Document:

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                                                                    EXHIBIT 4.20

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                      AMENDED AND RESTATED TRUST INDENTURE

                             AND SECURITY AGREEMENT

                            dated as of May 24, 2001

                                     between

                WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,
                              not in its individual
                  capacity except as expressly set forth herein
                           but solely as Owner Trustee

                                       and

               STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
                      NATIONAL ASSOCIATION, as Loan Trustee

                   One McDonnell Douglas Model MD-83 Aircraft

                      Bearing U.S. Registration No. N9630A
                         Manufacturer's Serial No. 53561

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                                TABLE OF CONTENTS
<Table>
<S>                                                                                                              <C>
GRANTING CLAUSE...................................................................................................2
HABENDUM CLAUSE...................................................................................................5

                                          ARTICLE 1 DEFINITIONS
                                       ARTICLE 2 THE EQUIPMENT NOTES

Section 2.01. Form of Equipment Notes.............................................................................7
Section 2.02. Issuance and Terms of Equipment Notes...............................................................7
Section 2.03. Method of Payment...................................................................................8
Section 2.04. Registration, Transfer and Exchange of Equipment Notes..............................................9
Section 2.05. Mutilated, Destroyed, Lost or Stolen Equipment Notes...............................................10
Section 2.06. Payment of Expenses on Transfer; Cancellation......................................................10
Section 2.07. Mandatory Redemption of Equipment Notes............................................................10
Section 2.08. Voluntary Redemption of Equipment Notes............................................................11
Section 2.09. Redemptions; Notice of Redemption to Noteholders...................................................11
Section 2.10. Purchase upon Indenture Event of Default...........................................................12
Section 2.11. Payment from Indenture Estate Only; Non-Recourse Obligations.......................................13
Section 2.12. Application of Payments............................................................................14
Section 2.13. Subordination......................................................................................14
Section 2.14. Certain Payments...................................................................................15
Section 2.15. Directions by Subordination Agent..................................................................16
Section 2.16. Repayment of Monies for Equipment Note Payments Held by the Loan Trustee...........................17
Section 2.17. Termination of Interest in Indenture Estate........................................................17

                ARTICLE 3 RECEIPT, DISTRIBUTION AND APPLICATION OF FUNDS IN THE INDENTURE ESTATE

Section 3.01. Payment upon Issuance of Equipment Notes...........................................................17
Section 3.02. Basic Distributions................................................................................17
Section 3.03. Event of Loss; Optional Redemption; Voluntary Termination..........................................19
Section 3.04. Payments After Indenture Event of Default..........................................................19
Section 3.05. Certain Payments...................................................................................22
Section 3.06. Payments for Which No Application Is Otherwise Provided............................................22
Section 3.07. Payments to Owner Trustee..........................................................................22

                                          ARTICLE 4 COVENANTS OF OWNER TRUSTEE

Section 4.01. Covenants of Owner Trustee.........................................................................23

               ARTICLE 5 DISPOSITION, SUBSTITUTION AND RELEASE OF PROPERTY INCLUDED IN THE INDENTURE
                                        ESTATE DURING CONTINUATION OF LEASE

Section 5.01. Disposition, Substitution and Release of Property Included in the
                    Indenture Estate During Continuation of Lease................................................23

                                                  ARTICLE 6 [RESERVED]
                                                  ARTICLE 7 [RESERVED]
                                           ARTICLE 8 DEFAULTS AND REMEDIES

Section 8.01. Indenture Events of Default........................................................................24
Section 8.02. Acceleration; Rescission and Annulment.............................................................26
Section 8.03. Certain Rights.....................................................................................27
Section 8.04. Remedies...........................................................................................28
Section 8.05. Return of Aircraft, Etc............................................................................30
</Table>

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<Table>
<S>                                                                                                              <C>
Section 8.06. Remedies Cumulative................................................................................31
Section 8.07. Discontinuance of Proceedings......................................................................31
Section 8.08. Waiver of Past Defaults............................................................................32
Section 8.09. Loan Trustee Authorized to Execute Bills of Sale, Etc..............................................32
Section 8.10. Rights of Noteholders to Receive Payment...........................................................32

                                          ARTICLE 9 DUTIES OF THE LOAN TRUSTEE

Section 9.01. Notice of Indenture Event of Default...............................................................32
Section 9.02. Action upon Instructions...........................................................................33
Section 9.03. Indemnification....................................................................................34
Section 9.04. No Duties Except as Specified in Indenture or Instructions.........................................34
Section 9.05. No Action Except Under Lease, Indenture or Instructions............................................34
Section 9.06. Notices, Etc.......................................................................................34
Section 9.07. Investment of Funds Held by Loan Trustee...........................................................34
Section 9.08. Replacement of Loan Trustee........................................................................35
Section 9.09. Successor Loan Trustee by Merger, Etc..............................................................36
Section 9.10. Eligibility; Disqualification......................................................................36
Section 9.11. Trustee's Liens....................................................................................37
Section 9.12. Withholding Taxes; Information Reporting...........................................................37

                                     ARTICLE 10 THE OWNER TRUSTEE AND THE LOAN TRUSTEE

Section 10.01. Acceptance of Trusts and Duties...................................................................37
Section 10.02. Absence of Duties.................................................................................38
Section 10.03. No Representations or Warranties as to Aircraft or Documents......................................38
Section 10.04. No Segregation of Moneys; No Interest.............................................................38
Section 10.05. Reliance; Agents; Advice of Counsel...............................................................39
Section 10.06. Capacity in Which Acting..........................................................................39
Section 10.07. Compensation......................................................................................39
Section 10.08. May Become Noteholder.............................................................................40
Section 10.09. Further Assurances; Financing Statements..........................................................40

                                ARTICLE 11 INDEMNIFICATION OF LOAN TRUSTEE BY OWNER TRUSTEE
Section 11.01. Scope of Indemnification..........................................................................40

                        ARTICLE 12 SUPPLEMENTS AND AMENDMENTS TO THIS INDENTURE AND OTHER DOCUMENTS

Section 12.01. Amendments to This Indenture Without Consent of Noteholders.......................................41
Section 12.02. Amendments to This Indenture with Consent of Noteholders..........................................42
Section 12.03. Revocation and Effect of Consents.................................................................43
Section 12.04. Notation on or Exchange of Equipment Notes........................................................43
Section 12.05. Amendments, Waivers, Etc., of Other Operative Documents...........................................43
Section 12.06. Trustees Protected................................................................................46
Section 12.07. Documents Mailed to Noteholders...................................................................46

                                                  ARTICLE 13 MISCELLANEOUS

Section 13.01. Termination of Indenture..........................................................................46
Section 13.02. No Legal Title to Indenture Estate in Noteholders.................................................47
Section 13.03. Sale of Indenture Estate by Loan Trustee is Binding...............................................47
Section 13.04. Indenture for Benefit of Owner Trustee, Loan Trustee, Owner Participant,
               Noteholders, Other Indenture Indemnitees and Lessee...............................................47
Section 13.05. No Action Contrary to Lessee's Rights Under the Lease.............................................47
</Table>

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<Table>
<S>                                                                                                             <C>
Section 13.06. Notices...........................................................................................47
Section 13.07. Severability......................................................................................48
Section 13.08. Oral Modifications or Continuing Waivers..........................................................48
Section 13.09. Successors and Assigns............................................................................48
Section 13.10. Headings..........................................................................................48
Section 13.11. Normal Commercial Relations.......................................................................48
Section 13.12. GOVERNING LAW.....................................................................................48
Section 13.13. Execution in Counterparts.........................................................................48

Annex A         -   Definitions

Exhibit A       -   Form of Equipment Note
Exhibit B       -   Form of Trust Agreement and Indenture Supplement
Schedule I      -   Description of Aircraft
Schedule II     -   Terms of Equipment Notes
Schedule III    -   List of Pass Through Trust Agreements
</Table>

                                      iii
<PAGE>

                      AMENDED AND RESTATED TRUST INDENTURE
                             AND SECURITY AGREEMENT

                  This AMENDED AND RESTATED TRUST INDENTURE AND SECURITY
AGREEMENT, dated as of May 24, 2001, between WELLS FARGO BANK NORTHWEST,
NATIONAL ASSOCIATION, a national banking association, not in its individual
capacity except as otherwise expressly provided herein, but solely as Owner
Trustee under the Trust Agreement (capitalized terms used herein without
definition having the respective meanings specified therefor in Article 1), and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a
national banking association, as Loan Trustee hereunder.

                                  WITNESSETH:

                  WHEREAS, the Owner Participant and the Owner Trustee in its
individual capacity have entered into the Trust Agreement whereby, among other
things, (i) the Owner Trustee has established a certain trust for the use and
benefit of the Owner Participant subject, however, to the Indenture Estate
created pursuant hereto for the use and benefit of, and with the priority of
payment to, the holders of the Equipment Notes issued hereunder, and (ii) the
Owner Trustee has been authorized and directed to execute and deliver this
Indenture;

                  WHEREAS, the Owner Trustee and Wilmington Trust Company as
Indenture Trustee (the "Indenture Trustee") entered into the Original Indenture
described in Schedule I;

                  WHEREAS, the Original Indenture was recorded with the FAA on
April 9, 2001 and was assigned the Conveyance No. specified in Schedule I;

                  WHEREAS, the Indenture Trustee under the Original Indenture
has resigned and has been replaced in such capacity by the Loan Trustee under
the Instrument of Resignation being filed with the FAA simultaneously herewith;

                  WHEREAS, the parties desire by this Indenture, among other
things, (i) to amend and restate in its entirety the Original Indenture, (ii) to
provide for the issuance by the Owner Trustee of the Equipment Notes and (iii)
to provide for the assignment, mortgage and pledge by the Owner Trustee to the
Loan Trustee, as part of the Indenture Estate hereunder, among other things, of
certain of the Owner Trustee's right, title and interest in and to the Aircraft
and the Operative Documents and certain payments and other amounts received
hereunder or thereunder in accordance with the terms hereof, as security for,
among other things, the Owner Trustee's obligations to the Loan Trustee, the
Noteholders and the Indenture Indemnitees, for the ratable benefit and security
of the Noteholders, subject to Section 2.13 and Article 3;

                  WHEREAS, all things have been done to make the Equipment
Notes, when executed by the Owner Trustee and authenticated and delivered by the
Loan Trustee hereunder, the valid, binding and enforceable obligations of the
Owner Trustee; and

                  WHEREAS, all things necessary to make this Indenture the
legal, valid and binding obligation of the Owner Trustee and the Loan Trustee,
for the uses and purposes herein set forth, in accordance with its terms, have
been done and performed and have happened;

<PAGE>

                                 GRANTING CLAUSE

                  NOW, THEREFORE, THIS TRUST INDENTURE AND SECURITY AGREEMENT
WITNESSETH, that, to secure the prompt payment of the principal of, Make-Whole
Amount, if any, and interest on and all other amounts due with respect to, all
Equipment Notes from time to time outstanding and the performance and observance
by the Owner Trustee of all the agreements, covenants and provisions contained
herein and in the other Operative Documents to which it is a party for the
benefit of the Noteholders and the Indenture Indemnitees, and the prompt payment
of any amounts from time to time owing to the Noteholders and the Indenture
Indemnitees under the Participation Agreement by the Owner Trustee, the Owner
Participant and the Lessee, and for the uses and purposes and subject to the
terms and provisions hereof, and in consideration of the premises and of the
covenants herein contained, and of the acceptance of the Equipment Notes by the
Noteholders, and of the sum of $1 paid to the Owner Trustee by the Loan Trustee
at or before the delivery hereof, the receipt whereof is hereby acknowledged,
the Owner Trustee has granted, bargained, sold, assigned, transferred, conveyed,
mortgaged, pledged and confirmed, and does hereby grant, bargain, sell, assign,
transfer, convey, mortgage, pledge and confirm, unto the Loan Trustee, its
successors and assigns, for the security and benefit of the Noteholders and the
Indenture Indemnitees from time to time, a first priority security interest in
and mortgage Lien on all estate, right, title and interest of the Owner Trustee
in, to and under the following described property, rights, interests and
privileges (which collectively, including all property hereafter specifically
subjected to the Lien of this Indenture by any instrument supplemental hereto,
but excluding the Excepted Property, are herein called the "Indenture Estate"):

                  (1) the Aircraft (including the Airframe and the Engines more
         fully described in Schedule I hereto), and all replacements thereof and
         substitutions therefor in which the Owner Trustee shall from time to
         time acquire an interest as provided herein and in accordance with the
         Lease, as more particularly described in the Trust Agreement and
         Indenture Supplement executed and delivered with respect to the
         Aircraft or any such replacements thereof or substitutions therefor, as
         provided in this Indenture, including all logs, manuals and data, and
         inspection, modification and overhaul records required to be maintained
         with respect thereto under applicable rules and regulations of the FAA
         and, if the Aircraft has been registered under the laws of a
         jurisdiction other than the United States, of the applicable foreign
         governmental authority;

                  (2) the Lease, each Lease Supplement and all Rent thereunder,
         including, without limitation, all amounts of Basic Rent, Supplemental
         Rent, and payments of any kind thereunder; the Purchase Agreement (to
         the extent assigned by the Purchase Agreement Assignment), and the
         Purchase Agreement Assignment, in each case including, without
         limitation, (x) all rights of the Owner Trustee to receive any payments
         or other amounts or to exercise any election or option or to make any
         decision or determination or to give or receive any notice, consent,
         waiver or approval or to take any other action under or in respect of
         any such document or to accept surrender or redelivery of the Aircraft
         or any part thereof, as well as all the rights, powers and remedies on
         the part of the Owner Trustee, whether acting under any such document
         or by statute or at law or in equity, or otherwise, arising out of any
         Lease Event of Default, and (y) any right

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         to restitution from the Lessee or any other Person in respect of any
         determination of invalidity of any such document;

                  (3) all rents, issues, profits, revenues and other income of
         the property subjected or required to be subjected to the Lien of this
         Indenture, including all payments or proceeds payable to the Owner
         Trustee after termination of the Lease with respect to the Aircraft as
         the result of the sale, lease or other disposition thereof, and all
         estate, title and interest of every nature whatsoever of the Owner
         Trustee in and to the same and every part thereof;

                  (4) all requisition proceeds with respect to the Aircraft or
         any part thereof and all insurance proceeds with respect to the
         Aircraft or any part thereof, but excluding any insurance maintained by
         the Owner Trustee, the Owner Participant or the Lessee and not required
         under Section 11 of the Lease;

                  (5) all moneys and securities now or hereafter paid or
         deposited or required to be paid or deposited to or with the Loan
         Trustee by or for the account of the Owner Trustee pursuant to any term
         of any Operative Document and held or required to be held by the Loan
         Trustee hereunder;

                  (6) all rights of the Owner Trustee to amounts paid or payable
         by the Lessee to the Owner Trustee under the Participation Agreement
         and all rights of the Owner Trustee to enforce payment of any such
         amounts thereunder; and

                  (7) all proceeds of the foregoing (the Owner Trustee having
         delivered to the Loan Trustee the original executed Lease and executed
         counterparts of the Trust Agreement and the Purchase Agreement
         Assignment);

                  Notwithstanding the foregoing provisions:

                  (a) there shall be excluded from the Indenture Estate and from
         the security interest granted by this Indenture all Excepted Property;

                  (b) (i) whether or not a Lease Event of Default shall occur
         and be continuing, the Owner Trustee and the Owner Participant shall at
         all times retain the right, to the exclusion of the Loan Trustee, (A)
         to retain the rights of the "Lessor" with respect to the election to
         retain or sell the Aircraft pursuant to Section 9 of the Lease and (B)
         to retain the right of the "Lessor" in connection with the
         determination of the fair market rental value or fair market sales
         value pursuant to Section 20 of the Lease;

                  (ii) whether or not a Lease Event of Default or an Indenture
         Event of Default shall occur and be continuing, (A) the Owner Trustee
         and the Owner Participant shall at all times retain the right, to the
         exclusion of the Loan Trustee, (x) to exercise any election or option
         or make any decision or determination, or to give or receive any
         notice, consent, waiver or approval, or to demand, collect, sue for or
         otherwise receive and enforce the payment of Excepted Property due and
         payable to it or to take any other action in respect of, but in each
         case only to the extent relating to, Excepted Property and to commence
         an action at law to obtain such Excepted Property, (y) to retain all
         rights

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         with respect to insurance maintained for its own account in conformity
         with Section 11(f) of the Lease, and (z) to exercise, to the extent
         necessary to enable it to exercise its rights under Section 8.03
         hereof, the rights of the "Lessor" under Section 23 of the Lease; and
         (B) the Owner Trustee and the Loan Trustee shall each retain the right,
         separately but not to the exclusion of the other, (w) to receive from
         the Lessee all notices, certificates, reports, filings, opinions of
         counsel, copies of all documents and all information which the Lessee
         is permitted or required to give or furnish to the "Lessor" or to the
         "Owner Trustee" pursuant to any Operative Document, (x) to give any
         notice of default under Section 15 of the Lease and to declare the
         Lease in default in respect thereof, (y) to cause the Lessee to take
         any action and execute and deliver such documents, financial
         information and assurances as the "Lessor" may from time to time
         reasonably request pursuant to Section 17 of the Lease and (z) to
         exercise inspection rights pursuant to Section 12 of the Lease;

                  (iii) without limiting the effect of clause (ii) above, so
         long as no Indenture Event of Default shall have occurred and be
         continuing (but subject to the provisions of Article 12), the Owner
         Trustee shall retain the right, to the exclusion of the Loan Trustee,
         to exercise all other rights of the "Lessor" under the Lease including,
         without limitation, (A) the right to approve as satisfactory any
         accountants, engineers or counsel to render services for or issue
         opinions to the Owner Trustee pursuant to express provisions of the
         Operative Documents and to exercise all rights with respect to the
         Lessee's use, operation, and maintenance or modification of the
         Aircraft or Engines which the Lease specifically provides to the Lessor
         and (B) the right to consent to reregistration of the Aircraft pursuant
         to Section 12(l) of the Participation Agreement; provided that the
         foregoing shall not limit (x) any rights separately and expressly
         granted the Loan Trustee or any Noteholder under the Operative
         Documents or (y) the right of the Loan Trustee to receive any funds to
         be delivered to the "Lessor" under the Lease (except funds which
         constitute or are delivered with respect to Excepted Property) and
         under the Purchase Agreement;

                  (c) the leasehold interest granted to the Lessee under the
         Lease shall not be subject to the security interest granted by this
         Indenture, and nothing in this Indenture shall affect the rights of the
         Lessee under the Lease so long as no Lease Event of Default has
         occurred and is continuing; and

                  (d) as between the Owner Trustee and the Loan Trustee, nothing
         contained in this Granting Clause shall prevent the Owner Trustee or
         the Owner Participant from seeking specific performance of the
         covenants of the Lessee under the Lease relating to the protection,
         insurance, maintenance, possession and use of the Aircraft, provided
         such action shall not interfere with the exercise by the Loan Trustee
         of its remedies under Article 8 hereof or Section 15 of the Lease, or
         from maintaining separate insurance with respect to the Aircraft to the
         extent permitted by Section 11 of the Lease.

                  Notwithstanding the foregoing, the Loan Trustee shall at all
times have the right, to the exclusion of the Owner Trustee and the Owner
Participant, to (a) declare the Lease to be in default under Section 15 thereof
and (b) subject only to the provisions of Sections 8.03 and

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<PAGE>

8.04(a) hereof, exercise the remedies set forth in such Section 15 (other than
in connection with Excepted Property) and in Article 8 hereof.

                                 HABENDUM CLAUSE

                  TO HAVE AND TO HOLD all and singular the aforesaid property
unto the Loan Trustee, its successors and assigns, in trust for the benefit and
security of the Noteholders and the Indenture Indemnitees from time to time,
without any priority of any one Equipment Note over any other except as provided
in Section 2.13 and Article 3 hereof, and for the uses and purposes and subject
to the terms and provisions set forth in this Indenture.

                  The Owner Trustee agrees that this Indenture is intended to
create and shall create and grant to the Loan Trustee a security interest in the
Aircraft, which security interest shall attach on and as of the Commencement
Time. The security interest created by this Indenture and granted to the Loan
Trustee hereunder in the Indenture Estate other than in the Aircraft shall
attach upon the delivery hereof.

                  It is expressly agreed that, anything herein contained to the
contrary notwithstanding, the Owner Trustee shall remain liable under each of
the Operative Documents to which it is a party to perform all of the obligations
assumed by it thereunder, all in accordance with and pursuant to the terms and
provisions thereof, and the Loan Trustee and the Noteholders shall have no
obligation or liability under any of the Operative Documents to which the Owner
Trustee is a party by reason of or arising out of the assignment hereunder, nor
shall the Loan Trustee (except as to the Loan Trustee, if the Loan Trustee shall
have become the "Lessor" under the Lease) be required or obligated in any manner
to perform or fulfill any obligations of the Owner Trustee under or pursuant to
any of the Operative Documents to which the Owner Trustee is a party or, except
as herein or therein expressly provided, to make any payment, or to make any
inquiry as to the nature or sufficiency of any payment received by it, or
present or file any claim, or take any action to collect or enforce the payment
of any amounts which may have been assigned to it or to which it may be entitled
at any time or times.

                  Subject to the terms and conditions hereof, the Owner Trustee
does hereby constitute the Loan Trustee the true and lawful attorney of the
Owner Trustee, irrevocably, with full power (in the name of the Owner Trustee or
otherwise) to ask, require, demand, receive, compound and give acquittance for
any and all moneys and claims for moneys due and to become due to the Owner
Trustee (other than Excepted Property) under or arising out of the Indenture
Documents and all other property which now or hereafter constitutes part of the
Indenture Estate (subject to the provisions of Section 12.05(b)(i)), to endorse
any checks or other instruments or orders in connection therewith and to file
any claims or take any action or institute any proceedings which the Loan
Trustee may deem to be necessary or advisable in the premises. The Owner Trustee
has directed the Lessee to make all payments of Rent (other than Excepted
Property) payable to the Owner Trustee by the Lessee and all other amounts which
are required to be paid to or deposited with the Owner Trustee pursuant to the
Lease directly to the Loan Trustee at such address as the Loan Trustee shall
specify, for application as provided in this Indenture. The Owner Trustee agrees
that promptly on receipt thereof, it will transfer to the Loan Trustee any and
all moneys from time to time received by it constituting part of the Indenture
Estate, for distribution by the Loan Trustee pursuant to this Indenture, except
that the

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<PAGE>

Owner Trustee shall accept for distribution pursuant to the Trust Agreement any
amounts distributed to it by the Loan Trustee as expressly provided in this
Indenture and any Excepted Property.

                  The Owner Trustee agrees that at any time and from time to
time, upon the written request of the Loan Trustee, the Owner Trustee will
promptly and duly execute and deliver or cause to be duly executed and delivered
to the Loan Trustee any and all such further instruments and documents as the
Loan Trustee may reasonably deem desirable in obtaining the full benefits of the
mortgage and security interest granted hereby and of the rights and powers
herein granted.

                  The Owner Trustee does hereby warrant and represent that it
has not mortgaged, assigned or pledged, and hereby covenants that it will not
mortgage, assign or pledge, so long as the Lien of this Indenture shall or is
intended to remain in effect, any of its right, title or interest subject to the
mortgage and security interest hereby created, to anyone other than the Loan
Trustee, and that it will not (other than in respect of Excepted Property),
except as provided in or permitted by this Indenture, accept any payment from
the Lessee, enter into an agreement amending or supplementing any of the
Operative Documents to which it is a party, execute any waiver or modification
of, or consent under the terms of any of the Operative Documents to which it is
a party, settle or compromise any claim against the Lessee arising under any of
the Operative Documents, or submit or consent to the submission of any dispute,
difference or other matter arising under or in respect of any of the Operative
Documents to which it is a party to arbitration thereunder.

                  The Owner Trustee does hereby agree that it will not without
the written consent of the Loan Trustee:

                  (a) receive or collect or agree to the receipt or collection
         of any payment (other than Excepted Payments) of Rent, including Basic
         Rent, Stipulated Loss Value, Termination Value or any other payment to
         be made pursuant to Section 9 or 10 of the Lease prior to the date for
         the payment thereof provided for by the Lease or assign, transfer or
         hypothecate (other than to the Loan Trustee hereunder) any payment of
         Rent, including Basic Rent, Stipulated Loss Value, Termination Value or
         any other payment to be made pursuant to Section 9 or 10 of the Lease,
         then due or to accrue in the future under the Lease in respect of the
         Airframe and Engines; or

                  (b) except as contemplated by the Trust Agreement in
         connection with the appointment of a successor owner trustee, sell,
         mortgage, transfer, assign or hypothecate (other than to the Loan
         Trustee hereunder) its interest in the Airframe and Engines or any part
         thereof or in any amount to be received by it from the use or
         disposition of the Airframe and Engines, other than amounts distributed
         to it pursuant to Article 3 hereof.

                  It is hereby further agreed that any and all property
described or referred to in the granting clauses hereof which is hereafter
acquired by the Owner Trustee shall ipso facto, and without any other
conveyance, assignment or act on the part of the Owner Trustee or the Loan
Trustee, become and be subject to the Lien herein granted as fully and
completely as though

                                       6
<PAGE>

specifically described herein, but nothing contained in this paragraph shall be
deemed to modify or change the obligations of the Owner Trustee contained in the
foregoing paragraphs.

                  The Owner Trustee does hereby ratify and confirm the Lease and
does hereby agree that it will not violate any covenant or agreement made by it
therein, herein or in any other Operative Document.

                  IT IS HEREBY COVENANTED AND AGREED by and among the parties
hereto as follows:

                                   ARTICLE 1

                                   DEFINITIONS

                  Unless the context otherwise requires, all capitalized terms
used but not defined herein shall have the respective meanings set forth, and
shall be construed and interpreted in the manner described, in Annex A hereto
for all purposes of this Indenture.

                                   ARTICLE 2

                               THE EQUIPMENT NOTES

                  Section 2.01. Form of Equipment Notes. The Equipment Notes
shall be substantially in the form set forth in Exhibit A hereto.

                  Section 2.02. Issuance and Terms of Equipment Notes. The
Equipment Notes shall be dated the date of issuance thereof, shall be issued in
(a) five (or if the Series E Equipment Notes are issued, six) separate series
consisting of Series A-1 Equipment Notes, Series A-2 Equipment Notes, Series B
Equipment Notes, Series C Equipment Notes, Series D Equipment Notes and, if
issued, Series E Equipment Notes and (b) the respective maturities and principal
amounts specified in Schedule II and shall bear interest at the respective
interest rates per annum specified in Schedule II (or, in the case of a Series E
Equipment Note issued after the Closing Date, as specified in an amendment to
this Indenture). On the Closing Date, each Series A-1 Equipment Note, Series A-2
Equipment Note, Series B Equipment Note, Series C Equipment Note and Series D
Equipment Note shall be issued to the Subordination Agent on behalf of each of
the Pass Through Trustees for the Pass Through Trusts created under the Pass
Through Trust Agreements referred to in Schedule III. Subject to complying with
the conditions set forth in Section 20(d) of the Participation Agreement, the
Owner Trustee shall have the option to issue Series E Equipment Notes at or
after the Closing Date. The Equipment Notes shall be issued in registered form
only. The Equipment Notes shall be issued in denominations of $1,000 and
integral multiples thereof, except that one Equipment Note of each Series may be
in an amount that is not an integral multiple of $1,000.

                  Each Equipment Note shall bear interest at the Debt Rate
(calculated on the basis of a year of 360 days comprised of twelve 30-day
months), payable in arrears on each Payment Date on the unpaid principal amount
thereof from time to time outstanding until such principal amount is paid in
full, as further provided in the form of Equipment Note set forth in Exhibit A.
The principal amount of each Equipment Note shall be payable as specified in
Schedule II. Each

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<PAGE>

Equipment Note shall bear interest, payable on demand, at the Past Due Rate (and
not at the Debt Rate) (calculated on the basis of a year of 360 days comprised
of twelve 30-day months) on any principal amount and (to the extent permitted by
applicable law) Make-Whole Amount, if any, interest and any other amounts
payable thereunder not paid when due for any period during which the same shall
be overdue, in each case for the period the same is overdue. Amounts shall be
overdue under an Equipment Note if not paid in the manner provided therein or in
this Indenture when due (whether at stated maturity, by acceleration or
otherwise). Notwithstanding anything to the contrary contained herein, if any
date on which a payment hereunder or under any Equipment Note becomes due and
payable is not a Business Day, then such payment shall not be made on such
scheduled date but shall be made on the next succeeding Business Day with the
same force and effect as if made on such scheduled date, and if such payment is
made on such next succeeding Business Day, no interest shall accrue on the
amount of such payment from and after such scheduled date.

                  The Equipment Notes shall be executed on behalf of the Owner
Trustee by the manual or facsimile signature of one of its authorized officers.
Equipment Notes bearing the signatures of individuals who were at the time of
execution the proper officers of the Owner Trustee shall be valid,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Equipment Notes or did
not hold such offices at the respective dates of such Equipment Notes. No
Equipment Note shall be secured by or entitled to any benefit under this
Indenture or be valid or obligatory for any purposes unless there appears on
such Equipment Note a certificate of authentication in the form provided herein
executed by the Loan Trustee by the manual signature of one of its authorized
officers, and such certificate upon any Equipment Notes shall be conclusive
evidence, and the only evidence, that such Equipment Note has been duly
authenticated and delivered hereunder.

                  Section 2.03. Method of Payment. The principal amount of,
interest on, Make-Whole Amount, if any, and, except to the extent expressly
provided herein, all other amounts due to any Noteholder under each Equipment
Note or otherwise payable hereunder shall be payable by the Owner Trustee in
Dollars by wire transfer of immediately available funds not later than 11:00
a.m. (New York City time) on the due date of payment to the Loan Trustee at the
Corporate Trust Office for distribution among the Noteholders in the manner
provided herein. The Owner Trustee shall not have any responsibility for the
distribution of such payment to any Noteholder. Notwithstanding the foregoing or
any provision in any Equipment Note to the contrary, the Loan Trustee will use
reasonable efforts to pay or cause to be paid, if so directed in writing by any
Noteholder (with a copy to the Owner Trustee), all amounts paid by the Owner
Trustee hereunder and under such Noteholder's Equipment Note or Equipment Notes
to such Noteholder or a nominee therefor (including all amounts distributed
pursuant to Article 3) by transferring, or causing to be transferred, by wire
transfer of immediately available funds in Dollars, prior to 12:00 Noon (New
York City time) on the due date of payment, to an account maintained by such
Noteholder with a bank located in the continental United States the amount to be
distributed to such Noteholder, for credit to the account of such Noteholder
maintained at such bank; provided that, in the event the Equipment Notes are not
held by the Subordination Agent on behalf of the Pass Through Trustees, the Loan
Trustee may at its option pay such amounts by check mailed to the Noteholder's
address as it appears on the Equipment Note Register. If, after its receipt of
funds at the place and prior to the time specified above in the immediately
preceding sentence, the Loan Trustee shall fail (other than as a result of a
failure of

                                       8
<PAGE>

the Noteholder to provide it with wire transfer instructions) to make any such
payment required to be paid by wire transfer as provided in the immediately
preceding sentence on the Business Day it receives such funds, the Loan Trustee,
in its individual capacity and not as trustee, agrees to compensate such
Noteholders for loss of use of funds at the Federal Funds Rate until such
payment is made and the Loan Trustee shall be entitled to any interest earned on
such funds until such payment is made. Any payment made hereunder shall be made
without any presentment or surrender of any Equipment Note, except that, in the
case of the final payment in respect of any Equipment Note, such Equipment Note
shall be surrendered to the Loan Trustee for cancellation. Notwithstanding any
other provision of this Indenture to the contrary, the Loan Trustee shall not be
required to make, or cause to be made, wire transfers as aforesaid prior to the
first Business Day on which it is practicable for the Loan Trustee to do so in
view of the time of day when the funds to be so transferred were received by it
if such funds were received after 1:00 p.m. (New York City time) at the place of
payment.

                  Section 2.04. Registration, Transfer and Exchange of Equipment
Notes. The Loan Trustee shall keep a register or registers (the "Equipment Note
Register") in which the Loan Trustee shall provide for the registration of
Equipment Notes and the registration of transfers of Equipment Notes. No such
transfer shall be given effect unless and until registration hereunder shall
have occurred. The Equipment Note Register shall be kept at the Corporate Trust
Office of the Loan Trustee. The Loan Trustee is hereby appointed "Equipment Note
Registrar" for the purpose of registering Equipment Notes and transfers of
Equipment Notes as herein provided. A holder of any Equipment Note intending to
exchange or transfer such Equipment Note shall surrender such Equipment Note to
the Loan Trustee at the Corporate Trust Office, together with a written request
from the registered holder thereof for the issuance of a new Equipment Note of
the same Series, specifying, in the case of a surrender for transfer, the name
and address of the new holder or holders. Upon surrender for registration of
transfer of any Equipment Note and subject to satisfaction of Section 2.06, the
Owner Trustee shall execute, and the Loan Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Equipment Notes of a like aggregate principal amount and of the same Series.
At the option of the Noteholder, Equipment Notes may be exchanged for other
Equipment Notes of the same Series of any authorized denominations of a like
aggregate principal amount, upon surrender of the Equipment Notes to be
exchanged to the Loan Trustee at the Corporate Trust Office. Whenever any
Equipment Notes are so surrendered for exchange, the Owner Trustee shall
execute, and the Loan Trustee shall authenticate and deliver, the Equipment
Notes which the Noteholder making the exchange is entitled to receive. All
Equipment Notes issued upon any registration of transfer or exchange of
Equipment Notes (whether under this Section 2.04 or under Section 2.05 or
otherwise under this Indenture) shall be the valid obligations of the Owner
Trustee evidencing the same respective obligations, and entitled to the same
security and benefits under this Indenture, as the Equipment Notes surrendered
upon such registration of transfer or exchange. Every Equipment Note presented
or surrendered for registration of transfer, shall be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the Loan
Trustee, duly executed by the Noteholder or such Noteholder's attorney duly
authorized in writing, and the Loan Trustee shall require evidence satisfactory
to it as to the compliance of any such transfer with the Securities Act of 1933,
as amended, and the securities laws of any applicable state or jurisdiction. The
Loan Trustee shall make a notation on each new Equipment Note of the amount of
all payments of principal amount previously made on the old Equipment Note or
Equipment Notes with respect

                                       9
<PAGE>

to which such new Equipment Note is issued and the date to which interest on
such old Equipment Note or Equipment Notes has been paid. Principal, interest
and all other amounts shall be deemed to have been paid on such new Equipment
Note to the date on which such amounts shall have been paid on such old
Equipment Note. The Loan Trustee shall not be required to exchange any
surrendered Equipment Notes as provided above (a) during the ten-day period
preceding the due date of any payment on such Equipment Note or (b) that has
been called for redemption. The Owner Trustee and the Loan Trustee shall in all
cases deem and treat the Person in whose name any Equipment Note shall have been
issued and registered on the Equipment Note Register as the absolute owner and
Noteholder of such Equipment Note for the purpose of receiving payment of all
amounts payable with respect to such Equipment Note and for all other purposes,
and neither the Owner Trustee nor the Loan Trustee shall be affected by any
notice to the contrary. The Loan Trustee will promptly notify the Owner Trustee
of each registration of a transfer of an Equipment Note. Any such transferee of
an Equipment Note, by its acceptance of an Equipment Note, agrees to the
provisions of the Operative Documents applicable to Noteholders, and shall be
deemed to have represented, warranted and covenanted to the parties to the
Participation Agreement as to the matters represented, warranted and covenanted
by the Noteholders, including the Pass Through Trustees, in the Participation
Agreement. Subject to compliance by the Noteholder and its transferee (if any)
of the requirements set forth in this Section 2.04 and in Section 2.06, the Loan
Trustee and the Owner Trustee shall use all reasonable efforts to issue new
Equipment Notes upon transfer or exchange within ten Business Days of the date
an Equipment Note is surrendered for transfer or exchange.

