Document:

FN>

                               FINANCING AGREEMENT

                  This  FINANCING  AGREEMENT  (this  "Agreement"),  dated  as of
December  13,  2000,  is entered into by and between  AMERICAN  TRANS AIR,  INC.
("ATA"),  an Indiana  corporation,  and  GENERAL  ELECTRIC  CAPITAL  CORPORATION
("GECC"), a New York corporation.

                  WHEREAS,  ATA and GECC wish to set forth  their  understanding
regarding the leveraged lease  financings or single investor lease financings of
(Confidential Material Omitted) new Boeing B737-800 aircraft, each equipped with
two CFM56-7 engines  (collectively,  the "Aircraft") to be delivered pursuant to
the Purchase  Agreement No. 2262 dated as of June 30, 2000, as amended,  between
ATA and The Boeing  Company  (the "ATA  Purchase  Contract")  or pursuant to the
Purchase Agreement No. 1905 dated as of April 25, 1996, as amended, between GECC
and The Boeing Company (the "GE Purchase  Contract"  and,  together with the ATA
Purchase Contract, the "Purchase Contracts"); and

                  WHEREAS, in furtherance  thereof,  ATA and GECC wish to commit
to execute and deliver  certain agreed  documents  relating to such financing of
each  Aircraft on or before the date (the "Tender  Date") that such  Aircraft is
tendered  for  delivery  by The Boeing  Company  under the  applicable  Purchase
Contract  (which  date  will,  if  the  closing  of  the  applicable   financing
transaction  as described  herein  occurs on such date, be the Delivery Date for
such Aircraft).

                  NOW, THEREFORE, the parties hereto agree as follows:

     1. Leveraged Transactions. (a) ATA and GECC agree to enter into a leveraged
lease  financing  transaction,  on and  subject  to  the  terms  and  conditions
described  herein  (a  "Leveraged  Transaction"),  with  respect  to each of the
(Confidential  Material  Omitted)  Aircraft  identified  on Exhibit A (the "Firm
Aircraft").

     (b) (Confidential Material Omitted).

     (c) Each of the Firm Aircraft.  (Confidential Material Omitted) is referred
to herein as a "Leveraged Aircraft".

<PAGE>

                                      - 7 -

2.  Single-Investor  Transactions.  ATA and GECC  agree  to enter  into a single
investor lease financing transaction, on and subject to the terms and conditions
described   herein  (a  "SIL   Transaction"),   with  respect  to  each  of  the
(Confidential  Material  Omitted)  Aircraft  identified  on  Exhibit B (the "SIL
Aircraft").  The SIL Transactions and the Leveraged Transactions are referred to
collectively as the "Transactions".

3.  Leveraged  Documents.  Attached as Exhibit C are the forms of the agreements
and other documents (collectively,  the "Leveraged Documents") which the parties
have  negotiated  and  agreed  to  utilize  to  effect  each  of  the  Leveraged
Transactions.  Capitalized  terms used in this Agreement  without  definition in
relation to the Leveraged  Transactions shall have the meanings set forth in the
Leveraged Documents.  Subject to the terms and conditions of this Agreement, ATA
agrees that, on or before the Tender Date of each Leveraged Aircraft,  it shall,
with respect to such Aircraft,  (a) execute and deliver,  as Lessee, each of the
Leveraged Documents to which Lessee is to be a party as provided therein and (b)
procure that the parties  identified  therein as Owner  Trustee and as Mortgagee
and Loan Participant,  respectively (or other institutions reasonably acceptable
to  GECC)  execute  and  deliver  the  applicable  Leveraged  Documents  in such
capacities.  GECC agrees that, on the Tender Date of each Leveraged Aircraft, it
shall (or shall cause an Affiliate  that is a Permitted  Institution  to),  with
respect to such Aircraft, execute and deliver, as Owner Participant, each of the
Leveraged  Documents  to which  Owner  Participant  is to be  party as  provided
therein.

                  The  parties  agree  that  the  Leveraged  Documents  for each
  Leveraged  Aircraft  shall be in the form set forth in  Exhibit  C,  except as
  modified only to  incorporate  (a) the Delivery Date (and other dates measured
  with reference thereto),  serial numbers and registration number applicable to
  such Aircraft;  (b) the actual Lessor's Cost, as determined in accordance with
  Section 5 below;  (c) the Actual  Pricing,  as determined  in accordance  with
  Section 6 below;  (d) changes to reflect the terms of the Debt  Financing,  to
  the extent  agreed by the parties,  as  contemplated  in Section 7 below;  (e)
  changes,  if requested by GECC, to effect a like kind exchange as described in
  Exhibit E; and (f) the actual  Payment  Dates  (which will  correspond  to the
  interest payment dates under the Debt Financing).

4. SIL  Documents.  Attached as Exhibit D are the forms of agreements  and other
documents (collectively,  the "SIL Documents") which the parties have negotiated
and agreed to utilize to effect each of the SIL Transactions.  Capitalized terms
used in this Agreement  without  definition in relation to the SIL  Transactions
shall have the meanings set forth in the SIL Documents. Subject to the terms and
conditions  of this  Agreement,  ATA agrees that, on the Tender Date of each SIL
Aircraft, it shall (a) execute,  deliver and perform, as Lessee, each of the SIL
Documents to which  Lessee is to be a party as provided  therein and (b) procure
that the party  identified  therein as Owner  Trustee  (or  another  institution
reasonably  acceptable to GECC) execute and deliver the applicable SIL Documents
in such capacity.  GECC agrees that, on the Tender Date of each SIL Aircraft, it
shall  (or  shall  cause a  Permitted  Institution  to),  with  respect  to such
Aircraft,  execute,  deliver and perform, as Owner Participant,  each of the SIL
Documents to which Owner Participant is to be a party as provided therein.

                  The parties agree that the SIL Documents for each SIL Aircraft
shall  be in the form set  forth  in  Exhibit  D,  except  as  modified  only to
incorporate  (a) the  Delivery  Date (and other dates  measured  with  reference
thereto),  serial numbers and registration  number  applicable to such Aircraft;
(b) the actual  Lessor's Cost, as determined in accordance with Section 5 below;
(c) the Actual Pricing,  as determined in accordance  with Section 6 below;  (d)
changes,  if requested by GECC,  to effect a like kind  exchange as described in
Exhibit E; and (e) the actual Payment  Dates;  provided that with respect to the
Aircraft  identified  on  Exhibit  B as "GE  Purchase  Contract"  aircraft,  the
additional changes described in Exhibit F shall be made.

5. Lessor's Cost. In the Pricing Assumptions,  Lessor's Cost has been assumed to
be (Confidential  Material  Omitted) for each Aircraft to be delivered under the
ATA Purchase Contract and  (Confidential  Material Omitted) for each Aircraft to
be delivered  under the GE Purchase  Contract.  Lessor's  Cost for each Aircraft
shall be  adjusted  to be equal to the sum of (a) the actual  purchase  price of
such  Aircraft  under the  applicable  Purchase  Contract  (including  any price
escalation provided for therein) and (b) capitalized interest.

6. Pricing. (a) The Basic Rent payments and allocations, Stipulated Loss Values,
Termination  Values  and  EBO  Price  (collectively,  the  "Pricing")  for  each
Aircraft,  based on the pricing assumptions set forth in Exhibit G (the "Pricing
Assumptions"),  are set  forth in  Exhibit  H (the  "Assumed  Pricing")  for the
Leveraged  Aircraft  and the  SIL  Aircraft  respectively.  The  actual  Pricing
("Actual  Pricing") for each Aircraft  will be the Assumed  Pricing  adjusted as
provided in the following provisions of this Section 6.

                    (b) The Net  Economic  Return  shall be adjusted by changing
the net after-tax book yield component thereof to reflect any difference between
(1)  (Confidential  Material  Omitted) as quoted on the  (Confidential  Material
Omitted)  page (ask side  based on a 30/360  day  convention)  as of the  second
Business Day prior to the Delivery Date and (2) (Confidential Material Omitted).

                    (c) The Assumed  Pricing shall be  recalculated  (upwards or
downwards)  as of the  Delivery  Date by GECC,  in order to (i) maintain the Net
Economic  Return  (adjusted  as  provided  in Secton 6(b) above) and (ii) to the
extent possible consistent with clause (i), to minimize the Net Present Value of
Rents to Lessee, to reflect (A) any change in:

     (1) the Delivery  Date;  (2) the amount of Lessor's Cost; (3) the amount of
Transaction  Expenses;  or (4) in respect  of the  Leveraged  Transactions,  the
original  principal amount,  interest rate or amortization  schedule of the Debt
Financing from that set forth in the Pricing Assumptions; (Confidential Material
Omitted)and (C) any Change in Tax Law enacted, adopted, issued or (to the extent
described as a "proposed change" in the following definition of a "Change in Tax
Law") proposed on or prior to the Delivery  Date.  "Change in Tax Law" means (i)
any change, or any proposed change that has a proposed effective date that is on
or prior to the Delivery  Date,  in the Code  (provided  that,  in the case of a
proposed change in the Code, such change must have been "reported  favorably" by
the House Ways and Means  Committee  or the  Senate  Finance  Committee)  or the
Treasury  Regulations  (provided  that, in the case of a proposed  change in the
Treasury Regulations, such change must have been issued by the Department of the
Treasury)  or (ii) any  change  in the  interpretation  of the Code or  Treasury
Regulations in a decision by the United States Supreme Court,  the United States
Tax Court,  the United States Court of Claims or any of the United States Courts
of Appeal or  District  Courts,  or any  issuance of a revenue  ruling,  revenue
procedure or any pronouncement by the Internal Revenue Service or the Department
of the  Treasury  (other than a change in the  alternative  minimum tax or other
change that results in Owner  Participant's being subject to alternative minimum
tax or unable to use all tax benefits  because of its particular tax situation).
Subject to the following  paragraph,  in the event of any such proposed  change,
the parties  hereto shall  cooperate in order to determine the  methodology  for
taking into account in such recalculation the effect of such proposed change.

Any  such  recalculation  shall be  prepared  by GECC,  in  compliance  with the
provisions  of ss.  3.2.1(e)  of the Lease and  subject to  verification  in the
manner  provided  in  ss.  3.2.1(d)  of the  Lease,  on the  basis  of the  same
methodology  and assumptions  used by GECC in determining  the Assumed  Pricing,
except as such  assumptions have been modified to reflect the events giving rise
to such  recalculation and taking into account the law applicable at the time of
such recalculation (and, in respect of the EBO Price, subject to the constraints
set forth in ss. 3.2.1(b)(3) of the Lease). All recalculations (1) shall be made
so as to avoid  characterization  of the Lease as a  "disqualified  leaseback or
long-term agreement" within the meaning of Code ss. 467 and Treasury Regulations
thereunder and (2) shall be in compliance  with the  requirements of ss.4(1) and
ss. 4(6) of Revenue Procedure 75-21 and ss.ss.  4.02(5),  4.07(1) and 4.07(2) of
Revenue Procedure 75-28. In connection with any such  recalculations to payments
and allocations of Basic Rent,  appropriate  corresponding  adjustments shall be
made to the percentages set forth on the Schedules of Stipulated Loss Values and
Termination  Values in the  columns  headed  "Deferred  Basic Rent  Amount"  and
"Prepaid Basic Rent Amount."

     (d) In the  event  that  any  adjustment  to the  Pricing  for an  Aircraft
occasioned  by a Change In Tax Law  pursuant to clause (B) of Section 6(c) would
cause the Net  Present  Value of Rents (as defined in the  applicable  Lease) to
increase by more than (Confidential Material Omitted) in the case of an Aircraft
delivered under the GE Purchase  Contract or (Confidential  Material Omitted) in
the case of an  Aircraft  delivered  under the ATA  Purchase  Contract,  ATA may
terminate  this  Agreement  with respect to such  Aircraft by written  notice to
GECC, unless GECC, in its sole discretion, by written notice to ATA given within
four Business  Days after ATA gives such  termination  notice,  agrees to revise
such  adjustment  so that such present  value  increase  shall be  (Confidential
Material Omitted) or (Confidential Material Omitted),  respectively, or less. If
ATA  terminates  this  Agreement  with respect to any Aircraft  pursuant to this
Section 6(d), ATA shall not effect any lease or other financing of such Aircraft
that would reflect a Net Present Value of Rents (or the equivalent)  equal to or
greater  than the Net  Present  Value of Rents that  would  have  applied in the
transaction contemplated by this Agreement with respect to such Aircraft.

                  (e) In the event that any  recalculation  pursuant  to Section
6(c) results in a "back-ended  rent profile" for purposes of ss. 467 of the Code
and the Treasury Regulations thereunder, (i) the (Confidential Material Omitted)
requirement set forth in clause (A) of the definition of "Applicable Percentage"
shall apply to the first two Renewal  Terms,  and (ii) the provisions of Section
17 of the Lease shall be modified accordingly.

     (Confidentail Material Omitted)

8. Dates.  ATA shall give to GECC not less than five Business Days' prior notice
of the  scheduled  Delivery  Date of each  Aircraft,  provided that ATA shall be
entitled  to postpone  the  scheduled  Delivery  Date for an Aircraft by written
notice  to GECC  given  at any  time  prior  to 2:00 PM (New  York  time) on the
scheduled  Delivery  Date for such  Aircraft,  which  notice  may  specify a new
scheduled  Delivery  Date  on  a  subsequent   Business  Day.  If  notice  of  a
postponement does not specify a new scheduled Delivery Date, ATA shall give GECC
not less than two Business Days' notice of the new scheduled  Delivery Date with
respect to such Aircraft.

9. Return of Funds. If the closing of a Transaction  with respect to an Aircraft
fails to occur on the  scheduled  Delivery  Date and GECC  shall have made funds
available for such closing, ATA shall cause such funds to be returned to GECC in
immediately  available  funds by 3:30  p.m.  (New York  time) on such  scheduled
Delivery Date, unless GECC shall have agreed otherwise in writing.

10. Expenses. If the applicable Transaction with respect to an Aircraft fails to
close for any reason prior to the  termination  of this  Agreement,  pursuant to
Section 12 below,  ATA will pay all fees and expenses  (including the reasonable
legal fees and  expenses of GECC's  counsel)  incurred in  connection  with such
Transaction;  provided  that if the  Transaction  fails to close by  reason of a
breach  by  GECC  of its  obligations  under  this  Agreement  or by  the  Owner
Participant  of  any of  its  obligations  under  the  applicable  Participation
Agreement,  GECC  shall  pay  all  reasonable  fees  and  expenses  incurred  in
connection  with such  Transaction  (including  the  reasonable  legal  fees and
expenses of ATA's  counsel)  but  excluding  in any event any fees and  expenses
related to the Debt Financing.

11.  Conditions.

 (a) The obligation of GECC to participate in the  Transactions
with respect to each Aircraft as contemplated by this Agreement shall be subject
to the fulfillment or the waiver by GECC, on or before the Delivery Date of such
Aircraft,  of the conditions set forth in ss. 5.1 (except subsections 5.1.15 and
5.1.16 thereof) of the applicable  Participation  Agreement with respect to such
Transaction and the further conditions that (Confidential Material Omitted) (ii)
the Delivery  Date for such  Aircraft  shall have occurred on or before the date
contemplated  by clause  (ii) of Section 12 hereof  and  (Confidential  Material
Omitted).

     (b) The obligations of ATA to participate in the  Transaction  with respect
to each Aircraft as  contemplated  by this Agreement shall be subject to (i) the
satisfaction, or waiver by ATA, on or before the Delivery Date of such Aircraft,
of the conditions set forth in ss. 5.4 of the applicable Participation Agreement
and (ii) with respect to the Leveraged  Transactions,  the agreement of GECC and
the debt  providers on debt/equity  matters (to the extent  different from those
reflected  in the  form of  Mortgage  included  in  Exhibit  C) by the  date set
contemplated by clause (ii) of Section 12 hereof.

     12. Termination.  The obligations of ATA and GECC under this Agreement with
respect to any Aircraft shall  terminate and be of no further force or effect on
the earlier of (i) the consummation of the  Transactions  with respect to all of
the  Aircraft and (ii) the Outside Date (as defined  below)  applicable  to such
Aircraft,  provided that the obligations of ATA and GECC under Section 10 hereof
shall survive, and remain in full force and effect following, the termination of
this  Agreement.  For purposes of this Section 12, "Outside Date" means December
31, 2002 with respect to the Firm  Aircraft and the SIL  (Confidential  Material
Omitted) (such date, in each case, the "Expiry Date"),  provided that if a labor
strike or similar  event occurs at The Boeing  Company  prior to the  applicable
Expiry  Date and such  strike or event  causes  the date of  delivery  under the
Purchase Agreement in respect of any of the Aircraft to be delayed, the "Outside
Date"  shall be deemed to mean the  earlier  of (x) the date which  follows  the
applicable  Expiry  Date by the  number of days  that  such  strike or event has
continued  in effect and (y) the date which is six months  after the  applicable
Expiry Date.

     13. Related  Matters.  (a) Upon execution and delivery of this Agreement by
ATA, GECC shall return to ATA the letter of credit provided by ATA in connection
with  leveraged  lease  transaction  [ATA 1996 B]  covering  the Boeing  757-23N
aircraft having manufacturer's serial number 27974 and shall execute and deliver
an appropriate amendment to the Participation Agreement dated as of December 16,
1996 in such  transaction  releasing  ATA from the  provisions  of Section 8(ee)
thereof that require such letter of credit.

                  (Confidential Material Omitted)

     14. GE Purchase  Contract.  GECC confirms that the purchase  price for each
Aircraft to be delivered under the GE Purchase Contract (with the specifications
set forth in Boeing Detail Specification Ref. (Confidential Material Omitted)

                  GECC agrees that it will not, in respect of any Aircraft  that
is subject to this Agreement,  further amend the price,  specifications or other
terms of the GE Purchase  Contract  without  ATA's  written  consent.  GECC also
agrees that it will agree to reasonable  change orders and  amendments to the GE
Purchase  Contract,  with  respect  to any  Aircraft  that  is  subject  to this
Agreement, that are requested by ATA and accepted by the Boeing Company.

     15. Entire Agreement.  This Agreement,  as of the date hereof,  constitutes
the entire  agreement of the parties  hereto with respect to the subject  matter
hereof,  and  all  prior  understandings,  written  or oral  (including  without
limitation  the letter of intent  dated May 3, 2000 insofar as it relates to the
Aircraft),  between the parties  hereto with respect to such subject  matter are
hereby superseded in their entireties.

     16. Notices. All notices and other communications contemplated hereby shall
be in writing and shall be effective when delivered  addressed to a party at its
address or facsimile  number set forth under its  signature  hereto,  or to such
other address or facsimile number as any such party shall specify.

     17.  Miscellaneous.  This  Agreement  may  be  executed  in any  number  of
counterparts,  and each fully-executed counterpart of this Agreement shall be an
original and all of such counterparts  together shall constitute one instrument.
Neither this Agreement nor any of the terms hereof may be amended, supplemented,
waived or modified  orally,  but only by an instrument in writing  signed by the
party against which the  enforcement  of the  amendment,  supplement,  waiver or
modification  is sought.  The  parties  intend  that this  Agreement  shall be a
binding  agreement  with  respect to matters  set forth  herein.  The rights and
obligations  of the parties  hereto shall not be  assignable,  and any purported
assignment shall be voided.

     18.  Governing Law. This  Agreement  shall be governed by, and construed in
accordance  with, the laws of the State of New York applicable to contracts made
and to be performed wholly within such State.

<PAGE>

                  IN WITNESS  WHEREOF,  the parties have  executed and delivered
this Agreement as of the date first written above.

                     AMERICAN TRANS AIR, INC.

                     By:  ____________________________
                              Name:
                              Title:

                       Address:        7337 West Washington Street
                                       Indianapolis, IN  46231

                       Attention:      Treasurer

                       Facsimile:      317-240-7091

                     GENERAL ELECTRIC CAPITAL CORPORATION

                     By:  ____________________________
                              Name:
                              Title:

                       Address:   201 High Ridge Road
                                  Stamford, CT 06927

                       Attention: Contracts Leader

                       Facsimile: 203-357-3201

<PAGE>

                                                                       Exhibit A

                               Leveraged Aircraft

  Aircraft Under ATA Purchase Contract        Month of Scheduled Delivery

 (Confidential Material Omitted)

<PAGE>

     Exhibit B
                         Single-Investor Lease Aircraft

     Aircraft Under ATA Purchase Contract     Month of Scheduled Delivery

     (Confidential Material Omitted)

     Aircraft Under GE Purchase Contract

     (Confidential Material Omitted)

<PAGE>

                                                                     Exhibit B-1

 (Confidential Material Omitted)

<PAGE>

                                                                       Exhibit C

                            Leveraged Lease Documents

                  Attached are forms of the following Leveraged Documents:

                  1.  Participation Agreement (including Annex A - Definitions)

                  2.  Lease

                  3.  Trust Agreement

                  4.  Tax Indemnity Agreement

                  5.  Guarantee

                  6.  Purchase Agreement Assignment

                  7.  Consent and Agreement

                  8.  Mortgage and Equipment Notes

<PAGE>

                                                                       Exhibit D

                         Single-Investor Lease Documents

                  Attached  are forms of the  following  Single  Investor  Lease
                  Documents:

                  1.  Participation Agreement (including Annex A - Definitions)

                  2.  Lease

                  3.  Trust Agreement

                  4.  Tax Indemnity Agreement

                  5.  Guarantee

                  6.  Purchase Agreement Assignment

                  7.  Consent and Agreement

<PAGE>

                                                                       Exhibit E

                               Like Kind Exchange

The Owner  Participant may elect,  with respect to any of the Aircraft,  to fund
its equity  investment  pursuant to a like kind  exchange  arranged by the Owner
Participant  with a qualified  intermediary.  If such an  election is made,  the
following new ss. 10.3 will be added to the applicable Participation Agreement:

         "10.3    Like Kind Exchange

                      Notwithstanding  anything to the contrary contained in any
              of the Operative Agreements,  upon notice to Lessee, each of Owner
              Trustee's  and  Owner  Participant's  rights  (but  not any of its
              obligations  other than the obligation to pay Owner  Participant's
              Commitment  for the Aircraft)  under this Agreement to acquire the
              Aircraft may be assigned to [the  Intermediary] in connection with
              a like kind  exchange  under Section 1031 of the Code and pursuant
              to the Like Kind  Exchange  Documents (as defined in Schedule 3 to
              this  Agreement).  Notwithstanding  the  first  sentence  of  this
              Section 10.3, Owner  Participant  shall be responsible to make its
              Commitment  available in  accordance  with the  provisions of this
              Agreement  if the  Intermediary  fails  to  make  such  Commitment
              available,  and  any  such  assignment  shall  not  release  Owner
              Participant  or  Owner  Trustee  from  any  of  their   respective
              obligations hereunder or under any other Operative Agreement.  Any
              Lessor  Lien  attributable  to the  Intermediary  shall be  deemed
              attributable  to Owner  Participant  for purposes of the Operative
              Agreements."

The Like Kind Exchange Documents will consist of the following:

     1.  Assignment  and Acceptance  Replacement  Property  Contract,  dated the
Delivery Date, among Owner Participant, Owner Trustee and Intermediary.

     2. Notice of  Assignment  to Qualified  Intermediary  of Certain  Rights in
Participation  Agreement and Purchase  Agreement,  dated the Delivery Date, from
Owner Participant and Owner Trustee,  with  acknowledgment of receipt by Lessee,
Manufacturer, Mortgagee and Loan Participant.

     3.   Direction  of  Title   Transfer  dated  the  Delivery  Date  from  the
Intermediary and acknowledged and agreed by Lessee and Manufacturer.

     4.  Reassignment and Reacceptance  Replacement  Property Contract dated the
Delivery  Date among the  Intermediary,  Owner  Participant  and Owner  Trustee,
acknowledged by Lessee and Manufacturer.

The Owner Participant shall indemnify Lessee, on a net after-tax basis,  against
any obligation,  liability,  loss or expense  (including legal fees) of any kind
that Lessee pays or incurs as a result of any  like-kind  exchange  described in
this Exhibit E, and such like-kind exchange shall be excluded from the indemnity
obligations of Lessee under the applicable transaction documents.

ATA shall not be required  to adjust the timing of  delivery of any  Aircraft in
order to permit GECC to effect any such like-kind exchange.

<PAGE>

                                                                       Exhibit F

                          GE PURCHASE CONTRACT AIRCRAFT

                  The  Purchase   Agreement   Assignment  and  the  Consent  and
Agreement,  as set  forth  in  Exhibit  D,  with  respect  to the  SIL  Aircraft
identified  on Exhibit B as Aircraft  under the GE Purchase  Contract,  shall be
modified to reflect the fact that GECC,  rather than ATA, is the purchaser under
the GE  Purchase  Contract  and will be the party  assigning  rights  under that
contract  to the Owner  Trustee,  and  references  thereto in the  Participation
Agreement shall be modified accordingly.

<PAGE>

                                                                       Exhibit G

                               Pricing Assumptions

                                                    SIL Transactions

                         Leveraged       ATA                 GE
Assumptions              Transactions    Purchase Contract   Purchase Contract

1.  Delivery Date                   (Confidential Material Omitted)

2.  Lessor's Cost
      ($ million)

3.  Transaction
    Expenses
    (% of Lessor's
    Cost)

4.  Basic Lease Term

5.  Tax Rate

(Confidential Material
Omitted)

7.  Foreign Source
       Usage

8.  Pricing Files

<PAGE>

                                                                       Exhibit H

                                 Assumed Pricing

The Assumed Pricing consists of the following:

                  For the Leveraged Aircraft:

1.       Basic Rent Payments:

                         As set forth in Exhibit H-1

2.       Basic Rent Allocations:

                         As set forth in Exhibit H-2

                         (Confidential Material Omitted)

5.       Termination Values:

                         As set forth in Exhibit H-5

6.       Stipulated Loss Values:

                         Identical to Termination Values as set forth in Exhibit
                         H-5

7.       EBO:

                         As set forth in Exhibit H-6

                  For the SIL Aircraft (GE Contract):

1.       Basic Rent Payments:

                         As set forth in Exhibit H-7

2.       Basic Rent Allocations:

                         As set forth in Exhibit H-8

3.       Termination Values:

                         As set forth in Exhibit H-9

4.       Stipulated Loss Values:

                         Identical to Termination Values as set forth in Exhibit
                         H-9

5.       EBO:

                    As set forth in Exhibit H-10

                  For the SIL Aircraft (ATA Contract):

1.       Basic Rent Payments:

                         As set forth in Exhibit H-11

2.       Basic Rent Allocations:

                         As set forth in Exhibit H-12

3.       Termination Values:

                         As set forth in Exhibit H-13

4.       Stipulated Loss Values:

                         Identical to Termination Values as set forth in
                         Exhibit H-13

5.       EBO:

                         As set forth in Exhibit H-14

<PAGE>

                                                                     Exhibit H-1

              Rent Schedule in Percentages of Total Cost

       Rental Date                              Total Rent
                              (Confidential Material Omitted)
      Jun 15 2001
      Jul 15 2001
      Oct 15 2001
      Jan 15 2002
      Apr 15 2002
      Jul 15 2002
      Oct 15 2002
      Jan 15 2003
      Apr 15 2003
      Jul 15 2003
      Oct 15 2003
      Jan 15 2004
      Apr 15 2004
      Jul 15 2004
      Oct 15 2004
      Jan 15 2005
      Apr 15 2005
      Jul 15 2005
      Oct 15 2005
      Jan 15 2006
      Apr 15 2006
      Jul 15 2006
      Oct 15 2006
      Jan 15 2007
      Apr 15 2007
      Jul 15 2007
      Oct 15 2007
      Jan 15 2008
      Apr 15 2008
      Jul 15 2008
      Oct 15 2008
      Jan 15 2009
      Apr 15 2009
      Jul 15 2009
      Oct 15 2009
      Jan 15 2010
      Apr 15 2010
      Jul 15 2010
      Oct 15 2010
      Jan 15 2011
      Apr 15 2011
      Jul 15 2011
      Oct 15 2011
      Jan 15 2012
      Apr 15 2012
      Jul 15 2012
      Oct 15 2012
      Jan 15 2013
      Apr 15 2013
      Jul 15 2013
      Oct 15 2013
      Jan 15 2014
      Apr 15 2014
      Jul 15 2014
      Oct 15 2014
      Jan 15 2015
      Apr 15 2015
      Jul 15 2015
      Oct 15 2015
      Jan 15 2016
      Apr 15 2016
      Jul 15 2016
      Oct 15 2016
      Jan 15 2017
      Apr 15 2017
      Jul 15 2017
      Oct 15 2017
      Jan 15 2018
      Apr 15 2018
      Jul 15 2018
      Oct 15 2018
      Jan 15 2019
      Apr 15 2019
      Jul 15 2019
      Oct 15 2019
      Jan 15 2020
      Apr 15 2020
      Jul 15 2020
      Oct 15 2020
      Jan 15 2021
      Apr 15 2021
      Jun 15 2021

<PAGE>

                                                                     Exhibit H-2

                                Allocation to Cash Rent Report

   Allocation Year    Allocation      Cash Rent             Cash Rent Date

        2001          (Confidential Material Omitted)         15-Jul-01
                                                              15-Oct-01
        2002                                                  15-Oct-01
                                                              15-Jan-02
                                                              15-Apr-02
        2003                                                  15-Apr-02
                                                              15-Jul-02
                                                              15-Oct-02
                                                              15-Jan-03
        2004                                                  15-Jan-03
                                                              15-Apr-03
                                                              15-Jul-03
                                                              15-Oct-03
                                                              15-Jan-04
        2005                                                  15-Jan-04
                                                              15-Apr-04
                                                              15-Jul-04
                                                              15-Oct-04
        2006                                                  15-Jan-05
                                                              15-Apr-05
                                                              15-Jul-05
                                                              15-Oct-05
        2007                                                  15-Jan-06
                                                              15-Apr-06
                                                              15-Jul-06
                                                              15-Oct-06
        2008                                                  15-Jan-07
                                                              15-Apr-07
                                                              15-Jul-07
                                                              15-Oct-07
        2009                                                  15-Jan-08
                                                              15-Apr-08
                                                              15-Jul-08
                                                              15-Oct-08
        2010                                                  15-Jan-09
                                                              15-Apr-09
                                                              15-Jul-09
                                                              15-Oct-09
        2011                                                  15-Jan-10
                                                              15-Apr-10
                                                              15-Jul-10
                                                              15-Oct-10
        2012                                                  15-Jan-11
                                                              15-Apr-11
                                                              15-Jul-11
                                                              15-Oct-11
        2013                                                  15-Jan-12
                                                              15-Apr-12
                                                              15-Jul-12
                                                              15-Oct-12
        2014                                                  15-Jan-13
                                                              15-Apr-13
                                                              15-Jul-13
                                                              15-Oct-13
        2015                                                  15-Jan-14
                                                              15-Apr-14
                                                              15-Jul-14
                                                              15-Oct-14
        2016                                                  15-Jan-15
                                                              15-Apr-15
                                                              15-Jul-15
                                                              15-Oct-15
        2017                                                  15-Jan-16
                                                              15-Apr-16
                                                              15-Jul-16
                                                              15-Oct-16
        2018                                                  15-Jan-17
                                                              15-Apr-17
                                                              15-Jul-17
                                                              15-Oct-17
        2019                                                  15-Jan-18
                                                              15-Apr-18
                                                              15-Jul-18
                                                              15-Oct-18
        2020                                                  15-Jan-19
                                                              15-Apr-19
                                                              15-Jul-19
                                                              15-Oct-19
        2021                                                  15-Jan-20
                                                              15-Apr-20
                                                              15-Jul-20
                                                              15-Oct-20
                                                              15-Jan-21
                                                              15-Apr-21
<PAGE>

