. COLLATERAL DOCUMENTS. The security interests created in favor of
Administrative Agent under the Collateral Documents have at all times from and
after the Initial Closing Date constituted and will continue to constitute, as
security for the obligations purported to be secured thereby, a legal, valid and
enforceable security interest in and Lien on all of the Collateral referred to
therein in favor of Administrative Agent for the benefit of the Lenders,
perfected and prior to the rights of all third persons in accordance with the
requirements of all applicable Collateral Documents. Each Loan Party has good
and marketable title to its respective Collateral, and all such Collateral is
free and clear of all Liens except for Liens permitted by subsection 6.2. No
consents, filings or recordings are required in order to perfect (or maintain
the perfection or priority of) the security interests purported to be created by
any of the Collateral Documents, other than such as have been obtained and which
remain in full force and effect and UCC financing statements to be filed, or
delivered to Administrative Agent for filing, on the Fourth Restatement Date and
periodic UCC continuation filings or as is specifically otherwise permitted by
the terms of any applicable Collateral Document.

4.2      AUTHORIZATION OF BORROWING, ETC.

         A. AUTHORIZATION OF BORROWING. The execution, delivery and performance
of the Loan Documents have been duly authorized by all necessary corporate
action on the part of each Loan Party.

         B. NO CONFLICT. The execution, delivery and performance by the Loan
Parties of the Loan Documents and the consummation of the transactions
contemplated by the Loan Documents do not and will not (i) violate any provision
of any law or any governmental rule or regulation applicable to Company or any
of its Subsidiaries, the Certificate or Articles of Incorporation or Bylaws of
Company or any of its Subsidiaries or any order, judgment or decree of any court
or other agency of government binding on Company or any of its Subsidiaries,
(ii) conflict with in any material respect, result in a material breach of or
constitute (with due notice or lapse of time or both) a material default under
any Contractual Obligation of Company or any of its Subsidiaries, (iii) result
in or require the creation or imposition of any Lien upon any of the properties
or assets of Company or any of its Subsidiaries (other than any Liens created
under any of the Loan Documents in favor of Administrative Agent on behalf of
Lenders), or (iv) require any approval of stockholders or any approval or
consent of any Person under any Contractual Obligation of Company or any of its
Subsidiaries, except for such approvals or consents which will be obtained on or
before the Fourth Restatement Date and disclosed in writing to Lenders.

                                      -64-
<PAGE>
         C. GOVERNMENTAL CONSENTS. The execution, delivery and performance by
the Loan Parties of the Loan Documents and the consummation of the transactions
contemplated by the Loan Documents do not and will not require any registration
with, consent or approval of, or notice to, or other action to, with or by, any
federal, state or other governmental authority or regulatory body which has not
been obtained or made on or prior to the date required to be obtained or made
unless waived by Administrative Agent in accordance with this Agreement.

         D. BINDING OBLIGATION. Each of the Loan Documents has been duly
executed and delivered by each of the Loan Parties party thereto and is the
legally valid and binding obligation of each such Loan Party, enforceable
against such Loan Party in accordance with its respective terms, except as may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability.

4.3      FINANCIAL CONDITION.

         Company has heretofore delivered to Lenders, at Lenders' request, the
following financial statements and information: the audited consolidated balance
sheets of Company and its Subsidiaries as at December 31, 1999, and the related
consolidated statements of income, stockholders' equity and cash flows of
Company and its Subsidiaries for the Fiscal Year then ended. All such statements
were prepared in conformity with GAAP and fairly present the financial position
(on a consolidated basis) of the entities described in such financial statements
as at the respective dates thereof and the results of operations and cash flows
(on a consolidated basis) of the entities described therein for each of the
periods then ended, subject, in the case of any such unaudited financial
statements, to changes resulting from audit and normal year-end adjustments.
Company does not have any Contingent Obligation, contingent liability or
liability for taxes, long-term lease or unusual forward or long-term commitment
that is not reflected in the foregoing financial statements or the notes thereto
and which in any such case is material in relation to the business, operations,
properties, assets, condition (financial or otherwise) or prospects of Company
or of Company and its Subsidiaries taken as a whole.

4.4      NO MATERIAL ADVERSE CHANGE; NO RESTRICTED JUNIOR PAYMENTS.

         Since December 31, 1999, no event or change has occurred that has
caused or evidences, either in any case or in the aggregate, a Material Adverse
Effect. Since December 31, 1999, neither Company nor any of its Subsidiaries has
directly or indirectly declared, ordered, paid or made, or set apart any sum or
property for, any Restricted Junior Payment or agreed to do so except as
permitted by subsection 6.5.

4.5      TITLE TO PROPERTIES; LIENS.

         A. Company and its Subsidiaries have (i) good, sufficient and legal
title to (in the

                                      -65-
<PAGE>
case of fee interests in real property), (ii) valid leasehold interests in (in
the case of leasehold interests in real or personal property), or (iii) good
title to (in the case of all other personal property), all of the properties and
assets reflected in the financial statements referred to in subsection 4.3 or in
the most recent financial statements delivered pursuant to subsection 5.1, in
each case except for assets disposed of since the date of such financial
statements in the ordinary course of business or as otherwise permitted under
subsection 6.7. Except as permitted by this Agreement, all such properties and
assets are free and clear of Liens.

         B. Each Financed Aircraft operated in the United States has a current
and valid airworthiness certificate issued by the FAA pursuant to the Federal
Aviation Act in effect and is in such condition as may be necessary to enable
the airworthiness certificate to be maintained in good standing. Each Engine has
a rated takeoff horsepower greater than 750 horsepower, or the equivalent of
such horsepower. Each Financed Aircraft operated in the United States is
registered with the FAA in the name of Company, and Company has authority to
operate such Financed Aircraft. Company has good title to such Financed
Aircraft, free and clear of all Liens other than Liens permitted by subsection
6.2.

4.6      LITIGATION; ADVERSE FACTS.

         There are no actions, suits, proceedings, arbitrations or governmental
investigations (whether or not purportedly on behalf of Company or any of its
Subsidiaries) at law or in equity or before or by any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, pending or, to the knowledge of Company,
threatened against or affecting Company or any of its Subsidiaries or any
property of Company or any of its Subsidiaries that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
Neither Company nor any of its Subsidiaries is (i) in violation of any
applicable laws that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect or (ii) subject to or in default
with respect to any final judgments, writs, injunctions, decrees, rules or
regulations of any court or any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect.

4.7      PAYMENT OF TAXES.

         Except to the extent permitted by subsection 5.3, all tax returns and
reports of Company and its Subsidiaries required to be filed by any of them have
been timely filed, and all taxes, assessments, fees and other governmental
charges upon Company and its Subsidiaries and upon their respective properties,
assets, income, businesses and franchises which are due and payable have been
paid when due and payable. Company does not know of any proposed tax assessment
against Company or any of its Subsidiaries which is not being actively contested
by Company or such Subsidiary in good faith and by appropriate proceedings;
provided that such reserves or other appropriate provisions, if any, for
liabilities

                                      -66-
<PAGE>
for taxes as shall be required in conformity with GAAP shall have been made or
provided in the financial statements of Company. There are no agreements with
respect to taxes between Company and any tax agency or authority.

4.8      PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS.

         A. Neither Company nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, would not have a Material Adverse Effect.

         B. Neither Company nor any of its Subsidiaries is a party to or is
otherwise subject to any agreements or instruments or any charter or other
internal restrictions which, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.

4.9      GOVERNMENTAL REGULATION.

         Neither Company nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable.

4.10     SECURITIES ACTIVITIES.

         A. Neither Company nor any of its Subsidiaries is engaged principally,
or as one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying any Margin Stock.

         B. Following application of the proceeds of each Loan, not more than
25% of the value of the assets (either of Company only or of Company and its
Subsidiaries on a consolidated basis) subject to the provisions of subsection
6.2 or 6.7 or subject to any restriction contained in any agreement or
instrument, between any Loan Party, on the one had, and any Lender or any
Affiliate of any Lender, on the other hand, relating to Indebtedness and within
the scope of subsection 7.2, will be Margin Stock.

4.11     EMPLOYEE BENEFIT PLANS.

         Company maintains a qualified retirement plan under Section 401(k) of
the Internal Revenue Code (the "Company 401(k) Plan"). Company's 401(k) Plan has
no unfunded liabilities in excess of $10,000,000, and Company is in compliance
with all applicable provisions and requirements of ERISA and the regulations and
published interpretations

                                      -67-
<PAGE>
thereunder with respect to each Employee Benefit Plan and has performed all its
obligations under such Employee Benefit Plan in all material respects. The
Company has no Employee Benefit Plans, other than the Company 401(k) Plan. The
Company has no ERISA Affiliates that sponsor, maintain, contribute to or are
liable with respect to any Employee Benefit Plans.

4.12     CERTAIN FEES.

         No broker's or finder's fee or commission will be payable with respect
to this Agreement or any of the transactions contemplated hereby, and Company
hereby indemnifies Lenders against, and agrees that it will hold Lenders
harmless from, any claim, demand or liability for any such broker's or finder's
fees alleged to have been incurred in connection herewith or therewith and any
expenses (including reasonable fees, expenses and disbursements of counsel)
arising in connection with any such claim, demand or liability.

4.13     ENVIRONMENTAL PROTECTION.

         A. All Facilities and operations of the Company are, and have been to
the best of Company's knowledge, in compliance in all material respects with all
Environmental Laws.

         B. There are no, and have been no, conditions, occurrences, or
Hazardous Materials Activity (a) arising at any Facilities or at any other
location or (b) arising in connection with the operations of Company (including
the transportation of Hazardous Materials in accordance with applicable
regulations), which conditions, occurrences or Hazardous Materials Activity
could reasonably be expected to form the basis of an Environmental Claim against
Company and which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.

         C. To the best of Company's knowledge, there are no pending or
threatened Environmental Claims against Company, and Company has received no
notices, inquiries, or requests for information with respect to any
Environmental Claims.

4.14     EMPLOYEE MATTERS.

         There is no strike or work stoppage in existence or threatened
involving Company or any of its Subsidiaries that could reasonably be expected
to have a Material Adverse Effect.

4.15     SOLVENCY.

         Company and each of its Subsidiaries is and, upon the incurrence of any
Obligations by Company on any date on which this representation is made, will
be, Solvent.

4.16     DISCLOSURE.

         No representation or warranty of Company or any of its Subsidiaries
contained in any Loan Document or in any other document, certificate or written
statement furnished to

                                      -68-
<PAGE>
Lenders by or on behalf of Company or any of its Subsidiaries for use in
connection with the transactions contemplated by this Agreement contains any
untrue statement of a material fact or omits to state a material fact (known to
Company, in the case of any document not furnished by Company) necessary in
order to make the statements contained herein or therein not misleading in light
of the circumstances in which the same were made. Any projections and pro forma
financial information contained in such materials are based upon good faith
estimates and assumptions believed by Company to be reasonable at the time made,
it being recognized by Lenders that such projections as to future events are not
to be viewed as facts and that actual results during the period or periods
covered by any such projections may differ from the projected results. There are
no facts known (or which should upon the reasonable exercise of diligence be
known) to Company (other than matters of a general economic nature) that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect and that have not been disclosed herein or in such other
documents, certificates and statements furnished to Lenders for use in
connection with the transactions contemplated hereby.

                                   SECTION 5.
                         COMPANY'S AFFIRMATIVE COVENANTS

         Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations unless Requisite Lenders shall otherwise give prior
written consent, Company shall perform, and shall cause each of its Subsidiaries
to perform, all covenants in this Section 5.

5.1      FINANCIAL STATEMENTS AND OTHER REPORTS.

         Company will maintain, and cause each of its Subsidiaries to maintain,
a system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. Company will deliver to Administrative Agent and Lenders:

                  (i)  [Intentionally Omitted]

                  (ii) Quarterly Financials: as soon as available and in any
         event within 45 days after the end of each fiscal quarter of each
         Fiscal Year, (a) the consolidated balance sheet of Company and its
         Subsidiaries as at the end of such fiscal quarter and the related
         consolidated statement of income, stockholders' equity and cash flows
         of Company and its Subsidiaries for such fiscal quarter and for the
         period from the beginning of the then current Fiscal Year to the end of
         such fiscal quarter, setting forth in each case in comparative form the
         corresponding figures for the corresponding periods of the previous
         Fiscal Year, all in reasonable detail and certified by the chief
         financial officer of Company that they fairly present the financial
         condition of Company and its Subsidiaries as at the dates indicated and
         the results of their operations and their cash flows for the periods
         indicated, subject to changes resulting

                                      -69-
<PAGE>
         from audit and normal year-end adjustments, and (b) a narrative report
         describing the operations of Company and its Subsidiaries in the form
         prepared for presentation to senior management for such fiscal quarter
         and for the period from the beginning of the then current Fiscal Year
         to the end of such fiscal quarter; provided that delivery of Company's
         Form 10-Q for such fiscal quarter shall be deemed to satisfy the
         requirements of this subsection 5.1(ii);

                  (iii) Year-End Financials: as soon as available and in any
         event within 90 days after the end of each Fiscal Year, (a) the
         consolidated balance sheet of Company and its Subsidiaries as at the
         end of such Fiscal Year and the related consolidated statement of
         income, stockholders' equity and cash flows of Company and its
         Subsidiaries for such Fiscal Year, setting forth in each case in
         comparative form the corresponding figures for the previous Fiscal
         Year, all in reasonable detail and certified by the chief financial
         officer of Company that they fairly present the financial condition of
         Company and its Subsidiaries as at the dates indicated and the results
         of their operations and their cash flows for the periods indicated, (b)
         a narrative report describing the operations of Company and its
         Subsidiaries in the form prepared for presentation to senior management
         for such Fiscal Year, and (c) in the case of such consolidated
         financial statements, a report thereon of Arthur Andersen LLP or other
         independent certified public accountants of recognized national
         standing selected by Company and satisfactory to Administrative Agent,
         which report shall be unqualified, shall express no doubts about the
         ability of Company and its Subsidiaries to continue as a going concern,
         and shall state that such consolidated financial statements fairly
         present the consolidated financial position of Company and its
         Subsidiaries as at the dates indicated and the results of their
         operations and their cash flows for the periods indicated in conformity
         with GAAP applied on a basis consistent with prior years (except as
         otherwise disclosed in such financial statements) and that the
         examination by such accountants in connection with such consolidated
         financial statements has been made in accordance with generally
         accepted auditing standards; provided that delivery of Company's Form
         10-K for such Fiscal Year shall be deemed to satisfy the requirements
         of clauses (a) and (b) of this subsection 5.1(iii);

                  (iv) Officers' and Compliance Certificates: together with each
         delivery of financial statements of Company and its Subsidiaries
         pursuant to subdivisions (ii) and (iii) above after the Fourth
         Restatement Date, (a) an Officers' Certificate of Company stating that
         the signers have reviewed the terms of this Agreement and have made, or
         caused to be made under their supervision, a review in reasonable
         detail of the transactions and condition of Company and its
         Subsidiaries during the accounting period covered by such financial
         statements and that such review has not disclosed the existence during
         or at the end of such accounting period, and that the signers do not
         have knowledge of the existence as at the date of such Officers'
         Certificate, of any condition or event that constitutes an Event of
         Default or Potential Event of Default, or, if any such condition or
         event existed or exists, specifying the nature and period of

                                      -70-
<PAGE>
         existence thereof and what action Company has taken, is taking and
         proposes to take with respect thereto; and (b) a Compliance Certificate
         demonstrating in reasonable detail compliance during and at the end of
         the applicable quarterly and annual accounting periods with the
         restrictions contained in Section 6;

                  (v) Reconciliation Statements: if, as a result of any change
         in accounting principles and policies from those used in the
         preparation of the audited financial statements referred to in
         subsection 4.3, the consolidated financial statements of Company and
         its Subsidiaries delivered pursuant to subdivisions (ii) or (iii) of
         this subsection 5.1 will differ in any material respect from the
         consolidated financial statements that would have been delivered
         pursuant to such subdivisions had no such change in accounting
         principles and policies been made, then (a) together with the first
         delivery of financial statements pursuant to subdivision (ii) or (iii)
         of this subsection 5.1 following such change, consolidated financial
         statements of Company and its Subsidiaries for (y) the current Fiscal
         Year to the effective date of such change and (z) the two full Fiscal
         Years immediately preceding the Fiscal Year in which such change is
         made, in each case prepared on a pro forma basis as if such change had
         been in effect during such periods, and (b) together with each delivery
         of financial statements pursuant to subdivision (ii) or (iii) of this
         subsection 5.1 following such change, a written statement of the chief
         accounting officer or chief financial officer of Company setting forth
         the differences which would have resulted if such financial statements
         had been prepared without giving effect to such change;

                  (vi) Accountants' Certification: together with each delivery
         of consolidated financial statements of Company and its Subsidiaries
         pursuant to subdivision (iii) above, a written statement by the
         independent certified public accountants giving the report thereon (a)
         stating that their audit examination has included a review of the terms
         of this Agreement and the other Loan Documents as they relate to
         accounting matters, (b) stating whether, in connection with their audit
         examination, any condition or event that constitutes an Event of
         Default or Potential Event of Default has come to their attention and,
         if such a condition or event has come to their attention, specifying
         the nature and period of existence thereof; provided that such
         accountants shall not be liable by reason of any failure to obtain
         knowledge of any such Event of Default or Potential Event of Default
         that would not be disclosed in the course of their audit examination,
         and (c) stating that based on their audit examination nothing has come
         to their attention that causes them to believe either or both that the
         information contained in the certificates delivered therewith pursuant
         to subdivision (iv) above is not correct or that the matters set forth
         in the Compliance Certificates delivered therewith pursuant to clause
         (b) of subdivision (iv) above for the applicable Fiscal Year are not
         stated in accordance with the terms of this Agreement;

                  (vii) Accountants' Reports: promptly upon receipt thereof
         (unless restricted by applicable professional standards), copies of all
         reports submitted to Company by

                                      -71-
<PAGE>
         independent certified public accountants in connection with each
         annual, interim or special audit of the financial statements of Company
         and its Subsidiaries made by such accountants, including, without
         limitation, any comment letter submitted by such accountants to
         management in connection with their annual audit;

                  (viii) SEC Filings and Press Releases: promptly upon their
         becoming available, copies of (a) all financial statements, reports,
         notices and proxy statements sent or made available generally by
         Company to its security holders, (b) all regular and periodic reports
         and all registration statements (other than on Form S-8 or a similar
         form) and prospectuses, if any, filed by Company or any of its
         Subsidiaries with any securities exchange or with the Securities and
         Exchange Commission or any governmental or private regulatory
         authority, and (c) all press releases and other statements made
         available generally by Company or any of its Subsidiaries to the public
         concerning material developments in the business of Company or any of
         its Subsidiaries;

                  (ix) Events of Default, etc.: promptly upon any officer of
         Company obtaining knowledge (a) of any condition or event that
         constitutes an Event of Default or Potential Event of Default, or
         becoming aware that any Lender has given any notice (other than to
         Administrative Agent) or taken any other action with respect to a
         claimed Event of Default or Potential Event of Default, (b) that any
         Person has given any notice to Company or any of its Subsidiaries or
         taken any other action with respect to a claimed default or event or
         condition of the type referred to in subsection 7.2, (c) of any
         condition or event that would be required to be disclosed in a current
         report filed by Company with the Securities and Exchange Commission on
         Form 8-K (Items 1, 2, 4, 5 and 6 of such Form as in effect on the date
         hereof), or (d) of the occurrence of any event or change that has
         caused or evidences, either in any case or in the aggregate, a Material
         Adverse Effect, an Officers' Certificate specifying the nature and
         period of existence of such condition, event or change, or specifying
         the notice given or action taken by any such Person and the nature of
         such claimed Event of Default, Potential Event of Default, default,
         event or condition, and what action Company has taken, is taking and
         proposes to take with respect thereto;

                  (x) Litigation or Other Proceedings: (a) promptly upon any
         officer of Company obtaining knowledge of (X) the institution of, or
         non-frivolous threat of, any action, suit, proceeding (whether
         administrative, judicial or otherwise), governmental investigation or
         arbitration against or affecting Company or any of its Subsidiaries or
         any property of Company or any of its Subsidiaries (collectively,
         "PROCEEDINGS") not previously disclosed in writing by Company to
         Lenders or (Y) any material development in any Proceeding that, in any
         case:

                           (1) if adversely determined, has a reasonable
                  possibility of giving rise to a Material Adverse Effect; or

                                      -72-
<PAGE>
                           (2) seeks to enjoin or otherwise prevent the
                  consummation of, or to recover any damages or obtain relief as
                  a result of, the transactions contemplated hereby;

         written notice thereof together with such other information as may be
         reasonably available to Company to enable Lenders and their counsel to
         evaluate such matters; and (b) within twenty days after the end of each
         fiscal quarter of Company, a schedule of all Proceedings involving an
         alleged liability of, or claims against or affecting, Company or any of
         its Subsidiaries equal to or greater than $1,000,000 and promptly after
         request by Administrative Agent such other information as may be
         reasonably requested by Administrative Agent to enable Administrative
         Agent and its counsel to evaluate any of such Proceedings;
                  (xi) 401K Plan Notices: promptly upon becoming aware of the
         occurrence of or forthcoming occurrence of any material and adverse
         event with respect to Company's 401(k) Plan (as defined in subsection
         4.11), a written notice specifying the nature thereof, what action
         Company has taken, is taking or proposes to take with respect thereto,
         and, when known, any action taken or threatened by the Internal Revenue
         Service, the Department of Labor or the PBGC with respect thereto;

                  (xii)    [intentionally omitted]

                  (xiii) Insurance: as soon as practicable and in any event by
         the last day of each Fiscal Year, a report in form and substance
         satisfactory to Administrative Agent outlining all material insurance
         coverage maintained as of the date of such report by Company and its
         Subsidiaries and all material insurance coverage planned to be
         maintained by Company and its Subsidiaries in the immediately
         succeeding Fiscal Year;

                  (xiv) Environmental Audits and Reports: as soon as practicable
         following receipt thereof, copies of all environmental audits and
         reports, whether prepared by personnel of Company or any of its
         Subsidiaries or by independent consultants, with respect to significant
         environmental matters at any Facility or which relate to an
         Environmental Claim which could result in a Material Adverse Effect;

                  (xv) Special Purpose Subsidiaries: promptly upon any Special
         Purpose Subsidiary becoming a Subsidiary of Company, a written notice
         setting forth with respect to such Special Purpose Subsidiary (a) the
         date on which such Special Purpose Subsidiary became a Subsidiary of
         Company and (b) all of the data required to be set forth in Schedule
         4.1 annexed hereto with respect to all Subsidiaries of Company (it
         being understood that such written notice shall be deemed to supplement
         Schedule 4.1 annexed hereto for all purposes of this Agreement);

                  (xvi) Pricing Certificates: (a) together with each delivery of
         financial statements of Company and its Subsidiaries pursuant to
         subdivisions (ii) and (iii)

                                      -73-
<PAGE>
         above, (b) within one Business Day after any public release by S&P or
         Moody's lowering Company's "Senior Secured Debt Rating" or "Senior
         Secured Rating," as applicable, and (c) at such additional times as
         Company may elect, a certificate setting forth its "Senior Secured Debt
         Rating" and "Senior Secured Rating," as assigned by S&P or Moody's, as
         applicable (each, a "Pricing Certificate");

                  (xvii) Holding Company: at least five Business Days prior to
         the consummation thereof, the terms of the Holding Company
         Reorganization and, on and after the consummation of the Holding
         Company Reorganization, in addition to the information requirements of
         this subsection 5.1 with respect to the Company, the same information
         shall be delivered (and at the same times) with respect to the Holding
         Company and Holding Company Subsidiaries; and

                  (xviii) Other Information: with reasonable promptness, such
         other information and data with respect to Company or any of its
         Subsidiaries as from time to time may be reasonably requested by
         Administrative Agent or any Lender.

5.2      CORPORATE EXISTENCE.

         Except as permitted under subsection 6.7, Company will, and will cause
each of its Subsidiaries to, at all times preserve and keep in full force and
effect its corporate existence and all rights and franchises material to its
business; provided, however, that the corporate existence of any such Subsidiary
may be terminated if such termination is in the best interests of Company and
its Subsidiaries and is not materially disadvantageous to any Lender. Company
will, and will cause each of its Subsidiaries to, at all times maintain its
corporate existence as a United States Citizen.

5.3      PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.

         A. Company will, and will cause its Subsidiaries to, pay all taxes,
assessments and other governmental charges imposed upon it or any of its
properties or assets or in respect of any of its income, businesses or
franchises before any penalty, fine or interest accrues thereon, and all claims
(including, without limitation, claims for labor, services, materials and
supplies) for sums that have become due and payable and that by law have or may
become a Lien upon any of its properties or assets, prior to the time when any
penalty fine or interest shall be incurred with respect thereto; provided that
no such charge or claim need be paid if being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted and if such
reserve or other appropriate provision, if any, with respect to any liability
for taxes, as shall be required in conformity with GAAP shall have been made
therefor in the financial statements of the Company.

         B. Company will not, and will not permit any of its Subsidiaries to,
file or consent to the filing of any consolidated income tax return with any
Person (other than any Subsidiary of Company or Company and other than the
Holding Company and Holding Company

                                      -74-
<PAGE>
Subsidiaries).

5.4      MAINTENANCE OF PROPERTIES; INSURANCE.

         Company will, and will cause its Subsidiaries to, maintain or cause to
be maintained in good repair, working order and condition, ordinary wear and
tear excepted, all material properties used or useful in the business of Company
and its Subsidiaries and from time to time will make or cause to be made all
appropriate repairs, renewals and replacements thereof. Company will maintain or
cause to be maintained, with insurers of recognized responsibility and
reputation, insurance with respect to its properties and business and the
properties and businesses of its Subsidiaries against loss or damage (including,
without limitation, flood insurance, if necessary or advisable) of the kinds
customarily carried or maintained under similar circumstances by corporations
engaged in similar businesses and Company will, with respect to each Financed
Aircraft, maintain the insurance specified in the First Aircraft Chattel
Mortgage with respect to such Financed Aircraft.

         Company may self-insure, by way of deductible or equivalent structures
or provisions in insurance policies, the risks required to be insured against
pursuant to this subsection 5.4 in such reasonable amounts as are then
applicable to other similar aircraft or spare engines in Company's fleet, and as
are not substantially greater than amounts self-insured by corporations engaged
in the same or similar business and similarly situated with Company; provided,
however, that Company may not self-insure in an amount in excess of $1,000,000
per Financed Aircraft without the prior written consent of Administrative Agent.

5.5      INSPECTION; LENDER MEETING.

         Company will, and will cause its Subsidiaries to, permit any authorized
representatives designated by any Lender to visit and inspect any of the
properties of Company or any of its Subsidiaries, including its and their
financial and accounting records, and, with the permission of Company which
shall not be unreasonably withheld, to make copies and take extracts therefrom,
and to discuss its and their affairs, finances and accounts with its and their
officers and independent public accountants (provided that Company may, if it so
chooses, be present at or participate in any such discussion), all upon
reasonable notice and at such reasonable times during normal business hours and
as often as may be reasonably requested; provided that so long as no Event of
Default shall have occurred and be continuing, such inspection shall not be
disruptive to Company's business, as reasonably determined by Company. Within
120 days after the end of each Fiscal Year, senior management of Company shall
participate in a meeting of Lenders during which senior management will review,
among other matters, the financial results of Company and its Subsidiaries for
such Fiscal Year and outline the prospects for Company for the current Fiscal
Year and report on any major changes in the business strategy of Company
anticipated to occur during the term of this Agreement.

                                      -75-
<PAGE>
5.6      COMPLIANCE WITH LAWS, ETC.

         Company will, and will cause its Subsidiaries to, comply with the
requirements of all applicable laws, rules, regulations and orders of any
governmental authority (including, without limitation, Environmental Laws),
noncompliance with which could reasonably be expected to cause a Material
Adverse Effect. Company shall not conduct, and shall not permit the conduct of,
any Hazardous Materials Activity at any Facility or at any other location which
could reasonably be expected to form the basis of an Environmental Claim against
Company and which could reasonably be expected to have a Material Adverse
Effect.

5.7      ENVIRONMENTAL INDEMNITY.

         Company agrees to indemnify, defend, and hold harmless Administrative
Agent and Lenders, and the officers, directors, employees, agents and affiliates
of Administrative Agent and Lenders from and against any and all losses, claims,
liability or expenses arising in connection with Environmental Claims against
Company or with any Hazardous Materials Activity.

5.8      COMPANY'S REMEDIAL ACTION REGARDING HAZARDOUS MATERIALS.

         Company will promptly take, and will cause each of its Subsidiaries
promptly to take, any and all necessary remedial action in connection with the
presence, storage, use, disposal, transportation or Release of any Hazardous
Materials on, under or about any Facility in order to comply with all applicable
Environmental Laws and Governmental Authorizations. In the event Company or any
of its Subsidiaries undertakes any remedial action with respect to any Hazardous
Materials on, under or about any Facility, Company or such Subsidiary will
conduct and complete such remedial action in compliance with all applicable
Environmental Laws, and in accordance with the policies, orders and directives
of all federal, state and local governmental authorities except when, and only
to the extent that, Company's or such Subsidiary's liability for such presence,
storage, use, disposal, transportation or discharge of any Hazardous Materials
is being contested in good faith by Company or such Subsidiary.

5.9      FURTHER ASSURANCES; NEW SUBSIDIARIES; HOLDING COMPANY.

         A. At any time or from time to time upon the request of Administrative
Agent, Company will, at its expense, promptly execute, acknowledge and deliver
such further documents and do such other acts and things as Administrative Agent
may reasonably request in order to effect fully the purposes of the Loan
Documents and to provide for payment of the Obligations in accordance with the
terms of this Agreement, the Notes and the other Loan Documents.

         B. In furtherance and not in limitation of the foregoing, Company will
cause any Subsidiary whose total assets exceed 15% of the consolidated total
assets of Company, in each case determined in accordance with GAAP (other than a
Special Purpose Subsidiary or

                                      -76-
<PAGE>
Atlas One), to take such actions as Administrative Agent may reasonably request
from time to time to ensure that the Obligations are guarantied by any such
Subsidiary. If, after the Fourth Restatement Date, Company or any of its
Subsidiaries (other than a Special Purpose Subsidiary or Atlas One) acquires any
asset, other than an aircraft financed with Loans hereunder or with Other
Permitted Indebtedness, with a fair market value in excess of $5 million, or the
value of spare parts of Company and its Subsidiaries not subject to Liens
securing Designated Indebtedness exceeds $25 million in the aggregate, Company
shall so notify Administrative Agent and take, or cause such Subsidiaries to
take, such actions as Administrative Agent may reasonably request from time to
time (including, without limitation, the execution and delivery of guaranties,
security agreements, mortgages, deeds of trust, financing statements and other
documents, the filing or recording of any of the foregoing, title insurance with
respect to any of the foregoing that relates to an interest in real property,
and the delivery of stock certificates and other collateral with respect to
which perfection is obtained by possession) to ensure that the Obligations are
secured by a first priority security interest in such asset or spare parts
(other than capital stock of a Subsidiary), as the case may be; provided that,
in the case of any engine otherwise subject to such security interest, such Lien
may be released at the request of Company in connection with a refinancing
thereof with Other Permitted Indebtedness. Notwithstanding the foregoing, so
long as the AFL III Financing remains outstanding nothing herein shall cause or
give rise to an obligation on the part of the Company or AFL III to require a
guaranty or grant of security interest in the assets of AFL III. The Lenders
acknowledge that the security interests and Liens created by the Collateral
Documents do not extend to the assets of AFL III now existing or hereafter
acquired.

         C. In furtherance and not in limitation of the foregoing, if Company
interposes a Holding Company, Company will cause the Holding Company to take
such actions (including, without limitation, the execution and delivery of a
guaranty, pledge agreement, financing statements and other documents, the filing
or recording of any of the foregoing, and the delivery of stock certificates
properly endorsed for transfer or accompanied by duly executed stock powers) as
Administrative Agent and Lenders may reasonably request to ensure that the
Obligations are guarantied by the Holding Company and that the Obligations are
secured by a first priority security interest in all of the capital stock of
Company. Company agrees that the Holding Company will not incur, directly or
indirectly, any Indebtedness and will not engage in any business or activity or
own any assets other than (1) holding the capital stock of Company or other
Subsidiaries formed by the Holding Company, and performing its obligations
incidental thereto, (2) employing certain management employees and pilots and
performing its obligations incidental thereto, (3) paying general administrative
costs and expenses in the ordinary course of business and (4) such other
activities as may be consented to from time to time by Requisite Lenders.

5.10     APPRAISALS.

         At the request of Administrative Agent or Requisite Lenders (but no
more than once

                                      -77-
<PAGE>
each calendar year), Company will obtain appraisals of each of the Financed
Aircraft from two Approved Appraisers, in form and substance satisfactory to
Administrative Agent; provided that, upon the occurrence and during the
continuance of an Event of Default, Company will obtain such additional
appraisals with respect to the Financed Aircraft as Administrative Agent or
Requisite Lenders may request.

5.11     MAINTENANCE CONTRACTS.

         Company shall maintain contracts with respect to the maintenance of
each Financed Aircraft sufficient to insure compliance with the Federal Aviation
Act, in form and substance reasonably satisfactory to Administrative Agent.

5.12     EMPLOYEE BENEFIT PLANS.

         Company will not establish or permit to be established any Employee
Benefit Plans for Company or any of its employees and will not permit any ERISA
Affiliate to establish any Employee Benefit Plan which, in either case, could
result in a liability for Company, under ERISA, in excess of $10 million.

5.13     REGISTRATION OF FOREIGN LEASED AIRCRAFT WITH FAA.

         Upon termination of an Approved Lease to which a Foreign Leased
Aircraft is subject, Company shall cause such Foreign Leased Aircraft to be
deregistered in such country and registered under the Federal Aviation Act and
file for recordation with the FAA following such deregistration a First Aircraft
Chattel Mortgage and Second Aircraft Chattel Mortgage with respect to such
Foreign Leased Aircraft and shall cause FAA counsel to deliver an opinion in
form and substance satisfactory to Administrative Agent.

5.14     CORPORATE SEPARATENESS.

         Following the creation of a Holding Company, Company will take all such
action as is necessary to keep its operations separate and apart from those of
Holding Company or any of its Affiliates, including, without limitation,
ensuring that all customary corporate formalities, including the maintenance of
separate corporate records and documents and holding regular meetings are
followed. Any financial statements distributed to any creditors of Company shall
clearly establish the corporate separateness of Company from Holding Company and
each Holding Company Subsidiary. Company shall not take any action or conduct
its affairs in a manner that is likely to result in the corporate existence of
Company on the one hand and of Holding Company or any Holding Company Subsidiary
on the other hand being disregarded, or in the assets and liabilities of Holding
Company or any Holding Company Subsidiary being substantively consolidated with
those of Company in a bankruptcy, reorganization or other insolvency proceeding.
Company shall maintain its principal executive office separate from Holding
Company or any of its Affiliates.

                                      -78-
<PAGE>
                                   SECTION 6.
                          COMPANY'S NEGATIVE COVENANTS

         Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations, unless Requisite Lenders shall otherwise give prior
written consent, Company shall perform, and shall cause each of its Subsidiaries
to perform, all covenants in this Section 6.

6.1      INDEBTEDNESS.

         Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:

                  (i) Company may become and remain liable with respect to the
         Obligations;

                  (ii) Company and its Subsidiaries may become and remain liable
         with respect to Contingent Obligations permitted by subsection 6.4 and,
         upon any matured obligations actually arising pursuant thereto, the
         Indebtedness corresponding to the Contingent Obligations so
         extinguished;

                  (iii) Company and its Subsidiaries may become and remain
         liable with respect to Indebtedness in respect of Capital Leases;
         provided that such Capital Leases are permitted under the terms of
         subsection 6.9;

                  (iv) Company and its Subsidiaries, as applicable, may remain
         liable with respect to Indebtedness described in Schedule 6.1 annexed
         hereto;

                  (v) Company may become and remain liable with respect to
         Permitted Extension Indebtedness; provided, that with respect to any
         transaction in which Permitted Extension Indebtedness is incurred with
         respect to any Financed Aircraft, the cash proceeds from such Permitted
         Extension Indebtedness are sufficient to repay in full the Notes
         associated with such Financed Aircraft;

                  (vi) so long as no Event of Default or Potential Event of
         Default shall have occurred and be continuing or would result therefrom
         and Company delivers an Officers' Certificate to Administrative Agent
         and Lenders, in form and substance reasonably satisfactory to
         Administrative Agent, confirming that, on a Pro Forma Basis after
         giving effect to such incurrence of Indebtedness, (i) the ratio of
         Consolidated Total Debt (less Cash and Cash Equivalents held by Company
         in excess of $25 million) as of the last day of the most recently ended
         fiscal quarter (the "Determination Date") plus seven times Consolidated
         Rental Payments to Consolidated Adjusted EBITDA plus Consolidated
         Rental Payments for the four fiscal

                                      -79-
<PAGE>
         quarter period ending on such Determination Date does not exceed the
         ratio set forth in subsection 6.6B for the fiscal quarter in which such
         Indebtedness is to be incurred, (ii) the ratio of Consolidated Adjusted
         EBITDA for such four fiscal quarter period to Consolidated Interest
         Expense for such four-fiscal quarter period is not less than the ratio
         set forth in subsection 6.6A for the fiscal quarter in which such
         Indebtedness is to be incurred;

                  (vii) Company may become and remain liable with respect to
         Indebtedness under the NationsBanc/Bank of America Agreement;

                  (viii) AFL III may become and remain liable with respect to
         all of the obligations under the AFL III Financing documents and
         Company may become and remain liable with respect to the AFL III
         Leases;

                  (ix) Company may become and remain liable with respect to the
         Senior Notes and the Pass Through Trust Agreements; and

                  (x) Company and its Subsidiaries may become and remain liable
         with respect to other Indebtedness in an aggregate principal amount not
         to exceed, without duplication, when added to the maximum aggregate
         liability, contingent or otherwise, of Company and its Subsidiaries
         outstanding in accordance with subsection 6.4(vi), $50 million at any
         time outstanding;

provided that, notwithstanding the foregoing, Company may not become or remain
liable, directly or indirectly, for any Indebtedness of any Holding Company
Subsidiary.

6.2      LIENS AND RELATED MATTERS.

         A. PROHIBITION ON LIENS. Company shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Company or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the Uniform Commercial Code of any state or under any similar
recording or notice statute, except:

                  (i) Permitted Encumbrances;

                  (ii) Liens in respect of Permitted Extension Indebtedness and
         Other Permitted Indebtedness; provided that such Liens encumber only
         assets subject to purchase money Liens securing such Indebtedness; and

                  (iii) other Liens securing Indebtedness in an aggregate amount
         not to exceed

                                      -80-
<PAGE>
         $10 million at any time outstanding.

         B. EQUITABLE LIEN IN FAVOR OF LENDERS. If Company or any of its
Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 6.2A, it shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured; provided that, notwithstanding the foregoing,
this covenant shall not be construed as a consent by Requisite Lenders to the
creation or assumption of any such Lien not permitted by the provisions of
subsection 6.2A.

         C. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO COMPANY OR OTHER
SUBSIDIARIES. Except (i) as provided herein, as (ii) described on Schedule 6.2
annexed hereto, (iii) with respect to Special Purpose Subsidiaries and (iv)
pursuant to the AFL III Financing Agreement, Company will not, and will not
permit any of its Subsidiaries to, create or otherwise cause or suffer to exist
or become effective any consensual encumbrance or restriction of any kind on the
ability of any such Subsidiary to (i) pay dividends or make any other
distributions on any of such Subsidiary's capital stock owned by Company or any
other Subsidiary of Company, (ii) repay or prepay any Indebtedness owed by such
Subsidiary to Company or any other Subsidiary of Company, (iii) make loans or
advances to Company or any other Subsidiary of Company, or (iv) transfer any of
its property or assets to Company or any other Subsidiary of Company.