                  Section 2.05. Mutilated, Destroyed, Lost or Stolen Equipment
Notes. If any Equipment Note shall become mutilated, destroyed, lost or stolen,
the Owner Trustee shall, upon the written request of the holder of such
Equipment Note, issue and execute, and the Loan Trustee shall authenticate and
deliver, in replacement thereof, a new Equipment Note of the same Series in the
same principal amount and dated the same date as the Equipment Note so
mutilated, destroyed, lost or stolen. If the Equipment Note being replaced has
become mutilated, such Equipment Note shall be surrendered to the Loan Trustee.
If the Equipment Note being replaced has been destroyed, lost or stolen, the
related Noteholder shall furnish to the Owner Trustee and the Loan Trustee such
security or indemnity as may be required by each of them to save the Owner
Trustee and the Loan Trustee harmless and evidence satisfactory to the Owner
Trustee and the Loan Trustee of the destruction, loss or theft of such Equipment
Note and of the ownership thereof.

                  Section 2.06. Payment of Expenses on Transfer; Cancellation.
(a) No service charge shall be made to a Noteholder for any registration of
transfer or exchange of Equipment Notes, but the Loan Trustee, as Equipment Note
Registrar, may require payment by such Noteholder of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Equipment Notes.

                  (b) The Loan Trustee shall cancel all Equipment Notes
surrendered for replacement, redemption, transfer, exchange, payment or
cancellation and shall destroy the canceled Equipment Notes.

                  Section 2.07. Mandatory Redemption of Equipment Notes. (a)
Upon the occurrence of an Event of Loss to the Airframe, all the Equipment Notes
shall be redeemed in

                                       10
<PAGE>

whole on the Loss Payment Date at a redemption price equal to the aggregate
unpaid principal amount thereof together with accrued and unpaid interest
thereon to, but not including, the redemption date. No Make-Whole Amount shall
be payable on the Equipment Notes in connection with their redemption as a
result of an Event of Loss in respect of the Airframe.

                  (b) If the Lease is terminated pursuant to Section 9(a)
thereof, on the date the Lease is so terminated, all the Equipment Notes shall
be redeemed in whole at a redemption price equal to the aggregate unpaid
principal amount thereof together with accrued and unpaid interest thereon to,
but not including, the redemption date and all other amounts then due and
payable hereunder and under all other Operative Documents to the Noteholders,
plus Make-Whole Amount, if any.

                  Section 2.08. Voluntary Redemption of Equipment Notes. All
(but not less than all) of the Equipment Notes may be redeemed by the Owner
Trustee upon at least 20 days' revocable prior written notice to the Loan
Trustee, at a redemption price equal to the aggregate unpaid principal amount
thereof together with accrued and unpaid interest thereon to, but not including,
the date of redemption and all other Secured Obligations payable to the
Noteholders, plus Make-Whole Amount, if any.

                  Section 2.09. Redemptions; Notice of Redemption to
Noteholders. Notice of redemption with respect to the Equipment Notes shall be
given by first-class mail, postage prepaid, mailed not less than 15 nor more
than 60 days prior to the redemption date, to each Noteholder of such Equipment
Notes to be redeemed, at such Noteholder's address appearing in the Equipment
Note Register; provided that, in the case of a redemption to be made pursuant to
Section 2.07(b) or 2.08, such notice shall be revocable and shall be deemed
revoked in the event that the Lease does not in fact terminate on the Lease
Termination Date or, in the case of a redemption under Section 2.08, in the
event the Loan Trustee receives written notice of such revocation from the
Lessee or the Owner Trustee not later than three days prior to the redemption
date.

                  All notices of redemption shall state:

                  (1) the redemption date,

                  (2) the applicable basis for determining the redemption price,

                  (3) that on the redemption date, the redemption price will
         become due and payable upon each such Equipment Note, and that, if any
         such Equipment Notes are then outstanding, interest on such Equipment
         Notes shall cease to accrue on and after such redemption date, and

                  (4) the place or places where such Equipment Notes are to be
         surrendered for payment of the redemption price.

Notice of redemption or purchase of Equipment Notes to be redeemed shall be
given by the Loan Trustee.

                                       11
<PAGE>

                  On or before the redemption date, the Owner Trustee (or any
person on behalf of the Owner Trustee) shall, to the extent an amount equal to
the redemption price for the Equipment Notes to be redeemed on the redemption
date shall not then be held in the Indenture Estate, deposit or cause to be
deposited with the Loan Trustee by 11:00 a.m. (New York City time) on the
redemption date in immediately available funds the redemption price of the
Equipment Notes to be redeemed or purchased.

                  Notice of redemption having been given as aforesaid (and not
deemed revoked as contemplated in the proviso to this Section 2.09), the
Equipment Notes to be redeemed or purchased shall, on the redemption date,
become due and payable at the principal corporate trust office of the Loan
Trustee or at any office or agency maintained for such purposes pursuant to this
Indenture, and from and after such redemption date (unless there shall be a
default in the payment of the redemption price) any such Equipment Notes then
outstanding shall cease to bear interest. Upon surrender of any Equipment Note
for redemption in accordance with said notice such Equipment Note shall be paid
at the redemption price.

                  If any Equipment Note called for redemption shall not be so
paid upon surrender thereof for redemption, the principal amount thereof shall,
until paid, continue to bear interest from the applicable redemption date at the
Debt Rate in effect for such Equipment Note as of such redemption date.

                  Section 2.10. Purchase upon Indenture Event of Default. At any
time (a) while a Lease Event of Default has occurred and is continuing during
which the Loan Trustee has not declared the Lease to be in default as a
consequence thereof, (b) after the Equipment Notes shall have become due and
payable as provided in Article 8 hereof, (c) in the event of a bankruptcy
proceeding affecting the Lessee, (i) during the 60-day period under Section
1110(a)(2)(A) of the Bankruptcy Code (or such longer period as may apply under
Section 1110(b) of the Bankruptcy Code) the trustee in such proceeding or the
Lessee does not agree to perform its obligations under the Lease or (ii) at any
time after agreeing to perform such obligations, such trustee or the Lessee
ceases to perform such obligations such that the stay period applicable under
the Bankruptcy Code comes to an end; or (d) after the Loan Trustee has given to
the Owner Trustee or the Owner Participant the notice regarding, or has
otherwise commenced, exercise of remedies referred to in Section 8.04 (including
declaration of the Lease to be in default), the Owner Participant may at any
time elect to purchase all, but not less than all, Equipment Notes then
outstanding in accordance with the provisions of this Section 2.10. To exercise
such election the Owner Participant shall give written notice thereof to the
Loan Trustee (which will promptly notify each Noteholder). Such notice to the
Loan Trustee shall state that it is irrevocable and shall designate a date
within 15 days of such notice as the payment date and from the date of receipt
of such notice until the specified payment date the Loan Trustee shall not
exercise any remedies under Section 8.04 (or if the Loan Trustee has commenced
the exercise of such remedies, the Loan Trustee shall stay the exercise of such
remedies) unless, in the case of an Indenture Event of Default which does not
result from a Lease Event of Default or a Lease Default, the Loan Trustee or a
Majority in Interest of Noteholders shall reasonably conclude that the
non-exercise or stay of remedies would materially adversely affect the rights of
the Loan Trustee or the Noteholders under this Indenture. Each Noteholder agrees
that on such specified payment date, such Noteholder will, upon payment to the
Loan Trustee for such Noteholder's account in the manner provided for in Section
2.03 hereof from the Owner Participant of an

                                       12
<PAGE>

amount equal to the aggregate unpaid principal amount of all Equipment Notes
then held by such Noteholder, together with accrued and unpaid interest thereon
to the date of payment, and all other sums then due and payable to such
Noteholder hereunder, under such Equipment Notes or under the Participation
Agreement, forthwith sell, assign, transfer and convey to the Owner Participant
(without recourse, representation or warranty of any kind except for its own
acts), all of the estate, right, title and interest of such Noteholder in and to
the Indenture Estate, this Indenture, all Equipment Notes held by such
Noteholder and the Participation Agreement (excluding all estate, right, title
and interest under any of the foregoing to the extent such right, title or
interest is with respect to an obligation not then due and payable or past due
and not satisfied by the Owner Participant's payment hereunder with respect to
any action or inaction or state of affairs occurring prior to such sale).
However, if the election to purchase Equipment Notes is exercised pursuant to
clause (a) above at any time when there shall have occurred and be continuing
for less than 180 days a Lease Event of Default, the purchase price of the
Equipment Notes shall equal the price provided in the immediately preceding
sentence plus Make-Whole Amount, if any. The Owner Participant shall assume all
of such Noteholder's obligations under the Participation Agreement and this
Indenture arising subsequent to such sale. If the Owner Participant shall so
request, such Noteholder will comply with all the provisions of Section 2.04
hereof to enable new Equipment Notes to be issued to the Owner Participant in
such authorized denominations as the Owner Participant shall request. All
charges and expenses required pursuant to Section 2.06 hereof in connection with
the issuance of any such new Equipment Note pursuant to this Section shall be
borne by the Owner Participant.

                  Section 2.11. Payment from Indenture Estate Only; Non-Recourse
Obligations. Notwithstanding any other provision herein or in the Equipment
Notes to the contrary, all amounts payable by the Loan Trustee and the Owner
Trustee under the Equipment Notes and this Indenture shall be made only from the
income and proceeds of the Indenture Estate and each Noteholder, by its
acceptance of such Equipment Note, agrees that (a) it will look solely to the
income and proceeds of the Indenture Estate for the payment of such amounts, to
the extent available for distribution to it as herein provided, and (b) none of
the Owner Trustee, the Owner Participant or the Loan Trustee is or shall be
personally liable to any Noteholder for any amount payable under such Equipment
Note or this Indenture or, except as expressly provided in this Indenture or the
Participation Agreement in the case of the Owner Trustee and the Loan Trustee,
for any liability under such Equipment Note or hereunder.

                  Wells Fargo Bank Northwest, National Association is entering
into this Indenture solely as Owner Trustee under the Trust Agreement and not in
its individual capacity, and in no case whatsoever shall Wells Fargo Bank
Northwest, National Association (or any entity acting as successor trustee under
the Trust Agreement) be personally liable for, or for any loss in respect of,
any statements, representations, warranties, agreements or obligations hereunder
or thereunder; provided that Wells Fargo Bank Northwest, National Association
shall be liable hereunder in its individual capacity (i) for the performance of
its agreements undertaken in its individual capacity under Section 12 of the
Participation Agreement and (ii) for its own willful misconduct or negligence.
If a successor Owner Trustee is appointed in accordance with the terms of the
Trust Agreement and the Participation Agreement, such successor Owner Trustee
shall, without any further act, succeed to all of the rights, duties, immunities
and obligations hereunder, and its predecessor Owner Trustee and Wells Fargo
Bank Northwest, National Association shall be released from all further duties
and obligations hereunder, without prejudice

                                       13
<PAGE>

to any claims against Wells Fargo Bank Northwest, National Association or such
predecessor Owner Trustee for any default by Wells Fargo Bank Northwest,
National Association or such predecessor Owner Trustee, respectively, in the
performance of its obligations hereunder prior to such appointment.

                  Section 2.12. Application of Payments. Subject always to
Section 2.11 and except as otherwise provided in Article 3, in the case of each
Equipment Note, each payment of an installment of principal amount, Make-Whole
Amount, if any, and interest paid thereon shall be applied:

                  first, to the payment of accrued interest on such Equipment
         Note (as well as any interest on any overdue principal amount and (to
         the extent permitted by law) any overdue Make-Whole Amount, if any, any
         overdue interest and any other overdue amounts thereunder) to the date
         of such payment;

                  second, to the payment of Make-Whole Amount, if any; and

                  third, to the payment of principal amount of such Equipment
         Note (or portion thereof) then due thereunder.

                  Section 2.13. Subordination. (a) The indebtedness evidenced by
the Series A-1 Equipment Notes and Series A-2 Equipment Notes shall rank in
right of payment equally with all other Series A-1 Equipment Notes and Series
A-2 Equipment Notes. The indebtedness evidenced by the Series B Equipment Notes
is, to the extent and in the manner provided in this Indenture, subordinate and
subject in right of payment to the prior payment in full of the Secured
Obligations in respect of the Series A-1 Equipment Notes and Series A-2
Equipment Notes, and the Series B Equipment Notes are issued subject to such
provisions. The indebtedness evidenced by the Series C Equipment Notes is, to
the extent and in the manner provided in this Indenture, subordinate and subject
in right of payment to the prior payment in full of the Secured Obligations in
respect of the Series A-1 Equipment Notes, the Series A-2 Equipment Notes and
the Series B Equipment Notes, and the Series C Equipment Notes are issued
subject to such provisions. The indebtedness evidenced by the Series D Equipment
Notes is, to the extent and in the manner provided in this Indenture,
subordinate and subject in right of payment to the prior payment in full of the
Secured Obligations in respect of the Series A-1 Equipment Notes and Series A-2
Equipment Notes, the Series B Equipment Notes and the Series C Equipment Notes,
and the Series D Equipment Notes are issued subject to such provisions. The
indebtedness evidenced by the Series E Equipment Notes, if issued, shall be, to
the extent and in the manner provided in this Indenture, subordinate and subject
in right of payment to the prior payment in full of the Secured Obligations in
respect of the Series A-1 Equipment Notes, the Series A-2 Equipment Notes, the
Series B Equipment Notes, the Series C Equipment Notes and the Series D
Equipment Notes, and the Series E Equipment Notes, if issued, shall be issued
subject to such provisions. By acceptance of its Equipment Notes of any Series,
each Noteholder of such Series (i) agrees to and shall be bound by such
provisions, (ii) authorizes and directs the Loan Trustee on such Noteholder's
behalf to take such action as may be necessary or appropriate to effectuate the
subordination as provided in this Indenture and (iii) appoints the Loan Trustee
as such Noteholder's attorney-in-fact for such purpose.

                                       14
<PAGE>

                  (b) The Owner Trustee, the Loan Trustee and, by acceptance of
its Equipment Notes of any Series, each Noteholder of such Series, hereby agree
that no payment or distribution shall be made on or in respect of the Secured
Obligations owed to such Noteholder of such Series, including any payment or
distribution of cash, property or securities, after the occurrence of any of the
events referred to in Section 8.01(g) or after the commencement of any
proceedings of the type referred to in Section 8.01(h), except as expressly
provided in Article 3.

                  (c) By the acceptance of its Equipment Notes of any Series,
each Noteholder of such Series agrees that if such Noteholder, in its capacity
as a Noteholder, shall receive any payment or distribution on any Secured
Obligations in respect of such Series that it is not entitled to receive under
this Section 2.13 or Article 3 hereof, it will hold any amount so received in
trust for the Loan Trustee and forthwith turn over such amount to the Loan
Trustee in the form received to be applied as provided in Article 3.

                  Section 2.14. Certain Payments. The Owner Trustee agrees to
pay to the Loan Trustee for distribution in accordance with Section 3.05:

                  (a) an amount or amounts equal to the fees payable to the
         Liquidity Provider under Section 2.03 of each Liquidity Facility and
         the related Fee Letter (as defined in the Intercreditor Agreement),
         multiplied by a fraction, the numerator of which shall be the sum of
         the then outstanding aggregate principal amount of the Series A-1
         Equipment Notes, Series A-2 Equipment Notes, Series B Equipment Notes
         and Series C Equipment Notes and the denominator of which shall be the
         sum of the then outstanding aggregate principal amount of all "Series
         A-1 Equipment Notes," "Series A-2 Equipment Notes," "Series B Equipment
         Notes" and "Series C Equipment Notes" (in each case as defined in the
         Intercreditor Agreement);

                  (b) the amount equal to interest on any Downgrade Advance
         (other than any Applied Downgrade Advance) payable under Section 3.07
         of each Liquidity Facility minus Investment Earnings from such
         Downgrade Advance, multiplied by the fraction specified in the
         foregoing clause (a);

                  (c) the amount equal to interest on any Non-Extension Advance
         (other than any Applied Non-Extension Advance) payable under Section
         3.07 of each Liquidity Facility minus Investment Earnings from such
         Non-Extension Advance, multiplied by the fraction specified in the
         foregoing clause (a);

                  (d) if any payment default shall have occurred and be
         continuing with respect to interest on any Series A-1 Equipment Note,
         Series A-2 Equipment Note, Series B Equipment Note or Series C
         Equipment Note, (i) the excess, if any, of (A) the amount equal to the
         sum of interest on any Unpaid Advance or Applied Provider Advance
         payable under Section 3.07 of each Liquidity Facility plus any other
         amounts payable in respect of such Unpaid Advance or Applied Provider
         Advance under Section 3.01, 3.03 or 3.09 of the Liquidity Facility
         under which such Unpaid Advance or Applied Provider Advance was made
         over (B) the sum of Investment Earnings from any Final Advance plus any
         amount of interest at the Past Due Rate actually payable (whether or
         not in fact paid) in respect of the overdue scheduled interest on the
         Equipment Notes in respect of

                                       15
<PAGE>

         which such Unpaid Advance or Applied Provider Advance was made,
         multiplied by (ii) a fraction, the numerator of which shall be the then
         aggregate overdue amounts of interest on the Series A-1 Equipment
         Notes, Series A-2 Equipment Notes, Series B Equipment Notes and Series
         C Equipment Notes (other than interest becoming due and payable solely
         as a result of acceleration of any such Equipment Notes) and the
         denominator of which shall be the then aggregate overdue amounts of
         interest on all "Series A-1 Equipment Notes", "Series A-2 Equipment
         Notes", "Series B Equipment Notes" and "Series C Equipment Notes" (in
         each case as defined in the Intercreditor Agreement) (other than
         interest becoming due and payable solely as a result of acceleration of
         any such "Equipment Notes");

                  (e) any amounts owed to the Liquidity Provider by the
         Subordination Agent as borrower under Section 3.01 (other than in
         respect of an Unpaid Advance or Applied Provider Advance), 3.03 (other
         than in respect of an Unpaid Advance or Applied Provider Advance ),
         7.05 and 7.07 of each Liquidity Facility (or similar provisions of any
         Replacement Liquidity Facility) multiplied by the fraction specified in
         the foregoing clause (a); and

                  (f) an amount or amounts equal to the compensation, including
         reasonable expenses and disbursements, payable to the Subordination
         Agent under Section 6.07 of the Intercreditor Agreement, multiplied by
         the fraction specified in the foregoing clause (a) (but in any event
         without duplication of any amount or amounts payable in respect of such
         compensation under any other Operative Document or Pass Through Trust
         Document).

                  For purposes of this paragraph, the terms "Advance", "Applied
Downgrade Advance", "Applied Non-Extension Advance", "Applied Provider Advance",
"Cash Collateral Account", "Downgrade Advance", "Final Advance", "Investment
Earnings", "Non-Extension Advance, "Replacement Liquidity Facility" and "Unpaid
Advance" shall have the meanings specified in each Liquidity Facility or the
Intercreditor Agreement.

                  Section 2.15. Directions by Subordination Agent. So long as
the Subordination Agent is a Noteholder, notwithstanding anything contained
herein or in any other Operative Document to the contrary, in exercising its
right to vote the Equipment Notes held by it, or in giving or taking any
direction, consent, request, demand, instruction, authorization, notice, waiver
or other action provided by this Indenture or in respect of the Equipment Notes
to be given or taken by a Noteholder (each such vote or other action, a
"Direction") in respect of such Equipment Notes, the Subordination Agent shall
act in accordance with any votes, directions, consents, requests, demands,
instructions, authorizations, notices, waivers or other actions given or taken
by any applicable Pass Through Trustee or the Controlling Party pursuant to the
Intercreditor Agreement, including without limitation pursuant to Section 2.06,
Article IV or Section 8.01(b) thereof. The Subordination Agent shall be
permitted (x) to give a Direction with respect to less than the entire principal
amount of any single Equipment Note held by it, and (y) to give different
Directions with respect to different portions of the principal amount of any
single Equipment Note held by it. Any Direction given by the Subordination Agent
at any time with respect to more than a majority in aggregate unpaid principal
amount of all of the

                                       16
<PAGE>

Equipment Notes issued and then outstanding hereunder shall be deemed to have
been given by a Majority in Interest of Noteholders.

                  Section 2.16. Repayment of Monies for Equipment Note Payments
Held by the Loan Trustee. Any money held by the Loan Trustee in trust for any
payment of the principal of, Make-Whole Amount, if any, or interest on and any
other amounts due on any Equipment Note, including, without limitation, any
money deposited pursuant to Section 2.09, and remaining unclaimed for two years
after the due date for such payment (or if earlier, one month prior to the
escheat period provided under applicable state law) shall be paid to the Owner
Trustee; and the Noteholders entitled to payment thereon shall thereafter, as
unsecured general creditors, look only to the Lessee on behalf of the Owner
Trustee (to the extent of such funds actually received by the Lessee) for
payment thereof, and all liability of the Loan Trustee with respect to such
trust money shall thereupon cease; provided that the Loan Trustee, before being
required to make any such repayment, may at the expense of the Lessee cause to
be mailed to each such Noteholder notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of mailing, any unclaimed balance of such money then remaining will be
repaid to the Owner Trustee as provided herein.

                  Section 2.17. Termination of Interest in Indenture Estate(a) .
A Noteholder shall have no further interest in, or other right with respect to,
the Indenture Estate when and if the principal amount of, Make-Whole Amount, if
any, and interest on all Equipment Notes held by such Noteholder and all other
sums due and payable to such Noteholder hereunder, under such Equipment Notes
and under the other Operative Documents (collectively, the "Secured
Obligations") shall have been paid in full.

                                   ARTICLE 3

                    RECEIPT, DISTRIBUTION AND APPLICATION OF
                          FUNDS IN THE INDENTURE ESTATE

                  Section 3.01. Payment upon Issuance of Equipment Notes. On the
Closing Date, the Owner Trustee shall first, apply, or cause to be applied, the
proceeds of the sale of the Equipment Notes to the redemption of the notes
issued pursuant to the Original Indenture and second, distribute any remaining
amounts to the Owner Trustee.

                  Section 3.02. Basic Distributions. Except as otherwise
provided in Sections 3.03, 3.04 and 3.05, each installment of Basic Rent, any
payment of interest on overdue installments of Basic Rent and any payment
received by the Loan Trustee pursuant to Section 8.03 shall be promptly
distributed in the following order of priority:

                  first, so much of such payment as shall be required to pay in
         full the aggregate amount of the payment or payments of principal
         amount and interest (as well as any interest on any overdue principal
         amount and, to the extent permitted by applicable law, on any overdue
         interest and any other overdue amounts) then due under all Series A-1
         Equipment Notes and Series A-2 Equipment Notes shall be distributed to
         the Noteholders of Series A-1 Equipment Notes and Series A-2 Equipment
         Notes ratably, without priority of one over the other, in the
         proportion that the amount of such payment or payments

                                       17
<PAGE>

         then due under each Series A-1 Equipment Note or Series A-2 Equipment
         Note bears to the aggregate amount of the payments then due under all
         Series A-1 Equipment Notes and Series A-2 Equipment Notes;

                  second, after giving effect to clause "first" above, so much
         of such payment remaining as shall be required to pay in full the
         aggregate amount of the payment or payments of principal amount and
         interest (as well as any interest on any overdue principal amount and,
         to the extent permitted by applicable law, on any overdue interest and
         other overdue amounts) then due under all Series B Equipment Notes
         shall be distributed to the Noteholders of Series B Equipment Notes
         ratably, without priority of one over the other, in the proportion that
         the amount of such payment or payments then due under each Series B
         Equipment Note bears to the aggregate amount of the payments then due
         under all Series B Equipment Notes;

                  third, after giving effect to clause "second" above, so much
         of such payment remaining as shall be required to pay in full the
         aggregate amount of the payment or payments of principal amount and
         interest (as well as any interest on any overdue principal amount and,
         to the extent permitted by applicable law, on any overdue interest and
         any other overdue amounts) then due under all Series C Equipment Notes
         shall be distributed to the Noteholders of Series C Equipment Notes
         ratably, without priority of one over the other, in the proportion that
         the amount of such payment or payments then due under each Series C
         Equipment Note bears to the aggregate amount of the payments then due
         under all Series C Equipment Notes;

                  fourth, after giving effect to clause "third" above, so much
         of such payment remaining as shall be required to pay in full the
         aggregate amount of the payment or payments of principal amount and
         interest (as well as any interest on any overdue principal amount and,
         to the extent permitted by applicable law, on any overdue interest and
         any other overdue amounts) then due under all Series D Equipment Notes
         shall be distributed to the Noteholders of Series D Equipment Notes
         ratably, without priority of one over the other, in the proportion that
         the amount of such payment or payments then due under each Series D
         Equipment Note bears to the aggregate amount of the payments then due
         under all Series D Equipment Notes;

                  fifth, after giving effect to clause "fourth" above, so much
         of such payment remaining as shall be required to pay in full the
         aggregate amount of the payment or payments of principal amount and
         interest (as well as any interest on any overdue principal amount and,
         to the extent permitted by applicable law, on any overdue interest and
         any other overdue amounts) then due under all Series E Equipment Notes
         shall be distributed to the Noteholders of Series E Equipment Notes
         ratably, without priority of one over the other, in the proportion that
         the amount of such payment or payments then due under each Series E
         Equipment Note bears to the aggregate amount of the payments then due
         under all Series E Equipment Notes; and

                  sixth, the balance, if any, of such installment remaining
         thereafter shall be distributed to the Owner Trustee to be held or
         distributed in accordance with the terms of the Trust Agreement.

                                       18
<PAGE>

                  Section 3.03. Event of Loss; Optional Redemption; Voluntary
Termination. Except as otherwise provided in Sections 3.04 and 3.05 and subject
to the following proviso, any payments received by the Loan Trustee (a) with
respect to the Aircraft as the result of an Event of Loss, (b) pursuant to an
optional redemption of the Equipment Notes pursuant to Section 2.08 or (c)
pursuant to a voluntary termination of the Lease pursuant to Section 9 thereof
shall be applied to redemption of the Equipment Notes, and to payment of all
other Secured Obligations by applying such funds in the following order of
priority:

                  first, (i) to reimburse the Loan Trustee and the Noteholders
         for any reasonable costs or expenses incurred in connection with such
         redemption for which they are entitled to reimbursement, or indemnity
         by the Lessee, under the Operative Documents; and then (ii) to pay any
         other amounts then due (except as provided in clause "second" below) to
         the Loan Trustee, the Noteholders and the other Indenture Indemnitees
         under this Indenture, the Participation Agreement or the Equipment
         Notes;

                  second, (i) to pay the amounts specified in subclause (i) of
         clause "third" of Section 3.04 plus Make-Whole Amount, if any, then due
         and payable in respect of the Series A-1 Equipment Notes and the Series
         A-2 Equipment Notes; (ii) after giving effect to subclause (i) above,
         to pay the amounts specified in subclause (ii) of clause "third" of
         Section 3.04 plus Make-Whole Amount, if any, then due and payable in
         respect of the Series B Equipment Notes; (iii) after giving effect to
         subclause (ii) above, to pay the amounts specified in subclause (iii)
         of clause "third" of Section 3.04 plus Make-Whole Amount, if any, then
         due and payable in respect of the Series C Equipment Notes; (iv) after
         giving effect to subclause (iii) above, to pay the amounts specified in
         subclause (iv) of clause "third" of Section 3.04 plus Make-Whole
         Amount, if any, then due and payable in respect of the Series D
         Equipment Notes; (v) after giving effect to subclause (iv) above, to
         pay the amount specified in subclause (v) of clause "third" of Section
         3.04 plus Make-Whole Amount, if any, then due and payable in respect of
         the Series E Equipment Notes; and

                  third, the balance, if any, of such payments shall be
         distributed to the Owner Trustee to be held or distributed in
         accordance with the terms of the Trust Agreement.

                  If one or more Replacement Engines are to be substituted for
one or more Engines subject to an Event of Loss as provided in Section 10(b) of
the Lease, any insurance, condemnation or similar proceeds resulting from such
Event of Loss that are received by the Loan Trustee shall be held by the Loan
Trustee as part of the Indenture Estate (and invested as provided in Section
9.07) and, unless otherwise applied pursuant to Section 3.04 hereof following an
Indenture Event of Default, such proceeds shall be released to the Lessee upon
the release of such Engine subject to the replacement thereof as provided in
Section 10(b) of the Lease.

                  No Make-Whole Amount shall be payable on the Equipment Notes
in connection with their redemption as a result of an Event of Loss in respect
of the Airframe.

                  Section 3.04. Payments After Indenture Event of Default.
Except as otherwise provided in Section 3.05, all payments received and amounts
held or realized by the Loan

                                       19
<PAGE>

Trustee (including any amounts realized by the Loan Trustee from the exercise of
any remedies pursuant to Section 15 of the Lease or Article 8) after both an
Indenture Event of Default shall have occurred and be continuing and the
Equipment Notes shall have become due and payable pursuant to Section 8.02, as
well as all payments or amounts then held by the Loan Trustee as part of the
Indenture Estate, shall be promptly distributed by the Loan Trustee in the
following order of priority:

                  first, so much of such payments or amounts as shall be
         required to (i) reimburse the Loan Trustee, to the extent the Loan
         Trustee is entitled to be reimbursed or indemnified under the Operative
         Documents, for any tax, expense or other loss (including, without
         limitation, all amounts to be expended at the expense of, or charged
         upon the tolls, rents, revenues, issues, products and profits of, the
         Indenture Estate and every part thereof pursuant to Section 8.05)
         incurred by the Loan Trustee (to the extent not previously reimbursed),
         the expenses of any sale, taking or other proceeding, reasonable
         attorneys' fees and expenses, court costs and any other expenditures
         incurred or expenditures or advances made by the Loan Trustee or the
         Noteholders in the protection, exercise or enforcement of any right,
         power or remedy or any damages sustained by the Loan Trustee or any
         Noteholder, liquidated or otherwise, upon such Indenture Event of
         Default shall be applied by the Loan Trustee as between itself and the
         Noteholders in reimbursement of such expenses and any other expenses
         for which the Loan Trustee or the Noteholders are entitled to
         reimbursement under any Operative Document, and (ii) to pay all amounts
         payable (except as provided in clauses "second" and "third" below) to
         the other Indenture Indemnitees (including amounts payable to the Loan
         Trustee on behalf of any Indenture Indemnitee) hereunder and under the
         Participation Agreement and the Lease; and in case the aggregate amount
         so to be distributed is insufficient to pay as aforesaid, then ratably,
         without priority of one over the other, in proportion to the amounts
         owed each hereunder;

                  second, so much of such payments or amounts remaining as shall
         be required to reimburse the then existing or prior Noteholders for
         payments made pursuant to Section 9.03 (to the extent not previously
         reimbursed) shall be distributed to such then existing or prior
         Noteholders ratably, without priority of one over the other, in
         accordance with the amount of the payment or payments made by each such
         then existing or prior Noteholder pursuant to Section 9.03;

                  third, (i) so much of such payments or amounts remaining as
         shall be required to pay in full the aggregate unpaid principal amount
         of all Series A-1 Equipment Notes and Series A-2 Equipment Notes and
         the accrued but unpaid interest and all other Secured Obligations in
         respect of the Series A-1 Equipment Notes and Series A-2 Equipment
         Notes to the date of distribution shall be distributed to the
         Noteholders of Series A-1 Equipment Notes and Series A-2 Equipment
         Notes ratably, without priority of one over the other, in the
         proportion that the aggregate unpaid principal amount of all Series A-1
         Equipment Notes and Series A-2 Equipment Notes held by each Noteholder
         plus the accrued but unpaid interest and other amounts due hereunder or
         thereunder to the date of distribution bears to the aggregate unpaid
         principal amount of all Series A-1 Equipment Notes and Series A-2
         Equipment Notes held by all such Noteholders plus the accrued but
         unpaid interest and other amounts due thereon to the date of
         distribution; (ii) after giving

                                       20
<PAGE>

         effect to subclause (i) above, so much of such payments or amounts
         remaining as shall be required to pay in full the aggregate unpaid
         principal amount of all Series B Equipment Notes and the accrued but
         unpaid interest and all other Secured Obligations in respect of the
         Series B Equipment Notes to the date of distribution shall be
         distributed to the Noteholders of Series B Equipment Notes ratably,
         without priority of one over the other, in the proportion that the
         aggregate unpaid principal amount of all Series B Equipment Notes held
         by each Noteholder plus the accrued but unpaid interest and other
         amounts due hereunder or thereunder to the date of distribution bears
         to the aggregate unpaid principal amount of all Series B Equipment
         Notes held by all such Noteholders plus the accrued but unpaid interest
         and other amounts due thereon to the date of distribution; (iii) after
         giving effect to subclause (ii) above, so much of such payments or
         amounts remaining as shall be required to pay in full the aggregate
         unpaid principal amount of all Series C Equipment Notes and the accrued
         but unpaid interest and all other Secured Obligations in respect of the
         Series C Equipment Notes to the date of distribution shall be
         distributed to the Noteholders of Series C Equipment Notes ratably,
         without priority of one over the other, in the proportion that the
         aggregate unpaid principal amount of all Series C Equipment Notes held
         by each Noteholder plus the accrued but unpaid interest and other
         amounts due hereunder or thereunder to the date of distribution bears
         to the aggregate unpaid principal amount of all Series C Equipment
         Notes held by all such Noteholders plus the accrued but unpaid interest
         and other amounts due thereon to the date of distribution; (iv) after
         giving effect to subclause (iii) above, so much of such payments or
         amounts remaining as shall be required to pay in full the aggregate
         unpaid principal amount of all Series D Equipment Notes and the accrued
         but unpaid interest and all other Secured Obligations in respect of the
         Series D Equipment Notes to the date of distribution shall be
         distributed to the Noteholders of Series D Equipment Notes, ratably,
         without priority of one over the other, in the proportion that the
         aggregate unpaid principal amount of all Series D Equipment Notes held
         by each Noteholder plus the accrued but unpaid interest and other
         amounts due hereunder or thereunder to the date of distribution bears
         to the aggregate unpaid principal amount of all Series D Equipment
         Notes held by all such Noteholders plus the accrued but unpaid interest
         and other amounts due thereon to the date of distribution; and (v)
         after giving effect to subclause (iv) above, so much of such payments
         or amounts remaining as shall be required to pay in full the aggregate
         unpaid principal amount of all Series E Equipment Notes and the accrued
         but unpaid interest and all other Secured Obligations in respect of the
         Series E Equipment Notes to the date of distribution shall be
         distributed to the Noteholders of Series E Equipment Notes, ratably,
         without priority of one over the other, in the proportion that the
         aggregate unpaid principal amount of all Series E Equipment Notes held
         by each Noteholder plus the accrued but unpaid interest and other
         amounts due hereunder or thereunder to the date of distribution bears
         to the aggregate unpaid principal amount of all Series E Equipment
         Notes held by all such Noteholders plus the accrued but unpaid interest
         and other amounts due thereon to the date of distribution; and

                  fourth, the balance, if any, of such payments or amounts shall
         be distributed to the Owner Trustee to be held or distributed in
         accordance with the terms of the Trust Agreement.

                                       21
<PAGE>

                  No Make-Whole Amount shall be payable on the Equipment Notes
as a consequence of or in connection with an Indenture Event of Default or the
acceleration of the Equipment Notes.

                  Section 3.05. Certain Payments. (a) Any payment received by
the Loan Trustee for which no provision as to the application thereof is made in
this Indenture and for which provision is made in any other Operative Document
shall be applied forthwith to the purpose for which such payment was made in
accordance with terms of such Operative Document. Notwithstanding anything in
this Article 3 or elsewhere in this Indenture to the contrary, the Loan Trustee
shall be obligated to distribute and shall distribute to the Owner Participant
or the Owner Trustee, as the case may be, any Excepted Property received by the
Loan Trustee promptly upon receipt thereof by the Loan Trustee.

                  (b) The Loan Trustee will distribute promptly upon receipt any
indemnity or other payment received by it from the Owner Trustee or the Lessee
in respect of the Loan Trustee in its individual capacity or any other Indenture
Indemnitee pursuant to Section 10(b) or 10(c) of the Participation Agreement
directly to the Person entitled thereto as such Person's interest may appear.
Any payment received by the Loan Trustee under Section 2.14 shall be distributed
to the Subordination Agent to be distributed in accordance with the terms of the
Intercreditor Agreement.

                  Section 3.06. Payments for Which No Application Is Otherwise
Provided. (a) Any payments received by the Loan Trustee for which no provision
as to the application thereof is made in the Lease or in another Operative
Document or elsewhere in this Indenture shall be distributed by the Loan Trustee
(i) to the extent received or realized at any time prior to the payment in full
of all obligations to the Noteholders secured by the Lien of this Indenture, in
the order of priority specified in Section 3.02 hereof, and (ii) to the extent
received or realized at any time after payment in full of all obligations to the
Noteholders secured by the Lien of this Indenture, in the following order of
priority: first in the manner provided in clause "first" of Section 3.04 hereof,
and second, in the manner provided in clause "fourth" of Section 3.04 hereof.