                                                                     Exhibit H-3
                                   (Confidential Material Omitted)
<PAGE>
                                                                      Exhibt H-4

                                   (Confidential Material Omitted
<PAGE>

<PAGE>

                                                                     Exhibit H-5

                                               Termination Values

        Date              TV           Rent Adjustment      Net TV

Jun 15 2001      (Confidential Material Omitted)
Jul 15 2001
Oct 15 2001
Jan 15 2002
Apr 15 2002
Jul 15 2002
Oct 15 2002
Jan 15 2003
Apr 15 2003
Jul 15 2003
Oct 15 2003
Jan 15 2004
Apr 15 2004
Jul 15 2004
Oct 15 2004
Jan 15 2005
Apr 15 2005
Jul 15 2005
Oct 15 2005
Jan 15 2006
Apr 15 2006
Jul 15 2006
Oct 15 2006
Jan 15 2007
Apr 15 2007
Jul 15 2007
Oct 15 2007
Jan 15 2008
Apr 15 2008
Jul 15 2008
Oct 15 2008
Jan 15 2009
Apr 15 2009
Jul 15 2009
Oct 15 2009
Jan 15 2010
Apr 15 2010
Jul 15 2010
Oct 15 2010
Jan 15 2011
Apr 15 2011
Jul 15 2011
Oct 15 2011
Jan 15 2012
Apr 15 2012
Jul 15 2012
Oct 15 2012
Jan 15 2013
Apr 15 2013
Jul 15 2013
Oct 15 2013
Jan 15 2014
Apr 15 2014
Jul 15 2014
Oct 15 2014
Jan 15 2015
Apr 15 2015
Jul 15 2015
Oct 15 2015
Jan 15 2016
Apr 15 2016
Jul 15 2016
Oct 15 2016
Jan 15 2017
Apr 15 2017
Jul 15 2017
Oct 15 2017
Jan 15 2018
Apr 15 2018
Jul 15 2018
Oct 15 2018
Jan 15 2019
Apr 15 2019
Jul 15 2019
Oct 15 2019
Jan 15 2020
Apr 15 2020
Jul 15 2020
Oct 15 2020
Jan 15 2021
Apr 15 2021
Jun 15 2021

<PAGE>

                                                                    Exhibit H-6

   EBO Amount

       EBO            EBO Price         Rent Adjustment          EBO Amount*
  Payment Date      (Percentage of       (Percentage of        (Percentage of
                    Lessor's Cost)       Lessor's Cost)        Lessor's Cost)

(Confidential Material Omitted)

<PAGE>

                                                                     Exhibit H-7

 Rent Schedule in Percentages of Total Cost

                      Rental Date                             Total Rent

                      Jun 15 2001          (Confidential Material Omitted)
                      Jul 15 2001
                      Oct 15 2001
                      Jan 15 2002
                      Apr 15 2002
                      Jul 15 2002
                      Oct 15 2002
                      Jan 15 2003
                      Apr 15 2003
                      Jul 15 2003
                      Oct 15 2003
                      Jan 15 2004
                      Apr 15 2004
                      Jul 15 2004
                      Oct 15 2004
                      Jan 15 2005
                      Apr 15 2005
                      Jul 15 2005
                      Oct 15 2005
                      Jan 15 2006
                      Apr 15 2006
                      Jul 15 2006
                      Oct 15 2006
                      Jan 15 2007
                      Apr 15 2007
                      Jul 15 2007
                      Oct 15 2007
                      Jan 15 2008
                      Apr 15 2008
                      Jul 15 2008
                      Oct 15 2008
                      Jan 15 2009
                      Apr 15 2009
                      Jul 15 2009
                      Oct 15 2009
                      Jan 15 2010
                      Apr 15 2010
                      Jul 15 2010
                      Oct 15 2010
                      Jan 15 2011
                      Apr 15 2011
                      Jul 15 2011
                      Oct 15 2011
                      Jan 15 2012
                      Apr 15 2012
                      Jul 15 2012
                      Oct 15 2012
                      Jan 15 2013
                      Apr 15 2013
                      Jul 15 2013
                      Oct 15 2013
                      Jan 15 2014
                      Apr 15 2014
                      Jul 15 2014
                      Oct 15 2014
                      Jan 15 2015
                      Apr 15 2015
                      Jul 15 2015
                      Oct 15 2015
                      Jan 15 2016
                      Apr 15 2016
                      Jul 15 2016
                      Oct 15 2016
                      Jan 15 2017
                      Apr 15 2017
                      Jul 15 2017
                      Oct 15 2017
                      Jan 15 2018
                      Apr 15 2018
                      Jul 15 2018
                      Oct 15 2018
                      Jan 15 2019
                      Apr 15 2019
                      Jul 15 2019
                      Oct 15 2019
                      Jan 15 2020
                      Apr 15 2020
                      Jul 15 2020
                      Oct 15 2020
                      Jan 15 2021
                      Apr 15 2021
                      Jun 15 2021

<PAGE>

                                                                     Exhibit H-8

 Allocation to Cash Rent Report

  Allocation   Allocation    Cash Rent                Cash Rent Date
     Year
               (Confidential Material Omitted)
 2001                                                   15-Jul-01
                                                        15-Oct-01
 2002                                                   15-Oct-01
                                                        15-Jan-02
 2003                                                   15-Jan-02
                                                        15-Apr-02
                                                        15-Jul-02
                                                        15-Oct-02
                                                        15-Jan-03
 2004                                                   15-Jan-03
                                                        15-Apr-03
                                                        15-Jul-03
                                                        15-Oct-03
                                                        15-Jan-04
 2005                                                   15-Jan-04
                                                        15-Apr-04
                                                        15-Jul-04
                                                        15-Oct-04
                                                        15-Jan-05
 2006                                                   15-Jan-05
                                                        15-Apr-05
                                                        15-Jul-05
                                                        15-Oct-05
                                                        15-Jan-06
 2007                                                   15-Jan-06
                                                        15-Apr-06
                                                        15-Jul-06
                                                        15-Oct-06
 2008                                                   15-Jan-07
                                                        15-Apr-07
                                                        15-Jul-07
                                                        15-Oct-07
 2009                                                   15-Jan-08
                                                        15-Apr-08
                                                        15-Jul-08
                                                        15-Oct-08
 2010                                                   15-Jan-09
                                                        15-Apr-09
                                                        15-Jul-09
                                                        15-Oct-09
 2011                                                   15-Jan-10
                                                        15-Apr-10
                                                        15-Jul-10
                                                        15-Oct-10
 2012                                                   15-Jan-11
                                                        15-Apr-11
                                                        15-Jul-11
                                                        15-Oct-11
 2013                                                   15-Jan-12
                                                        15-Apr-12
                                                        15-Jul-12
                                                        15-Oct-12
 2014                                                   15-Jan-13
                                                        15-Apr-13
                                                        15-Jul-13
                                                        15-Oct-13
 2015                                                   15-Jan-14
                                                        15-Apr-14
                                                        15-Jul-14
                                                        15-Oct-14
 2016                                                   15-Jan-15
                                                        15-Apr-15
                                                        15-Jul-15
                                                        15-Oct-15
 2017                                                   15-Jan-16
                                                        15-Apr-16
                                                        15-Jul-16
                                                        15-Oct-16
 2018                                                   15-Jan-17
                                                        15-Apr-17
                                                        15-Jul-17
                                                        15-Oct-17
 2019                                                   15-Jan-18
                                                        15-Apr-18
                                                        15-Jul-18
                                                        15-Oct-18
 2020                                                   15-Jan-19
                                                        15-Apr-19
                                                        15-Jul-19
                                                        15-Oct-19
 2021                                                   15-Jan-20
                                                        15-Apr-20
                                                        15-Jul-20
                                                        15-Oct-20
                                                        15-Jan-21
                                                        15-Apr-21

<PAGE>

                                                                       Exhibit 9

     Termination Values

     Date            TV               Rent Adjustment         Net TV

Jun 15 2001                   (Confidential Material Omitted)
Jul 15 2001
Oct 15 2001
Jan 15 2002
Apr 15 2002
Jul 15 2002
Oct 15 2002
Jan 15 2003
Apr 15 2003
Jul 15 2003
Oct 15 2003
Jan 15 2004
Apr 15 2004
Jul 15 2004
Oct 15 2004
Jan 15 2005
Apr 15 2005
Jul 15 2005
Oct 15 2005
Jan 15 2006
Apr 15 2006
Jul 15 2006
Oct 15 2006
Jan 15 2007
Apr 15 2007
Jul 15 2007
Oct 15 2007
Jan 15 2008
Apr 15 2008
Jul 15 2008
Oct 15 2008
Jan 15 2009
Apr 15 2009
Jul 15 2009
Oct 15 2009
Jan 15 2010
Apr 15 2010
Jul 15 2010
Oct 15 2010
Jan 15 2011
Apr 15 2011
Jul 15 2011
Oct 15 2011
Jan 15 2012
Apr 15 2012
Jul 15 2012
Oct 15 2012
Jan 15 2013
Apr 15 2013
Jul 15 2013
Oct 15 2013
Jan 15 2014
Apr 15 2014
Jul 15 2014
Oct 15 2014
Jan 15 2015
Apr 15 2015
Jul 15 2015
Oct 15 2015
Jan 15 2016
Apr 15 2016
Jul 15 2016
Oct 15 2016
Jan 15 2017
Apr 15 2017
Jul 15 2017
Oct 15 2017
Jan 15 2018
Apr 15 2018
Jul 15 2018
Oct 15 2018
Jan 15 2019
Apr 15 2019
Jul 15 2019
Oct 15 2019
Jan 15 2020
Apr 15 2020
Jul 15 2020
Oct 15 2020
Jan 15 2021
Apr 15 2021
Jun 15 2021

<PAGE>

                                                                    Exhibit H-10

                                   EBO Amount

      EBO            EBO Price          Rent Adjustment         EBO Amount*
 Payment Date      (Percentage of       (Percentage of         (Percentage of
                   Lessor's Cost)       Lessor's Cost)         Lessor's Cost)

(Confidential Material Omitted)

<PAGE>

                                                                    Exhibit H-11

                        Rent Schedule in Percentages of Total Cost

                      Rental Date                            Total Rent

                      Jun 15 2001            (Confidential Material Omitted)
                      Jul 15 2001
                      Oct 15 2001
                      Jan 15 2002
                      Apr 15 2002
                      Jul 15 2002
                      Oct 15 2002
                      Jan 15 2003
                      Apr 15 2003
                      Jul 15 2003
                      Oct 15 2003
                      Jan 15 2004
                      Apr 15 2004
                      Jul 15 2004
                      Oct 15 2004
                      Jan 15 2005
                      Apr 15 2005
                      Jul 15 2005
                      Oct 15 2005
                      Jan 15 2006
                      Apr 15 2006
                      Jul 15 2006
                      Oct 15 2006
                      Jan 15 2007
                      Apr 15 2007
                      Jul 15 2007
                      Oct 15 2007
                      Jan 15 2008
                      Apr 15 2008
                      Jul 15 2008
                      Oct 15 2008
                      Jan 15 2009
                      Apr 15 2009
                      Jul 15 2009
                      Oct 15 2009
                      Jan 15 2010
                      Apr 15 2010
                      Jul 15 2010
                      Oct 15 2010
                      Jan 15 2011
                      Apr 15 2011
                      Jul 15 2011
                      Oct 15 2011
                      Jan 15 2012
                      Apr 15 2012
                      Jul 15 2012
                      Oct 15 2012
                      Jan 15 2013
                      Apr 15 2013
                      Jul 15 2013
                      Oct 15 2013
                      Jan 15 2014
                      Apr 15 2014
                      Jul 15 2014
                      Oct 15 2014
                      Jan 15 2015
                      Apr 15 2015
                      Jul 15 2015
                      Oct 15 2015
                      Jan 15 2016
                      Apr 15 2016
                      Jul 15 2016
                      Oct 15 2016
                      Jan 15 2017
                      Apr 15 2017
                      Jul 15 2017
                      Oct 15 2017
                      Jan 15 2018
                      Apr 15 2018
                      Jul 15 2018
                      Oct 15 2018
                      Jan 15 2019
                      Apr 15 2019
                      Jul 15 2019
                      Oct 15 2019
                      Jan 15 2020
                      Apr 15 2020
                      Jul 15 2020
                      Oct 15 2020
                      Jan 15 2021
                      Apr 15 2021
                      Jun 15 2021

                                                                    Exhibit H-12

                      Allocation to Cash Rent Report

   Allocation Year     Allocation            Cash Rent       Cash Rent Date
                       (Confidential Material Omitted)

         2001                                                     15-Jul-01
                                                                  15-Oct-01
         2002                                                     15-Oct-01
                                                                  15-Jan-02
         2003                                                     15-Jan-02
                                                                  15-Apr-02
                                                                  15-Jul-02
                                                                  15-Oct-02
                                                                  15-Jan-03
         2004                                                     15-Jan-03
                                                                  15-Apr-03
                                                                  15-Jul-03
                                                                  15-Oct-03
                                                                  15-Jan-04
         2005                                                     15-Jan-04
                                                                  15-Apr-04
                                                                  15-Jul-04
                                                                  15-Oct-04
                                                                  15-Jan-05
         2006                                                     15-Jan-05
                                                                  15-Apr-05
                                                                  15-Jul-05
                                                                  15-Oct-05
                                                           )      15-Jan-06
         2007                                                     15-Jan-06
                                                                  15-Apr-06
                                                                  15-Jul-06
                                                                  15-Oct-06
         2008                                                     15-Jan-07
                                                                  15-Apr-07
                                                                  15-Jul-07
                                                                  15-Oct-07
         2009                                                     15-Jan-08
                                                                  15-Apr-08
                                                                  15-Jul-08
                                                                  15-Oct-08
         2010                                                     15-Jan-09
                                                                  15-Apr-09
                                                                  15-Jul-09
                                                                  15-Oct-09
         2011                                                     15-Jan-10
                                                                  15-Apr-10
                                                                  15-Jul-10
                                                                  15-Oct-10
         2012                                                     15-Jan-11
                                                                  15-Apr-11
                                                                  15-Jul-11
                                                                  15-Oct-11
         2013                                                     15-Jan-12
                                                                  15-Apr-12
                                                                  15-Jul-12
                                                                  15-Oct-12
         2014                                                     15-Jan-13
                                                                  15-Apr-13
                                                                  15-Jul-13
                                                                  15-Oct-13
         2015                                                     15-Jan-14
                                                                  15-Apr-14
                                                                  15-Jul-14
                                                                  15-Oct-14
         2016                                                     15-Jan-15
                                                                  15-Apr-15
                                                                  15-Jul-15
                                                                  15-Oct-15
         2017                                                     15-Jan-16
                                                                  15-Apr-16
                                                                  15-Jul-16
                                                                  15-Oct-16
         2018                                                     15-Jan-17
                                                                  15-Apr-17
                                                                  15-Jul-17
                                                                  15-Oct-17
         2019                                                     15-Jan-18
                                                                  15-Apr-18
                                                                  15-Jul-18
                                                                  15-Oct-18
         2020                                                     15-Jan-19
                                                                  15-Apr-19
                                                                  15-Jul-19
                                                                  15-Oct-19
         2021                                                     15-Jan-20
                                                                  15-Apr-20
                                                                  15-Jul-20
                                                                  15-Oct-20
                                                                  15-Jan-21
                                                                  15-Apr-21

<PAGE>

                                                                    Exhibit H-13

                        Termination Values

     Date             TV          Rent Adjustment        Net TV

Jun 15 2001           (Confidential Material Omitted)

Jul 15 2001
Oct 15 2001
Jan 15 2002
Apr 15 2002
Jul 15 2002
Oct 15 2002
Jan 15 2003
Apr 15 2003
Jul 15 2003
Oct 15 2003
Jan 15 2004
Apr 15 2004
Jul 15 2004
Oct 15 2004
Jan 15 2005
Apr 15 2005
Jul 15 2005
Oct 15 2005

Jan 15 2006
Apr 15 2006
Jul 15 2006
Oct 15 2006
Jan 15 2007
Apr 15 2007
Jul 15 2007
Oct 15 2007
Jan 15 2008
Apr 15 2008
Jul 15 2008
Oct 15 2008
Jan 15 2009
Apr 15 2009
Jul 15 2009
Oct 15 2009
Jan 15 2010
Apr 15 2010
Jul 15 2010
Oct 15 2010
Jan 15 2011
Apr 15 2011

Jul 15 2011
Oct 15 2011
Jan 15 2012
Apr 15 2012
Jul 15 2012
Oct 15 2012
Jan 15 2013
Apr 15 2013
Jul 15 2013
Oct 15 2013
Jan 15 2014
Apr 15 2014
Jul 15 2014
Oct 15 2014
Jan 15 2015
Apr 15 2015
Jul 15 2015
Oct 15 2015
Jan 15 2016
Apr 15 2016
Jul 15 2016
Oct 15 2016
Jan 15 2017
Apr 15 2017
Jul 15 2017
Oct 15 2017
Jan 15 2018
Apr 15 2018
Jul 15 2018
Oct 15 2018
Jan 15 2019
Apr 15 2019
Jul 15 2019
Oct 15 2019
Jan 15 2020
Apr 15 2020
Jul 15 2020
Oct 15 2020
Jan 15 2021
Apr 15 2021
Jun 15 2021

<PAGE>

                                                                    Exhibit H-14

                                   EBO Amount

      EBO            EBO Price          Rent Adjustment         EBO Amount*
 Payment Date      (Percentage of       (Percentage of         (Percentage of
                   Lessor's Cost)       Lessor's Cost)         Lessor's Cost)

(Confidential Material Omitted)PARTICIPATION AGREEMENT N___AT

                           dated as of __________, 200_

                                      among

                            AMERICAN TRANS AIR, INC.,
                                     Lessee,

                      GENERAL ELECTRIC CAPITAL CORPORATION,
                               Owner Participant,

                   FIRST SECURITY BANK, NATIONAL ASSOCIATION,
          NOT IN ITS INDIVIDUAL CAPACITY EXCEPT AS EXPRESSLY PROVIDED HEREIN,
          BUT SOLELY AS OWNER TRUSTEE, Owner Trustee,

                                       and

     WILMINGTON  TRUST  COMPANY,  NOT  IN  ITS  INDIVIDUAL  CAPACITY  EXCEPT  AS
EXPRESSLY  PROVIDED HEREIN, BUT SOLELY AS MORTGAGEE,  SUBORDINATION  AGENT UNDER
THE  INTERCREDITOR  AGREEMENT,  AND  PASS-THROUGH  TRUSTEE  UNDER  EACH  OF  THE
PASS-THROUGH TRUST AGREEMENTS, Mortgagee and Loan Participant

     One Boeing model 737-800 aircraft bearing  manufacturer's  serial no. _____
and U.S. registration no. N___AT

<PAGE>

                                    CONTENTS

          1. DEFINITIONS AND CONSTRUCTION......................................2

          2. PARTICIPATION IN LESSOR'S COST; ISSUANCE OF EQUIPMENT NOTES; .....2
           TERMINATION OF OBLIGATION TOPARTICIPATE
          2.1 Participation in Lessor's Cost...................................2
            2.2 Nature of Obligations of Participants..........................3
            2.3 Termination of Obligation to Participate.......................3

          3. LEASE OF AIRCRAFT.................................................3

          4. PROCEDURE FOR PARTICIPATION IN PAYMENT OF LESSOR'S COST;
          POSTPONEMENT OF SCHEDULED DELIVERY DATE..............................4
            4.1 Notices of Scheduled Delivery Date.............................4
            4.2 Payment of Lessor's Cost.......................................4
            4.3 Postponement of Scheduled Delivery Date........................5
            4.4 Closing........................................................5

          5. CLOSING CONDITIONS................................................5
            5.1 Conditions to Participants'Obligations.........................6
            5.2 Conditions to Owner Trustee's Obligations.....................11
            5.3 Conditions to Mortgagee's Obligations.........................12
            5.4 Conditions to Lessee's Obligations............................12
            5.5 Post-Registration Opinion.....................................13

          6. REPRESENTATIONS AND WARRANTIES............... ...................13
            6.1 Lessee's Representations and Warranties.......................13
            6.2 Owner Participant's Representations and Warranties............17
            6.3 FSB's Representations and Warranties..........................20
            6.4 WTC's Representations and Warranties..........................22

          7. COVENANTS........................................................25
            7.1 Lessee's Covenants............................................25
            7.2 Owner Participant's Covenants.................................27
            7.3 FSB's and Owner Trustee's Covenants...........................30
            7.4 WTC's Covenants...............................................32
            7.5 Note Holders'Covenants........................................33
            7.6 Other Agreements..............................................34

          8. CONFIDENTIALITY..................................................41

           9. INDEMNIFICATION AND EXPENSES....................................42
            9.1 General Indemnity.............................................42
            9.2 Expenses......................................................49
            9.3 General Tax Indemnity.........................................50
            9.4 Payments......................................................61
            9.5 Interest......................................................62
            9.6 Benefit of Indemnities........................................62

          10. ASSIGNMENT OR TRANSFER OF INTERESTS.............................62
            10.1 Participants, Owner Trustee, and Note Holders....... ........62
            10.2 Effect of Transfer...........................................64

          11. RE-FUNDING AND CERTAIN OTHER MATTERS............................65
            11.1 Re-Funding Generally.........................................65
            11.2 Limitations on Obligation to Refund..........................67
            11.3 Execution of Facilitating Documents..........................68
            11.4 ERISA........................................................68
            11.5 Consent to Optional Redemptions..............................68
            11.6 Lessee's Assumption of Equipment Notes.......................68

          12. SECTION 1110....................................................72

          13. CHANGE OF CITIZENSHIP...........................................72
            13.1 Generally....................................................72
            13.2 Owner Participant............................................72
            13.3 Owner Trustee................................................73
            13.4 Mortgagee....................................................73

          14. CONCERNING OWNER TRUSTEE........................................73

          15. MISCELLANEOUS...................................................74
            15.1 Amendments...................................................74
            15.2 Severability.................................................74
            15.3 Survival.....................................................74
            15.4 Reproduction of Documents....................................74
            15.5 Counterparts.................................................75
            15.6 No Waiver....................................................75
            15.7 Notices......................................................75
            15.8 Governing Law; Submission to Jurisdiction; Venue... .........76
            15.9 Third-Party Beneficiary......................................77
            15.10 Entire Agreement............................................77
            15.11 Further Assurances..........................................77

          ANNEX A        Definitions

          SCHEDULE 1     Accounts; Addresses
          SCHEDULE 2     Commitments
          SCHEDULE 3     Certain Terms

          EXHIBIT A      Opinion of special  counsel to Lessee
          EXHIBIT B      Opinion of  corporate counsel  to  Lessee
          EXHIBIT C      Opinion  of  corporate   counsel  to  Airframe
                         Manufacturer Trustee
          EXHIBIT D      Opinion of special counsel to Owner
          EXHIBIT E      Opinion of special counsel to Mortgagee and Loan
                         Participants
          EXHIBIT F      Opinion of special counsel to Owner Participant
          EXHIBIT G      Opinion of FAA Counsel
          EXHIBIT H      Opinion of corporate counsel to Owner Participant
          EXHIBIT I      Form of Assignment and Assumption Agreement
          EXHIBIT J      Form of Owner Participant Guaranty

<PAGE>

                         PARTICIPATION AGREEMENT N___AT

     This  Participation  Agreement  N___AT  (this  "AGREEMENT"),  dated  as  of
__________,  200_,  is entered  into by and among (1) American  Trans Air,  Inc.
("LESSEE"),  an Indiana  corporation,  (2) General Electric Capital  Corporation
("OWNER PARTICIPANT"), a New York corporation, (3) First Security Bank, National
Association,  a national  banking  association,  not in its individual  capacity
(except as  expressly  provided  herein),  but solely as Owner  Trustee  (in its
capacity as Owner Trustee,  "OWNER  TRUSTEE" or "LESSOR",  and in its individual
capacity,  "FSB"), (4) Wilmington Trust Company, a Delaware banking corporation,
not in its individual capacity (except as expressly provided herein), but solely
as mortgagee (in its capacity as Mortgagee,  "MORTGAGEE",  and in its individual
capacity,  "WTC"), (5) Wilmington Trust Company,  not in its individual capacity
(except as expressly  provided  herein) but solely as trustee  under each of the
Pass-Through  Trust  Agreements  (each,  a  "PASS-THROUGH   TRUSTEE"),  and  (6)
Wilmington  Trust Company,  not in its individual  capacity (except as expressly
provided  herein),  but solely as  subordination  agent under the  Intercreditor
Agreement ("SUBORDINATION AGENT").

     RECITALS

     A...........Owner   Participant   and  FSB  are  entering  into  the  Trust
Agreement,  pursuant to which Owner Trustee  agrees to hold the Trust Estate for
the use and benefit of Owner Participant.

     B...........Lessee  and  Airframe  Manufacturer  entered  into the Purchase
Agreement, pursuant to which Airframe Manufacturer agreed to manufacture certain
aircraft  (including the Aircraft) and sell them to Lessee, and Lessee agreed to
buy certain aircraft (including the Aircraft) from Airframe Manufacturer.

     C...........Seller  will sell the Aircraft to Owner Trustee pursuant to the
terms of this Participation Agreement.

     D...........Lessee  and  Owner  Trustee  are  entering  into  the  Purchase
Agreement Assignment and the Engine Manufacturer Warranty Agreement, pursuant to
which  Lessee  assigns to Owner  Trustee  certain of Lessee's  rights  under the
Purchase Agreement and the Engine Manufacturer Warranty Agreement.

     E...........Pursuant  to each of the Pass-Through Trust Agreements,  on the
Issuance  Date,  the  Pass-Through  Trusts  were  created  and the  Pass-Through
Certificates were issued and sold.

     F...........Pursuant  to the Note  Purchase  Agreement,  each  Pass-Through
Trustee  agreed to use a portion of the  proceeds  from the issuance and sale of
the Pass-Through Certificates issued by each Pass-Through Trust to purchase from
Owner Trustee,  on behalf of the related  Pass-Through Trust, the Equipment Note
bearing the same interest rate as the Pass-Through  Certificates  issued by such
Pass-Through Trust.

     G...........Owner  Trustee and Mortgagee are entering into the Mortgage for
the benefit of the Note Holders,  pursuant to which Owner Trustee  agrees (1) to
issue Equipment Notes, in the amounts and otherwise as provided in the Mortgage,
the proceeds of which will be used to pay a portion of Lessor's Cost, and (2) to
mortgage,  pledge, and assign to Mortgagee all of Owner Trustee's right,  title,
and  interest in the  Collateral  to secure the Secured  Obligations,  including
Owner Trustee's obligations under the Equipment Notes.

     H...........Lessor  and Lessee are  entering  into the Lease,  pursuant  to
which  Lessor is leasing  the  Aircraft  to Lessee  and  Lessee is  leasing  the
Aircraft from Lessor.

     I...........The  parties  to  this  Agreement  want  to set  forth  in this
Agreement  the terms and  conditions  upon and  subject  to which the  foregoing
transactions shall be effected.

     The parties hereto agree as follows:

     1. DEFINITIONS AND CONSTRUCTION

     The terms defined in Annex A, when capitalized as in Annex A, have the same
meanings when used in this Agreement.  Annex A also contains rules of usage that
control construction in this Agreement.

     2. PARTICIPATION IN LESSOR'S COST; ISSUANCE OF EQUIPMENT NOTES; TERMINATION
OF OBLIGATION TO PARTICIPATE

     2.1 PARTICIPATION IN LESSOR'S COST

     Subject to the terms and  conditions  of this  Agreement,  on the  Delivery
Date, Owner Participant and each  Pass-Through  Trustee shall participate in the
payment of Lessor's Cost as follows:  (a) Owner  Participant  shall finance,  in
part,  Owner  Trustee's  payment of Lessor's  Cost for the Aircraft by making an
equity  investment in the beneficial  ownership of the Aircraft in the amount in
Dollars equal to Owner Participant's Percentage multiplied by Lessor's Cost; and
(b) each  Pass-Through  Trustee shall make a non-recourse  secured loan to Owner
Trustee to finance,  in part,  Owner  Trustee's  payment of Lessor's Cost in the
amount in Dollars equal to such Pass-Through Trustee's PTT Percentage multiplied
by Lessor's  Cost,  such loan to be  evidenced by one or more  Equipment  Notes,
dated the Delivery Date, issued to Subordination  Agent as the registered holder
on behalf of each such Pass-Through  Trustee for the related  Pass-Through Trust
by Owner Trustee in  accordance  with this  Agreement  and the  Mortgage,  in an
aggregate  principal  amount equal to the  Commitment of each such  Pass-Through
Trustee.

     2.2 NATURE OF OBLIGATIONS OF PARTICIPANTS

     The obligations  hereunder of each Participant are several,  and not joint,
and a Participant  shall have no  obligation to make  available to Owner Trustee
any  portion of any  amount not paid  hereunder  by any other  Participant.  The
failure by any Participant to perform its obligations hereunder shall not affect
the  obligations  of Lessee toward any other  Participant,  except to the extent
provided in ss. 5.4.

     2.3 TERMINATION OF OBLIGATION TO PARTICIPATE

     NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT,  IF THE CLOSING DOES
NOT OCCUR ON OR BEFORE THE COMMITMENT  TERMINATION  DATE, THE COMMITMENT OF EACH
PARTICIPANT  AND ITS  OBLIGATION TO  PARTICIPATE IN THE PAYMENT OF LESSOR'S COST
SHALL EXPIRE AND BE OF NO FURTHER FORCE AND EFFECT; PROVIDED, THAT THE LIABILITY
OF ANY PARTICIPANT THAT HAS DEFAULTED IN THE PAYMENT OF ITS COMMITMENT SHALL NOT
BE RELEASED.

     3. LEASE OF AIRCRAFT

     Subject to the terms and conditions of this  Agreement,  concurrently  with
the issuance of the Equipment  Notes on the Delivery  Date,  Owner Trustee shall
purchase and accept  delivery of the Aircraft  from Seller under and pursuant to
the Purchase  Agreement  and the Purchase  Agreement  Assignment,  and thereupon
Owner  Trustee  shall lease the  Aircraft to Lessee,  and Lessee shall lease the
Aircraft from Owner Trustee, under the Lease.