6.3      INVESTMENTS; JOINT VENTURES.

         Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, make or own any Investment in any Person, including any
Joint Venture, except:

                  (i) Company may make and own Investments in Cash Equivalents;

                  (ii) Company and its Subsidiaries may continue to own the
         Investments owned by them as of the Fourth Restatement Date in any
         Subsidiaries of Company;

                  (iii) Company may make and own Investments in Special Purpose
         Subsidiaries; provided that Company delivers to Administrative Agent an
         Officer's Certificate in form and substance satisfactory to
         Administrative Agent demonstrating that such Special Purpose Subsidiary
         meets the requirements set forth in the definition thereof;

                  (iv) Company may make Investments in Joint Ventures in an
         aggregate amount not to exceed (A) $50 million plus (B) 20% of
         Consolidated Net Income for the period commencing January 1, 2000 and
         ending on the last day of the Fiscal Year immediately preceding the
         date of determination (taken as a single accounting period) less (C)
         the sum of (x) the aggregate amount of Restricted Junior Payments with

                                      -81-
<PAGE>
         respect to Company Common Stock declared or paid during such period
         (excluding Restricted Junior Payments made in accordance with
         subsection 6.5(iii)) and (y) the aggregate amount contributed to
         capital of Special Purpose Subsidiaries during such period; provided
         that Company shall not incur liabilities related to any such Joint
         Venture in excess of Company's Investment therein;

                  (v) Company and its Subsidiaries may continue to own the
         Investments owned by them and described in Schedule 6.3 annexed hereto
         and Investments made in compliance with subsection 6.3(iv);

                  (vi) Company, AFL and AFL II may make the contributions to AFL
         III of the AFL III Equipment and cash contemplated pursuant to the AFL
         III Restructuring; and

                  (vii) Company and its Subsidiaries may make and own other
         Investments in an aggregate amount not to exceed $15 million at any
         time outstanding.

         Notwithstanding the foregoing, (1) except in connection with the AFL
III Restructuring, neither Company nor its Subsidiaries may make any direct or
indirect loan, advance or capital contribution to AFL III and (2) neither
Company nor its Subsidiaries may make any direct or indirect loan or advance to
a Holding Company.

6.4      CONTINGENT OBLIGATIONS.

         Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:

                  (i) any Subsidiary may become and remain liable with respect
         to Contingent Obligations arising under their guaranties of the
         Obligations;

                  (ii) Company may become and remain liable with respect to
         Contingent Obligations under Interest Rate Agreements and Currency
         Agreements with a Lender;

                  (iii) Company and its Subsidiaries may become and remain
         liable with respect to Contingent Obligations in respect of customary
         indemnification and purchase price adjustment obligations incurred in
         connection with Asset Sales or other sales of assets or securities;

                  (iv) Company and its Subsidiaries, as applicable, may remain
         liable with respect to Contingent Obligations described in Schedule 6.4
         annexed hereto;

                  (v) Company and its Subsidiaries may become and remain liable
         with respect to Contingent Obligations to the extent such Contingent
         Obligations are

                                      -82-
<PAGE>
         permitted pursuant to subsections 6.9 and 6.10; and

                  (vi) Company and its Subsidiaries may become and remain liable
         with respect to other Contingent Obligations; provided that the maximum
         aggregate liability, contingent or otherwise, of Company and its
         Subsidiaries in respect of all such Contingent Obligations when added,
         without duplication, to the aggregate principal amount of Indebtedness
         outstanding in accordance with subsection 6.1(x) shall at no time
         exceed $30 million.

6.5      RESTRICTED JUNIOR PAYMENTS.

         Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, declare, order, pay, make or set apart any sum for any
Restricted Junior Payment; provided that Company may make scheduled payments of
principal and interest or mandatory prepayments of principal (including through
the exercise of remedies) from time to time on Designated Indebtedness; and
provided, further, that so long as no Event of Default or Potential Event of
Default has occurred and is continuing, or would result therefrom:

                  (i) Company may prepay Designated Indebtedness from the
         proceeds of Permitted Extension Indebtedness or Other Permitted
         Indebtedness;

                  (ii) Company may make Restricted Junior Payments with respect
         to Company Common Stock not to exceed in any Fiscal Year, the lesser of
         20% of Consolidated Net Income for such Fiscal Year and $15 million;

                  (iii) Company may repurchase Company Common Stock in an amount
         not to exceed in any Fiscal Year $15 million for purposes of
         establishing or contributing to an employee compensation plan; provided
         that any such repurchased Company Common Stock resold to employees of
         Company shall, to the extent of the price paid for such Company Common
         Stock by such employee, be excluded from the calculation of the $15
         million limit set forth above;

                  (iv) Company may apply Equity Proceeds to prepay Designated
         Indebtedness;

                  (v) Company and AFL III shall be permitted to consummate the
         AFL III Restructuring; and

                  (vi) Company may repurchase or redeem all or any portion of
         the Senior Notes for aggregate cash consideration not to exceed, when
         aggregated with any "change of control" put payments arising as a
         result of the Holding Company Reorganization, $75,000,000; provided
         that, (A) after giving effect to the proposed repurchase or redemption,
         Company shall have not less than $150,000,000 in Cash or Cash
         Equivalents on its balance sheet and (B) the Leverage Ratio (calculated
         on a pro

                                      -83-
<PAGE>
         forma basis as if the proposed repurchase or redemption had been
         consummated on the last day of the most recent four fiscal quarter
         period) shall not exceed the lower of 4.25:1.00 or the ratio required
         to be met in accordance with subsection 6.6B for the immediately
         succeeding fiscal quarter end.

6.6      FINANCIAL COVENANTS.

         A. MINIMUM INTEREST COVERAGE RATIO. Company shall not permit the ratio
of (i) Consolidated Adjusted EBITDA to (ii) Consolidated Interest Expense for
the four fiscal quarter period ending as of the last day of any fiscal quarter
of Company set forth below to be less than the correlative ratio indicated:

<TABLE>
<CAPTION>
==================================================================
FISCAL QUARTER ENDING                             MINIMUM INTEREST
                                                   COVERAGE RATIO
==================================================================
<S>                                               <C>
March 31, 2000                                       2.10:1.00
June 30, 2000                                        2.10:1.00
September 30, 2000                                   2.20:1.00
December 31, 2000                                    2.20:1.00
March 31, 2001                                       2.40:1.00
June 30, 2001                                        2.40:1.00
September 30, 2001                                   2.50:1.00
December 31, 2001                                    2.50:1.00
March 31, 2002                                       2.50:1.00
June 30, 2002                                        2.50:1.00
September 30, 2002                                   2.50:1.00
December 31, 2002                                    2.50:1.00
March 31, 2003                                       2.50:1.00
June 30, 2003                                        2.75:1.00
September 30, 2003                                   2.75:1.00
December 31, 2003                                    2.75:1.00
March 31, 2004                                       2.75:1.00
June 30, 2004                                        2.75:1.00
September 30, 2004                                   2.75:1.00
December 31, 2004                                    2.75:1.00
</TABLE>

                                      -84-
<PAGE>
<TABLE>
<CAPTION>
==================================================================
FISCAL QUARTER ENDING                             MINIMUM INTEREST
                                                   COVERAGE RATIO
==================================================================
<S>                                               <C>
March 31, 2005                                       2.75:1.00
</TABLE>

         B. MAXIMUM LEVERAGE RATIO. Company shall not permit the ratio of (i)
Consolidated Total Debt as of each date set forth below (less Cash and Cash
Equivalents held by Company in excess of $25 million as of such date) plus seven
times Consolidated Rental Payments (for the four fiscal quarter period ending
with the most recently ended fiscal quarter) to (ii) Consolidated Adjusted
EBITDA plus Consolidated Rental Payments for the four fiscal quarter period
ending as of the last day of any fiscal quarter of Company set forth below to
exceed the correlative ratio indicated:

                                      -85-
<PAGE>
<TABLE>
<CAPTION>
===========================================================
FISCAL QUARTER ENDING                            MAXIMUM
                                                 LEVERAGE
                                                  RATIO
===========================================================
<S>                                             <C>
March 31, 2000                                  4.75:1.00
June 30, 2000                                   4.75:1.00
September 30, 2000                              4.75:1.00
December 31, 2000                               4.75:1.00
March 31, 2001                                  4.75:1.00
June 30, 2001                                   4.50:1.00
September 30, 2001                              4.50:1.00
December 31, 2001                               4.50:1.00
March 31, 2002                                  4.50:1.00
June 30, 2002                                   4.50:1.00
September 30, 2002                              4.50:1.00
December 31, 2002                               4.25:1.00
March 31, 2003                                  4.25:1.00
June 30, 2003                                   4.25:1.00
September 30, 2003                              4.25:1.00
December 31, 2003                               4.00:1.00
March 31, 2004                                  4.00:1.00
June 30, 2004                                   4.00:1.00
September 30, 2004                              4.00:1.00
December 31, 2004                               3.75:1.00
March 31, 2005                                  3.75:1.00
</TABLE>

         C. MINIMUM CONSOLIDATED NET WORTH. Company shall not permit
Consolidated Net Worth at any time during any of the periods set forth below to
be less than the correlative amount indicated:

                                      -86-
<PAGE>
<TABLE>
<CAPTION>
=============================================================================
FISCAL QUARTER ENDING                          MINIMUM CONSOLIDATED
                                                    NET WORTH
=============================================================================
<S>                                            <C>
March 31, 2000                                     $300 million
June 30, 2000                                      $300 million
September 30, 2000                                 $325 million
December 31, 2000                                  $325 million
March 31, 2001                                     $350 million
June 30, 2001                                      $350 million
September 30, 2001                                 $350 million
December 31, 2001                                  $350 million
March 31, 2002                                     $400 million
June 30, 2002                                      $400 million
September 30, 2002                                 $400 million
December 31, 2002                                  $400 million
March 31, 2003                                     $450 million
June 30, 2003                                      $450 million
September 30, 2003                                 $450 million
December 31, 2003                                  $450 million
March 31, 2004                                     $450 million
June 30, 2004                                      $450 million
September 30, 2004                                 $450 million
December 31, 2004                                  $450 million
March 31, 2005                                     $450 million
</TABLE>

6.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND ACQUISITIONS; NEW
SUBSIDIARIES.

         Company shall not, and shall not permit any of its Subsidiaries to,
enter into any transaction of merger or consolidation, or liquidate, wind-up or
dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease, sub-lease, transfer or otherwise dispose of,

                                      -87-
<PAGE>
in one transaction or a series of transactions, all or any part of its business,
property or fixed assets, whether now owned or hereafter acquired, or acquire by
purchase or otherwise all or any portion of the business, property or fixed
assets of, or stock or other evidence of beneficial ownership of, any Person or
any division or line of business of any Person, except:

                  (i) any Subsidiary of Company may be merged with or into
         Company or any wholly owned Subsidiary of Company that has entered into
         a valid and effective guaranty and security agreement to the extent
         required by subsection 5.9, or be liquidated, wound up or dissolved, or
         all or any part of its business, property or assets may be conveyed,
         sold, leased, transferred or otherwise disposed of, in one transaction
         or a series of transactions, to Company or any such wholly owned
         Subsidiary of Company; provided that, in the case of such a merger,
         Company or such wholly owned Subsidiary shall be the continuing or
         surviving corporation;

                  (ii) Company and its Subsidiaries may sell or otherwise
         dispose of assets in transactions that do not constitute Asset Sales;
         provided that the consideration received for such assets shall be in an
         amount at least equal to the fair market value thereof;

                  (iii) subject to subsection 6.13, Company and its Subsidiaries
         may make Asset Sales of assets having a fair market value not in excess
         of $100 million in any Fiscal Year or $500 million in the aggregate;
         provided that (w) with respect to the sale of any Financed Aircraft,
         the cash proceeds of the sale of such Financed Aircraft are sufficient
         to repay in full the Notes associated with such Financed Aircraft; (x)
         the consideration received for such assets shall be in an amount at
         least equal to the fair market value thereof; (y) the consideration
         received shall be at least 75% cash; and (z) the proceeds of such Asset
         Sales shall be applied as required by subsection 2.4B(iii)(a);

                  (iv) Company may lease or transfer any Financed Aircraft to
         the extent expressly permitted by Section 4(d) of the First Aircraft
         Chattel Mortgage with respect to such Financed Aircraft or as
         contemplated by subsection 9.21;

                  (v) Company may make acquisitions of the capital stock of
         another Person or all or substantially all of the assets of a division
         or line of business of another Person provided that, (a) the
         acquisition primarily involves the acquisition of assets to be used in
         the business of Company, (b) if such acquisition is structured as a
         merger or as a stock or other equity acquisition, then either (i) the
         Person so acquired becomes a wholly owned Subsidiary of the Company or
         (ii) such Person is merged with and into the Company or a wholly owned
         Subsidiary of the Company (with the Company or such wholly owned
         Subsidiary being the surviving corporation of such merger), (c) if such
         acquisition is structured as an asset acquisition, then such assets are
         acquired either by the Company directly or by a wholly owned Subsidiary
         of Company, (d) to

                                      -88-
<PAGE>
         the extent required by subsection 5.9, such wholly owned Subsidiary of
         Company shall execute a guaranty of the Obligations and Company or such
         wholly owned Subsidiary of Company shall grant a security interest in
         the assets acquired to Administrative Agent for the benefit of Lenders
         which may be subordinate to debt incurred in such acquisition, (e)
         immediately before and after giving effect thereto, no Potential Event
         of Default or Event of Default shall have occurred and be continuing,
         (f) immediately after giving effect to the acquisition, Company shall
         be in compliance on a Pro Forma Basis with financial covenants in
         subsection 6.6 and such compliance shall be evidenced by an Officer's
         Certificate demonstrating such compliance, (g) Administrative Agent
         shall have reviewed and be reasonably satisfied with the nature and
         amount of all contingent liabilities or other liabilities not on the
         balance sheet of Company assumed in connection with such acquisition
         and (h) the aggregate amount of cash payments made in connection with
         all such acquisitions, other than with the proceeds from sales or
         issuances of equity by Company, does not exceed $100,000,000;

                  (vi) Company and its Subsidiaries may make Consolidated
         Capital Expenditures in connection with the purchase of up to twelve
         Eligible Aircraft during each Fiscal Year, such number of Eligible
         Aircraft permitted during any Fiscal Year to be increased by any number
         of Eligible Aircraft permitted to be purchased, but not purchased,
         during the previous Fiscal Year (but in no event shall any such number
         of Eligible Aircraft once carried forward to the next Fiscal Year be
         carried forward to any Fiscal Year thereafter) together with
         Consolidated Capital Expenditures with respect to the acquisition, in
         the normal course of business, of spare parts and spare engines
         associated with such Eligible Aircraft;

                  (vii) Company and its Subsidiaries may make Consolidated
         Capital Expenditures with respect to maintenance of aircraft in the
         normal course of business;

                  (viii) Company and its Subsidiaries may make other
         Consolidated Capital Expenditures not in excess of $10 million during
         any Fiscal Year; provided that, any amount of such other Consolidated
         Capital Expenditures permitted, but not made, in any Fiscal Year may be
         carried forward to and made during the immediately succeeding Fiscal
         Year (but no amount once carried forward to the next Fiscal Year may be
         carried forward to any Fiscal Year thereafter);

                  (ix) Company and AFL III shall be permitted to consummate the
         AFL III Restructuring;

                  (x) Company shall be permitted to dispose of or acquire assets
         pursuant to the consolidation and relocation of its offices and
         operations to Colorado; provided that the aggregate consideration paid
         with respect to the acquisition of assets shall be in an amount not to
         exceed $20 million; and

                                      -89-
<PAGE>
                  (xi) the Holding Company Reorganization shall be permitted so
         long as in connection therewith Company complies with, and causes
         Holding Company to comply with, subsection 5.9 hereof.

6.8      AMENDMENTS OF MATERIAL AGREEMENTS.

         Company shall not permit (i) the certificate or articles of
incorporation or bylaws of any Loan Party to be amended or otherwise modified in
any manner which could reasonably be expected to have a Material Adverse Effect
or (ii) any Material Agreement to be amended or otherwise modified in any manner
with respect to any provision providing material representations and warranties
to Company, indemnification rights to Company, or limiting Company's remedies or
rights upon the other party to such agreements failure to perform or which could
otherwise reasonably be expected to have Material Adverse Effect on the value of
any Financed Aircraft.

6.9      RESTRICTION ON LEASES.

         Company shall not, and shall not permit any of its Subsidiaries to,
become liable in any way, whether directly or by assignment or as a guarantor or
other surety, for the obligations of the lessee under any lease, whether an
Operating Lease or a Capital Lease (other than intercompany leases between
Company and its wholly owned Subsidiaries); provided however that Company may
become so obligated to the extent that, and only to the extent that, immediately
after giving effect to the incurrence of liability with respect to such lease,
the Consolidated Rental Payments at the time in effect during the then current
Fiscal Year do not exceed $35 million plus the amount of Consolidated Rental
Payments made during such Fiscal Year in respect of up to six 747-400F aircraft
subject to Operating Leases as of the Fourth Restatement Date plus the amount of
Consolidated Rental Payments in respect of up to two 747-400F aircraft per year,
subject to the agreement dated June 9, 1997 between Company and The Boeing
Company regarding the purchase of twelve new 747-400F aircraft and the option to
purchase eight additional new 747-400F aircraft, plus an amount not to exceed
$15 million during any Fiscal Year, equal to Consolidated Rental Payments
incurred in connection with sale and leaseback transactions described in
subsection 6.10, plus Consolidated Rental Payments assumed pursuant to
acquisitions permitted under subsection 6.7(v). Notwithstanding the foregoing,
the AFL III Leases shall be permitted hereunder and shall not be taken into
account for purposes of determining compliance with the foregoing provisions of
this subsection 6.9.

6.10     SALES AND LEASE-BACKS.

         Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease, whether an Operating Lease or a Capital
Lease, of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, (i) which Company or any of its Subsidiaries has sold or
transferred or is to sell or transfer to any other Person (other than

                                      -90-
<PAGE>
Company or any of its Subsidiaries) or (ii) which Company or any of its
Subsidiaries intends to use for substantially the same purpose as any other
property which has been or is to be sold or transferred by Company or any of its
Subsidiaries to any Person (other than Company or any of its Subsidiaries) in
connection with such lease; provided that Company and its Subsidiaries may
become and remain liable as lessee, guarantor or other surety with respect to
any such lease if and to the extent that Company or any of its Subsidiaries
would be permitted to enter into, and remain liable under, such lease under
subsection 6.9. Notwithstanding the foregoing provisions of this subsection
6.10, this subsection 6.10 shall not restrict or prohibit in any manner
consummation of the AFL III Restructuring.

6.11     SALE OR DISCOUNT OF RECEIVABLES.

         Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, sell with recourse, or discount or otherwise sell for
less than the face value thereof, any of its notes or accounts receivable.

6.12     TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.

         Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction
(including, without limitation, the purchase, sale, lease or exchange of any
property or the rendering of any service) with any holder of 10% or more of any
class of equity Securities of Company or with any Affiliate of Company or of any
such holder, on terms that are less favorable to Company or that Subsidiary, as
the case may be, than those that might be obtained at the time from Persons who
are not such a holder or Affiliate Holding Company; provided that the foregoing
restrictions shall not apply to (i) reasonable and customary fees paid to and
indemnification of members of the Boards of Directors of Company and its
Subsidiaries, (ii) reasonable and customary salaries, bonuses and other
compensation paid to and indemnification of employees of Company or any of its
Subsidiaries in accordance with past practice or approved by the compensation
committee of Company, (iii) transactions contemplated in connection with the AFL
III Restructuring or (iv) the Holding Company Reorganization.

6.13     DISPOSAL OF SUBSIDIARY STOCK.

         Company shall not:

                  (i) directly or indirectly sell, assign, pledge or otherwise
         encumber or dispose of any shares of capital stock or other equity
         Securities of any of its Subsidiaries, except to qualify directors if
         required by applicable law or to a wholly owned Subsidiary of Company;
         or

                  (ii) permit any of its Subsidiaries directly or indirectly to
         sell, assign, pledge or otherwise encumber or dispose of any shares of
         capital stock or other equity Securities of any of its Subsidiaries
         (including such Subsidiary), except to Company, another wholly owned
         Subsidiary of Company, or to qualify directors if required by

                                      -91-
<PAGE>
         applicable law.

Notwithstanding the foregoing, AFL III shall be permitted to issue preferred
stock in an amount not to exceed $100,000 to a third party.

6.14     CONDUCT OF BUSINESS.

         From and after the Fourth Restatement Date, Company shall not, and
shall not permit any of its Subsidiaries to, engage in any business other than
(i) the businesses engaged in by Company and its Subsidiaries on the Fourth
Restatement Date and similar or related businesses and (ii) such other lines of
business as may be consented to by Requisite Lenders.

6.15     CHANGE OF CHIEF EXECUTIVE OFFICE.

         Company shall not, and shall not permit any of its Subsidiaries to,
change its chief executive office without giving 30 days' prior written notice
to the Administrative Agent.

                                   SECTION 7.
                                EVENTS OF DEFAULT

         If any of the following conditions or events ("EVENTS OF DEFAULT")
         shall occur:

7.1      FAILURE TO MAKE PAYMENTS WHEN DUE.

         Failure by Company to pay any installment of principal of any Loan when
due, whether at stated maturity, by acceleration, by notice of voluntary
prepayment, by mandatory prepayment or otherwise; or failure by Company to pay
any interest on any Loan or any fee or any other amount due under this Agreement
within five days after the date due; or

7.2      DEFAULT IN OTHER AGREEMENTS.

         (i) Failure of Company or any of its Subsidiaries to pay when due
following applicable grace periods (a) any principal of or interest on any
Indebtedness (other than Indebtedness referred to in subsection 7.1) in an
individual principal amount of $5 million or more or any items of Indebtedness
with an aggregate principal amount of $10 million or more or (b) any Contingent
Obligation in an individual principal amount of $5 million or more or any
Contingent Obligations with an aggregate principal amount of $10 million or
more, in each case beyond the end of any grace period provided therefor; or (ii)
breach or default by Company or any of its Subsidiaries with respect to any
other material term of (a) any evidence of any Indebtedness in an individual
principal amount of $5 million or more or any items of Indebtedness with an
aggregate principal amount of $10 million or more or any Contingent Obligation
in an individual principal amount of $5 million or more or any Contingent
Obligations with an aggregate principal amount of $10 million or more or (b) any
loan agreement, mortgage, indenture or other agreement relating to such
Indebtedness or Contingent Obligation(s), if the effect of such breach or
default is to cause, or to permit the

                                      -92-
<PAGE>
holder or holders of that Indebtedness or Contingent Obligation(s) (or a trustee
on behalf of such holder or holders) to cause, that Indebtedness or Contingent
Obligation(s) to become or be declared due and payable prior to its stated
maturity or the stated maturity of any underlying obligation, as the case may be
(upon the giving or receiving of notice, lapse of time, both, or otherwise);
provided that the foregoing shall not apply to Indebtedness under the AFL III
Financing Agreement; or

7.3      BREACH OF CERTAIN COVENANTS.

         Failure of Company to perform or comply in any material respect with
any term or condition contained in subsection 2.5 or 5.2 or subsection 6.1, 6.2
(as it relates to prohibitions on Liens on Financed Aircraft), 6.5, 6.7 (as it
relates to the sale of any Financed Aircraft or all or substantially all of the
assets of Company or to the merger of Company into any other Person), 6.8, 6.10
and 6.13 of this Agreement or in clauses (i) and (ii) of Section 4(c), Section
4(d) or Section 4(g) of any First Aircraft Chattel Mortgage; or

7.4      BREACH OF WARRANTY.

         Any representation, warranty, certification or other statement made by
Company or any of its Subsidiaries in any Loan Document or in any statement or
certificate at any time given by Company or any of its Subsidiaries in writing
pursuant hereto or thereto or in connection herewith or therewith shall be false
in any material respect on the date as of which made; or

7.5      OTHER DEFAULTS UNDER LOAN DOCUMENTS.

         (i) Any Loan Party shall default in the performance of or compliance
with any term contained in this Agreement or any of the other Loan Documents,
other than any such term referred to in any other subsection of this Section 7,
and such default shall not have been remedied or waived (x) within 15 days after
the earlier of (a) an officer of Company becoming aware of such default or (b)
receipt by Company of notice from Administrative Agent or any Lender of such
default or (y) with respect to a default under subsection 6.6, the earlier of
(a) an officer of Company becoming aware of the default after the applicable
measurement date and (b) the delivery of financial statements pursuant to
subsection 5.1 or (ii) a guaranty, if any, of the Obligations for any reason
ceases to be in full force and effect; or

7.6      INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.

         (i) A court having jurisdiction in the premises shall enter a decree or
order for relief in respect of Company or any of its Subsidiaries in an
involuntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, which decree
or order is not stayed; or any other similar relief shall be granted under any
applicable federal or state law; or (ii) an involuntary case shall be commenced
against Company or any of its material Subsidiaries under the Bankruptcy Code or
under any other

                                      -93-
<PAGE>
applicable bankruptcy, insolvency or similar law now or hereafter in effect; or
a decree or order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, sequestrator, trustee, custodian or other
officer having similar powers over Company or any of its Subsidiaries, or over
all or a substantial part of its property, shall have been entered; or there
shall have occurred the involuntary appointment of an interim receiver, trustee
or other custodian of Company or any of its Subsidiaries for all or a
substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of Company or any of its Subsidiaries, and any such event described in
this clause (ii) shall continue for 60 days unless dismissed, bonded or
discharged; or

7.7      VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.

         (i) Company or any of its material Subsidiaries shall have an order for
relief entered with respect to it or commence a voluntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, or shall consent to the entry of an order for
relief in an involuntary case, or to the conversion of an involuntary case to a
voluntary case, under any such law, or shall consent to the appointment of or
taking possession by a receiver, trustee or other custodian for all or a
substantial part of its property; or Company or any of its Subsidiaries shall
make any assignment for the benefit of creditors; or (ii) Company or any of its
Subsidiaries shall be unable, or shall fail generally, or shall admit in writing
its inability, to pay its debts as such debts become due; or the Board of
Directors of Company or any of its Subsidiaries (or any committee thereof) shall
adopt any resolution or otherwise authorize any action to approve any of the
actions referred to in clause (i) above or this clause (ii); or

7.8      JUDGMENTS AND ATTACHMENTS.

         Any money judgment, writ or warrant of attachment or similar process
involving (i) in any individual case an amount in excess of $5 million or (ii)
in the aggregate at any time an amount in excess of $10 million (in either case
not adequately covered by insurance as to which a solvent and unaffiliated
insurance company has acknowledged coverage) shall be entered or filed against
Company or any of its Subsidiaries or any of their respective assets and shall
remain undischarged, unvacated, unbonded or unstayed for a period of 60 days (or
in any event later than five days prior to the date of any proposed sale
thereunder); or

7.9      DISSOLUTION.

         Any order, judgment or decree shall be entered against Company or any
of its material Subsidiaries decreeing the dissolution or split up of Company or
that Subsidiary and such order shall remain undischarged or unstayed for a
period in excess of 30 days; or

                                      -94-
<PAGE>
7.10     CHANGE IN CONTROL.

         (i) (a) Permitted Holders shall cease to beneficially own and control
shares of capital stock of Company representing at least 30% of the combined
voting power of all Securities of Company entitled to vote in the election of
directors, other than Securities having such power only by reason of the
happening of a contingency, or (b) any Person or any two or more Persons acting
in concert (in any such case, excluding Permitted Holders) shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Exchange Act), directly or indirectly, of
Securities of Company (or other Securities convertible into such Securities)
representing 20% or more of the combined voting power of all Securities of
Company entitled to vote in the election of directors, other than Securities
having such power only by reason of the happening of a contingency or (c) the
Board of Directors of Company shall not consist of a majority Continuing
Directors or (ii) a "Change of Control" shall occur under any of the Pass
Through Trust Documents, any of the Senior Note Documents or any other Material
Agreement (as in effect on the date of such occurrence); provided that,
following consummation of the Holding Company Reorganization (x) the references
in clause (i) above to Company shall be deemed to be reference to the Holding
Company and (y) it shall also be an Event of Default if at any time Holding
Company ceases to own directly or indirectly 100% of the outstanding Securities
of Company; provided further, that an Event of Default under clause (ii) above
arising as a result of the Holding Company Reorganization shall not constitute
an "Event of Default"; provided further, that in the event that Permitted
Holders cease to own 30% of the combined voting power of all Securities of
Company (or the Holding Company, as the case may be) because of the issuance of
Securities of Company (or the Holding Company, as the case may be) (as opposed
to the Permitted Holders selling Securities) then the failure to maintain the
30% ownership level shall not constitute an Event of Default unless the
Permitted Holders shall cease to own shares of capital stock constituting 25% of
the combined voting power of all Securities of Company (or the Holding Company,
as the case may be); or

7.11     FAILURE OF SECURITY.

         Upon execution and delivery thereof, any Collateral Document shall, at
any time, cease to be in full force and effect (other than by reason of a
release of Collateral thereunder in accordance with the terms hereof or thereof,
the satisfaction in full of the Obligations or any other termination of such
Collateral Document in accordance with the terms hereof or thereof) or shall be
declared null and void, or the validity or enforceability thereof shall be
contested in writing by any Loan Party, or Administrative Agent shall not have
or shall cease to have a valid security interest in any Collateral purported to
be covered thereby, perfected and with the priority required by the relevant
Collateral Document, for any reason other than the failure of Administrative
Agent or any Lender to take any action within its control, subject only to Liens
permitted under the applicable Collateral Documents; or

                                      -95-
<PAGE>
7.12     CERTIFICATED AS AIR CARRIER.

         Company for any reason ceases to be a United States Citizen or to hold
an air carrier operating certificate under the Federal Aviation Act for aircraft
capable of carrying 10 or more individuals or 6,000 pounds or more of cargo; or

7.13     MATERIAL AGREEMENTS.

         Any Material Agreement, other than any Approved Lease, shall at any
time be terminated other than by its terms or cease to be in full force and
effect other than by its terms, or any party to the Modification Agreement or
any Purchase Agreement shall default in the observance or performance of any
material covenants or agreements contained in any such agreement; or

7.14     "CHANGE OF CONTROL" PUT PAYMENTS.

         Company becomes obligated to make any "change of control" put payments
in connection with the Holding Company Reorganization that, when aggregated with
all payments made under subsection 6.5(vi), exceed $75,000,000 or, after giving
effect to such "change of control" put payments, (A) Company shall have less
than $150,000,000 in Cash or Cash Equivalents on its balance sheet or (B) its
Leverage Ratio (calculated on a pro forma basis as if the proposed payment had
been consummated on the last day of the most recent four fiscal quarter period)
shall exceed the lower of 4.25:1.00 or the ratio to be met in accordance with
subsection 6.6B for the immediately succeeding fiscal quarter end:

THEN (i) upon the occurrence of any Event of Default described in subsection 7.6
or 7.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans and (b) all other Obligations shall automatically become immediately due
and payable, without presentment, demand, protest or other requirements of any
kind, all of which are hereby expressly waived by Company, and the obligation of
each Lender to make any Loan shall thereupon terminate and (ii) upon the
occurrence and during the continuation of any other Event of Default,
Administrative Agent shall, upon the written request or with the written consent
of Requisite Lenders, by written notice to Company, declare all or any portion
of the amounts described in clauses (a) and (b) above to be, and the same shall
forthwith become, immediately due and payable, and the obligation of each Lender
to make any Loan shall thereupon terminate.

         Notwithstanding anything contained in the second preceding paragraph,
if at any time within 60 days after an acceleration of the Loans pursuant to
such paragraph Company shall pay all arrears of interest and all payments on
account of principal which shall have become due otherwise than as a result of
such acceleration (with interest on principal and, to the extent permitted by
law, on overdue interest, at the rates specified in this Agreement) and all
Events of Default and Potential Events of Default (other than non-payment of the
principal of and accrued interest on the Loans, in each case which is due and
payable solely by virtue of acceleration) shall be remedied or waived pursuant
to subsection 9.6, then Requisite Lenders,

                                      -96-
<PAGE>
by written notice to Company, may at their option rescind and annul such
acceleration and its consequences; but such action shall not affect any
subsequent Event of Default or Potential Event of Default or impair any right
consequent thereon. The provisions of this paragraph are intended merely to bind
Lenders to a decision which may be made at the election of Requisite Lenders and
are not intended to benefit Company and do not grant Company the right to
require Lenders to rescind or annul any acceleration hereunder, even if the
conditions set forth herein are met.

                                   SECTION 8.
                                      AGENT

8.1      APPOINTMENT.

         Bankers Trust is hereby appointed Administrative Agent hereunder and
under the other Loan Documents and each Lender hereby authorizes Administrative
Agent to act as its agent in accordance with the terms of this Agreement and the
other Loan Documents. Administrative Agent agrees to act upon the express
conditions contained in this Agreement and the other Loan Documents, as
applicable. The provisions of this Section 8 are solely for the benefit of
Administrative Agent and Lenders and Company shall have no rights as a third
party beneficiary of any of the provisions thereof. In performing its functions
and duties under this Agreement, Administrative Agent shall act solely as an
agent of Lenders and does not assume and shall not be deemed to have assumed any
obligation towards or relationship of agency or trust with or for Company or any
of its Subsidiaries.

8.2      POWERS AND DUTIES; GENERAL IMMUNITY.

         A. POWERS; DUTIES SPECIFIED. Each Lender irrevocably authorizes
Administrative Agent to take such action on such Lender's behalf and to exercise
such powers, rights and remedies hereunder and under the other Loan Documents as
are specifically delegated or granted to Administrative Agent by the terms
hereof and thereof, together with such powers, rights and remedies as are
reasonably incidental thereto. Administrative Agent shall have only those duties
and responsibilities that are expressly specified in this Agreement and the
other Loan Documents. Administrative Agent may exercise such powers, rights and
remedies and perform such duties by or through its agents or employees.
Administrative Agent shall not have, by reason of this Agreement or any of the
other Loan Documents, a fiduciary relationship in respect of any Lender; and
nothing in this Agreement or any of the other Loan Documents, expressed or
implied, is intended to or shall be so construed as to impose upon
Administrative Agent any obligations in respect of this Agreement or any of the
other Loan Documents except as expressly set forth herein or therein.

         B. NO RESPONSIBILITY FOR CERTAIN MATTERS. Administrative Agent shall
not be responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement or any
other Loan Document or for any representations, warranties, recitals or
statements made herein or therein or made in

                                      -97-
<PAGE>
any written or oral statements or in any financial or other statements,
instruments, reports or certificates or any other documents furnished or made by
Administrative Agent to Lenders or by or on behalf of Company to Administrative
Agent or any Lender in connection with the Loan Documents and the transactions
contemplated thereby or for the financial condition or business affairs of
Company or any other Person liable for the payment of any Obligations, nor shall
Administrative Agent be required to ascertain or inquire as to the performance
or observance of any of the terms, conditions, provisions, covenants or
agreements contained in any of the Loan Documents or as to the use of the
proceeds of the Loans or as to the existence or possible existence of any Event
of Default or Potential Event of Default. Anything contained in this Agreement
to the contrary notwithstanding, Administrative Agent shall not have any
liability arising from confirmations of the amount of outstanding Loans or the
component amounts thereof.

         C. EXCULPATORY PROVISIONS. Neither of Administrative Agent nor any of
its officers, directors, partners, employees or agents shall be liable to
Lenders for any action taken or omitted by Administrative Agent under or in
connection with any of the Loan Documents except to the extent caused by
Administrative Agent's gross negligence or willful misconduct. If Administrative
Agent shall request instructions from Lenders with respect to any act or action
(including the failure to take an action) in connection with this Agreement or
any of the other Loan Documents, Administrative Agent shall be entitled to
refrain from such act or taking such action unless and until Administrative
Agent shall have received instructions from Requisite Lenders. Without prejudice
to the generality of the foregoing, (i) Administrative Agent shall be entitled
to rely, and shall be fully protected in relying, upon any communication,
instrument or document believed by it to be genuine and correct and to have been
signed or sent by the proper person or persons, and shall be entitled to rely
and shall be protected in relying on opinions and judgments of attorneys (who
may be attorneys for Company and its Subsidiaries), accountants, experts and
other professional advisors selected by it; and (ii) no Lender shall have any
right of action whatsoever against Administrative Agent as a result of
Administrative Agent acting or (where so instructed) refraining from acting
under this Agreement or any of the other Loan Documents in accordance with the
instructions of Requisite Lenders. Administrative Agent shall be entitled to
refrain from exercising any power, discretion or authority vested in it under
this Agreement or any of the other Loan Documents unless and until it has
obtained the instructions of Requisite Lenders.

         D. ADMINISTRATIVE AGENT ENTITLED TO ACT AS LENDER. The agency hereby
created shall in no way impair or affect any of the rights and powers of, or
impose any duties or obligations upon, Administrative Agent in its individual
capacity as a Lender hereunder. With respect to its participations in the Loans,
Administrative Agent shall have the same rights and powers hereunder as any
other Lender and may exercise the same as though it were not performing the
duties and functions delegated to it hereunder, and the term "Lender" or
"Lenders" or any similar term shall, unless the context clearly otherwise
indicates, include Administrative Agent in its individual capacity.
Administrative Agent and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of banking, trust,

                                      -98-
<PAGE>
financial advisory or other business with Company or any of its Affiliates as if
it were not performing the duties specified herein, and may accept fees and
other consideration from Company for services in connection with this Agreement
and otherwise without having to account for the same to Lenders.

8.3      REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF
CREDITWORTHINESS.

         Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with the making of the Loans hereunder and that
it has made and shall continue to make its own appraisal of the creditworthiness
of Company and its Subsidiaries. Administrative Agent shall have no duty or
responsibility, either initially or on a continuing basis, to make any such
investigation or any such appraisal on behalf of Lenders or to provide any
Lender with any credit or other information with respect thereto, whether coming
into its possession before the making of the Loans or at any time or times
thereafter, and Administrative Agent shall not have responsibility with respect
to the accuracy of or the completeness of any information provided to Lenders.

8.4      RIGHT TO INDEMNITY.

         Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify Administrative Agent (and its respective affiliates and partners), to
the extent that Administrative Agent shall not have been reimbursed by Company,
for and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including, without
limitation, counsel fees and disbursements) or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against
Administrative Agent in exercising its powers, rights and remedies or performing
its duties hereunder or under the other Loan Documents or otherwise in its
capacity as Administrative Agent, in any way relating to or arising out of this
Agreement or the other Loan Documents; provided that no Lender shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from
Administrative Agent's gross negligence or willful misconduct.

8.5      COLLATERAL DOCUMENTS.

         Without limiting the generality of subsection 8.1, each Lender hereby
further authorizes Administrative Agent to enter into the Collateral Documents
as secured party on behalf of and for the benefit of such Lender and agrees to
be bound by the terms of each of the Collateral Documents; provided that, except
as otherwise provided below, Administrative Agent shall not enter into or
consent to any amendment, modification, termination or waiver of any provision
contained in any Collateral Document without prior written consent of Requisite
Lenders. Anything contained in any of the Loan Documents to the contrary
notwithstanding, each Lender agrees that no Lender shall have any right
individually to

                                      -99-
<PAGE>
realize upon any of the collateral under any Collateral Document, it being
understood and agreed that all powers, rights and remedies under the Collateral
Documents may be exercised solely by Administrative Agent for the benefit of
Lenders in accordance with the terms thereof. Each Lender hereby authorizes
Administrative Agent (i) to release or subordinate Collateral as permitted or
required under this Agreement or the Collateral Documents, and agrees that a
certificate executed by Administrative Agent evidencing such release of
Collateral shall be conclusive evidence of such release as to any third party
and (ii) to enter into any amendments of the Collateral Documents to cure any
ambiguity, defect or inconsistency or to amend provisions relating to
ministerial or administrative matters which do not materially adversely affect
the rights of the Lenders thereunder.

8.6      SUCCESSOR ADMINISTRATIVE AGENT.

         Administrative Agent may resign at any time by giving 30 days' prior
written notice thereof to Lenders and Company. Upon any such notice of
resignation, Requisite Lenders shall have the right, upon consultation with
Company, to appoint a successor Administrative Agent. Upon the acceptance of any
appointment hereunder by a successor Administrative Agent, that successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent and
the retiring or removed Administrative Agent shall be discharged from its duties
and obligations under this Agreement. After any retiring Administrative Agent's
resignation hereunder as Administrative Agent, the provisions of this Section 8
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement.