                  (b) Notwithstanding anything to the contrary set forth in this
Indenture, any amounts held by the Loan Trustee, including, without limitation,
pursuant to Section 10 or 11 of the Lease, and any other condemnation,
requisition, indemnity or other payments, amounts or proceeds of any kind or
nature received by it with respect to the Aircraft or other collateral subject
to the Lien of this Indenture, which are payable to the Lessee pursuant to the
terms of the Lease or the Operative Documents or held by the Loan Trustee in
accordance with Section 25 of the Lease shall be (i) so paid to the Lessee or
(ii) held by the Loan Trustee as security for the obligations of the Lessee, in
each case in accordance with the applicable provisions of the Lease (provided
that such monies held by the Loan Trustee shall be invested as provided in
Section 9.07).

                  Section 3.07. Payments to Owner Trustee. Any amounts
distributed hereunder by the Loan Trustee to the Owner Trustee shall be paid to
the Owner Trustee by wire transfer of funds of the type received by the Loan
Trustee at such office and to such account or accounts of

                                       22
<PAGE>

such entity or entities as shall be designated by notice from the Owner Trustee
to the Loan Trustee from time to time.

                                   ARTICLE 4

                           COVENANTS OF OWNER TRUSTEE

                  Section 4.01. Covenants of Owner Trustee. The Owner Trustee
hereby covenants and agrees that:

                  (a) it will, subject always to Section 2.11, pay or cause to
         be paid when due all amounts of principal and interest due under the
         Equipment Notes (in any case, without duplication of amounts
         theretofore paid to the Loan Trustee in respect thereof), and if
         received from the Owner Participant or from the Lessee as Supplemental
         Rent, Make-Whole Amount, if any, and any other amount due under the
         Equipment Notes;

                  (b) in the event that any Responsible Officer of the Owner
         Trustee shall have actual knowledge of an Indenture Event of Default or
         Indenture Default or an Event of Loss, the Owner Trustee will give
         prompt written notice thereof to the Loan Trustee, the Owner
         Participant, each Noteholder and the Lessee;

                  (c) it will not, except as contemplated by the Operative
         Documents or with the consent of the Loan Trustee, contract for,
         create, incur, assume or suffer to exist any Debt, and will not
         guarantee (directly or indirectly or by an instrument having the effect
         of assuming another's payment or performance on any obligation or
         capability of so doing or otherwise), endorse or otherwise be or become
         contingently liable, directly or indirectly, in connection with the
         Debt of any other Person; and

                  (d) it will not, in its capacity as Owner Trustee, engage in
         any business or other activity, except as contemplated hereby or by the
         other Operative Documents.

                                   ARTICLE 5

                DISPOSITION, SUBSTITUTION AND RELEASE OF PROPERTY
                     INCLUDED IN THE INDENTURE ESTATE DURING
                              CONTINUATION OF LEASE

                  Section 5.01. Disposition, Substitution and Release of
Property Included in the Indenture Estate During Continuation of Lease. So long
as the Lease is in effect:

                  (a) Parts. Any Parts and alterations, improvements and
         modifications in and additions to the Aircraft shall, to the extent
         required or specified by the Lease, become subject to the Lien of this
         Indenture and be leased to the Lessee under the Lease; provided that,
         to the extent permitted by and as provided in the Lease, the Lessee
         shall have the right, at any time and from time to time, without any
         release from or consent by the Owner Trustee or the Loan Trustee, to
         remove, replace and pool Parts and to make alterations, improvements
         and modifications in, and additions to, the Aircraft. The Loan

                                       23
<PAGE>

         Trustee agrees that, to the extent permitted by and as provided in the
         Lease, title to any such removed or replaced Part shall vest in the
         Lessee.

                  (b) Substitution Under the Lease upon an Event of Loss
         Occurring to Engines or upon Voluntary Termination of Lease with
         Respect to Engines. Upon (i) the occurrence of an Event of Loss
         occurring to an Engine, or (ii) a voluntary termination of the Lease
         with respect to an Engine, the Lessee shall substitute an engine and
         upon satisfaction of all conditions to such substitution specified in
         Section 10 of the Lease, the Loan Trustee shall release all of its
         right, interest and Lien in and to such Engine in accordance with the
         provisions of the following two sentences and the Lease. The Loan
         Trustee shall execute and deliver to the Owner Trustee an instrument
         releasing its Lien in and to such Engine and shall execute for
         recording in public offices, at the expense of the Lessee, such
         instruments in writing as the Owner Trustee or the Lessee shall
         reasonably request and as shall be reasonably acceptable to the Loan
         Trustee in order to make clear upon public records that such Lien has
         been released under the laws of the applicable jurisdiction. The Owner
         Trustee hereby waives and releases any and all rights existing or that
         may be acquired to any penalties, forfeit or damages from or against
         the Loan Trustee for failure to execute and deliver any document in
         connection with the release of a Lien or to file any certificate in
         compliance with any law or statute requiring the filing of the same in
         connection with the release of a Lien, except for failure by the Loan
         Trustee to execute and deliver any document or to file any certificate
         as may be specifically requested in writing by the Owner Trustee or the
         Lessee.

                                   ARTICLE 6

                                   [RESERVED]

                                   ARTICLE 7

                                   [RESERVED]

                                   ARTICLE 8

                              DEFAULTS AND REMEDIES

                  Section 8.01. Indenture Events of Default. "Indenture Event of
Default" shall mean any of the following events (whatever the reason for such
Indenture Event of Default and whether such event shall be voluntary or
involuntary or come about or be effected by operation of law or pursuant to or
in compliance with any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body) and each such
Indenture Event of Default shall be deemed to exist so long as, but only so long
as, it shall not be remedied:

                  (a) any amount of interest on, principal of, Make-Whole
         Amount, if any, or other amount due and payable under any Equipment
         Note or hereunder shall not be paid when due and payable (other than as
         a result of a Lease Default or Lease Event of Default), and such
         default in payment shall continue unremedied for more than 15 days
         after such amount shall have become due and payable, in the case of any
         payment of

                                       24
<PAGE>

         interest, principal or Make-Whole Amount, if any, thereon and, in the
         case of any other amount, for more than 20 days after the Owner Trustee
         or the Owner Participant receives written demand from the Loan Trustee
         or any Noteholder; or

                  (b) [reserved]

                  (c) if at any time when the Aircraft is registered under the
         laws of the United States, the Owner Participant shall not be a Citizen
         of the United States, and as the result thereof the registration of the
         Aircraft under the Federal Aviation Act, and regulations then
         applicable thereunder, shall cease to be effective; provided that no
         Indenture Event of Default shall be deemed to have occurred under this
         subsection (c) unless such circumstances continue unremedied for more
         than 60 days after the Owner Participant has actual knowledge of the
         state of facts that resulted in such ineffectiveness and of such loss
         of citizenship; or

                  (d) other than as provided in (c) above and (i) below, any
         failure by the Owner Trustee or the Owner Participant, to observe or
         perform any other covenant or obligation of the Owner Trustee or the
         Owner Participant, as the case may be, for the benefit of the Loan
         Trustee or the Noteholders contained in this Indenture, Section 4.3(a)
         of the Trust Agreement, the Participation Agreement or the Equipment
         Notes which is not remedied within a period of 60 days after notice
         thereof has been given to the Owner Trustee and the Owner Participant;
         or

                  (e) any representation or warranty made by the Owner
         Participant, the Owner Trustee or the Owner Participant Guarantor
         herein, in the Participation Agreement, in the Owner Participant
         Guaranty or in any certificate furnished by any of them to the Loan
         Trustee or any Noteholder in connection with the transactions
         contemplated by the Operative Documents shall prove at any time to have
         been false or incorrect when made in any material respect and continues
         to be material and adverse to the rights and interests of the Loan
         Trustee or the Noteholders; and if such misrepresentation is capable of
         being corrected and if such correction is being sought diligently, such
         misrepresentation and its consequences shall not have been corrected
         within 60 days (or, without affecting Section 8.01(c) hereof, in the
         case of the representations made in Sections 11(e)(xi) and 11(f)(v)of
         the Participation Agreement as to the citizenship of the Owner Trustee
         in its individual capacity and of the Owner Participant, respectively,
         as soon as is reasonably practicable but in any event within 60 days)
         after notice thereof has been given to the Owner Participant and the
         Owner Trustee by the Loan Trustee or any Noteholder; or

                  (f) any Lease Event of Default; or

                  (g) either the Trust Estate or the Owner Trustee with respect
         thereto (and not in its individual capacity), the Owner Participant or
         the Owner Participant Guarantor, as the case may be, shall (i) file, or
         consent by answer or otherwise to the filing against it of a petition
         for relief or reorganization or arrangement or any other petition in
         bankruptcy, for liquidation or to take advantage of any bankruptcy or
         insolvency law of any jurisdiction, (ii) make an assignment for the
         benefit of its creditors, or (iii) consent to the

                                       25
<PAGE>

         appointment of a custodian, receiver, trustee or other officer with
         similar powers of itself or any substantial part of its property; or

                  (h) a court or governmental authority of competent
         jurisdiction shall enter an order appointing, without consent by the
         Trust Estate or the Owner Trustee with respect thereto (and not in its
         individual capacity), the Owner Participant, or the Owner Participant
         Guarantor, as the case may be, a custodian, receiver, trustee or other
         officer with similar powers with respect to it or with respect to any
         substantial part of its property, or constituting an order for relief
         or approving a petition for relief or reorganization or any other
         petition in bankruptcy or for liquidation or to take advantage of any
         bankruptcy or insolvency law of any jurisdiction, or ordering the
         dissolution, winding-up or liquidation of the Trust Estate or the Owner
         Trustee with respect thereto (and not in its individual capacity), the
         Owner Participant, or the Owner Participant Guarantor, as the case may
         be, and any such order or petition is not dismissed or stayed within 90
         days after the earlier of the entering of any such order or the
         approval of any such petition; or

                  (i) any Lessor's Lien required to be discharged by the Owner
         Participant or the Owner Trustee, in its individual capacity, pursuant
         to Section 19(b) of the Participation Agreement (in the case of the
         Owner Participant) or Section 12(h) of the Participation Agreement (in
         the case of the Owner Trustee) shall remain undischarged for a period
         of 30 days after the Owner Participant and the Owner Trustee shall have
         received written notice from the Loan Trustee or any Noteholder of such
         Lien, or

                  (j) any Owner Participant Guaranty ceases to be a valid and
         enforceable obligation of the Owner Participant Guarantor.

                  Section 8.02. Acceleration; Rescission and Annulment. If an
Indenture Event of Default referred to in clause (g) or (h) of Section 8.01
hereof shall have occurred or a Lease Event of Default under Section 14(f), (g),
(h) or (i) of the Lease shall have occurred, then and in every such case the
unpaid principal of all Equipment Notes then outstanding, together with interest
accrued but unpaid thereon owing to the Noteholders and all other amounts due
thereunder and hereunder, shall immediately and without further act become due
and payable, without presentment, demand, protest or notice, all of which are
hereby waived.

                  If any other Indenture Event of Default occurs and is
continuing, the Loan Trustee, may, and upon the written instructions of a
Majority in Interest of Noteholders, the Loan Trustee shall, by notice to the
Lessee, the Owner Participant and the Owner Trustee, declare the principal of
all the Equipment Notes to be due and payable, subject to Section 8.03. Upon
such declaration, the principal of all Equipment Notes, together with accrued
interest thereon from the date in respect of which interest was last paid
hereunder to the date payment of such principal has been made or duly provided
for shall be immediately due and payable.

                  At any time after the principal of the Equipment Notes shall
have become so due and payable, and before any judgment or decree for the
payment of the money so due, or any thereof, shall be entered, a Majority in
Interest of Noteholders, by notice to the Loan Trustee, the Owner Trustee and
the Owner Participant, may rescind such a declaration and thereby annul its

                                       26
<PAGE>

consequences if (i) an amount sufficient to pay all principal of, Make-Whole
Amount, if any, and interest on, such Equipment Notes, to the extent each such
amount is due or past due, if any, in respect of the outstanding Equipment Notes
other than by reason of such acceleration and all sums due and payable to the
Loan Trustee has been deposited with the Loan Trustee, (ii) the rescission would
not conflict with any judgment or decree and (iii) all existing Indenture
Defaults and Indenture Events of Default under this Indenture have been cured or
waived except nonpayment of principal of, or interest on the Equipment Notes
that has become due solely because of such acceleration. No Make-Whole Amount
shall be payable on the Equipment Notes as a result of the acceleration of the
Equipment Notes.

                  Section 8.03. Certain Rights. The Loan Trustee shall give the
Noteholders, the Owner Trustee and the Owner Participant prompt written notice
of any Indenture Event of Default of which the Indenture Trustee has actual
knowledge and shall give the Noteholders, the Owner Trustee and the Owner
Participant not less than ten (10) Business Days' prior written notice of the
date (the "Enforcement Date") on or after which the Loan Trustee may commence
and consummate the exercise of any remedy or remedies described in Section 8.02,
8.04, 8.05 or 8.06, or the exercise of any remedy or remedies pursuant to the
provisions of Section 15 of the Lease. If an Indenture Event of Default shall
have occurred and be continuing, the Owner Trustee shall have the following
rights hereunder, any of which may be exercised directly by the Owner
Participant.

                  If as a result of any default by the Lessee in the payment of
any installment of Basic Rent due under the Lease, the Loan Trustee shall have
insufficient funds to make any payment of the principal of and interest on any
Equipment Note on the day it becomes due and payable, the Owner Trustee or the
Owner Participant through the Owner Trustee, may pay to the Loan Trustee prior
to the Enforcement Date, as provided in Section 2.03 hereof, for application in
accordance with Section 3.02 hereof a sum equal to the amount of all (but not
less than all) of the principal and interest (including interest, if any, on any
overdue payment of such principal and interest) as shall then (without regard to
any acceleration pursuant to Section 8.02 hereof) be due and payable on the
Equipment Notes and, unless the Owner Trustee has cured Indenture Events of
Default in respect of payments of Basic Rent on each of the three immediately
preceding Basic Rent payment dates or the Owner Trustee has cured an aggregate
of six previous Indenture Events of Default in respect of payments of Basic
Rent, such payment by the Owner Trustee shall, solely for purposes of this
Indenture, be deemed to cure any Indenture Event of Default which would
otherwise have arisen on account of the nonpayment by the Lessee of such
installment of Basic Rent (but not as to any other Indenture Default or
Indenture Event of Default which shall have occurred and be continuing).

                  In the event of any default by the Lessee in any obligation
under the Lease other than the payment of Basic Rent, if such default can be
remedied by the payment of money (it being understood that defaults requiring
action such as the obtaining of insurance and the procuring of maintenance
services can be so remedied) and the Owner Trustee shall have been furnished (by
the Owner Participant) with all funds necessary for remedying such default, the
Owner Trustee may, prior to the Enforcement Date, without the consent or
concurrence of any Noteholder, instruct the Owner Trustee to exercise the Owner
Trustee's rights under Section 23 of the Lease to perform such obligation on
behalf of the Lessee or the Owner Participant may directly exercise the Owner
Trustee's rights under Section 23 of the Lease.

                                       27
<PAGE>

                  Solely for the purpose of determining whether there exists an
Indenture Event of Default, (a) any payment by the Owner Trustee, pursuant to,
and in compliance with, the first sentence of this Section 8.03 shall be deemed
to remedy any default by the Lessee in the payment of installments of Basic Rent
theretofore due and payable and to remedy any corresponding default by the Owner
Trustee in payment of any amount due and payable under the Equipment Notes or
hereunder, and (b) any performance by the Owner Trustee or the Owner Participant
of any obligation of the Lessee under the Lease pursuant to, and in compliance
with, the second sentence of this Section 8.03 shall be deemed to remedy any
Lease Event of Default to the same extent that like performance by the Lessee
itself would have remedied such Lease Event of Default (but any such payment or
performance shall not relieve the Lessee of its duty to pay all Rent and perform
all of its obligations pursuant to the Lease). If, on the basis specified in the
preceding sentence, such Lease Event of Default shall have been remedied, then
any declaration pursuant to Section 15 of the Lease that the Lease is in
default, and any declaration pursuant to this Indenture that the Equipment Notes
are due and payable or that an Indenture Event of Default exists hereunder,
based upon such Lease Event of Default, shall be deemed to be rescinded.

                  Except as hereinafter in this Section 8.03 provided, neither
the Owner Trustee nor the Owner Participant shall, as a result of exercising the
right to cure any such Indenture Event of Default, obtain any Lien on any of the
Indenture Estate or any Rent payable under the Lease for or on account of costs
or expenses incurred in connection with the exercise of such right, nor shall
any claim of the Owner Trustee or the Owner Participant against Lessee or any
other party for the repayment of such costs or expenses impair the prior right
and security interest of the Loan Trustee in and to the Indenture Estate. The
Owner Participant or the Owner Trustee, as applicable, shall (to the extent of
any such payments made by it) be subrogated to the rights of the Noteholders
hereunder to receive such payment of Basic Rent or Supplemental Rent from the
Loan Trustee (and the payment of interest on account of such Rent being
overdue), and shall be entitled, so long as no other Indenture Default or
Indenture Event of Default shall have occurred or would result therefrom, to
receive such payment upon receipt thereof by the Loan Trustee; provided that (a)
if the principal of and interest on the Equipment Notes shall have become due
and payable pursuant to Section 8.02 hereof, such subrogation shall, until the
principal of, interest on, Make-Whole Amount, if any, and all other amounts due
with respect to all Equipment Notes shall have been paid in full, be subordinate
to the rights of the Loan Trustee and the Noteholders in respect of such payment
of overdue Basic Rent, Supplemental Rent and such interest and (b) the Owner
Participant or the Owner Trustee, as applicable, shall not otherwise attempt to
recover any such amount paid by it on behalf of the Lessee pursuant to this
Section 8.03 except by demanding of the Lessee payment of such amount or by
commencing an action at law and obtaining and enforcing a judgment against the
Lessee for the payment of such amount or taking appropriate action in a pending
action at law against the Lessee; provided further that at no time while an
Indenture Event of Default shall have occurred and be continuing shall any such
demand be made or shall any such action be commenced (or continued) and any
amounts nevertheless received by the Owner Participant or the Owner Trustee, as
applicable, in respect thereof shall be held in trust for the benefit of and
promptly paid to, the Loan Trustee for distribution as provided in Section 3.04
hereof.

                  Section 8.04. Remedies. (a) If an Indenture Event of Default
shall have occurred and be continuing and so long as the same shall be
continuing unremedied, then and in every

                                       28
<PAGE>

such case the Loan Trustee may, subject to Section 2.10, Section 8.03 and the
second paragraph of this Section 8.04(a), exercise any or all of the rights and
powers and pursue any and all of the remedies pursuant to this Article 8 and
shall have and may exercise all of the rights and remedies of a secured party
under the Uniform Commercial Code and, in the event such Indenture Event of
Default is a Lease Event of Default, any and all of the remedies pursuant to
Section 15 of the Lease and may take possession of all or any part of the
properties covered or intended to be covered by the Lien and security interest
created hereby or pursuant hereto (but, in the case of the Aircraft, only as
permitted by Section 15 of the Lease) and may exclude the Owner Participant, the
Owner Trustee and (to the extent permitted by Section 15 of the Lease) the
Lessee and all Persons claiming under any of them or wholly or partly therefrom;
provided that the Loan Trustee shall give the Owner Trustee and the Owner
Participant twenty days' prior written notice of its intention to sell the
Aircraft, and provided further that, in the event the Loan Trustee shall have
validly terminated the Lease, the Loan Trustee shall not sell or lease, or
otherwise afford the use of, the Aircraft or any portion thereof to the Lessee
or any Affiliate thereof. Unless an Indenture Event of Default not resulting
from or relating to a Lease Event of Default has occurred and is continuing, the
Owner Participant may bid at the sale and become the purchaser. Without limiting
any of the foregoing, but subject to any conditions provided for herein or under
applicable law, it is understood and agreed that the Loan Trustee may exercise
any right of sale of the Aircraft available to it, even though it shall not have
taken possession of the Aircraft and shall not have possession thereof at the
time of such sale.

                  Anything in this Indenture to the contrary notwithstanding, if
an Indenture Event of Default which arises solely by reason of one or more
events or circumstances which constitute a Lease Event of Default shall have
occurred and be continuing, if the Loan Trustee shall proceed to foreclose the
Lien of this Indenture, it shall concurrently therewith, to the extent the Loan
Trustee is then entitled to do so hereunder and under the Lease, and is not then
stayed or otherwise prevented from doing so by operation of law, proceed (to the
extent it has not already done so) to declare the Lease to be in default and
exercise one or more dispossessory remedies referred to in Sections 15 of the
Lease; provided that such requirement to exercise one or more of such remedies
under the Lease shall not apply in circumstances where the Loan Trustee is, and
has been, for a continuous period in excess of 60 days or such other period as
may be specified in Section 1110 of the Bankruptcy Code (such 60-day or other
period being the "Section 1110 Period"), involuntarily stayed or prohibited by
applicable law or court order from exercising such remedies under the Lease (a
"Continuous Stay Period"); provided further that the requirement to exercise one
or more of such remedies under the Lease shall nonetheless be applicable during
a Continuous Stay Period subsequent to the expiration of the Section 1110 Period
to the extent that the continuation of such Continuous Stay Period subsequent to
the expiration of the Section 1110 Period (i) results from an agreement by the
trustee or the debtor-in-possession in such proceeding during the Section 1110
Period with the approval of the relevant court to perform the Lease in
accordance with Section 1110(a)(2)(A) of the Bankruptcy Code and continues to
perform as required by Section 1110(a)(2)(A-B) of the Bankruptcy Code or (ii) is
an extension of the Section 1110 Period with the consent of the Loan Trustee
pursuant to Section 1110(b) of the Bankruptcy Code or (iii) is the consequence
of the Loan Trustee's own failure to give any requisite notice to any Person. In
the event that the applicability of Section 1110 of the Bankruptcy Code to the
Aircraft is being contested by Lessee in judicial proceedings, both the Loan
Trustee and the Owner Trustee (without affecting in any way any right or remedy
of the Loan Trustee hereunder) shall have the right to participate in such
proceedings.

                                       29
<PAGE>

                  It is expressly understood and agreed that, subject to the
restrictions set forth in the immediately preceding paragraph, the
above-described inability of the Loan Trustee to exercise any right or remedy
under the Lease shall in no event and under no circumstance (except as provided
in the immediately preceding paragraph) prevent the Loan Trustee from exercising
all of its rights, powers and remedies under this Indenture, including without
limitation this Article 8.

                  (b) The Noteholders shall be entitled, at any sale pursuant to
Section 15 of the Lease or this Section 8.04, to credit against any purchase
price bid at such sale by such Noteholders all or any part of the unpaid
obligations owing to such Noteholders and secured by the Lien of this Indenture
(only to the extent that such purchase would have been paid to such Noteholder
pursuant to Article 3 hereof if such purchase price were paid in cash and the
foregoing provisions of this subsection (b) were not given effect).

                  (c) In the event of any sale of the Indenture Estate, or any
part thereof, pursuant to any judgment or decree of any court or otherwise in
connection with the enforcement of any of the terms of this Indenture, the
unpaid principal of all Equipment Notes then outstanding, together with accrued
interest thereon (without Make-Whole Amount), and other amounts due thereunder,
shall immediately become due and payable without presentment, demand, protest or
notice, all of which are hereby waived.

                  (d) Notwithstanding anything contained herein, so long as the
Pass Through Trustee under any Pass Through Trust Agreement or the Subordination
Agent on its behalf is a Noteholder, the Loan Trustee will not be authorized or
empowered to acquire title to any Indentured Property or take any action with
respect to any Indentured Property so acquired by it if such acquisition or
action would cause any Trust to fail to qualify as a grantor trust for federal
income tax purposes.

                  Section 8.05. Return of Aircraft, Etc. (a) Unless the Owner
Participant shall have purchased the Equipment Notes pursuant to Section 2.10
hereof, if an Indenture Event of Default shall have occurred and be continuing
and the Equipment Notes shall have been accelerated, at the request of the Loan
Trustee, the Owner Trustee shall promptly execute and deliver or cause to be
delivered to the Loan Trustee such instruments of title and other documents as
the Loan Trustee may deem necessary or advisable to enable the Loan Trustee or
an agent or representative designated by the Loan Trustee, at such time or times
and place or places as the Loan Trustee may specify, to obtain possession of all
or any part of the Indentured Property to which the Loan Trustee shall at the
time be entitled hereunder. If the Owner Trustee shall for any reason fail to
execute and deliver or cause to be delivered such instruments and documents
after such request by the Loan Trustee, the Loan Trustee may (i) obtain a
judgment conferring on the Loan Trustee the right to immediate possession and
requiring the Owner Trustee to execute and deliver or cause to be delivered such
instruments and documents to the Loan Trustee, to the entry of which judgment
the Owner Trustee hereby specifically consents to the fullest extent it may
lawfully do so, and (ii) to the extent permitted by law, pursue all or part of
such Indentured Property wherever it may be found (but not in violation of the
Lease) and may enter any of the premises of the Lessee wherever such Indentured
Property may be or is supposed to be and search for such Indentured Property and
take possession of and remove such Indentured Property (but not in violation of
the Lease). All expenses of obtaining such judgment

                                       30
<PAGE>

or of pursuing, searching for and taking such property shall, until paid, be
secured by the Lien of this Indenture.

                  (b) Upon every such taking of possession, the Loan Trustee
may, from time to time, at the expense of the Indenture Estate, make all such
expenditures for maintenance, insurance, repairs, replacements, alterations,
additions and improvements to and of the Indentured Property, as it may
reasonably deem proper. In each such case, the Loan Trustee shall have the right
to maintain, use, operate, store, lease, control or manage the Indentured
Property and to carry on the business and to exercise all rights and powers of
the Owner Trustee relating to the Indentured Property, as the Loan Trustee shall
deem best, including the right to enter into any and all such agreements with
respect to the maintenance, insurance, use, operation, storage, leasing,
control, management or disposition of the Indentured Property or any part
thereof as the Loan Trustee may reasonably determine; and the Loan Trustee shall
be entitled to collect and receive directly all tolls, rents (including Rent),
revenues, issues, income, products and profits of the Indentured Property and
every part thereof, except Excepted Property, without prejudice, however, to the
right of the Loan Trustee under any provision of this Indenture to collect and
receive all cash held by, or required to be deposited with, the Loan Trustee
hereunder. Such tolls, rents (including Rent), revenues, issues, income,
products and profits shall be applied to pay the expenses of maintenance, use,
operation, storage, leasing, insurance control, management, modification,
alteration or disposition of the Indentured Property and of conducting the
business thereof, and of all maintenance, repairs, replacements, alterations,
additions and improvements, and to make all payments which the Loan Trustee may
be required or may elect to make, if any, for taxes, assessments, insurance or
other proper charges upon the Indentured Property or any part thereof, and all
other payments which the Loan Trustee may be required or authorized to make
under any provision of this Indenture, as well as just and reasonable
compensation for the services of the Loan Trustee, and of all Persons properly
engaged and employed by the Loan Trustee. Nothing in Section 8.04 or in this
Section 8.05 shall impair the rights of quiet enjoyment provided in Section 4(b)
of the Lease.

                  Section 8.06. Remedies Cumulative. To the extent permitted
under applicable law, each and every right, power and remedy given to the Loan
Trustee specifically or otherwise in this Indenture shall be cumulative and
shall be in addition to every other right, power and remedy herein specifically
given or now or hereafter existing at law, in equity or by statute, and each and
every right, power and remedy whether specifically herein given or otherwise
existing may be exercised from time to time and as often and in such order as
may be deemed expedient by the Loan Trustee, and the exercise or the beginning
of the exercise of any power or remedy shall not be construed to be a waiver of
the right to exercise at the same time or thereafter any other right, power or
remedy. No delay or omission by the Loan Trustee in the exercise of any right,
remedy or power or in the pursuance of any remedy shall impair any such right,
power or remedy or be construed to be a waiver of any default on the part of the
Owner Trustee or the Lessee or to be an acquiescence therein.

                  Section 8.07. Discontinuance of Proceedings. In case the Loan
Trustee shall have instituted any proceeding to enforce any right, power or
remedy under this Indenture by foreclosure, entry or otherwise, and such
proceedings shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Loan Trustee, then and in every such case
the Owner Trustee, the Loan Trustee and the Lessee shall, subject to any
determination

                                       31
<PAGE>

in such proceedings, be restored to their former positions and rights hereunder
with respect to the Indentured Property, and all rights, remedies and powers of
the Loan Trustee shall continue as if no such proceedings had been instituted.

                  Section 8.08. Waiver of Past Defaults. Upon written
instructions from a Majority in Interest of Noteholders, the Loan Trustee shall
waive any existing default hereunder and its consequences and upon any such
waiver such default shall cease to exist and any Indenture Event of Default (as
well as any Lease Event of Default giving rise to such Indenture Event of
Default) arising therefrom shall be deemed to have been cured for every purpose
of this Indenture, but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon; provided, however, that in the
absence of written instructions from the Noteholder affected thereby, the Loan
Trustee shall not waive any default (i) in the payment of the principal of,
Make-Whole Amount, if any, or interest due under, any Equipment Note then
outstanding, or (ii) in respect of a covenant or provision hereof which, under
Article 12 hereof, cannot be modified or amended without the consent of each
affected Noteholder.

                  Section 8.09. Loan Trustee Authorized to Execute Bills of
Sale, Etc. Subject to the provisions of this Indenture, the Owner Trustee
irrevocably appoints the Loan Trustee the true and lawful attorney-in-fact of
the Owner Trustee (which appointment is coupled with an interest) in its name
and stead and on its behalf, for the purpose of effectuating any sale,
assignment, transfer or delivery for the enforcement of the Lien of this
Indenture, whether pursuant to foreclosure or power of sale, assignments and
other instruments as may be necessary or appropriate, with full power of
substitution, the Owner Trustee hereby ratifying and confirming all that such
attorney or any substitute shall do by virtue hereof in accordance with
applicable law. Nevertheless, if so requested by the Loan Trustee or any
purchaser, the Owner Trustee shall ratify and confirm any such sale, assignment,
transfer or delivery, by executing and delivering to the Loan Trustee or such
purchaser all bills of sale, assignments, releases and other proper instruments
to effect such ratification and confirmation as may be designated in any such
request.

                  Section 8.10. Rights of Noteholders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Noteholder to receive payment of principal of, and Make-Whole Amount, if any,
and interest on an Equipment Note on or after the respective due dates expressed
in such Equipment Note, to bring suit for the enforcement of any such payment on
or after such respective dates, shall not be impaired or affected without the
consent of such Noteholder.

                                   ARTICLE 9

                           DUTIES OF THE LOAN TRUSTEE

                  Section 9.01. Notice of Indenture Event of Default. In the
event the Loan Trustee shall have knowledge of an Indenture Event of Default, or
shall have knowledge of an Indenture Default arising from a failure to pay Rent,
the Loan Trustee shall give prompt written notice thereof to the Owner Trustee,
the Owner Participant, the Lessee and each Noteholder. Subject to the terms of
Sections 8.03, 8.04, 8.08, 9.02 and 9.03 hereof, the Loan Trustee shall take
such action, or refrain from taking such action, with respect to such Indenture
Event of Default or

                                       32
<PAGE>

Indenture Default (including with respect to the exercise of any rights or
remedies hereunder) as the Loan Trustee shall be instructed in writing by the
Majority in Interest of Noteholders. Subject to the provisions of Section 9.03
hereof, if the Loan Trustee shall not have received instructions as above
provided within 20 days after giving notice of such Indenture Default or
Indenture Event of Default to the Noteholders, the Loan Trustee may, subject to
instructions thereafter received pursuant to the preceding provisions of this
Section 9.01, take such action, or refrain from taking such action, but shall be
under no duty to take or refrain from taking any action, with respect to such
Indenture Default or Indenture Event of Default as it shall determine advisable
in the best interests of the Noteholders and shall use the same degree of care
and skill in connection therewith as a prudent person would use under the
circumstances in the conduct of his or her own affairs; provided that the Loan
Trustee may not sell the Aircraft or any Engine without the consent of the
Majority in Interest of Noteholders. In the event the Loan Trustee shall at any
time declare the Lease to be in default pursuant to Section 15 thereof or shall
elect, subject to Section 8.03, to foreclose or otherwise enforce this
Indenture, the Loan Trustee shall forthwith notify the Owner Participant, the
Noteholders, the Owner Trustee and the Lessee. For all purposes of this
Indenture, in the absence of actual knowledge on the part of the Loan Trustee,
the Loan Trustee shall not be deemed to have knowledge of an Indenture Event of
Default or an Indenture Default (except, in the case of the Loan Trustee, the
failure of the Lessee to pay any installment of Basic Rent, if any portion of
such installment was then required to be paid to the Loan Trustee, which failure
shall constitute knowledge of an Indenture Default one Business Day after such
Basic Rent was due) or the curing of an Indenture Event of Default unless
notified in writing by the Lessee, the Owner Trustee, the Owner Participant or
one or more Noteholders.

                  Section 9.02. Action upon Instructions. (a) Subject to the
terms of Sections 2.10, 8.03, 8.04(a), 8.08, 9.01 and 9.03, upon the written
instructions at any time and from time to time of a Majority in Interest of
Noteholders, the Loan Trustee shall take such of the following actions as may be
specified in such instructions: (i) give such notice, consent, waiver or
approval or exercise such right, remedy or power or take such other action
hereunder or in respect of any part or all of the Indenture Estate as shall be
specified in such instructions and as shall be consistent with the Operative
Documents; (ii) take such action with respect to, or to preserve or protect, the
Indenture Estate (including the discharge of Liens) as shall be specified in
such instructions and as are consistent with this Indenture; and (iii) take such
other action in respect of the subject matter of this Indenture as is consistent
with the terms hereof and the Indenture Documents. The Loan Trustee will execute
and file or cause to be filed such continuation statements with respect to
financing statements relating to the security interest created hereunder in the
Indenture Estate as may be specified from time to time in written instructions
of a Majority in Interest of Noteholders (which instructions may, by their
terms, be operative only at a future date and which shall be accompanied by the
execution form of such continuation statement so to be filed).

                  (b) If any Lease Event of Default shall have occurred and be
continuing and the Owner Participant shall have failed to cure or shall have
fully utilized its rights to cure such Lease Event of Default under and in
accordance with the provisions of Section 8.03 hereof, on request of a Majority
in Interest of Noteholders and subject to the terms and conditions of this
Indenture (including Section 9.01 hereof), the Loan Trustee shall exercise such
remedies under Section 15 of the Lease as shall be specified in such request.

                                       33
<PAGE>

                  Section 9.03. Indemnification. The Loan Trustee shall not be
required to take any action or refrain from taking any action under Section 9.01
(other than the first sentence thereof) or 9.02 or Article 8 hereof unless the
Loan Trustee shall have been indemnified against any liability, cost or expense
(including counsel fees) which may be incurred in connection therewith. The Loan
Trustee shall not be under any obligation to take any action under this
Indenture and nothing contained in this Indenture shall require the Loan Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it. The Loan Trustee shall not be required to take any
action under Section 9.01 (other than the first sentence thereof) or 9.02 or
Article 8 hereof, nor shall any other provision of this Indenture be deemed to
impose a duty on the Loan Trustee to take any action, if the Loan Trustee shall
have been advised by counsel that such action is contrary to the terms hereof or
of the Lease or is otherwise contrary to law.

                  Section 9.04. No Duties Except as Specified in Indenture or
Instructions. The Loan Trustee shall not have any duty or obligation to use,
operate, store, lease, control, manage, sell, dispose of or otherwise deal with
the Aircraft or any other part of the Indenture Estate, or to otherwise take or
refrain from taking any action under, or in connection with, this Indenture or
any part of the Indenture Estate, except as expressly provided by the terms of
this Indenture or as expressly provided in written instructions from Noteholders
as provided in this Indenture; and no implied duties or obligations shall be
read into this Indenture against the Loan Trustee.

                  Section 9.05. No Action Except Under Lease, Indenture or
Instructions. The Owner Trustee and the Loan Trustee agree that they will not
use, operate, store, lease, control, manage, sell, dispose of or otherwise deal
with the Aircraft or any other part of the Indenture Estate except (i) as
required or permitted by the terms of the Lease or the Participation Agreement
and (ii) in accordance with the powers granted to, or the authority conferred
upon, the Owner Trustee and the Loan Trustee pursuant to this Indenture and in
accordance with the express terms hereof.