     4. PROCEDURE FOR PARTICIPATION IN PAYMENT OF LESSOR'S COST; POSTPONEMENT OF
SCHEDULED DELIVERY DATE

     4.1 NOTICES OF SCHEDULED DELIVERY DATE

     Without limiting its obligations to the Loan Participant  under ss. 1(b) of
the Note Purchase Agreement, Lessee agrees to give Participants,  Owner Trustee,
and  Mortgagee  at least one  Business  Day's  written  notice of the  Scheduled
Delivery Date, which notice shall set forth Lessor's Cost and the amount of each
Participant's  Commitment.  Each  Participant  agrees that making its Commitment
available shall constitute a waiver of such notice.  Owner Trustee and Mortgagee
shall be deemed to have waived such notice if WTC receives from each Participant
funds in the full amount of its respective Commitment.

     4.2 PAYMENT OF LESSOR'S COST

     (a).........Each Participant agrees, subject to the terms and conditions of
this  Agreement,  to  make  the  Dollar  amount  of  its  respective  Commitment
available,  by wire transfer of immediately  available funds to WTC's account at
Wilmington Trust Company, ABA No. __________, account no. __________,  reference
American  Trans Air, Inc.  Lease N5__AT,  at or before 12:00 noon, New York City
time,  on the Scheduled  Delivery  Date.  All such funds made  available by each
Participant  to WTC shall,  until  payment  thereof to Seller as provided in ss.
4.2(b)(2) or return  thereof to the  respective  Participant  as provided in ss.
4.3.2, be held by WTC in trust for the benefit of the respective Participant, as
the sole and exclusive property of the respective Participant and not as part of
the Trust Estate or the Collateral.

     (b).........Subject to the satisfaction, or waiver by the applicable party,
of the  conditions  precedent  set forth in ss. 5, and  simultaneously  with the
receipt by the parties  hereto of all amounts to be paid to them on the Delivery
Date pursuant to this ss. 4.2, Owner Trustee shall:

     (1) purchase, take title to, and accept delivery of the Aircraft;

     (2) in  consideration  of the  transfer  of title to the  Aircraft to Owner
Trustee,  direct WTC to pay,  from the funds made  available to WTC hereunder by
the  Participants,  all of the Commitments of the Participants to Seller,  which
payments in the aggregate  shall be equal to Lessor's  Cost, by wire transfer of
immediately  available  funds to Seller's  account set forth in Schedule 1 or as
otherwise directed by Seller;

     (3) execute an application for registration of the Aircraft with the FAA;

     (4) execute the Mortgage  and issue the  Equipment  Notes to  Subordination
Agent in accordance withss. 2.1(b);

     (5) lease the Aircraft to Lessee pursuant to the Lease; and

     (6) take such other action as may be required to be taken by Owner  Trustee
on the Delivery Date by the terms of any Operative Agreement.

     4.3 POSTPONEMENT OF SCHEDULED DELIVERY DATE

     4.3.1 POSTPONEMENT

     If  for  any  reason  whatsoever  the  Closing  is not  consummated  on the
Scheduled  Delivery Date,  Lessee may,  subject to the provisions of 1(e) of the
Note Purchase Agreement,  by telephonic notice, given by 5:00 p.m. New York City
time (such  telephonic  notice to be promptly  confirmed  in writing by personal
delivery or  facsimile)  on the Scheduled  Delivery  Date, to each  Participant,
Owner Trustee,  and Mortgagee,  designate a Delayed Delivery Date, in which case
Owner Participant will keep its funds available, and each Loan Participant shall
comply with its obligations under ss. 5.01 of each applicable Pass-Through Trust
Agreement.

     4.3.2 RETURN OF FUNDS

     WTC shall promptly return to each Participant that makes funds available to
it in accordance  with ss.  4.2(a) such funds,  together with interest or income
earned  thereon,  if the Closing fails to occur on the Scheduled  Delivery Date,
PROVIDED,  that any such funds made available by the Loan  Participant  shall be
returned on such Scheduled Delivery Date.

     4.4 CLOSING

     The Closing  shall occur at the offices of Troutman  Sanders LLP, 5200 Bank
of America Plaza,  Atlanta,  GA (with a set of Operative  Agreements  also being
delivered in New York City), or such other place as the parties shall agree.

     5. CLOSING CONDITIONS

     5.1 CONDITIONS TO PARTICIPANTS' OBLIGATIONS

     Each  Participant's  obligation to make the Dollar amount of its Commitment
available  for  payment as  directed by Owner  Trustee on the  Delivery  Date is
subject  to the  satisfaction  or such  Participant's  waiver,  on or before the
Delivery Date, of the conditions in this ss. 5.1; PROVIDED, that it shall not be
a condition to the obligation of any  Participant  that any document be produced
or action  taken that is to be  produced  or taken by such  Participant  or by a
Person within such Participant's control; PROVIDED, FURTHER, that ss. 5.1.2 (a),
(m), and (u)(8) shall not be  conditions to the Loan  Participants'  obligations
and ss. 5.1.15 and ss.  5.1.16 shall not be  conditions  to Owner  Participant's
obligations.

     5.1.1 NOTICE

     Such  Participant  received the notice described in ss. 4.1 or, in the case
of a Delayed Delivery Date, ss. 4.3, when and as required thereby.

     5.1.2 DELIVERY OF DOCUMENTS

     Except as otherwise  provided in this ss. 5.1.2, such Participant  receives
executed counterparts of the following documents, and such counterparts (x) have
been duly authorized,  executed,  and delivered by the party or parties thereto,
(y) are reasonably  satisfactory in form and substance to such Participant,  and
(z) are in full force and effect:

     (a) the  Lease  (Mortgagee  to  receive  the sole  executed  chattel  paper
original thereof);

     (b) the Tax Indemnity Agreement;  PROVIDED, that only Owner Participant and
Lessee shall receive copies of the Tax Indemnity Agreement;

     (c) the Trust Agreement;

     (d) the Mortgage;

     (e) the Purchase Agreement Assignment;

     (f)  the  Consent  and  Agreement  and  the  Engine  Manufacturer  Warranty
Agreement;

     (g) the Equipment  Notes dated the Delivery Date;  PROVIDED,  that only the
Subordination Agent shall receive the authenticated Equipment Notes;

     (h) an excerpted copy of the Purchase  Agreement to the extent  relating to
Airframe   Manufacturer's  or  Engine   Manufacturer's   warranties  or  related
obligations  or any right in the Purchase  Agreement  assigned to Owner  Trustee
pursuant to the Purchase Agreement Assignment; PROVIDED, that only Owner Trustee
and Mortgagee  shall receive  copies of such  agreement  (copies of which may be
inspected by Participants and their  respective  special counsel on the Delivery
Date, but after the Delivery Date such copies shall be retained by Owner Trustee
and  Mortgagee and may be inspected  and reviewed by Owner  Participant  or Loan
Participant or their counsel if and only if a Lease Default exists);

     (i) the Bills of Sale;

     (j) the Guarantee;

     (k) an invoice from Seller  specifying  the amount due to Seller in respect
of the Aircraft, which amount shall equal Lessor's Cost of the Aircraft;

     (l) the broker's report and insurance certificates required byss. 11 of the
Lease;

     (m) an  appraisal  or  appraisals  from an  Appraiser,  which  appraisal or
appraisals  shall be  reasonably  satisfactory  in form and  substance  to Owner
Participant;  PROVIDED, that only Owner Participant shall receive copies of such
appraisal(s);

     (n)  (1) a  copy  of  Lessee's  articles  of  incorporation,  by-laws,  and
resolutions,  in each case certified as of the Delivery Date by the Secretary or
an Assistant Secretary of Lessee, duly authorizing Lessee's execution, delivery,
and performance of the Lessee Operative  Agreements  required to be executed and
delivered  by Lessee on or  before  the  Delivery  Date in  accordance  with the
provisions  hereof  and  thereof;   (2)  a  copy  of  Guarantor's   articles  of
incorporation,  by-laws,  and  resolutions,  in each  case  certified  as of the
Delivery  Date by the  Secretary or an Assistant  Secretary of  Guarantor,  duly
authorizing  Guarantor's execution,  delivery, and performance of the Guarantee;
(3) incumbency certificates of Lessee,  Guarantor,  Owner Participant,  FSB, and
WTC as to the person(s) authorized to execute and deliver the relevant Operative
Agreements  on behalf  of such  party;  and (4)  copies  of the  certificate  or
articles of incorporation,  by-laws, and general authorizing  resolutions of the
boards of directors (or executive  committees) or other satisfactory evidence of
authorization of Owner  Participant,  FSB, and WTC, certified as of the Delivery
Date  by  the  Secretary  or  an  Assistant  or  Attesting  Secretary  of  Owner
Participant, FSB, and WTC, respectively, which authorize the execution, delivery
and performance by Owner Participant, FSB, and WTC, respectively, of each of the
Operative Agreements to which it is a party,  together with such other documents
and evidence with respect to it as Lessee or any Participant reasonably requests
in order to establish the consummation of the transactions  contemplated by this
Agreement and the taking of all corporate proceedings in connection therewith;

     (o) an Officer's  Certificate of Lessee,  dated the Delivery Date,  stating
that its  representations  and warranties in this Agreement are true and correct
as of the  Delivery  Date (or,  to the extent that any such  representation  and
warranty  expressly  relates to an  earlier  date,  true and  correct as of such
earlier date);

     (p) an Officer's  Certificate of FSB, dated the Delivery Date, stating that
its  representations  and  warranties,  in its individual  capacity and as Owner
Trustee,  in this Agreement are true and correct as of the Delivery Date (or, to
the extent that any such  representation  and warranty  expressly  relates to an
earlier date, true and correct as of such earlier date);

     (q) an Officer's Certificate of Owner Participant, dated the Delivery Date,
stating that its  representations  and warranties in this Agreement are true and
correct as of the Delivery Date (or, to the extent that any such  representation
and warranty  expressly  relates to an earlier date, true and correct as of such
earlier date);

     (r) an Officer's  Certificate of WTC, dated the Delivery Date, stating that
its representations and warranties, in its individual capacity, or as Mortgagee,
a Pass-Through Trustee, or Subordination Agent (as applicable) in this Agreement
are true and  correct as of the  Delivery  Date (or, to the extent that any such
representation  and  warranty  expressly  relates to an earlier  date,  true and
correct as of such earlier date);

     (s) an  application  for  registration  of the Aircraft with the FAA in the
name of Owner  Trustee (FAA Counsel to receive the sole  executed  copy thereof,
for filing with the FAA);

     (t) the Financing Statements;

     (u) the  following  opinions  of counsel,  in each case dated the  Delivery
Date:

     (1) an opinion  of  Troutman  Sanders  LLP,  special  counsel to Lessee and
Guarantor, substantially in the form of Exhibit A;

     (2) an opinion of Lessee's and Guarantor's Legal Department,  substantially
in the form of Exhibit B;

     (3) an opinion of corporate counsel to Airframe Manufacturer, substantially
in the form of Exhibit C;

     (4) an opinion of Ray, Quinney & Nebeker, special counsel to Owner Trustee,
substantially in the form of Exhibit D;

     (5) an opinion of Richards,  Layton & Finger,  special counsel to Mortgagee
and the Loan Participants, substantially in the form of Exhibit E;

     (6)  an  opinion  of  Dewey   Ballantine  LLP,  special  counsel  to  Owner
Participant, substantially in the form of Exhibit F;

     (7) an opinion of FAA Counsel,  substantially in the form of Exhibit G;

     (8) an  opinion  of Dewey  Ballantine  LLP,  special  tax  counsel to Owner
Participant,  with  respect  to certain  tax  consequences  of the  transactions
contemplated  hereby;  PROVIDED,  that only Owner Participant shall receive such
opinion; and

     (9) an opinion of corporate counsel of Owner Participant,  substantially in
the form of Exhibit H, and

     (v)  each  Participant  receives  copies  of  such  other  documents  as it
reasonably requests,  except as provided in clauses (b), (h), (m), and (u)(8) of
this ss. 5.1.2.

     5.1.3 OTHER COMMITMENTS

     Each other  Participant makes available the Dollar amount of its Commitment
in accordance with ss. 4.

     5.1.4 VIOLATION OF LAW

     No change occurs after the date of this Agreement in any applicable
Law  that  makes  it a  violation  of  Law  for  (a)  Lessee,  any  Participant,
Subordination  Agent,  Owner  Trustee,  or  Mortgagee to execute,  deliver,  and
perform the Operative Agreements to which it is a party or to be a party subject
to the  obligations  of the Operative  Agreements to which such  Participant  is
bound,  or (b) any  Participant  to make the  Dollar  amount  of its  Commitment
available or, in the case of any Loan Participant, to acquire an Equipment Note,
or to realize the benefits of the security afforded by the Mortgage.

     5.1.5 PERFECTED SECURITY INTEREST

     After  giving  effect to the  filing  of the  FAA-Filed  Documents  and the
Financing  Statements,  Mortgagee  shall  have a  duly-perfected  first-priority
security  interest in all of Owner Trustee's  right,  title, and interest in the
Aircraft and the Lease, subject only to Permitted Liens.

     5.1.6 REPRESENTATIONS, WARRANTIES, AND COVENANTS

     The  representations  and  warranties of each other party to this Agreement
made, in each case, in any Operative  Agreement to which it is a party, are true
and accurate in all material  respects as of the Delivery  Date (unless any such
representation  and warranty was made with  reference  to a specified  date,  in
which case such  representation  and  warranty  was true and accurate as of such
specified  date),  and each other  party to this  Agreement  has  performed  and
observed,  in all material  respects,  all of its  covenants,  obligations,  and
agreements in each Operative  Agreement to which it is a party to be observed or
performed by it as of the Delivery Date.

     5.1.7 NO DEFAULT

     On the Delivery Date, no Lease Default or Mortgage  Default exists or would
result from the sale, mortgage, or lease of the Aircraft.

     5.1.8 NO EVENT OF LOSS

     No Event of Loss with respect to the  Airframe or any Engine has  occurred,
and no circumstance, condition, act, or event has occurred that, with the giving
of notice or lapse of time,  would give rise to or  constitute  an Event of Loss
with respect to the Airframe or any Engine.

     5.1.9 TITLE

     Owner Trustee has good title (subject to filing and  recordation of the FAA
Bill of Sale with the FAA) to the Aircraft,  free and clear of Liens, except (a)
the rights of Lessee under the Lease, (b) the Lien created by the Mortgage,  (c)
the beneficial interest of Owner Participant created by the Trust Agreement, (d)
Liens  permitted  by clause (d)  (solely  for taxes not yet due) of ss. 6 of the
Lease, and (e) Liens permitted by clause (e) of ss. 6 of the Lease.

     5.1.10 CERTIFICATION

     The Aircraft  has been duly  certificated  by the FAA as to type,  and upon
registration in Owner  Trustee's name will be eligible for an FAA  airworthiness
certificate.

     5.1.11 SECTION 1110

     Owner  Trustee,  as lessor under the Lease (and  Mortgagee,  as assignee of
Owner Trustee under the  Mortgage),  is entitled to the benefits of Section 1110
(as  currently in effect) with  respect to the right to take  possession  of the
Airframe  and  Engines  as  provided  in the Lease in the event of a case  under
Chapter 11 of the Bankruptcy Code in which Lessee is a debtor.

     5.1.12 FILING

     The FAA-Filed Documents are on the Delivery Date duly filed for recordation
with the FAA in accordance  with the  Transportation  Code,  and each  Financing
Statement  has been duly  filed or is in the  process of being duly filed in the
appropriate jurisdiction.

     5.1.13 NO PROCEEDINGS

     No action or proceeding has been instituted,  nor is any action  threatened
in writing, before any Government Entity, nor has any order, judgment, or decree
been  issued or proposed to be issued by any  Government  Entity,  to set aside,
restrain,  enjoin,  or prevent the completion and  consummation of any Operative
Agreement or the Transactions.

     5.1.14 GOVERNMENTAL ACTION

     All appropriate action required to have been taken before the Delivery Date
by the FAA, or any other Government  Entity of the United States,  in connection
with  the  Transactions  has  been  taken,  and all  orders,  permits,  waivers,
authorizations,  exemptions,  and approvals of such  entities  required to be in
effect  on the  Delivery  Date in  connection  with the  Transactions  have been
issued.

     5.1.15 NOTE PURCHASE AGREEMENT

     The conditions  precedent to the obligations of the Loan  Participants  and
the other  requirements  relating to the Aircraft and the Equipment Notes in the
Note Purchase Agreement have been satisfied.

     5.2 CONDITIONS TO OWNER TRUSTEE'S OBLIGATIONS

     Owner  Trustee's  obligation to direct WTC to apply the  Commitments to pay
Lessor's  Cost on the  Delivery  Date is  subject to the  satisfaction  or Owner
Trustee's  waiver, on or before the Delivery Date, of the conditions in this ss.
5.2.

     5.2.1 NOTICE

     Owner Trustee receives the notice described in ss. 4.1 or, in the case of a
Delayed Delivery Date, ss. 4.3, when and as required thereby.

     5.2.2 DOCUMENTS

     Owner Trustee receives executed originals of the documents described in ss.
5.1.2,  except as otherwise provided therein,  unless the failure to receive any
such document is the result of any action or inaction by Owner Trustee.

     5.2.3 OTHER CONDITIONS PRECEDENT

     Each of the  conditions  in  ss.ss.  5.1.4,  5.1.6,  5.1.7,  and  5.1.11 is
satisfied,  unless the  failure of any such  condition  to be  satisfied  is the
result of any action or inaction by Owner Trustee.

     5.3 CONDITIONS TO MORTGAGEE'S OBLIGATIONS

     Mortgagee's  obligation to authenticate the Equipment Notes on the Delivery
Date is subject to the  satisfaction  or  Mortgagee's  waiver,  on or before the
Delivery Date, of the conditions in this ss. 5.3.

     5.3.1 NOTICE

     Mortgagee  receives  the notice  described  in ss. 4.1 or, in the case of a
Delayed Delivery Date, ss. 4.3, when and as required thereby.

     5.3.2 DOCUMENTS

     Mortgagee  receives  executed  originals of the documents  described in ss.
5.1.2,  except as otherwise provided therein,  unless the failure to receive any
such document is the result of any action or inaction by Mortgagee.

     5.3.3 OTHER CONDITIONS PRECEDENT

     Each of the conditions in ss.ss.  5.1.4,  5.1.6, 5.1.7, and 5.1.11 has been
satisfied,  unless the  failure of any such  condition  to be  satisfied  is the
result of any action or inaction by Mortgagee.

     5.4 CONDITIONS TO LESSEE'S OBLIGATIONS

     Lessee's  obligation  to lease the Aircraft on the Delivery Date is subject
to the satisfaction or Lessee's  waiver,  on or before the Delivery Date, of the
conditions in this ss. 5.4.

     5.4.1 DOCUMENTS

     Lessee receives executed originals of the documents described in ss. 5.1.2,
except as  otherwise  provided  therein,  and they are  satisfactory  to Lessee,
unless the failure to receive  any such  document is the result of any action or
inaction by Lessee.

     5.4.2 TAXES

     Lessee is satisfied that no sales, use, value-added, goods-and-services, or
like tax, and no stamp tax duty,  is payable with respect to the delivery of the
Aircraft  on the  Delivery  Date (to the  extent  that  Lessee  could be  liable
therefor under ss. 9.3).

     5.4.3 OTHER CONDITIONS

     Each of the  conditions in ss.ss.  5.1.3 (as to all  Participants),  5.1.4,
5.1.6, 5.1.7 (as to Mortgage Defaults' not constituting Lease Defaults),  5.1.8,
5.1.9, 5.1.10,  5.1.11,  5.1.12, 5.1.13, and 5.1.14 has been satisfied or waived
by Lessee,  unless the  failure of any such  condition  to be  satisfied  is the
result of any action or inaction by Lessee.

     5.5 POST-REGISTRATION OPINION

     Promptly after the  registration of the Aircraft and the recordation of the
FAA-Filed  Documents pursuant to the Transportation  Code, Lessee will cause FAA
Counsel to  deliver to Lessee,  each  Participant,  Subordination  Agent,  Owner
Trustee, and Mortgagee a favorable opinion or opinions addressed to each of them
with respect to such recordation.

     6. REPRESENTATIONS AND WARRANTIES

     6.1 LESSEE'S REPRESENTATIONS AND WARRANTIES

     Lessee  represents  and  warrants  to  each  Participant,   Owner  Trustee,
Subordination Agent, and Mortgagee that:

     6.1.1 ORGANIZATION; QUALIFICATION

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

     6.1.2 CORPORATE AUTHORIZATION

     Lessee has taken,  or caused to be taken,  all necessary  corporate  action
(including  obtaining  any consent or approval of  stockholders  required by its
articles of incorporation or by-laws) to authorize its execution,  delivery, and
performance of its obligations under each of the Lessee Operative Agreements.

     6.1.3 NO VIOLATION

     Lessee's execution,  delivery, and performance of its obligations under the
Lessee  Operative  Agreements  do not and will not (a) violate any  provision of
Lessee's articles of incorporation or by-laws, (b) violate any Law applicable to
or binding on Lessee, or (c) violate or constitute any default under (other than
any violation or default that would not result in a Materially Adverse Change to
Lessee),  or result in the creation of any Lien (other than as  permitted  under
the Lease) upon the Aircraft under, any lease, loan, or other material agreement
to which Lessee is a party or by which Lessee or any of its properties is bound.

     6.1.4 APPROVALS

     Lessee's  execution  and delivery of, and  performance  of its  obligations
under, the Lessee  Operative  Agreements do not and will not require the consent
or approval of, the giving of notice to, the registration with, the recording or
filing of any  documents  with,  or the taking of any other action in respect of
(a) any  trustee  or other  holder  of any Debt of  Lessee,  (b) any  Government
Entity, or (c) any other Person,  other than (x) the FAA-Filed Documents and the
Financing  Statements  (and  continuation  statements  periodically),   and  (y)
filings,  recordings,  notices,  corporate  approvals of Lessee (which have been
duly obtained) or other ministerial  actions pursuant to any routine  recording,
contractual, or regulatory requirements.

     6.1.5 VALID AND BINDING AGREEMENTS

     The Lessee Operative  Agreements have been duly authorized,  executed,  and
delivered by Lessee,  and  (assuming  their due  authorization,  execution,  and
delivery by the other parties  thereto)  constitute  legal,  valid,  and binding
obligations  of Lessee and are  enforceable  against  Lessee in accordance  with
their  terms,  except  as such  enforceability  may be  limited  by  bankruptcy,
insolvency,  and other similar Laws affecting the rights of creditors  generally
and general principles of equity.

     6.1.6 LITIGATION

     Except as set forth in Guarantor's  most recent Annual Report on Form 10-K,
filed by Lessee with the SEC on or before the Delivery Date, or in any Quarterly
Report on Form 10-Q or Current  Report on Form 8-K filed by  Guarantor  with the
SEC  subsequent to such Form 10-K and on or before the Delivery Date, no action,
claim,  or  proceeding  is  now  pending  or,  to  Lessee's  Actual   Knowledge,
threatened,  against Lessee,  Guarantor, or any of their Affiliates,  before any
Government Entity or any arbitrator,  that is reasonably likely to be determined
adversely  to Lessee and if  determined  adversely  to Lessee  would result in a
Materially Adverse Change.

     6.1.7 FINANCIAL CONDITION

     Guarantor's audited  consolidated  balance sheet for its most-recent fiscal
year, included in Guarantor's Annual Report on Form 10-K filed by Guarantor with
the SEC for  such  fiscal  year,  and the  related  consolidated  statements  of
operations  and cash flows for the period  then  ended,  have been  prepared  in
accordance  with GAAP and fairly present in all material  respects the financial
condition of Guarantor and its consolidated subsidiaries as of such date and the
results of its operations and cash flows for such period,  and since the date of
such  balance  sheet,  there  has  been no  Materially  Adverse  Change  in such
financial  condition  or  operations,  except for matters  disclosed  in (a) the
financial  statements referred to above, or (b) any subsequent  Quarterly Report
on Form 10-Q or Current Report on Form 8-K filed by Guarantor with the SEC on or
before the Delivery Date.

     6.1.8 REGISTRATION AND RECORDATION

     Except  for (a)  registering  the  Aircraft  with the FAA  pursuant  to the
Transportation  Code in the name of Owner  Trustee,  (b) filing for  recordation
(and  recording) the FAA-Filed  Documents,  (c) filing the Financing  Statements
(and  continuation  statements  relating  thereto at  periodic  intervals),  (d)
Mortgagee's   taking   possession  and  retaining  the  chattel  paper  original
counterpart of the Lease, and (e) affixing the placards referred to in ss. 7.1.3
of the Lease,  no further  action,  including  filing or recording  any document
(including any financing statement under UCC Article 9) is necessary in order to
establish  and  perfect  Owner  Trustee's  right,   title,  and  interest,   and
Mortgagee's security interest,  in the Aircraft and the Lease, as against Lessee
and any other Person, in any applicable jurisdiction in the United States.

     6.1.9 CHIEF EXECUTIVE OFFICE

     Lessee's chief executive office (as defined in UCC Article 9) is located at
7337 West Washington Street, Indianapolis, Indiana, 46231.

     6.1.10 NO DEFAULT

     No Lease Default exists.

     6.1.11 NO EVENT OF LOSS

     No Event of Loss has  occurred  with respect to the Airframe or any Engine,
and, to Lessee's Actual Knowledge, no circumstance, condition, act, or event has
occurred that,  with the giving of notice or lapse of time,  gives or would give
rise to or constitutes  or would  constitute an Event of Loss to the Airframe or
any Engine.

     6.1.12 COMPLIANCE WITH LAWS

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

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

     (c)  Lessee is not an  "investment  ompany" or a company  controlled  by an
"investment company" within the meaning of the Investment Company Act of 1940.

     6.1.13 SECURITIES LAWS

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

     6.1.14 BROKER'S FEES

     No Person acting on behalf of Lessee is or will be entitled to any broker's
fee, commission, or finder's fee in connection with the Transactions, except for
fees payable to Lessee's Advisor(s), if any.

     6.1.15 SECTION 1110

     Owner Trustee, as lessor under the Lease (and Mortgagee,  as assignee under
the Mortgage), will be entitled to the benefits of Section 1110 (as currently in
effect),  with  respect  to the right to take  possession  of the  Airframe  and
Engines as provided in the Lease, in the event of a case under Chapter 11 of the
Bankruptcy Code in which Lessee is a debtor.

     6.1.16 NO GOVERNMENT CONSENTS

     Neither  Lessee's  execution  and  delivery of any of the Lessee  Operative
Agreements nor Lessee's  performance of its obligations  hereunder  requires the
consent or approval of, the giving of notice to, or the  registration  with,  or
the taking of any other action in respect of any Government  Entity,  except for
(a) the orders, permits,  waivers,  exemptions,  authorizations and approvals of
the  regulatory  authorities  having  jurisdiction  over  the  operation  of the
Aircraft by Lessee, which orders, permits, waivers,  exemptions,  authorizations
and approvals  have been duly obtained and are, or will on the Delivery Date be,
in full force and effect,  and the  registration  and filings referred to herein
and  (b)  any  normal  periodic  and  other  reporting  requirements  under  the
applicable  rules of the FAA to the extent required to be given or obtained only
on or after the Delivery Date.

     6.1.17 PAYMENT OF TAXES

     Lessee and its  Affiliates  have  filed or caused to be filed all  federal,
state, and material local and non-U.S. tax returns that are required to be filed
and have paid or caused to be paid all taxes shown to be due on such  returns or
on any  assessment  received  by Lessee or its  Affiliates,  except any that are
being contested diligently and in good faith by appropriate  proceedings and for
which  adequate  provision  for payment has been made in  accordance  with GAAP.
There is no ongoing audit or, to the knowledge of Lessee, other investigation by
any Government Entity of the tax liability of Lessee or its Affiliates and there
is no  unresolved  claim  by a  taxing  authority  concerning  Lessee's  or  any
Affiliate's  tax liability,  for any period for which returns have been filed or
were  due,  that,  in  either  case,  reasonably  may be  expected  to result in
liability  of  Lessee  which  could  have a  materially  adverse  effect  on the
business,  operations or financial  condition of Lessee or the ability of Lessee
to perform its obligations under the Operative Agreements.

     6.2 OWNER PARTICIPANT'S REPRESENTATIONS AND WARRANTIES

     Owner Participant represents and warrants to Lessee, the Loan Participants,
Subordination Agent, Owner Trustee, and Mortgagee that:

     6.2.1 ORGANIZATION, ETC.

     Owner Participant (a) is a corporation duly incorporated,  validly existing
and in  good  standing  under  the  Laws  of the OP  Jurisdiction,  (b)  has the
corporate  power and  authority to conduct the business in which it is currently
engaged,  to own or hold  under  lease  its  properties,  and to enter  into and
perform its obligations  under the Owner Participant  Agreements,  and (c) has a
tangible net worth (exclusive of goodwill) greater than $50 million.

     6.2.2 CORPORATE AUTHORIZATION

     Owner Participant has taken (or caused to be taken) all necessary corporate
action (including obtaining any consent or approval of stockholders  required by
its  certificate  of  incorporation  or by-laws)  to  authorize  its  execution,
delivery, and performance of its obligations under each of the Owner Participant
Agreements.

     6.2.3 NO VIOLATION

     Owner Participant's execution, delivery, and performance of its obligations
under each of the Owner  Participant  Agreements do not and will not (a) violate
any provision of Owner  Participant's  certificate of  incorporation or by-laws,
(b)  violate  any  Law  applicable  to  or  binding  on  Owner  Participant  (no
representation  or  warranty  is made with  respect to ERISA,  other than as set
forth in ss. 6.2.9) or (c) violate or  constitute  any default under (other than
any violation or default that would not result in a Materially Adverse Change to
Owner  Participant),  or  result  in the  creation  of any Lien  (other  than as
provided for or otherwise permitted in the Operative  Agreements) upon the Trust
Estate  under,  any lease,  loan,  or other  material  agreement  to which Owner
Participant is a party or by which Owner Participant or any of its properties is
bound.

     6.2.4 APPROVALS

     Owner Participant's execution, delivery, and performance of its obligations
under each of the Owner  Participant  Agreements do not and will not require the
consent or  approval  of, the giving of notice to, the  registration  with,  the
recording or filing of any documents  with, or the taking of any other action in
respect of (a) any trustee or other holder of any Debt of Owner Participant, and
(b) any  Government  Entity,  other than filing the FAA-Filed  Documents and the
Financing Statements and routine regulatory filings.

     6.2.5 VALID AND BINDING AGREEMENTS

     The Owner Participant  Agreements have been duly authorized,  executed, and
delivered by Owner Participant, and (assuming the due authorization,  execution,
and delivery by the other parties thereto)  constitute legal, valid, and binding
obligations of Owner  Participant and are enforceable  against Owner Participant
in accordance with their terms,  except as such enforceability may be limited by
bankruptcy, insolvency, and other similar Laws affecting the rights of creditors
generally and general principles of equity.