                                   SECTION 9.
                                  MISCELLANEOUS

9.1      ASSIGNMENTS AND PARTICIPATIONS IN LOANS.

         A. GENERAL. Each Lender shall have the right at any time to (i) sell,
assign or transfer to any Eligible Assignee, or (ii) sell participations to any
Person in, all or any part of its Commitments or any Loan or Loans made by it or
any other interest herein or in any other Obligations owed to it; provided that
no such sale, assignment, transfer or participation shall, without the consent
of Company, require Company to file a registration statement with the Securities
and Exchange Commission or apply to qualify such sale, assignment, transfer or
participation under the securities laws of any state; provided, further that no
such sale, assignment or transfer described in clause (i) above shall be
effective unless and until (a) an Assignment Agreement effecting such sale,
assignment or transfer shall have been accepted by Administrative Agent and
recorded in the Register as provided in subsection 9.1B(ii) or (b) the sale,
assignment or transfer is made in accordance with subsection 9.21. Except as
otherwise provided in this subsection 9.1, no Lender shall, as between Company
and such Lender, be relieved of any of its obligations hereunder as a result of
any sale, assignment or

                                     -100-
<PAGE>
transfer of, or any granting of participations in, all or any part of its
Commitments or the Loans, or the other Obligations owed to such Lender.

         B.       ASSIGNMENTS.

                  (i) Amounts and Terms of Assignments. Each Commitment, Loan or
         other Obligation may (a) be assigned in any amount to another Lender,
         or to an Affiliate of the assigning Lender or another Lender, with the
         giving of notice to Company and Administrative Agent or (b) be assigned
         in an aggregate amount of not less than $5,000,000 (or such lesser
         amount as shall constitute the aggregate amount of the Commitments,
         Loans, and other Obligations of the assigning Lender) to any other
         Eligible Assignee with the giving of notice to Company and with the
         consent of Administrative Agent and Company (which consent shall not be
         unreasonably withheld). Any assignment of Loans hereunder shall effect
         a pro rata assignment of the Notes with respect to each Financed
         Aircraft. To the extent of any such assignment in accordance with
         either clause (a) or (b) above, the assigning Lender shall be relieved
         of its obligations with respect to its Commitments, Loans, or other
         Obligations or the portion thereof so assigned. The parties to each
         such assignment shall execute and deliver to Administrative Agent, for
         its acceptance and recording in the Register, an Assignment Agreement,
         together with a processing and recordation fee of $3,000 and such
         forms, certificates or other evidence, if any, with respect to United
         States federal income tax withholding matters as the assignee under
         such Assignment Agreement may be required to deliver to Administrative
         Agent pursuant to subsection 2.7B(iii)(a); provided, however that such
         processing fee shall not be required where the assignee is an existing
         Lender. Upon such execution, delivery and acceptance, from and after
         the effective date specified in such Assignment Agreement, (y) the
         assignee thereunder shall be a party hereto and, to the extent that
         rights and obligations hereunder have been assigned to it pursuant to
         such Assignment Agreement, shall have the rights and obligations of a
         Lender hereunder and (z) the assigning Lender thereunder shall, to the
         extent that rights and obligations hereunder have been assigned by it
         pursuant to such Assignment Agreement, relinquish its rights and be
         released from its obligations under this Agreement (and, in the case of
         an Assignment Agreement covering all or the remaining portion of an
         assigning Lender's rights and obligations under this Agreement, such
         Lender shall cease to be a party hereto). The Commitments hereunder
         shall be modified to reflect the Commitment of such assignee and any
         remaining Commitment of such assigning Lender and, if any such
         assignment occurs after the issuance of the Notes hereunder, the
         assigning Lender shall, upon the effectiveness of such assignment or as
         promptly thereafter as practicable, surrender its applicable Notes to
         Administrative Agent for cancellation, and thereupon new Notes shall be
         issued to the assignee substantially in the form of Exhibit IIIA
         annexed hereto or Exhibit IIIB, as the case may be, with appropriate
         insertions, to reflect the new Commitments and/or outstanding Loans, as
         the case may be, of the assignee and/or the assigning Lender.

                                     -101-
<PAGE>
                  (ii) Acceptance by Administrative Agent; Recordation in
         Register. Upon its receipt of an Assignment Agreement executed by an
         assigning Lender and an assignee representing that it is an Eligible
         Assignee, together with the processing and recordation fee referred to
         in subsection 9.1B(i) and any forms, certificates or other evidence
         with respect to United States federal income tax withholding matters
         that such assignee may be required to deliver to Administrative Agent
         pursuant to subsection 2.7B(iii)(a), Administrative Agent shall, if
         such Assignment Agreement has been completed and is in substantially
         the form of Exhibit VII hereto and if Administrative Agent has
         consented to the assignment evidenced thereby to the extent such
         consent is required pursuant to subsection 9.1B(i)), (a) accept such
         Assignment Agreement by executing a counterpart thereof as provided
         therein (which acceptance shall evidence any required consent of
         Administrative Agent to such assignment), (b) record the information
         contained therein in the Register and (c) give prompt notice thereof to
         Company. Administrative Agent shall maintain a copy of each Assignment
         Agreement delivered to and accepted by it as provided in this
         subsection 9.1B(ii).

         C. PARTICIPATIONS. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the scheduled final maturity date of any
Loan allocated to such participation, (ii) a reduction of the principal amount
of or the rate of interest payable on any Loan allocated to such participation
or (iii) a release of Collateral, and all amounts payable by Company hereunder
(including without limitation amounts payable to such Lender pursuant to
subsections 2.6D and 2.7) shall be determined as if such Lender had not sold
such participation. Company and each Lender hereby acknowledge and agree that,
solely for purposes of subsection 9.5, (a) any participation will give rise to a
direct obligation of Company to the participant and (b) the participant shall be
considered to be a "Lender".

         D. ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to the assignments
and participations permitted under the foregoing provisions of this subsection
9.1, any Lender may assign and pledge all or any portion of its Loans, the other
Obligations owed to such Lender, and its Notes to any Federal Reserve Bank as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any operating circular issued by such Federal Reserve
Bank; provided that (i) no Lender shall, as between Company and such Lender, be
relieved of any of its obligations hereunder as a result of any such assignment
and pledge and (ii) in no event shall such Federal Reserve Bank be considered to
be a "Lender" or be entitled to require the assigning Lender to take or omit to
take any action hereunder.

         E. INFORMATION. Each Lender may furnish any information concerning
Company and its Subsidiaries in the possession of that Lender from time to time
to assignees and participants (including prospective assignees and
participants), subject to subsection 9.19.

                                     -102-
<PAGE>
9.2      EXPENSES.

         Whether or not the transactions contemplated hereby shall be
consummated, Company agrees to pay promptly (i) all the actual and reasonable
costs and expenses of preparation of the Loan Documents; (ii) all the costs of
furnishing all opinions by counsel for Company (including without limitation any
opinions requested by Lenders as to any legal matters arising hereunder) and of
Company's performance of and compliance with all agreements and conditions on
its part to be performed or complied with under this Agreement and the other
Loan Documents including, without limitation, with respect to confirming
compliance with environmental and insurance requirements; (iii) the reasonable
fees, expenses and disbursements of counsel to Administrative Agent in
connection with the negotiation, preparation, execution and administration of
the Loan Documents and the Loans and any consents, amendments, waivers or other
modifications hereto or thereto and any other documents or matters requested by
Company; (iv) all the costs and expenses of creating and perfecting the Liens in
favor of Administrative Agent for the benefit of Lenders pursuant to the Loan
Documents, including filing and recording fees and expenses, title insurance,
fees and expenses of counsel for providing such opinions as Lenders may
reasonably request and fees and expenses of legal counsel to Administrative
Agent (including local counsel); (v) all other actual and reasonable costs and
expenses incurred by Administrative Agent in connection with the syndication of
the Commitments and the negotiation, preparation and execution of the Loan
Documents and the transactions contemplated hereby and thereby; provided that
such costs and expenses of syndication shall not exceed $10,000; and (vi) after
the occurrence of an Event of Default, all costs and expenses, including
reasonable attorneys' fees (including allocated costs of internal counsel) and
costs of settlement, incurred by Administrative Agent and Lenders in enforcing
any Obligations of or in collecting any payments due from Company hereunder or
under the other Loan Documents by reason of such Event of Default or in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "work-out" or pursuant to any
insolvency or bankruptcy proceedings.

9.3      INDEMNITY.

         In addition to the payment of expenses pursuant to subsection 9.2,
whether or not the transactions contemplated hereby shall be consummated,
Company agrees to defend, indemnify, pay and hold harmless Administrative Agent
and Lenders, and the officers, directors, partners, employees, agents and
affiliates of Administrative Agent and Lenders (collectively called the
"INDEMNITIES") from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs, expenses
and disbursements of any kind or nature whatsoever (including without limitation
the reasonable fees and disbursements of counsel for such Indemnities in
connection with any investigative, administrative or judicial proceeding
commenced or threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto), whether direct, indirect
or consequential and whether based on any federal, state or foreign laws,

                                     -103-
<PAGE>
statutes, rules or regulations (including without limitation securities and
commercial laws, statutes, rules or regulations and Environmental Laws), on
common law or equitable cause or on contract or otherwise, that may be imposed
on, incurred by, or asserted against any such Indemnitee, in any manner relating
to or arising out of this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby (including without limitation
Lenders' agreement to make the Loans hereunder or the use or intended use of the
proceeds of any of the Loans) or the statements contained in the commitment
letter delivered by any Lender to Company with respect thereto (collectively
called the "INDEMNIFIED LIABILITIES"); provided that Company shall not have any
obligation to any Indemnitee hereunder with respect to any Indemnified
Liabilities to the extent such Indemnified Liabilities arise solely from the
gross negligence or willful misconduct of that Indemnitee as determined by a
final judgment of a court of competent jurisdiction. To the extent that the
undertaking to defend, indemnify, pay and hold harmless set forth in the
preceding sentence may be unenforceable because it is violative of any law or
public policy, Company shall contribute the maximum portion that it is permitted
to pay and satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by the Indemnities or any of them.

9.4      SET-OFF.

         In addition to any rights now or hereafter granted under applicable law
and not by way of limitation of any such rights, upon the occurrence of any
Event of Default each Lender is hereby authorized by Company at any time or from
time to time, without notice to Company or to any other Person, any such notice
being hereby expressly waived, to set off and to appropriate and to apply any
and all deposits (general or special, including, but not limited to,
Indebtedness evidenced by certificates of deposit, whether matured or unmatured,
but not including trust accounts) and any other Indebtedness at any time held or
owing by that Lender to or for the credit or the account of Company against and
on account of the obligations and liabilities of Company to that Lender under
this Agreement, the Notes, and the other Loan Documents, including, but not
limited to, all claims of any nature or description arising out of or connected
with this Agreement, the Notes, or any other Loan Document, irrespective of
whether or not (i) that Lender shall have made any demand hereunder or (ii) the
principal of or the interest on the Loans or any other amounts due hereunder
shall have become due and payable pursuant to Section 7 and although said
obligations and liabilities, or any of them, may be contingent or unmatured.

9.5      RATABLE SHARING.

         Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment, by realization upon security, through the exercise
of any right of set-off or banker's lien, by counterclaim or cross action or by
the enforcement of any right under the Loan Documents or otherwise, or as
adequate protection of a deposit treated as cash collateral under the Bankruptcy
Code, receive payment or reduction of a proportion of the aggregate amount of
principal, interest, fees and other amounts then due and owing to that Lender

                                     -104-
<PAGE>
hereunder or under the other Loan Documents (collectively, the "AGGREGATE
AMOUNTS DUE" to such Lender) which is greater than the proportion received by
any other Lender in respect of the Aggregate Amounts Due to such other Lender,
then the Lender receiving such proportionately greater payment shall (i) notify
Administrative Agent and each other Lender of the receipt of such payment and
(ii) apply a portion of such payment to purchase participations (which it shall
be deemed to have purchased from each seller of a participation simultaneously
upon the receipt by such seller of its portion of such payment) in the Aggregate
Amounts Due to the other Lenders so that all such recoveries of Aggregate
Amounts Due shall be shared by all Lenders in proportion to the Aggregate
Amounts Due to them; provided that if all or part of such proportionately
greater payment received by such purchasing Lender is thereafter recovered from
such Lender upon the bankruptcy or reorganization of Company or otherwise, those
purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such purchasing Lender ratably to the extent
of such recovery, but without interest. Company expressly consents to the
foregoing arrangement and agrees that any holder of a participation so purchased
may exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies owing by Company to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder.

9.6      AMENDMENTS AND WAIVERS.

         A. No amendment, modification, termination or waiver of any provision
of this Agreement or of the Notes, or consent to any departure by Company
therefrom, shall in any event be effective without the written concurrence of
Requisite Lenders; provided that any such amendment, modification, termination,
waiver or consent which: increases the amount of any of the Commitments or
reduces the principal amount of any of the Loans; changes any Lender's Pro Rata
Share; changes in any manner the definition of "Requisite Lenders"; changes in
any manner any provision of this Agreement which, by its terms, expressly
requires the approval or concurrence of all Lenders; postpones the Final
Scheduled Maturity Date (but not the date of any scheduled installment of
principal) of any of the Loans; postpones the date on which any interest or any
fees are payable; decreases the interest rate borne by any of the Loans (other
than any waiver of any increase in the interest rate applicable to any of the
Loans pursuant to subsection 2.2E) or the amount of any fees payable hereunder;
increases the maximum duration of Interest Periods permitted hereunder; releases
all or substantially all of the Collateral; or changes in any manner the
provisions contained in subsection 7.1 or this subsection 9.6 shall be effective
only if evidenced by a writing signed by or on behalf of all Lenders to whom are
owed Obligations being directly affected by such amendment, modification,
termination, waiver or consent. In addition, (i) any amendment, modification,
termination or waiver of any of the provisions contained in Section 3 shall be
effective only if evidenced by a writing signed by or on behalf of
Administrative Agent and Requisite Lenders, (ii) no amendment, modification,
termination or waiver of any provision of any Note shall be effective without
the written concurrence of the Lender which is the holder of that Note, (iii) no
increase in the Commitments of any Lender over the amount thereof then

                                     -105-
<PAGE>
in effect shall be effective without the written concurrence of that Lender, it
being understood and agreed that in no event shall waivers or modifications of
conditions precedent, covenants, Events of Default, Potential Events of Default
or of a mandatory prepayment or a reduction of any or all of the Commitments be
deemed to constitute an increase of the Commitment of any Lender and that an
increase in the available portion of any Commitment of any Lender shall not be
deemed to constitute an increase in the Commitment of such Lender, and (iv) no
amendment, modification, termination or waiver of any provision of Section 7 or
of any other provision of this Agreement which, by its terms, expressly requires
the approval or concurrence of Administrative Agent shall be effective without
the written concurrence of Administrative Agent. Administrative Agent may, but
shall have no obligation to, with the concurrence of any Lender, execute
amendments, modifications, waivers or consents on behalf of that Lender. Any
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given. No notice to or demand on Company in
any case shall entitle Company to any other or further notice or demand in
similar or other circumstances. Any amendment, modification, termination, waiver
or consent effected in accordance with this subsection 9.6 shall be binding upon
each Lender at the time outstanding, each future Lender and, if signed by
Company, on Company. Notwithstanding anything in this subsection 9.6A to the
contrary, the Notes and Aircraft Chattel Mortgages may be amended in the manner
and for the purposes set forth in subsection 9.21 without the consents required
by this subsection 9.6A.

         B. If, in connection with any proposed change, waiver, discharge or
termination to any of the provision of this Agreement as contemplated by the
proviso in the first sentence of this subsection 9.6, the consent of Requisite
Lenders is obtained but consent of one or more of such other Lenders whose
consent is required is not obtained, then Company may, so long as all
non-consenting Lenders are so treated, elect to terminate such Lender as a party
to this Agreement; provided that, concurrently with such termination, (i)
Company shall pay that Lender all principal, interest and fees and other amounts
owed to such Lender through such date of termination, (ii) another financial
institution satisfactory to Company and Administrative Agent (or if
Administrative Agent is also the Lender to be terminated, the successor
Administrative Agent) shall agree, as of such date, to become a Lender for all
purposes under this Agreement (whether by assignment or amendment) and to assume
all obligations of the Lender to be terminated as of such date, and (iii) all
documents and supporting materials necessary, in the judgment of Administrative
Agent (or if Administrative Agent is also the Lender to be terminated, the
successor Administrative Agent) to evidence the substitution of such Lender
shall have been received and approved by Administrative Agent as of such date.

9.7      INDEPENDENCE OF COVENANTS.

         All covenants under this Agreement shall be given independent effect so
that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or would
otherwise be within the limitations of, another

                                     -106-
<PAGE>
covenant shall not avoid the occurrence of an Event of Default or Potential
Event of Default if such action is taken or condition exists.

9.8      NOTICES.

         Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed; provided that notices to Administrative Agent shall not
be effective until received. For the purposes hereof, the address of each party
hereto shall be as set forth under such party's name on the signature pages
hereof or (i) as to Company and Administrative Agent, such other address as
shall be designated by such Person in a written notice delivered to the other
parties hereto and (ii) as to each other party, such other address as shall be
designated by such party in a written notice delivered to Administrative Agent.

9.9      SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.

         A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
hereunder.

         B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Company set forth in subsections 2.6D, 2.7, 9.2, 9.3
and 9.4 and the agreements of Lenders set forth in subsections 8.2C, 8.4 and 9.5
shall survive the payment of the Loans, and the termination of this Agreement.

9.10     FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.

         No failure or delay on the part of Administrative Agent or any Lender
in the exercise of any power, right or privilege hereunder or under any other
Loan Document shall impair such power, right or privilege or be construed to be
a waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.

9.11     MARSHALLING; PAYMENTS SET ASIDE.

         Neither Administrative Agent nor any Lender shall be under any
obligation to marshal any assets in favor of Company or any other party or
against or in payment of any or all of the Obligations. To the extent that
Company makes a payment or payments to Administrative Agent or Lenders (or to
Administrative Agent for the benefit of Lenders), or Administrative Agent or
Lenders enforce any security interests or exercise their rights of set-off, and
such

                                     -107-
<PAGE>
payment or payments or the proceeds of such enforcement or set-off or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside and/or required to be repaid to a trustee, receiver or any other party
under any bankruptcy law, any other state or federal law, common law or any
equitable cause, then, to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied, and all Liens, rights and remedies
therefor or related thereto, shall be revived and continued in full force and
effect as if such payment or payments had not been made or such enforcement or
set-off had not occurred.

9.12     SEVERABILITY.

         In case any provision in or obligation under this Agreement or the
Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

9.13     OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.

         The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement and it shall not be necessary for any other
Lender to be joined as an additional party in any proceeding for such purpose.

9.14     HEADINGS.

         Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.

9.15     APPLICABLE LAW.

         THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES.

9.16     SUCCESSORS AND ASSIGNS.

         This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to

                                     -108-
<PAGE>
subsection 9.1). Neither Company's rights or obligations hereunder nor any
interest therein may be assigned or delegated by Company without the prior
written consent of all Lenders.

9.17     CONSENT TO JURISDICTION AND SERVICE OF PROCESS.

         ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OBLIGATION MAY BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF
NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT COMPANY ACCEPTS FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED
THEREBY IN CONNECTION WITH THIS AGREEMENT, SUCH OTHER LOAN DOCUMENT OR SUCH
OBLIGATION (SUBJECT TO ANY RIGHT TO APPEAL TO A COURT IN THE STATE OF NEW YORK).
Company hereby agrees that service of all process in any such proceeding in any
such court may be made by registered or certified mail, return receipt
requested, to Company at its address provided in subsection 9.8, such service
being hereby acknowledged by Company to be sufficient for personal jurisdiction
in any action against Company in any such court and to be otherwise effective
and binding service in every respect. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
any Lender to bring proceedings against Company in the courts of any other
jurisdiction.

9.18     WAIVER OF JURY TRIAL.

         EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver
is intended to be all-encompassing of any and all disputes that may be filed in
any court and that relate to the subject matter of this transaction, including
without limitation contract claims, tort claims, breach of duty claims and all
other common law and statutory claims. Each party hereto acknowledges that this
waiver is a material inducement to enter into a business relationship, that each
has already relied on this waiver in entering into this Agreement, and that each
will continue to rely on this waiver in their related future dealings. Each
party hereto further warrants and represents that it has reviewed this waiver
with its legal counsel and that it knowingly and voluntarily waives its jury
trial rights following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER

                                     -109-
<PAGE>
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS
MADE HEREUNDER. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.

9.19     CONFIDENTIALITY.

         Each Lender shall hold all non-public information obtained pursuant to
the requirements of this Agreement which has been identified as confidential by
Company in accordance with such Lender's customary procedures for handling
confidential information of this nature, it being understood and agreed by
Company that in any event a Lender may make disclosures to any Person who
evaluates, approves, structures or administers the Loans on behalf of a Lender
and who is subject to this confidentiality provision, or, reasonably required by
any bona fide assignee, transferee or participant in connection with the
contemplated assignment or transfer by such Lender of any Loans or any
participation therein or as required or requested by any governmental or
regulatory agency (including, without limitation, the National Association of
Insurance Commissioners) or representative thereof or pursuant to legal process
or in accordance with any applicable law or regulation; provided that, unless
specifically prohibited by applicable law or court order, each Lender shall
notify Company of any request by any governmental or regulatory agency or
representative thereof (other than any such request in connection with any
examination of the financial condition of such Lender by such governmental or
regulatory agency) for disclosure of any such non-public information prior to
disclosure of such information; and provided, further that in no event shall any
Lender be obligated or required to return any materials furnished by Company or
any of its Subsidiaries.

9.20     COUNTERPARTS; EFFECTIVENESS; EFFECT IF AGREEMENT DOES NOT BECOME
         EFFECTIVE.

         This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Company and
Administrative Agent of written or telephonic notification of such execution and
authorization of delivery thereof and the satisfaction (or waiver) of each of
the conditions set forth in subsection 3.1. Until this Agreement becomes
effective, the Existing Agreement remains in full force and effect and, in the
event this Agreement does not become effective on or before April 18, 2000, the
execution and delivery of this Agreement shall be disregarded and this Agreement
shall be deemed null

                                     -110-
<PAGE>
and void for all purposes.

9.21     COOPERATION IN REFINANCING, SYNDICATION AND ASSIGNMENT.

         Company, Administrative Agent and Lenders agree that, in connection
with the refinancing, syndication or assignment of the Notes, to the extent
deemed reasonably necessary by Company or Administrative Agent, some or all of
the Financed Aircraft may be transferred to a Special Purpose Subsidiary which
will lease such aircraft to Company under arrangements reasonably acceptable to
Company and Administrative Agent all in a manner designed to retain the economic
obligations and benefits of the Company, Administrative Agent and Lenders
hereunder and under the other Loan Documents. Company, Administrative Agent and
Lenders further agree that, in connection with an assignment of Loans and Notes
to a Person who will not become a Lender hereunder, Administrative Agent and
Lenders shall agree to any amendments to the Loans and Notes to be assigned and
the related Aircraft Chattel Mortgages and/or releases of the related First
Aircraft Chattel Mortgage and Second Aircraft Chattel Mortgage, in each case, as
requested by Company; provided that the terms of such amended Notes and Aircraft
Chattel Mortgages do not violate any term of this Agreement and provided,
further, that such amendments shall be effective only upon and simultaneous with
(i) the assignment of such Notes and Aircraft Chattel Mortgages to such Person,
(ii) indefeasible payment in full to Lenders of an amount equal to all amounts
owing under such Notes and (iii) releases from any liability relating to such
Notes and Aircraft Chattel Mortgages of Administrative Agent and Lenders in form
and substance satisfactory to Administrative Agent. Assignments made in
accordance with the foregoing sentence will result in such assigned Loans and
Notes being deemed not "outstanding" hereunder and such assigned Loans and Notes
will not reduce the Revolving Loan Commitments of the Lenders otherwise
available hereunder.

9.22     REPLACEMENT ENGINES.

         A. ENGINES. So long as no Event of Default or Potential Event of
Default has occurred and is continuing, Company may, upon not less than five (5)
Business Days prior written notice to Administrative Agent, replace any Engine
which is the subject of an Aircraft Chattel Mortgage with another engine (the
"Replacement Engine") meeting the requirements of the applicable Aircraft
Chattel Mortgage. In addition to the preceding sentence, any Replacement Engine
shall be an engine that is the same or improved make and model as the Engine to
be replaced, and that is suitable for installation and use on any Airframe, and
that has a value, utility and remaining useful life (including with respect to
hours and cycles remaining until overhaul) at least equal to the Engine to be
replaced thereby.

                  The Lenders agree to release the Lien created by the
applicable Aircraft Chattel Mortgage for any Engine to be replaced by a
Replacement Engine promptly upon (i) presentation by Company of documentation
necessary to create a legal, valid and enforceable first priority security
interest in and to the Replacement Engine, (ii) delivery to Administrative

                                     -111-
<PAGE>
Agent of an opinion of Cahill Gordon & Reindel, or such other counsel as may be
acceptable to Administrative Agent, confirming that Administrative Agent will
continue to be entitled to the benefits of Section 1110 of the Bankruptcy Code
with respect to such Replacement Engine free of all Liens (other than Permitted
Encumbrances) and (iii) receipt of all other deliveries required by Section
4(f)(iii) of the applicable Aircraft Chattel Mortgage.

         B. Further Assurances. Company shall, in addition to the actions
required by the preceding subsection 9.21 A, take all necessary actions to
provide that Administrative Agent will continue to be entitled to the benefits
of Section 1110 of the Bankruptcy Code with respect to each Replacement Engine,
free of all Liens (other than Permitted Encumbrances).

                  [Remainder of page intentionally left blank]

                                     -112-
<PAGE>
         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.

         COMPANY:
                          ATLAS AIR, INC.

                          By:      ______________________________________
                                   Name:
                                   Title:

                          Notice Address:

                          538 Commons Drive
                          Golden, Colorado 80401
                          Attention:   Thomas G. Scott
                                       Senior Vice President,
                                       General Counsel and Secretary

         ADMINISTRATIVE AGENT:
                          BANKERS TRUST COMPANY,
                          as Administrative Agent and Lender

                          By:      ______________________________________
                                   Name:
                                   Title:

                          Notice Address:

                          Bankers Trust Company
                          130 Liberty Street
                          New York, New York 10006
                          Attention:   Marguerite Sutton
<PAGE>
         LENDERS:
                          CITY NATIONAL BANK

                          By:      ______________________________________
                                   Name:
                                   Title:

                          Notice Address:

                          400 North Roxbury Drive
                          Third Floor
                          Beverly Hills, California 90210
                          Attention:   James Benko

                                      -2-
<PAGE>
                          FIRST SECURITY BANK

                          By:      ______________________________________
                                   Name:
                                   Title:

                          Notice Address:

                          15 East 100 South St.
                          Second Floor
                          Salt Lake City, Utah  84111
                          Attention:  Judy Callister

                                      -3-
<PAGE>
                          FLEET NATIONAL BANK

                          By:      ______________________________________
                                   Name:
                                   Title:

                          Notice Address:

                          100 Federal Street
                          Boston, Massachusetts  02110
                          Attention:    Margot Downing

                                      -4-
<PAGE>
                          GMAC COMMERCIAL CREDIT LLC

                          By:      ______________________________________
                                   Name:
                                   Title:

                          Notice Address:

                          1290 Avenue of the Americas
                          New York, New York  10104
                          Attention:    Frank Imperato
                                        Senior Vice President

                                      -5-
<PAGE>
                          IMPERIAL BANK, A CALIFORNIA BANKING CORPORATION

                          By:      ______________________________________
                                   Name:
                                   Title:

                          Notice Address:

                          9920 South La Cienega Boulevard
                          14th Floor, Department 2405
                          Inglewood, California 90301
                          Attention: Ray Vadalma

                                      -6-
<PAGE>
                          NORWEST BANK COLORADO NATIONAL ASSOCIATION

                          By:      ______________________________________
                                   Name:
                                   Title:

                          Notice Address:

                          1740 Broadway
                          Denver, Colorado  80274
                          Attention:        Darlene Evans

                                      -7-
<PAGE>
                          SUMMIT BANK

                          By:      ______________________________________
                                   Name:
                                   Title:

                          Notice Address:

                          750 Walnut Avenue
                          Aircraft Department, Third Floor
                          Cranford, New Jersey 07016
                          Attention: Robert Ewing

                                      -8-
<PAGE>
                          TRANSAMERICA BUSINESS CREDIT CORP.

                          By:      ______________________________________
                                   Name:
                                   Title:

                          Notice Address:

                          555 Theodore Fremd Avenue
                          C301
                          Rye, New York  10580
                          Attention:        Michael Kerneklian

                                      -9-
<PAGE>
                         UNION BANK OF CALIFORNIA, N.A.

                          By:      ______________________________________
                                   Name:
                                   Title:

                          Notice Address:

                          350 California Street
                          6th Floor
                          San Francisco, California 94104
                          Attention:        Alison Mason

                                      -10-
<PAGE>
                          UNION PLANTERS BANK N.A.

                          By:      ______________________________________
                                   Name:
                                   Title:

                          Notice Address:

                          2800 Ponce De Leon Boulevard
                          9th Floor
                          Coral Gables, Florida  33134
                          Attention:        Carlos Rodriguez

                                      -11-
<PAGE>
                          U.S. BANK

                          By:      ______________________________________
                                   Name:
                                   Title:

                          Notice Address:

                          918 Seventeenth Street
                          Denver, Colorado  80202
                          Attention:        Melissa Forbes

                                      -12-[CONFORMED COPY]

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

                                CREDIT AGREEMENT

                                     among

                       ATLAS FREIGHTER LEASING III, INC.,
                                  as Borrower,

                           THE LENDERS LISTED HEREIN,
                                   as Lenders

                                      and

                             BANKERS TRUST COMPANY,
                            as Administrative Agent.

                             ----------------------
                           Dated as of April 25, 2000
                             ----------------------

                                  $300,000,000

                         DEUTSCHE BANK SECURITIES, INC.
                                 Lead Arranger
                                      and
                                  Book Manager

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

<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                         Page
                                                                                                         ----
                                                        SECTION 1.

                                                       DEFINITIONS
<S>        <C>                                                                                             <C>
   1.1     Certain Defined Terms..............................................................................1
   1.2     Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement................21
   1.3     Other Definitional Provisions.....................................................................21

                                                        SECTION 2.

                                         AMOUNTS AND TERMS OF COMMITMENTS AND LOANS

   2.1     Commitments; Making of Loans; Notes; Register.....................................................21
           A.     COMMITMENTS................................................................................21
           B.     BORROWING MECHANICS........................................................................22
           C.     DISBURSEMENT OF FUNDS......................................................................23
           D.     NOTES......................................................................................23
           E.     THE REGISTER...............................................................................24
   2.2     Interest on the Loans.............................................................................25
           A.     RATE OF INTEREST...........................................................................25
           B.     INTEREST PERIODS...........................................................................25
           C.     INTEREST PAYMENTS..........................................................................26
           D.     DEFAULT RATE...............................................................................26
           E.     COMPUTATION OF INTEREST....................................................................26
   2.3     Fees..............................................................................................27
   2.4     Repayments and Prepayments; General Provisions Regarding Payments.................................27
           A.     MANDATORY REDUCTION OF COMMITMENTS.........................................................27
           B.     SCHEDULED REPAYMENTS OF LOANS..............................................................27
           C.     PREPAYMENTS................................................................................28
           D.     GENERAL PROVISIONS REGARDING PAYMENTS......................................................32
   2.5     Use of Proceeds...................................................................................33
           A.     APPLICATION OF PROCEEDS....................................................................33
           B.     MARGIN REGULATIONS.........................................................................33
   2.6     Special Provisions Governing Loans................................................................33
           A.     DETERMINATION OF APPLICABLE INTEREST RATE..................................................33
           B.     INABILITY TO DETERMINE APPLICABLE INTEREST RATE............................................33
</TABLE>

                                      -ii-

<PAGE>

<TABLE>
<CAPTION>
                                                                                                         Page
                                                                                                         ----
<S>        <C>                                                                                             <C>
           C.     ILLEGALITY OR IMPRACTICABILITY OF LOANS....................................................34
           D.     COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST PERIODS..........................34
           E.     BOOKING OF LOANS...........................................................................35
           F.     ASSUMPTIONS CONCERNING FUNDING OF LOANS....................................................35
           G.     SUBSTITUTE BASIS...........................................................................35
   2.7     Increased Costs, Taxes; Capital Adequacy..........................................................36
           A.     COMPENSATION FOR INCREASED COSTS AND TAXES.................................................36
           B.     WITHHOLDING OF TAXES.......................................................................37
           C.     CAPITAL ADEQUACY ADJUSTMENT................................................................40
           D.     SUBSTITUTE LENDERS.........................................................................40
   2.8     Obligation of Lenders to Mitigate.................................................................41

                                                        SECTION 3.

                                                   CONDITIONS TO LOANS

   3.1     Conditions to Loans...............................................................................41
           A.     BORROWER AND ATLAS DOCUMENTS...............................................................41
           B.     AIRCRAFT DOCUMENTS.........................................................................42
           C.     NOTICES OF BORROWING.......................................................................42
           D.     NECESSARY CONSENTS.........................................................................43
           E.     AIRCRAFT CHATTEL MORTGAGES.................................................................43
           F.     FAIRNESS OPINION...........................................................................43
           G.     FINANCIAL CONDITION CERTIFICATES...........................................................43
           H.     OPINIONS OF BORROWER'S COUNSEL.............................................................43
           I.     ATLAS CREDIT AGREEMENT; LEASES.............................................................44
           J.     OPINIONS OF FAA COUNSEL....................................................................44
           K.     FEES.......................................................................................44
           L.     FINANCIAL STATEMENTS.......................................................................44
           M.     EVIDENCE OF INSURANCE......................................................................44
           N.     NO MATERIAL ADVERSE EFFECT.................................................................45
           O.     REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS..................................45
           P.     COMPLIANCE CERTIFICATE.....................................................................45
           Q.     TRANSACTION; REFINANCING...................................................................45
           R.     COMPLETION OF PROCEEDINGS..................................................................46
           S.     APPRAISALS.................................................................................46
           T.     FAA CERTIFICATION AND TITLE................................................................46
           U.     BANKRUPTCY-REMOTE SUBSIDIARY...............................................................46

                                                        SECTION 4.

                                        BORROWER'S REPRESENTATIONS AND WARRANTIES

   4.1     Organization, Powers, Qualification, Good Standing, Business and Subsidiaries.....................47
</TABLE>

                                     -iii-

<PAGE>

<TABLE>
<CAPTION>
                                                                                                         Page
                                                                                                         ----
<S>        <C>                                                                                             <C>
           A.     ORGANIZATION AND POWERS....................................................................47
           B.     QUALIFICATION AND GOOD STANDING............................................................47
           C.     SUBSIDIARIES...............................................................................47
           D.     COLLATERAL DOCUMENTS.......................................................................47
   4.2     Authorization of Borrowing, etc...................................................................48
           A.     AUTHORIZATION OF BORROWING.................................................................48
           B.     NO CONFLICT................................................................................48
           C.     GOVERNMENTAL CONSENTS......................................................................48
           D.     BINDING OBLIGATION.........................................................................48
   4.3     Financial Condition...............................................................................48
   4.4     No Material Adverse Change; No Restricted Junior Payments.........................................49
   4.5     Title to Properties, Liens........................................................................49
   4.6     Litigation, Adverse Facts.........................................................................50
   4.7     Payment of Taxes..................................................................................50
   4.8     Performance of Agreements.........................................................................50
   4.9     Governmental Regulation...........................................................................51
   4.10    Securities Activities.............................................................................51
   4.11    Compliance with ERISA.............................................................................51
   4.12    Certain Fees......................................................................................51
   4.13    Environmental Protection..........................................................................51
   4.14    Employee Matters..................................................................................52
   4.15    Solvency..........................................................................................52
   4.16    Disclosure........................................................................................52
   4.17    Section 1110......................................................................................53
   4.18    Special Purpose Corporation.......................................................................53
   4.19    Transaction.......................................................................................53
   4.20    Representations and Warranties in Documents.......................................................53
   4.21    Leases............................................................................................53

                                                          SECTION 5.

                                              BORROWER'S AFFIRMATIVE COVENANTS

   5.1     Financial Statements and Other Reports............................................................54
   5.2     Corporate Existence...............................................................................57
   5.3     Payment of Taxes and Claims; Tax Consolidation....................................................57
   5.4     Maintenance of Properties; Insurance..............................................................57
   5.5     Inspection; Lender Meeting........................................................................58
   5.6     Compliance with Laws, etc.........................................................................58
   5.7     Environmental Indemnity...........................................................................58
   5.8     Borrower's Remedial Action Regarding Hazardous Materials..........................................59
   5.9     Maintenance Contracts.............................................................................59
   5.10    Employee Benefit Plans............................................................................59
   5.11    Further Assurances................................................................................59
</TABLE>

                                      -iv-

<PAGE>

<TABLE>
<CAPTION>
                                                                                                         Page
                                                                                                         ----
<S>        <C>                                                                                             <C>
   5.12    Performance of Obligations........................................................................59
   5.13    Corporate Separateness............................................................................60

                                                     SECTION 6.

                                           BORROWER'S NEGATIVE COVENANTS

   6.1     Indebtedness......................................................................................61
   6.2     Liens and Related Matters.........................................................................61
           A.     PROHIBITION ON LIENS.......................................................................61
           B.     NO NEGATIVE PLEDGES........................................................................61

   6.3     Investments; Joint Ventures.......................................................................61
   6.4     Contingent Obligations............................................................................61
   6.5     Restricted Junior Payments........................................................................62
   6.6     Restriction on Fundamental Changes, Asset Sales, Acquisitions, New Subsidiaries...................62
   6.7     Amendments of Material Agreements.................................................................62
   6.8     Restriction on Leases.............................................................................63
   6.9     Transaction with Shareholders and Affiliates......................................................63
   6.10    Conduct of Business...............................................................................63

                                                     SECTION 7.

                                                 EVENTS OF DEFAULT

   7.1     Failure to Make Payments When Due.................................................................64
   7.2     Default Under Lease...............................................................................64
   7.3     Breach of Certain Covenants.......................................................................64
   7.4     Breach of Warranty................................................................................64
   7.5     Other Defaults Under Loan Documents...............................................................64
   7.6     Involuntary Bankruptcy; Appointment of Receiver, etc..............................................64
   7.7     Voluntary Bankruptcy, Appointment of Receiver, etc................................................65
   7.8     Judgments and Attachments.........................................................................65
   7.9     Dissolution.......................................................................................65
   7.10    Change in Control.................................................................................65
   7.11    Failure of Security...............................................................................66
   7.12    Loss of United States Citizen Status..............................................................66

                                                     SECTION 8.

                                              THE ADMINISTRATIVE AGENT

   8.1     Appointment.......................................................................................67
   8.2     Powers and Duties; General Immunity...............................................................67
           A.     POWERS; DUTIES SPECIFIED...................................................................67
           B.     NO RESPONSIBILITY FOR CERTAIN MATTERS......................................................67
</TABLE>

                                      -v-

<PAGE>

<TABLE>
<CAPTION>
                                                                                                         Page
                                                                                                         ----
<S>        <C>                                                                                             <C>
           C.     EXCULPATORY PROVISIONS.....................................................................68
           D.     ADMINISTRATIVE AGENT ENTITLED TO ACT AS LENDER.............................................68
   8.3     Representations and Warranties; No Responsibility For Appraisal of Creditworthiness...............69
   8.4     Right to Indemnity................................................................................69
   8.5     Collateral Documents..............................................................................69
   8.6     Successor Administrative Agent....................................................................70

                                                    SECTION 9.