                  Section 9.06. Notices, Etc. The Loan Trustee shall deliver to
each Noteholder, promptly upon receipt thereof, duplicates or copies of all
reports, notices, requests, demands, certificates, financial statements,
opinions and other instruments received by it (i) in connection with the
Indentured Property or (ii) under or pursuant to any Operative Document, to the
extent that the same shall not have been required to be furnished pursuant
thereto or hereto to such Noteholders.

                  Section 9.07. Investment of Funds Held by Loan Trustee. (a)
Subject to subsection (b) below, any monies (including for the purpose of this
subsection any cash deposited with the Loan Trustee or Permitted Investments
purchased by the use of such cash pursuant to this subsection 9.07(a) or any
cash constituting the proceeds of the maturity, sale or other disposition of any
Permitted Investment) held by the Loan Trustee hereunder as part of the
Indenture Estate, until paid out by the Loan Trustee as herein provided, at any
time and from time to time, at the request of the Owner Trustee, shall be
invested and reinvested in Permitted Investments as specified in such request
(if such investments are reasonably available for purchase) and sold, in any
case at such prices, including accrued interest or its equivalent, as are

                                       34
<PAGE>

set forth in such request, and such Permitted Investments shall be held by the
Trustee in trust as part of the Indenture Estate until so sold. Unless otherwise
expressly provided in this Indenture, any profit, income, interest, dividend or
gain realized upon maturity, sale or other disposition of any such Permitted
Investment, net of the Loan Trustee's reasonable fees and expenses in making
such Permitted Investment, shall be held and applied by the Loan Trustee in the
same manner as the principal amount of such Permitted Investment is to be
applied and any loss realized upon maturity, sale or other disposition of any
such Permitted Investment shall be charged against the principal amount
invested.

                  (b) Notwithstanding anything to the contrary contained in
paragraph (a) above, any amounts held by the Loan Trustee hereunder as a part of
the Indenture Estate, until paid out by the Loan Trustee as herein provided,
which are either (i) amounts held pursuant to Section 25 of the Lease or (ii)
amounts held in connection with termination of the Lease pursuant to Section
9(a) of the Lease, at any time and from time to time, so long as no Lease Event
of Default shall have occurred and be continuing, at the request (given directly
by the Lessee to the Loan Trustee) of the Lessee acting as the agent of the
Owner Trustee, shall be invested and reinvested in Permitted Investments as
specified in such request (if such investments are reasonably available for
purchase) and sold, in any case at such prices, including accrued interest, or
its equivalent, as are set forth in such request, and such Permitted Investments
shall be held by the Loan Trustee in trust as a part of the Indenture Estate
until so sold; provided that the Lessee, on behalf of the Owner Trustee, as
agent of the Owner Trustee, shall upon demand pay to the Loan Trustee the amount
of any loss realized upon maturity, sale or other disposition of any such
Permitted Investment and, so long as no Lease Event of Default shall have
occurred and be continuing, be entitled to receive from the Loan Trustee, and
the Loan Trustee shall promptly pay to the Lessee, on behalf of the Owner
Trustee, any profit, income, interest, dividend or gain realized upon maturity,
sale or other disposition of any such Permitted Investment. If any Lease Event
of Default shall have occurred and be continuing, any net income, profit,
interest, dividend or gain realized upon maturity, sale or other disposition of
any Permitted Investment made pursuant to this paragraph (b) shall be held as
part of the Indenture Estate and shall be applied by the Loan Trustee at the
same time, on the same conditions and in the same manner as the amounts in
respect of which such income, profit, interest, dividend or gain was realized
are required to be distributed in accordance with the provisions hereof or of
the Lease pursuant to which such amounts were required to be held.

                  (c) The Loan Trustee shall not be responsible for any losses
on any investments or sales of Permitted Investments made pursuant to the
procedure specified in this Section.

                  Section 9.08. Replacement of Loan Trustee. (a) The resignation
or removal of the Loan Trustee and the appointment of a successor Loan Trustee
shall become effective only upon the successor Loan Trustee's acceptance of
appointment as provided in this Section.

                  (b) The Loan Trustee may resign by giving at least 30 days'
prior written notice to the Lessee and the Owner Trustee. The Majority in
Interest of Noteholders may remove the Loan Trustee by giving at least 30 days'
prior written notice to the Loan Trustee, the Owner Trustee, the Owner
Participant and the Lessee and may appoint a successor Loan Trustee for such
Equipment Notes with, so long as no Indenture Event of Default shall have
occurred and

                                       35
<PAGE>

be continuing, the Owner Trustee's and the Lessee's consent. The Owner Trustee
(acting pursuant to instructions from the Lessee) may remove the Loan Trustee
if:

                  (1) the Loan Trustee fails to comply with Section 9.10 hereof;

                  (2) the Loan Trustee is adjudged a bankrupt or an insolvent;

                  (3) a receiver or public officer takes charge of its property;
         or

                  (4) the Loan Trustee becomes incapable of acting.

                  (c) If the Loan Trustee resigns or is removed, or if a vacancy
exists in the office of Loan Trustee for any reason and a new Loan Trustee has
not been appointed pursuant to Section 9.08(b), the Owner Trustee shall promptly
appoint a successor Loan Trustee.

                  (d) If a successor Loan Trustee does not take office within 30
days after the retiring Loan Trustee resigns or is removed, the retiring Loan
Trustee, the Lessee, the Owner Trustee or a Majority in Interest of Noteholders
may petition any court of competent jurisdiction for the appointment of a
successor Loan Trustee.

                  (e) If the Loan Trustee fails to comply with Section 9.10, any
Noteholder may petition any court of competent jurisdiction for the removal of
such Loan Trustee and the appointment of a successor Loan Trustee.

                  (f) A successor Loan Trustee shall deliver a written
acceptance of its appointment to the retiring Loan Trustee, to the Lessee and to
the Owner Trustee. Thereupon, the resignation or removal of the retiring Loan
Trustee shall become effective, and the successor Loan Trustee shall have all
the rights, powers and duties of the retiring Loan Trustee for which the
successor Loan Trustee is to be acting as Loan Trustee under this Indenture. The
retiring Loan Trustee shall promptly transfer all property and all books and
records relating to the administration of the Indenture Estate held by it as
Loan Trustee to the successor Loan Trustee subject to the Lien provided for in
Section 10.07. The Owner Trustee shall give notice of each appointment of a
successor Loan Trustee if there are Equipment Notes outstanding, by mailing
written notice of such event by first-class mail to the Noteholders.

                  Section 9.09. Successor Loan Trustee by Merger, Etc. If the
Loan Trustee consolidates with, merges or converts into, or transfers all or
substantially all of its corporate trust business assets to, another
corporation, the successor corporation, without any further act, shall be the
successor Loan Trustee.

                  Section 9.10. Eligibility; Disqualification. This Indenture
shall at all times have a Loan Trustee which shall be a Citizen of the United
States and shall be a bank or trust company and have a combined capital and
surplus of at least $75,000,000 (or a combined capital and surplus in excess of
$5,000,000 and the obligations of which, whether now in existence or hereafter
incurred, are fully and unconditionally guaranteed by a corporation organized
and doing business under the laws of the United States, any State or Territory
thereof or of the District of Columbia and having a combined capital and surplus
of at least $75,000,000) or a corporation with a net worth of at least
$75,000,000, if there be such an institution willing, able

                                       36
<PAGE>

and legally qualified to perform the duties of the Loan Trustee hereunder and
upon reasonable or customary terms. If such corporation publishes reports of
conditions at least annually, pursuant to law or to the requirements of Federal,
State, Territorial or District of Columbia supervising or examining authority,
then for the purposes of this Section 9.10, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of conditions so published.

                  In case at any time the Loan Trustee shall cease to be
eligible in accordance with the provisions of this Section 9.10, the Loan
Trustee shall resign immediately in the manner and with the effect specified in
Section 9.08.

                  Section 9.11. Trustee's Liens. The Loan Trustee in its
individual capacity agrees that it will at its own cost and expense promptly
take such action as may be necessary to duly discharge and satisfy in full all
Liens ("Trustee's Liens") on the Indenture Estate which are either (i)
attributable to the Loan Trustee in its individual capacity and which are
unrelated to the transactions contemplated by the Operative Documents, or (ii)
attributable to the Loan Trustee as trustee hereunder or in its individual
capacity and which arise out of acts or omissions by it which are contrary to
the terms of this Indenture.

                  Section 9.12. Withholding Taxes; Information Reporting. The
Loan Trustee shall exclude and withhold at the appropriate rate from each
distribution of principal, Make-Whole Amount, if any, and interest and other
amounts due hereunder or under the Equipment Notes any and all withholding taxes
applicable thereto as required by law. The Loan Trustee agrees (i) to act as
such withholding agent and, in connection therewith, whenever any present or
future taxes or similar charges are required to be withheld with respect to any
amounts payable in respect of the Equipment Notes, to withhold such amounts and
timely pay the same to the appropriate authority in the name of and on behalf of
the Noteholders, (ii) that it will file any necessary withholding tax returns or
statements when due and (iii) that, as promptly as possible after the payment of
such amounts, it will deliver to each Noteholder appropriate documentation
showing the payment of such amounts, together with such additional documentary
evidence as such Noteholders may reasonably request from time to time. The Loan
Trustee agrees to file any other information reports as it may be required to
file under United States law.

                                   ARTICLE 10

                     THE OWNER TRUSTEE AND THE LOAN TRUSTEE

                  Section 10.01. Acceptance of Trusts and Duties. The Loan
Trustee accepts the duties hereby created and applicable to it and agrees to
perform the same but only upon the terms of this Indenture and agrees to receive
and disburse all moneys constituting part of the Indenture Estate in accordance
with the terms hereof. The Loan Trustee shall not be answerable or accountable
under any circumstances in its individual capacity, except for its own willful
misconduct or negligence and its failure to use ordinary care in receiving,
handling or disbursing funds, except as provided in the third sentence of
Section 2.03 or Section 9.11 hereof or, except for liabilities that may result
from the inaccuracy of any representation or warranty of, or breach of any
covenant by, the Loan Trustee in Section 11 or Section 12 of the Participation
Agreement

                                       37
<PAGE>

or any other document. The Owner Trustee shall not be deemed a trustee for the
Noteholders for any purpose.

                  Section 10.02. Absence of Duties. In the case of the Loan
Trustee, except in accordance with written instructions furnished pursuant to
Section 9.01, 9.02 or 13.01 hereof, and except as provided in, and without
limiting the generality of, Sections 9.02, 9.03 and 9.04 hereof and, in the case
of the Owner Trustee, except as provided in Section 4.01 or 13.01 hereof, the
Owner Trustee and the Loan Trustee shall have no duty (i) to see to any
registration of the Aircraft or any recording or filing of the Lease or of this
Indenture or any other document, or to see to the maintenance of any such
registration, recording or filing, (ii) to see to any insurance on the Aircraft,
whether or not the Lessee shall be in default with respect thereto, (iii) to see
to the payment or discharge of any Lien of any kind against any part of the
Trust Estate or the Indenture Estate, (iv) to confirm, verify or inquire into
the failure to receive any financial statements of the Lessee or (v) to inspect
the Aircraft at any time or ascertain or inquire as to the performance or
observance of any of the Lessee's covenants under the Lease with respect to the
Aircraft.

                  Section 10.03. No Representations or Warranties as to Aircraft
or Documents. NONE OF THE LOAN TRUSTEE, THE OWNER TRUSTEE (IN ITS INDIVIDUAL
CAPACITY OR AS OWNER TRUSTEE) OR THE OWNER PARTICIPANT MAKES OR SHALL BE DEEMED
TO HAVE MADE, AND EACH HEREBY EXPRESSLY DISCLAIMS, ANY REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE, AIRWORTHINESS, VALUE,
WORKMANSHIP, COMPLIANCE WITH SPECIFICATIONS, CONDITION, DESIGN, QUALITY,
DURABILITY, OPERATION, MERCHANTABILITY OR FITNESS FOR USE FOR A PARTICULAR
PURPOSE OF THE AIRCRAFT OR ANY ENGINE OR ANY PART THEREOF, AS TO THE ABSENCE OF
LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY
INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF
OBLIGATIONS BASED ON STRICT LIABILITY IN TORT, OR ANY OTHER REPRESENTATION OR
WARRANTY WITH RESPECT TO THE AIRCRAFT OR ANY ENGINE OR ANY PART THEREOF
WHATSOEVER, except that the Owner Trustee in its individual capacity warrants
that (i) at the Commencement Time for the Aircraft the Owner Trustee shall have
received or continued to hold whatever interest and title in the Aircraft and
the other property included in the Trust Estate was conveyed to it at or prior
to such Commencement Time subject to the rights of the parties to the Indenture
Documents and (ii) the Aircraft shall be free and clear of Lessor's Liens
attributable to the Owner Trustee in its individual capacity. Neither the Owner
Trustee nor the Loan Trustee makes or shall be deemed to have made any
representation or warranty as to the validity, legality or enforceability of
this Indenture, the Trust Agreement, the Equipment Notes or any Indenture
Documents or as to the correctness of any statement contained in any thereof,
except for the representations and warranties of the Owner Trustee and the Loan
Trustee made in their respective individual capacities under this Indenture or
in the Participation Agreement.

                  Section 10.04. No Segregation of Moneys; No Interest. Any
moneys paid to or retained by the Loan Trustee pursuant to any provision hereof
and not then required to be distributed to any Noteholder, the Lessee or the
Owner Trustee as provided in Article 3 hereof need not be segregated in any
manner except to the extent provided herein or as otherwise

                                       38
<PAGE>

required by law, and may, except as aforesaid, be deposited under such general
conditions as may be prescribed by law, and the Loan Trustee shall not (except
as otherwise provided in Section 9.07 hereof) be liable for any interest
thereon; provided that any payments received or applied hereunder by the Loan
Trustee shall be accounted for by the Loan Trustee so that any portion thereof
paid or applied pursuant hereto shall be identifiable as to the source thereof.

                  Section 10.05. Reliance; Agents; Advice of Counsel. Neither
the Owner Trustee nor the Loan Trustee shall incur any liability to anyone in
acting upon any signature, instrument, notice, resolution, request, consent,
order, certificate, report, opinion, bond or other document or paper believed by
it to be genuine and believed by it to be signed by the proper party or parties.
The Owner Trustee and the Loan Trustee may accept a copy of a resolution of the
Board of Directors or any applicable committee thereof of any party to the
Participation Agreement, certified by the Secretary or an Assistant Secretary
thereof as duly adopted and in full force and effect, as conclusive evidence
that such resolution has been duly adopted and that the same is in full force
and effect. As to the aggregate unpaid principal amount of Equipment Notes
outstanding as of any date, the Owner Trustee may for all purposes hereof rely
on a certificate signed by any Vice President or other authorized corporate
trust officer of the Loan Trustee. As to any fact or matter relating to the
Lessee, the manner of ascertainment of which is not specifically described
herein, the Owner Trustee and the Loan Trustee may for all purposes hereof rely
on a certificate, signed by a Responsible Officer of the Lessee, as to such fact
or matter, and such certificate shall constitute full protection to the Owner
Trustee and the Loan Trustee for any action taken or omitted to be taken by them
in good faith in reliance thereon. The Loan Trustee shall assume, and shall be
fully protected in assuming, that the Owner Trustee is authorized by the Trust
Agreement to enter into this Indenture and to take all action to be taken by it
pursuant to the provisions hereof, and shall not inquire into the authorization
of the Owner Trustee with respect thereto. In the administration of the trusts
hereunder, the Loan Trustee may execute any of the trusts or powers hereof and
perform its powers and duties hereunder directly or through agents (provided
that, so long as no Lease Event of Default shall have occurred and be
continuing, any agent of the Loan Trustee shall have been consented to by the
Lessee) and may, at the expense of the Indenture Estate, consult with counsel,
accountants and other skilled persons to be selected and retained by it, and the
Loan Trustee shall not be liable for anything done, suffered or omitted in good
faith by them in accordance with the written advice or written opinion of any
such counsel, accountants or other skilled persons.

                  Section 10.06. Capacity in Which Acting. The Loan Trustee acts
hereunder solely as trustee as herein provided, and the Owner Trustee acts
hereunder solely as trustee as in the Trust Agreement provided, and, in each
case, not in its individual capacity, except as otherwise expressly provided
herein.

                  Section 10.07. Compensation. The Loan Trustee shall be
entitled to reasonable compensation, including expenses and disbursements, for
all services rendered hereunder, which compensation shall be payable pursuant to
Section 12(a) of the Participation Agreement and shall have a first priority
claim on the Indenture Estate for the payment of such compensation, to the
extent that such compensation shall not have been paid by the Lessee, and shall
have the right to use or apply any moneys held by it hereunder in the Indenture
Estate toward such payments. The Loan Trustee agrees that it shall have no right
against any Noteholder or, other than as

                                       39
<PAGE>

provided in Section 12(a) of the Participation Agreement, the Owner Participant,
for any fee as compensation for its services as trustee under this Indenture.

                  Section 10.08. May Become Noteholder. Each of the institutions
acting as Owner Trustee and Loan Trustee hereunder may become a Noteholder and
have all rights and benefits of a Noteholder to the same extent as if it were
not the institution acting as Owner Trustee or Loan Trustee, as the case may be.

                  Section 10.09. Further Assurances; Financing Statements. At
any time and from time to time, upon the request of the Loan Trustee or the
Lessee or the Owner Participant, the Owner Trustee shall promptly and duly
execute and deliver any and all such further instruments and documents
including, without limitation, chattel paper originals of subsequent leases, as
may be specified in such request and as are necessary or desirable to perfect,
preserve or protect the mortgage, security interests and assignments created or
intended to be created hereby, or to obtain for the Loan Trustee the full
benefit of the specific rights and powers herein granted, including, without
limitation, the execution and delivery of Uniform Commercial Code financing
statements and continuation statements with respect thereto, or similar
instruments relating to the perfection of the mortgage, security interests or
assignments created or intended to be created hereby.

                                   ARTICLE 11

                INDEMNIFICATION OF LOAN TRUSTEE BY OWNER TRUSTEE

                  Section 11.01. Scope of Indemnification. The Owner Trustee,
not individually but solely in its capacity as Owner Trustee under the Trust
Agreement, hereby agrees, whether or not any of the transactions contemplated
hereby shall be consummated, to assume liability for, and does hereby indemnify,
protect, save and keep harmless the Loan Trustee, in its individual capacity,
and its successors, assigns, agents and servants, from and against any and all
liabilities, obligations, losses, damages, penalties, taxes (excluding any Taxes
payable by the Loan Trustee on or measured by any compensation received by the
Loan Trustee for its services under this Indenture), claims, actions, suits or
reasonable costs, expenses or disbursements (including reasonable legal fees and
expenses) of any kind and nature whatsoever which may be imposed on, incurred by
or asserted against the Loan Trustee in its individual capacity (whether or not
also agreed to be indemnified against by any other person under any other
document) in any way relating to or arising out of this Indenture, the Trust
Agreement, the Indenture Documents or the enforcement of any of the terms of any
thereof, or in any way relating to or arising out of the manufacture, purchase,
acceptance, non-acceptance, rejection, delivery, lease, possession, use,
operation, condition, sale, return or other disposition of the Aircraft
(including, without limitation, latent and other defects, whether or not
discoverable, and any claim for patent, trademark or copyright infringement), or
in any way relating to or arising out of the administration of the Indenture
Estate or the action or inaction of the Loan Trustee hereunder, except only (i)
in the case of willful misconduct or gross negligence of the Loan Trustee in the
performance of its duties hereunder or (ii) as may result from the inaccuracy of
any representation or warranty of the Loan Trustee in Section 11 of the
Participation Agreement or (iii) as otherwise provided in Section 2.03 and
Section 9.11 hereof or (iv) as otherwise excluded by the terms of Section 10(b)
or Section 10(c) of the Participation Agreement from the Lessee's

                                       40
<PAGE>

general indemnity and general tax indemnity under said Sections. The Loan
Trustee in its individual capacity shall be entitled to indemnification from the
Indenture Estate for any liability, obligation, loss, damage, penalty, claim,
action, suit, cost, expense or disbursement indemnified against pursuant to this
Section 11.01 to the extent not reimbursed by the Lessee or others, but without
releasing any of them from their respective agreements of reimbursement; and to
secure the same, the Loan Trustee shall have a prior lien on the Indenture
Estate; provided that, so long as the Lease is in effect, the Loan Trustee shall
not make any claim under this Section 11.01 for any claim or expense indemnified
against by the Lessee under the Participation Agreement without (but only if and
to the extent permitted by applicable law) first making demand on the Lessee
under the Participation Agreement for such claim or expense. Upon payment in
full by the Owner Trustee of any indemnity pursuant to this Section 11.01, the
Owner Trustee shall be subrogated to the rights, if any, of the Loan Trustee in
its individual capacity, or its agents and servants, as the case may be, in
respect of the matter as to which the indemnity was paid. The indemnities
contained in this Section 11.01 shall survive the termination of this Indenture.

                                   ARTICLE 12

        SUPPLEMENTS AND AMENDMENTS TO THIS INDENTURE AND OTHER DOCUMENTS

                  Section 12.01. Amendments to This Indenture Without Consent of
Noteholders. The Owner Trustee and the Loan Trustee may enter into one or more
agreements supplemental hereto without the consent of any Noteholder for any of
the following purposes:

                  (a) (i) to cure any defect or inconsistency herein or in the
         Equipment Notes, or (ii) to cure any ambiguity or correct any mistake;

                  (b) to evidence the succession of another party as the Owner
         Trustee in accordance with the terms of the Trust Agreement or to
         evidence (in accordance with Article 9) the succession of a new trustee
         hereunder, the removal of the trustee hereunder or the appointment of
         any co-trustee or co-trustees or any separate or additional trustee or
         trustees;

                  (c) to convey, transfer, assign, mortgage or pledge any
         property to or with the Loan Trustee or to make any other provisions or
         amendments with respect to matters or questions arising hereunder or
         under the Equipment Notes or to amend, modify or supplement any
         provision hereof or thereof so long as such action shall not adversely
         affect the interests of any Noteholder;

                  (d) to correct or amplify the description of any property at
         any time subject to the Lien of this Indenture or better to assure,
         convey and confirm unto the Loan Trustee any property subject or
         required to be subject to the Lien of this Indenture or to subject to
         the Lien of this Indenture the Engines or engine substituted for the
         Engines in accordance herewith or with the Lease; provided that Trust
         Agreement and Indenture Supplements entered into for the purpose of
         subjecting to the Lien of this Indenture the Engines in accordance with
         the Lease need only be executed by the Owner Trustee;

                                       41
<PAGE>

                  (e) to add to the covenants of the Owner Trustee for the
         benefit of the Noteholders, or to surrender any rights or power herein
         conferred upon the Owner Trustee, the Owner Participant or the Lessee;

                  (f) to add to the rights of the Noteholders;

                  (g) to provide for compliance with applicable law;

                  (h) to provide for the issuance of Series E Equipment Notes;
         or

                  (i) to include on the Equipment Notes any legend as may be
         required by law.

                  Section 12.02. Amendments to This Indenture with Consent of
Noteholders. (a) With the written consent of a Majority in Interest of
Noteholders, the Owner Trustee and the Loan Trustee may enter into such
supplemental agreements to add any provisions to or to change or eliminate any
provisions of this Indenture or of any such supplemental agreements or to modify
the rights of the Noteholders; provided, however, that, without the consent of
each Noteholder affected thereby, an amendment under this Section 12.02 may not:

                  (i) reduce the principal amount of, any principal installment
         payable with respect to, Make-Whole Amount, if any, or interest on, any
         Equipment Note; or

                  (ii) change the date on which any principal of, Make-Whole
         Amount, if any, or interest on any Equipment Note, is due or payable;
         or

                  (iii) create any Lien on the Indenture Estate prior to or pari
         passu with the Lien thereon under this Indenture except such as are
         permitted by this Indenture, or deprive any Noteholder of all or any
         part of the benefit of the Lien on the Indenture Estate created by this
         Indenture; or

                  (iv) reduce the percentage in principal amount of the
         outstanding Equipment Notes, the consent of whose holders is required
         for any such supplemental agreement, or the consent of whose holders is
         required for any waiver (of compliance with certain provisions of this
         Indenture or of certain defaults hereunder or their consequences)
         provided for in this Indenture; or

                  (v) make any change in Section 8.08, 8.09 or this Section
         12.02(a); or

                  (vi) change the definition of "Indenture Estate" or the
         amounts secured thereby, or

                  (vii) permit redemption of Equipment Notes earlier than
         permitted under Section 2.07 or 2.08 hereof or the purchase of
         Equipment Notes other than as permitted by Section 2.10 hereof.

                  (b) It is not necessary under this Section 12.02 for the
Noteholders to consent to the particular form of any proposed supplemental
agreement, but it is sufficient if they consent to the substance thereof.

                                       42
<PAGE>

                  Section 12.03. Revocation and Effect of Consents. The Owner
Trustee may at its option by delivery of an Officers' Certificate to the Loan
Trustee set a record date to determine the Noteholders entitled to give any
consent, request, demand, authorization, direction, notice, waiver or other act.
Such record date shall be the record date specified in such Officers'
Certificate which shall be a date not more than 30 days prior to the first
solicitation of Noteholders in connection therewith. If such a record date is
fixed, such consent, request, demand, authorization, direction, notice, waiver
or other act may be given before or after such record date, but only the
Noteholders of record at the close of business on such record date shall be
deemed to be Noteholders for the purposes of determining whether Noteholders
holding the requisite proportion of outstanding Equipment Notes have authorized
or agreed or consented to such consent, request, demand, authorization,
direction, notice, waiver or other act, and for that purpose the outstanding
Equipment Notes shall be computed as of such record date; provided that no such
consent, request, demand, authorization, direction, notice, waiver or other act
by the Noteholders on such record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later than one
year after the record date.

                  Section 12.04. Notation on or Exchange of Equipment Notes. The
Loan Trustee may place an appropriate notation about an amendment or waiver on
any Equipment Note thereafter executed. The Loan Trustee in exchange for such
Equipment Notes may execute new Equipment Notes that reflect the amendment or
waiver.

                  Section 12.05. Amendments, Waivers, Etc., of Other Operative
Documents. (a) Without the consent of a Majority in Interest of the Noteholders,
the respective parties to the Participation Agreement, the Lease, the Trust
Agreement and the Purchase Agreement Assignment may not modify, amend or
supplement any of said agreements, or give any consent, waiver, authorization or
approval thereunder, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions thereof or modifying in any
manner the rights of the respective parties thereunder; provided, however, that
the actions specified in subsection (b) of this Section 12.05 may be taken
without the consent of the Loan Trustee or any Noteholder.

                  (b) Subject to the provisions of subsection (c) of this
Section 12.05, the respective parties to the Participation Agreement, the Lease
and the Trust Agreement, at any time and from time to time without the consent
of the Loan Trustee or of any Noteholder, may:

                  (i) so long as no Indenture Event of Default shall have
         occurred and be continuing, modify, amend or supplement the Lease, or
         give any consent, waiver, authorization or approval with respect
         thereto, except that without compliance with subsection (a) of this
         Section 12.05 the parties to the Lease shall not modify, amend or
         supplement, or give any consent, waiver, authorization or approval for
         the purpose of adding any provisions to or changing in any manner or
         eliminating any of the provisions thereof or of modifying in any manner
         the rights of the respective parties thereunder, with respect to the
         following provisions of the Lease as in effect on the Closing Date:
         Section 2, Section 3(a) (if the result thereof would be to shorten the
         Term of the Lease to a period shorter than the period ending with the
         latest maturity date of any Equipment Notes), Section 3(b), Section
         3(c) (except to the extent such Section relates to amounts payable
         (whether directly or pursuant to the Indenture) to Persons other than
         the Noteholders and

                                       43
<PAGE>

         the Loan Trustee in its individual capacity), Section 3(d) (except
         insofar as it relates to the address or account information of the
         Owner Trustee or the Loan Trustee), Section 4, Section 6, Section 9
         (except that further restrictions may be imposed on the ability of the
         Lessee to terminate the Lease with respect to the Aircraft or an
         Engine), Section 10 (except that additional requirements may be imposed
         on the Lessee), Section 11 (except for Section 11(d) and except that
         additional insurance requirements may be imposed on the Lessee),
         Section 12 (except in order to increase the Lessee's liabilities or
         enhance the Lessor's rights thereunder), Section 13 (except in the case
         of an assignment by the Lessor in circumstances where the Aircraft
         shall remain registrable under the FAA), Section 14 (except to impose
         additional or more stringent Lease Events of Default), Section 15
         (except to impose additional remedies), Section 16, Section 17 (except
         to impose additional requirements on the Lessee), Section 19, Section
         22, Section 25 and any definition of terms used in the Lease, to the
         extent that any modification of such definition would result in a
         modification of the Lease not permitted pursuant to this subsection
         (b); provided that, in the event an Indenture Event of Default shall
         have occurred and be continuing, the Loan Trustee shall have all rights
         of the Owner Trustee as "Lessor" under the Lease to modify, amend or
         supplement the Lease or give any consent, waiver, authorization or
         approval thereunder, for the purpose of adding any provisions to or
         changing in any manner or eliminating any of the provisions thereof or
         of modifying in any manner the rights of the "Lessor" thereunder;
         provided further that, without the prior consent of the Owner Trustee,
         and whether or not an Indenture Event of Default shall have occurred
         and be continuing, no such action shall be taken (x) with respect to
         any of the provisions of Sections 1 (to the extent any modification of
         a definition contained therein would result in a modification of the
         Lease not permitted by this proviso), 3, 5, 6 (to the extent such
         action would reduce the Lessee's obligations), 7, 8, 9, 10, 11 (except
         to increase the amounts or types of insurance the Lessee must provide
         thereunder at its expense), 12, 13, 14, 15, 17 (insofar as it relates
         to the Lessor), 19, 20 and 28 of the Lease, (y) any other section of
         the Lease to the extent such action shall affect the amount or timing
         of any amounts payable by the Lessee under the Lease as originally
         executed (or as subsequently modified with the consent of the Owner
         Trustee) which, absent the occurrence and continuance of an Indenture
         Event of Default, would be distributable to the Owner Trustee under
         Article 3 or (z) which would otherwise materially and adversely affects
         the rights of the Owner Trustee or the Owner Participant; and provided
         further that the parties to the Lease may take any such action without
         the consent of the Loan Trustee or any Noteholder to the extent such
         action relates to the payment of amounts constituting, or the Owner
         Trustee's, the Owner Participant's or the Lessee's rights or
         obligations with respect to, Excepted Property;

                  (ii) modify, amend or supplement the Trust Agreement, or give
         any consent, waiver, authorization or approval with respect thereto, in
         each case only to the extent any such action shall not adversely impact
         the interests of the Noteholders;

                  (iii) modify, amend or supplement the Participation Agreement,
         or give any consent, waiver, authorization or approval with respect
         thereto, except that without the consent of a Majority in Interest of
         the Noteholders, the parties to the Participation Agreement shall not
         modify, amend or supplement, or give any consent, waiver, authorization
         or approval for the purpose of adding any provisions to or changing in
         any

                                       44
<PAGE>

         manner or eliminating any of the provisions thereof or of modifying in
         any manner the rights of the respective parties thereunder, with
         respect to the following provisions of the Participation Agreement as
         in effect on the Closing Date: Section 10 (insofar as such Section 10
         relates to the Loan Trustee, the Indenture Estate and the Noteholders
         holding the Equipment Notes), Section 11, Sections 12(b) through 12(d),
         Section 13, Section 16 Section 19(b) and, to the extent the Noteholders
         would be adversely affected thereby, Section 19(c) and any definition
         of terms used in the Participation Agreement, to the extent that any
         modification of such definition would result in a modification of the
         Participation Agreement not permitted pursuant to this subsection (b);

                  (iv) modify, amend or supplement any of said agreements in
         order to cure any ambiguity, to correct or supplement any provisions
         thereof which may be defective or inconsistent with any other provision
         thereof or of any provision of this Indenture, or to make any other
         provision with respect to matters or questions arising thereunder or
         under this Indenture which shall not be inconsistent with the
         provisions of this Indenture, provided the making of any such other
         provision shall not adversely affect the interests of the Noteholders
         unless such provision corrects a mistake or cures an ambiguity; and

                  (v) modify, amend or supplement any indemnities solely in
         favor of the Owner Participant or any member of its Related Indemnitee
         Group in such manner as shall be agreed by the Owner Participant and
         the Lessee.

                  (c) No modification, amendment, supplement, consent, waiver,
authorization or approval with respect to the Lease or the Participation
Agreement, whether effected pursuant to subsection (a) or pursuant to subsection
(b) of this Section 12.05 and anything in such subsections or elsewhere in this
Indenture to the contrary notwithstanding, shall, without the consent of each
Noteholder affected thereby,

                  (i) modify, amend or supplement the Lease in such a way as to
         extend the time of payment of Basic Rent or Supplemental Rent payable
         in respect of the Make-Whole Amount or Stipulated Loss Value or any
         other amounts payable upon the occurrence of an Event of Loss or
         Termination Value and any other amounts payable upon termination of the
         Lease with respect to the Aircraft, payable under, or as provided in,
         the Lease in effect on the Closing Date, or reduce the amount of any
         installment of Basic Rent or Supplemental Rent payable in respect of
         the Make-Whole Amount as in effect on the Closing Date so that the same
         is less than the payment of principal of, Make-Whole Amount, if any,
         and interest on the Equipment Notes, as the case may be, to be made
         from such installment of Basic Rent or Supplemental Rent payable in
         respect of the Make-Whole Amount, or reduce the aggregate amount of
         Stipulated Loss Value or any other amounts payable under, or as
         provided in, the Lease as in effect on the Closing Date upon the
         occurrence of an Event of Loss so that the same is less than the
         accrued interest on and principal as of the Loss Payment Date, and
         Make-Whole Amount, if any, of the Equipment Notes at the time
         outstanding or reduce the amount of Termination Value and any other
         amounts payable under, or as provided in, the Lease as in effect on the
         Closing Date upon termination of the Lease with respect to the Aircraft
         so that the same is less than the accrued interest on and principal as
         of the Lease Termination Date and Make-Whole Amount, if any, of the
         Equipment Notes at the time outstanding, or

                                       45
<PAGE>

                  (ii) modify, amend or supplement the Lease in such a way as
         to, or consent to any assignment of the Lease or give any consent,
         waiver, authorization or approval which would, release the Lessee from
         its obligations in respect of payment of Basic Rent, Supplemental Rent
         payable in respect of the Make-Whole Amount or Stipulated Loss Value
         and any other amounts payable upon the occurrence of an Event of Loss,
         or Termination Value and any other amounts payable upon termination of
         the Lease with respect to the Aircraft, payable under, or as provided
         in, the Lease as in effect on the Closing Date, except for any such
         assignment pursuant to Section 16(e) of the Participation Agreement,
         and except as provided in the Lease as in effect on the Closing Date.

                  Section 12.06. Trustees Protected. If, in the opinion of the
institution acting as Owner Trustee under the Trust Agreement or the institution
acting as Loan Trustee hereunder, any document required to be executed pursuant
to the terms of this Article affects any right, duty, immunity or indemnity with
respect to such institution under this Indenture such institution may in its
discretion decline to execute such document.

                  Section 12.07. Documents Mailed to Noteholders. Promptly after
the execution by the Owner Trustee or the Loan Trustee of any document entered
into pursuant to this Article, the Loan Trustee shall mail, by first-class mail,
postage prepaid, a copy thereof to each Noteholder at its address last set forth
in the Equipment Note Register, but the failure of the Loan Trustee to mail such
copies shall not impair or affect the validity of such document.