     6.2.6 CITIZENSHIP

     Owner Participant is a Citizen of the United States.

     6.2.7 NO LIENS

     There are no Lessor Liens  attributable to Owner  Participant on all or any
part of the Trust Estate.

     6.2.8 INVESTMENT BY OWNER PARTICIPANT

     Owner Participant is acquiring its beneficial  interest in the Trust Estate
for  its own  account,  for  investment  and not  with a view to any  resale  or
distribution  thereof;  PROVIDED,  that, subject to the transfer restrictions in
ss. 10, its disposition of its beneficial  interest in the Trust Estate shall at
all times be within its control.

     6.2.9 ERISA

     No part of the funds to be used by Owner Participant to acquire or hold its
interests in the Trust Estate  directly or  indirectly  constitutes  assets of a
Plan.

     6.2.10 LITIGATION

     There  are  no  pending  or,  to  Owner  Participant's   Actual  Knowledge,
threatened   actions  or  proceedings   against  Owner  Participant  before  any
Government  Entity that, if  determined  adversely to Owner  Participant,  would
materially   adversely  affect  Owner  Participant's   ability  to  perform  its
obligations under the Owner Participant Agreements.

     6.2.11 SECURITIES LAWS

     Neither Owner  Participant nor any Person Owner  Participant has authorized
to act on its behalf has directly or indirectly offered any beneficial  interest
in or Security  relating to the ownership of the Aircraft or any interest in the
Trust Estate, or any of the Equipment Notes or any other interest in or Security
under the  Mortgage,  for sale to, or solicited  any offer to acquire any of the
same from,  any Person in violation of the  Securities  Act or applicable  state
securities  Laws (with the  understanding  that Owner  Participant  shall not be
deemed to have  authorized  Lessee's  Advisor(s)  to act on Owner  Participant's
behalf).

     6.2.12 BROKER'S FEES

     No Person acting on behalf of Owner  Participant  is or will be entitled to
any  broker's  fee,   commission,   or  finder's  fee  in  connection  with  the
Transactions.

     6.3 FSB'S REPRESENTATIONS AND WARRANTIES

     FSB  represents  and  warrants  to  Lessee,  Owner  Participant,  the  Loan
Participants, Subordination Agent, and Mortgagee that:

     6.3.1 ORGANIZATION, ETC.

     FSB is a national banking association duly organized,  validly existing and
in  good  standing  under  the  Laws  of the  United  States,  holding  a  valid
certificate  to do  business  as a national  banking  association  with  banking
authority  to execute,  deliver,  and perform  its  obligations  under the Owner
Trustee Agreements.

     6.3.2 CORPORATE AUTHORIZATION

     FSB has  taken  (or  caused to be taken)  all  necessary  corporate  action
(including obtaining any consent or approval of stockholders  required by Law or
by its  articles of  association  or by-laws) to  authorize  the  execution  and
delivery by FSB or Owner Trustee, of each of the Owner Trustee  Agreements,  and
the performance of its obligations thereunder.

     6.3.3 NO VIOLATION

     FSB's and Owner  Trustee's  execution,  delivery,  and performance of their
respective  obligations  under the Owner Trustee  Agreements do not and will not
(a) violate any  provision  of FSB's  articles of  association  or by-laws,  (b)
violate any Utah Law or federal  banking Law  applicable  to or binding on Owner
Trustee or FSB, or (c) violate or  constitute  any default under (other than any
violation or default that would not result in a Materially Adverse Change to FSB
or Owner Trustee), or result in the creation of any Lien (other than the Lien of
the  Mortgage)  upon  any  property  of  FSB,  Owner  Trustee,  or any of  FSB's
subsidiaries under, any lease, loan, or other material agreement to which FSB or
Owner  Trustee  is a party  or by  which  FSB,  Owner  Trustee,  or any of their
properties is or may be bound or affected.

     6.3.4 APPROVALS

     FSB's and Owner  Trustee's  execution,  delivery,  and performance of their
respective  obligations  under the Owner Trustee  Agreements do not and will not
require the consent, approval, or authorization of, the giving of notice to, the
registration  with, the recording or filing of any documents with, or the taking
of any other  action in respect of, (a) any trustee or other  holder of any Debt
of FSB, or (b) any Government Entity governing  banking and trust powers,  other
than filing the FAA-Filed Documents and the Financing Statements.

     6.3.5 VALID AND BINDING AGREEMENTS

     The Owner  Trustee  Agreements  have been duly  authorized,  executed,  and
delivered  by FSB and  Owner  Trustee,  and  (assuming  the  due  authorization,
execution,  and delivery thereof by the other parties thereto) constitute legal,
valid,  and binding  obligations  of FSB and Owner  Trustee and are  enforceable
against FSB and Owner  Trustee in  accordance  with their terms,  except as such
enforceability may be limited by bankruptcy,  insolvency, and other similar Laws
affecting the rights of creditors generally and general principles of equity.

     6.3.6 CITIZENSHIP

     FSB is a Citizen of the United States.

     6.3.7 CHIEF EXECUTIVE OFFICE

     The chief  executive  office (as defined in UCC Article 9) of Owner Trustee
is located at 79 South Main Street, Salt Lake City, Utah 84111.

     6.3.8 TITLE

     On the Delivery Date,  Owner Trustee shall have received  whatever title to
the Aircraft as was conveyed to it by Seller.

     6.3.9 NO LIENS; FINANCING STATEMENTS

     There are no Lessor Liens  attributable  to FSB or Owner Trustee in respect
of all or any part of the Aircraft, Trust Estate, or the Collateral.  Except for
the  Financing  Statements,  neither FSB nor Owner  Trustee has executed any UCC
financing statement relating to the Aircraft or the Lease.

     6.3.10 LITIGATION

     There are no pending or, to FSB's Actual Knowledge,  threatened  actions or
proceedings  against FSB or Owner Trustee before any Government  Entity that, if
determined  adversely to FSB, would  materially  adversely affect the ability of
FSB or Owner  Trustee  to  perform  its  obligations  under  the  Owner  Trustee
Agreements.

     6.3.11 SECURITIES LAWS

     Neither FSB, nor any Person  authorized to act on its behalf,  has directly
or  indirectly  offered any  beneficial  interest  or  Security  relating to the
ownership  of the  Aircraft or any  interest  in the Trust  Estate or any of the
Equipment Notes or any other interest in or security under the Mortgage for sale
to, or solicited any offer to acquire any such interest or security from, or has
sold any such  interest or security to, any Person other than the  Participants,
except for the offering and sale of the Pass-Through Certificates.

     6.3.12 EXPENSES AND TAXES

     There are no Expenses  or Taxes that may be imposed on or asserted  against
the Trust, the Trust Estate,  or any part thereof or any interest  therein,  the
Collateral,  Lessee, Owner Participant, any Pass-Through Trustee,  Subordination
Agent, Owner Trustee, or Mortgagee (except as to Owner Trustee, Taxes imposed on
the fees payable to Owner  Trustee)  under the laws of Utah in  connection  with
Owner Trustee's execution,  delivery,  or performance of any Operative Agreement
or in connection  with the issuance of the Equipment  Notes,  which  Expenses or
Taxes would not have been imposed if Owner Trustee had not (x) had its principal
place of business in Utah, (y) performed (in its individual capacity or as Owner
Trustee) any or all of its duties under the Operative Agreements in Utah, or (z)
engaged in any  activities  unrelated to the  transactions  contemplated  by the
Operative Agreements in Utah.

     6.4 WTC'S REPRESENTATIONS AND WARRANTIES

     WTC, Mortgagee,  Pass-Through  Trustee and Subordination  Agent, each as to
itself,  represent  and  warrant  (with  respect  to ss.  6.4.10,  solely in its
capacity as Subordination Agent) to Lessee, Owner Participant, and Owner Trustee
that:

     6.4.1 ORGANIZATION, ETC.

     WTC is a Delaware banking corporation duly organized,  validly existing and
in good standing  under the Laws of the State of Delaware,  and authorized to do
business as a Delaware banking  corporation  with banking  authority to execute,
deliver,  and  perform  its  obligations  under the  Mortgagee  Agreements,  the
Pass-Through Trustee Agreements, and the Subordination Agent Agreements.

     6.4.2 CORPORATE AUTHORIZATION

     WTC has  taken  (or  caused to be taken)  all  necessary  corporate  action
(including obtaining any consent or approval of stockholders  required by Law or
by its certificate of  incorporation  or by-laws) to authorize the execution and
delivery by WTC, Mortgagee,  each Pass-Through  Trustee, and Subordination Agent
(as  applicable)  of  the  Mortgagee   Agreements,   the  Pass-Through   Trustee
Agreements,  and the Subordination  Agent Agreements and the performance by WTC,
Mortgagee, each Pass-Through Trustee, and Subordination Agent (as applicable) of
its obligations thereunder.

     6.4.3 NO VIOLATION

     The execution and delivery by WTC,  Mortgagee,  each Pass-Through  Trustee,
and  Subordination  Agent  (as  applicable)  of the  Mortgagee  Agreements,  the
Pass-Through Trustee Agreements, and the Subordination Agent Agreements, and the
performance by WTC,  Mortgagee,  each  Pass-Through  Trustee,  and Subordination
Agent (as  applicable) of its  obligations  thereunder,  do not and will not (a)
violate any provision of WTC's  certificate  of  incorporation  or by-laws,  (b)
violate any Law of the United States or of Delaware  applicable to or binding on
WTC or  (except  in the case of any Law  relating  to any Plan)  Mortgagee,  any
Pass-Through  Trustee, or Subordination  Agent, or (c) violate or constitute any
default  under  (other than any  violation or default that would not result in a
Materially  Adverse  Change to WTC,  Mortgagee,  any  Pass-Through  Trustee,  or
Subordination Agent), or result in the creation of any Lien (other than the Lien
of the Mortgage) upon any property of WTC, Mortgagee,  any Pass-Through Trustee,
Subordination  Agent,  or any of WTC's  subsidiaries  under any lease,  loan, or
other  agreement  to  which  WTC,  Mortgagee,   any  Pass-Through   Trustee,  or
Subordination  Agent is a party or by which  WTC,  Mortgagee,  any  Pass-Through
Trustee, Subordination Agent, or any of their properties is bound.

     6.4.4 APPROVALS

     The execution and delivery by WTC,  Mortgagee,  each Pass-Through  Trustee,
and  Subordination  Agent  (as  applicable)  of the  Mortgagee  Agreements,  the
Pass-Through Trustee Agreements, and the Subordination Agent Agreements to which
it is a party, and the performance by WTC, Mortgagee, each Pass-Through Trustee,
and Subordination  Agent (as applicable) of its obligations  thereunder,  do not
and will not require the consent,  approval,  or authorization of, the giving of
notice to, the registration  with, the recording or filing of any document with,
or the taking of any other  action in respect of (a) any trustee or other holder
of any Debt of WTC,  or (b) any  Government  Entity of the  United  States or of
Delaware,   other  than  filing  the  FAA-Filed   Documents  and  the  Financing
Statements.

     6.4.5 VALID AND BINDING AGREEMENTS

     The Mortgagee  Agreements,  the Pass-Through  Trustee  Agreements,  and the
Subordination  Agent  Agreements  have  been  duly  authorized,   executed,  and
delivered by WTC, Mortgagee,  each Pass-Through Trustee, and Subordination Agent
(as applicable), and (assuming the due authorization, execution, and delivery by
the other parties thereto)  constitute legal,  valid, and binding obligations of
WTC,  Mortgagee,   each  Pass-Through   Trustee,  and  Subordination  Agent  (as
applicable)  and are  enforceable  against  WTC,  Mortgagee,  each  Pass-Through
Trustee, and Subordination Agent (as applicable) in accordance with their terms,
except as such enforceability may be limited by bankruptcy, insolvency, or other
similar Laws affecting the rights of creditors  generally and general principles
of equity.

     6.4.6 CITIZENSHIP

     WTC is a Citizen of the United States.

     6.4.7 NO LIENS

     There are no Lessor Liens attributable to WTC in respect of all or any part
of the Trust Estate or the Collateral.

     6.4.8 LITIGATION

     There are no pending or, to WTC's Actual Knowledge,  threatened  actions or
proceedings against WTC, Mortgagee,  any Pass-Through  Trustee, or Subordination
Agent (as applicable) before any Government Entity that, if determined adversely
to WTC,  Mortgagee,  any  Pass-Through  Trustee,  and  Subordination  Agent  (as
applicable),  would materially  adversely affect the ability of WTC,  Mortgagee,
any  Pass-Through  Trustee,  or  Subordination  Agent to perform its obligations
under any of the Mortgagee Agreements,  the Pass-Through Trustee Agreements,  or
the Subordination Agent Agreements.

     6.4.9 SECURITIES LAWS

     Other than as contemplated herein and in the Operative Agreements,  neither
WTC nor any Person  authorized  to act on its behalf has directly or  indirectly
offered any  beneficial  interest or Security  relating to the  ownership of the
Aircraft or any interest in the Collateral or any of the Equipment  Notes or any
other  interest in or security  under the Mortgage for sale to, or solicited any
offer to  acquire  any such  interest  or  security  from,  or has sold any such
interest or security to, any Person other than the Participants,  except for the
offering and sale of the Pass-Through Certificates.

     6.4.10 INVESTMENT

     THE  EQUIPMENT  NOTES TO BE  ACQUIRED  BY  SUBORDINATION  AGENT  ARE  BEING
ACQUIRED BY IT FOR THE ACCOUNT OF THE PASS-THROUGH  TRUSTEES, FOR INVESTMENT AND
NOT WITH A VIEW TO ANY RESALE OR DISTRIBUTION THEREOF; PROVIDED THAT, SUBJECT TO
THE TRANSFER  RESTRICTIONS IN SS. 10.1.3, ITS DISPOSITION OF ITS EQUIPMENT NOTES
SHALL AT ALL TIMES BE WITHIN ITS CONTROL.

     6.4.11 TAXES

     There are no Taxes  payable by any  Pass-Through  Trustee or WTC imposed by
Delaware or any political  subdivision or taxing authority thereof in connection
with such Pass-Through  Trustee's or WTC's execution,  delivery, and performance
of this Agreement or any Pass-Through Trustee Agreement (other than franchise or
other taxes based on or  measured  by any fees or  compensation  received by any
such  Pass-Through  Trustee or WTC for services  rendered in connection with the
transactions  contemplated by any of the  Pass-Through  Trust  Agreements),  and
there  are no Taxes  payable  by any  Pass-Through  Trustee  or WTC  imposed  by
Delaware  or  any  political   subdivision   thereof  in  connection   with  the
acquisition, possession, or ownership by any such Pass-Through Trustee of any of
the Equipment Notes (other than franchise or other taxes based on or measured by
any fees or compensation  received by any such  Pass-Through  Trustee or WTC for
services rendered in connection with the transactions contemplated by any of the
Pass-Through  Trust  Agreements),  and,  assuming that the trusts created by the
Pass-Through Trust Agreements will not be taxable as corporations,  but, rather,
that each will be  characterized  as a grantor  trust under Part I, subpart E of
Subchapter  J of the Code or as a  partnership  under  Subchapter K of the Code,
such  trusts  will not be  subject  to any  Taxes  imposed  by  Delaware  or any
political subdivision thereof.

     6.4.12 CONTROL

            WTC is not an Affiliate of Owner Participant or Owner Trustee.

     6.4.13 BROKER'S FEES

     No Person acting on behalf of WTC, Mortgagee,  any Pass-Through Trustee, or
Subordination Agent is or will be entitled to any broker's fee,  commission,  or
finder's fee in connection with the Transactions.

     7. COVENANTS

     7.1 LESSEE'S COVENANTS

     Lessee agrees for the benefit of Owner Participant,  the Loan Participants,
Owner Trustee, and Mortgagee as follows:

     7.1.1 CORPORATE EXISTENCE; U.S. AIR CARRIER

     Lessee  shall at all times  maintain  its  corporate  existence,  except as
permitted  byss.  13.2 of the Lease,  and shall at all times  remain a U.S.  Air
Carrier.

     7.1.2 NOTICE OF CHANGE OF CHIEF EXECUTIVE OFFICE

     Lessee will give to Owner Participant,  Owner Trustee, and Mortgagee timely
written  notice of (but in any event within 90 days after) any relocation of its
chief executive office (as defined in UCC Article 9), and will promptly take any
action required by ss. 7.1.3(c) as a result of sucH relocation.

     7.1.3 CERTAIN ASSURANCES

     (a) Lessee  shall duly  execute,  acknowledge,  and deliver (or cause to be
executed,  acknowledged, and delivered) all such further documents, and shall do
and cause to be done such further things, as Owner  Participant,  Owner Trustee,
or Mortgagee  reasonably  requests to  accomplish  the purposes of the Operative
Agreements,  provided  that no  document  so  executed by Lessee will expand any
obligations or limit any rights of Lessee in respect of the Transactions.

     (b) Lessee shall  promptly take such action with respect to the  recording,
filing,  re-recording,  and refiling of the Lease, the Trust Agreement,  and the
Mortgage,  and any  supplements  thereto,  as shall be necessary  to  establish,
perfect, and protect Owner Trustee's interests and rights in and to the Aircraft
and under the Lease and the  perfection  and priority of the Lien created by the
Mortgage.  Lessee  shall  furnish to Owner  Participant  or Owner  Trustee  such
information (other than with respect to the citizenship of Owner Participant and
Owner  Trustee) in Lessee's  possession  or  otherwise  reasonably  available to
Lessee and required to enable  Owner  Participant  or Owner  Trustee to apply to
register the Aircraft under the Transportation  Code (subject to Lessee's rights
under  ss.  7.1.2  of  the  Lease),  and  shall  pay or  cause  to be  paid  all
out-of-pocket costs and expenses thereof (includinG  reasonable  attorneys' fees
and disbursements).

     (c) Lessee will cause the FAA-Filed  Documents,  the Financing  Statements,
and  all  continuation  statements  (and  any  amendments  necessitated  by  any
combination,  consolidation, or merger pursuant to ss. 13.2 of the Lease, or any
relocation of its chief executive office) in respect oF the Financing Statements
to be prepared and,  subject only to the execution and delivery thereof by Owner
Trustee or Mortgagee (as  applicable),  duly and timely filed and  recorded,  or
filed for  recordation,  to the extent permitted under the  Transportation  Code
(with respect to the FAA-Filed Documents) or the UCC or similar law of any other
applicable jurisdiction (with respect to such other documents).

     (d) If the Aircraft is registered in a country other than the United States
pursuant  to ss.  7.1.2 of the Lease,  Lessee  will  furnish  tO Owner  Trustee,
Mortgagee,   and  each   Participant   annually   while  the   Aircraft  is  not
U.S.-registered  (starting  with the calendar  year after such  registration  is
effected)  an  opinion  of  special  counsel  reasonably  satisfactory  to Owner
Participant and Mortgagee  stating that, in the opinion of such counsel,  either
(1)  such  action  has  been  taken  with  respect  to  the  recording,  filing,
re-recording,  and re-filing of the Operative Agreements and any supplements and
amendments  thereto as is necessary to  establish,  perfect,  and protect  Owner
Trustee's and Mortgagee's  right,  title and interest in and to the Aircraft and
the Operative  Agreements,  reciting the details of such actions, or (2) no such
action is  necessary  to  maintain  the  perfection  of such right,  title,  and
interest.

     7.1.4 SECURITIES LAWS

     Neither Lessee nor any Person authorized to act on its behalf will directly
or  indirectly  offer  any  beneficial  interest  or  Security  relating  to the
ownership  of the  Aircraft or the Lease or any interest in the Trust Estate and
Trust  Agreement  or any of the  Equipment  Notes or any  other  interest  in or
security  under the  Mortgage  for sale to, or solicit  any offer to acquire any
such  interest or security  from,  or sell any such interest or security to, any
Person  in  violation  of the  Securities  Act or  applicable  state or  foreign
securities Laws.

     7.1.5 CERTIFICATION

     Lessee  shall  cause the  Aircraft  to be duly  certified  by the FAA as to
airworthiness and shall,  immediately upon registration of the Aircraft in Owner
Trustee's name, obtain an FAA airworthiness certificate for the Aircraft.

     7.2 OWNER PARTICIPANT'S COVENANTS

     Owner  Participant  agrees  for the  benefit of Lessee,  and  (except  with
respect to ss.  7.2.4) Loan  Participants,  Owner  Trustee,  and  Mortgagee,  aS
follows:

     7.2.1 LIENS

     Owner  Participant (a) (1) will not directly or indirectly  create,  incur,
assume, or suffer to exist any Lessor Lien attributable to it on or with respect
to all or any part of the Trust Estate, the Collateral, or the Aircraft, and (2)
will, at its own cost and expense,  promptly take such action as is necessary to
discharge any Lessor Lien  attributable to Owner  Participant on all or any part
of the Trust  Estate,  the  Collateral  or the  Aircraft;  PROVIDED,  that Owner
Participant  shall not be required to comply with the  foregoing  provisions  of
this  clause (a) if it shall in good faith by  appropriate  proceedings  contest
claims or charges  resulting  in any such Lien as long as such  contest does not
involve any material danger of the sale, forfeiture, loss, or loss of use of the
Aircraft or the interest of Lessor,  Mortgagee,  or any Participant therein; and
(b) will hold harmless and indemnify  Lessee,  Owner Trustee,  each Note Holder,
Mortgagee,  each of  their  respective  Affiliates,  successors,  and  permitted
assigns,  the Trust Estate,  and the Collateral from and against (1) any and all
Expenses, (2) any reduction in the amount payable out of the Trust Estate or the
Collateral,  and (3) any interference with the possession,  operation,  or other
use of all or any part of the Aircraft, in each case imposed on, incurred by, or
asserted  against any of the foregoing as a consequence  of any such Lessor Lien
(without regard to the proviso to the foregoing clause (a)).

     7.2.2 REVOCATION OF TRUST AGREEMENT

     (a)  Owner  Participant  will  comply  with  the  provisions  of the  Trust
Agreement  applicable to it, will not terminate or revoke the Trust Agreement or
the trusts created  thereunder  without the prior written  consent of Lessee and
Mortgagee,  and will not amend,  modify,  or supplement the Trust Agreement,  or
waive  any  of  the  provisions  thereof,   if  such  amendment,   modification,
supplement,  or waiver would have any adverse effect (1) on Lessee,  without the
consent of Lessee,  or (2) on Mortgagee or any Note Holder,  without the consent
of Mortgagee.

     (b) Notwithstanding ss. 7.2.2(a),  Owner Participant may at any time remove
Owner Trustee  pursuant to ss. 9.1 of the Trust Agreement or terminate the Trust
Agreement pursuant to ss. 11.2 of the Trust Agreement.

     7.2.3 CHANGE OF SITUS OF OWNER TRUST

     If, at any time, any Tax Indemnitee or the Trust Estate becomes  subject to
any Taxes for which it is indemnified  pursuant to ss. 9.3 of thiS Agreement and
if, as a  consequence  thereof,  Lessee  requests that the situs of the Trust be
moved to another  state in the United  States from the state in which it is then
located,  the situs of the Trust may be moved with the written  consent of Owner
Participant  (which  consent  shall  not be  unreasonably  withheld)  and  Owner
Participant will take whatever action is reasonably necessary to accomplish such
removal;  PROVIDED, that, in any event, (a) Lessee shall provide such additional
tax   indemnification   as  Owner  Participant  and  the  Note  Holders  or  the
Pass-Through  Trustees reasonably request to cover any additional  unindemnified
Taxes or loss of Tax benefits  described in the assumptions in the Tax Indemnity
Agreement  resulting from such change in situs,  (b) the rights and  obligations
under  the  Operative  Agreements  of  Owner  Participant,   the  Note  Holders,
Pass-Through Trustees, and Mortgagee shall not be adversely affected as a result
of the taking of such action,  (c) the Lien of the Mortgage,  on the  Collateral
shall not be  adversely  affected by such action,  and Lessee and Owner  Trustee
shall  execute and deliver such  documents as Mortgagee  reasonably  requests to
protect  and  maintain  the  perfection  and  priority  of such Lien,  (d) Owner
Participant,  the Pass-Through  Trustees, and Mortgagee shall receive an opinion
or  opinions  of counsel  (which  counsel is  reasonably  satisfactory  to Owner
Participant,  the Pass-Through  Trustees,  and Mortgagee),  in scope,  form, and
substance  reasonably  satisfactory  to  Owner  Participant,   the  Pass-Through
Trustees,  and  Mortgagee,  to the effect that (1) the Trust,  as thus  removed,
remains a  validly-established  trust, (2) any amendments to the Trust Agreement
necessitated by such removal have been duly authorized,  executed, and delivered
and constitute  valid and binding  obligations  of such parties,  enforceable in
accordance  with  their  terms,   (3)  covering  such  other  matters  as  Owner
Participant,  the Pass-Through Trustees, or Mortgagee reasonably request, (e) if
such removal involves the replacement of Owner Trustee,  then Owner Participant,
the Pass-Through  Trustees, and Mortgagee shall receive an opinion of counsel to
such successor Owner Trustee, in form and substance  reasonably  satisfactory to
Owner  Participant,  the  Pass-Through  Trustees,  and  Mortgagee,  covering the
matters described in the opinion delivered pursuant to ss. 5.1.2(u)(4),  and (f)
Lessee shall  indemnify anD hold harmless Owner  Participant,  the Note Holders,
Pass-Through Trustees, FSB, and Owner Trustee, on a net after-tax basis, against
any and all reasonable  out-of-pocket costs and expenses  (including  attorneys'
fees  and   disbursements),   fees  and  expenses  of  any  new  owner  trustee,
registration,   recording,   or  filing  fees,   and  taxes  incurred  by  Owner
Participant,  the Note  Holders,  Pass-Through  Trustees,  or Owner  Trustee  in
connection with such change of situs.  Owner  Participant  agrees,  for Lessee's
benefit,  that Owner  Participant  will not consent to or direct a change in the
situs of the Trust Estate without Lessee's prior written consent.

     7.2.4 COMPLIANCE WITH LEASE PROVISIONS

     Owner Participant  agrees,  solely for Lessee's benefit, to comply with the
express provisions applicable to Owner Participant in the Lease.

     7.2.5 SECURITIES ACT

     Owner  Participant  will not directly or  indirectly  offer any  beneficial
interest or security  relating to the  ownership of the Aircraft or any interest
in the Trust Estate or any of the  Equipment  Notes or any other  interest in or
security  under the  Mortgage  for sale to, or solicit  any offer to acquire any
such  interest or security  from,  or sell any such interest or security to, any
Person  in  violation  of the  Securities  Act or  applicable  state or  foreign
securities  Laws,  PROVIDED,  that  this ss.  7.2.5  shall  not  impose on Owner
Participant  any  responsibility  with  respect  to any  such  offer,  sale,  oR
solicitation by any other party hereto.

     7.2.6 REGARDING OWNER TRUSTEE

     Owner  Participant  will direct  Owner  Trustee to perform its  obligations
under each Owner Trustee Agreement.

     7.3 FSB'S AND OWNER TRUSTEE'S COVENANTS

     FSB and Owner Trustee agree for the benefit of Lessee,  Owner  Participant,
each Note Holder, and Mortgagee as follows:

     7.3.1 LIENS

     FSB (a) will not directly or indirectly create, incur, assume, or suffer to
exist any Lessor Lien  attributable to it or Owner Trustee on all or any part of
the Trust Estate, the Collateral, or the Aircraft, (b) will, at its own cost and
expense,  promptly take such action as is necessary to discharge any Lessor Lien
attributable to FSB or Owner Trustee on all or any part of the Trust Estate, the
Collateral, or the Aircraft, and (c) will personally hold harmless and indemnify
Lessee,  Owner  Participant,   each  Note  Holder,   Mortgagee,  each  of  their
Affiliates,  successors,  and  permitted  assigns,  the  Trust  Estate,  and the
Collateral  from and against (1) any and all Expenses,  (2) any reduction in the
amount  payable  out  of the  Trust  Estate  or  the  Collateral,  and  (3)  any
interference with the possession,  operation, or other use of all or any part of
the Aircraft  imposed on, incurred by, or asserted  against any of the foregoing
as a consequence of any such Lessor Lien.

     7.3.2 OTHER BUSINESS

     Owner Trustee will not enter into any business or other activity  except as
contemplated by the Operative Agreements.

     7.3.3 NOTICE OF CHANGE OF CHIEF EXECUTIVE OFFICE

     FSB and Owner Trustee will give to Lessee, each Participant,  and Mortgagee
30 days' prior written  notice of any relocation of its chief  executive  office
(as defined in UCC Article 9), and will promptly take any action required by ss.
7.3.8 as a result of such relocation.

     7.3.4 SECURITIES ACT

     Neither  FSB nor  Owner  Trustee  will  directly  or  indirectly  offer any
beneficial interest or Security relating to the ownership of the Aircraft or any
interest in the Trust Estate or any of the Equipment Notes or any other interest
in or security  under the  Mortgage for sale to, or solicit any offer to acquire
any such  interest or security  from,  or sell any such interest or security to,
any Person in violation of the  Securities  Act or  applicable  state or foreign
securities Laws,  PROVIDED,  that the foregoing shall not impose on FSB or Owner
Trustee any responsibility with respect to any such offer, sale, or solicitation
by any other party hereto.

     7.3.5 PERFORMANCE OF AGREEMENTS

     Owner  Trustee  shall  perform  its  obligations  under the  Owner  Trustee
Agreements in accordance with the terms thereof.

     7.3.6 RELEASE OF LIEN OF MORTGAGE

     In each  instance  referred  to in the  Lease  in which a  transfer  of any
property is required to be made by Owner  Trustee to Lessee or any other  Person
(other than Mortgagee or Owner  Participant),  Owner Trustee shall,  at Lessee's
request and expense, use reasonable efforts to procure from Mortgagee the prompt
release of the Lien of the Mortgage with respect to such property.

     7.3.7 NOTICES; DOCUMENTS

     If any claim with respect to any liabilities is filed against Owner Trustee
and Owner  Trustee  has  Actual  Knowledge  thereof,  then Owner  Trustee  shall
promptly  notify  Lessee in writing  thereof.  Owner Trustee  further  agrees to
provide to Lessee promptly any documents  (including the certificate of aircraft
registration) that it receives from the FAA with respect to the Aircraft.

     7.3.8 FILINGS

     After the Delivery  Date,  Owner  Trustee shall duly execute and deliver to
Lessee all  filings and  recordings  (including  all  filings and UCC  financing
statements under the  Transportation  Code and the UCC and any amendments to UCC
financing  statements  necessitated  by any  relocation  of its chief  executive
office),  prepared  and  delivered  to it by Lessee,  required to perfect  Owner
Trustee's title to the Aircraft and the liens of and security  interests granted
by the Mortgage (or to maintain such perfection) and to make such title,  liens,
and security interests valid and enforceable.