                                                  MISCELLANEOUS

   9.1     Assignments and Participations in Loans...........................................................70
           A.     GENERAL....................................................................................70
           B.     ASSIGNMENTS................................................................................71
           C.     PARTICIPATIONS.............................................................................72
           D.     ASSIGNMENTS TO FEDERAL RESERVE BANKS AND OTHERS............................................72
           E.     INFORMATION................................................................................73
   9.2     Expenses..........................................................................................73
   9.3     Indemnity.........................................................................................74
   9.4     Set-Off...........................................................................................74
   9.5     Ratable Sharing...................................................................................75
   9.6     Amendments and Waivers............................................................................75
   9.7     Independence of Covenants.........................................................................77
   9.8     Notices...........................................................................................77
   9.9     Survival of Representations, Warranties and Agreements............................................77
   9.10    Failure or Indulgence Not Waiver; Remedies Cumulative.............................................78
   9.11    Marshalling; Payments Set Aside...................................................................78
   9.12    Severability......................................................................................78
   9.13    Obligations Several; Independent Nature of Lenders' Rights........................................78
   9.14    Headings..........................................................................................79
   9.15    Applicable Law....................................................................................79
   9.16    Successors and Assigns............................................................................79
   9.17    Consent to Jurisdiction and Service of Process....................................................79
   9.18    Waiver of Jury Trial..............................................................................80
   9.19    Confidentiality...................................................................................80
   9.20    Counterparts; Effectiveness.......................................................................81
   9.21    Replacement Engines and Airframes.................................................................81
           A.     ENGINES....................................................................................81
           B.     AIRFRAMES..................................................................................82
           C.     FURTHER ASSURANCES.........................................................................82
</TABLE>

                                      -vi-

<PAGE>

<TABLE>
<CAPTION>
                                                                                                         Page
                                                                                                         ----
<S>        <C>                                                                                             <C>
SCHEDULES

2.1               LENDER'S COMMITMENTS
2.2               MAXIMUM LOAN AMOUNTS FOR AIRCRAFT AND SPARE ENGINE POOLS

EXHIBITS

I                 FORM OF NOTICE OF BORROWING
IIA               FORM OF TRANCHE A NOTE
IIB               FORM OF TRANCHE B NOTE
III               FORM OF COMPLIANCE CERTIFICATE
IVA               FORM OF OPINION OF CAHILL GORDON & REINDEL
IVB               FORM OF SECTION 1110 OPINION
IVC               FORM OF OPINION COVERING CERTAIN BANKRUPTCY MATTERS
IVD               FORM OF OPINION COVERING CERTAIN TAX MATTERS
IVE               FORM OF OPINION OF FAA COUNSEL
V                 FORM OF ASSIGNMENT AGREEMENT
VI                FORM OF CERTIFICATE RE NON-BANK STATUS
VII               FORM OF FINANCIAL CONDITION CERTIFICATE - BORROWER
VIIA              FORM OF FINANCIAL CONDITION CERTIFICATE - ATLAS
VIIIA             FORM OF AIRCRAFT LEASE
VIIIB             FORM OF SPARE ENGINE LEASE
IXA               FORM OF AIRCRAFT CHATTEL MORTGAGE
IXB               FORM OF SPARE ENGINE CHATTEL MORTGAGE
</TABLE>

                                     -vii-

<PAGE>

         CREDIT AGREEMENT, dated as of April 25, 2000, among ATLAS FREIGHTER
LEASING III, INC., a Delaware corporation ("AFL III" or the "BORROWER"), the
lenders party hereto from time to time (each a "LENDER," and collectively, the
"LENDERS") and BANKERS TRUST COMPANY, as Administrative Agent for the Lenders
(in such capacity, the "ADMINISTRATIVE AGENT").

                              W I T N E S S E T H:

         WHEREAS, the Borrower has been established for the sole purpose of
owning and leasing to Atlas the Aircraft and the Spare Engines;

         WHEREAS, the Aircraft and the Spare Engines are currently owned by
Atlas, AFL or AFL II;

         WHEREAS, the Aircraft and the Spare Engines are currently encumbered
by certain indebtedness which is to be refinanced;

         WHEREAS, in connection with the refinancing of such indebtedness,
Atlas, AFL and AFL II, will contribute or transfer the Aircraft and the Spare
Engines subject to certain indebtedness to AFL III; and

         WHEREAS, subject to and upon the terms and conditions herein set
forth, the Lenders are willing to make available to the Borrower the credit
facility provided for herein to refinance the indebtedness relating to the
Aircraft and the Spare Engines;

         NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, do hereby agree as follows:

                                   SECTION 1.

                                  DEFINITIONS

1.1  CERTAIN DEFINED TERMS.

         The following terms used in this Agreement shall have the following
meanings:

         "ACCEPTABLE ALTERNATE AIRFRAME" means, with respect to any Airframe,
an Acceptable Alternate Airframe as defined in the applicable Aircraft Lease.

         "ACCEPTABLE ALTERNATE ENGINE" means, with respect to any Engine, an
Acceptable Alternate Engine as defined in the applicable Lease.

<PAGE>

         "ADJUSTED EURODOLLAR RATE" means, for any Interest Rate Determination
Date, the rate per annum obtained by dividing (rounded upward to the nearest
1/100 of one percent) (x) the offered quotation, if any, to first class banks
in the interbank Eurodollar market by the Administrative Agent for U.S. dollar
deposits of amounts in same day funds comparable to the principal amount of the
Loans of the Administrative Agent for which the Adjusted Eurodollar Rate is
then being determined with maturities comparable to such Interest Period as of
approximately 10:00 A.M. (New York time) on such Interest Rate Determination
Date by (y) a percentage equal to 100% minus the stated maximum rate of all
reserve requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves) applicable on such Interest Rate
Determination Date to any member bank of the Federal Reserve System in respect
of "Eurocurrency liabilities" as defined in Regulation D (or any successor
category of liabilities under Regulation D).

         "ADMINISTRATIVE AGENT" has the meaning assigned to that term in the
preamble to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to subsection 8.6.

         "AFFECTED LENDER" has the meaning assigned to that term in subsection
2.6C.

         "AFFECTED LOANS" has the meaning assigned to that term in subsection
2.6C.

         "AFFILIATE" means, as applied to any Person, any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under
common control with"), as applied to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of that Person, whether through the ownership of voting securities
or by contract or otherwise.

         "AFL" means Atlas Freighter Leasing, Inc., a Delaware corporation.

         "AFL AIRCRAFT" means six Boeing 747-200 aircraft in full freighter
configuration with FAA Registration Nos. N505MC, N507MC, N508MC, N509MC, N516MC
and N517MC, including the 24 General Electric CFC-50E2 engines with
manufacturer's serial numbers 517476, 528318, 530197, 517753, 517284, 530320,
517767, 530288, 517324, 517287, 517269, 530284, 530283, 517207, 530304, 530318,
517551, 517214, 530202, 530247, 517943, 517886, 517675 and 517941, which
aircraft (i) are in cargo configuration capable of immediate operation in the
business of Atlas, when leased to Atlas by the Borrower, (ii) have a maximum
gross take-off weight ("MTOW") of at least 800,000 pounds and (iii) are owned
by AFL (prior to giving effect to the AFL Contribution).

         "AFL CONTRIBUTION" has the meaning assigned to that term in subsection
3.1Q.

                                      -2-

<PAGE>

         "AFL CREDIT FACILITY" means that certain Credit Agreement, dated as of
May 29, 1997, among Atlas Freighter Leasing, Inc., as borrower, the lenders
party thereto from time to time, and Bankers Trust Company, as agent for the
lenders, as amended, restated, supplemented, or otherwise modified prior to the
date hereof.

         "AFL EQUIPMENT OBLIGATIONS" means all amounts owing by AFL or any of
its Affiliates pursuant to the AFL Credit Facility and relating to the AFL
Aircraft.

         "AFL II" means Atlas Freighter Leasing II, Inc., a Delaware
corporation.

         "AFL II AIRCRAFT" means four Boeing 747-200 aircraft in full freighter
configuration with FAA Registration Nos. N523MC, N524MC, N526MC, and N527MC,
including the 16 General Electric CFC-50E2 engines with manufacturer's serial
numbers 528105, 530166, 517353, 517265, 528419, 517343, 517545, 517791, 530169,
517718, 517506, 517569, 528420, 517532, 455793 and 455430, which aircraft (i)
are in cargo configuration capable of immediate operation in the business of
Atlas, when leased to Atlas by the Borrower, (ii) have a maximum gross take-off
weight ("MTOW") of at least 800,000 pounds and (iii) are owned by AFL II (prior
to giving effect to the AFL II Contribution).

         "AFL II CONTRIBUTION" has the meaning assigned to that term in
subsection 3.1Q.

         "AFL II CREDIT FACILITY" means that certain Credit Agreement, dated as
of September 5, 1997, among AFL II, as a borrower, the lenders party thereto
from time to time, Bankers Trust Company, as administrative agent, and Goldman
Sachs Credit Partners L.P., as syndication agent, as amended, restated,
supplemented, or otherwise modified prior to the date hereof.

         "AFL II EQUIPMENT OBLIGATIONS" means all amounts owing by AFL II or
any of its Affiliates pursuant to the AFL II Credit Facility and relating to
the AFL II Aircraft or the AFL II Spare Engines.

         "AFL II SPARE ENGINES" means the nine General Electric CF6-50E2
engines with manufacturer's serial numbers 530168, 517790, 517530, 517547,
455167, 517602, 517538, 517539, and 530255, which Spare Engines are owned by
AFL II (prior to giving effect to the AFL II Contribution).

         "AFL III" has the meaning assigned to that term in the preamble to
this Agreement.

         "AGGREGATE AMOUNTS DUE" has the meaning assigned to that term in
subsection 9.5.

                                      -3-

<PAGE>

         "AGREEMENT" means this Credit Agreement, dated as of April 25, 2000,
as it may be amended, supplemented or otherwise modified from time to time.

         "AIRCRAFT" means, collectively, the Atlas Aircraft, the AFL Aircraft
and the AFL II Aircraft, or any of them, as appropriate.

         "AIRCRAFT CHATTEL MORTGAGE" means, with respect to each Aircraft or
Spare Engine Pool, a Security Agreement and Chattel Mortgage substantially in
the form of Exhibit IXA or Exhibit IXB annexed hereto, as appropriate, granting
to the Administrative Agent for the benefit of the Lenders a first priority
security interest in such Aircraft or Spare Engine Pool, as the case may be, as
such Aircraft Chattel Mortgage may be amended, restated, supplemented or
otherwise modified from time to time in accordance with the terms hereof and
thereof.

         "AIRCRAFT LEASE" or "AIRCRAFT LEASES" means each of the lease
agreements, in the form of Exhibit VIIIA, dated as of April 25, 2000, between
Atlas Freighter Leasing III, Inc., as Lessor and Atlas Air, Inc., as Lessee, as
the same may be amended, modified, or supplemented from time to time in
accordance with the terms hereof, and including any lease supplement entered
into in accordance with the terms of any Aircraft Lease.

         "AIRFRAME" means, as the context requires, an Airframe as defined in a
particular Aircraft Chattel Mortgage, all Airframes as defined in all Aircraft
Chattel Mortgages, a Replacement Airframe, all Replacement Airframes or all or
any of the foregoing.

         "AMENDED AIRCRAFT CREDIT FACILITY" means the Fourth Amended and
Restated Credit Agreement, dated as of April 25, 2000, among Atlas Air, Inc.,
as borrower, the lenders listed therein and Bankers Trust Company, as
administrative agent, but without giving effect to any amendments,
modifications, supplements or waivers thereof.

         "APPLICABLE MARGIN" means, with respect to Tranche A Loans, the
Tranche A Applicable Margin, and with respect to Tranche B Loans, the Tranche B
Applicable Margin.

         "APPRAISED VALUE" means, with respect to any Aircraft or Spare Engine,
the average of the appraised value of such Aircraft or Spare Engine by two
Approved Appraisers as determined pursuant to subsection 3.1S.

         "APPROVED APPRAISER" means any of AvSolutions, Inc., BK Associates,
Inc., Jack B. Feir Associates, Morton Beyer & Agnew, Inc., Simat, Helliesen &
Eichner, Inc., or AVITAS, Inc., Airclaims, Ltd., Aircraft Information Services,
Inc., or any other nationally recognized firm of aircraft appraisers reasonably
satisfactory to the Administrative Agent.

         "ASSET SALE" means the sale (including any sale-leaseback transaction)
or other disposition by the Borrower to any other Person of any assets of the
Borrower (whether tangi-

                                      -4-

<PAGE>

ble or intangible) excluding (i) transactions related to aircraft engines,
components, parts or spare parts or other equipment, appliances, instruments,
appurtenances, accessories or furnishings of whatever nature that may from time
to time be removed from any Airframe or Engine in connection with transactions
permitted pursuant to and in accordance with Section 4(d) or Section 4(e) of
the Aircraft Chattel Mortgages and (ii) transactions effected in accordance
with Section 9.21 of this Agreement.

         "ASSIGNMENT AGREEMENT" means an Assignment Agreement in substantially
the form of Exhibit V annexed hereto.

         "ATLAS" means Atlas Air, Inc., a Delaware corporation.

         "ATLAS AIRCRAFT" means one Boeing 747-200 aircraft in full freighter
configuration with FAA Registration No. N528MC, including the four General
Electric CF6-50C2 engines with manufacturer's serial number 517600, 530167,
517719 and 517825, which aircraft (i) is in cargo configuration capable of
immediate operation in the business of Atlas, when leased to Atlas by the
Borrower, (ii) has a maximum gross take-off weight ("MTOW") of at least 800,000
pounds and (iii) is owned by Atlas (prior to giving effect to the Atlas
Contribution).

         "ATLAS ASSET SALES" means the sale (including any sale-leaseback
transaction) by Atlas or any of its Subsidiaries to any other Person of (i) any
of the stock of any of Atlas's Subsidiaries, (ii) substantially all of the
assets of any division or line of business of Atlas or any of its Subsidiaries,
or (iii) any other assets (whether tangible or intangible) of Atlas or any of
its Subsidiaries outside of the ordinary course of business.

         "ATLAS CONTRIBUTION" has the meaning assigned to that term in
subsection 3.1Q.

         "ATLAS EQUIPMENT OBLIGATIONS" means all amounts owing by Atlas or any
of its Subsidiaries pursuant to the Amended Aircraft Credit Facility
immediately prior to giving effect to the fourth amendment and restatement
thereof on the date hereof and relating to the Atlas Aircraft or the Atlas
Spare Engines.

         "ATLAS SPARE ENGINES" means the three General Electric CF6-80C2
engines with manufacturer's serial numbers 704699, 704860, and 704918, which
Spare Engines are owned by Atlas (prior to giving effect to the Atlas
Contribution).

         "BANKRUPTCY CODE" means Title 11 of the United States Code, entitled
"Bankruptcy," as now and hereafter in effect, or any successor statute.

         "BASE RATE" means, at any time, the higher of (x) the Prime Rate or
(y) the rate that is 1/2 of 1% in excess of the Federal Funds Effective Rate.

                                      -5-

<PAGE>

         "BORROWER" has the meaning assigned to that term in the preamble to
this Agreement.

         "BUSINESS DAY" means any day excluding Saturday, Sunday and any day
that is a legal holiday under the laws of the States of New York or Colorado or
is a day on which banking institutions located in either such state are
authorized or required by law or other governmental action to close.

         "CAPITAL LEASE", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.

         "CASH" means money, currency or a credit balance in a Deposit Account.

         "CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date, (ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after
such date and having, at the time of the acquisition thereof, the highest
rating obtainable from either S&P or Moody's, (iii) commercial paper maturing
no more than one year from the date of creation thereof and having, at the time
of the acquisition thereof, a rating of at least A-1 from S&P or at least P-I
from Moody's, (iv) certificates of deposit or bankers' acceptances maturing
within one year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia that (a) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator) and (b) has Tier I capital (as defined in such regulations) of not
less than $100,000,000, and (v) shares of any money market mutual fund that (a)
has at least 95% of its assets invested continuously in the types of
investments referred to in clauses (i) and (ii) above, (b) has net assets of
not less than $500,000,000, and (c) has the highest rating obtainable from
either S&P or Moody's.

         "CASH PROCEEDS" means, with respect to any Asset Sale, Cash payments
(including any Cash received by way of deferred payment pursuant to, or
monetization of, a note receivable or otherwise, but only as and when so
received) received from such Asset Sale.

         "CERTIFICATE RE NON-BANK STATUS" means a certificate substantially in
the form of Exhibit VI annexed hereto delivered by a Lender to the
Administrative Agent pursuant to subsection 2.7B(iii).

                                      -6-

<PAGE>

         "CF6-50E2 SPARE ENGINE LEASE" means the lease agreement, in the form
of Exhibit VIIIB, dated as of April 25, 2000, between Atlas Freighter Leasing
III, Inc., as Lessor and Atlas Air, Inc., as Lessee, as the same may be
amended, modified or supplemented from time to time in accordance with the
terms hereof, and including any lease supplement entered into in accordance
with the terms of the CF6-50E2 Spare Engine Lease.

         "CF6-50E2 SPARE ENGINE POOL" means the set of Spare Engines leased
pursuant to the CF6-50E2 Spare Engine Lease.

         "CF6-80C2 SPARE ENGINE LEASE" means the lease agreement, in the form
of Exhibit VIIIB, dated as of April 25, 2000, between Atlas Freighter Leasing
III, Inc., as Lessor and Atlas Air, Inc., as Lessee, as the same may be
amended, modified or supplemented from time to time in accordance with the
terms hereof, and including any lease supplement entered into in accordance
with the terms of the CF6-80C2 Spare Engine Lease.

         "CF6-80C2 SPARE ENGINE POOL" means the set of Spare Engines leased
pursuant to the CF6-80C2 Spare Engine Lease.

         "COLLATERAL" means all of the properties and assets in which Liens are
purported to be granted by the Collateral Documents.

         "COLLATERAL DOCUMENTS" means each Aircraft Chattel Mortgage and any
security agreement executed pursuant to subsection 5.11.

         "COMMITMENT" means the sum of the Tranche A Commitment and the Tranche
B Commitment of each Lender as set forth on Schedule 2.1, as the same may be
reduced or terminated pursuant to Section 2.4 and/or Section 7.

         "COMPLIANCE CERTIFICATE" means a certificate delivered to the
Administrative Agent and the Lenders by the Borrower pursuant to subsection
3.1P or 5.1(iii).

         "CONDEMNATION PROCEEDS" has the meaning assigned to that term in
subsection 2.4C(ii)(b).

         "CONTINGENT OBLIGATION" means, as applied to any Person, any direct or
indirect liability, contingent or otherwise, of that Person (i) with respect to
any Indebtedness, lease, dividend or other obligation of another if the primary
purpose or intent thereof by the Person incurring the Contingent Obligation is
to provide assurance to the obligee of such obligation of another that such
obligation of another will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such obligation
will be protected (in whole or in part) against loss in respect thereof, (ii)
with respect to any letter of credit issued for the account of that Person or
as to which that Person is otherwise liable for reimbursement of drawings, or
(iii) under Interest Rate Agreements and Currency Agree-

                                      -7-

<PAGE>

ments. Contingent Obligations shall include, without limitation, (a) the direct
or indirect guaranty, endorsement (otherwise than for collection or deposit in
the ordinary course of business), co-making, discounting with recourse or sale
with recourse by such Person of the obligation of another, (b) the obligation
to make take-or-pay or similar payments if required regardless of
non-performance by any other party or parties to an agreement, and (c) any
liability of such Person for the obligation of another through any agreement
(contingent or otherwise) (X) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise) or (Y) to maintain the solvency
or any balance sheet item, level of income or financial condition of another
if, in the case of any agreement described under subclauses (X) or (Y) of this
sentence, the primary purpose or intent thereof is as described in the
preceding sentence. The amount of any Contingent Obligation shall be equal to
the amount of the obligation so guaranteed or otherwise supported or, if less,
the amount to which such Contingent Obligation is specifically limited.

         "CONTRACTUAL OBLIGATION", as applied to any Person, means any
provision of any Security issued by that Person or of any material indenture,
mortgage, deed of trust, deed to secure debt, contract, undertaking, agreement
or other instrument to which that Person is a party or by which it or any of
its properties is bound or to which it or any of its properties is subject.

         "CURRENCY AGREEMENT" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement designated to protect Borrower against
fluctuations in currency values.

         "DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.

         "DOLLARS" and the sign "$" mean the lawful money of the United States
of America.

         "EFFECTIVE DATE" has the meaning assigned to that term in Section
9.20.

         "ELIGIBLE ASSIGNEE" means (A) (i) a commercial bank organized under
the laws of the United States or any state thereof, (ii) a savings and loan
association or savings bank organized under the laws of the United States or
any state thereof, (iii) a commercial bank organized under the laws of any
other country or a political subdivision thereof, provided that (x) such bank
is acting through a branch or agency located in the United States or (y) such
bank is organized under the laws of a country that is a member of the
Organization for Economic Cooperation and Development or a political
subdivision of such country, and (iv) any other entity that is an "accredited
investor" (as defined in Regulation D under the Securities Act) that extends
credit or buys loans as one of its businesses (including, but not limited to,

                                      -8-

<PAGE>

insurance companies, mutual funds and lease financing companies), (B) any
Lender, and (C) any Related Fund or any Affiliate of any Lender; provided, that
no Affiliate of the Borrower shall be an Eligible Assignee.

         "EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as defined
in Section 3(3) of ERISA that is, or was at any time, maintained or contributed
to by the Borrower or by any of its ERISA Affiliates.

         "ENGINE" means, as the context requires, an Engine as defined in a
particular Aircraft Chattel Mortgage, all Engines as defined in all Aircraft
Chattel Mortgages, a Replacement Engine, all Replacement Engines or all or any
of the foregoing.

         "ENVIRONMENTAL CLAIM" means any investigation, notice, claim, suit or
order, by any governmental authority or any Person, arising in connection with
any alleged or actual violation of Environmental Laws or with any Hazardous
Material, or with any actual or alleged damage or harm to health, safety or the
environment.

         "ENVIRONMENTAL LAWS" means any and all current or future statutes,
ordinances, orders, rules, regulations, guidance documents, judgments,
Governmental Authorizations, or any other requirement of governmental
authorities relating to environmental matters, including, without limitation,
those relating to any Hazardous Materials Activity.

         "EQUIPMENT OBLIGATIONS" means, collectively, the Atlas Equipment
Obligations, the AFL Equipment Obligations and the AFL II Equipment
Obligations.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.

         "ERISA AFFILIATE" means, as applied to any Person, (i) any corporation
that is, or was at any time, a member of a controlled group of corporations
within the meaning of Section 414(b) of the Internal Revenue Code of which that
Person is, or was at any time, a member, (ii) any trade or business, (whether
or not incorporated) that is, or was at any time, a member of a group of trades
or businesses under common control within the meaning of Section 414(c) of the
Internal Revenue Code of which that Person is, or was at any time, a member,
and (iii) any member of an affiliated service group within the meaning of
Section 414(m) or (o) of the Internal Revenue Code of which that Person, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above is, or was at any time, a member.

         "EVENT OF DEFAULT" means each of the events set forth in Section 7.

         "EVENT OF LOSS" means any of the following events with respect to any
Aircraft (whether the Airframe or an Engine of such Aircraft or both) or any
Spare Engine: (A) loss of

                                      -9-

<PAGE>

such Aircraft or Spare Engine or the use thereof due to theft or disappearance
of such Aircraft or Spare Engine that results in the loss of possession thereof
for a period of 120 days (or for a shorter period ending on the date on which
there is an insurance settlement for a total loss on the basis of the theft or
disappearance of such Aircraft or Spare Engine), (B) the destruction, damage
beyond repair or rendition of such Aircraft or Spare Engine permanently unfit
for normal use for any reason whatsoever, (C) the condemnation, confiscation or
seizure of, or requisition of title to, or adverse use or possession (other
than use by the United States Government if the Borrower obtains adequate
compensation from the United States Government) of such Aircraft or Spare
Engine, (D) as a result of any rule, regulation, order or any other action by
the FAA or any other governmental body having jurisdiction, the use of such
Aircraft or Spare Engine in the normal course of interstate air transportation
of persons or cargo shall have been prohibited for a period of more than nine
consecutive months unless the Borrower, prior to the expiration of such nine
month period, shall have undertaken and shall be diligently carrying forward
all steps that are necessary or desirable to permit the normal use of such
property by the Borrower or, in any event, if such use shall have been
prohibited for a period of twelve consecutive months, (E) the operation or
location of such Aircraft or Spare Engine, while under requisition for use by
the United States or any instrumentality or agency thereof, in any area
excluded from coverage by any insurance policy in effect with respect to such
Aircraft or Spare Engine, if the Borrower shall be unable to obtain indemnity
or "war risk" insurance in lieu thereof from the United States, (F) any damage
that results in an insurance settlement with respect to such Aircraft or Spare
Engine on the basis of an actual or constructive total loss or (G) a
divestiture of such Airframe or Spare Engine as described in Section 4(d)(iii)
or Section 4(d)(vi) of any Aircraft Chattel Mortgage. An Event of Loss with
respect to any Aircraft shall be deemed to have occurred if an Event of Loss
occurs with respect to the Airframe of such Aircraft.

         "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.

         "FEDERAL AVIATION ACT" means the Federal Aviation Act of 1958, as
amended and as recodified in Title 49, United States Code, or any similar
legislation of the United States enacted to supersede, amend or supplement such
Act and the rules and regulations promulgated thereunder.

         "FEDERAL AVIATION ADMINISTRATION" or "FAA" means the United States
Federal Aviation Administration or any successor thereto administering the
functions of the Federal Aviation Administration under the Federal Aviation Act.

         "FEDERAL FUNDS EFFECTIVE RATE" means for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day
(or, if such day is not a Business Day, for the next preceding Business Day) by
the Federal Reserve Bank of New York, or, if such rate is not so

                                      -10-

<PAGE>

published for any day that is a Business Day, the average of the quotations for
such day on such transactions received by the Administrative Agent from three
federal funds brokers of recognized standing selected by the Administrative
Agent.

         "FINAL MATURITY DATE" means, in the case of Tranche A Loans, April 25,
2005, and, in the case of Tranche B Loans, April 25, 2006.

         "FISCAL YEAR" means the fiscal year of the Borrower.

         "FUNDING AND PAYMENT OFFICE" means the office of the Administrative
Agent located at 130 Liberty Street, New York, New York 10006, Attention:
Marguerite Sutton.

         "GAAP" means, subject to the limitations on the application thereof
set forth in subsection 1.2, generally accepted accounting principles set forth
in opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession. Financial statements and other information required
to be delivered by the Borrower to the Lenders pursuant to clauses (i) and (ii)
of subsection 5.1 shall be prepared in accordance with GAAP as in effect at the
time of such preparation. Calculations in connection with the definitions,
covenants and other provisions of this Agreement shall utilize accounting
principles and policies in conformity with GAAP as in effect on the date of
this Agreement.

         "GOVERNMENTAL AUTHORIZATION" means any permit, license, authorization,
plan, directive, consent order or consent decree of or from any federal, state
or local governmental authority, agency or court.

         "HAZARDOUS MATERIALS" means any chemical or other material or
substance, exposure to which is now or hereafter prohibited, limited or
regulated under any law.

         "HAZARDOUS MATERIALS ACTIVITY" means any past, current, proposed, or
threatened use, storage, release, generation, treatment, remediation or
transportation of any Hazardous Material (i) from, under, in, into or on the
facilities or surrounding property of the Borrower and (ii) caused by, or
undertaken by or on behalf of, the Borrower.

         "INDEBTEDNESS" means, as applied to any Person, (i) all indebtedness
for borrowed money, (ii) that portion of obligations with respect to Capital
Leases that is properly classified as a liability on a balance sheet in
conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed
money, (iv) any obligation owed for all or any part of the deferred purchase
price of property or services (excluding any such obligations incurred under
ERISA), which purchase price is (a) due more than six months from the date of
incurrence of the obligation in respect

                                      -11-

<PAGE>

thereof or (b) evidenced by a note or similar written instrument, and (v) all
indebtedness secured by any Lien on any property or asset owned or held by that
Person regardless of whether the indebtedness secured thereby shall have been
assumed by that Person or is nonrecourse to the credit of that Person.
Obligations under Interest Rate Agreements and Currency Agreements constitute
Contingent Obligations and are not Indebtedness.

         "INDEMNIFIED LIABILITIES" has the meaning assigned to that term in
subsection 3.

         "INDEMNITEE" has the meaning assigned to that term in subsection 9.3.

         "INDEPENDENT DIRECTOR" means a director of the Borrower that satisfies
the criteria for "Independent Director" set forth in the certificate of
incorporation of the Borrower.

         "INITIAL BORROWING DATE" shall mean the date occurring on or after the
Effective Date on which the borrowing of the Loans occurs.

         "INSURANCE PROCEEDS" has the meaning assigned to that term in
subsection 2.4C(ii)(b).

         "INTEREST PAYMENT DATE" means, with respect to any Loan, the last day
of each Interest Period applicable to such Loan.

         "INTEREST PERIOD" has the meaning assigned to that term in subsection
2.2B.

         "INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement designed to protect the Borrower against fluctuations
in interest rates.

         "INTEREST RATE DETERMINATION DATE" means, with respect to any Interest
Period, the second Business Day prior to the first day of such Interest Period.

         "INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter.

         "INVESTMENT" means (i) any direct or indirect purchase or other
acquisition by the Borrower of, or of a beneficial interest in, any Securities
of any other Person or (ii) any direct or indirect loan, advance (other than
advances to employees for moving, entertainment and travel expenses, drawing
accounts and similar expenditures in the ordinary course of business) or
capital contribution by the Borrower to any other Person, including all
indebtedness and accounts receivable from that other Person that are not
current assets or did not arise from sales to that other Person in the ordinary
course of business. The amount of any Investment shall be the original cost of
such Investment plus the cost of all additions thereto, with-

                                      -12-

<PAGE>

out any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment.

         "JOINT VENTURE" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; provided,
that in no event shall any corporate Subsidiary of any Person be considered to
be a Joint Venture to which such Person is a party.

         "LEASE" or "LEASES" means the eleven Aircraft Leases, the CF6-50E2
Spare Engine Lease and the CF6-80C2 Spare Engine Lease, or any of them, as the
context implies.

         "LENDER" and "LENDERS" means the Tranche A Lenders and the Tranche B
Lenders, or any of them, as the context implies.

         "LIEN" means any lien, mortgage, deed of trust, deed to secure debt,
pledge, assignment, security interest, charge, hypothecation, preference,
priority, privilege, lease or encumbrance of any kind (including any
conditional sale or other title retention agreement, any lease in the nature
thereof, and any agreement to give any security interest) and any option, trust
or other preferential arrangement having the practical effect of any of the
foregoing.

         "LOAN" or "LOANS" means all the term loans made under this Agreement
on the same day by the Lenders to the Borrower and relating to one Aircraft or
to one Spare Engine Pool, but secured by all Collateral.

         "LOAN DOCUMENTS" means this Agreement, the Notes, the Leases and the
Collateral Documents.

         "LOAN EXPOSURE" means, with respect to any Lender, as of any date of
determination, the outstanding principal amount of the Loans of that Lender.

         "MARGIN STOCK" has the meaning assigned to that term in Regulation U
of the Board of Governors of the Federal Reserve System as in effect from time
to time.

         "MATERIAL ADVERSE EFFECT" means (i) a material adverse effect upon the
business, operations, properties, assets, condition (financial or otherwise) or
prospects of the Borrower or (ii) the impairment of the ability of the Borrower
to perform the Obligations, or the impairment, as a result of actions or
inaction by the Borrower, of the ability of the Administrative Agent or the
Lenders to enforce the Obligations.

         "MAXIMUM LOAN AMOUNT" means, with respect to each Aircraft or Spare
Engine Pool, if any, the amount set forth on Schedule 2.2 opposite the
respective Aircraft or Spare Engine Pool.

                                      -13-

<PAGE>

         "MAXIMUM TRANCHE A LOAN AMOUNT" means, with respect to each Aircraft
or Spare Engine Pool, the product obtained by multiplying (i) the Maximum Loan
Amount for such Aircraft or Spare Engine Pool by (ii) a fraction, the numerator
of which is one hundred sixty-five (165), and the denominator of which is three
hundred (300).

         "MAXIMUM TRANCHE B LOAN AMOUNT" means, with respect to each Aircraft
or Spare Engine Pool, the product obtained by multiplying (i) the Maximum Loan
Amount for such Aircraft or Spare Engine Pool by (ii) a fraction, the numerator
of which is one hundred thirty-five (135), and the denominator of which is
three hundred (300).

         "MOODY'S" means Moody's Investors Service, Inc.

         "NET CASH PROCEEDS" means, with respect to any Asset Sale, Cash
Proceeds of such Asset Sale net of bona fide direct costs of sale including
income taxes reasonably estimated to be actually payable as a result of such
Asset Sale within two years of the date of such Asset Sale.

         "NON-U.S. LENDER" has the meaning assigned to that term in subsection
2.7B(iii)(a).

         "NOTES" has the meaning assigned to that term in subsection 2.1D.

         "NOTICE OF BORROWING" means a notice delivered by the Borrower to the
Administrative Agent pursuant to subsection 2.1B.

         "OBLIGATIONS" means all obligations of every nature of the Borrower
from time to time owed to the Administrative Agent, the Lenders or any of them
under the Loan Documents, whether for principal, interest, fees, expenses,
indemnification or otherwise.

         "OFFICERS' CERTIFICATE" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its chairman of the board
(if an officer) or its president or one of its vice presidents or its secretary
or by its chief financial officer or its treasurer; provided, that every
Officers' Certificate with respect to the fulfillment of a condition precedent
to the making of any Loans hereunder shall include (i) a statement that the
officer or officers making or giving such Officers' Certificate have read such
condition and any definitions or other provisions contained in this Agreement
relating thereto, (ii) a statement that, in the opinion of the signers, they
have made or have caused to be made such examination or investigation as is
necessary to enable them to express an informed opinion as to whether or not
such condition has been fulfilled, and (iii) a statement as to whether, in the
opinion of the signers, such condition has been fulfilled.

         "OPERATING LEASE" means, as applied to any Person, any lease
(including, without limitation, leases that may be terminated by the lessee at
any time) of any property

                                      -14-

<PAGE>

(whether real, personal or mixed) that is not a Capital Lease other than any
such lease under which that Person is the lessor.

         "PASS THROUGH TRUST DOCUMENTS" means, collectively, (i) those six
certain Pass Through Trust Agreements, dated as of February 9, 1998, between
Atlas Air, Inc., and Wilmington Trust Company, as trustee (the "1998 Pass
Through Trust Agreements") and any related agreements, notes, guaranties,
indentures, security documents or other documents, including, without
limitation, documents relating to the equipment notes to be held in trust
pursuant to the 1998 Pass Through Trust Agreements and all related documents,
as the same may be amended, restated, supplemented or otherwise modified from
time to time in accordance with this Agreement, (ii) that certain Pass Through
Trust Agreement, dated as of April 1, 1999, between Atlas Air, Inc., and
Wilmington Trust Company, as trustee (the "1999 Pass Through Trust Agreement")
and any related agreements, trust supplements, notes, guaranties, indentures,
security documents or other documents, including, without limitation, documents
relating to the equipment notes to be held in trust pursuant to the 1999 Pass
Through Agreement and all related documents, as the same may be amended,
restated, supplemented or otherwise modified from time to time in accordance
with this Agreement and (iii) that certain Pass Through Trust Agreement, dated
as of January 28, 2000, between Atlas Air, Inc., and Wilmington Trust Company,
as trustee (the "2000 Pass Through Trust Agreement") and any related
agreements, trust supplements, notes, guaranties, indentures, security
documents or other documents, including, without limitation, documents relating
to the equipment notes to be held in trust pursuant to the 2000 Pass Through
Trust Agreement and all related documents, as the same may be amended,
restated, supplemented or otherwise modified from time to time in accordance
with this Agreement.

         "PERMITTED ENCUMBRANCES" means the following types of Liens (other
than any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or by ERISA):

         (i)      Liens for taxes, assessments or governmental charges or
     claims, the payment of which is not, at the time, required by subsection
     5.3;

        (ii)      statutory Liens of landlords and Liens of carriers,
     warehousemen, mechanics and materialmen and other Liens imposed by law
     incurred in the ordinary course of business for sums not yet delinquent or
     being contested in good faith by appropriate proceedings that do not
     involve any danger of the sale, forfeiture or loss of any Collateral, if
     such reserve or other appropriate provision, if any, as shall be required
     by GAAP shall have been made therefor;

       (iii)      the rights of others under agreements or arrangements to the
     extent expressly permitted by the terms of Sections 4(d) and 4(e) of the
     Aircraft Chattel Mortgages; and

                                      -15-

<PAGE>

        (iv) Liens granted pursuant to the Collateral Documents.

         "PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability partnerships, limited
liability companies, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or
other organizations, whether or not legal entities, and governments and
agencies and political subdivisions thereof.

         "POTENTIAL EVENT OF DEFAULT" means a condition or event that, after
notice or the expiration of any grace period or both, would constitute an Event
of Default.

         "PRICING CERTIFICATE" has the meaning assigned to that term in
subsection 5.1(xi).

         "PRICING REDUCTION" means, for any Interest Period, a pricing
reduction in the Tranche A Applicable Margin equal to:

         (i)      0.250% if, as of 10:00 A.M. (New York time) on the Interest
     Rate Determination Date with respect to such Interest Period, Atlas has a
     senior secured rating of Ba1 or higher from Moody's and a senior secured
     rating of BB or higher from S&P; or

         (ii)     0.125% if, as of 10:00 A.M. (New York time) on the Interest
     Rate Determination Date with respect to such Interest Period, Atlas has a
     senior secured rating of Ba1 or higher from Moody's and a senior secured
     rating of BB- from S&P.

         Notwithstanding anything to the contrary herein, at any time when an
Event of Default shall have occurred and be continuing, the Pricing Reduction
shall be zero.

         "PRIME RATE" means the rate that the Administrative Agent announces
from time to time as its prime lending rate, as in effect from time to time.
The Prime Rate is a reference rate and does not necessarily represent the
lowest or best rate actually charged to any customer. The Administrative Agent
or any other Lender may make commercial loans or other loans at rates of
interest at, above or below the Prime Rate.

         "PRO RATA SHARE" means, with respect to each Lender, the percentage
obtained by dividing the Loan Exposure of that Lender by the aggregate Loan
Exposure of all Lenders, in each case as such percentage may be adjusted by
assignments permitted pursuant to subsection 9.1. The initial Pro Rata Share of
each Lender is set forth opposite the name of that Lender in Schedule 2.1
annexed hereto.

         "PROCEEDINGS" has the meaning assigned to that term in subsection
5.1(viii).

         "PROCEEDS" has the meaning assigned to that term in subsection
2.4C(ii)(b).

                                      -16-

<PAGE>

         "PROJECTIONS" means the financial projections of Atlas and its
Subsidiaries delivered on or prior to the Initial Borrowing Date covering the
period commencing on or prior to the Initial Borrowing Date and ending on
December 31, 2006.

         "REFINANCING" has the meaning assigned to that term in subsection
3.1Q.

         "REGISTER" has the meaning assigned to that term in subsection 2.1E.

         "REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.

         "RELATED FUND" means, with respect to any Lender that is a fund that
invests in loans, any other fund that invests in loans and is managed by the
same investment advisor as such Lender or by an Affiliate of such investment
advisor.

         "RELEASE" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including, without limitation, the abandonment or disposal of any
barrels, containers or other closed receptacles containing any Hazardous
Materials), or into or out of any facility, including the movement of any
Hazardous Material through the air, soil, surface water, groundwater or
property.

         "REQUISITE LENDERS" means Lenders having or holding 50.1% or more of
the aggregate Loan Exposure of all Lenders.

         "REPLACEMENT AIRFRAME" has the meaning assigned to that term in
subsection 9.21B.

         "REPLACEMENT ENGINE" has the meaning assigned to that term in
subsection 9.21A.