                                   ARTICLE 13

                                  MISCELLANEOUS

                  Section 13.01. Termination of Indenture. Upon (or at any time
after) payment in full of the principal of, Make-Whole Amount, if any, and
interest on and all other amounts due under, all Equipment Notes (provided that
following such payment there shall then be no other amounts due to the
Noteholders, the Indenture Indemnitees and the Loan Trustee hereunder or under
the Participation Agreement or any other Operative Document or otherwise secured
hereby), the Owner Trustee shall direct the Loan Trustee to execute and deliver
to or as directed in writing by the Owner Trustee or the Lessee an appropriate
instrument releasing the Aircraft, Airframe, or such Engine or Part, as
applicable, from the Lien of this Indenture and releasing the Indenture
Documents pertaining thereto from the assignment and pledge thereof hereunder,
and the Loan Trustee shall execute and deliver such instrument as aforesaid and
will execute and deliver such other instruments or documents as may be
reasonably requested by the Owner Trustee or the Lessee to give effect to such
release; provided, however, that this Indenture and the trusts created hereby
shall earlier terminate and this Indenture shall be of no further force or
effect upon any sale or other final disposition by the Loan Trustee of all
property part of the Indenture Estate and the final distribution by the Loan
Trustee of all moneys or other property or proceeds constituting part of the
Indenture Estate in accordance with the terms hereof. Except as aforesaid
otherwise provided, this Indenture and the trusts created hereby shall continue
in full force and effect in accordance with the terms hereof.

                                       46
<PAGE>

                  Section 13.02. No Legal Title to Indenture Estate in
Noteholders. No Noteholder shall have legal title to any part of the Indenture
Estate. No transfer, by operation of law or otherwise, of any Equipment Note or
other right, title and interest of any Noteholder in and to the Indenture Estate
or hereunder shall operate to terminate this Indenture or entitle such
Noteholder or any successor or transferee of such holder to an accounting or to
the transfer to it of legal title to any part of the Indenture Estate.

                  Section 13.03. Sale of Indenture Estate by Loan Trustee is
Binding. Any sale or other conveyance of the Indenture Estate or any interest
therein by the Loan Trustee made pursuant to the terms of this Indenture or of
the Lease shall bind the Noteholders and shall be effective to transfer or
convey all right, title and interest of the Loan Trustee, the Owner Trustee, the
Owner Participant and such Noteholders in and to the Indenture Estate or part
thereof. No purchaser or other grantee shall be required to inquire as to the
authorization, necessity, expediency or regularity of such sale or conveyance or
as to the application of any sale or other proceeds with respect thereto by the
Loan Trustee.

                  Section 13.04. Indenture for Benefit of Owner Trustee, Loan
Trustee, Owner Participant, Noteholders, Other Indenture Indemnitees and Lessee.
Nothing in this Indenture, whether express or implied, shall be construed to
give to any Person other than the Owner Trustee, the Loan Trustee, the Owner
Participant, the Noteholders, the other Indenture Indemnitees and, with respect
to this Section 13.04 and any other Section or provisions hereof requiring
payment to or otherwise granting any right or benefit to the Lessee, the Lessee,
any legal or equitable right, remedy or claim under or in respect of this
Indenture.

                  Section 13.05. No Action Contrary to Lessee's Rights Under the
Lease. The Owner Trustee and Loan Trustee agree that, except following a Lease
Event of Default that has occurred and is continuing, neither the Owner Trustee
nor the Loan Trustee nor any Person claiming by, through or under either the
Owner Trustee or the Loan Trustee will take or cause to be taken any action
inconsistent with Lessee's rights under the Lease and its right to quiet
enjoyment of, or otherwise interfere with or interrupt the Lessee's use,
operation and continuing possession of the Aircraft, the Airframe or any Engine
by the Lessee or any sublessee, assignee or transferee under any sublease,
assignment or transfer then in effect and permitted by the terms of the Lease.

                  Section 13.06. Notices. Unless otherwise expressly specified
or permitted by the terms hereof, all notices, requests, demands,
authorizations, directions, consents, waivers or documents provided or permitted
by this Indenture to be made, given, furnished or filed shall be in writing,
mailed by first-class mail, postage prepaid, by nationally recognized overnight
courier or by telecopy or confirmed telex, and (i) if to the Owner Trustee,
addressed to it at its office at Corporate Trust Services, 79 South Main Street,
Salt Lake City, Utah 84111, (ii) if to the Loan Trustee, addressed to it at its
office at Corporate Trust Division, 225 Asylum Street, Goodwin Square, Hartford,
Connecticut 06103 or (iii) if to any Participant, the Lessee or any Noteholder,
addressed to such party at such address as such party shall have furnished by
notice to the Owner Trustee and the Loan Trustee, or, until an address is so
furnished, addressed to the address of such party (if any) set forth in the
Participation Agreement. Whenever any notice in writing is required to be given
by the Owner Trustee or the Loan Trustee or any Noteholder to any of the other
of them or to the Lessee, such notice shall be deemed given and such requirement
satisfied

                                       47
<PAGE>

when such notice is received. Any party hereto may change the address to which
notices to such party will be sent by giving notice of such change to the other
parties to this Indenture.

                  Section 13.07. Severability. Any provision of this Indenture
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

                  Section 13.08. Oral Modifications or Continuing Waivers. No
terms or provisions of this Indenture or the Notes may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party or other person against whom enforcement of the change, waiver,
discharge or termination is sought; and any waiver of the terms hereof or of any
Note shall be effective only in the specific instance and for the specific
purpose given.

                  Section 13.09. Successors and Assigns. All covenants and
agreements contained herein shall be binding upon, and inure to the benefit of,
each of the parties hereto and the successors and permitted assigns of each, all
as herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by any Noteholder shall bind the successors and assigns of
such Noteholder. This Indenture and the Indenture Estate shall not be affected
by any amendment or supplement to the Trust Agreement or by any other action
taken under or in respect of the Trust Agreement, except that each reference in
this Indenture to the Trust Agreement shall mean the Trust Agreement as amended
and supplemented from time to time to the extent permitted hereby and thereby.

                  Section 13.10. Headings. The headings of the various Articles
and Sections herein and in the table of contents hereto are for the convenience
of reference only and shall not define or limit any of the terms or provisions
hereof.

                  Section 13.11. Normal Commercial Relations. Anything contained
in this Indenture to the contrary notwithstanding, any Participant or any bank
or other Affiliate of such Participant may conduct any banking or other
financial transactions, and have banking, trustee, custody, administrative
support or other commercial relationships, with the Lessee fully to the same
extent as if this Indenture were not in effect, including without limitation the
making of loans or other extensions of credit to the Lessee for any purpose
whatsoever, whether related to any of the transactions contemplated hereby or
otherwise.

                  Section 13.12. GOVERNING LAW. THIS INDENTURE HAS BEEN
DELIVERED IN THE STATE OF NEW YORK AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.

                  Section 13.13. Execution in Counterparts. This Indenture may
be executed in any number of counterparts, each of which shall be an original,
but such counterparts shall together constitute but one instrument.

                                       48
<PAGE>

                  IN WITNESS WHEREOF, the Owner Trustee and the Loan Trustee
have caused this Indenture to be duly executed by their respective officers
thereunto duly authorized, as of the day and year first above written.

                                          WELLS FARGO BANK NORTHWEST, NATIONAL
                                          ASSOCIATION, not in its individual
                                          capacity except as expressly provided
                                          herein, but solely as Owner Trustee

                                          By /s/ Nancy M. Dahl
                                             ----------------------------------
                                             Name: Nancy M. Dahl
                                             Title: Vice President

                                          STATE STREET BANK AND TRUST
                                          COMPANY OF CONNECTICUT,
                                          NATIONAL ASSOCIATION, as Loan Trustee

                                          By /s/ Alison Della Bella
                                             ----------------------------------
                                             Name: Alison Della Bella
                                             Title: Assistant Vice President

                                       49
<PAGE>

                                                       Exhibit A to Amended and
                                                       Restated Trust Indenture
                                                         and Security Agreement

                             Form of Equipment Notes

                  THIS EQUIPMENT NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR PURSUANT TO THE SECURITIES
LAWS OF ANY STATE OR OTHER JURISDICTION. ACCORDINGLY, THIS EQUIPMENT NOTE MAY
NOT BE OFFERED FOR SALE OR SOLD UNLESS EITHER REGISTERED UNDER THE ACT AND SUCH
APPLICABLE STATE OR OTHER LAWS OR EXEMPTIONS FROM SUCH REGISTRATION REQUIREMENTS
ARE AVAILABLE.

                   SERIES 2001 [___] EQUIPMENT NOTE DUE [___]
        ISSUED IN CONNECTION WITH THE MCDONNELL-DOUGLAS [______] AIRCRAFT
               BEARING UNITED STATES REGISTRATION NUMBER N[_____]A

          No.____                   Date:  [______,__]          $_____

          INTEREST RATE                                   MATURITY DATE
          [_____]                                        [_________,_____]

                  WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its
individual capacity, but solely as Owner Trustee (the "Owner Trustee") under the
Trust Agreement dated as of __________ between the Owner Trustee in its
individual capacity and the institution referred to therein as the "Owner
Participant" (as such Trustee Agreement may be amended or supplemented from time
to time, the "Trust Agreement") hereby promises to pay to ___________, or the
registered assignee thereof, the principal amount of ________________ Dollars
($_________) [on __________](1) [in installments on the Payment Dates set forth
in Schedule I hereto, each such installment to be in an amount computed by
multiplying the original principal amount of this Equipment Note by the
percentage set forth in Schedule I hereto opposite the Payment Date on which
such installment is due,] and to pay interest in arrears on each Payment Date at
the Debt Rate on the principal amount remaining unpaid from time to time
(calculated on the basis of a year of 360 days comprised of twelve 30-day
months) from the date hereof until paid in full. [Notwithstanding the foregoing,
the final payment made on this Equipment Note shall be in an amount sufficient
to discharge in full the unpaid principal amount and all accrued and unpaid
interest on, and any other amounts due under, this Equipment Note.](2)
Notwithstanding anything to the contrary contained herein, if any date on which
a payment under this Equipment Note becomes due and payable is not a Business
Day, then such payment shall not be made on such scheduled date but shall be
made on the next succeeding Business Day with the same force and effect as if
made on such scheduled date, and if such payment is made on such next succeeding
Business Day, no interest shall accrue on the amount of such payment from and
after such scheduled date.

---------
(1)  To be inserted in non-installment Equipment Notes.

(2)  To be inserted in installment Equipment Notes.

<PAGE>

                  For purposes hereof, the term "Indenture" means the Amended
and Restated Indenture and Security Agreement, dated as of ___________, 2001,
between the Owner Trustee and State Street Bank and Trust Company of
Connecticut, National Association, as Loan Trustee (the "Loan Trustee"), as the
same may be amended, supplemented or otherwise modified from time to time in
accordance with its terms. All capitalized terms used in this Equipment Note and
not defined herein, unless the context otherwise requires, shall have the
respective meanings set forth or incorporated by reference, and shall be
construed and interpreted in the manner described, in the Indenture.

                  This Equipment Note shall bear interest, payable on demand, at
the Past Due Rate (and not at the Debt Rate) (calculated on the basis of a year
of 360 days comprised of twelve 30-day months) on any principal amount and (to
the extent permitted by applicable law) Make-Whole Amount, if any, interest and
any other amounts payable hereunder not paid when due for any period during
which the same shall be overdue, in each case for the period the same is
overdue. Amounts shall be overdue if not paid in the manner provided herein or
in the Indenture when due (whether at stated maturity, by acceleration or
otherwise).

                  All payment of principal, interest, Make-Whole Amount, if any,
and other amounts, if any, to be made by the Owner Trustee hereunder and under
the Indenture or the Participation Agreement shall be payable only from the
income and proceeds from the Trust Estate to the extent included in the
Indenture Estate and only to the extent that the Owner Trustee shall have
sufficient income or proceeds from the Trust Estate to the extent included in
the Indenture Estate to enable the Loan Trustee to make payments in accordance
with the terms of Section 2.03 and Article 3 of the Indenture, and each holder
hereof, by its acceptance of this Equipment Note, agrees that it will look
solely to the income and proceeds from the Indenture Estate to the extent
available for distribution to the holder hereof as above provided and that none
of the Owner Participant, the Owner Trustee and the Loan Trustee is personally
liable or liable in any manner extending to any assets other than the Indenture
Estate to the holder hereof for any amounts payable or any liability under this
Equipment Note or, except as provided in the Indenture or in the Participation
Agreement, for any liability under the Indenture or the Participation Agreement;
provided, however, that nothing herein contained shall limit, restrict or impair
the right of the Loan Trustee, subject always to the terms and provisions of the
Indenture, to accelerate the maturity of this Equipment Note upon occurrence of
an Indenture Event of Default under the Indenture in accordance with Section
8.02 of the Indenture, to bring suit and obtain a judgment against the Owner
Trustee on this Equipment Note for purposes of realizing upon the Indenture
Estate and to exercise all rights and remedies provided under the Indenture or
otherwise realize upon the Indenture Estate as provided under the Indenture.

                  There shall be maintained an Equipment Note Register for the
purpose of registering transfers and exchanges of Equipment Notes at the
Corporate Trust Office of the Loan Trustee, or at the office of any successor
trustee, in the manner provided in Section 2.04 of the Indenture.

                  The principal amount and interest and other amounts due
hereunder shall be payable in Dollars by wire transfer in immediately available
funds at the Corporate Trust Office of the Loan Trustee, or as otherwise
provided in the Indenture. The Owner Trustee shall not have any responsibility
for the distribution of any such payment to the Noteholder of this

                                       A-2
<PAGE>

Equipment Note. Each such payment shall be made on the date such payment is due
and without any presentment or surrender of this Equipment Note, except that in
the case of any final payment with respect to this Equipment Note, the Equipment
Note shall be surrendered to the Loan Trustee for cancellation.

                  The holder hereof, by its acceptance of this Equipment Note,
agrees that, except as provided in the Indenture, including the subordination
provisions referred to below, each payment of an installment of principal
amount, Make-Whole Amount, if any, and interest received by it hereunder shall
be applied: first, to the payment of accrued interest on this Equipment Note (as
well as any interest on any overdue principal amount, and, to the extent
permitted by law, any overdue Make-Whole Amount, if any, any overdue interest
and other overdue amounts hereunder) to the date of such payment; second, to the
payment of Make-Whole Amount, if any, and third, to the payment of the principal
amount of this Equipment Note (or portion hereof) then due.

                  This Equipment Note is one of the Equipment Notes referred to
in the Indenture which have been or are to be issued by the Owner Trustee
pursuant to the terms of the Indenture. The Indenture Estate is held by the Loan
Trustee as security, in part, for the Equipment Notes. The provisions of this
Equipment Note are subject to the Indenture and the Participation Agreement.
Reference is hereby made to the Indenture and the Participation Agreement for a
complete statement of the rights and obligations of the holder of, and the
nature and extent of the security for, this Equipment Note and the rights and
obligations of the holders of, and the nature and extent of the security for,
any other Equipment Notes executed and delivered under the Indenture, to all of
which terms and conditions in the Indenture and the Participation Agreement each
holder hereof agrees by its acceptance of this Equipment Note.

                  As provided in the Indenture and subject to certain
limitations therein set forth, this Equipment Note is exchangeable for a like
aggregate principal amount of Equipment Notes of the same Series of different
authorized denominations, as requested by the holder surrendering the same.
Prior to the due presentment for registration of transfer of this Equipment
Note, the Owner Trustee and the Loan Trustee shall deem and treat the Person in
whose name this Equipment Note is registered on the Equipment Note Register as
the absolute owner and holder hereof for the purpose of receiving all amounts
payable with respect to this Equipment Note and for all purposes, and neither of
the Owner Trustee nor the Loan Trustee shall be affected by notice to the
contrary.

                  This Equipment Note is subject to redemption as provided in
Sections 2.07 and 2.08 of the Indenture and to purchase as provided in Section
2.10 of the Indenture but not otherwise.

                  The indebtedness evidenced by this Equipment Note [shall rank
in right of payment equally with all Series A-2 Equipment Notes and all other
Series A-1 Equipment Notes.](3) [shall rank in right of payment equally with all
Series A-1 Equipment Notes and all other Series A-2 Equipment Notes.](4) [is, to
the extent and in the manner provided in the

---------
(3)  To be inserted in the case of a Series A-1 Equipment Note.

(4)  To be inserted in the case of a Series A-2 Equipment Note.

                                      A-3
<PAGE>

Indenture, subordinate and subject in right of payment to the prior payment in
full of the Secured Obligations (as defined in the Indenture) in respect of
[Series A-1 Equipment Notes and Series A-2 Equipment Notes](5) [Series A-1
Equipment Notes, Series A-2 Equipment Notes and Series B Equipment Notes](6)
[Series A-1 Equipment Notes, Series A-2 Equipment Notes, Series B Equipment
Notes and Series C Equipment Notes](7) [Series A-1 Equipment Notes, Series A-2
Equipment Notes, Series B Equipment Notes, Series C Equipment Notes and Series D
Equipment Notes](8) and this Equipment Note is issued subject to such
provisions. The Noteholder of this Equipment Note, by accepting the same, (a)
agrees to and shall be bound by such provisions, (b) authorizes and directs the
Loan Trustee on such Noteholder's behalf to take such action as may be necessary
or appropriate to effectuate the subordination as provided in the Indenture and
(c) appoints the Loan Trustee such Noteholder's attorney-in-fact for such
purpose.

                  Without limiting the foregoing, the]9 [The]10 Noteholder of
this Equipment Note, by accepting the same, agrees that if such Noteholder, in
its capacity as a Noteholder, shall receive any payment or distribution on any
Secured Obligation in respect of this Equipment Note that it is not entitled to
receive under Section 2.13 or Article 3 of the Indenture, it shall hold any
amount so received in trust for the Loan Trustee and forthwith turn over such
amount to the Loan Trustee in the form received to be applied as provided in
Article 3 of the Indenture.

                  Unless the certificate of authentication hereon has been
executed by or on behalf of the Loan Trustee by manual signature, this Equipment
Note shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

                  THIS EQUIPMENT NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE.

---------
(5)  To be inserted in the case of a Series B Equipment Note.

(6)  To be inserted in the case of a Series C Equipment Note.

(7)  To be inserted in the case of a Series D Equipment Note.

(8)  To be inserted in the case of a Series E Equipment Note.

(9)  To be inserted in the case of a Series B Equipment Note, a Series C
     Equipment Note, a Series D Equipment Note or a Series E Equipment Note.

(10) To be inserted in the case of a Series A-1 Equipment Note or a Series A-2
     Equipment Note.

                                      A-4
<PAGE>

                  IN WITNESS WHEREOF, the Owner Trustee has caused this
Equipment Note to be executed in its corporate name by its officer thereunto
duly authorized on the date hereof.

                                           WELLS FARGO BANK NORTHWEST, NATIONAL
                                           ASSOCIATION, not in its individual
                                           capacity but solely as Owner Trustee

                                           By
                                             ----------------------------------
                                             Name:
                                             Title:

                                      A-5
<PAGE>

                                                       Exhibit B to Amended and
                                                       Restated Trust Indenture
                                                       and Security Agreement

                Form of Trust Agreement and Indenture Supplement

               [Intentionally omitted from FAA filing counterpart]

<PAGE>

                  LOAN TRUSTEE'S CERTIFICATE OF AUTHENTICATION

                  This is one of the Equipment Notes referred to in the
within-mentioned Indenture.

                                           [                                 ],
                                            --------------------------------
                                            as Loan Trustee

                                           By
                                             ----------------------------------
                                             Name:
                                             Title:

<PAGE>

                                                       Schedule I to Amended and
                                                        Restated Trust Indenture
                                                          and Security Agreement

       [Insert descriptions of Airframe and Engines and FAA Conveyance No.
                            for Original Indenture]

<PAGE>

                                                      Schedule II to Amended and
                                                        Restated Trust Indenture
                                                          and Security Agreement

                            Terms of Equipment Notes

               [Intentionally omitted from FAA filing counterpart]

<PAGE>

                                                     Schedule III to Amended and
                                                        Restated Trust Indenture
                                                          and Security Agreement

                      List of Pass Through Trust Agreements

                    [Intentionally omitted from FAA filing counterpart]<PAGE>
                                                                    EXHIBIT 4.21

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

                              AMENDED AND RESTATED
                                 LEASE AGREEMENT

                            Dated as of May 24, 2001

                                     between

                WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION

        not in its individual capacity except as expressly stated herein,
                       but solely as Owner Trustee, Lessor

                                       and

                             AMERICAN AIRLINES, INC.

                                     Lessee

                      One McDonnell Douglas MD-83 Aircraft
                     Bearing U.S. Registration Number N9630A

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

CERTAIN OF THE RIGHT, TITLE AND INTEREST IN AND TO THIS LEASE AGREEMENT, WELLS
FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, AS OWNER TRUSTEE UNDER THE TRUST
AGREEMENT, DATED AS OF THE DATE HEREOF, BETWEEN WELLS FARGO BANK NORTHWEST,
NATIONAL ASSOCIATION AND THE OWNER PARTICIPANT NAMED THEREIN, HAS BEEN ASSIGNED
TO AND IS SUBJECT TO A SECURITY INTEREST IN FAVOR OF STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, AS LOAN TRUSTEE, UNDER THE TRUST
INDENTURE AND SECURITY AGREEMENT, DATED AS OF THE DATE HEREOF, FOR THE BENEFIT
OF THE HOLDERS OF THE NOTES REFERRED TO IN SUCH TRUST INDENTURE AND SECURITY
AGREEMENT. THIS LEASE AGREEMENT HAS BEEN EXECUTED IN SEVERAL COUNTERPARTS. TO
THE EXTENT, IF ANY, THAT THIS LEASE CONSTITUTES CHATTEL PAPER (AS SUCH TERM IS
DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE
JURISDICTION) NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE
TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL. THE
COUNTERPART TO BE DEEMED THE ORIGINAL SHALL BE THE COUNTERPART THAT CONTAINS THE
RECEIPT THEREFOR EXECUTED BY STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION, AS LOAN TRUSTEE, ON THE SIGNATURE PAGES THEREOF AND NO
SECURITY INTEREST IN THIS LEASE AGREEMENT MAY BE CREATED THROUGH THE TRANSFER OF
ANY COUNTERPART OTHER THAN SAID ORIGINAL COUNTERPART. SEE SECTION 22 FOR
INFORMATION CONCERNING THE RIGHTS OF THE HOLDERS OF THE VARIOUS COUNTERPARTS
HEREOF.

                      THIS IS NOT THE ORIGINAL COUNTERPART.

                                                              AA-EETC 2001 Lease

<PAGE>

                               Table of Contents
                                  (continued)

<Table>
<Caption>
                                                                                                       Page
                                                                                                       ----
<S>                                                                                                    <C>
Section 1.        Definitions............................................................................1

Section 2.        Leasing of Aircraft....................................................................1

Section 3.        Term and Rent..........................................................................1
                  (a)      Term  5.......................................................................1
                  (b)      Basic Rent....................................................................1
                  (c)      Supplemental Rent.............................................................2
                  (d)      Payment to Lessor.............................................................3

Section 4.        Lessor's Representations, Warranties and Covenants; Quiet Enjoyment....................3
                  (a)      Lessor's Representations, Warranties and Covenants............................3
                  (b)      Quiet Enjoyment...............................................................4
                  (c)      Warranty Service..............................................................4

Section 5.        Return of Aircraft.....................................................................5
Section 6.        Liens..................................................................................5

Section 7.        Registration, Maintenance and Operation; Possession; Insignia..........................6
                  (a)      Registration, Maintenance and Operation.......................................6
                  (b)      Possession....................................................................8
                  (c)      Insignia.....................................................................12

Section 8.        Replacement and Pooling of Parts; Alterations, Modifications and Additions............12
                  (a)      Replacement of Parts.........................................................12
                  (b)      Pooling of Parts.............................................................13
                  (c)      Alterations, Modifications and Additions.....................................13
                  (d)      Passenger Convenience Equipment..............................................14

Section 9.        Voluntary Termination.................................................................15
                  (a)      Right of Termination.........................................................15
                  (b)      Sale of Aircraft.............................................................16
                  (c)      Certain Obligations upon Sale of Aircraft....................................17
                  (d)      Retention of Aircraft by Lessor..............................................17
                  (e)      [Intentionally Left Blank]...................................................18
                  (f)      Termination of Lease, etc....................................................18
                  (g)      Termination as to Engines....................................................18

Section 10.       Loss, Destruction, Requisition, etc...................................................18
                  (a)      Event of Loss with Respect to the Airframe...................................18
                  (b)      Event of Loss with Respect to an Engine......................................19
                  (c)      Application of Payments from Governmental Authorities for
                           Requisition of Title or Use..................................................21
</Table>

                                       i
                                                              AA-EETC 2001 Lease
<PAGE>

                               Table of Contents
                                  (continued)

<Table>
<Caption>
                                                                                                       Page
                                                                                                       ----
<S>                                                                                                    <C>
                  (d)      Requisition for Use by the Government of the Airframe and the
                           Engines Installed Thereon....................................................22
                  (e)      Requisition for Use by the Government of an Engine...........................23
                  (f)      Application of Payments During Existence of Event of Default.................23

Section 11.       Insurance.............................................................................24
                  (a)      Aircraft Liability Insurance.................................................24
                  (b)      Insurance against Loss or Damage to Aircraft.................................25
                  (c)      Self-Insurance...............................................................27
                  (d)      Application of Insurance Payments............................................27
                  (e)      Reports, etc.................................................................28
                  (f)      Salvage Rights; Other........................................................28

Section 12.       Inspection............................................................................29

Section 13.       Assignment, Citizenship, etc..........................................................30

Section 14.       Events of Default.....................................................................30

Section 15.       Remedies..............................................................................32

Section 16.       Section 1110..........................................................................35

Section 17.       Further Assurances; Financial Information.............................................35

Section 18.       Notices...............................................................................37

Section 19.       No Setoff, Counterclaim etc...........................................................37

Section 20.       Renewal Options; Purchase Options.....................................................38
                  (a)      Renewal Options..............................................................38
                  (b)      [Intentionally Left Blank]...................................................39
                  (c)      Purchase Option..............................................................39

Section 21.       Successor Owner Trustee...............................................................39

Section 22.       Security for Lessor's Obligation to Holders of Notes..................................39

Section 23.       Lessor's Right to Perform for Lessee..................................................40

Section 24.       [Intentionally Left Blank]............................................................40

Section 25.       Investment of Security Funds; Miscellaneous...........................................40

Section 26.       Concerning the Lessor.................................................................41

Section 27.       Sublessee's Performance and Rights....................................................41

Section 28.       Miscellaneous.........................................................................42
</Table>

                                       ii

                                                              AA-EETC 2001 Lease

<PAGE>

                               Table of Contents
                                  (continued)

<Table>
<Caption>
                                                                                                       Page
                                                                                                       ----
<S>                                                                                                    <C>

Annex A           -        Definitions

Schedule A        -        Airframe, Engines and Lease Information
Schedule B        -        Rent Schedule

Exhibit A         -        Form of Lease Supplement
</Table>

                                      iii

                                                              AA-EETC 2001 Lease
<PAGE>

                              AMENDED AND RESTATED
                                 LEASE AGREEMENT

         This LEASE AGREEMENT, dated as of May 24, 2001, between WELLS FARGO
BANK NORTHWEST, NATIONAL ASSOCIATION, a national banking association, not in its
individual capacity, except as expressly stated herein, but solely as Owner
Trustee under the Trust Agreement (as defined in Annex A) ("Lessor"), and
AMERICAN AIRLINES, INC. ("Lessee"), a Delaware corporation ("American").

                                  WITNESSETH:

         WHEREAS, the Aircraft is subject to the lease agreement described in
Schedule A attached hereto, as amended, supplemented or assigned by the
amendments, supplements and assignments, if any, thereto described in Schedule A
attached hereto (such lease agreement, as so amended, supplemented or assigned,
the "Original Lease"), covering the airframe and engines described in Schedule A
attached hereto (the "Airframe" and the "Engines", respectively; the Airframe
and Engines, together, the "Aircraft");

         NOW, THEREFORE, in consideration of the premises and mutual agreements
herein contained and other good and valuable consideration, receipt of which is
hereby acknowledged, the Original Lease is hereby amended and restated as
follows:

         Section 1. Definitions. Unless the context otherwise requires,
capitalized terms used herein without definition shall have the meanings set
forth in Annex A hereto for all purposes of this Lease.

         Section 2. Leasing of Aircraft. Commencing at the Commencement Time,
Lessor hereby leases to Lessee hereunder, and Lessee hereby leases from Lessor
hereunder, the Aircraft for the Term. Acceptance by Lessee of the Aircraft
pursuant to the Participation Agreement shall, without further act, irrevocably
constitute acceptance by Lessee of the Aircraft for all purposes of this Lease.

         Section 3. Term and Rent.

         (a) Term. Except as otherwise provided herein, the Term for the lease
of the Aircraft hereunder shall commence at the Commencement Time and end on the
Base Lease Expiry Date.

         (b) Basic Rent. Lessee hereby agrees to pay Lessor Basic Rent for the
Aircraft throughout the Term in consecutive semiannual installments payable on
each Lease Period Date, the first installment of which shall be due and payable
on the first Lease Period Date, and the remaining installments of which shall be
due and payable on

                                                              AA-EETC 2001 Lease
<PAGE>

the other Lease Period Dates shown in column 1 of Schedule B hereto, in the
amounts as shown in column 2 of such Schedule B. In connection with any
termination of this Lease and in accordance with the provisions hereof, the
Lessee's obligation in respect of the payment of the Basic Rent in connection
therewith shall be determined by reference to the applicable provisions of
Sections 9, 10(a), 15(c) and 15(d) hereof, as the case may be. Notwithstanding
anything to the contrary herein, but without affecting the timing or amount of
Basic Rent payment set forth in the preceding two sentences, Lessor and Lessee
acknowledge and agree that the amount of Basic Rent for which Lessee is liable
on account of the use of the Aircraft shall be allocated in accordance with
Treasury Regulation Section 1.467-1(c)(2)(ii)(A)(2) to each Lease Period as set
forth in column 3 of Schedule B hereto. Notwithstanding any other provisions of
the Operative Documents to the contrary, each installment of Basic Rent due on
each Lease Period Date, together with any Supplemental Rent of the type referred
to in Section 3(c)(iii) hereof, shall be, under any and all circumstances, an
amount at least sufficient to pay in full any installment of principal of and
interest on the Notes required to be paid pursuant to the Notes (other than
amounts becoming due on account of the exercise of remedies pursuant to Section
15 hereof) on such Lease Period Date. Further, and anything contained herein or
in the Participation Agreement to the contrary notwithstanding, Termination
Value and Stipulated Loss Value for the Aircraft will, under any circumstances
and in any event, be an amount which, together with such amounts of Basic Rent
as may be payable pursuant to Schedule B hereto and any Supplemental Rent of the
type referred to in Section 3(c)(iii) hereof, will be at least equal to, as of
the date of payment thereof, the aggregate unpaid principal of the outstanding
Notes, together with all unpaid interest thereon accrued to the date on which
such amount is paid in accordance with the terms hereof.

         (c) Supplemental Rent. Lessee also agrees to pay to Lessor, or to
whomsoever shall be entitled thereto, any and all Supplemental Rent promptly as
the same shall become due and owing, and in the event of any failure on the part
of Lessee to pay any Supplemental Rent, Lessor shall have all rights, powers and
remedies provided for herein or by law or in equity or otherwise in the case of
nonpayment of Basic Rent. In addition, Lessee will pay as Supplemental Rent (i)
on demand, an amount equal to interest at the Overdue Rate on any part of any
installment of Basic Rent not paid when due for any period for which the same
shall be overdue and on any payment of Supplemental Rent not paid when due for
the period until the same shall be paid, (ii) any amounts payable by the Owner
Trustee under Section 2.14 of the Indenture, (iii) any additional amounts
payable by Lessor on the Equipment Notes as a result of an increase in the Debt
Rate pursuant to Section 2(d) of the Registration Rights Agreement, (iv) in the
case of any redemption of Notes pursuant to Section 2.07(b) of the Indenture,
the Make-Whole Amount, if any, payable pursuant to Section 2.07(b) of the
Indenture; provided that notwithstanding anything to the contrary set forth in
any Operative Document or any document or instrument relating thereto, Lessee
shall have no responsibility or liability for any amounts payable to the Loan
Trustee or the Subordination Agent in respect of (x) Make-Whole Amount, if any,
payable thereon as a

                                                              AA-EETC 2001 Lease
                                       2
<PAGE>

result of a redemption or purchase of the Notes pursuant to Section 2.08 or 2.10
of the Indenture or (y) an Indenture Default that does not also constitute a
Lease Default or a Lease Event of Default. All Supplemental Rent to be paid
pursuant to this Section 3(c) shall be payable in the type of funds and in the
manner set forth in Section 3(d).

         (d) Payment to Lessor. All Rent shall be paid by Lessee to Lessor's
account specified in Schedule A hereto (or as Lessor shall otherwise direct in
writing), by wire transfer in funds consisting of lawful currency of the United
States of America which shall be immediately available in such account not later
than 11:00 a.m., New York City time, on the date of payment, provided that so
long as the Indenture shall not have been discharged pursuant to the terms
thereof, Lessor hereby directs, and each of Lessor and Lessee agrees, that all
Rent (excluding Excepted Property) or other sums payable to Lessor hereunder or
pursuant hereto shall be paid directly to the Loan Trustee by wire transfer at
the times and in funds of the type specified in this Section 3(d) to the account
of the Loan Trustee specified in Schedule A hereto, or at such other account as
the Loan Trustee may otherwise direct. Whenever the date scheduled for any
payment of Rent to be made hereunder shall not be a Business Day, then such
payment need not be made on such scheduled date but may be made on the next
succeeding Business Day with the same force and effect as if made on such
scheduled date and (provided such payment is made on such next succeeding
Business Day) no interest shall accrue on the amount of such payment from and
after such scheduled date to the time of such payment on such next succeeding
Business Day.

         Section 4. Lessor's Representations, Warranties and Covenants; Quiet
Enjoyment.

         (a) Lessor's Representations, Warranties and Covenants. NONE OF LESSOR
(IN ITS INDIVIDUAL CAPACITY OR AS OWNER TRUSTEE), THE OWNER PARTICIPANT (IN SUCH
CAPACITY), THE SUBORDINATION AGENT, ANY PASS THROUGH TRUSTEE, OR THE LOAN
TRUSTEE MAKES OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION OR WARRANTY,
AND LESSEE HEREBY WAIVES, RELEASES AND RENOUNCES ANY REPRESENTATION OR WARRANTY
OF ANY KIND, EXPRESS OR IMPLIED, AS TO THE TITLE, AIRWORTHINESS, VALUE,
CONDITION, WORKMANSHIP, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE
FOR A PARTICULAR PURPOSE OF THE AIRCRAFT OR ANY ENGINE OR ANY PART THEREOF, AS
TO THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO
THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, OR AS TO
THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT, WHETHER IN STRICT
OR ABSOLUTE LIABILITY OR ARISING FROM THE NEGLIGENCE OF LESSOR, LOAN TRUSTEE,
THE SUBORDINATION AGENT, ANY PASS THROUGH TRUSTEE, OR THE OWNER PARTICIPANT (IN
SUCH CAPACITY), ACTUAL OR

                                       3

                                                              AA-EETC 2001 Lease

<PAGE>

IMPUTED, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED
WITH RESPECT TO THE AIRCRAFT OR ANY ENGINE OR ANY PART THEREOF. Nothing
contained in this Section 4 shall be construed as a waiver by Lessee of any
warranty or other claim against any manufacturer, supplier, dealer, contractor,
subcontractor or other Person. Lessor also represents and warrants in its
individual capacity that it is, in its individual capacity, a Citizen of the
United States.

         (b) Quiet Enjoyment. Lessor covenants that, except as expressly
permitted under Section 15 following an Event of Default that has occurred and
is continuing, neither Lessor, nor any Person claiming through or under Lessor
will take or cause to be taken any action inconsistent with Lessee's right to
quiet enjoyment of, or otherwise interrupt or interfere in any way with Lessee's
continuing possession, use or operation of, the Aircraft, the Airframe or any
Engine by Lessee or any sublessee, assignee or transferee under any sublease,
assignment or transfer then in effect and permitted by the terms of this Lease,
provided that the existence of any event or condition that constitutes, was
caused by or results from, any TWA Matter shall not constitute a breach of this
covenant by Lessor.