     7.3.9 TRUST AGREEMENT

     FSB and Owner  Trustee  hereby (a) agree for the  benefit  of Lessee,  Loan
Participants,  and Mortgagee not to amend,  supplement,  terminate, or otherwise
modify any provision of the Trust  Agreement in a manner that adversely  affects
the rights of any such party  without the prior  written  consent of such party,
and (b) agree for the benefit of Lessee, Loan Participant,  and Mortgagee not to
revoke the trust created by the Trust Agreement so long as the Mortgage  remains
undischarged  or if such  revocation  would  have an  adverse  effect on Lessee.
Nothing in this  Agreement  shall impair any right under the Trust  Agreement of
FSB to resign as Owner  Trustee in accordance  with the  provisions of the Trust
Agreement.

     7.4 WTC'S COVENANTS

     WTC, Mortgagee, each Pass-Through Trustee, and Subordination Agent, each as
to itself, agree for the benefit of Lessee, Owner Participant, and Owner Trustee
as follows:

     7.4.1 LIENS

     Other than Liens arising in connection with the  transactions  contemplated
in the Operative  Agreements,  WTC (a) will not directly or  indirectly  create,
incur,  assume, or suffer to exist any Lessor Lien attributable to it on or with
respect to all or any part of the Trust Estate, the Collateral, or the Aircraft,
(b) will, at its own cost and expense, promptly take such action as is necessary
to discharge any Lessor Lien attributable to WTC on all or any part of the Trust
Estate, the Collateral,  or the Aircraft,  and (c) will personally hold harmless
and indemnify Lessee, Owner Participant,  each Note Holder, Owner Trustee,  each
of their respective  Affiliates,  successors,  and permitted assigns,  the Trust
Estate,  and the Collateral  from and against (1) any and all Expenses,  (2) any
reduction in the amount payable out of the Trust Estate or the  Collateral,  and
(3) any interference with the possession,  operation, or other use of all or any
part of the Aircraft,  imposed on,  incurred by, or asserted  against any of the
foregoing as a consequence of any such Lessor Lien.

     7.4.2 SECURITIES ACT

     WTC,  Mortgagee,   each  Pass-Through   Trustee,  and  Subordination  Agent
(respectively)  will not offer any beneficial  interest or Security  relating to
the  ownership of the Aircraft or any interest in the  Collateral  or any of the
Equipment Notes or any other interest in or security under the Mortgage for sale
to, or solicit any offer to acquire any such interest or security  from, or sell
any such interest or security to, any Person in violation of the  Securities Act
or applicable  state or foreign  securities Laws,  PROVIDED,  that the foregoing
shall not impose on WTC any responsibility with respect to any such offer, sale,
or solicitation by any other party hereto.

     7.4.3 PERFORMANCE OF AGREEMENTS

     WTC,  Mortgagee,   each  Pass-Through   Trustee,  and  Subordination  Agent
(respectively) shall perform its obligations under the Mortgage Agreements,  the
Pass-Through  Trustee  Agreements,  and the  Subordination  Agent  Agreements in
accordance with their terms.

     7.4.4 WITHHOLDING TAXES

     WTC shall  indemnify  (on an  after-tax  basis) and hold  harmless  Lessee,
Lessor,  and Owner Participant  against any United States withholding taxes (and
related interest,  penalties, and additions to tax) as a result of WTC's failure
to withhold  on  payments  to any Note Holder who does not provide to  Mortgagee
necessary certificates or forms to substantiate the right to exemption from such
withholding tax.

     7.5 NOTE HOLDERS' COVENANTS

     Each Note Holder (including Subordination Agent), as to itself only, agrees
for the benefit of Lessee,  Owner Participant,  Owner Trustee,  and Mortgagee as
follows:

     7.5.1 WITHHOLDING TAXES

     Such Note Holder (if it is a Non-U.S.  Person)  agrees to indemnify  (on an
after-tax  basis) and hold  harmless  Lessee,  Lessor,  Owner  Participant,  and
Mortgagee  against any United States  withholding  taxes (and related  interest,
penalties,  and additions to tax) as a result of the inaccuracy or invalidity of
any  certificate or form provided by such Note Holder to Mortgagee in connection
with such  withholding  taxes.  Any amount payable under this ss. 7.5.1 shall be
paid within 30 days after the pertinent  Note Holder  receives a written  demand
therefor.

     7.5.2 TRANSFER; COMPLIANCE

     (a) Such Note Holder will (1) not transfer any  Equipment  Note or interest
therein  in  violation  of the  Securities  Act or  applicable  state or foreign
securities  Law;  PROVIDED,  that the foregoing  provisions of this ss. 7.5.2(a)
shall not impose on such Note  Holder  any  responsibility  for any such  offer,
sale, or solicitation by any other party hereto, and (2) perform and comply with
the  obligations  specified  to be  imposed on it (as a Note  Holder)  under the
Mortgage and the Equipment Note.

     (b) Except as  otherwise  required by the terms of ss. 2.13 of the Mortgage
or ss. 11 hereof, such Note Holder will not sell, assign,  convEy,  exchange, or
otherwise transfer any Equipment Note or any interest in, or represented by, any
Equipment  Note  (this  provision  not  being  applicable  to  the  Pass-Through
Certificates)  unless the proposed  transferee thereof first provides Lessee and
Owner Participant with both of the following:

     (1) a written  representation  and covenant  that either (aa) no portion of
the funds it uses to purchase, acquire, and hold such Equipment Note or interest
directly or indirectly constitutes,  or may be deemed under the Code or ERISA or
any rulings,  regulations,  or court  decisions  thereunder to  constitute,  the
assets  of any Plan,  or (bb) the  transfer,  and  subsequent  holding,  of such
Equipment Note or interest shall not involve or give rise to a transaction  that
constitutes a prohibited transaction within the meaning of ERISA ss. 406 or CodE
ss. 4975(c)(1)  involving Lessee,  Owner  Participant,  a Pass-Through  Trustee,
Subordination  Agent, or the proposed  transferee (other than A transaction that
is exempted from the  prohibitions of such sections by applicable  provisions of
ERISA  or  the  Code  or   administrative   exemptions  or  regulations   issued
thereunder); and

     (2) a written  covenant that it will not transfer any Equipment Note or any
interest  in, or  represented  by, any  Equipment  Note  unless  the  subsequent
transferee  also makes the  representation  described  in clause (1) of this ss.
7.5.2(b) and agrees to comply with thiS clause (2).

     7.6 OTHER AGREEMENTS

     7.6.1 OWNER TRUSTEE IS OWNER FOR ALL PURPOSES

     Lessee,  Owner Participant,  and Owner Trustee agree that for all purposes,
after the Closing,  Owner Trustee will be the owner of the Aircraft (except that
Owner  Participant will be the owner for income tax purposes) and Lessee will be
the lessee  thereof.  No transfer,  by operation of Law or  otherwise,  of Owner
Participant's  beneficial  interest in and to the Trust Estate shall  operate to
transfer legal title to any part of the Trust Estate to any transferee thereof.

     7.6.2 COMMENCEMENT OF BANKRUPTCY PROCEEDINGS

     Lessee, each Participant,  each Note Holder,  FSB, Owner Trustee,  WTC, and
Mortgagee  agree for the benefit of each of the others that it will not commence
or join in any proceeding under the Bankruptcy Code to commence a case under ss.
303 of the Bankruptcy Code against the Trust Estate.  NothinG  contained  herein
shall be deemed  to  preclude  any  Participant,  any Note  Holder,  FSB,  Owner
Trustee, WTC, or Mortgagee from filing any claim against the Trust Estate in any
case commenced against the Trust Estate.

     7.6.3 CERTAIN BANKRUPTCY MATTERS

     If (a) all or any part of the Trust  Estate  becomes  the  property  of, or
Owner  Trustee  or  Owner   Participant   becomes,   a  debtor  subject  to  the
reorganization   provisions  of  the  Bankruptcy  Code,  (b)  pursuant  to  such
reorganization  provisions (including Bankruptcy Code ss. 1111(b)), FSB or OwneR
Participant is required, by reason of FSB's or Owner Participant's being held to
have recourse  liability to any Note Holder or Mortgagee  directly or indirectly
(other  than the  recourse  liability  of FSB or Owner  Participant  under  this
Agreement or the Mortgage or by separate agreement),  to make payment on account
of any amount payable as principal,  Make-Whole  Amount (if any),  interest,  or
other  amounts on the  Equipment  Notes,  and (c) any Note  Holder or  Mortgagee
actually  receives  any Excess  Amount (as defined  below)  which  reflects  any
payment by FSB or Owner  Participant on account of clause (b) of this paragraph,
then  such  Note  Holder  or  Mortgagee  shall  promptly  refund to FSB or Owner
Participant (whichever shall have made such payment) such Excess Amount.

     For purposes of this ss. 7.6.3,  "EXCESS  AMOUNT" means the amount by which
such payment  exceeds the amount that would have been  received by a NotE Holder
or Mortgagee if FSB or Owner  Participant had not become subject to the recourse
liability referred to in clause (b) of the preceding paragraph.  Nothing in this
ss. 7.6.3 shall prevent a Note Holder or Mortgagee  from  enforcing any personal
recourse  obligation  (and  retaining  the  proceeds  thereof)  oF FSB or  Owner
Participant under this Agreement (other than as referred to in clause (b) of the
preceding paragraph) or the Mortgage (including any exhibits or annexes thereto)
or from  retaining  any amount paid by Owner  Participant  under ss. 2.13 or ss.
4.03 of the Mortgage.

     7.6.4 QUIET ENJOYMENT; SALE BY OWNER TRUSTEE BINDING

     (a) Each of Owner  Participant,  each Pass-Through  Trustee,  Subordination
Agent, each Note Holder,  Owner Trustee, and Mortgagee agrees (as to itself) for
the benefit of Lessee that, unless a Lease Event of Default exists,  such Person
shall not interfere (and shall not permit any Affiliate or other Person claiming
by,  through,  or under it to interfere) with Lessee's rights in accordance with
the Lease to the quiet enjoyment, possession, and use of the Aircraft during the
Term.

     (b) Any assignment,  sale, transfer, or other conveyance of the Aircraft by
Owner  Trustee made  pursuant to the terms of this  Agreement or the Lease shall
bind Owner Participant,  and shall be effective to transfer or convey all right,
title,  and  interest  of Owner  Trustee  and  Owner  Participant  in and to the
Aircraft.  No purchaser or other  grantee shall be required to inquire as to the
authorization,  necessity,  expediency, or regularity of such assignment,  sale,
transfer, or conveyance,  or as to the application of any sale or other proceeds
with respect thereto by Owner Trustee, as regards Owner Participant.

     7.6.5 RELEASE OF LIEN OF MORTGAGE

     Each of Lessee, Lessor, and Mortgagee agrees that in each instance referred
to in the Lease in which a transfer  of any  property  is required to be made by
Lessor to Lessee or any other Person (other than  Mortgagee),  Mortgagee  shall,
upon request of Lessor and  compliance  with the  applicable  provisions  of the
Lease and the Mortgage (including payment of all amounts then due and payable to
each Liquidity Provider and the Policy Provider as Supplemental Rent),  promptly
execute (at Lessee's  cost and  expense)  such  instruments  as Lessor or Lessee
reasonably  requests to evidence the release of the Lien of the Mortgage on such
property.

     7.6.6 NON-RECOURSE

     Loan  Participant and Mortgagee agree that (a) obligations of Owner Trustee
under the  Mortgage or any other  Operative  Agreement  and with  respect to the
Equipment Notes shall be  non-recourse to Owner  Participant and to FSB, and (b)
they will look solely to the income and  proceeds  from the Trust Estate and the
Collateral to the extent  available for distribution to Note Holder or Mortgagee
as  provided in the  Mortgage,  and neither  Owner  Participant  nor FSB will be
personally  liable to Loan  Participant or Mortgagee for any amounts  payable by
Owner Trustee  under the Mortgage or any other  Operative  Agreement;  PROVIDED,
that the  foregoing  is not  intended  nor  shall it be  construed  to limit any
recourse liability of Owner Participant or FSB to the extent that such liability
is expressly set forth in this  Agreement or in any of the Operative  Agreements
or arises by reason of the breach of any  representation or warranty or covenant
given by such Person (in the case of FSB, in its individual capacity).

     7.6.7 OTHER DOCUMENTS; AMENDMENT

     (a) Each of Owner  Participant  and Owner  Trustee  hereby  agrees  for the
benefit  of  Lessee,  the  Loan  Participants,   and  Mortgagee  not  to  amend,
supplement, or otherwise modify any provision of the Trust Agreement in a manner
that could  adversely  affect such party,  without the prior written  consent of
such party.  Notwithstanding  the  foregoing,  so long as the Lease has not been
terminated or expired,  each  Participant,  Mortgagee,  and Owner Trustee hereby
agree for the benefit of Lessee that,  without Lessee's  consent,  they will not
amend,  supplement,  or  otherwise  modify (1) ss. 3, ss. 9, or ss.  2.05 of the
Mortgage,  (2) any  provision of any  Operative  Agreement  that will affect the
stated principal amount of or premium or interest on the Equipment Notes, or (3)
any other  provision of the  Mortgage or Equipment  Notes in a manner that could
adversely  affect Lessee.  Mortgagee and Owner Trustee agree to furnish promptly
to Lessee copies of any supplement, amendment, waiver, or modification of any of
the Operative  Agreements to which Lessee is not a party.  Each Loan Participant
agrees  that it will not take any  action in respect  of the  Collateral  except
through  Mortgagee  pursuant  to  the  Mortgage  or as  otherwise  permitted  by
Mortgage.

     (b) Owner  Trustee  agrees to join with Lessee to the extent that action on
its part is  necessary  or  appropriate  (1) to cause the  following  to be duly
accomplished in accordance with applicable United States federal Law by the time
the Aircraft is delivered  under this Agreement and the Lease:  (aa) to apply to
register  the  Aircraft in Owner  Trustee's  name,  and (bb) all related  action
necessary  in order for  Lessee to have  temporary  or  permanent  authority  to
operate the  Aircraft  as  contemplated  by the Lease,  and (2)  forthwith  upon
delivery  of the  Aircraft  under this  Agreement  and the  Lease,  to cause all
necessary documents to be duly filed for recording in accordance with applicable
United States federal Law.

     7.6.8 CONSENTS

     Each of each Participant,  each Pass-Through Trustee,  Subordination Agent,
Owner Trustee, and Mortgagee covenants and agrees, for Lessee's benefit, that it
shall not unreasonably withhold its consent to any consent or approval requested
of it or of Owner  Trustee or Mortgagee  under the terms of any of the Operative
Agreements which by its terms is not to be unreasonably withheld.

     7.6.9 INSURANCE

     Each of Owner Participant, the Pass-Through Trustees,  Subordination Agent,
and Owner Trustee agrees not to obtain or maintain insurance for its own account
as permitted by ss. 11.2 of the Lease if such  insurance  would limit,  increase
the cost of,  or  otherwise  adversely  affect  the  coverage  of anY  insurance
required to be obtained or maintained  by Lessee  pursuant to ss. 11 and Annex D
of the Lease.

     7.6.10 EXTENT OF NOTE HOLDER'S INTEREST

     A Note Holder  shall not, as such,  have any further  interest in, or other
right  with  respect  to,  the Trust  Estate or the  Collateral  when and if the
principal and  Make-Whole  Amount (if any) of and interest on the Equipment Note
held by such Note Holder,  and all other sums, then due and payable to such Note
Holder under any Operative Agreement, have been paid in full.

     7.6.11 FOREIGN REGISTRATION

     (a) Each  Participant,  Owner  Trustee,  and  Mortgagee  hereby  agree  for
Lessee's  benefit  that,  subject  to ss.  7.1.2 of the Lease,  LesseE  shall be
entitled to register the Aircraft or cause the  Aircraft to be  registered  in a
country other than the United States, if:

     (1) such registration is made only after the Tax Attribute  Period,  unless
Lessee prepays on a lump-sum basis any liability that would be due under the Tax
Indemnity  Agreement as a result of such registration  based upon the assumption
that such  registration  would  continue  for the  remainder  of the term of the
Permitted Sublease described in clause (3) below;

     (2) no Special Default or Lease Event of Default exists at the time of such
registration;

     (3) such  proposed  change of  registration  is made in  connection  with a
Permitted  Sublease  to a  Permitted  Air  Carrier,  and  such  country  is such
Permitted Air Carrier's domicile;

     (4) such country is a country with which the United  States then  maintains
normal  diplomatic  relations  (or, if Taiwan,  the United States then maintains
diplomatic  relations at least as good as those in effect on the Delivery  Date,
PROVIDED  that Lessee may not effect such  registration  in Taiwan unless it has
obtained the prior written consent of Owner Participant, which Owner Participant
may withhold in its sole and absolute discretion); and

     (5) Owner Participant,  Owner Trustee,  and Mortgagee receive an opinion of
counsel  (subject to  customary  exceptions)  reasonably  satisfactory  to Owner
Participant (and, while the Policy is in effect, the Policy Provider), addressed
to each such party, to the effect that:

     (aa) such country  recognizes  Owner  Trustee's  ownership  interest in the
Aircraft;

     (bb) Lessee's obligations,  and Owner Trustee's rights and remedies,  under
the  Lease  are  valid,   binding,  and  enforceable  under  the  laws  of  such
jurisdiction;

     (cc)  after  giving  effect  to such  change  in  registration,  (x)  Owner
Trustee's title continues as a valid and protected interest, (y) the Lien of the
Mortgage on Owner Trustee's  right,  title,  and interest in and to the Aircraft
and the Lease  continue as a valid and  duly-perfected  first-priority  security
interest,  and (z) all filing,  recording,  or other action necessary to protect
those matters addressed in (x) and (y) above have been accomplished (or, if such
opinion  cannot be given at the time of such  proposed  change  in  registration
because such change in registration is not yet effective,  (1) the opinion shall
detail what  filing,  recording,  or other  action is  necessary,  and (2) Owner
Participant, Owner Trustee and Mortgagee shall receive a certificate from Lessee
that all possible preparations to accomplish such filing,  recording,  and other
action are done, and such filing,  recording, and other action are accomplished,
and  a  supplemental  opinion  to  that  effect  shall  be  delivered  to  Owner
Participant,  Owner Trustee and Mortgagee  promptly  after the effective date of
such change in registration;

     (dd)  it is not  necessary,  solely  as a  consequence  of such  change  in
registration  and without  giving effect to any other activity of Owner Trustee,
Owner Participant,  or Mortgagee (or any Affiliate thereof),  for Owner Trustee,
Owner Participant, or Mortgagee (respectively) to qualify to do business in such
jurisdiction  as a result of such  reregistration  or in order to  exercise  any
rights or remedies with respect to the Aircraft pursuant to the Lease;

     (ee) there is no tort  liability  of the owner or lessor of an aircraft not
in possession thereof under the laws of such jurisdiction (it being agreed that,
if  such  latter  opinion  cannot  be  given  in a form  satisfactory  to  Owner
Participant,  such opinion shall be waived if insurance reasonably  satisfactory
to Owner Participant is provided to cover such risk); and

     (ff)  unless  Lessee  agrees  to  provide  insurance  covering  the risk of
requisition of use of the Aircraft by the government of such country (so long as
the Aircraft is  registered  under the laws of such  country),  the laws of such
country  require fair  compensation by the government of such country payable in
currency freely  convertible into Dollars and freely removable from such country
(without  license or permit,  unless Lessee before such proposed  reregistration
has  obtained  such  license or permit)  for the taking or  requisition  by such
government of such use.

     (b) In addition,  as a condition  precedent to any change in  registration,
Lessee  shall give to Owner  Participant  and  Mortgagee  assurances  reasonably
satisfactory to each of them:

     (1) that the provisions ofss. 11 of the Lease have been complied with after
giving effect to such change of registration;

     (2)  of  Lessee's  payment,  on  an  after-tax  basis,  of  all  reasonable
out-of-pocket expenses of Lessor, each Participant,  and Mortgagee in connection
with  such  change  of  registry,   including  (aa)  the  reasonable   fees  and
disbursements of counsel to Lessee,  Lessor,  and Mortgagee,  (bb) any filing or
recording  fees,  Taxes,  or similar  payments  incurred in connection  with the
change of  registration  of the Aircraft and the creation and  perfection of the
security interest therein in favor of Mortgagee for the benefit of Note Holders,
and  (cc) all  costs  and  expenses  incurred  in  connection  with any  filings
necessary  to  continue  in the United  States the  perfection  of the  security
interest in the Aircraft and the Lease in favor of Mortgagee  for the benefit of
Note Holders; and

     (3) that the tax and other  indemnities in favor of each Person named as an
indemnitee  under  any other  Operative  Agreement  afford  to each such  Person
substantially the same protection as provided before such change of registration
(or Lessee agrees to provide,  or cause to be provided,  additional  indemnities
that,  together with such original  indemnities,  in the reasonable  judgment of
Owner Participant, Lessor, and Mortgagee, afford such protection).

     7.6.12 OTHER COMMERCIAL RELATIONS UNAFFECTED

     Notwithstanding  anything  to the  contrary  set  forth  in  any  Operative
Agreement:

     (a) except as set forth in the Purchase  Agreement  Assignment,  nothing in
the Operative  Agreements shall constitute or be deemed to be a waiver by Lessee
of any rights,  remedies, or claims it may have against Airframe Manufacturer or
Engine  Manufacturer  or any  subcontractor  or  supplier  of  either;  and  the
Operative  Agreements  do not and shall not be construed or deemed to create any
rights, waivers,  immunities,  or indemnities in favor of Airframe Manufacturer,
Engine Manufacturer,  or any subcontractor or supplier of either with respect to
any such rights, remedies, or claims of Lessee; and

     (b) neither  Airframe  Manufacturer,  by its  execution and delivery of the
Consent and Agreement, nor Engine Manufacturer, by its execution and delivery of
the Engine Manufacturer  Warranty Agreement,  shall be deemed to have waived any
rights,  remedies,  or claims which Airframe Manufacturer or Engine Manufacturer
(or any  subcontractor  or  supplier  of either)  has  against  Lessee;  and the
Operative  Agreements  do not and shall not be construed or deemed to create any
rights, waivers,  immunities,  or indemnities in favor of Lessee with respect to
any such  rights,  remedies,  or  claims  of  Airframe  Manufacturer  or  Engine
Manufacturer (or any subcontractor or supplier of either).

     7.6.13 INTEREST IN CERTAIN ENGINES

     Each  Participant,  Owner Trustee,  and Mortgagee agree, for the benefit of
each  lessor,  conditional  seller,  or secured  party of any airframe or engine
leased to, purchased by, or owned by Lessee or any Permitted  Sublessee  subject
to a lease,  conditional  sale,  or other  security  agreement  that it will not
acquire or claim, as against such lessor,  conditional seller, or secured party,
any right, title, or interest in any engine as the result of the installation of
such  engine on the  Airframe  at any time while such  engine is subject to such
lease, conditional sale, or other security agreement and owned by such lessor or
conditional  seller or subject to a security  interest in favor of such  secured
party.

     8. CONFIDENTIALITY

     Lessee, Owner Participant, Note Holders, Owner Trustee, and Mortgagee shall
keep  Annexes  B,  C,  and D and  Schedules  1, 2, 3,  and 4 to the  Lease,  the
Participation  Agreement,  the  Purchase  Agreement  Assignment,   and  the  Tax
Indemnity Agreement confidential,  and shall not disclose them, or cause them to
be disclosed, to any Person, except (a) to prospective and permitted transferees
of Lessee's,  Owner Participant's,  a Note Holder's,  each Liquidity Provider's,
Policy Provider's, Owner Trustee's,  Mortgagee's, or other Mortgage Indemnitee's
interest or their counsel,  independent  insurance brokers,  auditors,  or other
agents who agree to hold such information  confidential,  (b) to Lessee's, Owner
Participant's,  a Note Holder's, each Liquidity Provider's, Policy Provider's, a
Pass-Through  Trustee's,  Owner  Trustee's,   Mortgagee's,   or  other  Mortgage
Indemnitee's counsel,  independent insurance brokers, auditors, or other agents,
Affiliates, or investors who agree to hold such information confidential, (c) as
may be required by any statute,  court, or administrative order or decree, legal
process, or governmental ruling or regulation, including those of any applicable
insurance  regulatory  bodies  (including the National  Association of Insurance
Commissioners),  federal or state banking  examiners,  Internal  Revenue Service
auditors,  or  any  stock  exchange,  (d)  with  respect  to  Lessee  and  Owner
Participant,  by mutual  agreement of such  parties,  (e) with respect to a Note
Holder or any Pass-Through Trustee, to a nationally-recognized rating agency for
the purpose of  obtaining a rating on the  Equipment  Notes or the  Pass-Through
Trust  Certificates or to support an NAIC rating for the Equipment Notes, or (f)
to such other Persons as are reasonably deemed necessary by the disclosing party
in order to protect the interests of such party or for the purposes of enforcing
such documents by such party;  PROVIDED,  that any and all disclosures permitted
by  clauses  (c),  (d),  (e),  and (f) above  shall be made  only to the  extent
necessary to meet the specific  requirements or needs of the Persons making such
disclosures.

     9. INDEMNIFICATION AND EXPENSES

     9.1 GENERAL INDEMNITY

     9.1.1 INDEMNITY

     Whether  or not  any of the  Transactions  are  consummated,  Lessee  shall
indemnify, protect, defend, and hold harmless each Indemnitee from, against, and
in respect of, and shall pay on a net after-tax  basis,  any and all Expenses of
any kind or nature whatsoever,  including those imposed on, incurred or suffered
by, or asserted  against any Indemnitee,  relating to, based on, resulting from,
or arising out of or in connection  with,  in each case directly or  indirectly,
any one or more of the following:

     (a)  the  Operative  Agreements,   the  Pass-Through  Agreements,   or  the
enforcement  of any of the  terms  of  any of the  Operative  Agreements  or the
Pass-Through Agreements;

     (b) the Aircraft,  the Airframe,  any Engine, or any Part, including,  with
respect   thereto,   (1)  the   manufacture,   design,   purchase,   acceptance,
nonacceptance,     rejection,    ownership,    registration,     reregistration,
deregistration,  delivery, nondelivery, lease, sublease, assignment, possession,
use, non-use,  operation,  maintenance,  testing, repair,  overhaul,  condition,
alteration,   modification,   addition,  improvement,   storage,  airworthiness,
replacement,  repair, sale, substitution,  return,  abandonment,  redelivery, or
other  disposition  of the Aircraft,  any Engine,  or any Part, (2) any claim or
penalty  arising out of  violations  of  applicable  Laws,  (3) tort  liability,
whether or not arising out of the negligence of any Indemnitee  (whether active,
passive,  or imputed,  and including  strict  liability  and  liability  without
fault),  (4) death or property damage of passengers,  shippers,  or others,  (5)
environmental control, noise, or pollution, (6) any claim for patent, trademark,
or  copyright  infringement  and (7) any Liens in respect of the  Aircraft,  any
Engine, or any Part;

     (c) the offer,  sale,  or delivery  of any  Equipment  Notes,  Pass-Through
Certificates, or any interest therein or represented thereby; and

     (d)  any  breach  of or  failure  to  perform  or  observe,  or  any  other
noncompliance with, any covenant, agreement, or other obligation to be performed
by Lessee under any Lessee Operative Agreement,  or any Pass-Through  Agreement,
or the  falsity  of any  representation  or  warranty  of Lessee  in any  Lessee
Operative  Agreement  or any  Pass-Through  Agreement,  other  than  in the  Tax
Indemnity Agreement.