         "RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
stock of the Borrower now or hereafter outstanding, except a dividend payable
solely in shares of that class of stock to the holders of that class, (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of stock
of the Borrower now or hereafter outstanding and (iii) any payment made to
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire shares of any class of stock of the Borrower now or
hereafter outstanding.

         "S&P" means Standard & Poor's Ratings Services.

         "SECURITIES" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement,

                                      -17-

<PAGE>

options, warrants, bonds, debentures, notes, or other evidences of
indebtedness, secured or unsecured, convertible, subordinated or otherwise, or
in general any instruments commonly known as "securities" or any certificates
of interest, shares or participations in temporary or interim certificates for
the purchase or acquisition of, or any right to subscribe to, purchase or
acquire, any of the foregoing.

         "SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time, and any successor statute.

         "SENIOR NOTE DOCUMENTS" means (i) the Indenture, dated as of August
13, 1997, between Atlas Air, Inc., and State Street Bank and Trust Company,
relating to the 10 3/4% $150 million Senior Notes due 2005 of the Borrower (the
"10 3/4% Senior Notes"), and any and all related agreements, as the same may be
amended, restated, supplemented or otherwise modified from time to time in
accordance with this Agreement, (ii) the Indenture, date as of April 9, 1998,
between Atlas Air, Inc., and State Street Bank and Trust Company, relating to
the 9 1/4% $175 million Senior Notes due 2008 of the Borrower (the "9 1/4%
Senior Notes") and any and all related agreements, as the same may be amended,
restated, supplemented or otherwise modified from time to time in accordance
with this Agreement and (iii) the Indenture, dated as of November 18, 1998,
between Atlas Air, Inc., and State Street Bank and Trust Company relating to
the 9 3/8% $150 million Senior Notes due 2006 of the Borrower (the "9 3/8%
Senior Notes," and together with the 10 3/4% Senior Notes and the 9 1/4% Senior
Notes, the "Senior Notes"), and any and all related agreements, as the same may
be amended, restated, supplemented or otherwise modified from time to time in
accordance with this Agreement.

         "SERVICE AGREEMENT" means the Service Agreement, dated as of April 25,
2000, between Atlas and the Borrower.

         "SOLVENT" means, with respect to any Person, that, as of the date of
determination, both (A) (i) the then fair saleable value of the property of
such Person is (y) greater than the total amount of liabilities (including
contingent liabilities) of such Person and (z) not less than the amount that
will be required to pay the probable liabilities on such Person's then existing
debts as they become absolute and matured considering all financing
alternatives and potential asset sales reasonably available to such Person,
(ii) such Person's capital is not unreasonably small in relation to its
business or any contemplated or undertaken transaction, and (iii) such Person
does not intend to incur, or believe (nor should it reasonably believe) that it
will incur, debts beyond its ability to pay such debts as they become due, and
(B) such Person is "solvent" within the meaning given that term and similar
terms under applicable laws relating to fraudulent transfers and conveyances.
For purposes of this definition, the amount of any contingent liability at any
time shall be computed as the amount that, in light of all of the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.

                                      -18-

<PAGE>

         "SPARE ENGINE POOL" means, collectively, the CF6-50E2 Spare Engine
Pool and the CF6-80C2 Spare Engine Pool, or either of them, as appropriate.

         "SPARE ENGINES" means the nine General Electric CF6-50E2 engines with
manufacturer's serial numbers 530168, 517790, 517530, 517547, 455167, 517602,
517538, 517539, and 517544, and the three General Electric CF6-80C2 engines
with manufacturer's serial numbers 704699, 704860, and 704918.

         "SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, association, joint venture or other business entity of which more
than 50% of the total voting power of shares of stock or other ownership
interests entitled (without regard to the occurrence of any contingency) to
vote in the election of the Person or Persons (whether directors, managers,
trustees or other Persons performing similar functions) having the power to
direct or cause the direction of the management and policies thereof is at the
time owned or controlled, directly or indirectly, by that Person or one or more
of the other Subsidiaries of that Person or a combination thereof.

         "SUBSTITUTE BASIS" has the meaning assigned to that term in subsection
2.6G.

         "SYNDICATION DATE" means the date on which the Administrative Agent
has completed, in its determination, the primary syndication of Loans.

         "TAX" or "TAXES" means any present or future tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature and whatever called, by
whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or
assessed; provided, that "TAX ON THE OVERALL NET INCOME" of a Person shall be
construed as a reference to a tax imposed by the jurisdiction in which that
Person's principal office (and/or, in the case of a Lender, its lending office)
is located on all or part of the net income, profits or gains of that Person
(whether worldwide, or only insofar as such income, profits or gains are
considered to arise in or to relate to a particular jurisdiction, or
otherwise).

         "TOTAL COMMITMENT" means the sum of the Commitments of the Lenders.

         "TRANCHE A APPLICABLE MARGIN" has the meaning assigned to that term in
subsection 2.2A.

         "TRANCHE A COMMITMENT" means the Tranche A commitment of each Tranche
A Lender as set forth on Schedule 2.1, as the same may be reduced or terminated
pursuant to Section 2.4 and/or Section 7.

         "TRANCHE A LENDER" or "TRANCHE A LENDERS" means the persons identified
as "Tranche A Lenders" and listed on the signature pages of this Agreement,
together with their successors and permitted assigns pursuant to subsection
9.1.

                                      -19-

<PAGE>

         "TRANCHE A LOAN" has the meaning assigned to that term in subsection
2.1A(i).

         "TRANCHE A LOAN EXPOSURE" means, with respect to any Tranche A Lender,
as of any date of determination, the outstanding principal amount of the
Tranche A Loans of that Lender.

         "TRANCHE A NOTES"  has the meaning assigned to that term in subsection
2.1D.

         "TRANCHE A PRO RATA SHARE" means, with respect to each Tranche A
Lender, the percentage obtained by dividing the Tranche A Loan Exposure of that
Tranche A Lender by the aggregate Tranche A Loan Exposure of all Tranche A
Lenders, in each case as such percentage may be adjusted by assignments
permitted pursuant to subsection 9.1. The initial Tranche A Pro Rata Share of
each Tranche A Lender is set forth opposite the name of that Tranche A Lender
in Schedule 2.1 annexed hereto.

         "TRANCHE B APPLICABLE MARGIN" has the meaning assigned to that term in
subsection 2.2B.

         "TRANCHE B COMMITMENT" means the Tranche B commitment of each Tranche
B Lender as set forth on Schedule 2.1, as the same may be reduced or terminated
pursuant to Section 2.4 and/or Section 7.

         "TRANCHE B LENDER" or "TRANCHE B LENDERS" means the persons identified
as "Tranche B Lenders" and listed on the signature pages of this Agreement,
together with their successors and permitted assigns pursuant to subsection
9.1.

         "TRANCHE B LOAN" has the meaning assigned to that term in subsection
2.1A(ii).

         "TRANCHE B LOAN EXPOSURE" means, with respect to any Tranche B Lender,
as of any date of determination, the outstanding principal amount of the
Tranche B Loans of that Lender.

         "TRANCHE B NOTES" has the meaning assigned to that term in subsection
2.1D.

         "TRANCHE B PRO RATA SHARE" means, with respect to each Tranche B
Lender, the percentage obtained by dividing the Tranche B Loan Exposure of that
Tranche B Lender by the aggregate Tranche B Loan Exposure of all Tranche B
Lenders, in each case as such percentage may be adjusted by assignments
permitted pursuant to subsection 9.1. The initial Tranche B Pro Rata Share of
each Tranche B Lender is set forth opposite the name of that Tranche B Lender
in Schedule 2.1 annexed hereto.

         "TRANSACTION" has the meaning assigned that term in subsection 3.1Q.

                                      -20-

<PAGE>

         "TRANSACTION DOCUMENTS" means this Agreement, the Amended Aircraft
Credit Facility, any bills of sale or certificates of transfer for each
Aircraft and each Spare Engine (including bills of sale on AC Form 8050-2)
delivered in connection with the Transaction, the Leases, all documents
relating to the Refinancing, and all other agreements and documentation
executed and delivered in connection with the Transaction, including, without
limitation, in connection with the Atlas Contribution and the Transfers.

         "TRANSFERS" has the meaning assigned to that term in subsection 3.1Q.

         "UNIFORM COMMERCIAL CODE" or "UCC" means the Uniform Commercial Code
(or any similar or equivalent legislation) as in effect from time to time in
the applicable jurisdiction.

         "UNITED STATES CITIZEN" means a "citizen of the United States" within
the meaning of the Federal Aviation Act.

1.2  ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS UNDER
     AGREEMENT.

         Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP.

1.3  OTHER DEFINITIONAL PROVISIONS.

         References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided. Any of the terms defined in subsection 1.1 may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference.

                                   SECTION 2.

                   AMOUNTS AND TERMS OF COMMITMENTS AND LOANS

2.1  COMMITMENTS; MAKING OF LOANS; NOTES; REGISTER.

         A.       COMMITMENTS. (i) Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of the
Borrower herein set forth, each Tranche A Lender hereby severally agrees to
make, on the Initial Borrowing Date, thirteen term loans (each, a "TRANCHE A
LOAN" and, collectively, the "TRANCHE A LOANS") to the Borrower in an aggregate
amount not to exceed the Tranche A Commitment of such Tranche A Lender. Each
Tranche A Loan of a Tranche A Lender shall relate to one of the

                                      -21-

<PAGE>

Aircraft or to one of the Spare Engine Pools and shall be in an amount equal to
such Tranche A Lender's Tranche A Pro Rata Share on the Initial Borrowing Date
of the Maximum Tranche A Loan Amount with respect to such Aircraft or Spare
Engine Pool. The Tranche A Loans of all of the Tranche A Lenders relating to
one Aircraft or Spare Engine Pool shall not exceed the Maximum Tranche A Loan
Amount for such Aircraft or Spare Engine Pool and shall be made on the same day
by the Tranche A Lenders ratably according to their respective Tranche A
Commitments. Once repaid, Tranche A Loans borrowed hereunder may not be
reborrowed.

        (ii)      Subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties of the Borrower herein set
forth, each Tranche B Lender hereby severally agrees to make, on the Initial
Borrowing Date, thirteen term loans (each, a "TRANCHE B LOAN" and,
collectively, the "TRANCHE B LOANS") to the Borrower in an aggregate amount not
to exceed the Tranche B Commitment of such Tranche B Lender. Each Tranche B
Loan of a Tranche B Lender shall relate to one of the Aircraft or to one of the
Spare Engine Pools and shall be in an amount equal to such Tranche B Lender's
Tranche B Pro Rata Share on the Initial Borrowing Date of the Maximum Tranche B
Loan Amount with respect to such Aircraft or Spare Engine Pool. The Tranche B
Loans of all of the Tranche B Lenders relating to one Aircraft or Spare Engine
Pool shall not exceed the Maximum Tranche B Loan Amount for such Aircraft or
Spare Engine Pool and shall be made on the same day by the Tranche B Lenders
ratably according to their respective Tranche B Commitments. Once repaid,
Tranche B Loans borrowed hereunder may not be reborrowed.

         B.       BORROWING MECHANICS. (i) Each borrowing of Loans relating to
a particular Aircraft or Spare Engine Pool shall be made by the delivery of a
Notice of Borrowing by the Borrower to the Administrative Agent not later than
12:00 Noon (New York City time) on the third Business Day prior to the date of
the proposed borrowing. The Administrative Agent shall give to each Lender
prompt notice thereof. Each such Notice of Borrowing shall be irrevocable and
binding on the Borrower. Each such Notice of Borrowing shall be in the form of
Exhibit I. The Notice of Borrowing shall specify (i) the proposed borrowing
date (which shall be a Business Day), (ii) the amount of Loans requested and
(iii) the Aircraft or Spare Engine Pool to which the Loans relate. In lieu of
delivering the above described Notice of Borrowing, the Borrower may give the
Administrative Agent telephonic notice by the required time of any proposed
borrowing under this subsection 2.1B, provided that such notice is promptly
confirmed in writing.

        (ii)      Neither the Administrative Agent nor any Lender shall incur
any liability to the Borrower in acting upon any telephonic notice referred to
above that the Administrative Agent believes in good faith to have been given
by a duly authorized officer or other person authorized to borrow on behalf of
the Borrower or for otherwise acting in good faith under this subsection 2.1B,
and upon funding of the Loans by the Lenders in accordance with this Agreement
pursuant to any such telephonic notice the Borrower shall have effected the

                                      -22-

<PAGE>

Loans hereunder. The Borrower shall notify the Administrative Agent prior to
the funding of the Loans in the event that any of the matters to which the
Borrower is required to certify in the Notice of Borrowing is no longer true
and correct as of the Initial Borrowing Date and the acceptance by the Borrower
of the proceeds of any Loans shall constitute a recertification by the Borrower
as of the Initial Borrowing Date, as to the matters to which the Borrower is
required to certify in the applicable Notice of Borrowing.

         C.       DISBURSEMENT OF FUNDS. All Loans under this Agreement shall
be made by the Lenders simultaneously and proportionately to their respective
Pro Rata Shares, it being understood that no Lender shall be responsible for
any default by any other Lender in that other Lender's obligation to make a
Loan requested hereunder nor shall the Commitment of any Lender to make a Loan
requested be increased or decreased as a result of a default by any other
Lender in that other Lender's obligation to make a Loan requested hereunder.
Promptly after receipt by the Administrative Agent of a Notice of Borrowing
pursuant to subsection 2.1B (or telephonic notice in lieu thereof), the
Administrative Agent shall notify each Lender of the proposed borrowing. Each
Lender shall make the amount of its Loans available to the Administrative Agent
not later than 12:00 Noon (New York time) on the Initial Borrowing Date, in
each case in same day funds in Dollars, at the Funding and Payment Office.

         Unless the Administrative Agent shall have been notified by any Lender
prior to the Initial Borrowing Date that such Lender does not intend to make
available to the Administrative Agent the amount of such Lender's Loans so
requested on the Initial Borrowing Date, the Administrative Agent may assume
that such Lender has made such amount available to the Administrative Agent on
the Initial Borrowing Date and the Administrative Agent may, in its sole
discretion, but shall not be obligated to, make available to the Borrower a
corresponding amount on the Initial Borrowing Date. If such corresponding
amount is not in fact made available to the Administrative Agent by such
Lender, the Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from the Initial Borrowing Date until the date such amount is paid
to the Administrative Agent, at the customary rate set by the Administrative
Agent for the correction of errors among banks for three Business Days. If such
Lender does not pay such corresponding amount forthwith upon the Administrative
Agent's demand therefor, the Administrative Agent shall promptly notify the
Borrower and the Borrower shall immediately pay such corresponding amount to
the Administrative Agent together with interest thereon, for each day from the
Initial Borrowing Date until the date such amount is paid to the Administrative
Agent, at the rate payable under this Agreement. Nothing in this subsection
2.1C shall be deemed to relieve any Lender from its obligation to fulfill its
Commitment hereunder or to prejudice any rights that the Borrower may have
against any Lender as a result of any default by such Lender hereunder.

         D.       NOTES. (i) The Borrower shall duly execute and deliver on the
Initial Borrowing Date to each Tranche A Lender (or to the Administrative Agent
for that Tranche A

                                      -23-

<PAGE>

Lender) the Tranche A Notes, each substantially in the form of Exhibit IIA
annexed hereto, to evidence that Tranche A Lender's Tranche A Loans in respect
of each Aircraft or Spare Engine Pool, in the principal amount of such Tranche
A Lender's Tranche A Pro Rata Share of the Maximum Tranche A Loan Amount
relating to such Aircraft or Spare Engine Pool and with other appropriate
insertions (each a "TRANCHE A NOTE" and collectively, the "TRANCHE A NOTES").

         (ii)     The Borrower shall duly execute and deliver on the Initial
Borrowing Date to each Tranche B Lender (or to the Administrative Agent for
that Tranche B Lender) the Tranche B Notes, each substantially in the form of
Exhibit IIB annexed hereto, to evidence that Tranche B Lender's Tranche B Loans
in respect of each Aircraft or Spare Engine Pool, in the principal amount of
such Tranche B Lender's Tranche B Pro Rata Share of the Maximum Tranche B Loan
Amount relating to such Aircraft or Spare Engine Pool and with other
appropriate insertions (each a "TRANCHE B NOTE" and collectively, the "TRANCHE
B NOTES" and, together with the Tranche A Notes, the "NOTES").

         E.       THE REGISTER. (i) The Administrative Agent shall maintain, at
its address referred to in subsection 9.8, a register (the "REGISTER") for the
recordation of the names and addresses of the Lenders and the Commitments and
Loans of each Lender from time to time and the Administrative Agent shall
record in the Register the Commitments and the Loans from time to time of each
Lender and each repayment or prepayment in respect of the principal amount of
the Loans of each Lender. Such recordation shall be conclusive and binding on
the Borrower and each Lender, absent manifest error; provided, that failure to
make any such recordation, or any error in such recordation, shall not affect
the Borrower's Obligations in respect of the applicable Loans. The Register
shall be available for inspection by the Borrower or by any Lender at any
reasonable time and from time to time upon reasonable prior notice.

         (ii)     Each Lender shall record on its internal records (including,
without limitation, the Notes held by such Lender) the amount of each Loan made
by it and each payment in respect thereof. Any such recordation shall be
conclusive and binding on the Borrower, absent manifest error; provided, that
failure to make any such recordation, or any error in such recordation, shall
not affect the Borrower's Obligations in respect of the applicable Loans; and
provided further, that, in the event of any inconsistency between the Register
and any Lender's records, the recordations in the Register shall govern.

        (iii)     The Borrower, the Administrative Agent and the Lenders shall
deem and treat the Persons listed as Lenders in the Register as the holders and
owners of the corresponding Commitments and Loans listed therein for all
purposes hereof, and no assignment or transfer of any such Loan or Commitment
shall be effective in any case unless and until an Assignment Agreement
effecting the assignment or transfer thereof shall have been accepted by the
Administrative Agent and recorded in the Register as provided in subsection
9.1B(ii). Prior to such recordation, all amounts owed with respect to the
applicable Loan shall be owed

                                      -24-

<PAGE>

to the Lender listed in the Register as the owner thereof, and any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is listed in the Register as a Lender shall
be conclusive and binding on any subsequent holder, assignee or transferee of
the corresponding Commitments or Loans.

         (iv)     The Borrower hereby designates the Administrative Agent to
serve as the Borrower's agent solely for purposes of maintaining the Register
as provided in this subsection 2.1E, and the Borrower hereby agrees that, to
the extent that the Administrative Agent serves in such capacity, the
Administrative Agent and its officers, directors, employees, agents and
affiliates shall constitute Indemnitees for all purposes under subsection 9.3.

2.2  INTEREST ON THE LOANS.

         A.       RATE OF INTEREST. (i) Subject to the provisions of Sections
2.6 and 2.7, each Loan shall bear interest on the unpaid principal amount
thereof from the Initial Borrowing Date through maturity (whether by
acceleration or otherwise) at a rate determined by reference to the Adjusted
Eurodollar Rate. The applicable Interest Period for determining the rate of
interest with respect to the Loans shall be determined in accordance with
subsection 2.2B.

         (ii)     Subject to the provisions of subsections 2.2D and 2.7, the
Loans shall bear interest through maturity at a per annum rate equal to the sum
of the Adjusted Eurodollar Rate plus the Applicable Margin.

        (iii)     The "TRANCHE A APPLICABLE MARGIN" for each Tranche A Loan
shall be 1.75% less the Pricing Reduction, if any, in effect from time to time.
The "TRANCHE B APPLICABLE MARGIN" for each Tranche B Loan shall be 2.00%.

         B.       INTEREST PERIODS. In connection with each Loan, the interest
period ("Interest Period") to be applicable to such Loan shall be three months;
provided, that:

         (i)      prior to the earlier of July 25, 2000, and the Syndication
     Date, the Interest Period for each Loan shall be one month, and the first
     such Interest Period shall commence on the Initial Borrowing Date;

        (ii)      each successive Interest Period shall be three months and
     shall commence on the day on which the next preceding Interest Period
     expires;

       (iii)      if an Interest Period would otherwise expire on a day that is
     not a Business Day, such Interest Period shall expire on the next
     succeeding Business Day; provided, that, if any Interest Period would
     otherwise expire on a day that is not a Business Day but is a day of the
     month after which no further Business Day occurs in such month, such
     Interest Period shall expire on the next preceding Business Day;

                                      -25-

<PAGE>

        (iv)      any Interest Period that begins on the last Business Day of a
     calendar month (or on a day for which there is no numerically
     corresponding day in the calendar month at the end of such Interest
     Period) shall, subject to clause (v) of this subsection 2.2B, end on the
     last Business Day of a calendar month;

         (v)      no Interest Period shall extend beyond the Final Maturity
     Date for the applicable tranche of Loans;

        (vi)      no Interest Period shall extend beyond a date on which the
     Borrower is required to make a scheduled payment of principal of the Loans
     of the same tranche as such Loan; and

       (vii)      there shall be no more than one Interest Period at any time.

         C.       INTEREST PAYMENTS. Subject to the provisions of subsection
2.2D, interest on each Loan shall be payable in arrears on the last day of each
Interest Period applicable to that Loan, upon any prepayment of Loans (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity).

         D.       DEFAULT RATE. Upon the occurrence and during the continuation
of any Event of Default, the outstanding principal amount of all Loans and, to
the extent permitted by applicable law, any interest payments thereon not paid
when due and any fees and other amounts then due and payable hereunder, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable upon
demand at a rate that is 2% per annum in excess of the interest rate otherwise
payable under this Agreement with respect to the applicable Loans (or, in the
case of any such fees and other amounts, at a rate that is 1% per annum in
excess of the sum of the Base Rate as in effect from time to time and the
Applicable Margin); provided, that, upon the expiration of the Interest Period
in effect at the time any such increase in interest rate is effective, such
Loans shall thereupon bear interest payable upon demand at a rate that is 1%
per annum in excess of the sum of the Base Rate as in effect from time to time
and the Applicable Margin. Payment or acceptance of the increased rates of
interest provided for in this subsection 2.2D is not a permitted alternative to
timely payment and shall not constitute a waiver of any Event of Default or
otherwise prejudice or limit any rights or remedies of the Administrative Agent
or any Lender.

         E.       COMPUTATION OF INTEREST. Interest on each Loan shall be
computed on the basis of a 360-day year, in each case for the actual number of
days elapsed in the period during which it accrues. In computing interest on
any Loan, the date of the making of such Loan or the first day of an Interest
Period applicable to such Loan shall be included, and the date of payment of
such Loan or the expiration date of an Interest Period applicable to such Loan
shall be excluded; provided, that if a Loan is repaid on the same day on which
it is made, one day's interest shall be paid on that Loan.

                                      -26-

<PAGE>

2.3  FEES.

         The Borrower agrees to pay to the Lenders and the Administrative Agent
such fees and in such amounts and at such times as have been separately agreed
upon in writing among the Borrower and the Administrative Agent.

2.4  REPAYMENTS AND PREPAYMENTS; GENERAL PROVISIONS REGARDING PAYMENTS.

         A.       MANDATORY REDUCTION OF COMMITMENTS. The Total Commitment (and
the Commitment of each Lender) shall terminate on the earlier of (x) the
Initial Borrowing Date, after giving effect to the incurrence of the Loans on
such date and (y) April 30, 2000.

         B.       SCHEDULED REPAYMENTS OF LOANS. (a) The Borrower shall make
the following scheduled payments on the Tranche A Loans on each three month
anniversary of April 25, 2000, commencing with the three month anniversary
thereof: (i) the first four scheduled principal payments shall be in the amount
of $4,950,000; (ii) the next succeeding four scheduled principal payments shall
be in the amount of $6,600,000 and (iii) the final twelve scheduled principal
payments shall be in the amount $9,900,000; provided, that such scheduled
installments of principal of the Tranche A Loans shall be reduced in connection
with any voluntary or mandatory prepayments of the Tranche A Loans in
accordance with subsection 2.4C; and provided further, that the Tranche A Loans
and all other amounts owed hereunder with respect to the Tranche A Loans shall
be paid in full no later than the Final Maturity Date applicable to Tranche A
Loans, and the final installment payable by the Borrower in respect of the
Tranche A Loans on such date shall be in an amount sufficient to repay all
amounts owing by the Borrower under this Agreement with respect to the Tranche
A Loans. Any payment pursuant to this subsection 2.4B(a) will be applied
ratably among the Tranche A Loans relating to all Aircraft and both Spare
Engine Pools based on the outstanding principal amount of each such Tranche A
Loan as compared to the total outstanding principal amount of all Tranche A
Loans. If the date on which any scheduled payment is due falls on a day that is
not a Business Day, then such scheduled repayment shall be made on the next
succeeding Business Day; provided, that, if any such scheduled repayment would
otherwise become due on a day that is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such scheduled
repayment shall be made on the next preceding Business Day.

         (b)      The Borrower shall make the following scheduled payments on
the Tranche B Loans on each three month anniversary of April 25, 2000,
commencing with the three month anniversary thereof: (i) the first eight
scheduled principal payments shall be in the amount of $1,687,500; (ii) the
next succeeding four scheduled principal payments shall be in the amount of
$3,375,000; (iii) the next succeeding four scheduled principal payments shall
be in the amount of $5,062,500; (iv) the next succeeding seven scheduled
principal payments shall be in the amount of $6,750,000 and (v) the final
scheduled principal payment shall be in

                                      -27-

<PAGE>

the amount of $40,500,000; provided, that such scheduled installments of
principal of the Tranche B Loans shall be reduced in connection with any
voluntary or mandatory prepayments of the Tranche B Loans in accordance with
subsection 2.4C; and provided further, that the Tranche B Loans and all other
amounts owed hereunder with respect to the Tranche B Loans shall be paid in
full no later than the Final Maturity Date applicable to Tranche B Loans, and
the final installment payable by the Borrower in respect of the Tranche B Loans
on such date shall be in an amount sufficient to repay all amounts owing by the
Borrower under this Agreement with respect to the Tranche B Loans. Any payment
pursuant to this subsection 2.4B(b) will be applied ratably among the Tranche B
Loans relating to all Aircraft and both Spare Engine Pools based on the
outstanding principal amount of each such Tranche B Loan as compared to the
total outstanding principal amount of all Tranche B Loans. If the date on which
any scheduled payment is due falls on a day that is not a Business Day, then
such scheduled repayment shall be made on the next succeeding Business Day;
provided, that, if any such scheduled repayment would otherwise become due on a
day that is not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such scheduled repayment shall be made on
the next preceding Business Day.

         C.       PREPAYMENTS.

         (i)      Voluntary Prepayments. The Borrower may, upon not less than
three Business Days' prior written or telephonic notice given to the
Administrative Agent by 12:00 Noon (New York time) on the date required, and,
if given by telephone, promptly confirmed in writing to the Administrative
Agent (which original written or telephonic notice the Administrative Agent
will promptly transmit by telefacsimile or telephone to each Lender), at any
time and from time to time prepay, without premium or penalty, the Loans on any
Business Day in whole or in part in an aggregate minimum amount of $5,000,000
and integral multiples of $500,000 in excess of that amount; provided, however,
that Loans may only be prepaid on the expiration of the Interest Period
applicable thereto. Notice of prepayment having been given as aforesaid, the
principal amount of the Loans specified in such notice shall become due and
payable on the prepayment date specified therein. Any such voluntary prepayment
shall be applied as specified in subsection 2.4C(iii).

        (ii)      Mandatory Prepayments.

         (a)      Prepayments and Reductions from Asset Sales. No later than
the second Business Day following the date of receipt by the Borrower of Cash
Proceeds of any Asset Sale, the Borrower shall prepay, without premium or
penalty (other than pursuant to subsection 2.6D), Loans in an amount equal to
the Net Cash Proceeds of such Asset Sale. Concurrently with any prepayment of
the Loans pursuant to this subsection 2.4C(ii)(a), the Borrower shall deliver
to the Administrative Agent an Officers' Certificate demonstrating the
derivation of the Net Cash Proceeds of the correlative Asset Sale from the
gross sales price thereof. In the event that the Borrower shall, at any time
after receipt of Cash Proceeds of any Asset Sale requiring a prepayment
pursuant to this subsection 2.4C(ii)(a), determine that the

                                      -28-

<PAGE>

prepayments previously made in respect of such Asset Sale were in an aggregate
amount less than that required by the terms of this subsection 2.4C(ii)(a), the
Borrower shall promptly make an additional prepayment of the Loans, as the case
may be, in the manner described above in an amount equal to the amount of any
such deficit, and the Borrower shall concurrently therewith deliver to the
Administrative Agent an Officers' Certificate demonstrating the derivation of
the additional Net Cash Proceeds resulting in such deficit. Any mandatory
prepayments pursuant to this subsection 2.4C(ii)(a) shall be applied as
specified in subsection 2.4C(iii).

         (b)      Prepayments and Reductions Due to Insurance and Condemnation
Proceeds. Within 270 days of receipt by the Borrower of any cash payments under
any of the casualty insurance policies covering damage to or loss of property
maintained pursuant to subsection 5.4 or otherwise resulting from damage to or
loss of all or any portion of the Collateral or any other tangible asset (net of
actual and documented reasonable costs incurred by the Borrower in connection
with adjustment and settlement thereof and in connection with the reinvestment
of proceeds permitted hereby, "INSURANCE PROCEEDS") or any proceeds resulting
from the taking of assets by the power of eminent domain, condemnation or
otherwise (net of actual and documented reasonable costs incurred by Borrower in
connection with adjustment and settlement thereof and in connection with the
reinvestment of proceeds permitted hereby, "CONDEMNATION PROCEEDS," and
collectively with Insurance Proceeds, "PROCEEDS") (other than proceeds applied
pursuant to subsection 2.4C(ii)(c)) and so long as at the time of receipt of
such proceeds there shall exist no Potential Event of Default or Event of
Default, the Borrower may reinvest such Proceeds in property substantially
similar to the property so damaged or lost so long as the Administrative Agent
receives a first priority perfected security interest in such property pursuant
to documentation acceptable to the Administrative Agent, the property is duly
leased to Atlas pursuant to the applicable Lease and the Administrative Agent
receives all documents and opinions in connection therewith that it may
reasonably request, including, without limitation, an opinion from counsel that
the Borrower as lessor and the Administrative Agent as the assignee under the
Lease are entitled to the benefits of Section 1110 of the Bankruptcy Code with
respect to such property. If, 270 days after receipt of any such Proceeds, the
Borrower has not reinvested such Proceeds as described above or if at the time
of receipt of such proceeds or at the time of reinvestment there shall exist a
Potential Event of Default or an Event of Default then the Borrower shall
immediately prepay, without premium or penalty (other than pursuant to
subsection 2.6D), those Loans relating to the Aircraft or Spare Engine Pool in
respect of which such Proceeds were received based on the outstanding principal
amount of each Loan as compared to the total outstanding principal amount of all
Loans relating to such Aircraft or Spare Engine Pool. Any amount of the Proceeds
remaining (a) after prepayment of the Loans described in the immediately
preceding sentence and/or (b) after being reinvested in the manner described in
the second preceding sentence shall be applied ratably to the prepayment of
Loans relating to all of the remaining Aircraft and Spare Engine Pools based on
the outstanding principal amount of each such Loan as compared to the total
outstanding principal amount of all Loans relating to all of the remaining
Aircraft and

                                      -29-

<PAGE>
Spare Engine Pools. Any such mandatory prepayments shall be applied as
specified in subsection 2.4C(iii). Until such time as such proceeds are
reinvested or applied to repay Loans, all such proceeds shall be held by the
Administrative Agent in a cash collateral account with the Administrative Agent
as security for the Obligations pursuant to a cash collateral agreement in form
and substance satisfactory to the Administrative Agent and providing that such
proceeds may be invested in Cash or Cash Equivalents at the direction of the
Borrower with any earnings thereon being for the account of the Borrower.

         (c)      Prepayments and Reductions Due to an Event of Loss. Following
an Event of Loss with respect to an Aircraft or a Spare Engine, the Borrower
shall prepay, without premium or penalty (other than pursuant to subsection
2.6(D)), the outstanding principal amount of Loans relating to the Aircraft or
Spare Engine Pool that were the subject of the Event of Loss; provided, that
the Borrower shall not be required to make a prepayment pursuant to this
subsection 2.4C(ii)(c) in the event that the Borrower receives Insurance
Proceeds or Condemnation Proceeds in connection with such Event of Loss so long
as at the time of reinvestment there exists no Potential Event of Default or
Event of Default, in which case such proceeds may, within 270 days of receipt
of any such Proceeds, be reinvested in aircraft or spare engines substantially
similar to the Aircraft or Spare Engines that were the subject of the Event of
Loss so long as such replacement aircraft or spare engines are duly leased to
Atlas pursuant to the applicable Lease or Leases and the Administrative Agent
receives all documents and opinions in connection therewith that it may
reasonably request, including, without limitation, an opinion from counsel of
the Borrower to the extent that the Borrower as lessor and the Administrative
Agent as the assignee under the Lease are entitled to the benefits of Section
1110 of the Bankruptcy Code with respect to such property. To the extent that
Insurance Proceeds or Condemnation Proceeds received upon the occurrence of an
Event of Loss with respect to an Aircraft or Spare Engine are not reinvested in
accordance with the preceding sentence, then the Borrower shall prepay, without
premium or penalty (other than pursuant to subsection 2.6D), those Loans
relating to the Aircraft or Spare Engine Pool in respect of which such
Insurance Proceeds or Condemnation Proceeds were received based on the
outstanding principal amount of each Loan as compared to the total outstanding
principal amount of all Loans relating to such Aircraft or Spare Engine Pool.
Any amount of the Proceeds remaining (a) after prepayment of the Loans
described in the immediately preceding sentence and/or (b) after being
reinvested in the manner described in the second preceding sentence, shall be
applied ratably to the prepayment of Loans relating to all of the remaining
Aircraft and Spare Engine Pools based on the outstanding principal amount of
each such Loan as compared to the total outstanding principal amount of all
Loans relating to all of the remaining Aircraft and Spare Engine Pools. Any
such mandatory prepayments shall be applied as specified in subsection
2.4C(iii). Until such time as such Proceeds are reinvested in replacement
aircraft or spare engines or applied to repay Loans, such proceeds shall be
held by the Administrative Agent in a cash collateral account with the
Administrative Agent as security for the Obligations pursuant to a cash
collateral agreement in form and substance satisfactory to the Administrative
Agent and providing that such proceeds may be invested in Cash or

                                      -30-

<PAGE>

Cash Equivalents at the direction of the Borrower with any earnings thereon
being for the account of the Borrower.

         (d)      Prepayments under Leases. On any date on which the Borrower
receives any prepayments of rent or other amounts pursuant to the terms of any
Lease, the Borrower shall prepay, without premium or penalty (other than
pursuant to subsection 2.6), the outstanding principal amount of Loans relating
to the Aircraft or Spare Engine Pool that is the subject of the Lease pursuant
to which such prepayments were made and, to the extent that such payments are
in excess of the principal amount of Loans relating to such Aircraft or Spare
Engine Pool, such excess proceeds shall be applied to make an additional
prepayment of Loans relating to all of the remaining Aircraft and Spare Engine
Pools based on the outstanding principal amount of each such Loan as compared
to the total outstanding principal amount of all Loans relating to all of the
remaining Aircraft and Spare Engine Pools.

       (iii)      Application of Prepayments.

         (a)      Application of Voluntary Prepayments by Type of Loans and
Order of Maturity. Any voluntary prepayments pursuant to subsection 2.4C(i)
shall be applied ratably among the Loans relating to all of the Aircraft and
both Spare Engine Pools based on the outstanding principal amount of each such
Loan as compared to the total outstanding principal amount of all Loans. All
voluntary prepayments of the Loans pursuant to subsection 2.4C(i) shall be
applied pro rata to all scheduled amortization payments.

         (b)      Application of Mandatory Prepayments of Loans. Any mandatory
prepayments of the Loans pursuant to subsection 2.4C(ii) shall be applied
ratably among the Loans relating to all of the Aircraft and both Spare Engine
Pools based on the outstanding principal amount of each such Loan as compared
to the total outstanding principal amount of all Loans; provided, that in the
event of a prepayment pursuant to subsection 2.4C(ii)(a) such prepayment shall
be applied first to the Loans relating to such Aircraft or Spare Engine Pool
that were the subject of the Asset Sale on a pro rata basis based on the
outstanding principal amount of each Loan as compared to the total outstanding
principal amount of all Loans relating to such Aircraft or Spare Engine Pool
and second, ratably among the Loans relating to all other Aircraft and Spare
Engine Pools on a pro rata basis based on the outstanding principal amount of
the Loan being prepaid as compared to the total outstanding principal amount of
all Loans relating to all other Aircraft and Spare Engine Pools. Any mandatory
prepayments of the Loans pursuant to subsection 2.4C(ii)(b) or (c) shall be
applied to the Loans relating to the particular Aircraft or Spare Engine Pool,
retained by the Borrower and/or applied ratably among the Loans relating to all
other Aircraft and Spare Engine Pools in accordance with such sections. All
mandatory prepayments of the Loans pursuant to subsection 2.4C(ii) shall be
applied to scheduled amortization payments in inverse order of maturity.

                                      -31-

<PAGE>

         D.   GENERAL PROVISIONS REGARDING PAYMENTS.

         (i)      Manner and Time of Payment. All payments by the Borrower of
principal, interest, fees and other Obligations hereunder and under the Notes
shall be made in Dollars in same day funds, without defense, set-off or
counterclaim, free of any restriction or condition, and delivered to the
Administrative Agent not later than 12:00 Noon (New York time) on the date due
at the Funding and Payment Office for the account of the Lenders. Funds
received by the Administrative Agent after that time on such due date shall be
deemed to have been paid by the Borrower on the next succeeding Business Day.
The Borrower hereby authorizes the Administrative Agent to charge its accounts
with the Administrative Agent in order to cause timely payment to be made to
the Administrative Agent of all principal, interest, fees and expenses due
hereunder (subject to sufficient funds being available in its accounts for that
purpose).

        (ii)      Application of Payments to Principal and Interest. All
payments in respect of the principal amount of any Loan shall include payment
of accrued interest on the principal amount being repaid or prepaid, and all
such payments shall be applied to the payment of interest before application to
principal.

       (iii)      Apportionment of Payments. Aggregate principal and interest
payments in respect of Tranche A Loans shall be apportioned among all
outstanding Tranche A Loans to which such payments relate, in each case
proportionately to each Tranche A Lender's respective Tranche A Pro Rate Share.
Aggregate principal and interest payments in respect of Tranche B Loans shall
be apportioned among all outstanding Tranche B Loans to which such payments
relate, in each case proportionately to each Tranche B Lender's respective
Tranche B Pro Rata Share. The Administrative Agent shall promptly distribute to
each Lender, at its address set forth below its name on the signature page
hereof or at such other address as such Lender may request, its Tranche A Pro
Rata Share of all such payments received by the Administrative Agent in respect
of Tranche A Loans, and its Tranche B Pro Rate Share of all such payments
received by the Administrative Agent in respect of Tranche B Loans.

        (iv)      Payments on Business Days. Except as otherwise provided
herein, whenever any payment to be made hereunder shall be stated to be due on
a day that is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder.

         (v)      Notation of Payment. Each Lender agrees that before disposing
of any Note held by it, or any part thereof (other than by granting
participations therein), that Lender will make a notation thereon of all Loans
evidenced by that Note and all principal payments previously made thereon and
of the date to which interest thereon has been paid; provided, that the failure
to make (or any error in the making of) a notation of any Loan made under

                                      -32-

<PAGE>

such Note shall not limit or otherwise affect the obligations of the Borrower
hereunder or under such Note with respect to any Loan or any payments of
principal or interest on such Note.

2.5  USE OF PROCEEDS.

         A.       APPLICATION OF PROCEEDS. The proceeds of the Loans shall be
applied solely (I)(x) to consummate the Refinancing and (y) to pay fees and
expenses related to the Refinancing and the other transactions contemplated
hereby, (II) (x) to finance the Transfers and (y) to pay fees and expenses
related to the Transfers and the other transactions contemplated hereby, (III)
to pay fees and expenses related to the Atlas Contribution and the other
transactions contemplated hereby and (IV) to the extent that there are proceeds
remaining after application pursuant to preceding clauses (I), (II) and (III),
for general corporate purposes, including the payment of dividends to Atlas
permitted hereunder.