         (c) Warranty Service. Lessor agrees that, so long as no Event of
Default or Specified Default shall have occurred and be continuing, Lessee shall
have the benefit of and shall be entitled to enforce, either in its own name or
in the name of Lessor for the use and benefit of Lessee, to the extent
assignable, any and all dealer's, manufacturer's, installer's, contractor's or
subcontractor's warranties (whether express or implied) in respect of the
Aircraft, the Airframe, any Engine or any Part thereof, and Lessor agrees to
execute and deliver such further documents and take such further action, as may
be reasonably requested by Lessee and at Lessee's expense, as may be necessary
to enable Lessee to obtain such warranty service as may be furnished for the
Aircraft, Airframe, any Engine or any Part thereof by such dealer, manufacturer,
contractor, installer, contractor or subcontractor. Lessor hereby appoints and
constitutes Lessee, except at such times as a Specified Default or Event of
Default shall have occurred and be continuing, its agent and attorney-in-fact
during the Term to assert and enforce, from time to time, in the name and for
the account of Lessor and Lessee, as their interests may appear, but in all
cases at the sole cost and expense of Lessee, whatever warranty Claims and
warranty rights Lessor may have against any dealer, manufacturer, installer,
contractor or subcontractor.

                                       4

                                                              AA-EETC 2001 Lease
<PAGE>

         Section 5. Return of Aircraft. Upon the termination of this Lease at
the end of the Term, a Renewal Term or pursuant to Section 9 or upon rescission
of this Lease pursuant to Section 15, unless Lessee shall have exercised its
option to purchase the Aircraft pursuant to Section 20(c), Lessee will return
the Aircraft in accordance with the Return Conditions.

         Section 6. Liens. Lessee will not directly or indirectly create, incur,
assume or suffer to exist any Lien on or with respect to the Airframe or any
Engine, title thereto or any interest therein or in this Lease except:

                  (i) the respective rights of Lessor and Lessee as herein
         provided, the Lien created under the Indenture, the rights of Lessor
         under the Purchase Agreement Assignment and the rights of the Owner
         Participant, the Owner Trustee, the Loan Trustee, the Subordination
         Agent, the Liquidity Provider and each Pass Through Trustee (in its
         capacity as Noteholder and in its capacity as Pass Through Trustee)
         under the Trust Agreement, the Indenture, the Participation Agreement,
         the Liquidity Facilities, the Intercreditor Agreement, the Pass Through
         Trust Supplements, and the Pass Through Trust Agreements;

                  (ii) the rights of others under agreements or arrangements to
         the extent expressly permitted by the terms of Section 7(b) or 8(b);

                  (iii) Lessor's Liens, Subordination Agent's Liens and
         Trustee's Liens;

                  (iv) Liens for Taxes either not yet due or being contested in
         good faith by appropriate proceedings so long as such proceedings do
         not involve any material risk of the sale, forfeiture or loss
         (including loss of use) of the Airframe or any Engine or interest
         therein or any meaningful risk of criminal liability or any material
         risk of civil penalty against Lessor or Owner Participant;

                  (v) materialmen's, mechanics', workmen's, repairmen's,
         employees' or other like Liens arising in the ordinary course of
         Lessee's business securing obligations that are not yet delinquent or
         are being contested in good faith by appropriate proceedings so long as
         such proceedings do not involve any material risk of the sale,
         forfeiture or loss (including loss of use) of the Airframe or any
         Engine or interest therein or any meaningful risk of criminal liability
         or any material risk of civil penalty against Lessor or Owner
         Participant;

                  (vi) Liens (other than Liens for Taxes) arising out of
         judgments or awards against Lessee (A) during an appeal or other
         proceeding for review regarding such judgment or award and with respect
         to which there shall have been secured a stay of execution pending such
         appeal or proceeding for review or (B) for 60 days after the entry of
         such judgment or award (including any

                                       5

                                                              AA-EETC 2001 Lease
<PAGE>

         determination of an appeal or other judicial review); provided that
         during such 60-day period there is no material risk of the sale,
         forfeiture or loss (including loss of use) of the Airframe or any
         Engine or any interest therein or any meaningful risk of criminal
         liability or any material risk of civil penalty against Lessor or Owner
         Participant;

                  (vii) salvage or similar rights of insurers under insurance
         policies maintained pursuant to Section 11; and

                  (viii) [Intentionally Left Blank]

                  (ix) the respective rights of the financing parties under any
         financing arrangements entered into by Lessor or Owner Participant with
         respect to the Aircraft at any time.

         Lessee will promptly, at its own expense, take such action as may be
necessary duly to discharge (by bonding or otherwise) any such Lien not excepted
above if the same shall arise at any time.

         Section 7. Registration, Maintenance and Operation; Possession;
Insignia.

         (a) Registration, Maintenance and Operation. At the Commencement Time,
Lessee has taken possession of the Aircraft "AS IS, WHERE IS AND WITH ALL
FAULTS". Following the Commencement Time Lessee, at no expense to Lessor, shall:

                  (i) cause the Aircraft to remain duly registered at the FAA in
         the name of Lessor, as owner, except (x) as otherwise required by the
         Transportation Code, or (y) to the extent that such registration cannot
         be maintained because of Lessor's or the Owner Participant's failure to
         comply with the citizenship requirements for registration of aircraft
         under the Transportation Code; provided that Lessor and Owner
         Participant shall execute and deliver all such documents as Lessee
         shall reasonably request for the purpose of continuing such
         registration. Notwithstanding the preceding sentence, but subject
         always to the terms and conditions set forth in Section 12(l) of the
         Participation Agreement, Lessee may at any time, upon notice to Lessor,
         cause the Aircraft to be duly registered under the applicable statutes
         of such other country as shall be permitted under Section 12(l) of the
         Participation Agreement, in the name of Lessor or of any nominee of
         Lessor, or, if required by applicable law, in the name of Lessee or any
         other Person, and shall thereafter maintain such registration unless
         and until changed as provided herein and therein;

                  (ii) maintain, service, repair, overhaul and test the Aircraft
         in accordance with a Maintenance Program (as approved by the FAA) (and,
         at Lessee's option, (x) in the event that the Aircraft is re-registered
         in another

                                       6

                                                              AA-EETC 2001 Lease
<PAGE>

         jurisdiction pursuant to Section 7(a)(i), in accordance with a
         Maintenance Program approved by the central civil aviation authority of
         the jurisdiction of such registration or (y) in the event of any -
         sublease to a foreign air carrier in accordance with Section 7(b)(ix),
         approved by the central civil aviation authority of one of the
         Permitted Countries and in the same manner and with the same care used
         by Lessee (or, so long as the Aircraft is subject to a sublease (the
         "Sublease") between Lessor and TWA Airlines, LLC ("TWA LLC"), TWA LLC)
         with respect to similar aircraft and engines operated by Lessee (or, so
         long as the Aircraft is subject to the Sublease, TWA LLC) and utilized
         in similar circumstances, so as to keep the Aircraft in as good
         operating and physical condition as when delivered to Lessee at the
         Commencement Time, ordinary wear and tear excepted, and in such
         condition as may be necessary to enable a standard airworthiness
         certificate of the Aircraft to be maintained in good standing at all
         times (other than during temporary periods of storage in accordance
         with applicable regulations or during periods of grounding by
         applicable governmental authorities, except where such periods of
         grounding are the result of the failure by Lessee (or, so long as the
         Aircraft is subject to the Sublease, TWA LLC) to maintain the Aircraft
         as otherwise required herein) under the Transportation Code and the
         related Federal Aviation Regulations or, if the Aircraft is registered
         under the laws of any other jurisdiction, the laws of such
         jurisdiction;

                  (iii) maintain, in the English language, all records, logs and
         other materials required by the FAA or other appropriate authorities in
         the jurisdiction where the Aircraft is registered to be maintained by
         Lessee (or, so long as the Aircraft is subject to the Sublease, TWA
         LLC) in respect of the Aircraft;

                  (iv) promptly furnish to Lessor such information as may be
         required to enable Lessor to file any reports, returns or statements
         required to be filed by Lessor with any governmental authority because
         of Lessor's or the Owner Participant's interest in the Aircraft; and

                  (v) Lessee shall comply with all mandatory airworthiness
         directives issued prior to the expiration of the Term by the FAA,
         compliance with which is required during the Term, and if compliance
         with such directive is not required prior to the end of the Term but is
         required within 12 months thereafter, Lessee shall nevertheless comply
         with such directive if, prior to the end of the Term, Lessee commences
         compliance with such directive with respect to any other aircraft
         affected by such directive and in use by Lessee and subsequent to any
         such commencement, the Aircraft is subjected to a maintenance check of
         the type at which Lessee makes the modification required by such
         directive, in accordance with Lessee's Maintenance Program; Lessee
         shall not be required to comply with any manufacturer service
         bulletins.

                                       7

                                                              AA-EETC 2001 Lease

<PAGE>

         Lessee agrees that the Aircraft will not be maintained, used or
operated in violation of any law or any rule, regulation or order of any
government or governmental authority having jurisdiction in any country in which
the Aircraft is flown, or in violation of any airworthiness certificate, license
or registration relating to the Aircraft issued by any such authority; provided
that Lessee may in good faith contest the validity or application of any such
law, rule, regulation or order in any reasonable manner which does not involve
any material risk of the sale, forfeiture or loss (including loss of use) of the
Aircraft or any Engine, any meaningful risk of criminal liability or any
material risk of civil penalty against Lessor or Owner Participant or otherwise
materially adversely affect Lessor, the Aircraft, the Owner Participant or the
Lien of the Indenture; and, provided, further, that Lessee shall not be in
default under this sentence if it is not possible for it to comply with the laws
of a jurisdiction other than the United States (or other than any jurisdiction
in which the Aircraft is then registered) because of a conflict with the
applicable laws of the United States (or such jurisdiction in which the Aircraft
is then registered), in which event Lessee will diligently and in good faith use
its reasonable best efforts to cause the Aircraft to be removed, as soon as
practicable, from the jurisdiction other than the U.S. (or other than any
jurisdiction in which the Aircraft is then registered) creating a conflict or to
take such other reasonable action (including, if necessary, changing the
registration of the Aircraft unless the Aircraft is then registered in the
U.S.), as soon as practicable, as may be necessary to avoid the conflict. Lessee
or any permitted sublessee may operate the Aircraft in any geographical area
except (i) in any area excluded from coverage by any insurance required by the
terms of Section 11, except in the case of a requisition for use by the U.S.
Government where Lessee obtains indemnity pursuant to Section 11 in lieu of such
insurance from the U.S. Government against the risks and in the amounts required
by Section 11 covering such area, or (ii) in any war zone or recognized or, in
Lessee's reasonable judgment, threatened area of hostilities unless covered by
war risk insurance obtained in accordance with Section 11, but only so long as
the same remains in effect while the Aircraft is so operated or located, or
unless the Aircraft is operated or used under contract with the U.S. Government
entered into pursuant to Section 11, under which contract the U.S. Government
assumes liability for any damage, loss, or destruction or failure to return
possession of the Aircraft at the end of the term of such contract and for
injury to persons and damage to property of others. Notwithstanding anything to
the contrary contained herein, an aircraft engine which is not an Engine, but
which is installed on the Airframe, shall be maintained in accordance with this
Section 7(a).

         (b) Possession. Lessee will not, without the prior written consent of
Lessor, sublease or otherwise in any manner deliver, transfer or relinquish
possession of the Airframe or any Engine or install any Engine, or permit any
Engine to be installed, on any airframe other than the Airframe; provided that,
so long as no Specified Default or Event of Default shall have occurred and be
continuing, and so long as the action to be taken shall not deprive the Loan
Trustee of the perfected lien of the Indenture on the Airframe or (subject to
subclause (C) of the "provided" clause in subparagraph (i) of this

                                       8

                                                              AA-EETC 2001 Lease

<PAGE>

Section 7(b)) any Engine, and in any event, so long as Lessee shall comply with
the provisions of Section 11, Lessee may, without the prior consent of Lessor:

                  (i) subject the Airframe to normal interchange agreements or
         any Engine to normal interchange or pooling agreements or arrangements
         in each case customary in the airline industry and entered into by
         Lessee in the ordinary course of its business with any Certificated Air
         Carrier or with any "foreign air carrier" (as such term is defined in
         the Transportation Code) as to which there is in force a permit issued
         pursuant to 49 U.S.C. Section 41301-41306 (any such Certificated Air
         Carrier and any such foreign air carrier being hereinafter called a
         "Permitted Air Carrier"); provided that (A) no transfer of the
         registration of such Airframe shall be effected in connection
         therewith, (B) no such agreement or arrangement contemplates or
         requires the transfer of title to the Airframe and (C) if Lessor's
         title to any such Engine shall be divested under any such agreement or
         arrangement, such divestiture shall be deemed to be an Event of Loss
         with respect to such Engine and Lessee shall comply with Section 10(b)
         in respect thereof;

                  (ii) deliver possession of the Airframe or any Engine to any
         organization for testing, service, repair, maintenance or overhaul work
         on the Airframe or such Engine or other similar purposes or for
         alterations or modifications in or additions to the Airframe or such
         Engine to the extent required or permitted by the terms of Section 7(a)
         or 8(c);

                  (iii) transfer possession of the Airframe or any Engine to the
         U.S. Government pursuant to a sublease, contract or other instrument, a
         copy of which shall be furnished to Lessor; provided that the term of
         such sublease (including, without limitation, any option of the
         sublessee to renew or extend) or the term of possession under such
         contract or other instrument shall not continue beyond the end of the
         Term or any Renewal Term then in effect or any Renewal Term that Lessee
         shall have irrevocably notified Lessor that it shall exercise;

                  (iv) subject the Airframe or any Engine to the Civil Reserve
         Air Fleet Program authorized under 10 U.S.C. Section 9511 et seq.
         (collectively, the "CRAF Program") or transfer possession of the
         Airframe or any Engine at any time to the U.S. Government, in
         accordance with applicable laws, rulings, regulations or orders
         (including, without limitation, the CRAF Program); provided that Lessee
         (x) promptly notifies Lessor upon transfer of possession of the
         Airframe or any Engine to the U.S. Government pursuant to this
         subparagraph (iv) of Section 7(b) and (y) in the case of a transfer of
         possession pursuant to the CRAF Program, within 60 days thereof,
         provides to Lessor the name and the address of the responsible
         Contracting Office Representative for the Air Mobility Command of the
         United States Air Force (or any Successor thereto) or other appropriate
         person to whom notice must be given;

                                       9

                                                              AA-EETC 2001 Lease

<PAGE>

                  (v) install an Engine on an airframe owned by Lessee free and
         clear of all Liens, except (A) Permitted Liens and those which apply
         only to the engines (other than Engines), appliances, parts,
         instruments, appurtenances, accessories, furnishings and other
         equipment (other than Parts) installed on such airframe (but not to the
         airframe as an entirety) and (B) the rights of third parties under
         normal interchange agreements or pooling or similar arrangements that
         would be permitted under subparagraph (i) of this Section 7(b);

                  (vi) install an Engine on an airframe leased to Lessee or
         purchased or owned by Lessee subject to a lease, conditional sale or
         other security agreement; provided that (A) such airframe is free and
         clear of all Liens except (1) the rights of the parties to the lease or
         conditional sale or other security agreement covering such airframe and
         (2) Liens of the type permitted by clauses (A) and (B) of subparagraph
         (v) of this Section 7(b) and (B) either (x) Lessee shall have obtained
         from the lessor or secured party of such airframe a written agreement
         (which may be the lease or conditional sale or other security agreement
         covering such airframe), in form and substance satisfactory to Lessor
         (it being understood that an agreement from such lessor or secured
         party substantially in the form of the final sentence of the
         penultimate paragraph of this Section 7(b) shall be deemed to be
         satisfactory to Lessor), whereby such lessor or secured party expressly
         agrees that neither it nor its successors or assigns will acquire or
         claim any right, title or interest in any Engine by reason of such
         Engine being installed on such airframe at any time while such Engine
         is subject to this Lease or to the Lien of the Indenture or title
         thereto is held by Lessor or (y) such lease, conditional sale or other
         security agreement shall effectively provide that such Engine shall not
         become subject to the Lien of such lease, conditional sale or other
         security agreement at any time while such Engine is subject to this
         Lease or to the Lien of the Indenture or title thereto is held by
         Lessor, notwithstanding the installation thereof on such airframe;

                  (vii) install an Engine on an airframe owned by Lessee, leased
         to Lessee or owned by Lessee subject to a conditional sale or other
         security agreement under circumstances where neither such subparagraph
         (v) nor such subparagraph (vi) of this Section 7(b) is applicable;
         provided that such installation shall be deemed an Event of Loss
         (without regard to the proviso to the definition thereof) with respect
         to such Engine and Lessee shall comply with Section 10(b) in respect
         thereof, if such installation shall divest Lessor's title to such
         Engine, Lessor not intending hereby to waive any right or interest it
         may have to or in such Engine under applicable law until compliance by
         Lessee with such Section 10(b); and

                  (viii) [Intentionally Left Blank]

                                       10

                                                              AA-EETC 2001 Lease

<PAGE>

                  (ix) so long as the sublessee is not the debtor in a case or
         proceeding under applicable bankruptcy, insolvency or reorganization
         laws on the date the sublease is entered into, sublease any Engine or
         the Airframe and Engines or engines then installed on the Airframe to
         any Permitted Sublessee; provided that:

                  (A) the term of such sublease (including, without limitation,
         any option of the sublessee to renew or extend) shall not continue
         beyond the end of the Term or any Renewal Term then in effect or any
         Renewal Term that Lessee has irrevocably notified Lessor that it will
         exercise, unless Lessee has irrevocably agreed to purchase the Aircraft
         pursuant to Section 20(c) or renew the Lease pursuant to Section 20(a)
         at the end of the Term or such Renewal Term, as the case may be, to a
         date beyond the end of the term of such sublease (assuming that all
         options to renew or extend such sublease shall be exercised); and

                  (B) such sublease shall provide that the sublessee shall not
         sub-sublease the Aircraft;

provided that the rights of any transferee who receives possession by reason of
a transfer permitted by this Section 7(b) (other than the transfer of an Engine
which is deemed an Event of Loss) shall be, during the period of such
possession, subject and subordinate to, and any sublease permitted by this
Section 7(b) shall be made expressly subject and subordinate to, all the terms
of this Lease, including, without limitation, Lessor's rights to repossession
pursuant to Section 15 and to avoid and terminate such sublease upon such
repossession, and Lessee shall in all events remain primarily liable hereunder
for the performance and observance of all the terms and conditions of this Lease
(including, without limitation, the terms and conditions set forth in Section
7(a)(ii) and Section 11) to the same extent as if such sublease or transfer had
not occurred, and that any such sublease shall include appropriate provisions
for the maintenance and insurance of the Aircraft. The terms of the sublease
shall explicitly prohibit further subleasing. No interchange agreement, pooling
agreement, sublease or other relinquishment of possession of the Airframe or any
Engine shall in any way discharge or diminish any of Lessee's obligations to
Lessor hereunder. Lessee shall, prior to or within 15 days after entering into a
sublease of the Airframe or Engines, notify Lessor and the Loan Trustee of the
identity of the sublessee (other than TWA LLC) and the term of such sublease,
and provide Lessor and the Loan Trustee with a copy of the sublease within 30
days after entering into such sublease; provided that the identity of the
sublessee (other than TWA LLC) and the existence and terms of such sublease
shall be Confidential Information and shall be held by Lessor and the Loan
Trustee in accordance with the provisions of Section 25(f) of the Participation
Agreement. Lessor hereby agrees, for the benefit of the lessor or secured party
of any airframe or engine leased to Lessee or purchased or owned by Lessee
subject to a lease, conditional sale or other security agreement, that Lessor
will not acquire or claim, as against such lessor or secured party, any right,
title or interest in any engine or engines owned by the lessor under such lease
or subject to a security

                                       11

                                                              AA-EETC 2001 Lease
<PAGE>

interest in favor of the secured party under such conditional sale or other
security agreement as the result of such engine or engines being installed on
the Airframe at any time while such engine or engines are subject to such lease
or conditional sale or other security agreement.

         Lessor acknowledges that any "wet lease" or other similar arrangement
under which Lessee maintains operational control of the Aircraft shall not
constitute a delivery, transfer or relinquishment of possession for purposes of
this Section 7(b). No "wet lease" shall extend beyond the Term or any Renewal
Term then in effect or any Renewal Term that Lessee has irrevocably notified
Lessor that it will exercise.

         (c) Insignia. Lessee agrees to affix as promptly as practicable after
the Closing Date and thereafter to maintain in the cockpit of the Airframe
adjacent to the airworthiness certificate therein and (if not prevented by
applicable law or regulations or by any governmental authority) on each Engine a
nameplate bearing the inscription "WELLS FARGO BANK NORTHWEST, NATIONAL
ASSOCIATION, AS OWNER TRUSTEE, LESSOR", and, so long as the Airframe or such
Engine shall constitute a part of the Indenture Estate, the inscription "STATE
STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, AS LOAN
TRUSTEE, MORTGAGEE" (such nameplate to be replaced, if necessary, with a
nameplate reflecting the name of any successor Lessor or successor Loan
Trustee). Except as above provided, Lessee will not allow the name of any Person
to be placed on the Airframe or on any Engine as a designation that might be
interpreted as a claim of ownership; provided that nothing herein contained
shall prohibit Lessee (or any sublessee) from placing its customary colors and
insignia on the Airframe or any Engine.

         Section 8. Replacement and Pooling of Parts; Alterations, Modifications
and Additions.

         (a) Replacement of Parts. Lessee, at its own cost and expense, will
promptly replace all Parts which may from time to time be incorporated or
installed in or attached to the Airframe or any Engine and which may from time
to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged
beyond repair or rendered permanently unfit for use for any reason whatsoever,
except as otherwise provided in Section 8(c). In addition, Lessee may, at its
own cost and expense, remove in the ordinary course of maintenance, service,
repair, overhaul or testing, any Parts, whether or not worn out, lost, stolen,
destroyed, seized, confiscated, damaged beyond repair or rendered permanently
unfit for use; provided that Lessee, except as otherwise provided in Section
8(c), will, at its own cost and expense, replace such Parts as promptly as
possible. All replacement Parts shall be free and clear of all Liens (except for
pooling arrangements to the extent permitted by Section 8(b) and Permitted
Liens), and shall be in as good operating condition as, and shall have a value
and utility at least equal to, the Parts replaced, assuming such replaced Parts
were in the condition and repair required to be maintained

                                       12

                                                              AA-EETC 2001 Lease

<PAGE>

by the terms hereof. Title to all Parts at any time removed from the Airframe or
any Engine shall remain vested in Lessor no matter where located, until such
time as such Parts shall be replaced by Parts which have been incorporated or
installed in or attached to the Airframe or any Engine and which meet the
requirements for replacement Parts specified above. Immediately upon any
replacement Part becoming incorporated or installed in or attached to the
Airframe or any Engine as above provided, without further act, (i) title to the
replaced Part shall thereupon vest in Lessee, free and clear of all rights of
Lessor, and such replaced Part shall no longer be deemed a Part hereunder, (ii)
title to such replacement Part shall thereupon vest in Lessor, free and clear of
all Liens (except for Permitted Liens) and (iii) such replacement Part shall
become subject to this Lease and be deemed part of the Airframe or such Engine
for all purposes to the same extent as the Parts originally incorporated or
installed in or attached to the Airframe or such Engine.

         (b) Pooling of Parts. Any Part removed from the Airframe or an Engine
as provided in Section 8(a) may be subjected by Lessee to a normal pooling
arrangement customary in the airline industry entered into in the ordinary
course of Lessee's business with Permitted Air Carriers; provided that the Part
replacing such removed Part shall be incorporated or installed in or attached to
the Airframe or such Engine in accordance with Section 8(a) as promptly as
practicable after the removal of such removed Part. In addition, any replacement
Part when incorporated or installed in or attached to the Airframe or an Engine
in accordance with Section 8(a) may be owned by a Permitted Air Carrier subject
to such a normal pooling arrangement; provided that Lessee, at its expense, as
promptly thereafter as practicable, either (i) causes title to such replacement
Part to vest in Lessor in accordance with Section 8(a) by Lessee acquiring title
thereto for the benefit of, and transferring such title to, Lessor, free and
clear of all Liens (other than Permitted Liens) or (ii) replaces such
replacement Part by incorporating or installing in or attaching to the Airframe
or such Engine a further replacement Part owned by Lessee free and clear of all
Liens (other than Permitted Liens) and by causing title to such further
replacement Part to vest in Lessor in accordance with Section 8(a).

         (c) Alterations, Modifications and Additions. Lessee, at its own
expense, will make such alterations and modifications in and additions to the
Airframe and the Engines as may be required from time to time to meet the
applicable standards of the Federal Aviation Administration or other applicable
regulatory agency or body of the jurisdiction in which the Aircraft is then
registered; provided, however, that Lessee may, in good faith, contest the
validity or application of any such standard in any reasonable manner which does
not create a material risk of sale, loss (including loss of use) or forfeiture
of the Aircraft or any Engine, any meaningful risk of criminal liability or any
material risk of civil penalty against Lessor or Owner Participant or otherwise
materially adversely affect Lessor, the Aircraft, the Owner Participant or the
lien of the Indenture. In addition, Lessee may from time to time make such
alterations and modifications in and additions to the Airframe or any Engine as
Lessee may deem desirable in the ordinary course and

                                       13

                                                              AA-EETC 2001 Lease
<PAGE>

proper conduct of its passenger transport business, including, without
limitation, removal of Parts which Lessee determines in the exercise of good
faith to be obsolete or no longer suitable or appropriate for use on the
Airframe or such Engine (such Parts, "Obsolete Parts"); provided that no such
alteration, modification, addition or removal shall materially diminish the
value or utility of the Airframe or such Engine, or impair the condition or
airworthiness thereof, below the value, utility, condition and airworthiness
thereof immediately prior to such alteration, modification, addition or removal
assuming the Airframe or such Engine was then of the value and utility and in
the condition and airworthiness required to be maintained by the terms of this
Lease, except that the value (but not the utility, condition or airworthiness)
of the Aircraft may be reduced by the value of Obsolete Parts which shall have
been removed, if the aggregate value of all such Obsolete Parts removed from the
Aircraft and not replaced shall not exceed $100,000. Title to all Parts
incorporated or installed in or attached or added to the Airframe or any Engine
as the result of such alteration, modification or addition shall, without
further act, vest in Lessor. Lessor will not be required under any circumstances
to pay or compensate Lessee for any such alteration, modification or addition.
Notwithstanding the foregoing, Lessee may, at any time, remove any Part;
provided that (i) such Part is in addition to, and not in replacement of or
substitution for, any Part originally incorporated or installed in or attached
to the Airframe or such Engine at the time of delivery thereof hereunder or any
Part in replacement of, or substitution for, any such Part, (ii) such Part is
not required to be incorporated or installed in or attached or added to such
Airframe or Engine pursuant to the first sentence of this Section 8(c), and
(iii) such Part can be removed from the Airframe or such Engine without
materially diminishing or impairing the value, utility, condition or
airworthiness required to be maintained by the terms of this Lease which the
Airframe or such Engine would have had at such time had such removal not
occurred. Upon the removal by Lessee of any Part as provided in the immediately
preceding sentence or the removal of any Obsolete Part permitted by this Section
8(c), title thereto shall, without further act vest in Lessee, free and clear of
all right, title and interest of Lessor and of Lessor's Liens, and such Part
shall no longer be deemed part of the Airframe or the Engine from which it was
removed. Title to any such Part not removed by Lessee prior to the return of the
Airframe or any Engine to Lessor hereunder shall remain vested in Lessor.

         (d) Passenger Convenience Equipment. Lessee may install in the Airframe
severable telecommunications or other electronic equipment for individual use by
Aircraft passengers ("Passenger Convenience Equipment") that is (i) owned by
another Person and leased to Lessee, (ii) sold to Lessee by another Person
subject to conditional sale contract or other retained security interest, (iii)
leased to Lessee pursuant to a lease which is subject to a security interest in
favor of another Person or (iv) owned by another Person and installed on the
Aircraft subject to a license arrangement with Lessee, and in any such case,
Lessor will not acquire or claim any right, title or interest in any such
Passenger Convenience Equipment solely as a result of its installation on the
Airframe, provided that Lessee will ensure that the rights and interests of each
such Person in or

                                       14

                                                              AA-EETC 2001 Lease
<PAGE>

with respect to such Passenger Convenience Equipment will not be exercised in
derogation or impairment of, or interference with, Lessor's rights, interests
and remedies under Lease.

         Section 9. Voluntary Termination.

         (a) Right of Termination. So long as no Specified Default or Event of
Default shall have occurred and be continuing, Lessee shall have the right at
its option to terminate this Lease at any time on or after the eighth
anniversary of the Commencement Time, if in Lessee's good faith determination
(evidenced by a certificate of a Responsible Officer of Lessee to such effect)
the Aircraft is surplus to Lessee's requirements or economically obsolete to
Lessee by delivering to Lessor and the Loan Trustee a written notice of
termination specifying a proposed date of termination (the "Termination Date")
which shall be a Business Day that is a Lease Period Date occurring not earlier
than 90 days after the date of such notice (if such Lease Period Date is not a
Business Day, the Termination Date shall be the next succeeding Business Day
after the Lease Period Date). The termination of this Lease shall, subject to
the terms and conditions of this Section 9, be effective on (i) if Lessor has
elected to sell the Aircraft, as provided below, the date of sale of the
Aircraft, if any, referred to in Section 9(b), or (ii) if Lessor has elected to
retain the Aircraft as provided in Section 9(d), the date of termination
referred to in Section 9(d). Lessor shall give Lessee irrevocable notice of its
election to sell or retain the Aircraft no later than 30 Business Days prior to
the Termination Date. Lessor shall be entitled, prior to making any such
election, to receive from Lessee the information of the type described in the
second sentence of Section 9(b) with respect to each bid theretofore received.
In the event Lessor shall fail to give notice pursuant to the immediately
preceding sentence, notice of its election to sell the Aircraft shall be deemed
to have been given as of such thirtieth Business Day prior to the Termination
Date. Unless Lessor shall have given to Lessee a timely notice of its election
to retain the Aircraft as provided in Section 9(d), Lessee may withdraw the
termination notice referred to above at any time on or prior to the date 15
Business Days prior to the Termination Date, whereupon this Lease shall continue
in full force and effect; provided that in the event Owner Participant submits a
bid, Lessee shall be entitled to withdraw the termination notice at any time so
long as the Owner Participant's bid remains the sole bid with respect to the
Aircraft. In the event Lessee withdraws a notice of termination given pursuant
to Section 9(a) or such notice is deemed withdrawn pursuant to the final
sentence of Section 9(b), Lessee will reimburse Lessor, the Loan Trustee, the
Subordination Agent, each Pass Through Trustee and the Owner Participant for any
reasonable out-of-pocket expenses incurred by it in connection with the proposed
sale. Lessee shall not be entitled to exercise its right of termination provided
for in this Section 9(a) more than two times during the Term (not including for
purposes of this sentence any exercise by Lessee of such right of termination
immediately following a failure of this Lease to be terminated by reason of
Lessor's failure to comply with its obligations under this Section 9).

                                       15

                                                              AA-EETC 2001 Lease

<PAGE>

         (b) Sale of Aircraft. If Lessee has given notice to Lessor as provided
in Section 9(a) and Lessor has elected or is deemed to have elected to sell the
Aircraft pursuant to Section 9(a), Lessee will act as an exclusive agent for
Lessor to obtain bids for the cash purchase on or prior to the Termination Date
of the Aircraft. Lessee shall use its reasonable efforts to obtain such bids and
no later than ten Business Days prior to the Termination Date, Lessee shall
certify to Lessor in writing the amount and terms of each cash bid received by
Lessee and the name and the address of the Person submitting each such bid.
Neither the Lessee nor any Affiliate of Lessee may submit a bid for the
Aircraft, directly or indirectly, in connection with such proposed sale. On the
Termination Date (or such other date of sale as may be agreed to by Lessor, the
Loan Trustee and Lessee, which shall thereafter be deemed the Termination Date),
(x) Lessee shall, subject to receipt (i) by Lessor (or, so long as the Indenture
shall not have been discharged, the Loan Trustee) of the full purchase price
thereof and all amounts owing to Lessor pursuant to the next sentence, and (ii)
by the Persons entitled thereto of all unpaid Supplemental Rent (including
Make-Whole Amount, if any, payable pursuant to Section 2.07(b) of the Indenture)
due on or before the Termination Date, deliver the Aircraft at a location
selected by Lessee to the Person who shall have submitted the highest cash bid
net of any broker's or finder's fees (or such other purchaser acceptable to
Lessor and Lessee), in the same manner as if delivery were made to Lessor at the
end of the Term pursuant to Section 5, and shall duly transfer to Lessor title
to any engines installed on the Airframe but not owned by Lessor, all in
accordance with the terms of Section 5, and (y) Lessor shall simultaneously
therewith sell, without recourse or warranty (except as to Lessor's Liens), for
cash all of Lessor's right, title and interest in and to the Aircraft to such
highest net cash bidder (or other purchaser). The total selling price realized
at such sale shall be retained by Lessor (or, so long as the Indenture shall not
have been discharged, distributed by the Loan Trustee pursuant to the terms of
the Indenture) and, in addition, on the Termination Date, Lessee shall pay to
Lessor or, in the case of Supplemental Rent, to the Persons entitled thereto, in
funds of the type specified in Section 3(d), an amount equal to the sum of (1)
the excess, if any, of (A) the Termination Value for the Aircraft as of the
Termination Date, over (B) the proceeds of the sale of the Aircraft after
deducting the reasonable out-of-pocket expenses incurred by Lessor and the Owner
Participant, plus (2) all Supplemental Rent (including, without limitation,
Make-Whole Amount, if any, payable in connection with a redemption of any Notes
resulting from a termination under Section 9(a)) other than Termination Value,
due and owing on the Termination Date, plus (3) such amounts of Basic Rent as
may be payable pursuant to Schedule B hereto. If on or prior to the scheduled
Termination Date no sale of the Aircraft shall have occurred and if Lessor shall
not have elected to retain the Aircraft in accordance with Section 9(a),
Lessee's termination notice given pursuant to Section 9(a) shall be deemed to be
withdrawn as of such scheduled Termination Date, this Lease shall continue in
full force and effect and Lessee shall pay the reasonable, out of pocket
expenses incurred by Lessor, the Owner Participant and the Loan Trustee in
connection with the proposed sale.

                                       16

                                                              AA-EETC 2001 Lease

<PAGE>

         (c) Certain Obligations upon Sale of Aircraft. Upon the sale of the
Aircraft pursuant to and in accordance with the provisions of Section 9(b),
Lessor will transfer to Lessee, without recourse or warranty (except as to
Lessor's Liens), all of Lessor's right, title and interest in and to any Engines
constituting part of the Aircraft but which are not then installed on the
Aircraft. Lessor shall be under no duty to solicit bids, to inquire into the
efforts of Lessee to obtain bids or otherwise take any action in connection with
the sale of the Aircraft under Section 9(b), other than to transfer to the
purchaser of the Aircraft (or to such purchaser and to Lessee, as the case may
be), without recourse or warranty (except as to Lessor's Liens), all of Lessor's
right, title and interest in and to the Aircraft against receipt of the payments
provided for herein, and to request the Loan Trustee upon the sale of the
Aircraft pursuant to Section 9(b) to execute and deliver to such purchaser (or
to such purchaser and to Lessee, as the case may be) an appropriate instrument
releasing the Aircraft from the lien of the Indenture and releasing the Purchase
Agreement and the Purchase Agreement Assignment from the assignment and pledge
under the Indenture.

         (d) Retention of Aircraft by Lessor. If Lessor has elected to retain
the Aircraft pursuant to Section 9(a), on the Termination Date specified in
Lessee's termination notice, Lessor shall pay, or cause to be paid, to the Loan
Trustee in funds of the type specified in Section 3(d), an amount equal to (1)
the aggregate outstanding principal amount of the Notes and all accrued interest
thereon, plus, without affecting the obligations of the Lessee pursuant to the
next sentence, (2) all other sums due and payable to the Loan Trustee on such
Termination Date under the Indenture, the Participation Agreement or such Notes.
Subject to receipt by the Loan Trustee of such funds, on the Termination Date,
(i) Lessee (x) shall deliver the Aircraft to Lessor in the same manner as if
delivery were made to Lessor at the end of the Term pursuant to Section 5, and
shall duly transfer to Lessor title to any engines installed on the Airframe but
not owned by Lessor, all in accordance with the terms of Section 5, and (y)
shall pay to Lessor or to the Persons entitled thereto, in funds of the type
specified in Section 3(d), (A) all Supplemental Rent (including, without
limitation, Make-Whole Amount, if any, payable in connection with a redemption
of any Notes resulting from a termination under Section 9(a)), other than
Termination Value, due and owing on the Termination Date, pursuant to Section
3(b), and (B) such amounts of Basic Rent as may be payable pursuant to Schedule
B hereto, and (ii) Lessor (x) shall transfer or cause to be transferred to
Lessee, without recourse or warranty (except as to Lessor's Liens), all of
Lessor's right, title and interest in and to any Engines constituting part of
the Aircraft but which are not then installed on the Aircraft, and (y) Lessor
shall request the Loan Trustee to execute and deliver to Lessee an appropriate
instrument releasing the Aircraft from the Lien of the Indenture and releasing
the Purchase Agreement and the Purchase Agreement Assignment from the assignment
and pledge under the Indenture. If Lessor shall fail to perform any of its
obligations pursuant to this Section 9(d) and as a result thereof this Lease
shall not be terminated on a proposed Termination Date, Lessor shall thereafter
no

                                       17

                                                              AA-EETC 2001 Lease

<PAGE>

longer be entitled to exercise its election to retain the Aircraft and Lessee
may at its option at any time thereafter submit a new termination notice
pursuant to Section 9(a).