                        9.1.2                         EXCEPTIONS

            Notwithstanding  anything in ss. 9.1.1, Lessee shall not be required
to indemnify,  protect, defend, and hold harmless any Indemnitee pursuant tO ss.
9.1.1 against any Expense of such Indemnitee:

     (a) for any  Taxes  or a loss of Tax  benefit,  whether  or not  Lessee  is
required  to  indemnify  therefor  pursuant  to ss.  9.3 or  the  TaX  Indemnity
Agreement  (other than amounts  required to be paid to render the payment of any
Expense payable under ss. 9.1.1 on aN after-tax basis);

     (b) except to the extent  attributable  to acts or events  occurring  prior
thereto,  acts  or  events  (other  than  acts or  events  related  to  Lessee's
performance  of its  obligations  pursuant to the terms of the Lessee  Operative
Agreements) that occur after: (1) with respect to the Airframe,  any Engine,  or
any Part, the return of possession  (which, if the Aircraft is placed in storage
as provided  inss.  5 of the Lease,  is the date that the  Aircraft is placed in
storage) of such  Airframe,  Engine,  or Part  pursuant to the Lease (other than
pursuant toss. 15 thereof,  in which case Lessee's  liability under thisss.  9.1
shall  survive  for so long as Lessor iS entitled  to  exercise  remedies  under
suchss.  15 or in  connection  with Lessee in the event of exercise of its early
termination option underss. 9 of the Lease or its purchase options underss. 17.3
of the Lease), and (2) the termination of the Term in accordance witH the Lease;

     (c) to the extent  attributable to any Transfer  (voluntary or involuntary)
by or on behalf of such  Indemnitee of any Equipment  Note or interest  therein,
except (1) for out-of-pocket costs and expenses incurred as a result of any such
Transfer  pursuant to the  exercise of remedies  under any  Operative  Agreement
resulting  from a Lease Event of Default,  and (2) as otherwise  required by the
terms of ss. 2.15 of the Mortgage or ss. 11 hereof;

     (d) to the extent  attributable to any Transfer  (voluntary or involuntary)
by or on behalf of Owner  Participant  of any  interest  in the  Aircraft or the
Trust Estate,  except for out-of-pocket  costs and expenses incurred as a result
of such  Transfer  during  the  existence  of a Lease  Event of  Default  (or in
connection with Lessee in the event of exercise of its early termination  option
under ss. 9 of the Lease or its purchase options under ss. 17.3 of the Lease);

     (e)  to  the  extent  attributable  to  the  gross  negligence  or  willful
misconduct  of such  Indemnitee  or any related  Indemnitee  (as defined  below)
(other than gross  negligence  or willful  misconduct  imputed to such Person by
reason of its interest in the Aircraft or any Operative Agreement);

     (f) in the case of FSB, to the extent attributable to matters enumerated in
the proviso toss. 14;

     (g) to the  extent  attributable  to the  incorrectness  or  breach  of any
representation  or  warranty  of  such  Indemnitee  or  any  related  Indemnitee
contained in or made  pursuant to any  Operative  Agreement or any  Pass-Through
Agreement;

     (h) to the extent  attributable  to the failure,  by such Indemnitee or any
related Indemnitee, to perform or observe any agreement,  covenant, or condition
on its part to be  performed  or  observed  in any  Operative  Agreement  or any
Pass-Through Agreement;

     (i) to the extent  attributable  to the offer or sale by such Indemnitee or
any related Indemnitee of any interest in the Aircraft, the Equipment Notes, the
Pass-Through Trust  Certificates,  the Trust Estate, or the Trust Agreement,  or
any similar  interest,  in violation of the Securities  Act or other  applicable
federal, state, or foreign securities Laws (other than any thereof caused by the
acts or omissions of Lessee or any person acting on behalf of Lessee);

     (j) (1) with  respect  to  Mortgagee,  to the  extent  attributable  to its
negligence  or willful  misconduct  in the  distribution  of funds  received and
distributable  by it in accordance with the Mortgage,  (2) with respect to Owner
Trustee,  to the extent  attributable to its negligence or willful misconduct in
the  distribution of funds received and  distributable  by it in accordance with
the Trust  Agreement,  (3) with respect to  Subordination  Agent,  to the extent
attributable  to its  negligence or willful  misconduct in the  distribution  of
funds  received and  distributable  by it in accordance  with the  Intercreditor
Agreement,  (4)  with  respect  to the  Pass-Through  Trustees,  to  the  extent
attributable  to its  negligence or willful  misconduct in the  distribution  of
funds received and distributable by it in accordance with the Pass-Through Trust
Agreements,  (5) with respect to Escrow Agent, to the extent attributable to its
negligence or willful misconduct in the payment of funds received and payable by
it in accordance with any Escrow Agreement,  (6) with respect to Depository,  to
the extent  attributable to  Depository's  failure to pay funds payable by it in
accordance with any Deposit Agreement,  and (7) with respect to Paying Agent, to
the  extent  attributable  to  its  negligence  or  willful  misconduct  in  the
distribution  of funds received and  distributable  by it in accordance with any
Escrow Agreement,

     (k) other than during the  existence  of a Lease  Event of Default,  to the
extent  attributable to the authorization or giving or withholding of any future
amendments,  supplements,  waivers,  or consents  with respect to any  Operative
Agreement  or  Pass-Through  Agreement,  other than any  requested  by Lessee or
required  by or made  pursuant  to the  terms  of the  Operative  Agreements  or
Pass-Through  Agreements (unless such requirement results from the actions of an
Indemnitee  not required by or made pursuant to the Operative  Agreements or the
Pass-Through Agreements);

     (l) to the extent attributable to any amount which any Indemnitee expressly
agrees to pay or such  Indemnitee  expressly  agrees  shall not be paid by or be
reimbursed by Lessee;

     (m) to the extent that it is an ordinary  and usual  operating  or overhead
expense of such Indemnitee;

     (n) with  respect to Owner  Participant  or Owner  Trustee,  or any related
Indemnitee,  to the extent  attributable to the  deregistration  of the Aircraft
under the Transportation  Code as a result of the failure of such Person (or any
related  Indemnitee  of such  Person) to be a Citizen of the United  States as a
result of any act (other than  reregistration  of the  Aircraft  pursuant to ss.
7.1.2  of thE  Lease)  of Owner  Participant  or Owner  Trustee  or any  related
Indemnitee of such Person (not taken at the request of Lessee);

     (o) for any Lessor  Lien  attributable  to such  Indemnitee  or any related
Indemnitee;

     (p) to the extent constituting principal, Make-Whole Amount, or interest on
the  Equipment  Notes  attributable  solely to a Mortgage  Event of Default  not
constituting a Lease Event of Default; or

     (q) to the extent incurred by or asserted  against an Indemnitee other than
Owner  Participant (but without limiting the other provisions of this ss. 9.1.2,
including  clauses  (g) and (h),  as to Owner  Participant)  as a result  of any
"prohibited  transaction",  within  thE  meaning  of ERISA  ss.  406 or Code ss.
4975(c)(1).

     With respect to the Pass-Through  Indemnitees,  Lessee's  obligations under
this ss. 9.1 shall be limited to the same extent that Lessee'S  obligations  are
limited in clause (5) of the  definition  of  Supplemental  Rent.  In  addition,
"Expenses"  payable  by Lessee  pursuant  to this ss. 9.1 shall bE deemed not to
include  amounts  payable under clauses (2), (3), (4), and (5) of the definition
of Supplemental Rent in the Lease, the "Lease" for any other "Leased  Aircraft",
or the third  paragraph of ss. 2.02 of any "Owned Aircraft  Indenture"  (each as
defined  in the Note  Purchase  Agreement),  in each  case,  assuming  each such
definition or third  paragraph is in the form attached as Exhibit A-1 or C-2, as
the case may be, to the Note  Purchase  Agreement as originally in effect (which
amounts shall be payable as  Supplemental  Rent or  "Supplemental  Rent" under a
"Lease", or pursuant to ss. 2.02 of the Mortgage, aS applicable).

            For  purposes  of this ss.  9.1,  a Person  shall  be  considered  a
"related Indemnitee" of an Indemnitee if that Person is an Affiliate or employer
oF such Indemnitee, a director,  officer,  employee, or agent of such Indemnitee
or any such  Affiliate,  or a  successor  or  permitted  assignee  of any of the
foregoing;  PROVIDED,  that  Owner  Trustee  and FSB  shall  not be deemed to be
related  Indemnitees  of Owner  Participant  merely  because  of their  trust or
fiduciary relationships.

     9.1.3 SEPARATE AGREEMENT

     This  Agreement  constitutes  a  separate  agreement  with  respect to each
Indemnitee, and is enforceable directly by each such Indemnitee.

     9.1.4 NOTICE

     If an Indemnitee makes a claim for any Expense indemnifiable under this ss.
9.1,  such  Indemnitee  shall  give  prompt  written  notice  thereof tO Lessee.
Notwithstanding  the  foregoing,  any  Indemnitee's  failure to notify Lessee as
provided in this ss. 9.1.4,  or in ss. 9.1.5,  shall not release Lessee fRom any
of its obligations to indemnify such Indemnitee hereunder,  except to the extent
that such  failure  results in an  additional  Expense to Lessee (in which event
Lessee  shall not be  responsible  for such  additional  expense) or  materially
impairs Lessee's ability to contest such claim.

     9.1.5 NOTICE OF PROCEEDINGS; DEFENSE OF CLAIMS; LIMITATIONS

     (a) If any action,  suit,  or  proceeding  for which Lessee is  responsible
under this ss. 9.1 is brought  against any  Indemnitee,  such  Indemnitee  shall
notify  Lessee of the  commencement  thereof,  and Lessee may,  at its  expense,
participate in and, to the extent that it so desires  (subject to the provisions
of the following paragraph),  assume and control its defense and, subject to ss.
9.1.5(c),  settle or compromise it. Unless OwneR  Participant  agrees in writing
otherwise, no settlement of any claim hereunder may require Owner Participant to
agree to any remedy  apart from the  payment  of money  damages  (for which such
payment of money damages Lessee will in any event indemnify the Indemnitees).

     (b) Lessee or its insurer(s) shall have the right, at its or their expense,
to investigate or, if Lessee or its insurer(s) agree not to dispute liability to
the Indemnitee giving notice of such action,  suit, or proceeding under this ss.
9.1.5 for indemnification  hereunder or under anY insurance policies pursuant to
which  coverage  is sought,  control  the  defense  of,  any  action,  suit,  or
proceeding, relating to any Expense for which indemnification is sought pursuant
to this  ss.  9.1,  and each  Indemnitee  shall  cooperate  with  Lessee  or its
insurer(s) with respect thereto;  PROVIDED, thaT Lessee shall not be entitled to
control the defense of any such action,  suit,  or  proceeding,  or to settle or
compromise  any such  Expense,  (i) while any Special  Default or Lease Event of
Default  under ss. 14.1 of the Lease  exists,  or (ii) if such action,  suit, or
proceeding will involve a material risk of thE sale, forfeiture,  or loss of, or
the  creation of any Lien (other than a  Permitted  Lien) on the  Aircraft,  the
Trust  Estate,  or any part  thereof,  unless Lessee shall have posted a bond or
other security or collateral  satisfactory to Owner Participant and Mortgagee in
respect to such risk, or (iii) if such action,  suit, or proceeding could in the
good faith opinion of such Indemnitee  entail any risk of criminal  liability or
material  civil  liability  or present a conflict  of interest  making  separate
representation  necessary. In connection with any such Lessee-controlled action,
suit,  or  proceeding,  such  Indemnitee  shall  have the  right to  participate
therein, at its sole cost and expense,  with counsel reasonably  satisfactory to
Lessee,  provided  that  such  Indemnitee's   participation  does  not,  in  the
reasonable  opinion  of the  independent  counsel  appointed  by  Lessee  or its
insurers to conduct such proceedings, interfere with the defense of such case.

     (c) In no event  shall any  Indemnitee  enter  into a  settlement  or other
compromise  with respect to any Expense  without  Lessee's prior written consent
(which shall not be  unreasonably  withheld or delayed),  unless such Indemnitee
waives its right to be  indemnified  with respect to such Expense under this ss.
9.1.

     (d) To the extent that any Expense  indemnified by Lessee  hereunder may be
covered by insurance maintained by Lessee, at Lessee's expense,  each Indemnitee
agrees  to  cooperate  with the  insurers  in the  exercise  of their  rights to
investigate, defend, or compromise that Expense as may be required to retain the
benefits of the insurance for that Expense.

     (e) If an Indemnitee is not a party to this  Agreement,  Lessee may require
that  Indemnitee  to agree in  writing  to the terms of this ss. 9 and ss.  15.8
before making any payment to such Indemnitee under this ss. 9.

     (f)  Nothing  herein  shall be  deemed  to be an  assumption  by  Lessee of
obligations  of Owner  Trustee with respect to, or a guarantee by Lessee of, any
amounts  payable by Owner  Trustee  upon  Equipment  Notes or a guarantee of any
residual value of the Aircraft.

     (g) Nothing in this ss. 9.1.5 shall  require an  Indemnitee  to contest any
Expense or to assume  responsibility  for or control of any judicial  proceeding
with respect thereto.

     9.1.6 INFORMATION

     Lessee will  provide the  relevant  Indemnitee  with such  information  not
within the control of such  Indemnitee  (but in Lessee's  control or  reasonably
available  to  Lessee)  which  such  Indemnitee  reasonably  requests,  and will
otherwise  cooperate  with such  Indemnitee  so as to enable such  Indemnitee to
fulfill its  obligations  under ss. 9.1.5 and to control or  participate  in any
proceeding to the extent  permitted by ss. 9.1.5.  The  IndemniTee  shall supply
Lessee  with such  information  not  within the  control of Lessee  (but in such
Indemnitee's  control or reasonably  available to such Indemnitee)  which Lessee
reasonably  requests to control or  participate  in any proceeding to the extent
permitted by ss. 9.1.5.

     9.1.7 EFFECT OF OTHER INDEMNITIES; SUBROGATION; FURTHER ASSURANCES

     Upon  payment in full by or on behalf of Lessee of any  indemnity  provided
for under this  Agreement,  without  any  further  action and to the full extent
permitted by Law,  Lessee will be  subrogated  to all rights and remedies of the
Person  indemnified  (other  than  with  respect  to  any of  such  Indemnitee's
insurance  policies or in connection with any indemnity claim of such Indemnitee
under  ss.  5.03 or ss.  7 of the  Mortgage  or ss.  5.3 or ss.  7 of the  Trust
Agreement) in respect of the matter as to which such  indemnity  was paid.  Each
Indemnitee  will give such further  assurances or agreements  and cooperate with
Lessee to permit  Lessee to pursue any such  claims,  to the  extent  reasonably
requested by Lessee and at Lessee's expense.

     9.1.8 REFUNDS

     If an Indemnitee  receives any refund, in whole or in part, with respect to
any  Expense  paid by or on behalf of Lessee  hereunder,  that  Indemnitee  will
promptly  pay the  amount  refunded  (but not an amount in excess of the  amount
Lessee or any of its  insurers  has paid in  respect  of such  Expense)  over to
Lessee unless a Lease Event of Default  exists,  in which case such amount shall
be paid over to Owner Trustee (or, if the Mortgage has not been  discharged,  to
Mortgagee)  to hold as  security  for  Lessee's  obligations  under  the  Lessee
Operative  Agreements  or, if  requested  by Lessee,  applied  to satisfy  those
obligations. Any subsequent loss of such recovery or tax benefit or refund shall
be subject to the provisions of ss. 9.1 and ss. 9.3.

     9.2 EXPENSES

     9.2.1 INVOICES AND PAYMENT

     Each of Owner  Trustee,  Mortgagee,  Owner  Participant,  the  Pass-Through
Trustees, and Subordination Agent shall promptly submit to Lessee for its prompt
approval  (which  shall not be  unreasonably  withheld)  copies of  invoices  in
reasonable  detail of the  Transaction  Expenses for which it is responsible for
providing  information  as they are  received  (and not later  than the 90th day
after the Delivery Date). If so submitted and approved, Owner Participant agrees
promptly  (and not later than the later of (i) the 105th day after the  Delivery
Date and (ii) the  tenth  Business  Day  following  such  approval)  to pay such
Transaction Expenses . Notwithstanding the foregoing,  Lessee at its sole option
shall have the right to pay directly any and all Transaction Expenses payable to
Lessee  Advisor  or  Lessee's  counsel  or (if such  payment  does not result in
adverse tax  consequences to Owner  Participant)  to any other Person.  If Owner
Participant  fails to pay any  Transaction  Expense  that it is obligated to pay
hereunder, Lessee shall pay such Transaction Expense. Any such payment by Lessee
shall not affect Owner  Participant's  obligations  or Lessee's  rights  against
Owner Participant for its failure to make any such payment.

     9.2.2 PAYMENT OF OTHER EXPENSES

     Lessee  shall pay (a) the ongoing  fees and  expenses of Owner  Trustee and
Mortgagee,  and (b) all reasonable  out-of-pocket  costs and expenses (including
the reasonable fees and  disbursements  of counsel)  incurred by any Participant
attributable  to (1)  any  transfer  of  title  to the  Aircraft  or any  Engine
contemplated  by  ss.  4.5 of  the  Lease,  or (2)  any  waiver,  amendment,  or
modification of any Operative Agreement to the extent requested by Lessee.

     9.2.3 INDEMNIFICATION INTEREST

     Lessee will pay to each Indemnitee upon demand,  to the extent permitted by
applicable  Law,  interest at the Past Due Rate on any amount of  indemnity  not
paid when due pursuant to this ss. 9 until the same shall be paid.

     9.3 GENERAL TAX INDEMNITY

     9.3.1 GENERAL

     Except as provided in ss.  9.3.2,  Lessee  agrees that each payment of Rent
paid by Lessee pursuant to the Lease, and any other payment or indemnitY paid by
Lessee to a Tax Indemnitee under any Operative  Agreement,  shall be free of all
withholdings or deductions with respect to Taxes of any nature, and if Lessee is
required by  applicable  law to make any such  withholding  or deduction for any
such payment, (a) Lessee shall make all such withholdings or deductions, (b) the
amount  payable by Lessee shall be increased so that,  after making all required
withholdings or deductions, such Tax Indemnitee receives the same amount that it
would have received had no such  withholdings  or deductions  been made, and (c)
Lessee  shall pay the full amount  withheld or deducted to the  relevant  Taxing
Authority in accordance  with  applicable law. Lessee further agrees that, if it
is required to withhold  from any payment of Basic Rent,  Stipulated  Loss Value
(and amounts determined by reference thereto), and amounts payable upon exercise
of Lessee's  purchase option pursuant to ss. 17.3 of the Lease,  any Tax imposed
upon Owner Participant or Owner Trustee  (including any withholding Tax based on
income or  receipts  of Owner  Participant  or Owner  Trustee),  and such Tax is
excluded  from  indemnification  pursuant to ss.  9.3.2,  Lessee  shall pay such
additional  amount (if any)  required  so that thE total  amount  paid by Lessee
(after making all required withholdings) is equal to (assuming timely payment of
the Equipment  Notes before the relevant  Payment Date) the aggregate  principal
amount of scheduled  installments due on the Equipment Notes  outstanding on the
relevant  Payment Date,  together with accrued and unpaid  interest,  due on the
Equipment  Notes; and Owner  Participant or Owner Trustee (as applicable)  shall
reimburse Lessee for any such additional  amounts within two Business Days after
demand therefor.  Except as provided in ss. 9.3.2, and whether or not any of the
Transactions arE consummated,  Lessee shall pay, indemnify, protect, defend, and
hold harmless on an after-tax  basis each Tax Indemnitee  from all Taxes imposed
by any Taxing Authority imposed on or asserted against any Tax Indemnitee or the
Aircraft,  the Airframe,  any Engine, or any Part, or any interest in any of the
foregoing (whether or not indemnified against by any other Person), upon or with
respect to the  Operative  Agreements  and the  Pass-Through  Agreements,  their
execution,  or the transactions or payments contemplated thereby,  including any
Tax imposed upon or with respect to (w) the Aircraft,  the Airframe, any Engine,
any  Part,  any  Operative  Agreement  (including  any  Equipment  Notes,  their
issuance,  acquisition,  transfer or  refinancing  or the payment of  principal,
interest,  premium or other  amounts with  respect  thereto),  any  Pass-Through
Agreement,  any data, or any other thing  delivered or to be delivered  under an
Operative Agreement, (x) the purchase, manufacture, acceptance, rejection, sale,
transfer of title, return, ownership,  mortgaging, delivery, transport, charter,
rental,  lease,  re-lease,  sublease,  assignment,   possession,   repossession,
presence,  use,  condition,  storage,  preparation,  maintenance,  modification,
alteration,   improvement,   operation,  registration,  transfer  or  change  of
registration,  reregistration, repair, replacement, overhaul, location, control,
imposition  of any Lien  (other  than a  Lessor  Lien),  financing,  refinancing
requested by Lessee,  abandonment,  or other  disposition  of the Aircraft,  the
Airframe,  any Engine, any Part, any data, or any other thing delivered or to be
delivered  under an Operative  Agreement,  (y) rent,  interest,  fees,  or other
income, proceeds, receipts, or earnings, whether actual or deemed, arising upon,
in connection with, or in respect of any of the Operative Agreements  (including
the property or income or other  proceeds  with respect to property held as part
of the  Trust  Estate)  or the  transactions  contemplated  thereby,  or (z) the
Pass-Through Certificates,  their issuance or acquisition, or the payment of any
amounts thereof.

     9.3.2 CERTAIN EXCEPTIONS

     The  provisions  of ss.  9.3.1 shall not apply to, and Lessee shall have no
liability hereunder for, Taxes:

     (a) imposed on a Tax  Indemnitee  by the federal  government  of the United
States or any Taxing Authority or governmental  subdivision of the United States
or any state or local Taxing Authority (1) on, based on, or measured by gross or
net income or gross or net  receipts,  including  capital  gains  taxes,  excess
profits taxes,  minimum taxes from tax preferences,  alternative  minimum taxes,
branch profits taxes,  accumulated  earnings  taxes,  personal  holding  company
taxes,  succession taxes and estate taxes,  and any withholding  taxes on, based
on, or measured by gross or net income or  receipts,  or (2) on, or with respect
to, or measured by capital or net worth or in the nature of a franchise tax or a
tax for the privilege of doing  business  (other than, in the case of clause (1)
or (2), Taxes in the nature of sales, use,  license,  value added (to the extent
not imposed as a substitute for an income tax), transfer,  stamp, ad valorem, or
property Taxes);

     (b) imposed on a Tax  Indemnitee  by any Taxing  Authority or  governmental
subdivision  thereof or therein  outside of the  United  States  (including  any
Taxing Authority in or of a territory, possession, or commonwealth of the United
States)  (1) on,  based  on, or  measured  by gross or net  income or  receipts,
including  capital gains taxes,  excess  profits  taxes,  minimum taxes from tax
preferences,  alternative  minimum  taxes,  branch  profits  taxes,  accumulated
earnings  taxes,  personal  holding company taxes,  succession  taxes and estate
taxes,  and any  withholding  taxes on,  based on, or  measured  by gross or net
income or receipts, or (2) on, or with respect to, or measured by capital or net
worth or in the nature of a franchise  tax or a tax for the  privilege  of doing
business  (other than, in the case of clause (1) or (2),  Taxes in the nature of
(aa) sales, use, license, value added (to the extent not imposed as a substitute
for an income tax), transfer,  stamp, ad valorem, or property Taxes, or (bb) any
Taxes  imposed by any Taxing  Authority  (other than a Taxing  Authority  within
whose jurisdiction such Tax Indemnitee is incorporated or organized or maintains
its  principal  place of  business) if such Tax  Indemnitee  would not have been
subject  to  such  Taxes  by  such   jurisdiction  but  for  (i)  the  location,
registration,  use, or operation of the Aircraft,  the Airframe,  any Engine, or
any Part  thereof  by a Lessee  Person  within  the  jurisdiction  of the Taxing
Authority imposing such Tax, or (ii) the activities of any Lessee Person (except
for activities of a Lessee Person who is not an Affiliate,  successor, or assign
of Lessee acting in its capacity other than as a Lessee Person, which activities
are unrelated to the transactions  contemplated by the Operative  Agreements) in
such  jurisdiction,  including  use of any  other  aircraft  by  Lessee  in such
jurisdiction, (iii) the status of any Lessee Person as a foreign entity or as an
entity owned in whole or in part by foreign  persons,  (iv) Lessee's having made
(or having been deemed to have made)  payments to such Tax  Indemnitee  from the
relevant  jurisdiction,  or (v) in the case of the  Pass-Through  Trustees,  any
Participant,  or  any  related  Tax  Indemnitee,  Lessee's  being  incorporated,
organized, or maintaining a place of business in such jurisdiction);

     (c) on, with  respect to, or  measured  by any trustee  fees,  commissions,
premiums,  or  compensation  received by Owner  Trustee,  Pass-Through  Trustee,
Subordination Agent, Policy Provider or Mortgagee;

     (d) on the Trust or the Trust  Estate  that result  from  treatment  of the
Trust or the Trust  Estate as an entity,  such as a  corporation,  separate  and
apart from Owner Participant;

     (e) that are being contested as provided inss. 9.3.4 during the pendency of
such contest;

     (f) imposed on any Tax Indemnitee to the extent that such Taxes result from
the  gross  negligence  or  willful  misconduct  of such Tax  Indemnitee  or any
Affiliate thereof (other than the gross negligence or willful misconduct imputed
to such Tax Indemnitee by reason of such Tax  Indemnitee's  participation in the
transactions contemplated by the Operative Agreements);

     (g)  imposed  on  or  with  respect  to a  Tax  Indemnitee  (including  the
transferee  in those  cases in which the Tax on  transfer  is imposed  on, or is
collected from, the  transferee) as a result of a transfer or other  disposition
(including a deemed transfer or disposition) by such Tax Indemnitee or a related
Tax Indemnitee (or, in the case of Owner Participant,  by Owner Trustee,  or, in
the case of Taxes imposed on a transferee, by the transferor) of any interest in
the Aircraft,  the Airframe,  any Engine,  or any Part, the Rent (other than the
assignment of Rent to Mortgagee pursuant to the Mortgage),  the Trust, the Trust
Estate,  the Collateral,  the Lease, or any interest arising under the Operative
Agreements  or any  Equipment  Note or a transfer or  disposition  (including  a
deemed transfer or disposition) of any interest in a Tax Indemnitee  (other than
(1) a substitution,  replacement,  modification,  pooling, or improvement of the
Aircraft,  the  Airframe,  any  Engine  or any Part by a Lessee  Person  that is
treated for Tax purposes as a transfer or disposition,  (2) a transfer  pursuant
to an exercise of remedies upon a  then-existing  Lease Event of Default,  (3) a
transfer pursuant toss. 17.3 orss. 9 of the Lease, or (4) a transfer pursuant to
an Event of Loss);

     (h) in excess of those that would  have been  imposed  had there not been a
transfer  or other  disposition  by or to such Tax  Indemnitee  or a related Tax
Indemnitee described in clause (g) of this ss. 9.3.2;

     (i) imposed on Owner  Participant and indemnified by Lessee pursuant to the
Tax Indemnity Agreement;

     (j) imposed  with  respect to any period  after the  expiration  or earlier
termination of the Term and, if required pursuant to the terms of the Lease, the
return of  possession  of the  Aircraft to Lessor or placement in storage at the
request of Lessor in accordance with the Lease  (PROVIDED,  that this clause (j)
shall  not apply to Taxes  imposed  after  such  period  arising  as a result of
payments  by Lessee  under the  Operative  Agreements  after such  period or are
attributable to events  occurring prior to or coincident with such expiration or
earlier termination of the Term);

     (k) consisting of any interest, penalties, or additions to tax imposed on a
Tax  Indemnitee  as a result  (in  whole or in  part) of a  failure  of such Tax
Indemnitee or a related Tax  Indemnitee to file any return  properly and timely,
unless such failure is caused by Lessee's failure to fulfill its obligations, if
any, under ss. 9.3.6 with respect to such return;

     (l) resulting from, or that would not have been imposed but for, any Lessor
Liens  arising  as a result  of  claims  against,  or acts or  omissions  of, or
otherwise attributable to such Tax Indemnitee or a related Tax Indemnitee;

     (m)  imposed  on any Tax  Indemnitee  as a result of the breach by such Tax
Indemnitee or a related Tax Indemnitee of any covenant of such Tax Indemnitee or
any Affiliate thereof contained in any Operative  Agreement or the inaccuracy of
any  representation  or warranty by such Tax Indemnitee or any Affiliate thereof
in any Operative Agreement;

     (n) in the nature of an  intangible or similar Tax (1) upon or with respect
to the value or principal  amount of the interest of any Loan Participant or any
Note Holder in any Equipment Note or the loan evidenced thereby,  or (2) upon or
with  respect to the value of the  interest  of Owner  Participant  in the Trust
Estate  or the  Trust,  in each case  only if such  Taxes  are in the  nature of
franchise Taxes or result from the conduct of business by such Tax Indemnitee in
the taxing jurisdiction and are imposed because of the place of incorporation or
the activities  unrelated to the Transactions in the taxing jurisdiction of such
Tax Indemnitee;

     (o) that is included in Lessor's  Cost and paid to the  appropriate  Taxing
Authority;

     (p) other than any Tax described in ss. 9.3.2(b)  hereof,  imposed on a Tax
Indemnitee by a Taxing Authority of a jurisdiction outside thE United States, to
the extent  that such Taxes  would not have been  imposed  but for a  connection
between the Tax  Indemnitee or a related Tax  Indemnitee  and such  jurisdiction
imposing such Tax unrelated to the Transactions; or

     (q) relating to ERISA or to Codess. 4975.

            For purposes  hereof, a Tax Indemnitee and any other Tax Indemnitees
who are successors,  assigns, agents, or Affiliates of such Tax Indemnitee shall
be related  Tax  Indemnitees;  PROVIDED,  that  neither  Mortgagee  nor any Loan
Participant  shall be  deemed a  related  Tax  Indemnitee  as to Lessor or Owner
Participant merely because of the assignment made in the Mortgage.

     9.3.3 PAYMENT

     (a) Without regard to ss. 9.3.2(a),  (b), or (h) hereof, Lessee's indemnity
obligation  to a Tax  Indemnitee  under this ss. 9.3 shall be The amount  which,
after  taking into  account  any Tax imposed  upon the receipt or accrual of the
amounts payable under this ss. 9.3 and any tax benefits  actuallY  recognized by
such Tax Indemnitee as a result of the indemnifiable Tax (including any benefits
recognized as a result of such Tax Indemnitee's use of an indemnifiable Tax as a
credit against Taxes not indemnifiable under this ss. 9.3), equals the amount of
the Tax indemnifiable under this ss. 9.3.

     (b) At Lessee's  request,  the  computation  of the amount of any indemnity
payment owed by Lessee or any amount owed by a Tax Indemnitee to Lessee pursuant
to this ss.  9.3  shall be  verified  and  certified  by an  independent  public
accounting  firm selected by such Tax Indemnitee and reasonablY  satisfactory to
Lessee.  Such  verification  shall be  binding.  The costs of such  verification
(including  the fee of such  public  accounting  firm)  shall be borne by Lessee
unless such  verification  results in an adjustment  in Lessee's  favor of 5% or
more of the net present value of the payment as computed by such Tax Indemnitee,
in which case such Tax Indemnitee shall pay those costs.

     (c) Each Tax Indemnitee shall provide Lessee with such certifications,  and
such  information and  documentation  in such Tax  Indemnitee's  possession,  as
Lessee  reasonably  requests to minimize any indemnity  payment pursuant to this
ss. 9.3;  PROVIDED,  that  notwithstanding  anything to the contrarY in this ss.
9.3.3(c),  no Tax  Indemnitee  shall be required to provide  Lessee with any Tax
returns.

     (d) Each Tax  Indemnitee  shall  promptly  forward  to Lessee  any  written
notice,  bill,  or advice  that such Tax  Indemnitee  receives  from any  Taxing
Authority concerning any Tax for which it seeks  indemnification  under this ss.
9.3. Lessee shall pay any amount for which it is liable pursuant tO this ss. 9.3
directly to the appropriate  Taxing  Authority if legally  permissible,  or upon
demand of a Tax Indemnitee, to such Tax Indemnitee within 30 dayS of such demand
(or, if a contest  occurs in accordance  with ss. 9.3.4,  within 30 days after a
Final Determination (as defined below)),  but in no event morE than one Business
Day before the related Tax is due. If requested by a Tax  Indemnitee in writing,
Lessee  shall  furnish to the  appropriate  Tax  Indemnitee  the  original  or a
certified copy of a receipt for Lessee's  payment of any Tax paid by Lessee,  or
such  other  evidence  of  payment  of such  Tax as is  acceptable  to such  Tax
Indemnitee. Lessee shall also furnish promptly upon written request such data as
any Tax Indemnitee  reasonably  requires to enable such Tax Indemnitee to comply
with the  requirements  of any  taxing  jurisdiction,  unless  such data are not
reasonably  available to Lessee or (unless such data are specifically  requested
by a Taxing  Authority) are not  customarily  furnished by domestic air carriers
under   similar   circumstances.   For  purposes  of  this  ss.  9.3,  a  "FINAL
DETERMINATION" is (1) a decision,  judgment, decree, or other order by any court
of competent  jurisdiction  that occurs pursuant to thE provisions of ss. 9.3.4,
which  decision,   judgment,  decree,  or  other  order  has  become  final  and
unappealable,  (2) a closing  agreement or settlement  agreemenT entered into in
accordance  with ss. 9.3.4 that has become binding and is not subject to further
review or appeal (absent fraud, misrepresentation, etc.), oR (3) the termination
of  administrative  proceedings and the expiration of the time for instituting a
claim in a court proceeding.