         B.       MARGIN REGULATIONS. No portion of the proceeds of any
borrowing under this Agreement shall be used by the Borrower in any manner that
might cause the borrowing or the application of such proceeds to violate
Regulation U, Regulation T or Regulation X of the Board of Governors of the
Federal Reserve System, or any other regulation of such Board, or to violate
the Exchange Act, in each case as in effect on the date or dates of such
borrowing and such use of proceeds.

2.6  SPECIAL PROVISIONS GOVERNING LOANS.

         Notwithstanding any other provisions of this Agreement to the
contrary, the following provisions shall govern with respect to Loans as to the
matters covered:

         A.       DETERMINATION OF APPLICABLE INTEREST RATE. As soon as
practicable after 10:00 A.M. (New York time) on each Interest Rate
Determination Date, the Administrative Agent shall determine (which
determination shall, absent manifest error, be final, conclusive and binding
upon all parties) the interest rate that shall apply to the Loans for which an
interest rate is then being determined for the applicable Interest Period and
shall promptly give notice thereof (in writing or by telephone confirmed in
writing) to the Borrower and to each Lender.

         B.       INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the event
that the Administrative Agent shall have determined (which determination shall
be final and conclusive and binding upon all parties hereto), on any Interest
Rate Determination Date with respect to any Loans, that, by reason of
circumstances affecting the interbank Eurodollar market, adequate and fair
means do not exist for ascertaining the interest rate applicable to such Loans
on the basis provided for in the definition of Adjusted Eurodollar Rate, the
Administrative Agent shall on such date give notice (by telefacsimile or by
telephone confirmed in writing) to the Borrower and to each Lender of such
determination, whereupon (i) no Loans may be incurred until such time as the
Administrative Agent notifies the Borrower and the

                                      -33-

<PAGE>

Lenders that the circumstances giving rise to such notice no longer exist, or
until the Borrower, the Administrative Agent and the Lenders agree upon a
Substitute Basis in accordance with Section 2.6G and (ii) the rate of interest
applicable to any Affected Loans then outstanding shall be determined in
accordance with Section 2.6G.

         C.       ILLEGALITY OR IMPRACTICABILITY OF LOANS. In the event that on
any date any Lender shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto but shall be made only after
consultation with the Borrower and the Administrative Agent) that the making,
maintaining or continuation of its Loans (i) has become unlawful as a result of
compliance by such Lender in good faith with any law, treaty, governmental
rule, regulation, guideline or order (or would conflict with any such treaty,
governmental rule, regulation, guideline or order not having the force of law
even though the failure to comply therewith would not be unlawful) or (ii) has
become impracticable, or would cause such Lender material hardship, as a result
of contingencies occurring after the date of this Agreement that materially and
adversely affect the interbank Eurodollar market or the position of such Lender
in that market, then, and in any such event, such Lender shall be an "AFFECTED
LENDER" and it shall on that day give notice (by telefacsimile or by telephone
confirmed in writing) to the Borrower and the Administrative Agent of such
determination (which notice the Administrative Agent shall promptly transmit to
each other Lender). Thereafter, (a) the obligation of the Affected Lender to
make Loans shall be suspended until such notice shall be withdrawn by the
Affected Lender, (b) the Affected Lender's obligation to maintain its
outstanding Loans (the "AFFECTED LOANS") shall be suspended until such notice
shall be withdrawn by the Affected Lender, and (c) the parties shall follow the
procedures set forth in Section 2.6G with respect to the Affected Loans so long
as, if following such procedures, the maintaining of such Loans is lawful.
Notwithstanding the foregoing, to the extent that a determination by an
Affected Lender as described above relates to a borrowing then being requested
by the Borrower subject to the provisions of subsection 2.6D, the Borrower
shall have the option, subject to the provisions of subsection 2.6D, to rescind
such borrowing as to all Lenders by giving notice (by telefacsimile or by
telephone confirmed in writing) to the Administrative Agent of such rescission
on the date on which the Affected Lender gives notice of its determination as
described above (which notice of rescission the Administrative Agent shall
promptly transmit to each other Lender). Except as provided in the immediately
preceding sentence, nothing in this subsection 2.6C shall affect the obligation
of any Lender other than an Affected Lender to make or maintain Loans in
accordance with the terms of this Agreement.

         D.       COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST
PERIODS. The Borrower shall compensate each Lender, upon written request by
such Lender (which request shall set forth the basis for requesting such
amounts), for all reasonable losses, expenses and liabilities (including,
without limitation, any interest paid by such Lender to lenders of funds
borrowed by it to make or carry its Loans and any loss, expense or liability
sustained by such Lender in connection with the liquidation or reemployment of
such funds)

                                      -34-

<PAGE>

that such Lender may sustain: (i) if for any reason (other than a default by
such Lender) a borrowing of any Loan does not occur on a date specified
therefor in a Notice of Borrowing or a telephonic request for borrowing, (ii)
if any prepayment or other principal payment occurs on a date prior to the last
day of an Interest Period applicable to such Loan, (iii) if any prepayment of
any of its Loans is not made on any date specified in a notice of prepayment
given by the Borrower, or (iv) as a consequence of any other default by the
Borrower in the repayment of its Loans when required by the terms of this
Agreement.

         E.       BOOKING OF LOANS. Any Lender may make, carry or transfer
Loans at, to, or for the account of any of its branch offices or the office of
an Affiliate of that Lender.

         F.       ASSUMPTIONS CONCERNING FUNDING OF LOANS. Calculation of all
amounts payable to a Lender under this subsection 2.6 and under subsection 2.7A
shall be made as though that Lender had actually funded each of its relevant
Loans through the purchase of a Eurodollar deposit bearing interest at the rate
obtained pursuant to the definition of Adjusted Eurodollar Rate in an amount
equal to the amount of such Loan and having a maturity comparable to the
relevant Interest Period and through the transfer of such Eurodollar deposit
from an offshore office of that Lender to a domestic office of that Lender in
the United States of America; provided, however, that each Lender may fund each
of its Loans in any manner it sees fit and the foregoing assumptions shall be
utilized only for the purposes of calculating amounts payable under this
subsection 2.6 and under subsection 2.7A.

         G.       SUBSTITUTE BASIS. During the 30 days following the date of
any notice given to the Borrower pursuant to subsections 2.6B and 2.6C, the
Administrative Agent, the Lenders and the Borrower shall negotiate in good
faith in order to arrive at a mutually acceptable alternative basis for
determining the interest rate from time to time applicable to the affected
Loans (the "SUBSTITUTE BASIS"). If, within the 30 days following the date of
any such notice to the Borrower, the Administrative Agent, the Lenders and the
Borrower shall agree upon a Substitute Basis, such Substitute Basis shall be
retroactive to and effective from the first day of the then current Interest
Period until and including the last day of such Interest Period. If, after 30
days from the date of such notice, the Lenders and the Borrower shall have
failed to agree upon a Substitute Basis, then each Lender shall certify in
writing to the Borrower through the Administrative Agent (such certification to
be conclusive and binding on all of the parties hereto absent manifest error)
the interest rate at which such Lender is prepared to make or maintain its
affected Loan for such Interest Period, it being understood that such Lender's
interest rate shall be at a rate per annum equal to the sum of the Applicable
Margin plus, a rate which adequately and fairly reflects the cost to such
Lender of obtaining the funds necessary to maintain its affected Loan for such
Interest Period, such interest rate to be retroactive to and effective from the
first day of such Interest Period. If no Substitute Basis is established, upon
receipt of notice of the interest rates at which the Lenders are prepared to
make or maintain their respective affected Loans, the Borrower shall have the
right, exercisable upon ten Business Days' prior notice to any Lender through
the Administrative Agent,

                                      -35-

<PAGE>

(A) to continue to borrow Loans at the interest rates so advised by the
respective Lenders (as such rates may be modified, from time to time, at the
outset of each subsequent Interest Period) or (B) to prepay in full the
Affected Loans of any Lender, together with accrued interest thereon at the
interest rate certified in writing by such Lender as provided above, whereupon
such Affected Loans shall become due and payable on the date specified by the
Borrower in such notice. In determining the actual interest rate per annum to
be charged on any Loan, the Substitute Basis or the interest rate advised by
the respective Lenders to apply to a Loan in accordance with the provisions of
this subsection 2.6G shall be increased to the rate per annum obtained by
dividing the Substitute Basis or such advised interest rate by a percentage
equal to 100% minus the then stated maximum rate of all required reserve
requirements under applicable law (including any marginal, emergency,
supplemental, special or other reserves) and applicable on the date of
determination of such interest rate to any member bank of the Federal Reserve
System in respect of "Eurocurrency liabilities" as defined in Regulation D of
the Board of Governors of the Federal Reserve System, as in effect from time to
time (or any successor category of liabilities under Regulation D).

2.7  INCREASED COSTS, TAXES; CAPITAL ADEQUACY.

          A.      COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the
provisions of subsection 2.7B, in the event that any Lender shall determine
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto) that any law, treaty or governmental rule,
regulation or order, or any change therein or in the interpretation,
administration or application thereof (including the introduction of any new
law, treaty or governmental rule, regulation or order), or any determination of
a court or governmental authority, in each case that becomes effective after the
date hereof, or compliance by such Lender with any guideline, request or
directive issued or made after the date hereof by any central bank or other
governmental or quasi-governmental authority (whether or not having the force of
law):

         (i)      subjects such Lender (or its applicable lending office) to
any additional Tax (other than any change in the rate of Tax on the overall net
income of such Lender) with respect to this Agreement or any of its obligations
hereunder or any payments to such Lender (or its applicable lending office) of
principal, interest, fees or any other amount payable hereunder;

        (ii)      imposes, modifies or holds applicable any reserve (including,
without limitation, any marginal, emergency, supplemental, special or other
reserve), special deposit, compulsory loan, FDIC insurance or similar
requirement against assets held by, or deposits or other liabilities in or for
the account of, or advances or loans by, or other credit extended by, or any
other acquisition of funds by, any office of such Lender (other than any such
reserve or other requirements with respect to Loans that are reflected in the
definition of Adjusted Eurodollar Rate); or

                                      -36-

<PAGE>

       (iii)      imposes any other condition (other than with respect to a Tax
matter) on or affecting such Lender (or its applicable lending office) or its
obligations hereunder or the interbank Eurodollar market;

and the result of any of the foregoing is to increase the cost to such Lender
of agreeing to make, making or maintaining Loans hereunder or to reduce any
amount received or receivable by such Lender (or its applicable lending office)
with respect thereto; then, in any such case, the Borrower shall promptly pay
to such Lender, upon receipt of the statement referred to in the next sentence,
such additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder. Such Lender shall deliver to the Borrower (with a copy to the
Administrative Agent) a written statement, setting forth in reasonable detail
the basis for calculating the additional amounts owed to such Lender under this
subsection 2.7A, which statement shall be conclusive and binding upon all
parties hereto absent manifest error.

         B.       WITHHOLDING OF TAXES.

         (i)      Payments to Be Free and Clear. All sums payable by the
Borrower under this Agreement and the other Loan Documents shall be paid free
and clear of and (except to the extent required by law) without any deduction
or withholding on account of any Tax (excluding, except as provided in
subsection 27B(ii)(e), any Tax on the overall net income of any Lender)
imposed, levied, collected, withheld or assessed by any jurisdiction or by any
political subdivision or taxing authority thereof or therein with respect to
such payments.

        (ii)      Grossing-up of Payments. If the Borrower or any other Person
is required by law to make any deduction or withholding on account of any such
Tax from any sum paid or payable by the Borrower to the Administrative Agent or
any Lender under any of the Loan Documents:

         (a)      the Borrower shall notify the Administrative Agent of any
such requirement or any change in any such requirement as soon as the Borrower
becomes aware of it;

         (b)      the Borrower shall pay any such Tax before the date on which
penalties attach thereto, such payment to be made (if the liability to pay is
imposed on the Borrower) for its own account or (if that liability is imposed
on the Administrative Agent or such Lender, as the case may be) on behalf of
and in the name of the Administrative Agent or such Lender;

         (c)      the sum payable by the Borrower in respect of which the
relevant deduction, withholding or payment is required shall be increased to
the extent necessary to ensure that, after the making of that deduction,
withholding or payment, the Administrative

                                      -37-

<PAGE>

Agent or such Lender, as the case may be, receives on the due date a net sum
equal to what it would have received had no such deduction, withholding or
payment been required or made;

         (d)      within 30 days after paying any sum from which it is required
by law to make any deduction or withholding, and within 30 days after the due
date of payment of any Tax which it is required by clause (b) above to pay, the
Borrower shall deliver to the Administrative Agent evidence satisfactory to the
other affected parties of such deduction, withholding or payment and of the
remittance thereof to the relevant taxing or other authority; and

         (e)      if any amounts are payable in respect of Taxes pursuant to
subsection 2.7B(ii)(c), the Borrower agrees to reimburse each Lender, upon the
written request of such Lender, for taxes imposed on or measured by the overall
net income of such Lender and for any withholding of taxes as such Lender shall
determine are payable by, or withheld from, such Lender, in respect of such
amounts so paid to or on behalf of such Lender pursuant to subsection
2.7B(ii)(c), and in respect of any amounts paid to or on behalf of such Lender
pursuant to this subsection 2.7B(ii)(e).

       (iii)      Evidence of Exemption from U.S. Withholding Tax.

         (a)      Each Lender that is organized under the laws of any
jurisdiction other than the United States or any state or other political
subdivision thereof (for purposes of this subsection 2.7B(iii), a "NON-U.S.
LENDER") shall deliver to the Administrative Agent for transmission to the
Borrower, on or prior to the Effective Date (in the case of each Lender listed
on the signature pages hereof) or on the date of the Assignment Agreement
pursuant to which it becomes a Lender (in the case of each other Lender that
was not a Lender hereunder immediately prior to such assignment or transfer),
and at such other times as may be necessary in the determination of the
Borrower or the Administrative Agent (each in the reasonable exercise of its
discretion), (1) two original copies of Internal Revenue Service Form W-8ECI or
Form W-8BEN (with respect to a complete exemption under an income tax treaty)
(or any successor forms), properly completed and duly executed by such Lender,
certifying to such Lender's entitlement to a complete exemption from United
States withholding tax with respect to any payments to such Lender under any of
the Loan Documents or (2) if such Lender is not a "bank" or other Person
described in Section 881(c)(3) of the Internal Revenue Code and cannot deliver
either Internal Revenue Service Form W-8ECI or Form W-8BEN (with respect to a
complete exemption under an income tax treaty) pursuant to clause (1) above, a
Certificate re Non-Bank Status together with two original copies of Internal
Revenue Service Form W-8BEN (with respect to the portfolio interest exemption)
(or any successor form), properly completed and duly executed by such Lender,
certifying to such Lender's entitlement to a complete exemption from United
States withholding tax with respect to any payments to such Lender of interest
payable under any of the Loan Documents.

         (b)      Each Lender required to deliver any forms, certificates or
other evidence with respect to United States federal income tax withholding
matters pursuant to sub-

                                      -38-

<PAGE>

section 2.7B(iii)(a) hereby agrees, from time to time after the initial
delivery by such Lender of such forms, certificates or other evidence, whenever
a lapse in time or change in circumstances renders such forms, certificates or
other evidence obsolete or inaccurate in any material respect, such Lender
shall (1) deliver to the Administrative Agent for transmission to the Borrower
two new original copies of Internal Revenue Service Form W-8ECI or Form W-8BEN
(with respect to the benefits of any income tax treaty), or a Certificate re
Non-Bank Status and two original copies of Internal Revenue Service Form W-8BEN
(with respect to the portfolio interest exemption), as the case may be,
properly completed and duly executed by such Lender, together with any other
certificate or statement of exemption required in order to confirm or establish
the entitlement of such Lender to a continued exemption from or reduction in
United States withholding tax with respect to payments to such Lender under the
Loan Documents or (2) immediately notify the Administrative Agent and the
Borrower of its inability to deliver any such forms, certificates or other
evidence, in which case such Lender shall not be required to deliver any such
forms, certificates or other evidence pursuant to this subsection 2.7B(iii)(b).

         (c)      The Borrower shall not be required to pay any additional
amount to any Non-U.S. Lender under clause (c) or (e) of subsection 2.7B(ii) if
such Lender shall have failed to satisfy the requirements of subsection
2.7B(iii)(a); provided, that if such Lender shall have satisfied such
requirements on the Initial Borrowing Date (in the case of each Lender listed
on the signature pages hereof) or on the date of the Assignment Agreement
pursuant to which it became a Lender (in the case of each other Lender),
nothing in this subsection 2.7B(iii)(c) shall relieve the Borrower of its
obligation to pay any additional amounts pursuant to clause (c) or (e) of
subsection 2.7B(ii) in the event that, as a result of any change in any
applicable law, treaty or governmental rule, regulation or order, or any change
in the interpretation, administration or application thereof, such Lender is no
longer properly entitled to deliver forms, certificates or other evidence at a
subsequent date establishing the fact that such Lender is not subject to
withholding as described in subsection 2.7B(iii)(a).

        (iv)      If the Borrower pays any additional amount under this
subsection 2.7B to a Lender and such Lender determines in its sole discretion
that it has actually received or realized in connection therewith any refund or
any reduction of, or credit against, its Tax liabilities in or with respect to
the taxable year in which the additional amount is paid, such Lender shall pay
to the Borrower an amount that such Lender shall, in its sole discretion,
determine is equal to the net benefit, after tax, that was obtained by the
Lender in such year as a consequence of such refund, reduction or credit;
provided, however, that (i) any Lender may determine, in its sole discretion
consistent with the policies of such Lender, whether to seek a Tax Benefit;
(ii) any Taxes that are imposed on a Lender as a result of a disallowance or
reduction (including through the expiration of any tax credit carryover or
carryback of such Lender that otherwise would not have expired) of any Tax
Benefit with respect to which such Lender has made a payment to the Borrower
pursuant to this Section 2.7B(iv) shall be treated as a Tax for which the
Borrower is obligated to indemnify such Lender pursuant to this Sec-

                                      -39-

<PAGE>

tion 2.7B(iv) without any exclusions or defenses; and (iii) nothing in this
Section 2.7B(iv) shall require the Lender to disclose any confidential
information to the Borrower (including , without limitation, its tax returns).

         C.       CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have
determined that the adoption, effectiveness, phase-in or applicability after
the date hereof of any law, rule or regulation (or any provision thereof)
regarding capital adequacy, or any change therein or in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Lender (or its applicable lending office) with any guideline,
request or directive regarding capital adequacy (whether or not having the
force of law) of any such governmental authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on the
capital of such Lender or any corporation controlling such Lender as a
consequence of, or with reference to, such Lender's Loans or Commitments or
other obligations hereunder to a level below that which such Lender or such
controlling corporation could have achieved but for such adoption,
effectiveness, phase-in, applicability, change or compliance (taking into
consideration the policies of such Lender or such controlling corporation with
regard to capital adequacy), then from time to time, within ten Business Days
after receipt by the Borrower from such Lender of the statement referred to in
the next sentence, the Borrower shall pay to such Lender such additional amount
or amounts as will compensate such Lender or such controlling corporation on an
after-tax basis for such reduction. Such Lender shall deliver to the Borrower
(with a copy to the Administrative Agent) a written statement, setting forth in
reasonable detail the basis of the calculation of such additional amounts,
which statement shall be conclusive and binding upon all parties hereto absent
manifest error.

         D.       SUBSTITUTE LENDERS. In the event that the Borrower is
required under the provisions of subsection 2.6C or this subsection 2.7 to make
payments in a material amount to any Lender or in the event that any Lender
fails to lend to the Borrower in accordance with this Agreement, the Borrower
may, so long as, no Event of Default or Potential Event of Default shall have
occurred and be continuing, elect to terminate such Lender as a party to this
Agreement, so long as, concurrently with such termination, (i) the Borrower
pays to that Lender all principal, interest and fees and other amounts
(including, without limitation, amounts, if any, owed under subsection 2.6C or
this subsection 2.7) owed to such Lender through such date of termination, (ii)
another financial institution satisfactory to the Borrower and the
Administrative Agent (or if the Administrative Agent is also the Lender to be
terminated, the successor Administrative Agent) agrees, as of such date, to
become a Lender for all purposes under this Agreement (whether by assignment or
amendment) and to assume all obligations of the Lender to be terminated as of
such date, and (iii) all documents and supporting materials necessary, in the
judgment of the Administrative Agent (or if the Administrative Agent is also
the Lender to be terminated, the successor Administrative Agent) to evidence

                                      -40-

<PAGE>

the substitution of such Lender have been received and approved by the
Administrative Agent as of such date.

2.8  OBLIGATION OF LENDERS TO MITIGATE.

         Each Lender agrees that, as promptly as practicable after the officer
of such Lender responsible for administering the Loans of such Lender becomes
aware of the occurrence of an event or the existence of a condition that would
cause such Lender to become an Affected Lender or that would entitle such
Lender to receive payments under subsection 2.7, it will, to the extent not
inconsistent with the internal policies of such Lender and any applicable legal
or regulatory restrictions, use reasonable efforts (i) to make, issue, fund or
maintain the Commitment of such Lender or the Affected Loan of such Lender
through another lending office of such Lender, or (ii) take such other measures
as such Lender may deem reasonable, if as a result thereof the circumstances
that would cause such Lender to be an Affected Lender would cease to exist or
the additional amounts that would otherwise be required to be paid to such
Lender pursuant to subsection 2.7 would be materially reduced and if, as
determined by such Lender in its sole discretion, the making, issuing, funding
or maintaining of such Commitments or Loans through such other lending office
or in accordance with such other measures, as the case may be, would not
otherwise materially adversely affect such Commitments or Loans or the
interests of such Lender; provided, that such Lender will not be obligated to
utilize such other lending office pursuant to this subsection 2.8 unless the
Borrower agrees to pay all incremental expenses incurred by such Lender as a
result of utilizing such other lending office as described in clause (i) above.
A certificate as to the amount of any such expenses payable by the Borrower
pursuant to this subsection 2.8 (setting forth in reasonable detail the basis
for requesting such amount) submitted by such Lender to the Borrower (with a
copy to the Administrative Agent) shall be conclusive absent manifest error.

                                   SECTION 3.

                              CONDITIONS TO LOANS

3.1  CONDITIONS TO LOANS.

         The obligations of the Lenders to make the Loans on the Initial
Borrowing Date are subject to prior or concurrent satisfaction of the following
conditions:

         A.   BORROWER AND ATLAS DOCUMENTS. On or before the Initial Borrowing
Date, the Borrower shall deliver or cause to be delivered to the Lenders (or to
the Administrative Agent for the Lenders with sufficient originally executed
copies, where appropriate, for each Lender and its counsel) the following,
each, unless otherwise noted, dated the Effective Date:

                                      -41-

<PAGE>

         (i)      certified copies of the certificate or articles of
incorporation of the Borrower and Atlas, together with a good standing
certificate from the Secretary of State of the State of Delaware and each other
state in which such corporation is qualified as a foreign corporation to do
business and, to the extent generally available, a certificate or other
evidence of good standing as to payment of any applicable franchise or similar
taxes from the appropriate taxing authority of each of such states, each dated
a recent date prior to the Effective Date;

        (ii)      copies of the bylaws of the Borrower and of Atlas, certified
in each case as of the Effective Date by its corporate secretary or an
assistant secretary;

       (iii)      resolutions of the Board of Directors of the Borrower and
Atlas approving and authorizing the execution, delivery and performance of this
Agreement, the other Loan Documents and the Transaction Documents (to the
extent that such Person is a party thereto), certified as of the Effective Date
by such Person's corporate secretary or an assistant secretary as being in full
force and effect without modification or amendment;

        (iv)      signature and incumbency certificates of the officers of the
Borrower and of Atlas executing this Agreement and the other Loan Documents;

         (v)      executed originals of this Agreement, the Notes (duly
executed in accordance with this Agreement) and the other Loan Documents,
including Aircraft Chattel Mortgages with respect to all of the Aircraft and
both of the Spare Engine Pools; and

        (vi)      such other documents as the Administrative Agent may
reasonably request.

         B.       AIRCRAFT DOCUMENTS. With respect to each Aircraft or Spare
Engine, the following documents shall have been duly authorized, executed and
delivered by the respective parties thereto, shall each be reasonably
satisfactory in form and substance to the Lenders and the Administrative Agent
and shall be in full force and effect, and copies shall have been delivered to
the Administrative Agent: all documents, including without limitation, any
bills of sale, certificates of transfer and bills of sale on AC Form 8050-2
evidencing the conveyance of title of the Aircraft and Spare Engines from
Atlas, AFL, or AFL II, as the case may be, to the Borrower and such other
evidence as the Administrative Agent shall request confirming that the Borrower
has good and valid title to each Aircraft and Spare Engine and that all
registrations and recordings necessary to evidence such title have been made,
including, without limitation, all recordings with the FAA to register the
Aircraft in the name of the Borrower.

         C.       NOTICES OF BORROWING. Prior to the making of the Loans, the
Administrative Agent shall have received such Notices of Borrowing as are
required by sub-section 2.1B.

                                      -42-

<PAGE>

         D.       NECESSARY CONSENTS. The Borrower shall have obtained all
consents necessary or advisable in connection with the transactions
contemplated by the Loan Documents and the continued operation of the business
of the Borrower, and each of the foregoing shall be in full force and effect
and in form and substance satisfactory to the Administrative Agent.

         E.       AIRCRAFT CHATTEL MORTGAGES. The Administrative Agent shall
have received a copy of a first priority Aircraft Chattel Mortgage relating to
each Aircraft and each Spare Engine, duly executed by the Borrower, which
Aircraft Chattel Mortgages shall provide a first priority security interest in
the Collateral for the benefit of the Lenders, securing all the Obligations,
together with:

         (i)      executed copies of proper financing statements to be filed
under the UCC in all jurisdictions where the Administrative Agent may deem such
filing necessary or desirable in order to perfect the security interests
created by the Aircraft Chattel Mortgages;

        (ii)      evidence of the completion of all recordings and filings with
respect to the Collateral that the Administrative Agent may deem necessary or
desirable in order to perfect the security interest created by the Aircraft
Chattel Mortgages including, without limitation, all filings with the FAA; and

       (iii)      evidence that all other actions necessary or, in the
reasonable opinion of the Administrative Agent, desirable to establish,
preserve and perfect the first priority security interests created by the
Aircraft Chattel Mortgages in all Aircraft and Spare Engines have been taken
(including all FAA filings).

         F.       FAIRNESS OPINION. On or prior to the Initial Borrowing Date,
the Borrower shall have delivered or shall have caused to be delivered to the
Administrative Agent a fairness opinion from Scott & Stringfellow, Inc.,
stating that the Transaction is on terms no less favorable to Atlas or the
Borrower than those that could have been obtained in an arm's length
transaction with unrelated third parties.

         G.       FINANCIAL CONDITION CERTIFICATES. Each of the Borrower and
Atlas shall have delivered to the Administrative Agent a Financial Condition
Certificate dated the Initial Borrowing Date, substantially in the form annexed
hereto as Exhibit VIIA and Exhibit VIIB annexed hereto, respectively, with
appropriate attachments demonstrating that, after giving effect to the
consummation of the financing transactions contemplated hereby, each of the
Borrower and Atlas and its Subsidiaries is Solvent.

         H.   OPINIONS OF BORROWER'S COUNSEL. Lenders and their respective
counsel shall have received (i) one or more favorable written opinions of
Cahill Gordon & Reindel, counsel for the Borrower, in form and substance
reasonably satisfactory to the Administrative Agent and its counsel, dated as
of the Initial Borrowing Date and setting forth substantially

                                      -43-

<PAGE>

the matters in the opinions designated in Exhibit IVA annexed hereto and as to
such other matters as the Administrative Agent acting on behalf of the Lenders
may reasonably request, (ii) an opinion of Cahill Gordon & Reindel regarding
Section 1110 of the Bankruptcy Code, dated the Initial Borrowing Date and
setting forth substantially the matters in the opinions designated in Exhibit
IVB annexed hereto, (iii) an opinion of Cahill Gordon & Reindel regarding
certain bankruptcy matters other than those covered in the opinion referred to
in clause (ii) above, dated the Initial Borrowing Date and setting forth
substantially the matters in the opinions designated in Exhibit IVC annexed
hereto and (iv) an opinion of Cahill Gordon & Reindel regarding certain tax
matters, dated the Initial Borrowing Date and setting forth substantially the
matters in the opinions designated in Exhibit IVD annexed hereto.

         I.       ATLAS CREDIT AGREEMENT; LEASES.  The Amended Aircraft Credit
Facility and the Leases shall be effective and shall be in form and substance
satisfactory to the Administrative Agent and the Lenders so as to allow,
according to its terms, the Transaction to be consummated.

         J.       OPINIONS OF FAA COUNSEL. The Lenders and their respective
counsel shall have received originally executed copies of one or more favorable
written opinions of FAA counsel in form and substance satisfactory to the
Administrative Agent and its counsel, dated the Initial Borrowing Date, and
setting forth substantially the matters in the opinions designated in Exhibit
IVE annexed hereto.

         K.       FEES. The Borrower shall have paid to the Administrative
Agent, for distribution (as appropriate) to the Administrative Agent and the
Lenders, the fees payable on the Initial Borrowing Date referred to in
subsection 2.3.

         L.       FINANCIAL STATEMENTS. On or before the Initial Borrowing
Date, the Administrative Agent shall have received from the Borrower (i) an
audited consolidated and consolidating balance sheet of Atlas and its
Subsidiaries as at December 31, 1999, and the related consolidated and
consolidating statements of income, stockholders' equity and cash flows of
Atlas and its Subsidiaries for such fiscal year, accompanied by an opinion of a
nationally recognized firm of independent public accountants and (ii) the
Projections, which financial statements and Projections shall be in form and
substance reasonably satisfactory to the Administrative Agent.

         M.       EVIDENCE OF INSURANCE. The Borrower shall have delivered to
the Administrative Agent certificates of insurance naming the Administrative
Agent on behalf of the Administrative Agent and the Lenders as loss payee under
the casualty insurance policies and the Administrative Agent and the Lenders as
additional insured under the liability policies of the Borrower and a broker's
report from the Borrower's insurance broker evidencing compliance with the
requirements of each Aircraft Chattel Mortgage, all as required pursuant to
subsection 5.4 hereof or pursuant to the Collateral Documents. All such
certificates of insurance shall contain such endorsements as are reasonably
required by the Administrative Agent.

                                      -44-

<PAGE>

         N.       NO MATERIAL ADVERSE EFFECT. Since December 31, 1999, no
Material Adverse Effect (in the reasonable opinion of the Administrative Agent)
shall have occurred.

         O.       REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS. On
the Initial Borrowing Date, (i) there shall exist no Potential Event of Default
or Event of Default and (ii) all representations and warranties in Section 4
hereof are true, correct and complete in all material respects on and as of the
Initial Borrowing Date to the same extent as though made on and as of that date
and the Borrower shall have performed in all material respects all agreements
and satisfied all conditions that this Agreement provides shall be performed or
satisfied by it on or before the Initial Borrowing Date except as otherwise
disclosed to and agreed to in writing by the Administrative Agent and Requisite
Lenders, and the Borrower shall have delivered to the Administrative Agent an
Officer's Certificate, in form and substance satisfactory to the Administrative
Agent, to that effect.

         P.       COMPLIANCE CERTIFICATE. The Borrower shall have delivered to
the Administrative Agent a Compliance Certificate dated the Initial Borrowing
Date, substantially in the form annexed hereto as Exhibit III.

         Q.       TRANSACTION; REFINANCING. On or prior to the Initial
Borrowing Date, the following shall have occurred: (i) Atlas shall have
contributed to the Borrower, in exchange for equity interests in the Borrower,
the sum of $12,783,142, together with the Atlas Aircraft and each of the Atlas
Spare Engines, and the Borrower shall, concurrently with such contribution, pay
the sum of $29,705,684 to the holders of the Atlas Equipment Obligations
(collectively, the "ATLAS CONTRIBUTION"); (ii) AFL shall have contributed to
the Borrower, in exchange for equity interests in the Borrower, each of the AFL
Aircraft, subject to the AFL Equipment Obligations (the "AFL CONTRIBUTION");
(iii) AFL II shall have contributed to the Borrower, in exchange for equity
interests in the Borrower, each of the AFL II Aircraft and each of the AFL II
Spare Engines, in each case subject to the AFL II Equipment Obligations (the
"AFL II CONTRIBUTION" and, together with the AFL Contribution, the
"TRANSFERS"); (iv) the Borrower shall have leased each of the Aircraft to Atlas
via the Aircraft Leases; (v) the Borrower shall have leased all of the AFL II
Spare Engines to Atlas via the CF6-50E2 Spare Engine Lease; (vi) the Borrower
shall have leased all of the Atlas Spare Engines to the Borrower via the
CF6-80C2 Spare Engine Lease; (vii) all Equipment Obligations shall have been
indefeasibly repaid in full from, among other sources, the proceeds of the
borrowing hereunder and (viii) all security interests and Liens encumbering the
Aircraft or any part thereof or the Spare Engines or any other assets of the
Borrower shall have been terminated and released (the actions taken in clauses
(vii) and (viii) collectively, the "REFINANCING," and the actions taken in
clauses (i) through (viii) together with the incurrence of Loans hereunder
collectively, the "TRANSACTION"). The Lenders shall have received true and
correct copies of all of the Transaction Documents, including, without
limitation, all documentation entered into in connection with the Atlas
Contribution, the Transfers and the Leases, which Leases shall be substantially
in the form of Exhibit VIIIA or Exhibit VIIIB annexed hereto, as appropriate,
and

                                      -45-

<PAGE>

all terms and conditions thereof shall be satisfactory to the Administrative
Agent (including, with respect to the Leases, their terms, rental schedules,
covenants, events of default and remedies). All of the Transaction Documents
shall have been duly executed and delivered by all parties thereto, and shall
be in full force and effect. Each of the conditions precedent to the
consummation of the Transaction set forth in the Transaction Documents shall
have been satisfied or waived, all to the satisfaction of the Administrative
Agent, and on or prior to the Initial Borrowing Date, the Transaction shall
have been consummated in accordance with the Transaction Documents and all
applicable laws, rules and regulations.

         R.       COMPLETION OF PROCEEDINGS. All corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by the Administrative Agent, acting on behalf of the Lenders, and
its counsel shall be satisfactory in form and substance to the Administrative
Agent and such counsel, and the Administrative Agent and such counsel shall
have received all such counterpart originals or certified copies of such
documents as the Administrative Agent may reasonably request.

         S.       APPRAISALS. The Borrower shall have delivered to the
Administrative Agent appraisals from two Approved Appraisers, in form and
substance satisfactory to the Lenders, which appraisals shall demonstrate to
the Lenders' satisfaction that the ratio of the Total Commitment to the
aggregate Appraised Value of the Aircraft and the Spare Engines does not exceed
65% and that the terms of each of the Leases, including, without limitation,
rental rates, economic life and residual value, are at fair market value.

         T.       FAA CERTIFICATION AND TITLE. The Administrative Agent shall
have received evidence satisfactory to it to the effect that Atlas is an air
carrier certificated under Sections 401 and 604(b) of the Federal Aviation Act
and with respect to each Aircraft, the Administrative Agent shall have received
evidence that (i) each of the Aircraft has been registered with and duly
certified by the FAA as to type and airworthiness in the name of the Borrower
and the Administrative Agent has received a copy of such certification and
evidence satisfactory to the Lenders that each Engine and each Spare Engine is
being maintained in accordance with an FAA-approved or substantially similar
program and (ii) the Borrower shall have good and marketable title to and a
valid ownership interest in the Collateral, including the Aircraft and each
Spare Engine, free and clear of all Liens other than Liens permitted by
subsection 6.2.

         U.       BANKRUPTCY-REMOTE SUBSIDIARY. The Administrative Agent and
the Lenders shall be satisfied that the Borrower is a bankruptcy-remote
Subsidiary of Atlas and that the certificate of incorporation contains
provisions under which the Borrower may not commence a voluntary bankruptcy
proceeding without the affirmative vote of all directors.

                                      -46-

<PAGE>

                                   SECTION 4.

                   BORROWER'S REPRESENTATIONS AND WARRANTIES

         In order to induce the Lenders to enter into this Agreement and to
make the Loans, the Borrower represents and warrants to each Lender, after
giving effect to the Transaction consummated on the Initial Borrowing Date,
that the following statements are true, correct and complete:

4.1  ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
     SUBSIDIARIES.

         A.       ORGANIZATION AND POWERS. The Borrower is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. The Borrower has all requisite corporate power and authority to own
and operate its properties, to carry on its business as now conducted and as
proposed to be conducted, to enter into the Loan Documents and to carry out the
transactions contemplated thereby and by the Transaction Documents.

         B.       QUALIFICATION AND GOOD STANDING. The Borrower is qualified to
do business and in good standing in every jurisdiction where its assets are
located and wherever necessary to carry out its business and operations, except
in jurisdictions where the failure to be so qualified or in good standing has
not had and will not have a Material Adverse Effect.

         C.       SUBSIDIARIES.  The Borrower has no Subsidiaries.

         D.       COLLATERAL DOCUMENTS. The security interests created in favor
of the Administrative Agent under the Collateral Documents will at all times
from and after the Initial Borrowing Date constitute, as security for the
obligations purported to be secured thereby, a legal, valid and enforceable
first priority perfected security interest in and a Lien on all of the
Collateral referred to therein in favor of the Administrative Agent for the
benefit of the Lenders, perfected and prior to the rights of all third persons
in accordance with the requirements of all applicable Collateral Documents. The
Borrower has good and marketable title to its Collateral, and all such
Collateral is free and clear of all Liens except for Liens permitted by
subsection 6.2. No consents, filings or recordings are required in order to
perfect (or maintain the perfection or priority of) the security interests
purported to be created by any of the Collateral Documents, other than such as
have been obtained and which remain in full force and effect and Uniform
Commercial Code financing statements to be filed, or delivered to the
Administrative Agent for filing, on the Initial Borrowing Date and periodic
Uniform Commercial Code continuation filings or as is specifically otherwise
permitted by the terms of any applicable Collateral Document.

                                      -47-

<PAGE>

4.2  AUTHORIZATION OF BORROWING, ETC.

         A.       AUTHORIZATION OF BORROWING. The execution, delivery and
performance of the Loan Documents and the Transaction Documents have been duly
authorized by all necessary corporate action on the part of the Borrower.

         B.       NO CONFLICT. The execution, delivery and performance by the
Borrower of the Loan Documents and the Transaction Documents and the
consummation of the Transaction and the transactions contemplated by the Loan
Documents do not and will not (i) violate any provision of any law or any
governmental rule or regulation applicable to the Borrower, the certificate or
articles of incorporation or bylaws of the Borrower or any order, judgment or
decree of any court or other agency of government binding on the Borrower, (ii)
conflict with in any material respect, result in a material breach of or
constitute (with due notice or lapse of time or both) a material default under
any material Contractual Obligation of the Borrower, including, without
limitation, the Pass Through Trust Documents, the Senior Note Documents and the
Amended Aircraft Credit Facility, (iii) result in or require the creation or
imposition of any Lien upon any of the properties or assets of the Borrower
(other than any Liens created under any of the Loan Documents in favor of the
Administrative Agent on behalf of the Lenders), or (iv) require any approval of
stockholders or any approval or consent of any Person under any Contractual
Obligation of the Borrower, except for such approvals or consents as will be
obtained on or before the Initial Borrowing Date, are disclosed in writing to
the Lenders and have terms and conditions that are acceptable to the
Administrative Agent and the Lenders.

         C.       GOVERNMENTAL CONSENTS. The execution, delivery and
performance by the Borrower of the Loan Documents and the Transaction Documents
and the consummation of the Transaction and the transactions contemplated by
the Transaction Documents do not and will not require any registration with,
consent or approval of, or notice to, or other action to, with or by, any
federal, state or other governmental authority or regulatory body that has not
been obtained or made on or prior to the date required to be obtained or made.