         (e) [Intentionally Left Blank]

         (f) Termination of Lease, etc. Upon the sale or retention of the
Aircraft, as the case may be, in compliance with the provisions of this Section
9, (i) the obligation of Lessee to pay Basic Rent under Section 3(b) on any
Lease Period Date occurring subsequent to the applicable Termination Value
Determination Date, and (ii) the obligation of Lessee to pay Supplemental Rent
(other than payments of Supplemental Rent to be made by Lessee (x) surviving
pursuant to Section 10(d) of the Participation Agreement or Section 10 of the
Tax Indemnity Agreement, (y) pursuant to clause (ii) of the second sentence of
Section 3(c) of this Lease, or (z) in respect of liabilities and obligations of
Lessee which have accrued under any Operative Document but not been paid or
which are in dispute as of the date of such sale or retention) shall cease as of
the Termination Date and, in each case, the Term shall end effective as of the
Termination Date.

         (g) Termination as to Engines. So long as no Specified Default or Event
of Default shall have occurred and be continuing, Lessee shall have the right at
its option at any time prior to the commencement of the C-check conducted in
connection with return of the Aircraft pursuant to Section D(6)(ii) of the
Return Conditions, on at least 60 days' prior written notice to Lessor and the
Loan Trustee, to terminate this Lease with respect to any Engine. In such event,
and prior to the date of such termination, Lessee shall replace such Engine
hereunder by complying with the terms of Section 10(b) to the same extent as if
an Event of Loss had occurred with respect to such Engine.

         Section 10. Loss, Destruction, Requisition, etc.

         (a) Event of Loss with Respect to the Airframe. Upon the occurrence of
an Event of Loss with respect to the Airframe, Lessee shall forthwith (and, in
any event, within 30 days after such occurrence) give Lessor and the Loan
Trustee notice of such Event of Loss and:

                  (i) [Intentionally Left Blank]

                  (ii) on or before the Loss Payment Date (as defined below),
         Lessee shall pay to Lessor or, in the case of Supplemental Rent, to the
         Persons entitled thereto, in funds of the type specified in Section
         3(d), (A) the Stipulated Loss Value for the Aircraft, determined as of
         the Loss Payment Date, plus (B) all Supplemental Rent due and owing on
         such Loss Payment Date, plus (C) such amounts of Basic Rent as may be
         payable pursuant to Schedule B hereto, plus (D) without affecting
         Lessee's obligation to pay installments of Basic Rent on each

                                       18

                                                              AA-EETC 2001 Lease

<PAGE>

         Lease Period Date prior to the Loss Payment Date, any Basic Rent due
         and payable prior to the Casualty Loss Determination Date and unpaid.

         As used herein, "Loss Payment Date" means the earliest of (x) 25 days
following the date on which insurance proceeds are received with respect to such
Event of Loss, (y) the Business Day next preceding the 121st day next following
the date of occurrence of the Event of Loss, and (z) an earlier Business Day
irrevocably specified by Lessee at least 25 days in advance by notice to Lessor
and the Loan Trustee.

         In the event of payment in full of the Stipulated Loss Value for the
Aircraft and all amounts payable pursuant to this Section 10, (1) the obligation
of Lessee to pay any Basic Rent under Section 3(b) on any Lease Period Date
occurring subsequent to the Casualty Loss Determination Date with respect to
which Stipulated Loss Value is determined shall terminate, (2) the obligation of
Lessee to pay Supplemental Rent (other than payments of Supplemental Rent to be
made by Lessee (x) surviving pursuant to Section 10 of the Tax Indemnity
Agreement or Section 10(d) of the Participation Agreement, or (y) in respect of
liabilities and obligations of Lessee which have accrued under any of the
Operative Documents but not been paid or which are in dispute as of the date of
such payment) shall terminate, (3) the Term for the Aircraft shall end, (4)
Lessor will transfer to Lessee (subject to any salvage rights of Lessee's
insurers pursuant to Section 11(f)), without recourse or warranty (except as to
Lessor's Liens), all Lessor's right, title and interest in and to the Airframe
and Engines (if any) with respect to which such Event of Loss occurred as well
as all Lessor's right, title and interest in and to any Engines constituting
part of the Aircraft but not installed thereon when such Event of Loss occurred,
and (5) Lessor will assign to or as directed by Lessee all Claims of Lessor
against third Persons relating to physical damage for loss of such Airframe and
Engines arising from such Event of Loss. Upon such transfer, Lessor shall
request the Loan Trustee to execute and deliver to Lessee an appropriate
instrument releasing the Airframe and Engines with respect to which title is
transferred from the lien of the Indenture and releasing the Purchase Agreement
and the Purchase Agreement Assignment from the assignment and pledge thereof
thereunder.

         (b) Event of Loss with Respect to an Engine. Upon the occurrence of an
Event of Loss with respect to an Engine under circumstances in which there has
not occurred an Event of Loss with respect to the Airframe, Lessee shall give
Lessor prompt written notice thereof and in any event within 30 days thereof and
shall, within 90 days after the occurrence of such Event of Loss, convey or
cause to be conveyed to Lessor, as replacement for the Engine with respect to
which such Event of Loss occurred, title to a Replacement Engine free and clear
of all Liens (other than Permitted Liens) and having a value and utility at
least equal to (but in any event without regard to the number of hours and
cycles), the Engine with respect to which such Event of Loss occurred, assuming
such Engine was of the condition and repair required by the terms hereof
immediately prior to the occurrence of such Event of Loss. Prior to or at the
time of any such

                                       19

                                                              AA-EETC 2001 Lease
<PAGE>

conveyance, Lessee, at its own expense, will (i) furnish Lessor with a warranty
(as to title) bill of sale (which warranty shall except Permitted Liens) with
respect to such Replacement Engine, (ii) cause a Lease Supplement, subjecting
such Replacement Engine to this Lease, and duly executed by Lessee, and such
other filings as Lessor may reasonably request to be delivered to Lessor for
execution and, upon such execution, to be filed for recordation pursuant to the
Transportation Code, or, if necessary, pursuant to the applicable laws of such
jurisdiction other than the United States of America in which the Aircraft is
registered, (iii) so long as the Indenture shall not have been satisfied and
discharged, comply with the applicable provisions thereof and cause a Trust
Agreement and Indenture Supplement substantially in the form of Exhibit A to the
Indenture or other requisite documents or instruments for such Replacement
Engine to be delivered to Lessor and to the Loan Trustee for execution and, upon
such execution, to be filed for recordation pursuant to the Transportation Code
or, if necessary, pursuant to the applicable laws of such jurisdiction other
than the United States of America in which the Aircraft is or is to be
registered in accordance with Section 7(a), as the case may be, (iv) furnish
Lessor and the Loan Trustee with an opinion or opinions of Lessee's counsel
addressed to each (which may be Lessee's General Counsel or other internal
counsel to Lessee reasonably satisfactory to Lessor and Owner Participant) to
the effect that upon such conveyance, Lessor will acquire good title to such
Replacement Engine, free and clear of all Liens other than Permitted Liens, (v)
furnish Lessor and the Loan Trustee with a certificate of an aircraft engineer
or appraiser (who may be an employee of Lessee) certifying that such Replacement
Engine has performance and durability characteristics and a value and utility at
least equal to (but in any event without regard to the number of hours or
cycles), the Engine so replaced or substituted, assuming such Engine was in the
condition and repair required by the terms hereof immediately prior to the
occurrence of such Event of Loss, (vi) so long as the Indenture shall not have
been satisfied and discharged, cause a financing statement or statements with
respect to the Replacement Engine or other requisite documents or instruments to
be filed in such place or places as necessary in order to perfect the security
interest therein created by or pursuant to the Indenture (to the same extent
that Engines so replaced are perfected or as otherwise may be required under the
Indenture), or, if necessary, pursuant to the applicable laws of the
jurisdiction in which the Aircraft is or is to be registered in accordance with
Section 7(a), as the case may be, (vii) furnish Lessor and the Loan Trustee with
such evidence of compliance with the insurance provisions of Section 11 with
respect to such Replacement Engine as Lessor or the Loan Trustee may reasonably
request. In the case of any Replacement Engine conveyed to Lessor under this
Section 10(b), promptly upon the recordation of the Lease Supplement and the
Trust Agreement and Indenture Supplement or other

                                       20

                                                              AA-EETC 2001 Lease
<PAGE>

requisite documents or instruments covering such Replacement Engine pursuant to
the Transportation Code (or pursuant to the applicable laws of the jurisdiction
in which the Aircraft is registered in accordance with Section 7(a)), Lessee
will cause to be delivered to Lessor, the Owner Participant and the Loan Trustee
an opinion of counsel to Lessee addressed to each as to the due recordation of
such Lease Supplement and such Trust Agreement and Indenture Supplement or other
requisite documents or instruments and the validity and perfection of the
security interest in such Replacement Engine granted to the Loan Trustee under
the Indenture. Upon full compliance by Lessee with the terms of this paragraph
(b), Lessor will transfer to Lessee (subject to any salvage rights of Lessee's
insurers pursuant to Section 11(f)), without recourse or warranty (except as to
Lessor's Liens), all of Lessor's right, title and interest in and to the Engine
with respect to which such Event of Loss occurred, and Lessor will assign to or
as directed by Lessee all claims of Lessor against third Persons relating to
such Engine arising from such Event of Loss. In addition, upon such transfer
Lessor shall request in writing that the Loan Trustee execute and deliver to
Lessee an appropriate instrument releasing such Engine from the Lien of the
Indenture and releasing the Purchase Agreement and the Purchase Agreement
Assignment (in respect solely of such Engine) from the assignment and pledge
under the Indenture. For all purposes hereof, each such Replacement Engine
shall, after such conveyance, be deemed part of the property leased hereunder
and shall be deemed an "Engine" as defined herein. No Event of Loss with respect
to an Engine under the circumstances contemplated by the terms of this Section
10(b) shall result in any reduction in Basic Rent.

         (c) Application of Payments from Governmental Authorities for
Requisition of Title or Use. Any payments (other than insurance proceeds the
application of which is provided for in Section 11) received at any time by
Lessor or by Lessee from any governmental authority or other Person with respect
to an Event of Loss resulting from the condemnation, confiscation, theft or
seizure of, or requisition of title to or use of, the Airframe or any Engine,
other than a requisition for use by any Government or by the government of the
country of registry of the Aircraft not constituting an Event of Loss, will be
applied as follows:

                  (i) [Intentionally Left Blank];

                  (ii) if such payments are received with respect to the
         Airframe or the Airframe and the Engines or engines installed on the
         Airframe, such payments shall, after reimbursement of Lessor for costs
         and expenses, be applied in reduction of Lessee's obligation to pay the
         Stipulated Loss Value required to be paid by Lessee pursuant to Section
         10(a), if not already paid by Lessee, or, if already paid by Lessee,
         shall be applied to reimburse Lessee for its payment of such Stipulated
         Loss Value, and the balance, if any, of such payments remaining
         thereafter shall be paid over to, and retained by, Lessee and Lessor,
         as their interests may appear; and

                  (iii) if such payments are received with respect to an Engine
         under circumstances contemplated by Section 10(b), so much of such
         payments remaining after reimbursement of Lessor for costs and expenses
         shall be paid over to, or retained by, Lessee; provided that Lessee
         shall have fully performed the

                                       21

                                                              AA-EETC 2001 Lease
<PAGE>

         terms of Section 10(b) with respect to the Event of Loss for which such
         payments are made.

         (d) Requisition for Use by the Government of the Airframe and the
Engines Installed Thereon. In the event of the requisition for use by any
Government or by the government of the country of registry of the Aircraft
(including for this purpose any agency or instrumentality thereof), including,
without limitation, pursuant to the CRAF Program referred to in Section
7(b)(iv), of the Airframe and the Engines or engines installed on the Airframe
during the Term, Lessee shall promptly notify Lessor of such requisition and all
of Lessee's obligations under this Lease with respect to the Aircraft shall
continue to the same extent as if such requisition had not occurred. All
payments received by Lessor or Lessee from such Government or government for the
use of the Airframe and Engines or engines during the Term for the Aircraft
shall be paid over to, or retained by, Lessee. If any requisition for use by the
U.S. Government of the Airframe and Engines or engines installed on the Airframe
would extend beyond the end of the Term, Lessee at its option may, by written
notice to Lessor given not more than 30 nor less than 10 days before the end of
the Term, elect to declare an Event of Loss with respect to the Airframe and
Engines or engines. Subject to the final paragraph of this Section 10(d), such
Event of Loss will be deemed to have occurred on the final day of the Term. If
Lessee does not so elect to declare an Event of Loss and (1) such requisition
fully terminates and (2) the Airframe and Engines or engines are returned to
Lessee before the first anniversary of the end of the Term, Lessee shall be
obligated to return the Airframe and the Engines or engines to Lessor pursuant
to, and in all other respects to comply with the provisions of, Section 5 as
soon as practicable after the Airframe and Engines or engines are returned to
Lessee unless Lessee shall have exercised its option to purchase the Aircraft
pursuant to Section 20(c). All payments received by Lessor or Lessee from such
government for the use of such Airframe and Engines or engines during the first
year after the end of the Term for the Aircraft shall be paid over to, or
retained by, Lessor unless Lessee shall have exercised its option to purchase
the Aircraft pursuant to Section 20(c), in which event all such payments
received after such purchase shall be paid over to, or retained by, Lessee. In
addition, Lessee shall pay to Lessor at monthly intervals (until the earlier of
(i) the return of the Aircraft to Lessor pursuant to Section 5 and (ii) the
first anniversary of the end of the Term) an amount equal to the difference, if
any, between the Basic Rent for the Aircraft payable during the Term, and (B)
the amounts received by Lessor from such government for the use of the Aircraft
for such period.

         If an Event of Loss to the Aircraft shall have occurred as a result of
a requisition for use by the U.S. Government that shall have extended more than
one year beyond the end of the Term, or if Lessee shall have elected in
accordance with the third sentence of this Section 10(d) to declare an Event of
Loss as a result of any such requisition that would extend beyond the end of the
Term, or if an Event of Loss to the Aircraft shall have occurred as a result of
a requisition for use by any other Government or government

                                       22

                                                              AA-EETC 2001 Lease
<PAGE>

that shall have extended beyond the end of the Term, Lessor (at the direction of
the Owner Participant) at its option may, by written notice to Lessee given not
more than 20 days after receiving notice of any such Event of Loss or election,
waive the occurrence of such Event of Loss. In the event that Lessor waives the
occurrence of an Event of Loss, Lessee shall, no later than the later of (i) the
date on which such Event of Default would have occurred and (ii) the tenth day
after Lessee shall have received such notice from Lessor, transfer to Lessor all
of Lessee's right, title and interest to the Airframe and any Engine subject to
such requisition under the agreement or agreements relating to such requisition.
Upon such transfer, (1) the obligation of Lessee to pay Basic Rent shall
terminate, (2) the obligation of Lessee to pay Supplemental Rent other than
payments of Supplemental Rent to be made by Lessee (x) surviving pursuant to
Section 10 of the Tax Indemnity Agreement or Section 10(d) of the Participation
Agreement, (y) pursuant to clause (ii) of the second sentence of Section 3(c)
hereof, or (z) in respect of liabilities and obligations of Lessee which have
accrued under any of the Operative Documents but not been paid or which are in
dispute as of the date of such transfer) shall terminate, (3) all other
obligations of Lessee under the Lease, including, without limitation, any
obligation to return the Aircraft in accordance with Section 5 thereof shall
terminate and (4) the Term for the Aircraft shall end. In addition, in the event
that any Engine shall not be subject to such requisition for use at the time of
such transfer, Lessee shall return such Engine to Lessor in accordance with
Section 5 hereof.

         (e) Requisition for Use by the Government of an Engine. In the event of
the requisition for use by any Government or by the government of the country of
registry of the Aircraft (including for this purpose any agency or
instrumentality thereof) of any Engine (but not the Airframe), Lessee will
replace such Engine hereunder by complying with the terms of Section 10(b) to
the same extent as if an Event of Loss had occurred with respect to such Engine,
and any payments received by Lessor or Lessee from such Government or government
with respect to such requisition shall be paid over to, or retained by, Lessee.

         (f) Application of Payments During Existence of Event of Default. Any
amount referred to in clause (i), (ii) or (iii) of Section 10(c), Section 10(d)
or Section 10(e) which is payable to Lessee shall not be paid to Lessee, or if
it has been previously paid directly to Lessee, shall not be retained by Lessee,
if at the time of such payment an Event of Default or Specified Default shall
have occurred and be continuing, but shall be paid to and held by the Lessor as
security for the obligations of Lessee under this Lease and, subject to the
Indenture, applied against Lessee's payment obligations hereunder when and as
they become due and payable, and at such time as there shall not be continuing
any such Event of Default or event, such amount shall be paid to Lessee to the
extent not applied in accordance with this sentence.

                                       23

                                                              AA-EETC 2001 Lease
<PAGE>

         Section 11. Insurance.

         (a) Aircraft Liability Insurance. (i) Except as provided in clause (ii)
of this Section 11(a) and subject to the rights of Lessee to establish and
maintain self-insurance in the manner and to the extent specified in Section
11(c), Lessee shall carry, or cause to be carried, at no expense to Lessor, the
Loan Trustee, the Subordination Agent, each Pass Through Trustee, each Liquidity
Provider or the Owner Participant (collectively the "Specified Persons"),
aircraft liability insurance (including, but not limited to, bodily injury,
personal injury and property damage liability, exclusive of manufacturer's
product liability insurance) and contractual liability insurance with respect to
the Aircraft (x) in amounts that are not less than the aircraft liability
insurance applicable to similar aircraft and engines in Lessee's fleet on which
Lessee carries insurance (provided that such liability insurance shall not be
less than the amount certified in the insurance report delivered to the
Specified Persons at the Closing Date), (y) of the type usually carried by
corporations engaged in the same or similar business, similarly situated with
Lessee and owning or operating similar aircraft and engines and covering risks
of the kind customarily insured against by Lessee and (z) that is maintained in
effect with insurers of recognized responsibility. Any policies of insurance
carried in accordance with this Section 11(a) and any policies taken out in
substitution or replacement for any of such policies shall (A) name the
Specified Persons as additional insureds, (B) subject to the condition of clause
(C) below, provide that, in respect of the interests of the Specified Persons in
such policies, the insurance shall not be invalidated by any action or inaction
of Lessee and shall insure the Specified Person's interests as they appear,
regardless of any breach or violation of any warranty, declaration or condition
contained in such policies by Lessee, (C) provide that, if such insurance is
canceled for any reason whatsoever, or if any change is made in the policy that
reduces the amount of insurance or the coverage certified in the insurance
report delivered to the Specified Persons at the Closing Date or if such
insurance is allowed to lapse for nonpayment of premium, such cancellation,
change or lapse shall not be effective as to any Specified Person for 30 days
(seven (7) days, or such other period as is customarily available in the
industry, in the case of any war risk or allied perils coverage) after receipt
by the Specified Persons of written notice from such insurers of such
cancellation, change or lapse, (D) provide that the Specified Persons shall not
have any obligation or liability for premiums, commissions, assessments or calls
in connection with such insurance, (E) provide that the insurers shall waive any
rights of (1) set-off, counterclaim or any other deduction, whether by
attachment or otherwise, in respect of any liability of the Specified Persons to
the extent of any moneys due to the Specified Persons and (2) subrogation
against the Specified Persons to the extent that Lessee has waived its rights by
its agreements to indemnify any such Specified Person pursuant to the Lease or
other Operative Documents, (F) be primary without right of contribution from any
other insurance that may be carried by any Specified Person with respect to its
interests as such in the Aircraft and (G) expressly provide that all of the
provisions thereof, except the limits of liability, shall operate in the same
manner as if there were a separate policy covering each insured.

                                       24

                                                              AA-EETC 2001 Lease
<PAGE>

In the case of a lease or contract with the U.S. Government in respect of the
Aircraft or any Engine, or in the case of any requisition for use of the
Aircraft or any Engine by the U.S. Government, a valid agreement by the U.S.
government to indemnify Lessee, or an insurance policy issued by the U.S.
Government, against the risks that Lessee is required hereunder to insure
against shall be considered adequate insurance for purposes of this Section
11(a) to the extent of the risks (and in the amounts) that are the subject of
such indemnification or insurance.

                  (ii) During any period that the Airframe or an Engine, as the
         case may be, is on the ground and not in operation, Lessee may carry or
         cause to be carried as to such non-operating Airframe or Engine, in
         lieu of the insurance required by clause (i) above, and subject to
         self-insurance to the extent permitted by Section 11(c) below,
         insurance otherwise conforming with the provisions of said clause (i)
         except that: (A) the amounts of coverage shall not be required to
         exceed the amounts of airline liability insurance from time to time
         applicable to airframes or engines owned or leased by Lessee of the
         same type as such non-operating Airframe or Engine and that are on the
         ground and not in operation and (B) the scope of the risks covered and
         the type of insurance shall be the same as from time to time applicable
         to airframes or engines owned or leased by Lessee of the same type as
         such non-operating Airframe or Engine and that are on the ground and
         not in operation.

         (b) Insurance against Loss or Damage to Aircraft. (i) Except as
provided in clause (ii) of this Section 11(b), and subject to the rights of
Lessee to establish and maintain self-insurance in the manner and to the extent
specified in Section 11(c), Lessee shall maintain, or cause to be maintained, in
effect with insurers of recognized responsibility, at no expense to the
Specified Persons, all-risk aircraft hull insurance covering the Aircraft and
all-risk coverage with respect to any Engines or Parts while removed from the
Aircraft (including, without limitation, war risk insurance if and to the extent
the same is maintained by Lessee or any permitted sublessee with respect to
other aircraft owned or operated by Lessee or such permitted sublessee, as the
case may be, on the same routes) that is of the type and in substantially the
amount usually carried by corporations engaged in the same or similar business
and similarly situated with Lessee; provided that (A) such insurance (including
the permitted self-insurance) shall at all times while the Aircraft is subject
to the Lease be for an amount not less than the Stipulated Loss Value for the
Aircraft from time to time and (B) such insurance need not cover an Engine while
attached to an airframe not owned, leased or operated by Lessee. Any policies
carried in accordance with this Section 11(b) and any policies taken out in
substitution or replacement for any such policies shall (A) provide that any
insurance proceeds up to an amount equal to the Stipulated Loss Value, payable
for any loss or damage constituting an Event of Loss with respect

                                       25

                                                              AA-EETC 2001 Lease
<PAGE>

to the Aircraft, and any insurance proceeds in excess of $4,000,000, up to the
amount of the Stipulated Loss Value, for any loss or damage to the Aircraft (or
Engines) not constituting an Event of Loss with respect to the Aircraft, shall
be paid to the Loan Trustee so long as the Indenture shall not have been
discharged pursuant to the terms and conditions thereof, and thereafter to
Lessor, and that all other amounts shall be payable to Lessee, unless the
insurer shall have received notice that an Event of Default exists, in which
case all insurance proceeds for any loss or damage to the Aircraft (or Engines)
up to the Stipulated Loss Value shall be payable to the Specified Persons, (B)
subject to the conditions of clause (C) below, provide that, in respect of the
interests of the Specified Persons in such policies, the insurance shall not be
invalidated by any action or inaction of Lessee and shall insure the Specified
Persons' interests as they appear, regardless of any breach or violation of any
warranty, declaration or condition contained in such policies by Lessee, (C)
provide that, if such insurance is canceled for any reason whatsoever, or if any
change is made in the policy that reduces the amount of insurance or the
coverage certified in the insurance report delivered to the Specified Persons at
the Closing Date or if such insurance is allowed to lapse for nonpayment of
premium, such cancellation, change or lapse shall not be effective as to any
Specified Person for 30 days (seven days, or such other period as is customarily
available in the industry, in the case of any war risk or allied perils
coverage) after receipt by such Specified Person of written notice from such
insurers of such cancellation, change or lapse, (D) provide that the Specified
Persons shall not have any obligation or liability for premiums, commissions,
assessments or calls in connection with such insurance, (E) provide that the
insurers shall waive any rights of (1) set-off, counterclaim or any other
deduction, whether by attachment or otherwise, in respect of any liability of
the Specified Persons to the extent of any moneys due to the Specified Persons
and (2) subrogation against the Specified Persons to the extent that Lessee has
waived its rights by its agreements to indemnify such party pursuant to the
Lease or other Operative Documents and (F) be primary without right of
contribution from any other insurance that may be carried by any Specified
Person with respect to its interests as such in the Aircraft. In the case of a
lease or contract with the U.S. Government in respect of the Aircraft or any
Engine, or in the case of any requisition for use of the Aircraft or any Engine
by the U.S. Government, a valid agreement by the U.S. Government to indemnify
Lessee, or an insurance policy issued by the U.S. Government, against any risks
that Lessee is required hereunder to insure against shall be considered adequate
insurance for purposes of this Section 11(b) to the extent of the risks (and in
the amounts) that are the subject of such indemnification or insurance.

                  (ii) During any period that the Airframe or Engine is on the
         ground and not in operation, Lessee may carry or cause to be carried as
         to such non-operating Airframe or Engine, in lieu of the insurance
         required by clause (i) above, and subject to self-insurance to the
         extent permitted by Section 11(c) below, insurance otherwise conforming
         with the provisions of said clause (i) except that the scope of the
         risks covered and the type of insurance shall be the same as from time
         to time applicable to airframes or engines owned or leased by Lessee of
         the same type as such non-operating Airframe or Engine and that are on
         the ground and not in operation; provided that, subject to
         self-insurance to the

                                       26

                                                              AA-EETC 2001 Lease
<PAGE>

         extent permitted by Section 11(c), Lessee shall maintain insurance
         against risk of loss or damage to such non-operating Airframe in an
         amount at least equal to the Stipulated Loss Value during such period
         that such Airframe is on the ground and not in operation.

         (c) Self-Insurance. Lessee may from time to time self-insure, by way of
deductible, self-insured retention, premium adjustment or franchise or otherwise
(including, with respect to insurance maintained pursuant to Section 11(a) or
(b) above, insuring for a maximum amount that is less than the amounts set forth
in Section 11(a) and (b)), the risks required to be insured against pursuant to
Section 11(a) and (b), but in no case shall the self-insurance with respect to
all of the aircraft and engines in the aggregate fleets of Lessee and, so long
as the Aircraft is subject to the Sublease, TWA LLC (including, without
limitation, the Aircraft) exceed for any 12-month policy year 1% of the average
aggregate insurable value (for the preceding policy year) of all aircraft
(including, without limitation, the Aircraft) on which Lessee and, so long as
the Aircraft is subject to the Sublease, TWA LLC, carry insurance; provided
that, if AMR Corporation's senior unsecured long-term debt is rated BB or below
by Standard & Poor's Ratings Group (or any successor thereto that is a
nationally recognized statistical rating organization) ("S&P") and Ba2 or below
by Moody's Investors Services, Inc. (or any successor thereto that is a
nationally recognized statistical rating organization) ("Moody's"), then, upon
not less than 30 days' notice from Lessor to Lessee, Lessee will, until AMR
Corporation's senior unsecured long-term debt is rated BB+ or better by S&P or
Ba1 or better by Moody's, reduce the self-insurance permitted hereunder to such
reasonable amount as Lessor may require; and provided, further, that a
deductible per occurrence that, in the case of the Aircraft, is not in excess of
the amount customarily allowed as a deductible in the industry or is required to
facilitate claims handling shall be permitted in addition to the above-mentioned
self-insurance.

         (d) Application of Insurance Payments. All losses will be adjusted by
Lessee with the insurers. As between the Specified Persons and Lessee it is
agreed that all insurance payments received under policies required to be
maintained by Lessee hereunder, exclusive of any payments received in excess of
the Stipulated Loss Value for the Aircraft from such policies, as the result of
the occurrence of an Event of Loss with respect to the Airframe or an Engine
will be applied as follows:

                  (i) [Intentionally Left Blank]

                  (ii) if such payments are received with respect to the
         Airframe (or the Airframe and any Engines installed on the Airframe),
         so much of such payments remaining after reimbursement of the Lessor
         for its costs and expenses shall be applied (A) in reduction of
         Lessee's obligation to pay the Stipulated Loss Value required to be
         paid by Lessee pursuant to Section 10(a), if not already paid by
         Lessee, or, if already paid by Lessee, shall be applied to reimburse
         Lessee for its

                                       27

                                                              AA-EETC 2001 Lease

<PAGE>

         payment of such Stipulated Loss Value, and (B) the balance, if any, of
         such payment remaining thereafter shall be paid over to, or retained
         by, Lessee; and

                  (iii) if such payments are received with respect to an Event
         of Loss with respect to an Engine under the circumstances contemplated
         by Section 10(b), such payments shall be paid over to, or retained by,
         Lessee; provided that Lessee shall have fully performed the terms of
         such Section 10(b) with respect to the Event of Loss for which such
         payments are made.

         As between Lessor and Lessee the insurance payment for any loss or
damage to the Aircraft in excess of the Stipulated Loss Value for the Aircraft
shall be paid to Lessee.

         As between Lessor and Lessee the insurance payments for any loss or
damage to the Airframe or an Engine not constituting an Event of Loss with
respect to the Airframe or such Engine shall be applied in payment (or to
reimburse Lessee) for repairs or for replacement property in accordance with the
terms of Section 7 and Section 8, and any balance remaining shall be paid to
Lessee.

         (e) Reports, etc. At or before the Closing Date, and annually upon
renewal of Lessee's insurance coverage, Lessee will furnish to the Specified
Persons a report signed by a firm of independent aircraft insurance brokers
appointed by Lessee (which brokers may be in the regular employ of Lessee),
stating the opinion of such firm that the insurance then carried and maintained
on the Aircraft complies with the terms hereof; provided that all information
contained in such report shall be Confidential Information and shall be treated
by the Specified Persons and their Affiliates and their respective officers,
directors, agents and employees in accordance with Section 25(f) of the
Participation Agreement. Lessee will cause such firm to advise the Specified
Persons in writing of any default in the payment of any premium or of any other
act or omission on the part of Lessee of which such firm has knowledge and that
might invalidate or render unenforceable, in whole or in part, any insurance on
the Aircraft. Lessee will also cause such firm to advise the Specified Persons
in writing as promptly as practicable after such firm acquires knowledge that an
interruption of any insurance carried and maintained on the Aircraft pursuant to
this Section 11 will occur.

         (f) Salvage Rights; Other. All salvage rights to the Airframe and each
Engine shall remain with Lessee's insurers at all times. Nothing in this Section
11 shall limit or prohibit the Specified Persons or Lessee from obtaining
insurance for their own account with respect to the Airframe or any Engine, and
any proceeds payable thereunder shall be payable as provided in the insurance
policy relating thereto; provided that no such insurance may be obtained which
would limit or otherwise adversely affect the coverage or amounts payable under,
or increase the premiums for, any insurance required to be maintained pursuant
to this Section 11 or any other insurance maintained by Lessee

                                       28

                                                              AA-EETC 2001 Lease
<PAGE>

(or any permitted sublessee) with respect to the Aircraft or any other aircraft
in the fleet of Lessee or American.

         Section 12. Inspection. At all reasonable times during the Term, but
upon at least 5 days' prior written notice to Lessee, Lessor, the Owner
Participant, the Loan Trustee, any Pass Through Trustee, or their authorized
representatives, may at their own expense and risk conduct a visual walk-around
inspection of the Aircraft and any Engine (including a visual walk-around
inspection of the Aircraft during any regularly scheduled heavy maintenance
visit for the Aircraft conducted by Lessee during the Term), which may include
going on board the Aircraft and examining the contents of any open panels, bays
or other components but shall not include opening any panels, bays or other
components of the Aircraft, and may inspect the books and records of Lessee
relating thereto; provided that (a) such representatives shall be fully insured
to the reasonable satisfaction of Lessee by Lessor, the Owner Participant, the
Loan Trustee, or any Pass Through Trustee, as the case may be, with respect to
any risks incurred in connection with any such inspection, (b) any such
inspection shall be subject to the safety, security and workplace rules
applicable at the location where such inspection is conducted and any applicable
governmental rules or regulations and (c) in the case of an inspection during a
maintenance visit, such inspection shall not in any respect interfere with the
normal conduct of such maintenance visit or extend the time required for such
maintenance visit. All information obtained in connection with any such
inspection shall be held confidential by Lessor, the Owner Participant, the Loan
Trustee and any Pass Through Trustee, and shall not be furnished or disclosed by
them to anyone other than (i) their Affiliates and their officers, directors and
employees and those of their Affiliates, (ii) their bank examiners, auditors,
accountants, agents, legal counsel, underwriters, lenders, rating agencies and
authorized insurance brokers, (iii) as required by applicable law, governmental
regulation or judicial process, (iv) to such other Persons as may be reasonably
necessary to enforce Lessor's, the Owner Participant's or the Loan Trustee's
rights hereunder, (v) to the extent such information is made public by Lessee
(including by filings with the FAA or the Securities and Exchange Commission)
and (vi) any Person with whom the Owner Participant, the Loan Trustee, or any
Pass Through Trustee is in good faith conducting negotiations relating to the
possible transfer and sale of such Pass Through Trustee's Equipment Notes or
interest in the Aircraft, as the case may be, if such Person shall have entered
into an agreement similar to that contained in this Section 12 whereby such
Person agrees to hold such information confidential. Lessee will, upon the
request of Lessor or the Loan Trustee, as the case may be, at any time, notify
Lessor of the time and location of the next scheduled heavy maintenance visit to
be conducted by Lessee in respect of the Aircraft during the Term; provided that
Lessee shall have the right in its sole discretion to reschedule, or change the
location of, any maintenance visit of which it shall have notified Lessor or the
Loan Trustee, as the case may be, pursuant to this sentence, Lessee hereby
agreeing to use reasonable efforts to notify Lessor of any such rescheduling or
change. None of the Lessor, the Loan Trustee, any Pass Through Trustee or the
Owner Participant shall have any duty to make any such inspection or

                                       29

                                                              AA-EETC 2001 Lease
<PAGE>

incur any liability or obligation by reason of not making any such inspection.
No inspection pursuant to this Section 12 shall relieve Lessee of any of its
obligations under this Lease. No inspection pursuant to this Section 12 shall
interfere with the use, operation or maintenance of the Aircraft or the normal
conduct of Lessee's business, and Lessee shall not be required to undertake or
incur any additional liabilities in connection therewith.

         Section 13. Assignment, Citizenship, etc.

         Except as otherwise provided in Section 7(b) or in the case of any
requisition for use by any Government, Lessee will not, without the prior
written consent of Lessor given in Lessor's sole discretion, assign any of its
rights or obligations hereunder, except as permitted by Section 16 of the
Participation Agreement. Except as elsewhere herein provided or as expressly
permitted by the provisions of the Participation Agreement, Lessor agrees that
it will not assign or convey its right, title and interest in and to this Lease
or the Aircraft. Lessee shall, for as long as and to the extent necessary to
entitle Lessor to any of the rights that may be afforded to lessors of aircraft
equipment under Section 1110, remain a Certificated Air Carrier. The terms and
provisions of this Lease shall be binding upon and inure to the benefit of
Lessor and Lessee and their respective permitted successors and assigns.