     (e) If any Tax Indemnitee  actually realizes a tax savings by reason of any
Tax paid or  indemnified  by Lessee  pursuant to this ss. 9.3 (whether  such tax
savings  arise by means of a foreign tax credit,  depreciation  or cost recovery
deduction, or otherwise),  and such savings are not otherwise taken into account
in computing such payment or indemnity,  such Tax Indemnitee shall pay to Lessee
an amount  equal to the lesser of (1) the amount of such tax  savings,  plus any
additional net tax savings recognized as the result of any payment made pursuant
to this sentence,  when, as, if, and to the extent realized,  and (2) the amount
of all payments  pursuant to this ss. 9.3 by Lessee to such Tax Indemnitee (less
any payments  previously  made bY such Tax Indemnitee to Lessee pursuant to this
ss.  9.3.3(e))  (and the excess,  if any, of the amount  described in clause (1)
over the amount  described iN clause (2) shall be carried forward and applied to
reduce PRO TANTO any  subsequent  obligations of Lessee to make payments to such
Tax  Indemnitee  pursuant to this ss. 9.3);  PROVIDED,  that such Tax Indemnitee
shall not be required to make any payment pursuant to this sentence so long as a
Special  Default or A Lease Event of Default of a monetary  nature exists.  If a
tax benefit is later  disallowed or denied,  the disallowance or denial shall be
treated as a Tax indemnifiable  under ss. 9.3.1 without regard to the provisions
of ss. 9.3.2 (other than ss.  9.3.2(f)).  Each such Tax Indemnitee shall in good
faitH use  reasonable  efforts in filing  its tax  returns  and in dealing  with
Taxing Authorities to seek and claim any such tax benefit.

     9.3.4 CONTEST

     (a) If a written  claim is made  against a Tax  Indemnitee  for Taxes  that
Lessee could be liable to pay or indemnify for hereunder, or if a Tax Indemnitee
determines that a Tax is due and that Lessee could have an indemnity  obligation
for that Tax  hereunder,  such Tax Indemnitee  shall  promptly  notify Lessee in
writing of such claim  (PROVIDED,  that  failure so to notify  Lessee  shall not
relieve  Lessee of its  indemnity  obligations  hereunder  unless the failure to
notify  effectively  forecloses  Lessee's  rights to  require a contest  of such
claim),  and shall take no action with  respect to such claim  without  Lessee's
prior written  consent for 30 days  following  Lessee's  receipt of such notice;
PROVIDED,  that, if applicable  Law requires such Tax  Indemnitee to take action
before the end of such 30-day period,  such Tax Indemnitee shall, in such notice
to Lessee, so inform Lessee, and such Tax Indemnitee shall take no action for as
long as it is legally able to avoid taking action (and a Tax Indemnitee shall be
entitled  to pay the Tax  claimed  and sue for a refund  before  the end of such
30-day period if (1)(aa) the failure to pay the Tax would result in  substantial
penalties  (unless  immediately  reimbursed by Lessee) and the act of paying the
Tax would not materially  prejudice the right to contest, or (bb) the failure to
pay would result in criminal  penalties,  and (2) such Tax Indemnitee shall take
any action so required in connection  with so paying the Tax in a manner that is
the least  prejudicial  to the pursuit of the  contest).  In addition,  such Tax
Indemnitee   shall  (provided  that  Lessee  shall  have  agreed  to  keep  such
information  confidential other than to the extent necessary in order to contest
the claim) furnish Lessee with copies of any requests for  information  from any
Taxing  Authority  relating  to such Taxes with  respect to which  Lessee may be
required to indemnify  hereunder.  If  requested by Lessee in writing  within 30
days after its receipt of such notice,  such Tax Indemnitee  shall,  at Lessee's
expense (including all reasonable costs, expenses, and reasonable attorneys' and
accountants' fees and disbursements), in good faith contest (or, if permitted by
applicable law, allow Lessee to contest) through appropriate  administrative and
judicial proceedings the validity, applicability, or amount of such Taxes by (x)
resisting  payment  thereof,  (y) not paying the Taxes except  under  protest if
protest is necessary and proper, or (z) if the payment is made, using reasonable
efforts to obtain a refund thereof in an appropriate  administrative or judicial
proceeding. If requested to do so by Lessee, the Tax Indemnitee shall appeal any
adverse  administrative  or judicial  decision,  except that the Tax  Indemnitee
shall not be required to pursue any appeals to the United States  Supreme Court.
If and to the extent that the Tax  Indemnitee  is able to separate the contested
issue(s)  from other  issues  arising  in the same  administrative  or  judicial
proceeding  that  are  unrelated  to  the  Transactions  without  (in  such  Tax
Indemnitee's good faith judgment) adversely affecting such Tax Indemnitee,  such
Tax Indemnitee shall permit Lessee to control the conduct of any such proceeding
and shall provide to Lessee (at Lessee's cost and expense) with such information
or data in such Tax Indemnitee's  control or possession and reasonably necessary
to conduct such contest  (other than such Tax  Indemnitee's  federal  income Tax
returns) in which case Lessee shall keep such Tax Indemnitee reasonably informed
concerning the progress of such contest. If the contest is being controlled by a
Tax  Indemnitee,  such Tax  Indemnitee  shall  consult with Lessee in good faith
regarding the manner of contesting  such claim and shall keep Lessee  reasonably
informed regarding the progress of such contest. A Tax Indemnitee shall not fail
to take any action  expressly  required by this ss. 9.3.4  (including anY action
regarding any appeal of an adverse  determination  with respect to any claim) or
settle or compromise any claim without Lessee's prior written consent (except as
contemplated by ss. 9.3.4(b) or (c)).

     (b)  Notwithstanding  the foregoing,  in no event shall a Tax Indemnitee be
required  to pursue any  contest  (or to permit  Lessee to pursue  any  contest)
unless  (1)  Lessee  agrees to pay to such Tax  Indemnitee  on demand  and on an
after-tax  basis all  reasonable  costs and  expenses  that such Tax  Indemnitee
incurs in  connection  with  contesting  such Taxes,  including  all  reasonable
out-of-pocket costs and expenses and reasonable attorneys' and accountants' fees
and disbursements, (2) if such contest involves the payment of the claim, Lessee
advances the amount thereof (to the extent indemnified hereunder) plus interest,
penalties,  and  additions to tax with  respect  thereto that are required to be
paid before  commencing the contest on an  interest-free  net after-Tax basis to
such Tax Indemnitee,  (3) such Tax Indemnitee does not reasonably determine that
the action to be taken will result in any material risk of forfeiture,  sale, or
loss of the Aircraft (unless Lessee makes provisions to protect the interests of
any  such  Tax  Indemnitee  in a  manner  reasonably  satisfactory  to such  Tax
Indemnitee)  (PROVIDED,  that such Tax Indemnitee shall notify Lessee in writing
promptly after it becomes aware of any such risk), (4) no Lease Event of Default
exists,  unless Lessee has provided  security for its  obligations  hereunder by
advancing to such Tax  Indemnitee,  before  proceeding or  continuing  with such
contest, the amount of the Tax being contested,  plus any interest and penalties
and an amount  estimated in good faith by such Tax Indemnitee for expenses,  (5)
before commencing any judicial action controlled by Lessee,  Lessee acknowledges
its liability for such claim hereunder in writing,  PROVIDED,  that Lessee shall
not be  bound  by its  acknowledgment  if the  Final  Determination  articulates
conclusions  of law and fact that  demonstrate  that Lessee has no liability for
the contested amounts hereunder,  (6) such Tax Indemnitee shall have received at
Lessee's sole expense,  an opinion  independent tax counsel,  such counsel to be
selected by Lessee and  reasonably  satisfactory  to such Tax  Indemnitee  ("Tax
Counsel"),  to the effect  that a  reasonable  basis,  within the meaning of ABA
Formal Opinion No. 85-352,  exists for contesting such claim,  (7) the amount of
payments  or  indemnification  that  would  be  required  as a  result  of  such
adjustment, when aggregated with further potential payments or adjustments where
the subject matter of the proposed  adjustment is of a continuing  nature, as to
the  Aircraft  and all other  aircraft  operated  by  Lessee,  shall be at least
$10,000,  and (8) the issue  shall not be  substantially  identical  as an issue
previously contested hereunder and decided adversely, unless such Tax Indemnitee
shall have received,  at Lessee's sole expense,  a written opinion,  in form and
substance reasonably satisfactory to such Tax Indemnitee,  of Tax Counsel to the
effect  that  the  applicable  circumstances  or law have  changed  and in light
thereof,  there is reasonable basis under ABA Formal Opinion No. 85-352 that the
tax  treatment  of the item which is the  subject of the claim will be upheld in
litigation if the claimed tax  treatment is  challenged  by a Taxing  Authority.
Notwithstanding  the  foregoing,   if  any  Tax  Indemnitee  releases,   waives,
compromises,  or settles any claim that may be  indemnifiable by Lessee pursuant
to this ss. 9.3 and which such Tax Indemnitee is otherwise  obligated to contest
under this ss. 9.3.4 without Lessee's written permissiOn, Lessee's obligation to
indemnify   such  Tax   Indemnitee   with   respect   to  such  claim  (and  all
directly-related  claims,  and claims  based on the outcome of such claim) shall
terminate,  subject  to ss.  9.3.4(c),  and  subject to ss.  9.3.4(c),  such Tax
Indemnitee shall repay to Lessee any amount  previously paid or advanCed to such
Tax Indemnitee with respect to such claim,  plus interest at the rate that would
have been payable by the relevant Taxing Authority on a refund of such Tax.

     (c) Notwithstanding  anything in this ss. 9.3, a Tax Indemnitee will not be
required to contest the  imposition of any Tax, and shall bE permitted to settle
or compromise  any claim without  Lessee's  consent,  if such Tax Indemnitee (1)
waives its right to  indemnity  under this ss. 9.3 witH respect to such Tax (and
any  directly-related  claim,  and any claim the outcome of which is  determined
based upon the outcome of such claim),  (2) pays to Lessee any amount previously
paid or  advanced by Lessee  pursuant to this ss. 9.3 with  respect to such Tax,
plus  interest at the rate that would have beeN payable by the  relevant  Taxing
Authority  on a refund of such Tax,  and (3) agrees to discuss  with  Lessee the
views  or  positions  of any  relevant  Taxing  Authority  with  respect  to the
imposition of such Tax PROVIDED,  that if Lessee has agreed in writing to settle
a claim for a stated amount and the relevant Tax Indemnitee settles the claim on
more favorable  terms,  such Tax  Indemnitee  shall not be required to waive the
indemnity for such claim to the extent of the amount agreed to by Lessee.

     9.3.5 REFUND

     If any Tax Indemnitee receives a refund of, or becomes entitled to a credit
against other liability for, all or any part of any Taxes paid,  reimbursed,  or
advanced by Lessee,  such Tax  Indemnitee  shall pay to Lessee within 30 days of
such  receipt an amount  equal to the lesser of (a) the amount of such refund or
credit plus any net tax benefit  (taking into account any Taxes incurred by such
Tax  Indemnitee by reason of the receipt of such refund or  realization  of such
credit)  actually  realized by such Tax Indemnitee as a result of any payment by
such Tax Indemnitee made pursuant to this sentence  (including this clause (a)),
and (b) such tax  payment,  reimbursement,  or  advance  by  Lessee  to such Tax
Indemnitee theretofore made pursuant to this ss. 9.3 (and the excess, if any, of
the amount described in clause (a) over the amount described in clause (b) shall
be carried forward and applied to reduce PRO TANTO any subsequent  obligation of
Lessee to make payments to such Tax Indemnitee pursuant to this ss. 9.3). If, in
addition to such refund or credit,  sucH Tax Indemnitee receives (or is credited
with) an amount  representing  interest  on the amount of such refund or credit,
such Tax  Indemnitee  shall pay to  Lessee  within 30 days  after  receiving  or
realizing such credit the portion of such interest fairly  attributable to Taxes
paid,  reimbursed,  or advanced  by Lessee  before the receipt of such refund or
realization  of such credit.  Notwithstanding  the  foregoing,  a Tax Indemnitee
shall not be obligated to make any payment to Lessee  pursuant to this ss. 9.3.5
if a Special Default or a Lease Event of Default has occurred and is continuing.
If it is later  determined  thaT such Tax  Indemnitee  was not  entitled to such
refund or credit,  the  portion of the refund or credit  repaid,  recaptured  or
disallowed  (and any  interest and tax savings  paid by such Tax  Indemnitee  to
Lessee with  respect  thereto)  shall be treated as Taxes for which  Lessee must
indemnify  such Tax  Indemnitee  pursuant to this ss. 9.3 without  regard to ss.
9.3.2 hereof other than ss. 9.3.2(f).

     9.3.6 TAX FILING

     Lessee shall timely file any report,  return, or statement that is required
to be filed with  respect to any Tax which is subject to  indemnification  under
this ss. 9.3 (except  for any such  report,  return,  or  statement  which a Tax
Indemnitee  has  timely  notified  Lessee in  writing  that sucH Tax  Indemnitee
intends to file, or for which such Tax Indemnitee is required by law to file, in
its own name);  PROVIDED,  that the relevant Tax Indemnitee shall furnish Lessee
with any  information  in such Tax  Indemnitee's  possession  or control that is
reasonably  necessary to file any such  return,  report,  or statement  and that
Lessee  reasonably  requests  in writing  (but the Tax  Indemnitee  shall not be
required  to  furnish  copies of its  actual  tax  returns,  although  it may be
required to furnish relevant information contained therein). Lessee shall either
file such report,  return,  or statement and send a copy to such Tax  Indemnitee
(and to Owner  Trustee,  if the Tax  Indemnitee  is not Owner  Trustee),  or, if
Lessee is not  permitted to file such report,  return,  or  statement,  it shall
notify such Tax  Indemnitee  of such  requirement  and prepare and deliver  such
report,  return,  or statement  to such Tax  Indemnitee  in a manner  reasonably
satisfactory  to such Tax  Indemnitee  within a reasonable  time before the time
such report, return, or statement is to be filed.

     9.3.7 FORMS

     Each  Tax  Indemnitee  agrees  to  furnish  from  time to  time to  Lessee,
Mortgagee,  or such other  Person as Lessee or  Mortgagee  shall  designate,  at
Lessee's or Mortgagee's request, such duly-executed and properly-completed forms
as may be  necessary  or  appropriate  in  order to claim  any  reduction  of or
exemption from any withholding or other Tax imposed by any Taxing Authority,  if
(a) such  reduction or exemption  is available to such Tax  Indemnitee,  and (b)
Lessee has  provided  such Tax  Indemnitee  with any  information  necessary  to
complete such form not otherwise reasonably available to such Tax Indemnitee.

     9.3.8 NON-PARTIES

     If a Tax  Indemnitee is not a party to this  Agreement,  Lessee may require
the Tax  Indemnitee  to agree in writing,  in a form  reasonably  acceptable  to
Lessee,  to the terms of this ss. 9.3 and ss. 15.8 before  making any payment to
such Tax Indemnitee under this ss. 9.3.

     9.3.9 FOREIGN TAX ON LOAN PAYMENTS

     If an Owner Participant is incorporated or organized,  or maintains a place
of  business  in a country  other  than the  United  States  or in a  territory,
possession,  or commonwealth of the United States (within the meaning of the tax
law of that foreign jurisdiction),  and if as a result thereof any foreign Taxes
(including   withholding  Taxes)  are  imposed  on  the  Pass-Through  Trustees,
Pass-Through  Trusts,  or  Note  Holders,  then  such  Owner  Participant  shall
reimburse  Lessee for any  payments  that  Lessee is  required  to make to or on
behalf of any  Pass-Through  Trustee,  Pass-Through  Trust, or Note Holder under
this ss. 9.3 as a result of the imposition of such Taxes.  The amount payable by
Owner Participant to Lessee shall be an amount which,  after takinG into account
any such Taxes,  any Tax  imposed  upon the receipt or accrual by Lessee of such
payment by such Owner Participant,  and any tax benefits or tax savings realized
by Lessee  with  respect to the payment of such  withholding  Tax or the payment
hereunder,  shall equal the amount of  Lessee's  payment to or on behalf of such
Pass-Through Trustee or Note Holder.

     9.4 PAYMENTS

     Any payments  made  pursuant to ss. 9.1 or ss. 9.3 shall be due on the 30th
day after demand,  and shall be made directly to the relevant  IndemniTee or Tax
Indemnitee or to Lessee, in immediately  available funds at such bank or to such
account  as  specified  by such  Indemnitee  or Tax  Indemnitee  or  Lessee  (as
applicable)  in written  directives to the payor,  or, if no such  direction has
been given,  by check of the payor  payable to the order of, and mailed to, such
Indemnitee  or Tax  Indemnitee  or Lessee (as  applicable)  by  certified  mail,
postage prepaid, at its address as set forth in this Agreement.

     9.5 INTEREST

     If any amount,  payable by Lessee,  any  Indemnitee,  or any Tax Indemnitee
under ss. 9.1 or ss. 9.3 is not paid when due, the Person obligated to mAke such
payment  shall pay on demand,  to the  extent  permitted  by Law,  to the Person
entitled thereto,  interest on any such amount for the period from and including
the due date for such amount to but  excluding  the date the amount is paid,  at
the Past-Due Rate.  Such interest shall be paid in the same manner as the unpaid
amount in respect of which such interest is due.

     9.6 BENEFIT OF INDEMNITIES

     Lessee's  obligations  for  indemnities,   obligations,   adjustments,  and
payments in ss. 9.1 or ss. 9.3 are expressly  made for the benefit of, and shAll
be enforceable by, the Indemnitee or Tax Indemnitee  entitled  thereto,  without
declaring  the Lease to be in default or taking  other  action  thereunder,  and
notwithstanding any provision of the Mortgage.

     10. ASSIGNMENT OR TRANSFER OF INTERESTS

     10.1 PARTICIPANTS, OWNER TRUSTEE, AND NOTE HOLDERS

     10.1.1 OWNER PARTICIPANT

     (a) During the Term, Owner Participant shall not Transfer any or all of its
right,  title, or interest in the Trust Estate or the Trust Agreement or to this
Agreement unless:

     (1) the Transferee has full power,  authority,  and legal right to execute,
deliver,  and  perform  the  obligations  of Owner  Participant  under the Owner
Participant  Agreements and provides  reasonably  satisfactory  evidence of such
power and authority to Lessee, Owner Trustee, and Mortgagee;

     (2) the Transferee  enters into a legal,  valid,  binding,  and enforceable
agreement,  substantially  in the form of Exhibit I hereto (or otherwise in form
and substance  reasonably  satisfactory to Lessee and  Mortgagee),  effective to
confirm  that such  Transferee  agrees  to be bound by all the terms of,  and to
undertake  all  of  the   obligations   arising  after  such  transfer  of,  the
transferring Owner Participant in the Owner Participant Agreements, and in which
it makes  representations and warranties  substantially the same as those in ss.
6.2 of thiS Agreement;

     (3) upon such  Transfer  Lessee  shall not be  obligated to pay any greater
amount or incur  any  greater  obligation  than  that  which it would  have been
obliged to pay or incur under the Lease or other Lessee  Operative  Agreement if
no transfer or assignment had taken place,  and upon such Transfer the terms and
conditions  of the Lessee  Operative  Agreements  insofar as they  relate to the
rights and obligations of Lessee or the Loan Participant are not altered;

     (4) Owner Participant shall deliver to Lessee, Owner Trustee, and Mortgagee
an opinion of counsel reasonably satisfactory to each of them to the effect that
such agreement or agreements referred to in ss. 10.1.1(a)(2) and, if applicable,
ss.  10.1.1(a)(6)  or (a)(7) Are legal,  binding,  and enforceable in accordance
with  its  or  their  terms  and  that  such   transfer  will  not  violate  the
Transportation  Code, the registration  provisions of the Securities Act, or any
other applicable Federal law;

     (5) the Transfer  shall relate to Owner  Participant's  entire  interest as
Owner  Participant;  or, if it relates to less than its entire interest as Owner
Participant,  then (aa) Lessee shall have given its prior written consent to the
partial  Transfer,   and  (bb)  all  amendments  to  the  Operative  Agreements,
reasonably  requested  by Lessee or Owner  Participant,  that are  necessary  or
appropriate to accommodate the existence of multiple Owner  Participants,  shall
be agreed to and  executed  by the  parties  thereto,  all at the expense of the
Owner Participants under ss. 10.1.1(c);

     (6) the  Transferee  is a Citizen of the United  States  (such status to be
determined  without  considering  FAR ss. 47.9 or anY other  provision  that may
restrict  Lessee's  use or  operation  of the  Aircraft),  or shall use a voting
powers  trust or similar  arrangement  in order to hold an interest in the Trust
Estate such that the Aircraft can be registered  in the United  States  (without
considering FAR ss. 47.9 oR any other  provision that may restrict  Lessee's use
or operation of the Aircraft); and

     (7) the  Transferee  is a single  Person  and is  either  (aa) a  Permitted
Institution,   (bb)  or  an  Affiliate  of  a  Permitted  Institution,  if  such
Affiliate's obligations under the Owner Participant Agreements are guaranteed by
such Permitted Institution pursuant to a written guaranty,  substantially in the
form of  Exhibit  J  hereto  (or  otherwise  in form  and  substance  reasonably
satisfactory  to Lessee,  Owner  Trustee and  Mortgagee),  or (cc) with Lessee's
prior written consent,  any other Person the obligations of whom under the Owner
Participant  Agreements are guaranteed by a Permitted  Institution pursuant to a
written guaranty, in form and substance reasonably satisfactory to Lessee, Owner
Trustee, and Mortgagee.

            (b)  Owner   Participant   shall  give  written  notice  to  Lessee,
Mortgagee,  and  Owner  Trustee  at least  10 days  before  any  such  Transfer,
specifying  the name and  address  of the  proposed  Transferee,  and  providing
financial   statements  of  the  proposed  Transferee  or  guarantor  evidencing
satisfaction of the requirements described in ss. 10.1.1(a)(7)(aa) or (bb).

            (c) Any  reasonable  fees,  charges,  and  expenses,  including  the
reasonable  legal  fees,  charges,   and  expenses  incurred  by  Lessee,  Owner
Participant, Mortgagee, any Note Holder, or Owner Trustee in connection with any
Transfer by Owner Participant permitted by this ss. 10.1.1, or by thE Transferee
in any such case, will be paid for by Owner Participant.

     10.1.2 OWNER TRUSTEE

     Owner Trustee may transfer its interests in the Trust Agreement pursuant to
ss. 9 thereof.

     10.1.3 NOTE HOLDERS

     Subject to ss. 7.5.2 hereof and ss. 2.07 of the  Mortgage,  any Note Holder
may, at any time, Transfer or grant  participations in all or any portIon of the
Equipment  Notes  or all or  any  portion  of  its  beneficial  interest  in its
Equipment  Notes and the  Collateral  to any  Person  (the sale or  issuance  of
Pass-Through  Certificates  by a  Pass-Through  Trustee not being  considered  a
Transfer  or  participation);   PROVIDED,  that  any  participant  in  any  such
participations  shall not have any direct rights under the Operative  Agreements
or any Lien on all or any part of the Aircraft or  Collateral,  and Lessee shall
not  have  any  increased  liability  or  obligations  as a  result  of any such
participation.  In the case of any such Transfer, the Transferee,  by acceptance
of Equipment  Notes in connection  with such Transfer,  shall be bound by all of
the covenants of Note Holders in the Operative Agreements.

     10.2 EFFECT OF TRANSFER

     Upon any Transfer in accordance with ss. 10.1.1,  ss. 10.1.2, or ss. 10.1.3
(other  than any  Transfer  by any Note  Holder,  to the  extent it only  gRants
participations in Equipment Notes or in its beneficial  interest  therein),  the
Transferee  shall be deemed "Owner  Participant",  "Owner  Trustee",  or a "Note
Holder",  respectively, for all purposes of the Operative Agreements and, in the
case of a Transferee of Owner Participant or any Note Holder, shall be deemed to
have  paid  its  ratable  portion  of  Lessor's  Cost  previously  made by Owner
Participant  or Loan  Participant,  respectively,  making  such  conveyance  and
represented by the interest being conveyed,  and each reference  herein to Owner
Participant,  Owner Trustee, or Note Holder,  respectively,  shall thereafter be
deemed a reference to such  Transferee  for all purposes,  and the  transferring
Owner  Participant,  Owner Trustee,  Loan  Participant,  or Note Holder shall be
released  (including,  in the  case of Owner  Participant,  any  Guarantor  with
respect to any guaranty provided by it under ss.  10.1.1(a)(7))  from all of itS
liabilities  and obligations  under the Operative  Agreements to the extent such
liabilities and obligations  arise after such Transfer and, in each case, to the
extent such liabilities and obligations are assumed by the Transferee; PROVIDED,
that such transferring Owner Participant, Owner Trustee, or Note Holder (and its
Affiliates,   successors,  assigns,  agents,  representatives,   directors,  and
officers) will continue to have the benefit of any rights or  indemnities  under
any Operative Agreement vested or relating to circumstances,  conditions,  acts,
or events before such Transfer.

     11. RE-FUNDING AND CERTAIN OTHER MATTERS

     11.1 RE-FUNDING GENERALLY

     Subject to ss.  11.2 and ss.  11.4,  if at any time Lessee  notifies  Owner
Participant,  Owner  Trustee,  and  Mortgagee  that Lessee  requests  that OwNer
Trustee  voluntary  redeem  all  (but  not  less  than  all) of the  outstanding
Equipment  Notes (in  compliance  with ss. 2.11 and ss. 2.12 of the Mortgage) as
part oF a re-funding transaction, Owner Participant will negotiate in good faith
and  promptly  conclude  an  agreement  with  Lessee  as to the  terms  of  such
re-funding  transaction  (including  the  terms  of any  debt  to be  issued  in
connection with such re-funding transaction and the documentation to be executed
in  connection  therewith),  and after Lessee and Owner  Participant  shall have
concluded such an agreement:

     11.1.1 RE-FUNDING CERTIFICATE

     Within 10 Business Days after reaching such  agreement,  Owner  Participant
will deliver a Re-Funding  Certificate to Lessee.  Within 10 Business Days after
receiving the Re-Funding Certificate, Lessee may demand a verification (pursuant
to ss. 3.2.1(d) of the Lease) of the information in thE Re-Funding  Certificate.
Upon Lessee's  acceptance of the accuracy of the  information  in the Re-Funding
Certificate or the determination pursuant to such verification procedures of the
Re-Funding Information,  the appropriate parties will take the actions specified
in ss. 11.1.2 through ss. 11.1.7.

     11.1.2 FINANCING AGREEMENTS

     The appropriate  parties will enter into appropriate  documentation  (which
may include an underwriting  agreement or similar private  placement  agreement)
with the institution or institutions to be named therein providing for (a) Owner
Trustee's  issuance  and  sale of the New  Debt  to such  institution(s)  on the
Re-Funding  Date, and (b) the application of the proceeds of the sale of the New
Debt to the  redemption  of all such  Equipment  Notes on the  Re-Funding  Date.
Lessee,  acting on behalf of Owner  Trustee,  shall give  Mortgagee  at least 30
days'  revocable  prior  written  notice of the  proposed  date of the  optional
redemption.

     11.1.3 LEASE AMENDMENTS

     As a condition  to the closing of the  re-funding  transaction,  Lessee and
Owner  Trustee  will amend the Lease,  as  contemplated  by ss.  3.2.1(b) oF the
Lease,  to provide that (a) Basic Rent payments and  allocations  for the period
from and  after the  Re-Funding  Date  shall be as  provided  in the  Re-Funding
Information,  and (b) Stipulated Loss Values,  Termination  Values,  and the EBO
Price,  from  and  after  the  Re-Funding  Date,  shall  be as  provided  in the
Re-Funding Information.

     11.1.4 SECURITY AGREEMENTS

     Owner  Trustee will enter into an agreement to provide for securing the New
Debt similarly to the Equipment  Notes,  and will enter into such amendments and
supplements to the Mortgage (or such new indenture or other security  agreement)
and the other Operative Agreements as are appropriate to effect such re-funding.

     11.1.5 EXPENSES

     Whether or not such re-funding transaction is consummated, Lessee shall pay
or  reimburse  on a net  after tax  basis  all of the  reasonable  out-of-pocket
expenses  of  all  parties  to  such  re-funding   transaction,   including  any
underwriting  or  placement  fees and the  reasonable  fees and expenses of such
parties' counsel and any related loan or commitment fees.

     11.1.6 MAKE WHOLE AMOUNT

     At the closing of such  re-funding,  Owner  Trustee  shall pay to Mortgagee
(for the  account of each Note  Holder),  upon  receipt of the same from  Lessee
(which Lessee shall pay as  Supplemental  Rent, as a condition to the closing to
the  re-funding  transaction,  at no  after-tax  cost to Owner  Trustee or Owner
Participant),  any Make-Whole  Amount payable to such Note Holder under ss. 2.11
of the Mortgage.

     11.1.7 RETURN OF EQUIPMENT NOTES

     Subject to Owner  Trustee's  and Lessee's  compliance  with all  applicable
terms and  conditions  for  voluntary  prepayment  under the  Mortgage  and this
Agreement,  each Note Holder will transfer to Owner Trustee the Equipment  Notes
held by such Note Holder for cancellation (and Owner Trustee shall cancel them),
against receipt by such Note Holder of the then-outstanding  principal amount of
such Equipment  Notes,  accrued and unpaid  interest and any  Make-Whole  Amount
thereon,  and all other  amounts then payable to such Note Holder and  Mortgagee
hereunder or under the Mortgage.

     11.2 LIMITATIONS ON OBLIGATION TO REFUND

     Notwithstanding  the foregoing,  Owner Participant shall have no obligation
to proceed with any re-funding transaction as contemplated by this ss. 11:

     (a) if such  transaction  would have,  or creates a risk of, an adverse tax
consequence to Owner  Participant  (as  determined by Owner  Participant in good
faith),  unless Lessee agrees to indemnify Owner Participant,  or to cause Owner
Participant to be indemnified, against such adverse tax consequence by a written
agreement  in form and  substance  and from a Person (if not Lessee)  reasonably
satisfactory to Owner Participant,  and such indemnification would not give rise
to a Materially Adverse Change with respect to Lessee;

     (b)  unless  Lessee   indemnifies  Owner  Participant  for  any  liability,
obligation  (other than the obligation to pay principal and interest and related
payments in respect of the New Debt),  cost,  or expense  (including  reasonable
attorneys'  fees)  related to or arising  out of any such  re-funding,  and such
indemnification  would not give rise to a Materially Adverse Change with respect
to Lessee;

     (c) if a Special Default or Lease Event of Default exists;

     (d) if two re-funding  transactions  have  previously  been  consummated at
Lessee's request pursuant to thisss. 11;

     (e) if such re-funding would cause (i) the principal amount of the New Debt
to exceed the then-outstanding  principal amount of the Equipment Notes, or (ii)
the  Weighted  Average  Life to Maturity of the New Debt to exceed the  Weighted
Average Life to Maturity of the Equipment  Notes, or (iii) the final maturity to
the New Debt to be later than the final maturity of the Equipment Notes; or

     (f) if the  structure  or  documentation  for such  re-funding  results  in
greater obligations or liabilities,  or lesser rights, of Owner Trustee or Owner
Participant,  compared to those contained in the structure and documentation for
the original Equipment Notes.