         D.       BINDING OBLIGATION. Each of the Loan Documents and the
Transaction Documents has been duly executed and delivered by the Borrower and
is the legally valid and binding obligation of the Borrower, enforceable
against the Borrower in accordance with its respective terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability.

4.3  FINANCIAL CONDITION.

         A.       The Borrower has heretofore delivered to the Lenders the
following financial statements and information: (i) the audited consolidated
and consolidating balance sheets of Atlas and its Subsidiaries as at December
31, 1999, and the related consolidated and

                                      -48-

<PAGE>

consolidating statements of income, stockholders' equity and cash flows of
Atlas and its Subsidiaries for such fiscal year and (ii) the Projections. All
such statements were prepared in conformity with GAAP and fairly present the
financial position (on a consolidated, and, where applicable, consolidating
basis) of the entities described in such financial statements as at the
respective dates thereof and the results of operations and cash flows (on a
consolidated and, where applicable, consolidating basis) of the entities
described therein for each of the periods then ended. Atlas does not have any
Contingent Obligation, contingent liability or liability for taxes, long-term
lease or unusual forward or long-term commitment that is not reflected in the
foregoing financial statements or the notes thereto and which in any such case
is material in relation to the business, operations, properties, assets,
condition (financial or otherwise) or prospects of Atlas or any of its
Subsidiaries.

         B.   Except as fully disclosed in the financial statements delivered
pursuant to Section 4.3A, there were, as of the Effective Date, no liabilities
or obligations with respect to Atlas and its Subsidiaries or to the Borrower of
any nature whatsoever (whether absolute, accrued, contingent or otherwise and
whether or not due) that, either individually or in aggregate, could reasonably
be expected to be material to Atlas and its Subsidiaries taken as a whole but
excluding the Borrower, or to the Borrower on a stand-alone basis. As of the
Effective Date, neither Atlas nor the Borrower knows of any basis for the
assertion against it or, in the case of Atlas, against it or its Subsidiaries,
of any liability or obligation of any nature whatsoever that is not fully
disclosed in the financial statements delivered pursuant to Section 4.3A that,
either individually or in the aggregate, could reasonably be expected to be
material to Atlas and its Subsidiaries taken as a whole but excluding the
Borrower, or to the Borrower on a stand-alone basis.

4.4  NO MATERIAL ADVERSE CHANGE; NO RESTRICTED JUNIOR PAYMENTS.

         (i)               Since December 31, 1999, no event or change has
occurred that has caused or evidences, either in any case or in the aggregate,
a Material Adverse Effect.

        (ii)      Since December 31, 1999, the Borrower has not directly or
indirectly declared, ordered, paid or made, or set apart any sum or property
for, any Restricted Junior Payment or agreed to do so, except as permitted by
subsection 6.5.

4.5  TITLE TO PROPERTIES, LIENS.

         A.   The Borrower has good, sufficient and legal title to all of its
properties and assets, including without limitation, all Aircraft and Spare
Engines. Except as permitted by this Agreement, all such properties and assets
are free and clear of Liens.

         B.   Each Aircraft has a current and valid airworthiness certificate
issued by the FAA pursuant to the Federal Aviation Act in effect and is in such
condition as may be necessary to enable the airworthiness certificate to be
maintained in good standing. Each En-

                                      -49-

<PAGE>

gine and Spare Engine has a rated takeoff horsepower greater than 750
horsepower or the equivalent of such horsepower. Each Aircraft is registered
with the FAA in the name of the Borrower and Atlas has authority to operate
such Aircraft.

4.6  LITIGATION, ADVERSE FACTS.

         There are no actions, suits, proceedings, arbitrations or governmental
investigations (whether or not purportedly on behalf of the Borrower) at law or
in equity or in admiralty or before or by any federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, pending or, to the knowledge of the
Borrower, threatened against or affecting the Borrower or any property of the
Borrower or with respect to the Transaction that could reasonably be expected
to result in a Material Adverse Effect. The Borrower is not (i) in violation of
any applicable laws that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect or (ii) subject to or in
default with respect to any final judgments, writs, injunctions, decrees, rules
or regulations of any court or any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, that, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.

4.7  PAYMENT OF TAXES.

         Except to the extent permitted by subsection 5.3, all tax returns and
reports of the Borrower required to be filed by it have been timely filed, and
all taxes, assessments, fees and other governmental charges upon the Borrower
and upon its respective properties, assets, income, businesses and franchises
that are due and payable have been paid when due and payable. The Borrower does
not know of any proposed tax assessment against it that is not being actively
contested by it in good faith and by appropriate proceedings; provided, that
such reserves or other appropriate provisions, if any, for liabilities for
taxes as shall be required in conformity with GAAP shall have been made or
provided for in the financial statements of the Borrower. There are no
agreements with respect to taxes or waiver extending any statute of limitations
relating to the payment or correction of taxes between the Borrower and any tax
agency or authority.

4.8  PERFORMANCE OF AGREEMENTS.

         The Borrower is not in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
of its Contractual Obligations, and no condition exists that, with the giving
of notice or the lapse of time or both, would constitute such a default, except
where the consequences, direct or indirect, of such default or defaults, if
any, would not have a Material Adverse Effect.

                                      -50-

<PAGE>

4.9  GOVERNMENTAL REGULATION.

         The Borrower is not subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce Act
or the Investment Company Act of 1940 or under any other federal or state
statute or regulation that may limit its ability to incur Indebtedness or that
may otherwise render all or any portion of the Obligations unenforceable.

4.10 SECURITIES ACTIVITIES.

         A.       The Borrower is not engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying any Margin Stock.

         B.       No part of the proceeds of any Loan will be used (or has been
used) to purchase or carry any Margin Stock or to extend credit for the purpose
of purchasing or carrying any margin Stock. Neither the making of any Loan nor
the use of the proceeds thereof will violate or be inconsistent with the
provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System.

4.11 COMPLIANCE WITH ERISA.

         The Borrower has no qualified retirement plans under Section 401(k) of
the Internal Revenue Code nor medical benefit plans. The Borrower has never
sponsored, maintained, contributed to (or had an obligation to contribute to)
any Employee Benefit Plans.

4.12 CERTAIN FEES.

         No broker's or finder's fee or commission will be payable with respect
to this Agreement or any of the transactions contemplated hereby, and the
Borrower hereby indemnifies the Lenders against, and agrees that it will hold
the Lenders harmless from, any claim, demand or liability for any such broker's
or finder's fees alleged to have been incurred in connection herewith or
therewith and any expenses (including reasonable fees, expenses and
disbursements of counsel) arising in connection with any such claim, demand or
liability.

4.13 ENVIRONMENTAL PROTECTION.

         A.       All facilities and operations of the Borrower are, and have
been to the best of the Borrower's knowledge, in compliance in all material
respects with all applicable Environmental Laws.

         B.       There are no, and have been no, conditions, occurrences, or
Hazardous Materials Activity, (a) arising at any facilities owned or operated
by the Borrower or (b) arising in connection with the operations of the
Borrower (including the transportation of Hazard-

                                      -51-

<PAGE>

ous Materials), which conditions, occurrences or Hazardous Materials Activity
could reasonably be expected to form the basis of an Environmental Claim
against the Borrower and that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.

         C.       To the best of the Borrower's knowledge, there are no pending
or threatened Environmental Claims against the Borrower, and the Borrower has
received no written notices, inquiries, or requests for information with
respect to any Environmental Claims.

4.14 EMPLOYEE MATTERS.

         There is no strike or work stoppage in existence or, to the Borrower's
knowledge threatened, involving the Borrower that could reasonably be expected
to have a Material Adverse Effect.

4.15 SOLVENCY.

         The Borrower is and, upon the incurrence of any Obligations by the
Borrower on any date on which this representation is made, will be, Solvent.

4.16 DISCLOSURE.

         No representation or warranty of the Borrower contained in any Loan
Document, any Transaction Document or in any other document, certificate or
written statement furnished to the Lenders by or on behalf of the Borrower for
use in connection with the transactions contemplated by this Agreement contains
any untrue statement of a material fact or omits to state a material fact
(known to the Borrower, in the case of any document not furnished by it)
necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances in which the same were made. The
Projections and pro forma financial information contained in such materials are
based upon good faith estimates and assumptions believed by the Borrower to be
reasonable at the time made, it being recognized by the Lenders that the
Projections as to future events are not to be viewed as facts and that actual
results during the period or periods covered by the Projections may differ from
the projected results. There are no facts known (or which should, upon the
reasonable exercise of diligence, be known) to the Borrower (other than matters
of a general economic nature) that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect and that have not
been disclosed herein or in such other documents, certificates and statements
furnished to the Lenders for use in connection with the transactions
contemplated hereby.

                                      -52-

<PAGE>

4.17 SECTION 1110.

         (i)      The Borrower, as Lessor under the Leases, is entitled to the
protection of Section 1110 of the Bankruptcy Code with respect to each Aircraft
and Spare Engine in the event of a case under Chapter 11 of the Bankruptcy Code
in which the Lessee is a debtor.

        (ii)      The Administrative Agent will be entitled to the protection
of Section 1110 of the Bankruptcy Code with respect to each Aircraft and Spare
Engine in the event of a case under Chapter 11 of the Bankruptcy Code in which
the Lessee is a debtor upon the exercise of the Administrative Agent's remedies
under each Aircraft Chattel Mortgage.

       (iii)      All assumptions made by the appraisers with respect to the
Aircraft and Spare Engines in the appraisals delivered to the Administrative
Agent that would affect any Approved Appraiser's determinations as set forth in
such appraisal shall be true and correct as of the Initial Borrowing Date with
respect to each Aircraft and Spare Engine.

4.18 SPECIAL PURPOSE CORPORATION.

         The Borrower was formed solely for the purpose of effecting the
Transaction, and except in connection therewith (and as contemplated by this
Agreement) has no assets or liabilities.

4.19 TRANSACTION.

         The Transaction has been consummated in accordance with applicable law
and the Transaction Documents.

4.20 REPRESENTATIONS AND WARRANTIES IN DOCUMENTS.

         All representations and warranties of the Borrower set forth in the
Loan Documents and the Transaction Documents were true and correct in all
material respects as of the time such representations and warranties were made
and shall be true and correct in all material respects as of the Initial
Borrowing Date as if such representations and warranties were made on and as of
such date, unless stated to relate to a specific earlier date, in which case
such representations and warranties shall be true and correct in all material
respects as of such earlier date.

4.21 LEASES.

         The Leases are in full force and effect and are leases for U.S.
federal income tax purposes of the Lessor and the Lessee thereunder.

                                      -53-

<PAGE>

                                   SECTION 5.

                        BORROWER'S AFFIRMATIVE COVENANTS

         The Borrower covenants and agrees that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all
of the Loans and other Obligations, unless Requisite Lenders shall otherwise
give prior written consent, the Borrower shall perform all covenants in this
Section 5.

5.1  FINANCIAL STATEMENTS AND OTHER REPORTS.

         The Borrower will maintain a system of accounting established and
administered in accordance with sound business practices to permit preparation
of financial statements in conformity with GAAP. The Borrower will deliver to
the Administrative Agent and the Lenders:

         (i)      Quarterly Financials: as soon as available, and in any event
within 45 days after the end of each fiscal quarter of each Fiscal Year, the
balance sheet of the Borrower as at the end of such fiscal quarter and the
related statements of income, stockholders' equity and cash flows of the
Borrower for such fiscal quarter and for the period from the beginning of the
then current Fiscal Year to the end of such fiscal quarter, setting forth in
each case in comparative form the corresponding figures for the corresponding
periods of the previous Fiscal Year, if applicable, in reasonable detail and
certified by the chief financial officer of the Borrower that they fairly
present the financial condition of the Borrower as at the dates indicated and
the results of its operations and its cash flows for the periods indicated,
subject to changes resulting from audit and normal year-end adjustments;

        (ii)      Year-End Financials: as soon as available, and in any event
within 90 days after the end of each Fiscal Year, (a) the balance sheet of the
Borrower as at the end of such Fiscal Year and the related statements of
income, stockholders' equity and cash flows of the Borrower for such Fiscal
Year, setting forth in each case in comparative form the corresponding figures
for the previous Fiscal Year, if applicable, in reasonable detail and certified
by the chief financial officer of the Borrower that they fairly present the
financial condition of the Borrower as at the dates indicated and the results
of its operations and its cash flows for the periods indicated, and (b) in the
case of such financial statements, a report thereon of independent certified
public accountants of recognized national standing selected by the Borrower and
satisfactory to the Administrative Agent, which report shall be unqualified,
shall express no doubts about the ability of the Borrower to continue as a
going concern, and shall state that such financial statements fairly present
the financial position of the Borrower as at the dates indicated and the
results of its operations and its cash flows for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years (except as
otherwise disclosed in such financial statements) and that the examination by
such accountants in con-

                                      -54-

<PAGE>

nection with such financial statements has been made in accordance with
generally accepted auditing standards;

       (iii)      Officers' and Compliance Certificates: together with each
delivery of financial statements of the Borrower pursuant to subdivisions (i)
and (ii) above after the Effective Date, (a) an Officers' Certificate of the
Borrower stating that the signers have reviewed the terms of this Agreement and
have made, or caused to be made under their supervision, a review in reasonable
detail of the transactions and condition of the Borrower during the accounting
period covered by such financial statements and that such review has not
disclosed the existence during or at the end of such accounting period, and
that the signers do not have knowledge of the existence as at the date of such
Officers' Certificate, of any condition or event that constitutes an Event of
Default or Potential Event of Default, or, if any such condition or event
existed or exists, specifying the nature and period of existence thereof and
what action the Borrower has taken, is taking and proposes to take with respect
thereto; and (b) a Compliance Certificate demonstrating, in reasonable detail,
compliance during and at the end of the applicable quarterly and annual
accounting periods with the restrictions contained in Section 6;

        (iv)      Notices under Leases: within 3 Business Days, all notices and
other information or documents delivered or received under any of the Leases by
the Lessor pursuant to Section 19 of the Leases, including, without limitation,
all additional financial statements and reports delivered pursuant to Section
6(a) of the Leases;

         (v)      Accountants' Certification: together with each delivery of
financial statements of the Borrower pursuant to subdivision (ii) above, a
written statement by the independent certified public accountants giving the
report thereon (a) stating that their audit examination has included a review
of the terms of this Agreement and the other Loan Documents as they relate to
accounting matters, (b) stating whether, in connection with their audit
examination, any condition or event that constitutes an Event of Default or
Potential Event of Default has come to their attention and, if such a condition
or event has come to their attention, specifying the nature and period of
existence thereof; provided, that such accountants shall not be liable by
reason of any failure to obtain knowledge of any such Event of Default or
Potential Event of Default that would not be disclosed in the course of their
audit examination, and (c) stating that based on their audit examination
nothing has come to their attention that causes them to believe either or both
that the information contained in the certificates delivered therewith pursuant
to subdivision (iii) above is not correct or that the matters set forth in the
Compliance Certificates delivered therewith pursuant to clause (b) of
subdivision (iii) above for the applicable Fiscal Year are not stated in
accordance with the terms of this Agreement;

        (vi)      Accountants' Reports: promptly upon receipt thereof (unless
restricted by applicable professional standards), copies of all reports
submitted to the Borrower by independent certified public accountants in
connection with each annual, interim or special audit

                                      -55-

<PAGE>

of the financial statements of the Borrower made by such accountants,
including, without limitation, any comment letter submitted by such accountants
to management in connection with their annual audit;

       (vii)      Events of Default, etc.: promptly upon any officer of the
Borrower obtaining knowledge (a) of any condition or event that constitutes an
Event of Default or Potential Event of Default, or becoming aware that any
Lender has given any notice (other than to the Administrative Agent) or taken
any other action with respect to a claimed Event of Default or Potential Event
of Default, (b) that any Person has given any notice to the Borrower or taken
any other action with respect to a claimed default or event or condition of the
type referred to in subsection 7.2, or (c) of the occurrence of any event or
change that has caused or evidences, either in any case or in the aggregate, a
Material Adverse Effect, an Officers' Certificate specifying the nature and
period of existence of such condition, event or change, or specifying the
notice given or action taken by any such Person and the nature of such claimed
Event of Default, Potential Event of Default, default, event or condition, and
what action the Borrower has taken, is taking and proposes to take with respect
thereto;

      (viii)      Litigation or Other Proceedings: (a) promptly upon any
officer of the Borrower obtaining knowledge of (X) the institution of, or
non-frivolous threat of, any action, suit, proceeding (whether administrative,
judicial or otherwise), governmental investigation or arbitration against or
affecting the Borrower or any property of the Borrower (collectively,
"PROCEEDINGS") not previously disclosed in writing by the Borrower to the
Lenders or (Y) any material development in any Proceeding that, in any case:

         (1)      if adversely determined, has a reasonable possibility of
giving rise to a Material Adverse Effect; or

         (2)      seeks to enjoin or otherwise prevent the consummation of, or
to recover any damages or obtain relief as a result of, the transactions
contemplated hereby;

written notice thereof, together with such other information as may be
reasonably available to the Borrower to enable the Lenders and their counsel to
evaluate such matters; and (b) within twenty days after the end of each fiscal
quarter of the Borrower, a schedule of all Proceedings involving an alleged
liability of, or claims against or affecting, the Borrower equal to or greater
than $1,000,000 and, promptly after request by the Administrative Agent, such
other information as may be reasonably requested by the Administrative Agent to
enable the Administrative Agent and its counsel to evaluate any of such
Proceedings;

        (ix)      Insurance: as soon as practicable, and in any event by the
last day of each Fiscal Year, a report in form and substance satisfactory to
the Administrative Agent outlining all material insurance coverage maintained
as of the date of such report by the Borrower and all material insurance
coverage planned to be maintained by the Borrower in the immediately succeeding
Fiscal Year;

                                      -56-

<PAGE>

         (x)      Environmental Audits and Reports: as soon as practicable
following receipt thereof, copies of all environmental audits and reports,
whether prepared by personnel of the Borrower or by independent consultants,
with respect to significant environmental matters or that relate to an
Environmental Claim that could result in a Material Adverse Effect;

        (xi)      Pricing Certificate: in the event that the Borrower believes
that it is entitled to a Pricing Reduction, copies of the most recent rating
reports pertaining to the Borrower from each of Moody's and S&P, together with
a certificate setting forth the calculations necessary to demonstrate the
Borrower's entitlement to a Pricing Reduction;

       (xii)      Other Information: with reasonable promptness, such other
information and data with respect to the Borrower or Atlas, as the case may be,
as from time to time may be reasonably requested by any Lender.

5.2  CORPORATE EXISTENCE.

         The Borrower will at all times preserve and keep in full force and
effect its corporate existence and all rights and franchises material to its
business. The Borrower will at all times maintain its corporate existence as a
United States Citizen.

5.3  PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.

         A.       The Borrower will pay all taxes, assessments and other
governmental charges imposed upon it or any of its properties or assets or in
respect of any of its income, businesses or franchises before any penalty, fine
or interest accrues thereon, and all claims (including, without limitation,
claims for labor, services, materials and supplies) for sums that have become
due and payable and that by law have or may become a Lien upon any of its
properties or assets, prior to the time when any penalty, fine or interest
shall be incurred or any Lien created with respect thereto; provided, that no
such charge or claim need be paid if being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted and if
such reserve or other appropriate provision, if any, with respect to any
liability for taxes, as shall be required in conformity with GAAP shall have
been made therefor in the financial statements of the Borrower.

         B.       The Borrower will not file or consent to the filing of any
consolidated federal income tax return with any Person other than the
affiliated group of which Atlas is the parent corporation.

5.4  MAINTENANCE OF PROPERTIES; INSURANCE.

         The Borrower will maintain or cause to be maintained in good repair,
working order and condition, ordinary wear and tear excepted, all material
properties used or useful in

                                      -57-

<PAGE>

the business of the Borrower and from time to time will make or cause to be
made all appropriate repairs, renewals and replacements thereof. The Borrower
will maintain or cause to be maintained, with financially sound and reputable
insurers, insurance with respect to its properties and business against loss or
damage (including, without limitation, flood insurance, if necessary or
advisable) of the kinds customarily carried or maintained under similar
circumstances by corporations of established reputation engaged in similar
businesses, and the Borrower will, with respect to each Aircraft and Spare
Engine, maintain the insurance specified in the Aircraft Chattel Mortgage with
respect to such Aircraft or Spare Engine.

5.5  INSPECTION; LENDER MEETING.

         The Borrower will permit any authorized representatives designated by
any Lender to visit and inspect any of the properties of the Borrower,
including its and their financial and accounting records, and to make copies
and take extracts therefrom, and to discuss its and their affairs, finances and
accounts with its and their officers and independent public accountants
(provided, that the Borrower may, if it so chooses, be present at or
participate in any such discussion), all upon reasonable notice and at such
reasonable times during normal business hours and as often as may be reasonably
requested, provided, so long as no Event of Default has occurred and is
continuing, that such inspection is not disruptive to the Borrower's business,
as reasonably determined by the Borrower. Without in any way limiting the
foregoing, the Borrower will, upon the request of the Administrative Agent or
Requisite Lenders, participate in a meeting of the Administrative Agent and
Lenders once during each Fiscal Year to be held at the Borrower's corporate
offices (or such other location as may be agreed to by the Borrower and the
Administrative Agent) at such time as may be agreed to by the Borrower and the
Administrative Agent.

5.6  COMPLIANCE WITH LAWS, ETC.

         The Borrower will comply with the requirements of all applicable laws,
rules, regulations and orders of any governmental authority (including, without
limitation, Environmental Laws), noncompliance with which could reasonably be
expected to cause a Material Adverse Effect. The Borrower shall not conduct,
and shall not permit the conduct of, any Hazardous Materials Activity at any
location that could reasonably be expected to form the basis of an
Environmental Claim against the Borrower and that could reasonably be expected
to have a Material Adverse Effect.

5.7  ENVIRONMENTAL INDEMNITY.

         The Borrower agrees to indemnify, defend, and hold harmless the
Administrative Agent and the Lenders, and the officers, directors, employees,
agents and affiliates of the Administrative Agent and the Lenders from and
against any and all losses, claims, liabilities or expenses arising in
connection with Environmental Claims against the Borrower or with any Hazardous
Materials Activity.

                                      -58-

<PAGE>

5.8  BORROWER'S REMEDIAL ACTION REGARDING HAZARDOUS MATERIALS.

         The Borrower will promptly take any and all necessary remedial action
in connection with the presence, storage, use, disposal, transportation or
Release of any Hazardous Materials on, under or about any facility in order to
comply with all applicable Environmental Laws and Governmental Authorizations.
In the event that the Borrower undertakes any remedial action with respect to
any Hazardous Materials on, under or about any such facility, the Borrower will
conduct and complete such remedial action in compliance with all applicable
Environmental Laws, and in accordance with the policies, orders and directives
of all federal, state and local governmental authorities except when, and only
to the extent that, the Borrower's liability for such presence, storage, use,
disposal, transportation or Release of any such Hazardous Materials is being
contested in good faith by the Borrower. Notwithstanding anything to the
contrary contained in the Transaction Documents, the Borrower or Lessee may
engage in the transportation of Hazardous Materials in the ordinary course of
business so long as such is conducted in compliance with all applicable
Environmental Laws and all other applicable laws, policies, orders, regulations
and directives.

5.9  MAINTENANCE CONTRACTS.

         The Borrower shall maintain or shall cause to be maintained a
maintenance program with respect to the Aircraft and Spare Engines approved by
the FAA.

5.10 EMPLOYEE BENEFIT PLANS.

         The Borrower will not establish, contribute to (or have an obligation
to contribute to) or permit to be established any Employee Benefit Plans for
the Borrower or any of its employees.

5.11 FURTHER ASSURANCES.

         At any time or from time to time upon the request of the
Administrative Agent, the Borrower will, at its expense, promptly execute,
acknowledge and deliver such further documents and do such other acts and
things as the Administrative Agent may reasonably request in order to effect
fully the purposes of the Loan Documents and to provide for payment of the
Obligations in accordance with the terms of this Agreement, the Notes and the
other Loan Documents.

5.12 PERFORMANCE OF OBLIGATIONS.

         The Borrower will perform all of its obligations under the terms of
each Lease, Collateral Document and Loan Document, contract or instrument by
which it is bound.

                                      -59-

<PAGE>

5.13 CORPORATE SEPARATENESS.

         The Borrower will take all such action as is necessary to keep its
operations separate and apart from those of Atlas or any of its Affiliates,
including, without limitation, ensuring that all customary corporate
formalities, including the maintenance of separate corporate records and
documents and holding regular meetings, are followed. Any financial statements
distributed to any creditors of the Borrower shall clearly establish the
corporate separateness of the Borrower from Atlas and each of Atlas's other
Subsidiaries. The Borrower shall not take any action or conduct its affairs in
a manner that is likely to result in the corporate existence of the Borrower on
the one hand and of Atlas or any Subsidiary of Atlas on the other hand being
disregarded, or in the assets and liabilities of Atlas or any Subsidiary of
Atlas being substantively consolidated with those of the Borrower in a
bankruptcy, reorganization or other insolvency proceeding. The Borrower shall
have at all times at least one Independent Director who shall be satisfactory
to the Administrative Agent. The Borrower shall maintain its principal
executive office separate from Atlas or any of its Affiliates, which may be
subleased from Atlas on an arm's-length basis or maintained as provided in the
Service Agreement.

         The Borrower shall pay out of its own funds fees for its directors and
salaries of its officers and employees, and shall promptly reimburse any
Affiliate for any services provided to the Borrower by such Affiliate;
provided, however, that Atlas may advance funds on behalf of the Borrower to
pay for the expenses of its organization and funding. All such advances shall
be duly and properly recorded and promptly repaid as intercompany advances. The
Borrower shall not commingle any of its funds or other assets with the funds or
assets of any other entity or person. The Borrower will maintain separate bank
accounts in its own name.

         The assets of the Borrower shall be separately identified and
segregated. All of the Borrower's assets shall at all times be held by or on
behalf of the Borrower, and, if held on behalf of the Borrower by another
entity, shall at all times be kept identifiable (in accordance with customary
usages) as assets owned by the Borrower. In no event shall any of the
Borrower's assets be held by Atlas or by any other Affiliate. The Borrower
shall pay from its assets all obligations and indebtedness of any kind incurred
by the Borrower, and shall not pay from its assets any obligations or
indebtedness of any other entity or person. The liabilities of the Borrower
will be separately managed from those of any Affiliate, and all liabilities,
including all administrative expenses, shall be paid from its own separate
assets; provided, however, that the Borrower will be included, to the extent
permitted by law, in the affiliated group of corporations of which Atlas is the
"common parent" for federal income tax returns filed for such affiliated group
by Atlas.

                                      -60-
<PAGE>

                                   SECTION 6.

                          BORROWER'S NEGATIVE COVENANTS

                  The Borrower covenants and agrees that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations, unless Requisite Lenders shall otherwise give
prior written consent, the Borrower shall perform all covenants in this Section
6.

6.1      INDEBTEDNESS.

                  The Borrower shall not, directly or indirectly, create, incur,
assume or guaranty, or otherwise become or remain directly or indirectly liable
with respect to, any Indebtedness, except that the Borrower may become and
remain liable with respect to the Obligations.

6.2      LIENS AND RELATED MATTERS.

                  A.   PROHIBITION ON LIENS. The Borrower shall not, directly or
indirectly, create, incur, assume or permit to exist any Lien on or with respect
to any property or asset of any kind (including any document or instrument in
respect of goods or accounts receivable) of the Borrower, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the Uniform Commercial Code of any state or under any similar
recording or notice statute, except for Permitted Encumbrances.

                  B.   NO NEGATIVE PLEDGES. The Borrower shall not enter into
any agreement prohibiting the creation or assumption of any Lien upon any of its
properties or assets, whether now owned or hereafter acquired.

6.3      INVESTMENTS; JOINT VENTURES.

                  The Borrower shall not, directly or indirectly, make or own
any Investment in any Person, including any Joint Venture, except that the
Borrower may make and own Investments in Cash Equivalents.

6.4      CONTINGENT OBLIGATIONS.

                  The Borrower shall not, directly or indirectly, create or
become or remain liable with respect to any Contingent Obligation.

                                      -61-
<PAGE>

6.5      RESTRICTED JUNIOR PAYMENTS.

                  The Borrower shall not, directly or indirectly, declare,
order, pay, make or set apart any sum for any Restricted Junior Payment;
provided, that the Borrower may make payments pursuant to the Service Agreement
in an aggregate annual amount not to exceed $200,000 per annum; and provided
further, that, so long as no Event of Default or Potential Event of Default has
occurred and is continuing, or would result therefrom, within five Business Days
of any payment made under any of the Leases by Atlas to the Borrower, to the
extent that such payment is in excess of amounts owing to the Lenders under the
Loan Documents, the Borrower may distribute such excess amounts to Atlas as a
dividend, to the extent that the Borrower, after giving effect to such dividend,
has no other liabilities and maintains a reserve of Cash or Cash Equivalents
adequate to fund all expenses of the Borrower (exclusive of payments under the
Loan Documents) to be incurred during the next four quarters following such
dividend.

6.6      RESTRICTION ON FUNDAMENTAL CHANGES, ASSET SALES, ACQUISITIONS, NEW
         SUBSIDIARIES.

                  The Borrower shall not enter into any transaction of merger or
consolidation, or liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, sub-lease, transfer or
otherwise dispose of, in one transaction or a series of transactions, all or any
part of its business, property or assets, whether now owned or hereafter
acquired, or acquire by purchase or otherwise all or any portion of the
business, property or assets of, or stock or other evidence of beneficial
ownership of, any Person or any division or line of business of any Person or
establish any Subsidiary, except that the Borrower may (i) effect the
Transaction on or prior to the Initial Borrowing Date, (ii) sell no more than
one Aircraft, provided that (x) the net proceeds of any such sale shall be in an
amount at least equal to the outstanding principal amount of all Loans and other
Obligations relating to such Aircraft and (y) the entire amount of the proceeds
of such asset sale are promptly applied in accordance with Section 2.4C(ii)(a)
of this Agreement and (iii) sell, lease or dispose of assets so long as such
transaction is effected in accordance with Section 4(d) or 4(e) of the Aircraft
Chattel Mortgages or Section 9.21 of this Agreement.

6.7      AMENDMENTS OF MATERIAL AGREEMENTS.

                  The Borrower shall not permit (i) its certificate of
incorporation or bylaws to be amended or otherwise modified in any manner or
(ii) any Lease to be amended or otherwise modified in any manner (other than any
amendment or modification which may be required to give effect to any
transaction permitted by Section 6.6(ii) or Section 9.21 of this Agreement).

                                      -62-
<PAGE>

6.8      RESTRICTION ON LEASES.

                  The Borrower shall not become liable in any way, whether
directly or by assignment or as a guarantor or other surety, for the obligations
of the lessee under any lease, whether such lease be an Operating Lease or a
Capital Lease.

6.9      TRANSACTION WITH SHAREHOLDERS AND AFFILIATES.

                  The Borrower shall not, directly or indirectly, enter into or
permit to exist any transaction (including, without limitation, the purchase,
sale, lease or exchange of any property or the rendering of any service) with
Atlas or with any other Affiliate of the Borrower; provided, that the foregoing
restriction shall not apply to (i) reasonable and customary fees paid to and
indemnification of members of the Board of Directors of the Borrower, (ii)
reasonable and customary salaries, bonuses and other compensation paid to and
indemnification of employees of the Borrower, (iii) the Transaction and (iv) the
Service Agreement providing for the rendering of accounting, administration and
office services by Atlas to the Borrower on terms consistent with the terms of
similar agreements between unrelated parties, in an aggregate amount not to
exceed $200,000 per annum.

6.10     CONDUCT OF BUSINESS.

                  (a) From and after the Initial Borrowing Date, the Borrower
shall not engage in any business other than in connection with owning the
Aircraft and Spare Engines or any replacement aircraft and spare engines and
leasing of the Aircraft and Spare Engines or any replacement aircraft and spare
engines to Atlas, and will have no material assets (other than Cash, Cash
Equivalents, the Aircraft and Spare Engines or any replacement aircraft and
spare engines, and the Leases) or liabilities (other than the Loans and other
liabilities that are expressly permitted hereunder); provided, however, that
replacement aircraft and spare engines may be substituted for Aircraft and Spare
Engines only in accordance with the applicable Aircraft Chattel Mortgage.

                  (b) The Borrower shall not take any action or enter into any
transaction that requires the approval of the Independent Director without the
consent of the Independent Director.

                                   SECTION 7.

                                EVENTS OF DEFAULT

                  If any of the following conditions or events ("EVENTS OF
DEFAULT") shall occur:

                                      -63-
<PAGE>

7.1      FAILURE TO MAKE PAYMENTS WHEN DUE.

                  Failure by the Borrower to pay any installment of principal of
any Loan when due, whether at stated maturity, by acceleration, by notice of
voluntary prepayment, by mandatory prepayment or otherwise; or failure by the
Borrower to pay any interest on any Loan or any fee or any other amount due
under this Agreement within five days after the date due; or

7.2      DEFAULT UNDER LEASE.

                  Any Lease shall at any time be terminated (other than by its
terms) or cease to be in full force and effect (other than by its terms), or
there shall exist a Default or a Lease Event of Default under, and as defined
in, any of the Leases; or

7.3      BREACH OF CERTAIN COVENANTS.

                  Failure of the Borrower to perform or comply in any material
respect with any term or condition contained in subsections 2.5, 5.1(vii), 5.2,
5.13, 6.1, 6.2, 6.5, 6.6, 6.7 or 6.10 of this Agreement or in clauses (i) and
(ii) of Section 4(c), Section 4(d) or Section 4(g) of any Aircraft Chattel
Mortgage; or

7.4      BREACH OF WARRANTY.

                  Any representation, warranty, certification or other statement
made by Atlas or the Borrower in any Loan Document or in any Transaction
Document or in any statement or certificate at any time given by Atlas or the
Borrower in writing pursuant hereto or thereto or in connection herewith or
therewith shall be false in any material respect on the date as of which made;
or

7.5      OTHER DEFAULTS UNDER LOAN DOCUMENTS.

                  The Borrower shall default in the performance of or compliance
with any term contained in this Agreement or any of the other Loan Documents,
other than any such term referred to in any other subsection of this Section 7,
and such default shall not have been remedied or waived within 15 days after the
earlier of (a) an officer of the Borrower becoming aware of such default or (b)
receipt by the Borrower of notice from the Administrative Agent or any Lender of
such default; or

7.6      INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.

                  (i) A court having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Borrower in an involuntary case
under the Bankruptcy Code or under any other applicable bankruptcy, insolvency
or similar law now or hereafter in effect, which decree or order is not stayed;
or any other similar relief shall be granted under any applicable federal or
state law; or (ii) an involuntary case shall be commenced against the Bor-

                                      -64-
<PAGE>

rower under the Bankruptcy Code or under any other applicable bankruptcy,
insolvency or similar law now or hereafter in effect; or a decree or order of a
court having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having similar
powers over the Borrower, or over all or a substantial part of its property,
shall have been entered; or there shall have occurred the involuntary
appointment of an interim receiver, trustee or other custodian of the Borrower
for all or a substantial part of its property; or a warrant of attachment,
execution or similar process shall have been issued against any substantial part
of the property of the Borrower, and any such event described in this clause
(ii) shall continue for 60 days unless dismissed, bonded or discharged; or

7.7      VOLUNTARY BANKRUPTCY, APPOINTMENT OF RECEIVER, ETC.

                  (i) The Borrower shall have an order for relief entered with
respect to it or commence a voluntary case under the Bankruptcy Code or under
any other applicable bankruptcy, insolvency or similar law now or hereafter in
effect, or shall consent to the entry of an order for relief in an involuntary
case, or to the conversion of an involuntary case to a voluntary case, under any
such law, or shall consent to the appointment of or taking possession by a
receiver, trustee or other custodian for all or a substantial part of its
property; or the Borrower shall make any assignment for the benefit of
creditors; or (ii) the Borrower shall be unable, or shall fail generally, or
shall admit in writing its inability, to pay its debts as such debts become due;
or the Board of Directors of the Borrower (or any committee thereof) shall adopt
any resolution or otherwise authorize any action to approve any of the actions
referred to in clause (i) above or this clause (ii); or

7.8      JUDGMENTS AND ATTACHMENTS.

                  Any money judgment, writ or warrant of attachment or similar
process (not adequately covered by insurance as to which a solvent and
unaffiliated insurance company has acknowledged coverage) shall be entered or
filed against the Borrower or any of its assets and shall remain undischarged,
unvacated, unbonded or unstayed for a period of 60 days (or in any event later
than five days prior to the date of any proposed sale thereunder); or

7.9      DISSOLUTION.

                  Any order, judgment or decree shall be entered against the
Borrower decreeing the dissolution or split up of the Borrower and such order
shall remain undischarged or unstayed for a period in excess of 30 days; or

7.10     CHANGE IN CONTROL.

                  Atlas shall cease to own beneficially and to control all of
the issued and outstanding shares of capital stock of the Borrower; or

                                      -65-
<PAGE>

7.11     FAILURE OF SECURITY.

                  Any Collateral Document shall, at any time, cease to be in
full force and effect (other than by reason of a release of Collateral
thereunder in accordance with the terms hereof or thereof, the satisfaction in
full of the Obligations or any other termination of such Collateral Document in
accordance with the terms hereof or thereof) or shall be declared null and void,
or the validity or enforceability thereof shall be contested in writing by the
Borrower, or the Administrative Agent shall not have or shall cease to have a
valid security interest in any Collateral purported to be covered thereby,
perfected and with the priority required by the relevant Collateral Document,
for any reason, subject only to Liens permitted under the applicable Collateral
Documents or the Borrower, as lessor under a Lease or the Administrative Agent,
as assignee of the Borrower's rights under such Lease, shall cease to be
entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to
the rights and remedies under such Lease; or

7.12     LOSS OF UNITED STATES CITIZEN STATUS.

                  The Borrower for any reason ceases to be a United States
Citizen;

THEN (I) (i) upon the occurrence of any Event of Default described in
subsection 7.6 or 7.7, each of (a) the unpaid principal amount of and accrued
interest on the Loans and (b) all other Obligations shall automatically become
immediately due and payable, without presentment, demand, protest or other
requirements of any kind, all of which are hereby expressly waived by the
Borrower, and the obligation of each Lender to make any Loan shall thereupon
terminate and (ii) upon the occurrence and during the continuation of any other
Event of Default, the Administrative Agent shall, upon the written request or
with the written consent of Requisite Lenders, by written notice to the
Borrower, declare all or any portion of the amounts described in clauses (a) and
(b) above to be, and the same shall forthwith become, immediately due and
payable, and the obligation of each Lender to make any Loan shall thereupon
terminate and (II) upon the occurrence of any Event of Default, the
Administrative Agent, upon the written request of the Requisite Lenders, shall,
by written notice to the Borrower, enforce all of the Liens and security
interests created pursuant to the Collateral Documents and exercise all other
remedies at law or in equity or in admiralty available under the Loan Documents.

                  If, at any time within 60 days after an acceleration of the
Loans pursuant to the preceding paragraph, the Borrower shall pay all arrears of
interest and all payments on account of principal which shall have become due
otherwise than as a result of such acceleration (with interest on principal and,
to the extent permitted by law, on overdue interest, at the rates specified in
this Agreement) and all Events of Default and Potential Events of Default (other
than non-payment of the principal of and accrued interest on the Loans, in each
case that is due and payable solely by virtue of acceleration) shall be remedied
or waived pursuant to subsection 9.6, then Requisite Lenders, by written notice
to the Borrower, may at their option rescind and annul such acceleration and its
consequences, but such action shall not affect any

                                      -66-
<PAGE>

subsequent Event of Default or Potential Event of Default or impair any right
consequent thereon. The provisions of this paragraph are intended merely to bind
the Lenders to a decision that may be made at the election of Requisite Lenders
and are not intended to benefit the Borrower and do not grant to the Borrower
the right to require the Lenders to rescind or annul any acceleration hereunder,
even if the conditions set forth herein are met.

                                   SECTION 8.