         Section 14. Events of Default. The following events shall constitute
Events of Default (whether any such event will be voluntary or involuntary or
come about or be effected by operation of law or pursuant to or in compliance
with any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body) and each such Event of Default shall
be deemed to exist and continue so long as, but only as long as, it shall not
have been remedied:

                  (a) Lessee shall fail to make (i) any payment of Basic Rent,
         Stipulated Loss Value or Termination Value within five Business Days
         after the same shall have become due, or (ii) any other payment of
         Supplemental Rent (excluding any payments of Excepted Property unless
         Lessor shall have given notice that such failure shall constitute an
         Event of Default) under this Lease (other than those described in
         clause (i) of this subparagraph (a) of Section 14) at the times
         required to be paid thereunder, and any such failure shall continue
         unremedied for a period of 15 Business Days after notice of such
         failure by Lessor; or

                  (b) Lessee shall fail to carry and maintain insurance on or
         with respect to the Aircraft in accordance with the provisions of
         Section 11; provided that, in the case of insurance with respect to
         which cancellation, change or lapse for nonpayment of premium shall not
         be effective as to Lessor, the Loan Trustee and each Participant for 30
         days (seven days, or such other period as may from time to time be
         customarily obtainable in the industry, in the case of any war risk

                                       30

                                                              AA-EETC 2001 Lease
<PAGE>

         coverage) after receipt of notice by Lessor, the Loan Trustee or any
         Participant of such cancellation, change or lapse, no such failure to
         carry and maintain insurance shall constitute an Event of Default
         hereunder until the earlier of (i) the - date such failure shall have
         continued unremedied for a period of 20 days (five days in the case of
         any war risk coverage) after receipt by Lessor, the Loan Trustee or any
         Participant of the notice of cancellation, change or lapse referred to
         in clause (C) in the second sentence of Section 11(a)(i) or in clause
         (C) in the second sentence of Section 11(b), or (ii) the date on which
         such insurance is not in effect as to any of Lessor, the Loan Trustee
         and any Participant; or

                  (c) Lessee shall operate the Aircraft when neither the
         aircraft public liability insurance required by Section 11(a) nor the
         indemnification described in the last subparagraph of Section 7(a)
         shall be in effect; or

                  (d) Lessee shall fail to perform or observe any other
         covenant, condition or agreement not specified elsewhere in this
         Section 14 to be performed by it hereunder or under the Participation
         Agreement, and such failure in any such case shall continue unremedied
         for a period of 30 days after written notice thereof by Lessor, Owner
         Participant or the Loan Trustee; provided that, if such failure is
         capable of being remedied, no such failure shall constitute an Event of
         Default hereunder for a period of 180 days after such notice so long as
         Lessee is diligently proceeding to remedy such failure; or

                  (e) any representation or warranty made by Lessee in this
         Lease or in the Participation Agreement or in any document furnished by
         Lessee pursuant hereto or thereto (other than in the Tax Indemnity
         Agreement or any document furnished by Lessee pursuant thereto) shall
         prove to have been incorrect in any material respect at the time made,
         and such incorrectness shall be material and shall continue to be
         unremedied for a period of 30 days after written notice thereof by
         Lessor, Owner Participant or the Loan Trustee; or

                  (f) Lessee shall consent to the appointment of a receiver,
         trustee or liquidator of itself or of a substantial part of its
         property, or Lessee shall admit in writing its inability to pay its
         debts generally as they come due, or shall make a general assignment
         for the benefit of creditors; or

                  (g) Lessee shall file a voluntary petition in bankruptcy or a
         voluntary petition or an answer seeking reorganization or liquidation
         in a proceeding under any bankruptcy laws (as now or hereafter in
         effect) or an answer admitting the material allegations of a petition
         filed against Lessee in any such proceeding, or Lessee shall by
         voluntary petition or answer, consent to or seek relief under the
         provisions of any other now existing or future bankruptcy or other
         similar law providing for the reorganization or winding-up of
         corporations, or Lessee shall

                                       31
                                                              AA-EETC 2001 Lease

<PAGE>

         seek an agreement, composition, extension or adjustment with its
         creditors under such law; or

                  (h) an order, judgment or decree shall be entered by any court
         of competent jurisdiction appointing, without the consent of Lessee, a
         receiver, trustee or liquidator of Lessee or of any substantial part of
         their property, or sequestering any substantial part of the property of
         Lessee, and any such order, judgment, or decree of appointment or
         sequestration shall remain in force undismissed, unstayed or unvacated
         for a period of 90 days after the date of entry thereof; or

                  (i) a petition against Lessee in a proceeding under the
         Federal bankruptcy laws or other insolvency laws, as now or hereafter
         in effect, shall be filed and will not be withdrawn or dismissed within
         90 days thereafter, or, under the provisions of any law providing for
         reorganization or winding-up of corporations which may apply to Lessee,
         any court of competent jurisdiction shall assume jurisdiction, custody
         or control of Lessee or of any substantial part of their respective
         property and such jurisdiction, custody or control shall remain in
         force unrelinquished, unstayed or unterminated for a period of 90 days;

provided that, notwithstanding anything to the contrary contained in this Lease,
any failure of Lessee to perform or observe any covenant, condition, or
agreement herein shall not constitute an Event of Default if such observance is
prevented solely by reason of an event referred to in the definition of "Event
of Loss" so long as Lessee is continuing to comply with the applicable terms of
Section 10.

         Section 15. Remedies. Upon the occurrence of any Event of Default and
at any time thereafter so long as the same shall be continuing, Lessor may, at
its option, declare this Lease to be in default by a written notice to Lessee
(provided that this Lease shall be deemed to have been declared in default
without the necessity of such written notice upon the occurrence of any Event of
Default described in paragraph (f), (g), (h) or (i) of Section 14 hereof); and
at any time thereafter, so long as Lessee shall not have remedied all
outstanding Events of Default, Lessor may do one or more of the following with
respect to all or any part of the Airframe and any Engines as Lessor in its sole
discretion shall elect, to the extent permitted by, and subject to compliance
with any mandatory requirements of, applicable law then in effect; provided that
during any period when the Aircraft is subject to the CRAF Program in accordance
with the provisions of Section 7(b) and in the possession of the U.S.
Government, Lessor shall not, on account of any Event of Default, be entitled to
do any of the following in such manner as to limit Lessee's control under this
Lease (or any sublessee's control under any sublease permitted by the terms of
this Lease) of any Airframe or any Engines, unless at least 60 days' (or such
lesser period as may then be applicable under the Air Mobility Command program)
prior written notice of default hereunder shall have been given by Lessor by

                                       32

                                                              AA-EETC 2001 Lease
<PAGE>

registered or certified mail to Lessee (or any sublessee) with a copy addressed
to the Contracting Office Representative for the Air Mobility Command of the
United States Air Force under any contract with Lessee (or any sublessee)
relating to the Aircraft:

                  (a) cause Lessee, upon the written demand of Lessor and at
         Lessee's expense, to return promptly, and Lessee shall return promptly,
         all or such part of the Airframe or any Engine as Lessor may so demand
         to Lessor or its order in the manner and condition required by, and
         otherwise in accordance with all the provisions of, Section 5, as if
         the Airframe or such Engine were being returned at the end of the Term,
         or Lessor, at its option, may enter upon the premises where all or any
         part of the Airframe or any Engine are located and take immediate
         possession of and remove the same (together with any engine which is
         not an Engine but which is installed on the Airframe, subject to all of
         the rights of the owner, lessor, lien or secured party of such engine;
         provided that the Airframe with an engine (which is not an Engine)
         installed thereon may be flown or returned only to a location within
         the continental United States, and such engine shall be held for the
         account of any such owner, lessor, lien or secured party or, if owned
         by Lessee, may, at the option of Lessor, be exchanged with Lessee for
         an Engine in accordance with the provisions of Section 5) by summary
         proceedings or otherwise, all without liability accruing to Lessor for
         or by reason of such entry or taking of possession or removal, whether
         for the restoration of damage to property caused by such taking or
         otherwise;

                  (b) sell all or any part of the Airframe and any Engine at
         public or private sale, whether or not Lessor shall at the time have
         possession thereof, as Lessor may determine, or otherwise dispose of,
         hold, use, operate, lease to others or keep idle all or any part of the
         Airframe or such Engine as Lessor, in its sole discretion, may
         determine, all free and clear of any rights of Lessee except as
         hereinafter set forth in this Section 15 and without any duty to
         account to Lessee with respect to such action or inaction or for any
         proceeds with respect thereto, except to the extent required by
         paragraph (d) below if Lessor elects to exercise its rights under such
         paragraph (d) in lieu of its rights under paragraph (c) below;

                  (c) whether or not Lessor shall have exercised, or shall
         thereafter at any time exercise, any of its rights under paragraph (a)
         or paragraph (b) above with respect to all or any part of the Airframe
         or any Engine, Lessor, by written notice to Lessee specifying a payment
         date (which date shall be deemed to be a "Termination Date" for
         purposes of computing Termination Value) which shall be not earlier
         than 10 days from the date of such notice, may demand that Lessee pay
         to Lessor, and Lessee shall pay Lessor, on the payment date specified
         in such notice, as liquidated damages for loss of a bargain and not as
         a penalty (in lieu of the Basic Rent due for Lease Periods commencing
         on or after the Lease Period Date next preceding the payment date
         specified in such notice), such amounts of

                                       33

                                                              AA-EETC 2001 Lease
<PAGE>

         Basic Rent as may be payable pursuant to Schedule B hereto plus
         whichever of the following amounts Lessor, in its sole discretion,
         shall specify in such notice (together with interest, if any, on such
         amount at the applicable Past Due Rate from the Termination Date to but
         excluding the date of actual payment): (i) an amount equal to the
         excess, if any, of the Termination Value for the Airframe or such
         Engine or part thereof, computed as of the payment date specified in
         such notice, over the aggregate fair market rental value (computed as
         hereafter provided in this Section 15) of the Airframe or such Engine
         or part thereof for the remainder of the Term, after discounting such
         aggregate fair market rental value monthly (effective on the Lease
         Period Dates) to present worth as of the payment date specified in such
         notice at the Average Certificate Rate; or (ii) an amount equal to the
         excess, if any, of the Termination Value for the Airframe or such
         Engine or part thereof computed as of the payment date specified in
         such notice, over the fair market sales value (computed as hereafter
         provided in this Section 15) of the Airframe or such Engine or part
         thereof as of the payment date specified in such notice;

                  (d) in the event Lessor, pursuant to paragraph (b) above,
         shall have sold all or any part of the Airframe or any Engine, Lessor,
         in lieu of exercising its rights under paragraph (c) above with respect
         to the Airframe or such Engine or part thereof, may, if it shall so
         elect, demand that Lessee pay Lessor, and Lessee shall pay to Lessor,
         on the date of such sale (which date shall be deemed a "Termination
         Date" for purposes of computing Termination Value), as liquidated
         damages for loss of a bargain and not as a penalty (in lieu of the
         Basic Rent due for Lease Periods commencing on or after the Lease
         Period Date next preceding the date of such sale), such amounts of
         Basic Rent as may be payable pursuant to Schedule B hereto, plus the
         amount of any deficiency between the net proceeds of such sale and the
         Termination Value for the Airframe or such Engine or part thereof,
         computed as of the date of such sale;

                  (e) Lessor may terminate or rescind this Lease as to the
         Airframe and any or all Engines, or may exercise any other right or
         remedy which may be available to it under applicable law or proceed by
         appropriate court action or actions, either at law or in equity, to
         enforce the terms or to recover damages for the breach hereof.

         In addition, Lessee shall be liable, except as otherwise provided in
paragraphs (c) and (d) above and without limiting the effect of the penultimate
sentence of Section 3(c), without duplication of any amounts payable hereunder,
for any and all unpaid Rent due hereunder before, after or during the exercise
of any of the foregoing remedies and for all legal fees and other costs and
expenses incurred by reason of the occurrence of any Event of Default or the
exercise of Lessor's remedies with respect thereto, including all costs and
expenses incurred in connection with the retaking or

                                       34

                                                              AA-EETC 2001 Lease
<PAGE>

return of the Airframe or any Engine in accordance with the terms of Section 5
or in placing such Airframe or Engine in the condition and airworthiness
required by such Section; provided that, if Lessee returns or surrenders
possession of all or any part of the Airframe or any Engine in accordance with
this Section 15 and Lessor does not within 365 days after the date of such
return or surrender exercise its rights under paragraph (c) or (d) above with
respect to such Airframe or Engine or part thereof, there shall be deducted from
each payment of Basic Rent becoming due after the expiration of such 365-day
period an amount equal to the quotient obtained by dividing the aggregate fair
market rental value (computed as hereafter provided in this Section 15) of such
Airframe or Engine or part thereof, for the remainder of the Term after the
expiration of such 365-day period (computed as of the date of such expiration),
by the number of Basic Rent installments remaining with respect to the Aircraft
after the expiration of such 365-day period to the end of the Term; and
provided, further, that Lessor and Lessee agree that, notwithstanding anything
to the contrary set forth in this Lease, the Indenture, the Participation
Agreement, the Tax Indemnity Agreement or any other document or instrument
relating hereto or thereto, Lessee shall have no responsibility or liability for
any Make Whole Amount payable as a result of (x) a redemption or purchase of the
Notes pursuant to Section 2.08 or 2.10 of the Indenture or (y) an Indenture
Default that does not also constitute an Event of Default. For purposes of
paragraph (c) above and the preceding sentence, the "aggregate fair market
rental value" or the "fair market sales value" of the Airframe or any Engine or
any part thereof shall be as specified in an Independent Appraisal. At any sale
of the Airframe or any Engine or part thereof pursuant to this Section 15,
Lessor or any Participant may bid for and purchase such property. Except as
otherwise expressly provided above, no remedy referred to in this Section 15 is
intended to be exclusive, but each shall be cumulative and in addition to any
other remedy referred to above or otherwise available to Lessor at law or in
equity; and the exercise or beginning of exercise by Lessor of any one or more
of such remedies shall not preclude the simultaneous or later exercise by Lessor
of any or all of such other remedies. No express or implied waiver by Lessor of
any Event of Default shall in any way be, or be construed to be, a waiver of any
future or subsequent Event of Default.

         Section 16. Section 1110. It is the intention of the parties hereto
that this Lease, to the fullest extent available under applicable law, entitles
Lessor to the benefits of Section 1110 with respect to the Aircraft. In
furtherance of the foregoing, Lessor and Lessee hereby confirm that this Lease
is to be treated as a lease for U.S. Federal income tax purposes. Nothing
contained in this paragraph shall be construed to limit Lessee's use and
operation of the Aircraft under this Lease or constitute a representation or
warranty by Lessee as to tax consequences.

         Section 17. Further Assurances; Financial Information.

         (a) Forthwith upon the execution and delivery of each Lease Supplement
and Trust Agreement and Indenture Supplement, and upon the amendment of this
Lease or

                                       35

                                                              AA-EETC 2001 Lease
<PAGE>

the Trust Agreement or Indenture, Lessee at its expense (except as otherwise
provided in the Operative Documents) will cause such Lease Supplement and Trust
Agreement and Indenture Supplement, or amendment to be duly filed and recorded
in accordance with the Transportation Code or the applicable laws of the
government of registry of the Aircraft if the Aircraft has been registered in
another jurisdiction pursuant to Section 7(a). In addition, each of Lessor and
Lessee will promptly and duly execute and deliver to the other party hereto such
further documents and assurances and take such further action as such other
party may from time to time reasonably request in order effectively to carry out
the intent and purpose of this Lease, including, without limitation, if
requested by Lessor, the execution and delivery of supplements or amendments
hereto or, in the case of Lessor, to the Indenture, in recordable form,
subjecting to this Lease and, in the case of Lessor, to the Indenture, any
Replacement Engine and the recording or filing of counterparts hereof or
thereof, in accordance with the laws of such jurisdictions as Lessor may from
time to time deem advisable; provided that this sentence is not intended to
impose upon Lessee or Lessor any additional liabilities not otherwise
contemplated by this Lease and the Participation Agreement.

         (b) Lessee also agrees to furnish Lessor, the Owner Participant, the
Subordination Agent, each Pass Through Trustee, and the Loan Trustee (i) within
60 days after the end of each of the first three quarterly fiscal periods in
each fiscal year of Lessee, either a consolidated balance sheet of Lessee and
its consolidated subsidiaries prepared by it as of the close of such period,
together with the related consolidated statements of income for such period, or
a Quarterly Report of Lessee on Form 10-Q in respect of such period in the form
filed with the Securities and Exchange Commission, (ii) within 120 days after
the close of each fiscal year of Lessee, either a consolidated balance sheet of
Lessee and its consolidated subsidiaries as of the close of such fiscal year,
together with the related consolidated statements of income for such fiscal
year, as certified by independent public accountants, or an Annual Report of
Lessee on Form 10-K in respect of such year in the form filed with the
Securities and Exchange Commission, (iii) within 120 days after the close of
each fiscal year of Lessee, a certificate of Lessee, signed by a Responsible
Officer of Lessee and addressed to Lessor, the Loan Trustee, the Subordination
Agent, each Pass Through Trustee and the Owner Participant, to the effect that
the signer has reviewed the relevant terms of this Lease and the Participation
Agreement and has made, or caused to be made under his supervision, a review of
the transactions and condition of Lessee during the accounting period covered by
the financial statements referred to in clause (ii) above, and that such review
has not disclosed the existence during such accounting period, nor does the
signer have knowledge of the existence as at the date of such certificate, of
any condition or event which constitutes an Event of Default or which, after
notice or lapse of time or both, would constitute an Event of Default, or, if
any such condition or event existed or exists, specifying the nature and period
of existence thereof and what action Lessee has taken or is taking or proposes
to take with respect thereto, and (iv) from time to time such other
non-confidential information as Lessor or the Loan Trustee may reasonably
request.

                                       36

                                                              AA-EETC 2001 Lease
<PAGE>

         The items required to be furnished pursuant to clauses (i) and (ii) of
this Section 17 shall be deemed to have been furnished on the date on which such
items are posted on the SEC's website at www.sec.gov, and such posting shall be
deemed to satisfy the requirements of clauses (i) and (ii) of this Section 17;
provided, that Lessee shall deliver a paper copy of any item referred to in
clauses (i) and (ii) of this Section 17 if Lessor so requests.

         Section 18. Notices. All notices required under the terms and
provisions of this Lease shall be in English and in writing, and any such notice
may be given by United States mail, courier service, telegram, telex, cable or
facsimile (confirmed by telephone or in writing in the case of notice by
telegram, telex, cable or facsimile) or any other customary means of
communication, and any such notice shall be effective when delivered (i) if to
Lessee, to P.O. Box 619616, Dallas/Fort Worth International Airport, Texas
75261-9616, Attention: Treasurer, or at 4333 Amon Carter Boulevard, Fort Worth,
Texas 76155, Attention: Treasurer, Telex: 4630158, Facsimile: (817) 967-4318,
Telephone: (817) 967-1532 or to such other address as Lessee shall from time to
time designate in writing to Lessor, (ii) if to Lessor, to 79 South Main Street,
MAC: U1254-031, Salt Lake City, Utah 84111, Attention: Corporate Trust Services,
Telex: 3789450, Facsimile: (801) 246-5053, Telephone: (801) 246-5630, or to such
other address as Lessor shall from time to time designate in writing to Lessee,
(iii) if to the Owner Participant, the Subordination Agent or any Pass Through
Trustee, to their respective addresses set forth on the Schedule I to the
Participation Agreement, or to such other address as the Owner Participant, or
the Subordination Agent shall from time to time designate in writing to Lessee
and Lessor, and (iv) if to the Loan Trustee, to 225 Asylum Street, Goodwin
Square, Hartford, Connecticut 06103, Attention: Corporate Trust Division,
Facsimile: (860) 224-1881, Telephone: (860) 224-1844, or such other address as
the Loan Trustee shall from time to time designate in writing to Lessor and
Lessee. Prior to the discharge of the lien of the Indenture, Lessee shall
furnish the Loan Trustee directly with a copy of each report, notice, request,
demand, certificate, financial statement or other instrument or document
furnished to Lessor hereunder.

         Section 19. No Setoff, Counterclaim etc. This Lease is a net lease and
it is intended that Lessee shall pay all costs and expenses of every character
whether foreseen or unforeseen, ordinary or extraordinary, or structural or
nonstructural in connection with the use, operation, maintenance, repair and
reconstruction of the Airframe and each Engine by Lessee, including the costs
and expenses particularly set forth in this Lease. Lessee's obligation to pay
all Rent payable hereunder shall be absolute and unconditional and shall not be
affected by any circumstances, including, without limitation, (i) any setoff,
counterclaim, recoupment, defense or other right which Lessee may have against
Lessor, any Participant, the Loan Trustee or anyone else for any reason
whatsoever, (ii) any defect in the title, airworthiness, condition, design,
operation or fitness for use of, or any damage to or loss or destruction of, the
Aircraft, or any interruption or cessation in or prohibition of the use or
possession thereof by Lessee for any reason whatsoever,

                                       37

                                                              AA-EETC 2001 Lease
<PAGE>

including, without limitation, any decision in the bankruptcy proceedings of
Trans World Airlines, Inc., (iii) any insolvency, bankruptcy, reorganization or
similar proceedings by or against Lessee or any other Person or (iv) any other
circumstance, happening or event whatsoever, whether or not unforeseen or
similar to any of the foregoing. If for any reason whatsoever this Lease shall
be terminated in whole or in part by operation of law or otherwise, except as
specifically provided in Sections 9, 10 and 15, Lessee nonetheless agrees to pay
to Lessor an amount equal to each Basic Rent and Supplemental Rent payment under
Section 3 at the time such payment would have become due and payable in
accordance with the terms hereof had this Lease not been terminated in whole or
in part. Lessee hereby waives, to the extent permitted by applicable law, any
and all rights which it may now have or which at any time hereafter may be
conferred upon it, by statute or otherwise, to terminate, cancel, quit or
surrender this Lease except in accordance with the express terms of Sections 9,
10 and 15. Each payment of Rent made by Lessee shall be final as to Lessor and
Lessee, and Lessee will not seek to recover all or any part of any such payment
of Rent from Lessor or from the Loan Trustee for any reason whatsoever.

         Section 20. Renewal Options; Purchase Options.

         (a) Renewal Options. Lessee shall have the right to extend this Lease
with respect to the Aircraft for up to two additional periods of one year each
(each such period being hereinafter referred to as a "Renewal Term"), each
commencing at the end of the Term or a Renewal Term. Such option to renew shall
be exercised upon irrevocable written notice from Lessee to Lessor given not
less than 180 days prior to the end of the Term or the Renewal Term then in
effect and if no Specified Default or Event of Default shall have occurred and
be continuing on such date, then this Lease shall be extended for the additional
period of such Renewal Term on the same conditions provided for herein, and upon
such extension, the word "Term" whenever used herein shall be deemed to refer,
unless the context otherwise requires, to include such Renewal Term; provided
that the rental payable during such Renewal Term shall be at a rental rate equal
to the fair market rental value for the Aircraft determined within 90 days after
such election by mutual agreement of Lessor and Lessee or, if they shall be
unable to agree, by an Independent Appraisal; and provided, further, that the
provisions of Section 9 shall not be applicable during any Renewal Term. The
amounts which are payable during any such Renewal Term in respect of Termination
Value as used in Section 15 and Stipulated Loss Value with respect to the
Aircraft shall be determined on the basis of the fair market sales value of the
Aircraft as of the commencement of such Renewal Term, amortized on a
straight-line basis over such Renewal Term to the fair market sales value of the
Aircraft as of the expiration of such Renewal Term, as such fair market sales
value in each case is determined prior to the commencement of such Renewal Term
by mutual agreement of Lessor and Lessee or, if they shall be unable to agree,
as determined by an Independent Appraisal.

                                       38

                                                              AA-EETC 2001 Lease
<PAGE>

         (b) [Intentionally Left Blank]

         (c) Purchase Option. So long as no Specified Default or Event of
Default shall have occurred and be continuing, Lessee shall have the right, at
its option, at the expiration of the Term or any Renewal Term, to elect to
purchase the Aircraft at a price equal to the fair market sales value of the
Aircraft, to be determined as provided below. Such option to purchase shall be
exercised irrevocably upon written notice from Lessee to Lessor given not less
than 180 days prior to the last day of the Term or any Renewal Term, as the case
may be. If Lessee shall have so elected to purchase the Aircraft, Lessor shall
transfer without recourse or warranty (except as to Lessor's Liens) the Aircraft
to Lessee, against payment by Lessee of the applicable purchase price and any
other amounts due hereunder in immediately available funds. In order to enable
Lessee to determine whether it wishes to exercise such election to purchase, the
fair market sales value for the Aircraft shall, at Lessee's request made in
sufficient time to permit such determination, be determined not less than 210
days prior to the end of the Term or any Renewal Term by mutual agreement of
Lessor and Lessee or, if they shall be unable to agree, by an Independent
Appraisal.

         Section 21. Successor Owner Trustee. Lessee agrees that, in the case of
the appointment of any successor Owner Trustee pursuant to the terms of the
Trust Agreement and Section 12(d) of the Participation Agreement, such successor
Owner Trustee shall succeed to all the rights, powers and title of Lessor
hereunder and shall be deemed to be Lessor of the Aircraft for all purposes
without in any way altering the terms of this Lease or Lessee's obligations
hereunder. Lessee further agrees that in the case of the appointment of any
additional trustee to act as co-trustee or as a separate trustee pursuant to the
terms of the Trust Agreement and Section 12(d) of the Participation Agreement,
such additional trustee shall acquire such rights, power and title of Lessor
hereunder as are specified in the instruments appointing such additional
trustee, without in any way altering the terms of this Lease or Lessee's
obligations hereunder. One such appointment and designation of a successor or
additional Owner Trustee shall not exhaust the right to appoint and designate
further successor or additional Owner Trustees pursuant to the Trust Agreement
and Section 12(d) of the Participation Agreement, but such right may be
exercised repeatedly as long as this Lease shall be in effect.

         Section 22. Security for Lessor's Obligation to Holders of Notes. In
order to secure the indebtedness evidenced by the Notes, Lessor has agreed in
the Indenture, among other things, to assign to the Loan Trustee this Lease and
the Lease Supplements and to mortgage in favor of the Loan Trustee all of
Lessor's right, title and interest in and to the Aircraft, subject to the
reservations and conditions therein set forth. Until the lien of the Indenture
has been released, (a) Lessee shall make all payments of Rent and all other
amounts payable hereunder (in each case, other than Excepted Property) to the
Loan Trustee as provided in Section 3(d) and, without limiting the provisions of
Section 19 hereof, the right of the Loan Trustee to receive such payment shall
not, be subject to

                                       39

                                                              AA-EETC 2001 Lease
<PAGE>

any defense, counterclaim, setoff or other right or claim of any kind which
Lessee may be able to assert against Lessor (in its individual or trust
capacity), the Loan Trustee (in its individual or trust capacity), any
Participant or any other Person in any action brought by any thereof on this
Lease, (b) all rights of Lessor with respect to this Lease, the Aircraft, the
Airframe or any Engine or any Part thereof, to the extent set forth in and
subject in each case to the exceptions set forth in the Indenture, shall be
exercisable by the Loan Trustee and (c) all documents, notices, certificates and
opinions of counsel sent by Lessee to the Owner Trustee will also be sent to the
Loan Trustee. Lessee hereby accepts and consents, pursuant to the terms of the
Indenture, the Loan Trustee's rights to receive payments (other than payments
not constituting Basic Rent) due under this Lease, the right to transfer or
assign title to the Aircraft subject to this Lease, to make all waivers and
agreements except as otherwise provided in the Indenture, to give all notices,
consents and releases and to take all action upon the happening of a Specified
Default or Event of Default under this Lease (except as otherwise specifically
provided in the Indenture), or to do any and all other things whatsoever which
the Lessor is or may become entitled to do under this Lease (except as otherwise
provided in the Indenture); all or any of which rights, obligations, benefits
and interests may, pursuant to the terms of the Indenture, be reassigned or
retransferred by the Loan Trustee at any time and from time to time (except as
otherwise provided in the Indenture); provided, however, that Lessor, except to
the extent, and for such time as, it is unable to do so by virtue of the
Indenture, shall remain liable for the performance of all the terms, conditions,
covenants and provisions for which it is obligated under this Lease
notwithstanding such assignment. To the extent, if any, that this Lease
constitutes chattel paper (as such term is defined in the Uniform Commercial
Code as in effect in any applicable jurisdiction), no security interest in this
Lease may be created through the transfer or possession of any counterpart
hereof other than the original counterpart, which shall be identified as the
counterpart containing the receipt therefor executed by the Loan Trustee on the
signature page thereof.

         Section 23. Lessor's Right to Perform for Lessee. If Lessee fails to
make any payment of Rent required to be made by it hereunder or fails to perform
or comply with any of its agreements contained herein, Lessor may, on behalf of
Lessee and upon prior notice to Lessee, itself make such payment or undertake
such performance or compliance. The amount of any such payment and the amount of
the reasonable expenses of Lessor incurred in connection with such payment,
performance or compliance together with interest thereon, at the Past Due Rate,
shall be deemed Supplemental Rent, payable by Lessee upon demand.

         Section 24. [Intentionally Left Blank]

         Section 25. Investment of Security Funds; Miscellaneous. Any moneys
held by Lessor or required to be paid to or retained by Lessor which are not
required to be paid to Lessee pursuant to Section 10(f) or 11(b) solely because
an Event of Default or

                                       40

                                                              AA-EETC 2001 Lease
<PAGE>

Specified Default shall have occurred, or which are required to be paid to
Lessee pursuant to Section 10(c) or 11(b) after completion of a replacement to
be made pursuant to Section 10(b) shall, until paid to Lessee as provided in
Section 10 or Section 11 or applied as provided herein or in the Trust Agreement
and Indenture, be invested in Permitted Investments by Lessor (unless the
Indenture shall not have been discharged, in which case, by the Loan Trustee as
provided in Section 9.07 of the Indenture) from time to time as directed in
writing by Lessee. There shall, so long as no Specified Default or Event of
Default shall have occurred or be continuing, be promptly remitted to Lessee
(but in any event not more frequently than once every three months) any gain
(including interest received) realized as the result of any such investment (net
of any fees, commissions and other expenses, if any, incurred in connection with
such investment), and Lessee will promptly pay to Lessor or the Loan Trustee, as
the case may be, on demand, the amount of any loss realized as the result of any
such investment (together with any fees, commissions and other expenses, if any,
incurred in connection with such investment), such amount to be disposed of in
accordance with the terms of the Trust Agreement and the Indenture.

         Section 26. Concerning the Lessor. Wells Fargo Bank Northwest, National
Association is entering into this Lease solely in its capacity as Owner Trustee
under the Trust Agreement and not in its individual capacity (except as
expressly stated herein) and in no case shall Wells Fargo Bank Northwest,
National Association (or any entity acting as successor Owner Trustee under the
Trust Agreement) be personally liable for or on account of any of the
statements, representations, warranties, covenants or obligations stated to be
those of Lessor hereunder; provided, however, that Wells Fargo Bank Northwest,
National Association (or any such successor Owner Trustee) shall be personally
liable hereunder for its own gross negligence or willful misconduct or for its
breach of its covenants, representations and warranties contained herein, to the
extent covenanted or made in its individual capacity.

         Section 27. Sublessee's Performance and Rights. Any obligation imposed
on Lessee in this Lease shall require only that Lessee perform or cause to be
performed such obligation, even if stated herein as a direct obligation, and the
performance of any such obligation by any permitted assignee, sublessee or
transferee under an assignment, sublease or transfer agreement then in effect
and permitted by the terms of this Lease shall constitute performance by Lessee
and to the extent of such performance, discharge such obligation by Lessee under
this lease. Except as otherwise expressly provided herein, any right granted to
Lessee in this Lease shall grant Lessee the right to exercise such right or
permit such right to be exercised by any such assignee, sublessee or transferee.
The inclusion of specific references to obligations or rights of any such
assignee, sublessee or transferee in certain provisions of this Lease shall not
in any way prevent or diminish the application of the provisions of the two
sentences immediately preceding with respect to obligations or rights in respect
of which specific reference to any such assignee, sublessee or transferee has
not been made in this Lease.

                                       41

                                                              AA-EETC 2001 Lease
<PAGE>

         Section 28. Miscellaneous. Any provision of this Lease which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. This Lease may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered, subject to Section 22, shall be an original, but all
such counterparts shall together constitute but one and the same instrument. To
the extent permitted by applicable law, Lessee hereby waives any provision of
law which renders any provision prohibited or unenforceable in any respect.
Neither this Lease nor any of the terms hereof may be terminated, amended,
supplemented, waived or modified orally, but only by an instrument in writing
signed by the party against which the enforcement of the termination, amendment,
supplement, waiver or modification is sought and no provision referring to the
Owner Participant or requiring the consent or participation of or notice to the
Owner Participant may be waived, modified, supplemented, terminated or amended
without the express written consent of the Owner Participant. This Lease shall
constitute an agreement of lease, and nothing herein shall be construed as
conveying to Lessee any right, title or interest in the Aircraft except as a
lessee only. The Section and paragraph headings in this Lease and the table of
contents are for convenience of reference only and shall not modify, define,
expand or limit any of the terms or provisions hereof and all references herein
to numbered Sections, unless otherwise indicated, are to Sections of this Lease.

         THIS LEASE HAS BEEN DELIVERED IN THE STATE OF NEW YORK AND SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.

                                       42

                                                              AA-EETC 2001 Lease
<PAGE>

         IN WITNESS WHEREOF, Lessor and Lessee have each caused this Lease
Agreement to be duly executed as of the day and year first above written.

                                      LESSOR:

                                      WELLS FARGO BANK NORTHWEST,
                                       NATIONAL ASSOCIATION,
                                       not in its individual capacity, except
                                       as expressly stated herein, but solely
                                       as Owner Trustee

                                      By: /s/ C. Scott Nielsen
                                          -----------------------------------
                                          Name: C. Scott Nielsen
                                          Title: Vice President

                                      LESSEE:

                                      AMERICAN AIRLINES, INC.

                                      By: /s/ Leslie M. Benners
                                          -----------------------------------
                                          Name: Leslie M. Benners
                                          Title: Managing Director -- Corporate
                                                 Finance and Banking

                                       43

                                                              AA-EETC 2001 Lease
<PAGE>

                                   SCHEDULE A

AIRFRAME:         The McDonnell Douglas model MD 83 aircraft with manufacturer's
                  serial number 53561 and United States nationality and
                  registration marks N9630A.

ENGINES:          The Pratt & Whitney model JT8D-219 aircraft engines with
                  manufacturer's serial numbers P728123D and P-728124D.

   (Each engine is capable of producing 750 or more rated takeoff horsepower.)

LEASE:            Lease Agreement dated as of May 5, 1997, between McDonnell
                  Douglas Corporation as lessor and Trans World Airlines, Inc.
                  as lessee, as supplemented by Lease Supplement No. 1, dated as
                  of May 13, 1997, recorded by the FAA on May 20, 1997, as
                  Conveyance No. T054102, as assigned by the FAA Instrument of
                  Assignment and Assumption dated as of April 9, 2001, between
                  the Lessor as assignor and the Owner Trustee as assignee,
                  recorded by the FAA on _________ as Conveyance No.
                  _________________, as amended by the Amendment to Lease
                  Agreement dated as of April 9, 2001, recorded _________ as
                  Conveyance No. _________________ and as amended and restated
                  by the Amended and Restated Lease Agreement dated as of April
                  9, 2001, between First Security Bank, National Association, as
                  owner trustee, American Airlines, Inc., as lessee, Wilmington
                  Trust Company, as indenture trustee, Thayer Leasing Company -
                  1, as owner participant and Boeing Nevada, Inc., as loan
                  participation, recorded by the FAA on _________, 2001, as
                  Conveyance No. _________________.

<PAGE>

                                                                      Schedule B

                                   BASIC RENT

         [INTENTIONALLY OMITTED FROM FAA COUNTERPART]

        Lease Period Date                           Basic Rent
        -----------------                           ----------

                                      B-1

                                                              AA-EETC 2001 Lease
<PAGE>

                             STIPULATED LOSS VALUES

    Casualty Loss Determination Date        Stipulated Loss Value
    --------------------------------        ---------------------

                  [INTENTIONALLY OMITTED FROM FAA COUNTERPART]

                                      B-2

                                                              AA-EETC 2001 Lease
<PAGE>

                               TERMINATION VALUES

   Termination Value Determination Date          Termination Value
   ------------------------------------          -----------------

                  [INTENTIONALLY OMITTED FROM FAA COUNTERPART]

                                      B-3

                                                              AA-EETC 2001 Lease

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