     11.3 EXECUTION OF FACILITATING DOCUMENTS

     Lessee,  Owner Participant,  Owner Trustee,  and Mortgagee will execute any
document  necessary or advisable to implement this ss. 11 (includinG  executing,
delivering,  or providing  any  appropriate  additional  or modified  amendment,
representation, warranty, certificate, opinion, or other document that Lessee or
any other Person reasonably requests).

     11.4 ERISA

     Owner   Participant  shall  not  be  obligated  to  conclude  the  proposed
re-funding  transaction  unless  the  agreements  used to effect it  contain  an
agreement by the initial holders of the New Debt  substantially  the same as ss.
7.5.2(b) of this  Agreement  (unless  the New Debt is sold in a public  offerinG
under the Securities Act or a private placement  intended for resale pursuant to
Rule 144A under the  Securities  Act,  in which case the holders of the New Debt
shall be subject to the restrictions relating to ERISA substantially the same as
those generally applicable to purchasers of pass-through  certificates issued by
U.S. airlines and sold to the public in SEC-registered form).

     11.5 CONSENT TO OPTIONAL REDEMPTIONS

     Each of Owner Participant, Owner Trustee, and Mortgagee agrees for Lessee's
benefit not to cause an  optional  redemption  of the  Equipment  Notes  without
Lessee's  consent  except as set forth in ss. 2.13 of the  Mortgage or elsewhere
herein.

     11.6 LESSEE'S ASSUMPTION OF EQUIPMENT NOTES

     11.6.1 LESSEE'S ELECTION; DOCUMENTATION

     If no Special Default  exists,  upon exercising a purchase option under ss.
17.3 of the Lease,  Lessee may elect to assume and apply as part of thE Purchase
Price the debt evidenced by all of the outstanding  Equipment Notes,  subject to
this ss. 11.6 and ss. 2.15 of the Mortgage.  Lessee shall notify OwNer  Trustee,
each  Participant,  and  Mortgagee of such election no later than 30 days before
the effective date of such assumption.  Subject to this ss. 11.6 anD ss. 2.15 of
the Mortgage,  the parties agree to cooperate and to enter into such  amendments
or  supplemental  agreements as may be necessary to effectuate  thE  transaction
contemplated by this ss. 11.6.

     If Lessee so elects,  then,  upon  compliance  with ss.  17.3 of the Lease,
Owner Trustee will transfer to Lessee,  without  recourse or warrantY (except as
to the absence of Lessor Liens) but subject to the Lien of the Mortgage,  all of
Owner Trustee's right,  title, and interest in and to the Aircraft,  and each of
the  parties  hereto  shall  execute  and  deliver   appropriate   documentation
permitting  Lessee to assume such  obligations  on the basis of full recourse to
Lessee, maintaining for the benefit of the Note Holders the security interest in
the Aircraft created by the Mortgage, and upon compliance with this ss. 11.6 and
ss. 2.15 of the Mortgage,  such  documentation  shall become effective and Owner
Participant  and Owner Trustee shall be released from All future  obligations in
respect  of  the  Equipment  Notes,  the  Mortgage,   and  all  other  Operative
Agreements, except any obligations arising (or with respect to events occurring)
before  such  assumption,  and take all such  other  actions  as are  reasonably
necessary to permit such assumption by Lessee.

     11.6.2 CLOSING CONDITIONS

     In connection with such assumption:

     (1) Lessee shall execute and deliver an instrument, reasonably satisfactory
in form and  substance to Mortgagee  and Owner  Trustee,  (aa) pursuant to which
Lessee  irrevocably  and  unconditionally  assumes  and  undertakes,  with  full
recourse  to  Lessee,  to pay  when  due (at the  stated  maturity  thereof,  by
acceleration,  or  otherwise)  the  principal  of,  and any  Make-Whole  Amount,
interest,  and other  Secured  Obligations  owing on, all  Equipment  Notes then
outstanding in accordance with their terms and punctually to perform and observe
all of the covenants and obligations (monetary or otherwise) hereunder and under
the  Mortgage  and the  Equipment  Notes (as  amended  in  connection  with such
assumption)  to be performed  or observed by Owner  Trustee,  which  obligations
shall be secured by a  first-priority  lien under the  Mortgage,  and (bb) which
contains  amendments  to  the  Mortgage,   in  form  and  substance   reasonably
satisfactory  to Mortgagee  and Owner  Trustee,  that  incorporate  therein such
provisions  from the  Lease and this  Agreement  as are  appropriate,  including
events of default  substantially  identical  in scope and effect to those in the
Lease  but  including  any such  additional  defaults  as  Mortgagee  reasonably
requests  to  provide  the  same  level of  protection  as in the  Mortgage  and
covenants substantially identical to the covenants of Lessee hereunder and under
the Lease.

     (2) The instrument  referred to in clause (1), any Uniform  Commercial Code
financing  statements  relating  thereto,  and  any  other  documents  that  are
necessary (or reasonably  requested by Mortgagee) to establish Lessee's title to
and interest in the Aircraft or to reflect the  substitution of Lessee for Owner
Trustee  under the  Operative  Agreements  or to continue the  perfection of the
security  interests in the  Aircraft  and the other rights and  interests of the
registered owners of the Equipment Notes (or Lessee's  substituted  obligations)
shall be filed  in such  form,  manner,  and  places  as are  necessary  or,  in
Mortgagee's or Owner Trustee's reasonable opinion, advisable for such purpose.

     (3) Mortgagee and Owner  Trustee shall receive an insurance  report,  dated
the effective date of such assumption,  of an independent  insurance broker, and
certificates of insurance, each in form and substance reasonably satisfactory to
such  Person,  as to  the  due  compliance  as of the  effective  date  of  such
assumption  with ss.  11 of the  Lease  (as  incorporated  into  the  instrument
referred to in (1) of this ss.  11.6.2) as it relates to the Note Holders,  each
Certificate  Holder, and Mortgagee relating to the insurance with respect to the
Aircraft.

     (4) Mortgagee and Owner  Trustee  shall  receive  evidence  that, as of the
effectiveness  of such  assumption,  the Aircraft is free and clear of all Liens
other than the Lien of the Mortgage and other
Permitted Liens (other than Lessor Liens).

     (5) Mortgagee  and Owner  Trustee  shall receive a certificate  from Lessee
that no Special Default exists on the effective date of such assumption.

     (6) Mortgagee  receives (aa) a Guarantor  Confirmation under which Holdings
expressly   acknowledges  and  agrees  that  each  of  the  Assumed  Obligations
constitute Guaranteed Obligations (as defined in the Guarantee) for all purposes
of the  Guarantee,  and (bb) restated  Equipment  Notes showing Lessee as issuer
(which  Mortgagee  shall also  authenticate)  evidencing such assumption and the
full recourse nature of Lessee's obligations thereunder.

     (7) Mortgagee  receives  such other  documentation  or evidence  reasonably
requested by Mortgagee to establish the authority of Lessee,  Owner Trustee, and
Owner Participant to consummate the transactions  contemplated by the assumption
and the taking of all corporate proceedings in connection therewith.

     (8) Each Loan Participant and Pass-Through  Certificate  holder  ("HOLDER")
shall  receive (by  delivery  to its  Pass-Though  Trustee,  in the case of each
Holder)  (aa) an opinion of  Troutman  Sanders  LLP,  or other  independent  tax
counsel  chosen by Lessee and  reasonably  acceptable  to each Loan  Participant
(Troutman  Sanders LLP or such other  counsel being the "TAX  COUNSEL"),  to the
effect that the  Pass-Through  Trusts will not be subject to U.S. federal income
tax as a result of Lessee's  assumption of the Equipment  Notes, and (bb) either
(i) an opinion  of Tax  Counsel to the  effect  that the Loan  Participants  and
Holders will not recognize income, gain, or loss for federal income tax purposes
as a result of Lessee's  assumption of the Equipment  Notes, and will be subject
to federal income tax in the same amounts,  in the same manner,  and at the same
time as would have been the case if such  assumption  had not occurred,  or (ii)
(x) an opinion  of Tax  Counsel to the  effect  that the Loan  Participants  and
Holders  should not  recognize  income,  gain,  or loss for  federal  income tax
purposes as a result of Lessee's  assumption of the Equipment  Notes, and should
be subject to federal income tax in the same amounts, in the same manner, and at
the same time as would have been the case if such  assumption  had not occurred,
and (y) an  indemnity  on an  After-Tax  Basis from  Lessee for any  adverse tax
consequences to each Loan Participant and Holder resulting from such assumption,
such  indemnity to be in form and substance  reasonably  acceptable to each Loan
Participant.

     (9) Each Note Holder, each Pass-Through Certificate holder,  Mortgagee, and
Owner Trustee shall receive (by delivery to its Pass-Though Trustee, in the case
of each  Holder):  (aa) a legal  opinion from  counsel for Lessee  (which may be
in-house counsel),  in form and substance  reasonably  satisfactory to each Note
Holder,  Mortgagee,  and  Owner  Trustee,  to the  effect  that  the  assumption
contemplated  by this ss.  11.6  does noT  contravene  Lessee's  certificate  of
incorporation  or by-laws,  or any agreement or instrument known to such counsel
to which Lessee is a party or by which it is bound, and as to (x) the compliance
of the assumption contemplated by this ss. 11.6 with the terms and conditions of
this  ss.  11.6  and ss.  2.15  oF the  Mortgage,  (y)  the  due  authorization,
execution, delivery, validity, and enforceability of the instruments referred to
in clauses (1) and (6), and (z) the continued  perfection of the  first-priority
Lien on the Aircraft for the benefit of the  registered  owners of the Equipment
Notes,  and the due filing of the Uniform  Commercial Code financing  statements
and the  other  documents  referred  to in clause  (2),  (bb)  from  counsel  to
Mortgagee,  counsel  to Lessee and  Guarantor,  counsel  to Owner  Trustee,  and
special aviation counsel, a legal opinion comparable to the respective  opinions
delivered on the Delivery Date (including,  in the case of Lessee's  counsel,  a
favorable opinion regarding the availability of the protections  available under
Section  1110 of the  Bankruptcy  Code),  with such  changes  therein  as may be
appropriate  in light of such  assumption,  and (cc) in the case of each opinion
described in subclause (aa) or (bb) of this clause (9), covering such additional
matters as Mortgagee, Owner Trustee, or any Note Holder reasonably requests.

            (10)  Each  Note  Holder  and  Mortgagee   receive  a  copy  of  the
Application  for  Aircraft  Registration  filed  with  the  FAA  (or  any  other
registration  application  filed  with the  applicable  Aviation  Authority)  in
connection with such assumption.

     12. SECTION 1110

     Lessee,  Owner  Participant,  Loan  Participants,  the Note  Holders  (such
intention  being  evidenced by each of their  acceptance of an Equipment  Note),
Owner  Trustee,  and Mortgagee  intend that Owner  Trustee,  as lessor under the
Lease (and Mortgagee as assignee of Owner Trustee under the Mortgage),  shall be
entitled to the benefits of Section 1110 in the event of a case under Chapter 11
of the Bankruptcy Code in which Lessee is a debtor.

     13. CHANGE OF CITIZENSHIP

     13.1 GENERALLY

     Without prejudice to the  representations,  warranties,  or covenants as to
any party's status as a Citizen of the United States:

     (a) Each of Lessee,  FSB, WTC, and Mortgagee agrees that,  immediately upon
obtaining  knowledge  of any facts that  would  cast  doubt upon its  continuing
status as a Citizen of the United States, and promptly upon public disclosure of
negotiations in respect of any transaction which would or might adversely affect
such  status,  it will  notify all  parties  hereto of all  relevant  matters in
connection therewith; and

     (b)  Owner  Participant  agrees  that,  if its  status  is to change or has
changed as a Citizen of the United  States,  or it makes  public  disclosure  of
circumstances  as a result of which it  believes  that such  status is likely to
change, it will notify all the other parties to this Participation  Agreement of
(1) such change in status promptly after obtaining Actual Knowledge thereof, and
(2) such belief as soon as practicable  after such public disclosure (but in any
event within 10 Business Days after such public disclosure).

     13.2 OWNER PARTICIPANT

     Owner  Participant  agrees,  solely for the  benefit of Lessee and the Note
Holders,  that if, when the Aircraft is  registered  in the United  States,  (a)
Owner Participant is not be a Citizen of the United States, and (b) the Aircraft
shall be, or would therefore become,  ineligible for registration in the name of
Owner Trustee under the  Transportation  Code and  regulations  then  applicable
thereunder  (without  considering  FAR ss. 47.9 or any other  provisioN that may
restrict  Lessee's  or  any  Permitted  Sublessee's  use  or  operation  of  the
Aircraft),  then Owner  Participant  shall as soon as is reasonably  practicable
(but in any event  within  30 days  after  obtaining  Actual  Knowledge  of such
ineligibility and of such loss of citizenship), (y) effect voting trust or other
similar  arrangements  (in which case any provisions  contained in the Operative
Agreements  restricting Owner  Participant's or Owner Trustee's ability to amend
the Trust Agreement shall not apply to the extent necessary to permit the use of
such a voting  trust or other  similar  arrangement)  or take any  other  action
necessary  to  prevent  any   deregistration   or  maintain  the  United  States
registration  of the Aircraft,  or (z) transfer in accordance  with the terms of
this Agreement all its right, title, and interest in and to this Agreement,  the
Trust Estate, and the Trust Agreement in accordance with ss. 10.1.

     13.3 OWNER TRUSTEE

     Upon FSB's giving any notice in accordance with ss. 13.1(a),  Owner Trustee
shall,  subject to ss. 9.1.1 of the Trust  Agreement,  resign as OwNer  Trustee.
Upon  its  receipt  of such  notice,  Owner  Participant  shall as  promptly  as
practicable  appoint a Citizen of the United  States as successor  Owner Trustee
pursuant to ss. 9.1 of the Trust Agreement.

     13.4 MORTGAGEE

     If WTC gives any notice under ss. 13.1(a),  WTC shall (if such  citizenship
is  necessary  under  the  Transportation  Code or, if it is not  necessary,  if
Mortgagee's   citizenship   could  have  any  adverse  effect  on  Lessee,   any
Participant, or any Note Holder), subject to ss. 8.02 of the Mortgage, resign aS
Mortgagee promptly upon its ceasing to be such a citizen.

     14. CONCERNING OWNER TRUSTEE

     Except as otherwise  expressly provided herein, in the Trust Agreement,  or
in the Mortgage,  Owner Trustee is entering  into this  Agreement  solely in its
capacity as trustee as provided in the Trust Agreement and not in its individual
capacity,  and in no case  whatsoever  will it be liable or  accountable  in its
individual  capacity  for any of the  statements,  representations,  warranties,
agreements,  or  obligations  of  Owner  Trustee  hereunder,  or for any loss in
respect  thereof,  as to all of which the  parties  agree to look  solely to the
Trust  Estate;  PROVIDED,  that  nothing in this ss. 14 shall  limiT in scope or
substance the personal  liability of FSB (a) to Owner  Participant  as expressly
set  forth  in the  Trust  Agreement,  (b) in  respect  of the  representations,
warranties,  and agreements of FSB expressly made as such herein or in any other
Operative  Agreement to which it is a party, and (c) for the consequences of its
own gross  negligence,  willful  misconduct,  and,  in  receiving,  handling  or
remitting  of funds  only,  its willful  misconduct  or simple  negligence  as a
trustee.

     15. MISCELLANEOUS

     15.1 AMENDMENTS

     No  provision  of this  Agreement  may be  amended,  supplemented,  waived,
modified,  discharged,  terminated,  or otherwise varied orally,  but only by an
instrument  in  writing  that  specifically  identifies  the  provision  of this
Agreement  that it  purports to amend,  supplement,  waive,  modify,  discharge,
terminate,  or  otherwise  vary and is  signed  by the  party  against  whom the
enforcement  of the  amendment,  supplement,  waiver,  modification,  discharge,
termination,  or variance is sought.  Each such amendment,  supplement,  waiver,
modification, discharge, termination, or variance shall be effective only in the
specific  instance  and for the  specific  purpose  for  which it is  given.  No
provision  of  this  Agreement   shall  be  varied  or   contradicted   by  oral
communication,  course of dealing or performance,  or other manner not set forth
in  writing  and signed by the party  against  whom  enforcement  of the same is
sought.

     15.2 SEVERABILITY

     If  any  provision  of  this  Agreement  is  held  invalid,   illegal,   or
unenforceable in any respect in any jurisdiction,  then, to the extent permitted
by Law, (a) all other provisions hereof shall remain in full force and effect in
such  jurisdiction,  and (b) such invalidity,  illegality,  or  unenforceability
shall not affect the validity,  legality, or enforceability of such provision in
any other jurisdiction.  If, however,  any Law pursuant to which such provisions
are held invalid,  illegal,  or unenforceable may be waived,  the parties hereto
hereby  waive  that  Law to the full  extent  permitted,  to the end  that  this
Agreement shall be a valid and binding agreement in all respects, enforceable in
accordance with its terms.

     15.3 SURVIVAL

     The  indemnities in this Agreement  shall survive the delivery or return of
the  Aircraft,  the  Transfer  of any  interest  of  Owner  Participant  in this
Agreement,  the Trust  Estate,  and the Trust  Agreement,  the  Transfer  of any
interest by any Note Holder of its Equipment  Note,  and the expiration or other
termination of any Operative Agreement,  except to the extent otherwise provided
therein.

     15.4 REPRODUCTION OF DOCUMENTS

     This Agreement (including all annexes,  schedules, and exhibits hereto) and
all documents  relating  hereto,  including (a) future  consents,  waivers,  and
modifications,  and (b) past and future financial statements,  certificates, and
other  information  furnished  to any party  hereto,  may be  reproduced  by any
photographic,  photostatic,  microfilm,  micro-card,  miniature photographic, or
other  similar  process,  and any party may destroy any  original  documents  so
reproduced.  Any such  reproduction  shall be as  admissible  in evidence as the
original itself in any judicial or administrative proceeding (whether or not the
original  exists and  whether or not such  party  made the  reproduction  in the
regular  course  of  business),  and  any  enlargement,  facsimile,  or  further
reproduction of such reproduction also shall be so admissible in evidence.

     15.5 COUNTERPARTS

     This Agreement and any amendments, waivers, consents, or supplements hereto
may be executed in any number of counterparts (or upon separate  signature pages
bound together into one or more counterparts),  each fully-executed set of which
shall be deemed to be an original.

     15.6 NO WAIVER

     No failure on the part of any party hereto to exercise, and no delay by any
party hereto in exercising,  any of its rights, powers,  remedies, or privileges
under this Agreement or otherwise  available shall impair,  prejudice,  or waive
any such right,  power,  remedy, or privilege or be construed as a waiver of any
breach hereof or default hereunder or as an acquiescence  therein, nor shall any
single or partial  exercise  of any such  right,  power,  remedy,  or  privilege
preclude  any other or further  exercise  thereof by it or the  exercise  of any
other right,  power,  remedy,  or privilege by it. No notice to or demand on any
party hereto in any case shall,  unless otherwise required under this Agreement,
entitle such party to any other or further  notice or demand in similar or other
circumstances,  or waive the rights of any party  hereto to any other or further
action in any circumstances without notice or demand.

     15.7 NOTICES

     Unless  otherwise  expressly  permitted by the terms  hereof,  all notices,
requests,  demands,  authorizations,  directions,  consents,  waivers, and other
communications  required or permitted  to be made,  given,  furnished,  or filed
hereunder  shall be in writing  (and the  specification  of a writing in certain
instances  and not in others does not imply an  intention  that a writing is not
required as to the latter),  shall refer  specifically  to this  Agreement,  and
shall be personally  delivered,  sent by fax or  telecommunication  transmission
(which  in  either  case  provides  written  confirmation  to the  sender of its
delivery),  sent by registered mail or certified mail, return receipt requested,
or sent by next-business-day courier service, in each case to the address or fax
number  set forth for such  party in  Schedule  1, or to such  other  address or
number as such party hereafter  specifies by notice to the other parties hereto.
Each such notice, request, demand, authorization, direction, consent, waiver, or
other  communication  shall be  effective  when  received  or,  if made,  given,
furnished, or filed by fax or telecommunication transmission, when confirmed.

     15.8 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE

     (A) THIS AGREEMENT  SHALL IN ALL RESPECTS BE GOVERNED BY AND INTERPRETED IN
ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW YORK,  INCLUDING  ALL  MATTERS  OF
CONSTRUCTION, VALIDITY, AND PERFORMANCE.

     (B) EACH PARTY  HERETO  HEREBY  IRREVOCABLY  AGREES,  ACCEPTS,  AND SUBMITS
ITSELF TO THE NON-EXCLUSIVE  JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
IN THE CITY AND  COUNTY OF NEW YORK AND OF THE UNITED  STATES  FOR THE  SOUTHERN
DISTRICT OF NEW YORK, IN CONNECTION  WITH ANY LEGAL ACTION,  SUIT, OR PROCEEDING
WITH RESPECT TO ANY MATTER  RELATING TO OR ARISING OUT OF OR IN CONNECTION  WITH
THE OPERATIVE AGREEMENTS.

     (C) EACH PARTY HERETO HEREBY IRREVOCABLY CONSENTS AND AGREES TO THE SERVICE
OF ANY AND ALL LEGAL  PROCESS,  SUMMONS,  NOTICES,  AND  DOCUMENTS OF ANY OF THE
AFOREMENTIONED  COURTS IN ANY SUCH SUIT,  ACTION,  OR PROCEEDING  MAY BE MADE BY
DELIVERING COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,  POSTAGE PREPAID,  AT
THE ADDRESS SET FORTH PURSUANT TO SS. 15.7. EACH PARTY HERETO HEREBY AGREES THAT
SERVICE UPON IT, OR ANY OF ITS AGENTS,  IN EACH CASE IN ACCORDANCE WITH THIS SS.
15.8(C),  SHALL CONSTITUTE VALID AND EFFECTIVE PERSONAL SERVICE UPON SUCH PARTY,
AND EACH PARTY  HERETO  HEREBY  AGREES  THAT THE FAILURE OF ANY OF ITS AGENTS TO
GIVE ANY NOTICE OF SUCH  SERVICE TO ANY SUCH PARTY SHALL NOT IMPAIR OR AFFECT IN
ANY WAY THE VALIDITY OF SUCH  SERVICE ON SUCH PARTY OR ANY JUDGMENT  RENDERED IN
ANY ACTION OR PROCEEDING BASED THEREON.

     (D) EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE  LAW, AND AGREES NOT TO ASSERT,  BY WAY OF MOTION,  AS A DEFENSE,  OR
OTHERWISE,  IN ANY LEGAL ACTION OR  PROCEEDING  BROUGHT  HEREUNDER IN ANY OF THE
ABOVE-NAMED COURTS, THAT SUCH ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT
FORUM,  THAT  VENUE  FOR THE  ACTION  OR  PROCEEDING  IS  IMPROPER,  OR THAT ANY
OPERATIVE AGREEMENT MAY NOT BE ENFORCED IN OR BY SUCH COURTS.

            (E) EACH PARTY HERETO HEREBY WAIVES ITS RIGHT TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION IN ANY COURT IN ANY JURISDICTION  BASED UPON OR ARISING
OUT OF OR RELATING TO THE OPERATIVE AGREEMENTS.

     15.9 THIRD-PARTY BENEFICIARY

     This  Agreement  is not  intended to provide  (and shall not  provide)  any
Person not a party hereto (other than each Liquidity Provider,  Policy Provider,
Escrow  Agent,  and  Paying  Agent,  each of  which is an  intended  third-party
beneficiary  with respect to the provisions of ss. 9.1 (and any otheR  provision
hereunder  pursuant  to  which  any  such  party  is  expressly  granted  rights
hereunder) with any rights of any nature  whatsoever  against any of the parties
hereto,  and no Person not a party hereto (other than each  Liquidity  Provider,
Policy Provider,  Escrow Agent, and Paying Agent, with respect to the provisions
of ss. 9.1 (and any other provision  hereunder  pursuant to which any such party
is expressly granted rights hereunder) shall have any right, power, or privilege
in respect of any party hereto, or have any benefit or interest,  arising out of
this Agreement.

     15.10 ENTIRE AGREEMENT

     This Agreement,  together with the other Operative Agreements, on and as of
the date hereof,  constitutes  the entire  agreement of the parties  hereto with
respect  to  the  subject  matter  hereof,  and  all  prior   understandings  or
agreements,  whether  written  or oral,  among any of the  parties  hereto  with
respect to such subject matter are hereby superseded in their entireties.

     15.11 FURTHER ASSURANCES

     Each party hereto shall execute,  acknowledge,  and deliver (or cause to be
executed, acknowledged, and delivered) all such further agreements, instruments,
certificates, or other documents, and shall do and cause to be done such further
things,  as any other party hereto  reasonably  requests in connection  with the
administration  of,  or to carry out more  effectively  the  purposes  of, or to
assure and  confirm  better to such other  party the rights and  benefits  to be
provided under, this Agreement and the other Operative Agreements.

     [THIS REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

<PAGE>

            IN WITNESS  WHEREOF,  the parties have executed  this  Participation
Agreement N___AT.

                                   AMERICAN TRANS AIR, INC., Lessee

                                   By: ____________________________

                                  Name:
                                  Title:

                                   GENERAL ELECTRIC CAPITAL
                                   CORPORATION, Owner Participant

                                   By: ____________________________

                                       Name:
                                       Title:

                                   FIRST SECURITY BANK, NATIONAL  ASSOCIATION,
                                   NOT IN ITS INDIVIDUAL CAPACITY
                                   (EXCEPT AS EXPRESSLY PROVIDED HEREIN), e
                                   BUT SOLELY AS TRUSTEE, Owner Truste

                                   By: _____________________________

                                   Name:
                                   Title:

                                   FIRST SECURITY BANK, NATIONAL ASSOCIATION,
                                   IN ITS INDIVIDUAL CAPACITY
                                   (AS EXPRESSLY PROVIDED HEREIN)

                                   By: _________________________________

                                    Name:
                                    Title:

<PAGE>

                                   WILMINGTON  TRUST  COMPANY,
                                   NOT  IN ITS  INDIVIDUAL  CAPACITY
                                   (EXCEPT  AS EXPRESSLY PROVIDED HEREIN),
                                   BUT SOLELY AS TRUSTEE, Mortgagee

                                   By: _________________________________

                                   Name:
                                   Title:

                                   WILMINGTON  TRUST  COMPANY,
                                   NOT  IN ITS  INDIVIDUAL  CAPACITY
                                   (EXCEPT  AS EXPRESSLY PROVIDED HEREIN),
                                   BUT SOLELY AS TRUSTEE,  Pass-Through Trustee
                                   under the Pass-Through Trust Agreement
                                   for the American Trans Air, Inc.
                                   Pass-Through Trust, 200_-1G

                                   By: _________________________________

                                   Name:
                                   Title:

                                   WILMINGTON  TRUST  COMPANY,
                                   NOT  IN ITS  INDIVIDUAL  CAPACITY
                                   (EXCEPT  AS EXPRESSLY PROVIDED HEREIN),
                                   BUT SOLELY AS TRUSTEE,  Pass-Through Trustee
                                   under the Pass-Through Trust Agreement
                                   for the American Trans Air, Inc.
                                   Pass-Through Trust, 200_-1C

     `                             By: ________________________________

                                   Name:
                                   Title:

                                   WILMINGTON  TRUST  COMPANY,
                                   NOT  IN ITS  INDIVIDUAL  CAPACITY
                                   (EXCEPT  AS EXPRESSLY PROVIDED HEREIN),
                                   BUT SOLELY AS SUBORDINATION AGENT

                                   By: _________________________________________

                                   Name:
                                   Title:

<PAGE>

                               ACCOUNTS; ADDRESSES
                 Account for Payments        Address for Notices

AMERICAN        (Confidential Material       American Trans Air, Inc.
TRANS AIR, INC   Omitted)                   7337 West Washington Street
                                             Indianapolis, Indiana  46231
                                             Attention: Exec. VP and CFO
                                             fax: (317) 240-7091

OWNER                                        General Electric Capital
PARTICIPANT                                  Corp.
                                             _______________________
                                             Attention: _________________
                                             fax: (____) __________

THE BOEING                                   The Boeing Company
COMPANY                                      P.O. Box 3707
                                             Seattle, WA 98124-3707
                                             Attention: Treasurer
                                             M/S 68-34
                                             fax: (206) 237-8746

FIRST SECURITY                               First Security Bank, N.A.
BANK,NATIONAL                                79 South Main Street
ASSOCIATION                                  Salt Lake City, UT  84111
                                             Attention: Corporate Trust
                                             Department
                                             fax: (801) 246-5053

WILMINGTON                                   Wilmington Trust Company
TRUST COMPANY,                               Rodney Square North
AS MORTGAGEE                                 1100 North Market Street
                                             Wilmington, DE  19890-0001
                                             Attention:Corporate Trust
                                             Administration
                                             fax: (302)651-8882

WILMINGTON TRUST                             Wilmington Trust Company
COMPANY, AS                                  Rodney Square North
SUBORDINATION AGENT                          1100 North Market Street
                                             Wilmington, DE  19890-0001
                                             Attention: Corporate Trust
                                             Administration
                                             fax: (302) 651-8882

WILMINGTON TRUST                             Wilmington Trust Company
COMPANY, AS                                  Rodney Square North
PASS-THROUGH TRUSTEE                         1100 North Market Street
FOR THE 200_-1G                              Wilmington, DE  19890-0001
PASS-THROUGH TRUST                           Attention: Corporate Trust
                                             Administration
                                             fax: (302) 651-8882

WILMINGTON TRUST                             Wilmington Trust Company
COMPANY, AS                                  Rodney Square North
PASS-THROUGH TRUSTEE                         1100 North Market Street
FOR THE 200_-1c                              Wilmington, DE  19890-0001
PASS-THROUGH TRUST                           Attention: Corporate Trust
                                             Administration
                                             fax: (302) 651-8882

AMBAC ASSURANCE                              Ambac Assurance Corporation
CORPORATION                                  1 State Street Plaza
                                             New York, NY  10004
                                             Attention:  David Nemschoff
                                             fax:  (212) 208-3113

<PAGE>

                                   COMMITMENTS

PARTICIPANT                PERCENTAGE OF LESSOR'S COST            DOLLAR AMOUNT

OWNER PARTICIPANT          OWNER PARTICIPANT'S PERCENTAGE
                           PERCENTAGE
General Electric Capital     __________%                             $__________
Corporation

PASS-THROUGH TRUSTEE       LOAN PARTICIPANT'S PTT PERCENTAGE

200_-1G Pass-Through Trustee  __________%                            $__________

200_-1C Pass-Through Trustee  __________%                            $__________

TOTAL                         100%                                   $__________

<PAGE>

                                  CERTAIN TERMS

DEFINED TERM                                       DEFINITION

Commitment Termination Date                        __________, 200_

Lessee's Advisor(s)                                Capstar Partners, LLC

Lessor's Cost                                      $_______________

OP Jurisdiction                                    New York

Owner Participant's Special Counsel                Dewey Ballantine LLP

Trust Company Jurisdiction                         Utah

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