                            THE ADMINISTRATIVE AGENT

8.1      APPOINTMENT.

                  Each Lender hereby appoints Bankers Trust Company as
Administrative Agent hereunder and under the other Loan Documents, and each
Lender hereby authorizes the Administrative Agent to act as its agent in
accordance with the terms of this Agreement and the other Loan Documents. The
Administrative Agent agrees to act upon the express conditions contained in this
Agreement and the other Loan Documents, as applicable. The provisions of this
Section 8 are solely for the benefit of the Administrative Agent and the
Lenders, and the Borrower shall have no rights as a third-party beneficiary of
any of the provisions thereof. In performing its functions and duties under this
Agreement, the Administrative Agent shall act solely as an agent of the Lenders
and does not assume and shall not be deemed to have assumed any obligation
towards or relationship of agency or trust with or for the Borrower.

8.2      POWERS AND DUTIES; GENERAL IMMUNITY.

                  A.   POWERS; DUTIES SPECIFIED. Each Lender irrevocably
authorizes the Administrative Agent to take such action on such Lender's behalf
and to exercise such powers, rights and remedies hereunder and under the other
Loan Documents as are specifically delegated or granted to such Administrative
Agent by the terms hereof and thereof, together with such powers, rights and
remedies as are reasonably incidental thereto. The Administrative Agent shall
have only those duties and responsibilities that are expressly specified in this
Agreement and the other Loan Documents. The Administrative Agent may exercise
such powers, rights and remedies and perform such duties by or through its
agents or employees. The Administrative Agent shall not have, by reason of this
Agreement or any of the other Loan Documents, a fiduciary relationship in
respect of any Lender, and nothing in this Agreement or any of the other Loan
Documents, expressed or implied, is intended to or shall be so construed as to
impose upon the Administrative Agent any obligations in respect of this
Agreement or any of the other Loan Documents except as expressly set forth
herein or therein.

                  B.   NO RESPONSIBILITY FOR CERTAIN MATTERS. The Administrative
Agent shall not be responsible to any Lender for the execution, effectiveness,
genuineness, validity,

                                      -67-
<PAGE>

enforceability, collectibility or sufficiency of this Agreement or any other
Loan Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statements or in any
financial or other statements, instruments, reports or certificates or any other
documents furnished or made by the Administrative Agent to any Lender or by or
on behalf of the Borrower to the Administrative Agent or any Lender in
connection with the Loan Documents and the transactions contemplated thereby or
for the financial condition or business affairs of the Borrower or any other
Person liable for the payment of any Obligations, nor shall the Administrative
Agent be required to ascertain or inquire as to the performance or observance of
any of the terms, conditions, provisions, covenants or agreements contained in
any of the Loan Documents or as to the use of the proceeds of the Loans or as to
the existence or possible existence of any Event of Default or Potential Event
of Default. Anything contained in this Agreement to the contrary
notwithstanding, the Administrative Agent shall not have any liability arising
from confirmations of the amount of outstanding Loans or the component amounts
thereof.

                  C.   EXCULPATORY PROVISIONS. Neither the Administrative Agent
nor any of its officers, directors, partners, employees or agents shall be
liable to the Lenders for any action taken or omitted by the Administrative
Agent under or in connection with any of the Loan Documents except to the extent
caused by their respective gross negligence or willful misconduct. If the
Administrative Agent shall request instructions from the Lenders with respect to
any act or action (including the failure to take an action) in connection with
this Agreement or any of the other Loan Documents, such Administrative Agent
shall be entitled to refrain from such act or taking such action unless and
until such Administrative Agent shall have received instructions from Requisite
Lenders. Without prejudice to the generality of the foregoing, (i) the
Administrative Agent shall be entitled to rely, and shall be fully protected in
relying, upon any communication, instrument or document believed by it to be
genuine and correct and to have been signed or sent by the proper person or
persons, and shall be entitled to rely and shall be protected in relying on
opinions and judgments of attorneys (who may be attorneys for the Borrower),
accountants, experts and other professional advisors selected by it; and (ii) no
Lender shall have any right of action whatsoever against the Administrative
Agent as a result of the Administrative Agent acting or (where so instructed)
refraining from acting under this Agreement or any of the other Loan Documents
in accordance with the instructions of Requisite Lenders. The Administrative
Agent shall be entitled to refrain from exercising any power, discretion or
authority vested in it under this Agreement or any of the other Loan Documents
unless and until it has obtained the instructions of Requisite Lenders.

                  D.   ADMINISTRATIVE AGENT ENTITLED TO ACT AS LENDER. The
agency hereby created shall in no way impair or affect any of the rights and
powers of, or impose any duties or obligations upon, the Administrative Agent in
its individual capacity as a Lender hereunder. With respect to its
participations in the Loans, the Administrative Agent shall have the same rights
and powers hereunder as any other Lender and may exercise the same as though it
were not performing the duties and functions delegated to it hereunder, and the
term "Lender"

                                      -68-
<PAGE>

or "Lenders" or any similar term shall, unless the context clearly otherwise
indicates, include the Administrative Agent in its individual capacity. The
Administrative Agent and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of banking, trust, financial advisory or other
business with the Borrower or any of its Affiliates as if it were not performing
the duties specified herein, and may accept fees and other consideration from
the Borrower for services in connection with this Agreement and otherwise
without having to account for the same to the Lenders.

8.3      REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF
         CREDITWORTHINESS.

                  Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Atlas and
its Subsidiaries (including the Borrower) and the Aircraft and Spare Engines in
connection with the making of the Loans hereunder and that it has made and shall
continue to make its own appraisal of the creditworthiness of Atlas and its
Subsidiaries (including the Borrower). The Administrative Agent shall not have
any duty or responsibility, either initially or on a continuing basis, to make
any such investigation or any such appraisal on behalf of the Lenders or to
provide any Lender with any credit or other information with respect thereto,
whether coming into their possession before the making of the Loans or at any
time or times thereafter, and the Administrative Agent shall not have any
responsibility with respect to the accuracy of or the completeness of any
information provided to the Lenders.

8.4      RIGHT TO INDEMNITY.

                  Each Lender, in proportion to its Pro Rata Share, severally
agrees to indemnify the Administrative Agent (and its affiliates and partners),
to the extent that the Administrative Agent shall not have been reimbursed by
the Borrower, for and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses (including,
without limitation, counsel fees and disbursements) or disbursements of any kind
or nature whatsoever which may be imposed on, incurred by or asserted against
the Administrative Agent in exercising its powers, rights and remedies or
performing its duties hereunder or under the other Loan Documents or otherwise
in its capacity as Administrative Agent, in any way relating to or arising out
of this Agreement or the other Loan Documents; provided, that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from such Administrative Agent's gross negligence or willful misconduct.

8.5      COLLATERAL DOCUMENTS.

                  Without limiting the generality of subsection 8.1, each Lender
hereby further authorizes the Administrative Agent to enter into the Collateral
Documents as secured party on behalf of and for the benefit of such Lender and
agrees to be bound by the terms of each of

                                      -69-
<PAGE>

the Collateral Documents; provided, that, except as otherwise provided below,
the Administrative Agent shall not enter into or consent to any amendment,
modification, termination or waiver of any provision contained in any Collateral
Document without prior written consent of Requisite Lenders. Anything contained
in any of the Loan Documents to the contrary notwithstanding, each Lender agrees
that no Lender shall have any right individually to realize upon any of the
collateral under any Collateral Document, it being understood and agreed that
all powers, rights and remedies under the Collateral Documents may be exercised
solely by the Administrative Agent for the benefit of the Lenders in accordance
with the terms thereof. Each Lender hereby authorizes the Administrative Agent
(i) to release or subordinate Collateral as permitted or required under this
Agreement or the Collateral Documents, and agrees that a certificate executed by
the Administrative Agent evidencing such release of Collateral shall be
conclusive evidence of such release as to any third party and (ii) to enter into
any amendments of the Collateral Documents to cure any ambiguity, defect or
inconsistency or to amend provisions relating to ministerial or administrative
matters that do not materially adversely affect the rights of the Lenders
thereunder.

8.6      SUCCESSOR ADMINISTRATIVE AGENT.

                  The Administrative Agent may resign at any time by giving 30
days' prior written notice thereof to the Lenders and the Borrower. Upon any
such notice of resignation, Requisite Lenders shall have the right, upon
consultation with the Borrower, to appoint a successor Administrative Agent.
Upon the acceptance of any appointment hereunder by a successor Administrative
Agent, that successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent and the retiring or removed Administrative Agent shall be
discharged from its duties and obligations under this Agreement. After any
retiring Administrative Agent's resignation hereunder as Administrative Agent,
the provisions of this Section 8 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Agreement.

                                   SECTION 9.

                                  MISCELLANEOUS

9.1      ASSIGNMENTS AND PARTICIPATIONS IN LOANS.

                  A.   GENERAL. Each Lender shall have the right at any time (i)
to sell, assign or transfer to any Eligible Assignee, or (ii) to sell
participations to any Person in, all or any part of its Commitment or any Loan
or Loans made by it or any other interest herein or in any other Obligations
owed to it, so long as no such sale, assignment, transfer or participation
shall, without the consent of the Borrower, require the Borrower to file a
registration state-

                                      -70-
<PAGE>

ment with the Securities and Exchange Commission or apply to qualify such sale,
assignment, transfer or participation under the securities laws of any state;
provided, that no such sale, assignment or transfer described in clause (i)
above shall be effective unless and until an Assignment Agreement effecting such
sale, assignment or transfer shall have been accepted by the Administrative
Agent and recorded in the Register as provided in subsection 9.1B(ii). Except as
otherwise provided in this subsection 9.1, no Lender shall, as between the
Borrower and such Lender, be relieved of any of its obligations hereunder as a
result of any sale, assignment or transfer of, or any granting of participations
in, all or any part of its Commitment or the Loans, or the other Obligations
owed to such Lender.

                  B.   ASSIGNMENTS.

                   (i)   Amounts and Terms of Assignments. Each Commitment, Loan
or other Obligation may (a) be assigned in any amount to another Lender, or to
an Affiliate or Related Fund of the assigning Lender or another Lender, with the
giving of notice to the Borrower and the Administrative Agent or (b) be assigned
in an aggregate amount of not less than $5,000,000 (or such lesser amount as
shall constitute the aggregate amount of the Commitments, Loans, and other
Obligations of the assigning Lender) to any other Eligible Assignee with the
giving of notice to the Borrower and with the consent of the Administrative
Agent and the Borrower (which consent shall not be unreasonably withheld or
delayed) unless (I) an Event of Default shall have occurred and be occurring or
(II) such assignment is consented to by the Administrative Agent within 15 days
after the Initial Borrowing Date, in each of which cases the consent of the
Borrower to such assignment shall not be required. Any assignment of Loans
hereunder shall effect a pro rata assignment of the Notes with respect to each
Aircraft or Spare Engine Pool. To the extent of any such assignment in
accordance with either clause (a) or (b) above, the assigning Lender shall be
relieved of its obligations with respect to its Commitment, Loans, or other
Obligations or the portion thereof so assigned. The parties to each such
assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment Agreement, together with
a processing and recordation fee of $3,000 and such forms, certificates or other
evidence, if any, with respect to United States federal income tax withholding
matters as the assignee under such Assignment Agreement may be required to
deliver to the Administrative Agent pursuant to subsection 2.7B(iii)(a);
provided, however, that such processing fee shall not be required where the
assignee is an existing Lender. Upon such execution, delivery, acceptance and
recording from and after the effective date specified in such Assignment
Agreement, (y) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment Agreement, shall have the rights and obligations of a Lender
hereunder and (z) the assigning Lender thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment Agreement, relinquish its rights and be released from its obligations
under this Agreement (and, in the case of an Assignment Agreement covering all
or the remaining portion of an assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto);

                                      -71-
<PAGE>

provided further, however, that the assigning Lender shall retain any right to
payment accrued under subsections 2.6C, 2.6D, 2.7, 9.2 or 9.3 unless such rights
are explicitly assigned to the assignee in the Assignment Agreement. The
Commitments hereunder shall be modified to reflect the Commitment of such
assignee and any remaining Commitment of such assigning Lender and, if any such
assignment occurs after the issuance of the Notes hereunder, the assigning
Lender shall, upon the effectiveness of such assignment or as promptly
thereafter as practicable, surrender its applicable Notes to the Administrative
Agent for cancellation, and thereupon new Notes shall be issued to the assignee
substantially in the form of Exhibit IIA annexed hereto or Exhibit IIB annexed
hereto, as appropriate, with appropriate insertions, to reflect the new
Commitment or outstanding Loans, as the case may be, of the assignee and/or the
assigning Lender.

                  (ii) Acceptance by Administrative Agent; Recordation in
Register. Upon its receipt of an Assignment Agreement executed by an assigning
Lender and an assignee representing that it is an Eligible Assignee, together
with the processing and recordation fee referred to in subsection 9.1B(i) and
any forms, certificates or other evidence with respect to United States federal
income tax withholding matters that such assignee may be required to deliver to
the Administrative Agent pursuant to subsection 2.7B(iii)(a), the Administrative
Agent shall, if such Assignment Agreement has been completed and is in
substantially the form of Exhibit V hereto, and if the Administrative Agent and
the Borrower have consented to the assignment evidenced thereby to the extent
that such consent is required pursuant to subsection 9.1B(i), (a) accept such
Assignment Agreement by executing a counterpart thereof as provided therein
(which acceptance shall evidence any required consent of the Administrative
Agent and the Borrower to such assignment), (b) record the information contained
therein in the Register and (c) give prompt notice thereof to the Borrower. The
Administrative Agent shall maintain a copy of each Assignment Agreement
delivered to and accepted by it as provided in this subsection 9.1B(ii).

                  C.   PARTICIPATIONS. The holder of any participation, other
than an Affiliate of the Lender granting such participation, shall not be
entitled to require such Lender to take or omit to take any action hereunder
except action directly affecting (i) the extension of the Final Maturity Date
of any Loan allocated to such participation, (ii) a reduction of the principal
amount of or the rate of interest payable on any Loan allocated to such
participation or (iii) a release of Collateral, and all amounts payable by the
Borrower hereunder (including, without limitation, amounts payable to such
Lender pursuant to subsections 2.6D and 2.7) shall be determined as if such
Lender had not sold such participation. The Borrower and each Lender hereby
acknowledge and agree that, solely for purposes of subsection 9.5, (a) any
participation will give rise to a direct obligation of the Borrower to the
participant and (b) the participant shall be considered to be a "Lender."

                  D.   ASSIGNMENTS TO FEDERAL RESERVE BANKS AND OTHERS.  In
addition to the assignments and participations permitted under the foregoing
provisions of this subsection

                                      -72-
<PAGE>

9.1, any Lender may assign and pledge all or any portion of its Loans, the
other Obligations owed to such Lender, and its Notes to (i) any Federal Reserve
Bank as collateral security pursuant to Regulation A of the Board of Governors
of the Federal Reserve System and any operating circular issued by such Federal
Reserve Bank or (ii) if such Lender is a "fund", to any holders of obligations
owed or securities issued by such fund as security for such obligations or
securities, or to any trustee for, or any representative of, such holders;
provided, that (i) no Lender shall, as between the Borrower and such Lender, be
relieved of any of its obligations hereunder as a result of any such assignment
and pledge and (ii) in no event shall such Federal Reserve Bank or lender be
considered to be a "Lender" or be entitled to require the assigning Lender to
take or omit to take any action hereunder.

                  E.   INFORMATION. Each Lender may furnish any information
concerning the Borrower in the possession of that Lender from time to time to
assignees and participants (including prospective assignees and participants),
subject to subsection 9.19.

9.2      EXPENSES.

                  Whether or not the transactions contemplated hereby shall be
consummated, the Borrower agrees to pay promptly (i) all the actual and
reasonable costs and expenses of preparation of the Loan Documents; (ii) all the
costs of furnishing all opinions by counsel for the Borrower (including, without
limitation, any opinions requested by the Lenders as to any legal matters
arising hereunder) and of the Borrower's performance of and compliance with all
agreements and conditions on its part to be performed or complied with under
this Agreement and the other Loan Documents, including, without limitation, with
respect to confirming compliance with environmental and insurance requirements;
(iii) the reasonable fees, expenses and disbursements of counsel to the
Administrative Agent in connection with the negotiation, preparation, execution
and administration of the Loan Documents and the Loans and any consents,
amendments, waivers or other modifications hereto or thereto and any other
documents or matters requested by the Borrower; (iv) all the costs and expenses
of creating and perfecting the Liens in favor of the Administrative Agent for
the benefit of the Lenders pursuant to the Loan Documents, including filing and
recording fees and expenses, title insurance, fees and expenses of counsel for
providing such opinions as the Lenders may reasonably request and fees and
expenses of legal counsel to the Administrative Agent (including local
counsel); (v) all other actual and reasonable costs and expenses incurred by the
Administrative Agent in connection with the syndication of the Commitments and
the Loans and the negotiation, preparation and execution of the Loan Documents
and the transactions contemplated hereby and thereby, provided that such costs
and expenses of syndication shall not exceed $25,000; and (vi) after the
occurrence of an Event of Default, all costs and expenses, including reasonable
attorneys' fees (including allocated costs of internal counsel) and costs of
settlement, incurred by the Administrative Agent and the Lenders in enforcing
any Obligations of or in collecting any payments due from the Borrower hereunder
or under the other Loan Documents by reason of such Event of Default or in
connection with any refinancing or re-

                                      -73-
<PAGE>

structuring of the credit arrangements provided under this Agreement in the
nature of a "work-out" or pursuant to any insolvency or bankruptcy proceedings.

9.3      INDEMNITY.

                  In addition to the payment of expenses pursuant to subsection
9.2, whether or not the transactions contemplated hereby shall be consummated,
the Borrower agrees to defend, indemnify, pay and hold harmless the
Administrative Agent and the Lenders, and the officers, directors, partners,
employees, agents and affiliates of the Administrative Agent and the Lenders
(collectively called the "INDEMNITEES") from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature whatsoever
(including, without limitation, the reasonable fees and disbursements of counsel
for such Indemnitees in connection with any investigative, administrative or
judicial proceeding, commenced or threatened by any Person, whether or not any
such Indemnitee shall be designated as a party or a potential party thereto),
whether direct, indirect or consequential and whether based on any federal,
state or foreign laws, statutes, rules or regulations (including, without
limitation, securities and commercial laws, statutes, rules or regulations and
Environmental Laws), on common law or equitable cause or on contract or
otherwise, that may be imposed on, incurred by, or asserted against any such
Indemnitee, in any manner relating to or arising out of this Agreement or the
other Loan Documents or the transactions contemplated hereby or thereby
(including, without limitation, the Lenders' agreement to make the Loans
hereunder, or the use or intended use of the proceeds of any of the Loans) or
the statements contained in the commitment letter delivered by any Lender to the
Borrower with respect thereto (collectively called the "INDEMNIFIED
LIABILITIES"); provided, that the Borrower shall not have any obligation to any
Indemnitee hereunder with respect to any Indemnified Liabilities to the extent
such Indemnified Liabilities arise solely from the gross negligence or willful
misconduct of that Indemnitee as determined by a final judgment of a court of
competent jurisdiction. To the extent that the undertaking to defend, indemnify,
pay and hold harmless set forth in the preceding sentence may be unenforceable
because it is violative of any law or public policy, the Borrower shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by the Indemnitees or any of them.

9.4      SET-OFF.

                  In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default each Lender is hereby authorized by the
Borrower at any time or from time to time, without notice to the Borrower or to
any other Person, any such notice being hereby expressly waived, to set off and
to appropriate and to apply any and all deposits (general or special, including,
but not limited to, Indebtedness evidenced by certificates of deposit, whether
matured or unmatured, but not including trust accounts) and any other
Indebtedness at any time held or owing by that

                                      -74-
<PAGE>

Lender to or for the credit or the account of the Borrower against and on
account of the obligations and liabilities of the Borrower to that Lender under
this Agreement, its Notes, and the other Loan Documents, including, but not
limited to, all claims of any nature or description arising out of or connected
with this Agreement, the Notes, or any other Loan Document, irrespective of
whether or not (i) that Lender shall have made any demand hereunder or (ii) the
principal of or the interest on the Loans or any other amounts due hereunder
shall have become due and payable pursuant to Section 7 and although said
obligations and liabilities, or any of them, may be contingent or unmatured.

9.5      RATABLE SHARING.

                  The Lenders hereby agree among themselves that if any of them
shall, whether by voluntary payment, by realization upon security, through the
exercise of any right of set-off or banker's lien, by counterclaim or cross
action or by the enforcement of any right under the Loan Documents or otherwise,
or as adequate protection of a deposit treated as cash collateral under the
Bankruptcy Code, receive payment or reduction of a proportion of the aggregate
amount of principal, interest, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents (collectively, the "AGGREGATE
AMOUNTS DUE" to such Lender) that is greater than the proportion received by any
other Lender in respect of the Aggregate Amounts Due to such other Lender, then
the Lender receiving such proportionately greater payment shall (i) notify the
Administrative Agent and each other Lender of the receipt of such payment and
(ii) apply a portion of such payment to purchase participations (which it shall
be deemed to have purchased from each seller of a participation simultaneously
upon the receipt by such seller of its portion of such payment) in the Aggregate
Amounts Due to the other Lenders so that all such recoveries of Aggregate
Amounts Due shall be shared by all Lenders in proportion to the Aggregate
Amounts Due to them; provided, that if all or part of such proportionately
greater payment received by such purchasing Lender is thereafter recovered from
such Lender upon the bankruptcy or reorganization of the Borrower or otherwise,
those purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such purchasing Lender ratably to the extent
of such recovery, but without interest. The Borrower expressly consents to the
foregoing arrangement and agrees that any holder of a participation so purchased
may exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies owing by the Borrower to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder.

9.6      AMENDMENTS AND WAIVERS.

                  A.   No amendment, modification, termination or waiver of any
provision of this Agreement or any of the other Loan Documents (other than any
amendment, modification, termination or waiver which may be required to effect
the replacement of any Engine or any Airframe in accordance with Section 9.21 of
this Agreement or the sale of a single Aircraft in accordance with Section
6.6(ii) of this Agreement), or consent to and departure by the

                                      -75-
<PAGE>

Borrower therefrom, shall in any event be effective without the written
concurrence of Requisite Lenders; provided, that any such amendment,
modification, termination, waiver or consent that: increases the amount of any
of the Commitments or reduces the principal amount of any of the Loans; changes
any Lender's Tranche A Pro Rata Share or Tranche B Pro Rata Share; changes in
any manner the definition of "Requisite Lenders;" changes in any manner any
provision of this Agreement that, by its terms, expressly requires the approval
or concurrence of all Lenders; postpones the Final Maturity Date (but not the
date of any scheduled installment of principal) of any of the Loans; postpones
the date on which any interest or any fees are payable; decreases the interest
rate borne by any of the Loans (other than any waiver of any increase in the
interest rate applicable to any of the Loans pursuant to subsection 2.2D) or the
amount of any fees payable hereunder; releases all or substantially all of the
Collateral; or changes in any manner the provisions contained in this subsection
9.6 shall be effective only if evidenced by a writing signed by or on behalf of
all Lenders to whom are owed Obligations being directly affected by such
amendment, modification, termination, waiver or consent. In addition, (i) no
amendment, modification, termination or waiver of any provision of any Note
shall be effective without the written concurrence of the Lender that is the
holder of that Note, (ii) no increase in the Commitment of any Lender over the
amount thereof then in effect shall be effective without the written concurrence
of that Lender, it being understood and agreed that in no event shall waivers or
modifications of conditions precedent, covenants, Events of Default, Potential
Events of Default or of a mandatory prepayment or a reduction of any or all of
the Commitments be deemed to constitute an increase of the Commitment of any
Lender, and that an increase in the available portion of any Commitment of any
Lender shall not be deemed to constitute an increase in the Commitment of such
Lender and (iii) no amendment, modification, termination or waiver of any
provision of Section 8 or of any other provision of this Agreement that, by its
terms, expressly requires the approval or concurrence of the Administrative
Agent shall be effective without the written concurrence of such Administrative
Agent. No change shall be made (x) to Section 2.4B(a) or (b) without the consent
of the holders of a majority of principal of the Tranche A Loans or Tranche B
Loans, respectively, and (y) to Section 2.4C(iii) without the consent of the
holders of a majority of principal of each of the Tranche A Loans and Tranche B
Loans. The Administrative Agent may, but shall have no obligation to, with the
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender. Any waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it was given. No
notice to or demand on the Borrower in any case shall entitle the Borrower to
any other or further notice or demand in similar or other circumstances. Any
amendment, modification, termination, waiver or consent effected in accordance
with this subsection 9.6 shall be binding upon each Person who was a Lender at
the time of such amendment, modification, termination, waiver or consent, upon
each Person who subsequently becomes a Lender and, if signed by the Borrower,
upon the Borrower.

                  B.   If, in connection with any proposed change, waiver,
discharge or termination to any of the provisions of this Agreement as
contemplated by the proviso in the first

                                      -76-
<PAGE>

sentence of this subsection 9.6, the consent of Requisite Lenders is obtained
but consent of one or more of such other Lenders whose consent is required is
not obtained, then the Borrower may, so long as all non-consenting Lenders are
so treated, elect to terminate such Lender as a party to this Agreement, so long
as, concurrently with such termination, (i) the Borrower pays to that Lender all
principal, interest and fees and other amounts owed to such Lender through such
date of termination, (ii) another financial institution satisfactory to the
Borrower and the Administrative Agent (or if the Administrative Agent is also
the Lender to be terminated, the successor Administrative Agent) agrees, as of
such date, to become a Lender for all purposes under this Agreement (whether by
assignment or amendment) and to assume all obligations of the Lender to be
terminated as of such date, and (iii) all documents and supporting materials
necessary, in the judgment of the Administrative Agent (or if the Administrative
Agent is also the Lender to be terminated, the successor Administrative Agent)
to evidence the substitution of such Lender have been received and approved by
the Administrative Agent as of such date.

9.7      INDEPENDENCE OF COVENANTS.

                  All covenants under this Agreement shall be given independent
effect so that if a particular action or condition is not permitted by any of
such covenants, the fact that it would be permitted by an exception to, or would
otherwise be within the limitations of, another covenant shall not avoid the
occurrence of an Event of Default or Potential Event of Default if such action
is taken or condition exists.

9.8      NOTICES.

                  Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given shall be in writing
and may be personally served, telexed or sent by telefacsimile or United States
mail or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed; provided, that notices to the Administrative Agent shall
not be effective until received. For the purposes hereof, the address of each
party hereto shall be as set forth under such party's name on the signature
pages hereof or (i) as to the Borrower and the Administrative Agent, such other
address as shall be designated by such Person in a written notice delivered to
the other parties hereto and (ii) as to each other party, such other address as
shall be designated by such party in a written notice delivered to the
Administrative Agent.

9.9      SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.

                  A.   All representations, warranties and agreements made
herein shall survive the execution and delivery of this Agreement and the making
of the Loans hereunder.

                                      -77-
<PAGE>

                  B.   Notwithstanding anything in this Agreement or implied by
law to the contrary, the agreements of the Borrower set forth in subsections
2.6D, 2.7, 9.2, 9.3 and 9.4 and the agreements of the Lenders set forth in
subsections 8.2C, 8.4 and 9.5 shall survive the payment of the Loans, and the
termination of this Agreement.

9.10     FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.

                  No failure or delay on the part of the Administrative Agent or
any Lender in the exercise of any power, right or privilege hereunder or under
any other Loan Document shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other power, right or privilege. All
rights and remedies existing under this Agreement and the other Loan Documents
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.

9.11     MARSHALLING; PAYMENTS SET ASIDE.

                  Neither the Administrative Agent nor any Lender shall be under
any obligation to marshal any assets in favor of the Borrower or any other party
or against or in payment of any or all of the Obligations. To the extent that
the Borrower makes a payment or payments to the Administrative Agent or Lenders
(or to the Administrative Agent for the benefit of the Lenders), or the
Administrative Agent or Lenders enforce any security interests or exercise their
rights of set-off, and such payment or payments or the proceeds of such
enforcement or set-off or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, any
other state or federal law, common law, the law of admiralty or any equitable
cause, then, to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights and remedies therefor
or related thereto, shall be revived and continued in full force and effect as
if such payment or payments had not been made or such enforcement or set-off had
not occurred.

9.12     SEVERABILITY.

                  In case any provision in or obligation under this Agreement or
the Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

9.13     OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.

                  The obligations of the Lenders hereunder are several and no
Lender shall be responsible for the obligations or Commitments of any other
Lender hereunder. Nothing contained herein or in any other Loan Document, and no
action taken by any Lenders pursuant

                                      -78-
<PAGE>

hereto or thereto, shall be deemed to constitute the Lenders as a partnership,
an association, a joint venture or any other kind of entity. The amounts payable
at any time hereunder to each Lender shall be a separate and independent debt,
and each Lender shall be entitled to protect and enforce its rights arising out
of this Agreement, and it shall not be necessary for any other Lender to be
joined as an additional party in any proceeding for such purpose.

9.14     HEADINGS.

                  Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.

9.15     APPLICABLE LAW.

                  THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

9.16     SUCCESSORS AND ASSIGNS.

                  This Agreement shall be binding upon the parties hereto and
their respective successors and assigns and shall inure to the benefit of the
parties hereto and the successors and assigns of the Lenders (it being
understood that the Lenders' rights of assignment are subject to subsection
9.1). Neither the Borrower's rights or obligations hereunder nor any interest
therein may be assigned or delegated by the Borrower without the prior written
consent of all Lenders.

9.17     CONSENT TO JURISDICTION AND SERVICE OF PROCESS.

                  ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST THE BORROWER ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY
OBLIGATION MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE BORROWER ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY
AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
AGREEMENT, SUCH OTHER LOAN DOCUMENT OR SUCH OBLIGATION (SUBJECT TO ANY RIGHT TO
APPEAL TO A COURT IN THE STATE OF NEW YORK). The Borrower hereby agrees that
service of all process in any such proceeding in any such court may be made by
registered or certified

                                      -79-
<PAGE>

mail, return receipt requested, to the Borrower at its address provided in
subsection 9.8, such service being hereby acknowledged by the Borrower to be
sufficient for personal jurisdiction in any action against the Borrower in any
such court and to be otherwise effective and binding service in every respect.
Nothing herein shall affect the right to serve process in any other manner
permitted by law or shall limit the right of any Lender to bring proceedings
against the Borrower in the courts of any other jurisdiction.

9.18     WAIVER OF JURY TRIAL.

                  EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR
THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including, without limitation, contract claims, tort claims, breach of duty
claims and all other common law and statutory claims. Each party hereto
acknowledges that this waiver is a material inducement to enter into a business
relationship, that each has already relied on this waiver in entering into this
Agreement, and that each will continue to rely on this waiver in their related
future dealings. Each party hereto further warrants and represents that it has
reviewed this waiver with its legal counsel and that it knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS
MADE HEREUNDER. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.

9.19     CONFIDENTIALITY.

                  Each Lender shall hold all non-public information obtained
pursuant to the requirements of the Transaction Documents that has been
identified as confidential by the Borrower in accordance with such Lender's
customary procedures for handling confidential information of this nature, it
being understood and agreed by the Borrower that in any event a Lender may make
disclosures to any Person who evaluates, approves, structures or administers the
Loans on behalf of a Lender and who is subject to this confidentiality
provision, or, subject to this Section 9.19, reasonably required by any bona
fide assignee, transferee or participant in connection with the contemplated
assignment or transfer by such Lender of any Loans or any participation therein
(at which time, any such assignee, transferee or participant shall be bound by
this Section 9.19) or as required or requested by any governmental or regu-

                                      -80-
<PAGE>

latory agency (including, without limitation, the National Association of
Insurance Commissions) or representative thereof or pursuant to legal process or
in accordance with any applicable law or regulation; provided, that, unless
specifically prohibited by applicable law or court order, each Lender shall
notify the Borrower of any request by any governmental or regulatory agency or
representative thereof (other than any such request in connection with any
examination of the financial condition of such Lender by such governmental or
regulatory agency) for disclosure of any such non-public information prior to
disclosure of such information; and provided further, that in no event shall any
Lender be obligated or required to return any materials furnished by the
Borrower.

9.20     COUNTERPARTS; EFFECTIVENESS.

                  A.   This Agreement and any amendments, waivers, consents or
supplements hereto or in connection herewith may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.

                  B.   This Agreement shall become effective upon the execution
of a counterpart hereof by each of the parties hereto and receipt by the
Borrower and the Administrative Agent of written or telephonic notification of
such execution and authorization of delivery thereof (the "EFFECTIVE DATE").

9.21     REPLACEMENT ENGINES AND AIRFRAMES.

                  A.   ENGINES. So long as no Event of Default or Potential
Event of Default has occurred and is continuing, the Borrower may, upon not less
than 5 Business Days' prior written notice to the Administrative Agent, replace
any Engine that is the subject of an Aircraft Chattel Mortgage with another
engine (the "Replacement Engine") meeting the requirements of the applicable
Aircraft Chattel Mortgage and the requirements of an Acceptable Alternate
Engine. In addition to the requirements of the preceding sentence, any
Replacement Engine shall be an engine that is the same or improved make and
model as the Engine to be replaced, and that is suitable for installation and
use on any Airframe (or any Boeing 747-400 aircraft operated by Atlas) and that
has a value, utility and remaining useful life (including with respect to hours
and cycles remaining until overhaul) at least equal to the Engine to be replaced
thereby.

                  The Lenders agree to release the Lien created by the
applicable Aircraft Chattel Mortgage for any Engine to be replaced by a
Replacement Engine promptly upon (i) presentation by the Borrower of
documentation necessary to create a legal, valid and enforceable first priority
security interest in and to the Replacement Engine, (ii) delivery to the
Adminis-

                                      -81-
<PAGE>

trative Agent of an opinion of Cahill Gordon & Reindel, or such other counsel as
may be acceptable to the Administrative Agent, confirming that the Borrower (and
the Administrative Agent upon succeeding to the Borrower's interest in the
applicable Lease) will continue to be entitled to the benefits of Section 1110
of the Bankruptcy Code with respect to such Replacement Engine free of all Liens
(other than Permitted Encumbrances and the applicable Lease) and (iii) receipt
of all other deliveries required by Section 4(f)(ii) of the applicable Aircraft
Chattel Mortgage.

                  B.   AIRFRAMES. So long as no Event of Default or Potential
Event of Default has occurred and is continuing, the Borrower may, upon not less
than 5 Business Days' prior notice to the Administrative Agent, replace any
Airframe that is the subject of an Aircraft Chattel Mortgage with another
airframe (the "Replacement Airframe") meeting the requirements of the applicable
Aircraft Chattel Mortgage and the requirements of an Acceptable Alternate
Airframe; provided that, no more than two Airframes may be replaced by the
Borrower pursuant to this subsection 9.21B. In addition to the requirements of
the preceding sentence, any Replacement Airframe shall be an airframe that is
the same or improved make and model as the Airframe to be replaced and that has
a value, utility and remaining useful life (including with respect to hours and
cycles remaining until overhaul) at least equal to the Airframe to be replaced
thereby.

                  The Lenders agree to release the Lien created by the
applicable Aircraft Chattel Mortgage for any Airframe to be replaced by a
Replacement Airframe promptly upon (i) presentation by the Borrower of
documentation necessary to create a legal, valid and enforceable first priority
security interest in and to the Replacement Airframe, (ii) delivery to the
Administrative Agent of an opinion of Cahill Gordon & Reindel, or such other
counsel as may be acceptable to the Administrative Agent, confirming that the
Borrower (and the Administrative Agent upon succeeding to the Borrower's
interest in the applicable Lease) will continue to be entitled to the benefits
of Section 1110 of the Bankruptcy Code with respect to such Replacement Airframe
free of all Liens (other than Permitted Encumbrances and the applicable Lease)
and (iii) receipt of all other deliveries required by Section 4(f)(ii) of the
applicable Aircraft Chattel Mortgage.

                  C.   FURTHER ASSURANCES. The Borrower shall, in addition to
the actions required by the preceding subsections 9.21A and 9.21B, take all
necessary actions to provide that the Borrower (and the Administrative Agent
upon succeeding to the Borrower's interest in the applicable Lease) will
continue to be entitled to the benefits of Section 1110 of the Bankruptcy Code
with respect to each Replacement Engine and each Replacement Airframe, in each
case free of all Liens (other than Permitted Encumbrances and the applicable
Lease).

                  [Remainder of page intentionally left blank]

                                      -82-
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.

                        ATLAS FREIGHTER LEASING III, INC.

                        By:  /s/ Fred L. deLeeuw
                             ---------------------------------
                             Title: Vice President

                        Notice Address:

                        538 Commons Drive
                        Golden, Colorado  80401

                        Attention: Richard H. Shuyler
                            Executive Vice President - Strategic Planning and
                            Treasurer

                        BANKERS TRUST COMPANY, as Administrative
                            Agent and Lender

                        By:  /s/ Marguerite Sutton
                            ----------------------------
                        Title: Vice President

                        Notice Address:

                        Bankers Trust Company
                        130 Liberty Street
                        New York, New York  10006

                        Attention: Marguerite Sutton

<PAGE>

LENDERS:

                        DEUTSCHE VERKEHRSBANK AG

                        By:    /s/ Constance Laudenschlager
                               --------------------------------------
                              Title: Senior Vice President

                        By:   /s/ James M. Morton
                               --------------------------------------
                              Title: Assistant Vice President

                        FIRST SECURITY BANK, N.A.

                        By:   /s/ Judy Callister
                               --------------------------------------
                              Title: Vice President

                        FIRST UNION NATIONAL BANK

                        By:   /s/ Gerald P. Hullinger
                               --------------------------------------
                              Title: Vice President

                        GMAC COMMERCIAL CREDIT LLC

                        By:    /s/ Sam Cirelli
                               --------------------------------------
                               Title: Executive Vice President

                        IMPERIAL BANK

                        By:    /s/ Ray Vadalma
                               --------------------------------------
                               Title: Senior Managing Director

                        NORWEST BANK COLORADO NATIONAL ASSOCIATION

                        By:   /s/ Darlene A. Evans
                               --------------------------------------
                              Title: Vice President

<PAGE>

                        SUMMIT BANK

                        By:    /s/ Robert A. Ewing
                               --------------------------------------
                               Title: Vice President

                        UNION PLANTERS BANK

                        By:    /s/ Carlos Rodriguez
                               --------------------------------------
                               Title: Senior Vice President

                        U.S. BANK N.A.

                        By:    /s/ Melissa S. Forbes
                               --------------------------------------
                               Title: Vice President

                        KZH CNC LLC

                        By:    /s/ Susan Lee
                               --------------------------------------
                               Title: Authorized Agent

                        KZH CYPRESSTREE-1 LLC

                        By:    /s/ Susan Lee
                               --------------------------------------
                               Title: Authorized Agent

                        NORTH AMERICAN SENIOR FLOATING RATE FUND

                        By:    CYPRESSTREE INVESTMENT
                               MANAGEMENT COMPANY, INC.
                               as Portfolio Manager

                        By:    /s/ Jeffrey W. Heuer
                               --------------------------------------
                               Title: Principal

                                      -2-
<PAGE>

                        CYPRESSTREE INVESTMENT FUND, LLC

                        By:   CYPRESSTREE INVESTMENT
                              MANAGEMENT COMPANY, INC.
                              its Managing Member

                        By:   /s/ Jeffrey W. Heuer
                               --------------------------------------
                              Title: Principal

                        FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY

                        By:   CYPRESSTREE INVESTMENT
                              MANAGEMENT COMPANY, INC.
                              as Attorney-in-Fact and on behalf of First
                              Allmerica Financial Life Insurance Company as
                              Portfolio Manager

                        By:   /s/ Jeffrey W. Heuer
                               --------------------------------------
                              Title: Principal

                        KZH ING-1 LLC

                        By:   /s/ Susan Lee
                               --------------------------------------
                              Title: Authorized Agent

                        KZH ING-2 LLC

                        By:   /s/ Susan Lee
                               --------------------------------------
                              Title: Authorized Agent

                        KZH ING-3 LLC

                        By:   /s/ Susan Lee
                               --------------------------------------
                              Title: Authorized Agent

                                      -3-

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